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Monthly Wrap-Up — May

Memecoin frenzy, a new era for Bitcoin, GPT-powered Bing, and more

May saw some big ups and downs in the crypto world. This month saw the rise of Bitcoin “wholecoiners” and the first time a presidential candidate accepted Bitcoin donations. From a numbers perspective, the total market capitalization of the industry dipped from $1.22 trillion to $1.15 trillion: a loss of around 5%.

Here’s a roundup of the most significant stories.

Microsoft Offers Free Access to GPT-4

Microsoft announced a number of new AI-powered features for its Bing chatbot and Edge web browser, including full access to GPT-4, which uses the same underlying engine that powers the ChatGPT Plus subscription service. The new features won’t require any purchases or subscriptions, though users will need a free Microsoft account to take advantage of the chatbot’s full suite.

The Bitcoin Ordinals Debate

Bitcoin Ordinals — Bitcoin-based NFTs that can be used to inscribe digital content onto the BTC blockchain —  continue to inspire debate among the Bitcoin community. Critics cite slow speeds and rising transaction costs as flaws, while supporters claim that the ordinals provide more opportunity, improve decentralization, and ensure freedom of expression.

FTX’s Acquisition Woes

FTX is seeking to wrench back more than $240 million from insiders and executives that benefited from its “wildly inflated” acquisition of stock-clearing platform Embed. As a result, the firm’s due diligence processes have once again come into the spotlight, with disproportionate payouts to Embed shareholders being the main point of contention.

A New Era for Bitcoin?

“Hyperbitcoinization” is on the horizon, according to Bitcoin OG Adam Back. The number of Bitcoin “wholecoiners” has crossed a major threshold, with over 1 million addresses holding at least 1 BTC. This trend could potentially make Bitcoin unattainable for many, leading to the replacement of established financial institutions with a public-driven system.

$BTC for Campaign Donations

Robert F. Kennedy Jr. made history by becoming the first presidential candidate in the United States to accept campaign donations in Bitcoin. He praised the cryptocurrency as a “symbol of democracy and freedom” during his announcement at the Bitcoin 2023 conference.

The Milady Memecoin Surge

The Milady meme-coin surged by over 5,250% after Elon Musk tweeted a meme using Milady NFT  imagery. The tweet also boosted the collection’s average sale price.

Voyager’s Bankruptcy Plan

Voyager proposed a bankruptcy plan that was approved, and its customers can now expect to receive 35.72% of their claims at first. The company had $1.33 billion in assets as of May 8, with $629.8 million more available for initial recovery.

Memecoin Frenzy Raises $BTC Transaction Costs

The ongoing trading frenzy of meme-coins like Pepe has triggered an unanticipated consequence for Bitcoin, raising its transaction costs to their highest point in two years. On May 3, the total amount of fees paid on the Bitcoin blockchain reached $3.5 million, jumping about 400% since late April.

AI Pioneer Offers Warning

Artificial intelligence pioneer and former Google employee Dr. Geoffrey Hinton shared his concerns about AI. He warned of the potential threat AI could pose to humanity in the future as it learns unexpected behaviors from the massive amounts of data it analyzes.

Florida’s CBDC Restrictions

Florida Governor Ron DeSantis signed a bill restricting the use of central bank digital currencies (CBDCs) in the state. The law prohibits the use of a United States federal CBDC “as money within Florida’s Uniform Commercial Code” and bans the use of CBDCs issued by foreign governments.

Coinbase’s Pepe Controversy

Coinbase faced backlash after describing the Pepe the Frog meme as a “hate symbol” co-opted by alt-right groups. The email sent to customers sparked outrage from online communities, leading to calls to boycott the exchange.

The Million-Dollar Bitcoin Bet

A wild Bitcoin price wager between former Coinbase Chief of Technology Officer Balaji Srinivasan and Twitter user James Medlock has been settled 45 days ahead of schedule for $1.5 million. Medlock offered a $1 million bet to anyone that the United States would not experience hyperinflation on March 17.

Srinivasan accepted the bet, predicting the U.S. dollar would deflate due to inflation and, as a result, BTC would reach $1 million within 90 days. In the settlement, Medlock netted $500,000, while another $1 million went to two organizations.

Coin Cafe’s Fee Fiasco

Coin Cafe has been ordered to repay $4.3 million to its users after allegedly charging “exorbitant and undisclosed fees” for storing Bitcoin on the platform. Some accounts were drained entirely of their funds due to these fees.

Glassnode Publishes Insights on Bitcoin Miner Earnings

Bitcoin miners have earned $50B from BTC block rewards and fees since 2010. Calculations from on-chain analytics firm Glassnode suggest that the total all-time income was almost 40% higher than their estimates.

Digital Currency Group’s Subsidiary Shutdown

Digital Currency Group is closing its prime brokerage subsidiary TradeBlock, citing the state of the broader economy and an uncertain regulatory environment for crypto in the United States. TradeBlock, led by Breanne Madigan, will officially begin the process of shutting down on May 31.

Visa, Microsoft, More Join Brazilian CBDC Pilot

Visa, Microsoft, and others have joined the Brazilian CBDC pilot project. The central bank will begin adding participants to the digital platform in June 2023. The final list of participants also includes Brazil-based bank Banco Inter and digital technology company 7COMm.

WDZD Swap Exploited for $1.1M

Decentralized finance protocol WDZD Swap fell victim to an exploit on May 19, resulting in a loss of $1.1 million worth of Binance-Pegged Ether. The exploit was reported by blockchain security firm CertiK.

The attacker conducted nine malicious transactions, draining 609 Binance-Pegged ETH from a contract associated with the WDZD project. WDZD Swap, which operates on the Binance Smart Chain, is a DeFi project that allows users to farm a token called “WDZD” in exchange for staking ETH.