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Trying to figure out where bitcoin’s going to go in 2023? You’re probably better off asking a Magic 8 ball.

Bitcoin is down some 65% over the past year and the outlook for 2023 is … a mixed bag. 

Last week, Galaxy Digital’s Mike Novogratz dropped his very optimistic prediction that bitcoin will reach $500,000 in the next five years. Meanwhile, venture capitalist Tim Draper reaffirmed his call that it can hit $250,000 in the new year.

And then you have Standard Chartered, which foresees gold reclaiming the haven title from bitcoin, which the bank predicts will collapse to $5,000.

The forecasts come as bitcoin clings to close to $17,000, down from a record of more than $69,000 last year, and following the collapse of Terra Luna in the first half of 2o22 and more recent falls of FTX, BlockFi and more. What 2023 might have in store for the cryptocurrency is anyone’s guess.

VCs and CEOs have their say

Draper’s original prediction for bitcoin was that it would surpass $250,000 by the end of 2022; he revised his forecast last month to June. 

The collapse of FTX has done little to dissuade the prominent investor, known for early investments in the likes of Skype, Tesla, Coinbase and Robinhood, with Draper reconfirming to CNBC on Saturday that $250,000 is still his number. 

Mike Novogratz is a little less optimistic.While he dropped his prediction that bitcoin would reach $500,000 in the next five years, he’s still holding onto that number — just perhaps further out than 2027. Novogratz cited Federal Reserve Chair Jerome Powell as having the most significant impact on his plans, saying he had found his central banking superpowers. 

The CEO blamed the Federal Reserve’s multiple interest rate hikes to temper inflation for the fall in bitcoin prices.

And then we have Ark Invest’s Cathie Wood. She has even more faith in the power of bitcoin, adamant it will reach $1 million by 2030. Wood recently told Bloomberg TV that once the seasons change and bitcoin emerges from the crypto winter, it will smell like roses.

Bleak outlook

Standard Chartered is decidedly on the other side of the fence, seeing gold returning to being the number-one safe haven it once was. 

“Gold makes a staggering recovery in 2023, rallying 30% to over $2,250 [per] ounce as cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals,” the bank predicted.

The bank also predicts that yields will plunge along with technology shares, and while bitcoin’s sell-off will decelerate, the damage has been done. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto traders beware: the European Union may have a tax surprise in store.

A European Commission proposal for taxing crypto estimates that taxes on crypto assets could raise as much as €2.4 billion ($2.5 billion), a leaked draft obtained by The Block suggests. The proposal, which is scheduled for adoption in the Commission this week, claims to close the “regulatory gap” and remove tax evasion opportunities for crypto investors as well as ensure member states avoid a tax shortfall.

Crypto service providers in the EU will need to report to national tax authorities, according to the draft, which defines crypto assets as those “issued in a decentralized manner, as well as stablecoins, and certain non-fungible tokens.” For rules to apply, a crypto asset must be used as means of payment or investment, with possible exceptions for “a limited network and certain utility tokens.”

A spokesperson for the European Commission said they couldn’t confirm or deny any details in the document.

Defining the taxable event in crypto markets is likely to remain a challenge as negotiations on the proposal develop in the EU institutions. But by targeting service providers in the directive, authorities will have easier access to the necessary information from crypto users as the Commission looks to minimize the “administrative burden” for the industry. 

Directive not regulation 

As the proposal is a directive in contrast to a regulation — as is the case for matters of taxation in the EU — member states will have the freedom to decide how to implement the provisions. It also aligns with internationally recognized standards for reporting on crypto taxation as defined in the Organization for Economic Co-operation and Development report published in October.

An older version of the document obtained by The Block shows that the directive would have applied to both centralized and decentralized platforms. However the latest version removes this distinction, stating that the rules apply to regulated crypto-assets service providers.

This draft proposal sweeps crypto assets into the EU’s series of Directives on Administrative Co-operation, which outlines how member states need to report certain information for taxation purposes. Since direct taxation policy is not harmonized across the bloc, the tax reporting directives make sure that citizens don’t evade taxation in other countries.

The document indicates that the some rules would start applying as early as 2025, with most coming into force in 2026.

Benjamin Robertson contributed reporting for this story.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Brian Quintenz has been made head of policy at crypto and web3 venture firm a16z. The former Commodity Futures Trading Commission official joined the investment group last year as an advisor, the firm said in a statement.

Quintenz’s elevation to the role comes as U.S. lawmakers prepare fresh regulations to oversee the crypto industry. The CFTC is among agencies jostling for additional powers to police the sector after a spate of high-profile failures left investors in the U.S. and elsewhere nursing billions of dollars in losses.

The ex-CFTC Commissioner has been instrumental in helping a16z manage Washington’s policy landscape, the firm said. ”The last year has made it evident that more regulation is needed in certain areas of crypto and web3. The shape that legislation takes has yet to be determined, but it could have a massive effect on web3’s promise.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Decentralized exchange SushiSwap is discussing a new proposal to direct all of the fees paid to xSushi holders into its treasury wallet for a year to provide financing for its operations.

The proposal comes at a time when SushiSwap, under new management, is attempting to turn around its declining fortunes. New Head Chef Jared Grey is trying to make the project profitable again and increase its runway — which he said has been reduced to just 1.5 years.

“After reviewing expenditures, it’s clear that a significant deficit in the Treasury threatens Sushi’s operational viability, requiring an immediate remedy,” Grey said.

Grey argued that the team needs $5 million in order to sustain operations during the current bear market. He said SushiSwap needs “immediate action” to ensure adequate funding.

The idea is to take all of the funds generated by trading fees on the exchange. Those that stake the Sushi’s governance token sushi receive a token called xSushi, which gives them a reward fee from all trades on the platform. Currently, xSushi holders receive 0.05% of each swap, 10% of which is directed to the SushiSwap treasury wallet.

In the proposal, Grey recommended that SushiSwap should increase the treasury fee ratio from 10% to 100%, leaving no more token rewards for xSushi holders.

Matthew Lilley, core developer at SushiSwap, agreed with Grey’s proposal that this would be a temporary solution and said the current fee-sharing system will be restored after a year.

“The timeline is 12 months, if nothing has changed after 12 months it will default back to the original model. Hopefully it can be ended early if tokenomics revamp is concluded before,” Lilley said.

Backlash from the community

The proposal, if passed, could have far-reaching implications for investors. This reward fee paid to xSushi incentivizes community members to hold onto SUSHI tokens by providing an additional income on top of any appreciation in value they may experience. 

If the reward fee reserved for xSushi holders is taken away, it removes that revenue. The proposal has already sparked comments from community members, with some users expressing their anger at what they saw as an unjustifiable move. 

“Depriving xSushi holders of the fees they are entitled to is a breach of primary covenant before the community,” one community member responded to the proposal.

Adam Cochran, partner at Cinneamhain Ventures weighed in on the matter, saying the team should justify its performance metrics before asking for a $5 million runway. He described the latest proposal as akin to a “rug,” a term used to describe a situation when a crypto project takes funds from its users.

“The team should probably defend a $5m runway with poor key performance indicators [KPIs] before rugging holders,” Cochran said, referring to how the project’s actions may harm the interest of xSushi holders.

That being said, SushiSwap is hoping to turn its fortunes around with a planned proposal called Meiji, which sets out to create a new decentralized autonomous organization (DAO) that will be funded by protocol fees and governed with non-transferable voting shares. 

In addition to this, the DAO has proposed introducing Curve-style Vote Escrow (VE) tokenomics. That system would incentivize token holders to lock their assets for an extended period of time, as they will receive rewards for doing so. The idea is that, with these two components in place, the new DAO can become self-sustaining and benefit from more stable capitalization over the long term.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Strike, a payments platform built on Bitcoin’s Lightning network, enabled instant and low-cost payments to Nigeria, Kenya and Ghana for U.S. users through its “Send Globally” feature.

The new feature is powered by a partnership with African payments platform Bitnob, according to a press release. The crypto payments are instantly converted into naira, cedi or shillings and deposited into the recipient’s bank, mobile money or Bitnob account.

“High fees, slow settlement, and lack of innovation in cross-border payments have negatively impacted the developing world,” Strike founder and CEO Jack Mallers said. “With exorbitant fees to transfer funds in and out of Africa and incumbent providers halting services, payments companies are struggling to operate in Africa and people cannot send money home to their family members. Strike offers an opportunity for people to transfer their US dollars easily and instantly across borders.”

Strike is looking to further its African efforts by exploring integrations and partnerships. Specifically, it is looking at working with African peer-to-peer and cross-border payment service provider Chipper Cash.

The Lightning-focused Bitcoin payments firm raised $80 million in a Series B funding round in September.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The UK government is expected to announce new rules governing the sale and marketing of crypto assets.

Regulators will have more power to police the sector, including a clampdown on crypto-related advertisements by companies based outside the UK, the Financial Times reported on Monday.  The Financial Conduct Authority will also monitor how crypto companies operate.

The proposed powers will be added to a piece of legislation that is already before parliament. The Financial Services and Markets Bill is designed to shape the UK’s financial sector post-Brexit and includes sections defining stablecoins and crypto assets.

Crypto industry leaders have long called for a more-comprehensive framework in the UK, similar to the European Union’s Markets in Crypto-assets (MiCA) law or some of the various plans being discussed in the United States. Instead, the UK prefers a piecemeal approach of incremental changes, which has frustrated some.

Asked last month how an FTX-style collapse could be avoided, Ian Taylor, executive director of industry association CryptoUK, told British lawmakers the country’s failure to design a proper regulatory framework for crypto trading venues and service providers hadn’t helped.

”We need to put in place clear guard rails for these kinds of centralized actors and this is what founding members of CryptoUK came to this select committee in 2018 and asked for,” he said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bankrupt crypto lender Celsius received court approval to extend its exclusivity period — the time when it maintains the exclusive right to submit a Chapter 11 reorganization plan — to Feb. 15.

“We intend to use this time to continue developing a plan for a stand-alone business, as we explore all value maximizing opportunities available to us, for the benefit of our customers and other stakeholders,” Celsius tweeted.

The extension comes after two court hearings, according to tweets from Celsius, during which a motion requesting approval for a stablecoin sale aimed at providing operational liquidity was also discussed. The judge’s decision on the matter, which aims to “maximize value for all stakeholders,” is expected next week, according to the crypto lender.

Celsius originally filed a motion requesting approval for the exclusivity period’s extension in the first half of November, during which time the crypto lender claimed it was “making substantial progress towards the determination of a value-maximizing path forward.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

In December 2021, before the crypto winter set in, Animoca Brands and Binance Smart Chain (now known as BNB Chain) trumpeted a new $200 million investment program for crypto gaming startups. One year on, precious few investments seem to have been made.

Data provided by Dealroom show that Animoca, a web3 gaming and software giant, and Binance Labs, the crypto exchange’s investment arm, have participated together in the same funding round just three times since the program — which aims to incubate games built on BNB Chain — was unveiled. Even those deals do not appear to have come through the joint funding initiative.

The recipients in question were crypto gaming startups Heroes of Mavia, Community Gaming and Tatsumeeko, which raised $5.5 million, $16 million and $7.5 million, respectively, between January and June this year. A person with direct knowledge of the matter said that none of those rounds came through the co-investment program. That makes sense, given that Heroes of Mavia is built on Ethereum, Tatsumeeko on Ethereum and Solana, and Community Gaming is not a game at all, but a platform offering e-sports infrastructure.

Few takers

When asked about the program’s progress, a spokesperson for Animoca highlighted half a dozen more “joint investments” made by Animoca and Binance — in BlinkMoon, CryptoSlam, Avocado Guild, GuildFi, Gamee and LiveArtX — but with a few possible exceptions these, too, do not appear to be part of the $200 million program. Gaming guilds Avocado Guild and GuildFi both raised money before the program’s launch; CryptoSlam is an NFT data aggregator, not a developer building on BNB Chain; LiveArtX is a digital art trading and discovery site; while Gamee was acquired by Animoca in 2020, and only took strategic funding from Binance Labs in February this year. Gaming studio BlinkMoon alone may fit the program’s criteria. 

While the so-called crypto winter is one potential cause of the program’s slow start, another is that the crypto gaming sector is still in its infancy. 

Gwendolyn Regina, investment director at BNB Chain, told The Block that web3 gaming remains “a fairly nascent space” despite the relative success of games like Axie Infinity and The Sandbox. “Without a solid infrastructure and set of tools, we cannot build great gamefi projects,” she added. The co-investment program appears to have adjusted accordingly. 

“The fund started with a mission but we allowed it to extend into other areas, such as guilds that we considered supportive of the gaming ecosystem, since it made sense. We have made investments and continue to collaborate, so it should come as no surprise that, given the events of 2022, investments may be slower than expected,” Regina said.

Animoca and BNB Chain have worked together, she said, by “frequently co-sharing insights, dealflow, opportunities for partnerships across both ecosystems,” but added that she “cannot reveal the full extent of our partnership.”

One other notable collaboration by Binance and Animoca was the $150 million fundraise by Axie Infinity creator Sky Mavis in April, days after it lost $540 million to a crippling hack. But The Block later revealed that Binance had substantially scaled back the size of its investment in that round — one that wouldn’t have fit the co-investment program’s criteria anyway.

‘Crypto’s mass adoption’

When it was announced, BNB Chain’s Regina said in a blog post that gaming’s “large-scale real life use case makes it one of the core focus areas for crypto’s mass adoption to onboard retail consumers into the Web 3.0 world.” 

The program was part of $1 billion growth initiative by BNB Chain, with $100 million from that pot set aside for co-investments with Animoca, which also set aside $100 million.

Animoca Brands is perhaps the world’s most active crypto gaming investor. Its hundreds of bets include The Sandbox, Dapper Labs and Star Atlas. Although its collaboration with Binance has stalled, Animoca has been anything but inactive. The Hong Kong-based company made over 60 investments in the first half of this year. As of September, it had made a grand total of 340 investments, according to The Block Research.

Last week, Animoca’s founder Yat Siu said the company is planning to launch a new fund of up to $2 billion in size to invest in mid- to late-stage metaverse companies.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Financial giant Goldman Sachs plans to spend “tens of millions of dollars” to buy or invest in crypto firms whose valuations have been hit by the demise of crypto exchange FTX.

The bank is doing due diligence on several different crypto firms, according to a report from Reuters. “We do see some really interesting opportunities, priced much more sensibly,” Mathew McDermott, Goldman Sachs’ head of digital assets, said.

Goldman Sachs is currently an investor in several crypto firms, including CertiK, TRM Labs, Elwood Technologies and Coin Metrics. Earlier this year, the investment bank re-established a cryptocurrency trading desk amid increased interest from institutional clients. More than 70 people are currently working for Goldman’s digital assets team, and the bank is also building its own private distributed ledger technology, according to McDermott.

Goldman sees an opportunity in the FTX crisis. McDermott said the crypto exchange’s implosion “definitely set the market back in terms of sentiment,” as “FTX was a poster child in many parts of the ecosystem.” Nevertheless, McDermott believes “the underlying technology continues to perform.”

FTX filed for chapter 11 bankruptcy protection on Nov. 11 following a liquidity crunch. The crypto exchange reportedly tapped customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting up its demise.

The FTX collapse increased Goldman Sachs’ trading volumes as investors sought to flock to regulated and well-capitalized players. “What’s increased is the number of financial institutions wanting to trade with us,” McDermott said. “I suspect a number of them traded with FTX, but I can’t say that with cast iron certainty.”

Goldman Sachs did not immediately respond to The Block’s request for comment.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Gemini formed an ad hoc committee with other creditors to coordinate and advocate for a resolution to the crypto exchange’s struggling Earn product — which paused customer redemptions on Nov. 16.

The update comes from Gemini’s co-founder Cameron Winklevoss, who tweeted that law firm Kirkland & Ellis “has been engaged as counsel by the Creditor Committee to advocate on its behalf.”

Winklevoss also claimed that returning user funds “is our highest priority and we are operating with the utmost urgency.”

The tweets follow news from earlier this month that crypto brokerage Genesis and its parent company, Digital Currency Group, owe $900 million to Gemini customers, according to the Financial Times. Gemini is reportedly attempting to recover the funds.

According to a CoinDesk report on Sunday, Genesis owes its creditors at least $1.8 billion.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.