The tech industry has never been known as a bastion of humility—and understandably so, to a certain extent. Successful entrepreneurs and companies need a healthy heaping of chutzpah to take down the competition, especially in a place as fast-moving as Silicon Valley.
But as cryptocurrency markets crumble beneath an unstable global economy and a series of embarrassing episodes, the sector could benefit from a nice slice of humble pie. The serving would help restore some confidence in a space quickly facing yet another reckoning.
Cryptocurrency values remained unsteady Tuesday in the aftermath of a multiday wipeout that saw hundreds of billions of dollars in global crypto market cap disappear. Bitcoin prices are down 20% since Sunday afternoon, falling to an 18-month low. Ethereum values are off 31% since Friday morning, dropping to their lowest point since January 2021. Several other widely traded tokens are down at least 20% in the past week, including Solana, Dogecoin, and Tron.
There are several reasons for the freefall, but two take center stage.
Investors continue to shed higher-risk investments—cryptocurrencies very much included—as inflation and looming interest rate hikes in the U.S. rattle global markets.
At the same time, the cryptocurrency industry has gone through several destabilizing events in the past few weeks: the $60 billion collapse of the stablecoin TerraUSD and its associated token, Luna; the stunning drop in share values at publicly traded crypto exchange Coinbase; the indefinite freeze on billions of dollars in assets held by crypto lender Celsius on Monday; and the suspiciously timed, three-hour suspension Monday of Bitcoin withdrawals by crypto exchange giant Binance.
Crypto bulls continue to argue the recent declines are a natural part of the sector’s evolution, pointing to past peaks and valleys in token prices. Coinbase, whose CEO announced layoffs Tuesday totaling 18% of its workforce amid an 80% year-to-date decline in the company’s share price, even had the gall to continue running an ad titled “Long Live Crypto” during Monday’s NBA Finals game.
Ultimately, they may be right. In the meantime, some modesty is in order.
Too often, crypto crusaders dismiss well-founded skepticism as unsophisticated noobism, refusing to engage in conversation about underlying fundamentals.
Take Do Kwon, the mastermind behind TerraUSD and Luna. Rather than engaging with critics questioning the token’s unbelievably high interest rates and lack of asset backing, Kwon spewed invectives at his enemies. Decrypt offers a solid summary of Kwon’s dismissiveness, which includes an ill-timed quip about the entertainment value associated with corporate deaths.
Celsius CEO Alex Mashinsky didn’t quite attack critics with Kwon’s elan, but in the days before his company halted transactions, he similarly refused to acknowledge impending doom. Mashinsky accused a prescient venture capitalist issuing Celsius warnings this past weekend of sowing misinformation and “FUD,” shorthand for fear, uncertainty, and doubt. Within two days, Celsius was in the tank.
Crypto markets undoubtedly thrive on the promise of market disruption and financial gain, both of which require drumming up excitement. There’s a reason crypto shill/actor Matt Damon told you fortune favors the bold, as opposed to, say, the prudent.
Given the recent turmoil, however, the crypto market could use more levelheaded evangelists like Ethereum founder Vitalik Buterin.
The 28-year-old continues to promote the enormous potential of blockchain technologies, but he’s increasingly a canary in the crypto greed coal mine. He often responds to blockchain skepticism with measured, thoughtful responses, offering solutions to ever-evolving problems. Following the demise of TerraUSD and Luna, he even floated the potential for an FDIC-like entity that helps protect everyday crypto investors.
“I do think that we need less indefinite optimism and more definite optimism—less relying on magic forces to make things better and more concerted efforts to identify specific great things that could be built and build them,” Buterin tweeted earlier this month.
Amen, Vitalik. If the rest of the crypto crowd would listen, the market may stabilize sooner than later.
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Jacob Carpenter
NEWSWORTHY
Taking aim at China. Federal lawmakers are building support for legislation that would give the government more power to screen corporate investments in foreign adversaries such as China, a key partner for many tech companies, the Wall Street Journal reported. Supporters of the bipartisan proposal say the added oversight would help shore up domestic supply chains and reduce the theft of important technologies. Opponents, including the U.S.-China Business Council, argue the legislation gives too much power to federal bureaucrats to dictate corporate policy and spending.
Ready to report. Several of the world’s largest tech companies have agreed to fall in line with new European Union rules on corporate anti-disinformation practices, the Financial Times reported Monday, citing confidential reports. Facebook, Google, Microsoft, and TikTok are among the outfits that will soon start providing the EU with a country-by-country breakdown of their efforts to stem the flow of false information on their platforms. Tech companies have fought disinformation reporting requirements in recent months as part of their opposition to the bloc’s landmark Digital Services Act.
He’ll take questions now. Elon Musk has agreed to meet virtually with Twitter staff later this week, when he will address employees about his planned $44 billion acquisition of the company, Insider reported Monday. Twitter CEO Parag Agrawal notified employees of the meeting, scheduled for Thursday, in a brief companywide email. Musk has said the acquisition is “on hold” owing to his concerns about the prevalence of spam bots on the social media platform, though Twitter officials are pressing forward with closing the deal.
No black clouds here. Oracle shares jumped 10% in midday trading Tuesday after the company bested its quarterly revenue guidance and beat analyst estimates, Barron’s reported. The software firm posted $11.8 billion in revenue for its fiscal fourth quarter, up 5% year over year, on the strength of strong gains in its cloud computing unit. Oracle officials said they expect cloud revenue growth to continue as the company takes aim at bigger rivals Amazon, Microsoft, and Google.
FOOD FOR THOUGHT
Sold on a shift. There’s not much job security in being an Amazon partner. The company is well-known for building its own logistics and product lines, cannibalizing its onetime contractors in the process. That same approach now extends to property. As Bloomberg reported Tuesday, the e-commerce giant, which used to rent warehouses from trusted developers, is increasingly moving its fast-growing real estate business in-house. Amazon has become a prominent purchaser of land across the country, building a sprawling network of delivery hubs. However, the move comes with some risk given the volatility of industrial real estate markets.
From the article:
Executives remain committed to securing land in the right locations to fulfill founder Jeff Bezos’ vision of making an online purchase as instantly gratifying as a trip to the store. If Amazon doesn’t keep marching closer to customers now, it could permanently surrender that proximity to retail competitors like Walmart Inc. that are just a short drive away.
“There’s going to be something on the other side of all of this investment for the consumer,” said John Blackledge, an analyst at Cowen and Company LLC. “People will buy more on Amazon when they see they can get it in five hours instead of in two days.”
IN CASE YOU MISSED IT
Cut off from Tinder and Grindr, Pakistani singles turn to Facebook, by Chris Morris
The Celsius meltdown is an old-fashioned bank run—except there’s no bank, by Gene Grant
Crypto firms are slashing jobs right and left. So why is Binance hiring? by Andrew Marquardt
SEC expands investigation into Donald Trump’s Truth Social, by Chris Morris
Africa is now the global leader in hydrogen energy, with even tiny Mauritania outproducing the U.S. Here’s why investors are so bullish, by Bernhard Warner
American businesses are coming home. Innovators in logistics will reap massive rewards, by Jake Medwell
BEFORE YOU GO
A priceless photo. Soon, you might not need to fork over any dough for one Adobe’s signature products. The Verge reported Tuesday that Adobe is offering a free, web-based version of Photoshop to users in Canada, a trial run that could expand into the U.S. Company officials said they ultimately envision free and premium versions of the iconic photo editing program, with basic tools remaining gratis and higher-tech features offered only to paying customers. An added bonus: Chromebook users would gain access to Photoshop for the first time. No word yet on when Americans might edit away for free.
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