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THE BIG SPLASH
The Bitcoin "moment?" 👀
It was almost fifteen years ago. It was October 31, 2008, and a person (a group?), whose identity is still unknown, published a nine-page document online.
This document, as you all know, is the Bitcoin white paper.
Beyond the title and technical specifications of the first of the cryptocurrencies, it is the message behind its launch that holds our attention today.
For the creators of Bitcoin, the bank bailout in 2008 and the massive injections of liquidity by the Fed 🇺🇸 that followed were the first step in a long flight to safety. According to Satoshi Nakamoto, this would inevitably lead to a dead end with uncontrollable inflation (hence the limited amount of Bitcoins) and no way to fight this price spike without causing a new financial crisis.
What has happened in the last few days, with the collapse of several US banks and the European contagion - Credit Suisse lost more than 20% yesterday 😱, speaks for itself in this regard.
To combat the rampant inflation of the last twelve months, the Fed, and also the ECB, raised rates sharply, which helped bring prices down, but also resulted in Silvergate, Silicon Valley Bank, and Signature Bank going down... Gregory explained the phenomenon very well in a thread here.
As a result, to prevent other institutions from being knocked down by the rate hike, the Fed could ease off sharply and thus let inflation go back up to the top.
A boon for bitcoin?
Watch the replay of the video interview with Denis Alexandre, former head of risk management at Société Générale.
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THE BIG NEWS
OUR EXCLUSIVE INFORMATION 🗣
👉 Yield products: the AMF's chilliness
Companies offering crypto yields are going to have to take their pain in patience to get registered in France. If not simply abandon their procedure.
According to our information, the Autorité des marchés financiers (AMF) would no longer look favorably on this type of product after the cascading losses of many platform clients in 2022 who were working stablecoins, including UST, in decentralized finance applications. The value of UST fell to zero in a few days.
"The regulator is currently considering whether this type of service should not rather be subject to the framework of traditional investment service providers rather than the one on digital assets," says the boss of a European start-up that has just withdrawn its application. 🧐
This regime is more restrictive because "we are obliged to work with accredited investors and this limits the market enormously," he continues.
Currently, several companies that have a registration as a provider of digital services are specialized in the performance of cryptos. Among them, Meria, CryptoSimple, Mon Livret C or Swissborg...
THE BIG REPORT
In Berlin, the crypto ecosystem is looking for a second wind
Considered one of the European cradles of crypto, the German capital has lost some ground in recent years. It is banking on its developer cluster and its "fintech" culture to come back to the forefront.
"Settle in, the drinks are here, it's going to start in a few minutes!"
No time to hang out this Friday afternoon on the third floor landing of Berlin's "Build Station". The building is swarming with people. After weeks of work, the participants of the hackathon organized by the Solana protocol teams will present their new products and innovations.
The atmosphere is festive. Between techno music and noise of bottle openers 🍻, the last start-uppers polish their presentation, until the intervention of "Chris", the master of clocks.
"Come on, it's over, let's go, let's get to the part you've all been waiting for, the pitches!"
Chris is the head of SuperTeam Deutschland, the Solana Ecosystem growth Initiative in Germany, supported by the Solana Foundation. "We have the best ecosystem," he says with a big smile.
About ten projects are scheduled to take place this snowy afternoon. There is everything: decentralized finance applications, collections of NFTs, (non-custodial) wallets, etc.
Each one has about ten minutes on stage, with a question and answer sequence.
The projects follow one another.
Apart from Daniel Kelleher's (pictured below) Sunrise Stake, which proposes a system in the ReFi, for "regenerative finance", related to the climate, the projects are not stunning.
You can feel it in the room.
"No other questions? Are you sure?", Chris tries on stage to try and keep the attention of the small crowd of 100 or so on hand. "Okkkk, I ask for a round of applause for Daniel." That will be some (big) applause.
As the presentations go on, the attention inexorably wanes, until the cocktail hour when everyone wakes up. 😅
"This kind of event is important, people are together, they see each other, they work, but nothing extraordinary ever comes out of it," admits Dan, a beer in hand. "That's kind of the problem," he adds.
This observation is made by other participants on site. "There's a lot of energy, it's great, but how many of these projects are really going to emerge," wonders Tilo, who is working on a collection of NFTs based on Solana. "Honestly? I don't think there will be many."
It's hard to prove him wrong, as some projects may seem like a gimmick...
An ecosystem in search of a solution
This mixed atmosphere, between euphoria and realism, is a bit like the Berlin ecosystem that The Big Whale discovered during several days (this is only a first trip).
As in most of the big European cities, there are a lot of initiatives, projects that are launched (there are more than 100 Web3 start-ups in Berlin alone), but there is a slight sense of disillusionment, and not because of the Bear Market that has plunged the markets.
To understand this feeling, which is not felt in Neuchâtel, Paris or London (read our report 👋), we have to go back a little bit and to what Berlin represented just a few years ago in crypto.
Because if some people have forgotten, the German capital is the birthplace of several unavoidable projects, such as Ethereum, which is now the second most important blockchain on the planet. A real pride for the local ecosystem.
"Berlin is a city that is a little bit apart in the crypto world. There's a different culture and history," says Barnabé Monnot, who works for the Ethereum Foundation and has been living in Berlin for nearly two years.
"The vast majority of people who work here are more developers than business specialists. We have less of that marketing culture," he adds. An understatement.
In Berlin, one should indeed not expect to see well-known crypto companies with well-identified figures. "Here, it's not like Paris where you have Ledger and Sorare who are stars," confirms Jonathan Nute, one of the co-founders of the investment fund W3Fund, which has invested in a dozen crypto projects (Pile, Senken, Spirals, etc.).
The ecosystem is less structured and more fragmented. "The dynamics come from the protocols, not the companies, so there are sort of chapels. You're in one community or another," says Jonathan Nute.
Part of the fully decentralized Ethereum Foundation team is based in Berlin. As of this writing, we still haven't been able to visit their office 😅. "It's a bit of a mess, and we like to work quietly, out of sight," a team member tells us.
According to legend, the Berlin offices still have the mattress that Vitalik Buterin, the co-founder of Ethereum, slept on for months in 2016... Quite a relic!
Ethereum is not the only protocol to have been developed in Berlin. This is also partly the case for Polkadot, Cosmos or Solana, which has large teams on site and organizes numerous events, such as the hackathon mentioned above, to try to get projects off the ground.
But which projects stand out in Berlin today?
"There aren't that many," says Paul Bramas, head of "ecosystem" at Kyve, a decentralized blockchain data storage solution. The Berlin-based company raised $9 million in 2022 and is among the projects to watch.
Most German Web3 companies, like Bison, are more focused on Munich, Cologne or Stuttgart where there is this business approach. "Frankfurt is the city where you find a lot of projects related to decentralized finance," explains Jonathan Nute.
Focus on Tech
In fact, Berlin's great strength lies in Tech.
It's no coincidence that the funds present there, such as Greenfield One, are betting heavily on it. "It's important to have applications in Web3, but you also have to create a solid foundation, and that goes through the protocols," explains a member of the fund, which has raised a $160 million vehicle in 2021 and has invested in the Near and 1Inch protocols.
Some people in Berlin believe that the center of gravity of the European ecosystem could gradually shift back to the German capital. At least in part.
"With the Bear market, there is less money and we are back to the fundamentals of the sector, i.e. protocols and technology, which is a strong point of Berlin," explains Paul Bramas.
"The projects without much interest are not financed," adds Jonathan Nute, who also counts on the arrival of several heavyweight players from the traditional economy to "bridge the gap" at the time when the markets will take off again.Berlin can thus count on the arrival of some heavyweight players in the Web3 ecosystem.
This is particularly true of N26 and Trade Republic. "Cryptocurrencies have become a must-have topic for our customers," says Thanasis Noulas, head of data and engineering at German investment app Trade Republic(find his interview below).
Enough to give it a second wind? That's what some people hope.
THE BIG FOCUS
Thanasis Noulas (Trade Republic): "Europe must not lose the lead it has in crypto"
A former Uber, Airbnb and Netflix employee, the head of technology at German investment app, Trade Republic, knows the U.S. well. We met him in Berlin. For him, financial innovation and the crypto industry are an asset for Europe.
The article is available on The Big Whale website 🐳