Square, another payment company, bought $50 million worth of Bitcoin and changed its name to Block, in part to denote its work with blockchain technology. Tesla bought $1.5 billion of it. Venture capital firm Andreessen Horowitz raised $4.5 billion for a fourth cryptocurrency-focused fund, doubling the previous one.
The excitement peaked in April last year when Coinbase, a cryptocurrency exchange, went public with a valuation of $85 billion, a coming-out party for the industry. Bitcoin reached $60,000 for the first time.
Last summer, El Salvador announced it would become the first country to classify Bitcoin as legal tender, alongside the US dollar. The country’s president has updated his Twitter profile picture with laser eyes, a calling card of Bitcoin believers. The value of El Salvador’s $105 million investment in Bitcoin has halved while its price has fallen.
Senators and mayors in the United States began touting cryptocurrency as the industry spent a lot of money on lobbying. New York City Mayor Eric Adams, who was elected in November, said he would take his first three paychecks in Bitcoin. Wyoming Republican Senators Cynthia Lummis and New York Democrat Kirsten Gillibrand have proposed legislation that would create a regulatory framework for the industry, giving the Commodity Futures Trading Commission, an agency that crypto firms have openly courted, more powers. would receive.
The frenzy has fueled the fear of missing out on celebrities, letting loose their NFTs on talk shows and chatting about blockchain projects on social media. This year’s Super Bowl featured four ads for crypto companies, including Matt Damon warning viewers that “luck favors the brave.”
That boastful optimism faltered this spring as the stock market plunged, inflation spiked and layoffs hit the tech sector. Investors began to lose confidence in their crypto investments and moved money into less risky assets. Several high-profile projects crashed amid shooting. TerraForm Labs, which created TerraUSD, a so-called stablecoin, and Celsius, an experimental crypto bank, both collapsed, wiping out billions in value and sending the broader market into a tailspin.
