Square, another payments company, bought $50 million worth of Bitcoin and changed its name to Block, in part to signify its work with blockchain technology. Tesla bought it for $1.5 billion. Venture capital firm Andreessen Horowitz has raised $4.5 billion for a fourth cryptocurrency-focused fund, doubling the previous one.
Excitement peaked last April when cryptocurrency exchange Coinbase went public with an $85 billion valuation. outdoor party for the industry. Bitcoin topped $60,000 for the first time.
Last summer, El Salvador announced that it would be the first country to classify bitcoin as legal tender along with the US dollar. The country’s president has updated his Twitter profile picture to include laser eyes, the calling card of bitcoin supporters. The value of El Salvador’s $105 million Bitcoin investment was cut in half as the price has dropped.
Senators and mayors across the United States have begun touting cryptocurrencies as the industry spent a lot on lobbying. New York City Mayor Eric Adams, who was elected in November, said he would receive his first three salaries in bitcoin. Senators Cynthia Lummis, Republican of Wyoming, and Kirsten Gillibrand, Democrat of New York, have proposed legislation that would create a regulatory framework for the industry by giving more power to the Commodity Futures Trading Commission, an agency openly courted by crypto companies.
In this frenzy, celebrities fueled the fear of missing out by posting their NFTs on talk shows and talking about blockchain projects on social media. Superbowl this year shown four announcements for crypto companies, including Matt Damon warning viewers that “fortune favors the brave”.
That swaggering optimism faltered this spring as the stock market plummeted, inflation soared, and layoffs hit the tech sector. Investors began to lose confidence in their crypto investments, moving money into less risky assets. Several high-profile projects have collapsed due to withdrawals of funds. TerraForm Labs, which created TerraUSD, a so-called stablecoin, and Celsius, an experimental crypto bank, both collapsed, wiping out billions of value and sending the broader market into a tailspin.