Roaring Kitty Returns, Gamestop Soars

The Breakdown First Five - Tuesday, May 14, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Coinbase Down 

Coinbase suffered a system-wide outage late last night. The cause is still under investigation, with Coinbase stating that customer funds are safe. Coinbase outages have typically been caused by a spike in traffic, but with tepid volume it seems questionable that would be the case. The last spate of outages in February happened during a raging uptrend, so many are taking this outage to be a bullish sign.

4. dYdX CEO Steps Away

Founder Antonio Juliano has stepped aside as dYdX CEO after seven years as head of the DeFi derivatives firm. He will take up a role as Chairman and President, handing the reins to former CSO Ivo Crnkovic-Rubsamen. Juliano said the move was well planned internally and that it was a relief to discover he “didn’t actually have to run his own company.” He dismissed concerns of regulatory pressure, stating that the firm has not received an SEC Wells notice. 

3. Senators Question Mixer Prosecution

Senators Lummis and Wyden have questioned the use of money transmitter laws to go after non-custodial crypto mixers. This charge was leveled against Samourai and Tornado Cash founders. The Senators argued that money transmission legislation requires control of funds and that the DOJ is stretching the law in applying it to non-custodial services. They called the prosecutions a “dangerous precedent that contradicts decades of settled law.”

2. Blocked Mining Facility

President Biden has signed an order forcing the divestment of a Chinese-owned Bitcoin mining facility in Wyoming. The facility was just one mile away from a nuclear armed strategic missile base. The Committee on Foreign Investment said Bitcoin mining operation used foreign-sourced equipment “potentially capable of facilitating surveillance and espionage activities.” The site has already been sold to Cleanspark in a deal that closed late last week. 

1. Memestocks are Back

Famous memestock trader Roaring Kitty has logged back in after a three year hiatus, sending Gamestop to the moon. GME spiked by more than 100% on yesterday’s open, being halted 9 times for volatility. The stock closed the day up 75% with reports that orders were being rejected on Robinhood, IBKR and several other brokerages. Sentiment has immediately shifted, with traders hopeful that the Wall Street Bets degens will flood markets once again.