Solana's Network Outage

Plus Microstrategy Slows Its Bitcoin Accumulation

Author

Nathaniel Whittemore
February 07, 2024

The Breakdown First Five - Wednesday, February 7, 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.

Solana's Network Outage

5. Dealers, Dealers Everywhere

The SEC has massively expanded the definition of securities dealer, assigning registration and reporting requirements on many non-traditional “de facto market-makers”. The main target was algorithmic trading firms and highly leveraged treasury traders, but DeFi looks set to be swept up as well. LPs who hold $50M in positions will be required to register with the SEC from next year. How should they register and report? SEC staff don’t really know.  

4. Yellen: Pass Appropriate Crypto Laws

Treasury Secretary Janet Yellen appeared at a Congressional hearing to discuss FSOC’s latest financial stability report, including a lengthy crypto section. She thinks Congress should pass “appropriate” stablecoin legislation, which involves assigning regulatory power to the Fed. She’s also in favor of market structure laws for “non security crypto assets”. Patrick Mc Henry accused FSOC of being “distracted by shiny partisan objects” and taking their eye off the ball. 

3. Monero Delisting

Binance is delisting Monero on February 20th. The privacy coin has been the subject of increasing government scrutiny, particularly from the EU. Monero dumped 30% on the news, but many suggested the crackdown confirmed that the token does its job, to the point it is getting attacked. The privacy coin will live on, trading across on-chain and OTC markets. 

2. Microstrategy Slows Down

Michael Saylor is back in the market, but his size is not size. Microstrategy acquired just $37.2M worth of Bitcoin in January, far smaller than the half a billion the company deployed in each of the past two months. Microstrategy raised $610M through stock sales in December and deployed around the same amount into Bitcoin. Their Q4 earnings disclosed just $46.8M in cash on hand. Doesn’t matter, Saylor has his stack of 190,000 loaded up, around 1% of all Bitcoin. 

1. Solana Stops

Solana had its first major outage in almost a year. The outage caused flashbacks to 2022, when Solana went down 8 times, once for several days. This time around the problem was patched within an hour and the blockchain took five hours to restart. Critics suggest that stability issues are non-negotiable. We’ll have to see if this is just a stumble or another wave of major problems as the network continues to scale.

Thanks for reading -NLW