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Observers Sunday Review 17/03/2024

This Sunday, Ireland and the world celebrate Saint Patrick’s Day. Dressed in green and wearing three-leaved shamrock plant accessories, thousands join parades celebrating the day Saint Patrick arrived in Ireland.

The festivity has long transcended its religious origins and is today much more a time to celebrate, drink good beer and have fun.

While most of us are raising a glass today, embodied by the jolly Irish spirit, there is somebody who certainly does not feel like joining the festivities.

Rather than drinking to celebrate, if Craig Wright drinks a pint today, it will most likely be to forget the three days of closing arguments in the UK court case between him and the Crypto Open Patent Alliance (COPA).

After receiving the news that COPA was looking to accuse him of perjury for his claim of being the creator of Bitcoin, which might lead to up to 7 years in jail, his dreams of becoming a world hero were crushed. Justice James Mellor concluded that “Dr. Wright is not the person who adopted or operated under the pseudonym “Satoshi Nakamoto”.

UK courts can now take a break from crypto-related cases, but the same doesn’t happen in the U.S. Following a complaint filed on Monday by Coinbase, the Court of Appeals must decide if the Securities and Exchange Commission broke the law by denying the crypto exchange’s petition for crypto rulemaking without proper explanation.

Also busy has been the U.S. Federal Bureau of Investigation (FBI), which published the 2023 Internet Crime Report. According to the government organization, crypto-related scams significantly increased last year, accounting for over 86% of overall losses to investment scams.

SEC’s counterpart in Hong Kong, the Securities and Futures Commission, is seeking to avoid the messy theatrics and to avoid more damage to the consumers; the country has added Bybit to its Alert List and let the public know that multiple crypto-related products offered by the crypto-exchange raise concerns.

If some countries are worried about protecting national investors, El Salvador is more focused on capturing international ones. The president of the first nation to make Bitcoin its official currency, Nayib Bukele, has announced a measure lowering the tax on unlimited international investments and money transfers from 30% straight to 0%.

On the other side of the globe, in Portugal, the future of crypto investors hangs in the balance after snap elections created a political mess that took the former crypto-friendly government out of power without exactly putting nobody there to replace them.

As governments have their hands full trying to figure out how to deal with cryptocurrencies, ecosystems are trying to cope with the increased governmental intromission in their affairs.

A proposal submitted to Arbitrum DAO to help fund the legal defence of Tornado Cash developers Roman Storm and Alexey Pertsev was withdrawn by its author as several token holders raised concerns about its potential legal risks.

The Arbitrum DAO has also been busy with other affairs. It is evaluating a proposal to raise $400 million to significantly bolster Web3 gaming development on the blockchain platform.

Arbitrum is betting on games, while Avalanche is going in the meme-coin direction. The Avalanche Foundation has announced its first investment in meme coins through its Culture Catalyst program. It will use part of its $100 million fund to buy community coins to make the Avalanche ecosystem more appealing.

After the incredible success of BRC-20 tokens within the Bitcoin ecosystem, the recently established Layer 1 Foundation has set forth governance resolutions and procedural standards for the development of BRC-20 and asked stakeholders to commit to these guiding principles publicly.

Of all the decentralized communities initiatives, none has, however, matched to achieve as much as the Ethereum one this week. The Ethereum network’s Dencun upgrade went live on Wednesday, introducing significant changes, including a noticeable reduction in transaction fees for Layer 2 rollups. Ethereum’s co-founder Vitalik Buterin has also made a post this week noting that the community is proactively addressing the challenges that quantum computing might pose to the blockchain’s security and is well-equipped to deal with them.

Non-fungible token collections on the second largest blockchain have been underperforming compared to NFTs from other ecosystems. Yuga Labs studio collections are failing to attract the same enthusiasm and funds from previous cycles.

Web3, however, might no longer need Yuga Labs to make the bridge with mainstream culture. Hollywood studios are increasingly investing in crypto-related productions. The long list of talents involved in creating big-screen stories of the dramas of the decentralized world features Pierre Morel, the director behind the classic action movie Taken, who is set to direct a feature film based on the NFT collection Reactor Motors.

Readyverse Studios also unveiled its debut project earlier this week, OPEN, a AAA battle royale metaverse game that channels the immersive world of the OASIS.

And like Web3 is becoming a part of pop culture, crypto is becoming more of a macro asset. Because of this, former critics of cryptocurrencies are voices starting to change their public opinions about them. Donald Trump, Larry Flink, and Peter Schiff are among the public figures and billionaire investors who have recently changed their minds about Bitcoin. Even Jamie Dimon, CEO of JP Morgan and long-time critic of Bitcoin, is softening his stance. He has recently stated that he accepts that people have the right to buy it even if he doesn’t personally understand it.

Given all the hype around crypto now and the change in public perceptions, Grayscale unveiled its plans to introduce a Bitcoin Mini Trust, aiming to attract investors who are drawn back by high fees.

Our Banking Roundup contrasted the approaches to CBDC in India, the EU and the U.S., inquired into China’s e-CNY developments and celebrated the completion of Canton Network’s first major pilot run.

And finally, we watched the MakerDAO continuing its Endgame in hibernated mode due to “bullish market sentiments” - something that no crypto project would be expected to complain about.

As the week comes to an end, it’s now time to put on our best green suits and get ready to celebrate Saint Patrick and Holy Bitcoin before a new week of ups and downs, surprises, and disappointments starts.