BlackRock Bitcoin ETF seeks SEC approval.Are Bitcoin ETFs the way to mass adoption? Or is traditional finance trying to profit from this new asset?
Bitcoin fans got excited when the news that BlackRock is applying for a Bitcoin-based fund got out. They think it could mean a big change in how the government regulates these things. They also believe it could make Bitcoin more accessible to everyone.
While there might be some truth to these ideas, we should take a step back and see the bigger picture. It’s not good that the simple chance of a Bitcoin-based fund being approved in the US can send the market crazy. The fact that BlackRock could have such a big effect on the price of Bitcoin should make us all think, not celebrate.
A Bitcoin-based fund would be an easy way for US retirement funds to benefit from Bitcoin’s potential growth. It’s also likely that if such a fund is approved in the US, it could lead to a big increase in Bitcoin’s price in the following years. But what about Bitcoin’s main goal – to become an alternative to the traditional financial system?
A Bitcoin-based fund wouldn’t do much to help with these things.
The BlackRock Bitcoin ETF
Recently, there’s been a lot of focus on applications for Bitcoin-based funds. Following BlackRock, a company that manages $10 trillion worth of assets, other firms like Fidelity, Invesco, Wisdom Tree, and Valkyrie have also applied for approval from the SEC.
If the SEC ends up approving the applications from big players like JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon, and Bank of America who want to offer similar services, the digital currency market could open up to firms managing a total of $27 trillion in assets. As we wait for a decision on Grayscale’s application, GBTC, its Bitcoin trust, has seen its price increase by over 134% in 2023, reaching $19.47.
However, the United States may see a delay in the introduction of a Bitcoin exchange-traded fund (ETF) as the SEC has labeled recent applications by investment managers as insufficient.
According to The Wall Street Journal, the SEC found the filings by the Nasdaq and Chicago Board Options Exchange unclear and incomplete. The SEC expected them to specify a “surveillance-sharing agreement” with a Bitcoin exchange or provide enough details about these arrangements.
BlackRock’s Bitcoin ETF application included a “surveillance sharing agreement” to avoid market manipulation, leading others like ARK Invest and 21Shares to modify their applications similarly.
Other companies like Invesco, WisdomTree, Valkyrie, and Fidelity have also refiled or amended their applications. Notably, ARK Invest is considered a front-runner in this process.
Bitcoin ETFs have been continuously rejected by the SEC since 2017. However, such financial products are already available in Canada, with funds like Purpose Bitcoin, 3iQ CoinShares, and CI Galaxy Bitcoin directly investing in Bitcoin.
BlackRock ETF’s application re-submitted
Nasdaq has resubmitted its application to list BlackRock’s proposed Bitcoin ETF, and has named Coinbase as the exchange to be monitored under a surveillance-sharing agreement.
This move follows feedback from U.S. regulators and aims to prevent market manipulation.
Other applications, including one from Fidelity, have also been updated to name Coinbase as the surveillance partner.
The Nasdaq reached an agreement with Coinbase on June 8, according to the new filing. The filing also indicates that Coinbase accounted for about 56% of the dollar-to-Bitcoin trading on U.S.-based platforms so far this year.
The SEC has historically rejected attempts to launch a Bitcoin spot ETF, but money managers are still trying. The news has positively affected Coinbase shares.
Traditional finance wants to take its share of crypto trading
The application from BlackRock and all the talk around it have really highlighted the mistrust that some people in the crypto world have toward traditional finance.
The timing of BlackRock’s move into Bitcoin funds is pretty interesting and has set off a bunch of conspiracy theories. Since the US Securities and Exchange Commission (SEC) has taken legal action against Binance and Coinbase, some think the government is trying to push aside crypto-focused companies to make way for traditional firms like BlackRock to lead in the crypto industry.
Whatever the reason is, the risk right now is that Bitcoin will turn into another type of investment.
These are the key dates and timeline for the BlackRock Spot Bitcoin ETF
Looking more closely at BlackRock’s application, more warning signs start to appear. The application includes a clause stating that in case of a major change or ‘hard fork’ in Bitcoin, BlackRock can decide which version of Bitcoin the fund should use. This could be a big deal because it means BlackRock could have a say in Bitcoin’s future or at least guide where big businesses and the general public put their money.
Having such a strong influence over what’s supposed to be a decentralized money system is obviously a problem. But, there’s another issue with these funds. Investors don’t actually get to own the Bitcoin their investment is based on. And owning Bitcoin is where the real benefits are.
Conflicting interests in Bitcoin-based funds
Bitcoin was created as a direct reaction to the financial aid and money-printing that happened after the 2008 financial crisis. Unlike regular money, there’s only a limited amount of Bitcoin. It’s truly rare and managed in a decentralized way.
Fifteen years after the crisis, central banks all over the world are still printing money as if it’s a free pass.
But it’s anything but free. Regular, hardworking people all over the world pay the price as the value of their money goes down, a problem that’s getting worse due to high, lasting inflation.
While central banks take risky gambles with public money, Bitcoin’s aim is to give power to individuals by providing a type of money that can’t be censored and works everywhere. As an open-source money network, Bitcoin has the potential to change the way we use money. It could even make centralized institutions much less important or not needed at all – something traditional finance likely knows all too well.
Bitcoin-based funds seem to go against this empowering philosophy.
El Salvador, with its revolutionary approach to adopting Bitcoin, arguably aligns more with Bitcoin’s main goals than any fund ever could.
While El Salvador is working to give power to people without banks by actively promoting Bitcoin ownership, investors in Bitcoin-based funds won’t get any of the benefits of Bitcoin.
Instead, they’ll fill the pockets of – and strengthen the position of – traditional finance institutions.
Potential risks of Bitcoin-based funds
Bitcoin-based funds are likely to become more common in the crypto world and appeal to a certain type of investor in the coming years. But their role shouldn’t distract us from Bitcoin’s long-term future.
If we only focus on letting people benefit from price changes without actually owning any Bitcoin, then we’ve completely missed the point of what could be a groundbreaking money system.
And no, if a rule is ever suggested that forces regular people to invest only through funds and not by owning Bitcoin directly, that’s not “protecting consumers.” It’s taking power away from them.
We in the crypto industry should be cautious, recognizing that the growing involvement of funds and traditional finance in the crypto world could threaten Bitcoin’s core purpose.
Being aware of these threats means not getting carried away by all the excitement but staying true to Bitcoin’s original goal – to change the world’s financial systems, not just to be an asset for gambling on price changes.
Navigating the dynamic landscape of the crypto industry, we explore the crucial role of security, education, and regulation in mitigating escalating crypto scams. How can these new-age digital assets, despite their rapid evolution and growth, can be protected from the increasing threats posed by bad actors?
The amount of money stolen by criminals in the cryptocurrency world has gone up a lot in the past two years. Even so, people who specialize in online security aren’t worried. They say that new technology often gets taken advantage of when it’s first introduced.
CertiK, the blockchain security company, published a report about online security in 2022. According to the report, wrongdoers stole more than $3.7 billion from Web3 technologies last year. This was a huge jump – 189% more than the $1.8 billion stolen in 2021.
In another report about the first three months of 2023, CertiK said that hackers got their hands on over $320 million.
You can also watch the key findings in the 2022 Certik report on their YouTube channel: https://youtu.be/lWZscaMAR0s
While this is worrying tech developers and investors, it’s also a normal phenomenon. The more projects and technologies are launched, the more there will be people who will search for ways to misuse that technology. This is because new stuff often has weaknesses and opportunities for misuse.
We’ve seen this pattern before, from the beginning of the internet to the spread of email and, most recently, with the introduction of blockchain and digital money.
At the same time, we need to remember that the crypto industry is still new. Some people in the industry are more interested in growing and creating new things than they are in making sure everything is secure. This could be why we’re seeing so many thefts.
Statista, a company that collects data, offers data that may anticipate more growth in the crypto industry. According to their report, the cryptocurrency market is projected to reach US$37.87 bn in 2023. The number of cryptocurrency users is expected to reach 994.30 million by 2027.
Why are there so many scams in crypto?
The fast growth in the number of users and earnings in the crypto industry, along with its new ideas, may lead to more misuse. In the end, we must remember that blockchain technology and smart contracts, which is the infrastructure for digital currencies, are very complicated.
This complexity can lead to weak security spots that talented hackers can misuse. Because digital currencies have real value and can be exchanged for fiat money in many parts of the world, they’re tempting for hackers who can quickly take and possibly cash in the stolen digital money.
In the future, the crypto world will become more secure, and as Web3 gets more mature, there will be fewer successful hacks, misuses, and scams.
However, there will always be a never-ending fight between the wrongdoers and the blockchain security experts, as they both work towards their goals in this constantly changing industry.
But industry leaders see it as a wake-up call for us to double our efforts to secure our funds. And for the financial authorities to oversee these game-changing technologies and make it possible for everyday users to access them safely and responsibly.
Artificial Intelligence – is it secure?
Artificial intelligence (AI) has been a hot topic recently. Some people are talking about how it might change the way we work, while others, like tech entrepreneur Elon Musk, are saying we should be careful about how it’s developed.
We will probably see AI gets used more and more, and it’ll probably face its own security problems, just like Web3 and other new types of technology.
As AI becomes a bigger part of our everyday lives, especially in areas where security is important, like self-driving cars or financial systems, the chance for hacks, misuse, and scams will likely go up.
AI systems can be taken advantage of in several ways, from messing with machine learning algorithms to data tampering and hostile attacks.
Sensitive data can also be accidentally shared from large language models as people interact and share info with AI chat platforms like ChatGPT.
However, as long as there is no immediate money-making opportunity with AI, scammers will probably not start using AI just yet.
But AI can certainly aid any researcher in doing their job, whatever that may be. For instance, AI capabilities may allow for a more advanced set of attack methods. Machine learning can be used by security researchers to check smart contracts to find weak spots more efficiently,
The pain points of the crypto industry
The cryptocurrency industry, being relatively new, is experiencing a number of pain points.
These include:
Rapid Evolution. The speed at which the industry evolves makes it challenging for security measures and best practices to keep up, leading to vulnerabilities.
User Knowledge. Users are still learning how to use crypto technologies safely, making them easy targets for exploitation.
Smart Contracts. Their open and visible nature means that if a contract has a flaw, it can be exploited by anyone, at any time.
Decentralization. Unlike traditional systems that can add extra layers of security through centralized servers, the decentralized nature of blockchain technologies can expose them to more threats.
However, the industry is continually improving its security practices, with some decentralized finance (DeFi) platforms implementing additional measures such as multi-signature wallets and time locks.
In addition, there’s an increased focus on regulatory scrutiny and user education to reduce future scams and hacks.
Crypto scams get more attention than traditional thefts
But crypto scams represent only a fraction of the total financial scams. The traditional money system continues to set records for losses through malicious actions each year.
Crypto is often highlighted in the news for theft and fraud, but the total losses are actually much less than fraud involving credit cards, automated clearing house transactions, and wire transfers worldwide.
Source: Global Anti-Scam Alliance
According to the Global Anti Scam Alliance, a nonprofit group dedicated to protecting consumers from financial crime and scams, traditional money lost to scams has been increasing, with $47.8 billion lost in 2020 and $55.3 billion in 2021.
The United Nations estimates that globally, the amount of money laundered around the world in a year is guessed to be 2 – 5% of global GDP, which is about $800 billion – $2 trillion in today’s US dollars. However, since money laundering is done in secret, it’s hard to figure out the total amount of money that’s actually laundered.
What draws so much attention to crypto scams is the very thing that attracted investors in the first place – its transparency.
Crypto transactions happen on the blockchain and are visible to everyone. This transparency can help track stolen funds and may explain why losses in crypto get more attention.
When a major theft occurs, everyone around the world can help track the funds to see exactly where they go. This isn’t possible in traditional financial systems where fund movements happen behind closed doors on private networks.
As more people around the world start using crypto, total losses will probably increase accordingly. However, better education and understanding of cryptocurrencies will ensure this increase isn’t disproportionate to other payment methods.
Are you planning on buying a car with Bitcoin? Cryptocurrency is now used to buy real-world assets such as cars and even real estate. While this payment method isn’t accepted worldwide, more and more services are starting to consider it. And car dealerships are no exception.
In 2021, Tesla’s CEO, Elon Musk, announced that it would accept Dogecoin as payment for Tesla. Meanwhile, the offer is no longer standing, but that doesn’t mean you can’t use Bitcoin to buy a car in 2023.
Is it legal to buy a car with Bitcoin?
Yes, it is indeed legal to purchase a car using Bitcoin. You can also use other popular cryptocurrencies, such as Dogecoin and Shiba Inu. However, similar to any other online transaction, it is important to exercise caution and adopt certain safe practices.
The first thing you need is to find a reputable car dealership that accepts Bitcoin as a payment method.
You can do this by checking out reviews on third-party consumer forums to discover the best places to purchase cars with cryptocurrencies. Platforms such as Crypto Emporium and BitCars have supported crypto payments for some years now and have excellent reputations in the market.
One of the advantages of using cryptocurrencies like Bitcoin for transactions is that they are generally secure. This means that you do not need to disclose any personal financial information, as transactions take place directly between two digital wallets. This method of payment contributes to your safety and security during the transaction.
While there is no car manufacturer that accepts cryptocurrency throughout their distribution network as a whole, there are specific car dealerships that have implemented cryptocurrency payment services to serve customers who wish to complete their purchases using digital assets.
In the end, it’s up to you to find a platform that allows crypto payments for products such as cars. Some of the most popular options for such purchases include:
One of the most popular payment services is BitPay, which is already used by some Lamborghini and BMW dealerships thought Europe, the UK and the USA.
Finding out if a car dealership accepts Bitcoin or other cryptocurrencies is simple. The quickest way is to call local dealerships and ask. Salespeople might need to check with management, but they should give you an answer soon.
You can also look at car dealership websites to see if they accept Bitcoin. However, these sites mainly focus on selling cars and might not clearly mention payment methods, so it could be a bit frustrating unless the dealership prominently displays this option.
How to buy a car with Bitcoin (or any other cryptocurrency)
Buying a car with cryptocurrency can be done from a dealer that accepts it or from a private seller who is comfortable with crypto. Usually, dealing with a dealer is easier. Here’s a simplified plan:
Find out which dealerships accept cryptocurrency.
Research different cryptocurrency exchange apps and learn how they work. The dealer might prefer a certain app like BitPay. Depending on the payment processor, you might need to set up an account.
Confirm that the dealer accepts the cryptocurrency you own. Bitcoin is one of the most commonly accepted.
Choose the car you want to buy.
Follow the dealership’s instructions for the exchange.
What’s the advantage of buying a car with Bitcoin?
There are several reasons why some crypto investors prefer to use Bitcoin to buy a car:
Fast Payments. Bitcoin transactions are usually faster than traditional fiat payments. Traditional payments rely on bank transfers or credit/debit cards, which require multiple intermediaries for processing. In contrast, Bitcoin transactions are decentralised and don’t involve intermediaries, allowing for quicker transactions that often take only a few minutes.
Highly Secure Payments. Bitcoin transactions use advanced encryption techniques, making them highly secure. They are recorded on a public ledger called the blockchain, which is virtually impossible to counterfeit or alter. Once a transaction is recorded on the blockchain, it can’t be amended or deleted. This immutability makes all transactions permanent and tamper-proof, hindering anyone from manipulating network records.
Lower Transaction Fees.Bitcoin transactions typically have lower fees than traditional payment methods such as credit cards or wire transfers. This advantage becomes especially significant for international transactions, where traditional remittance fees can be high. Crypto transactions could potentially eliminate 97% of these fees, making large, cross-border transfers more cost-effective.
No Transaction Limits. When purchasing a car with Bitcoin, you don’t need to worry about transaction limits. This is important when making big purchases like cars. Credit card companies and banks may decline a purchase exceeding a certain amount, but cryptocurrencies have no such limitations. This ensures that the transaction proceeds without any delays.
Should you buy a car with Bitcoin?
Whether or not you should buy a car using Bitcoin greatly depends on your comfort level with risk and volatility.
Cryptocurrencies, including Bitcoin, are known for their dramatic price swings.
Take, for example, Bitcoin’s performance in November 2021, when it reached a high of nearly $69,000. At that point, you could have purchased a new Porsche 718 Cayman with just one Bitcoin. Fast forward to the present, Bitcoin’s value is around $17,000, so the same Bitcoin would only be enough to buy an average city car.
The value of cars doesn’t fluctuate as significantly as cryptocurrencies, which makes this kind of transaction risky. However, a workaround for this volatility could be to use stablecoins, which are cryptocurrencies designed to maintain a stable value relative to a specific asset or a pool of assets. A good example is the USDC or USDT, which you can store in a crypto wallet and use for car payments, thus mitigating the risk of your crypto’s value suddenly dropping.
That being said, if you are a firm believer in the future of cryptocurrencies and their potential to revolutionise our financial system, buying a car with Bitcoin could be an exciting way to apply this innovative technology. Plus, there is a certain novelty factor in being able to tell your friends that you bought a car using Bitcoin.
Ultimately, the decision to buy a car with Bitcoin should be based on your personal financial situation, your tolerance for risk, and your belief in the future of cryptocurrencies.
After recently suing Binance, the SEC now targets Coinbase for allegedly operating as an unregistered securities exchange, adding to regulatory scrutiny in the crypto industry.
The U.S. government’s finance watchdog, the Securities and Exchange Commission (SEC), is suing Coinbase. Coinbase is a big company in New York that trades cryptocurrencies like Bitcoin.
The SEC says that Coinbase should have registered as a broker, national securities exchange, or clearing agency, but they didn’t.
This registration helps keep trading fair and transparent.
Also, the SEC claims that Coinbase has been selling certain cryptocurrencies that it shouldn’t have. These include Solana, Cardano, Polygon, Filecoin, The Sandbox, Axie Infinity, Chiliz, Flow, Internet Computer, Near, Voyager Token, Dash, and Nexo. According to the SEC, these count as securities, and you need special permission to sell them.
Today we charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency and for failing to register the offer and sale of its crypto asset staking-as-a-service program.https://t.co/XPG2gDkxtVpic.twitter.com/hCdVMw8B2v
— U.S. Securities and Exchange Commission (@SECGov) June 6, 2023
The lawsuit also says that Coinbase has been working like a broker for securities since 2019 without the needed registration. This is two years before they first started offering public shares in April 2021.
The SEC says that Coinbase’s staking program is also a problem. This program involves five different cryptocurrencies. According to the SEC, this makes the staking program an investment deal and counts as a security. Coinbase has been arguing with the SEC about this, saying its staking products are not securities. They keep arguing even though Kraken, another crypto company, settled with the SEC and stopped offering staking services in the U.S.
Gary Gensler, the head of the SEC, spoke about the lawsuit against Coinbase. He said Coinbase had not given its customers enough protection against scams and manipulation. They’ve also not been open about conflicts of interest. Gurbir Grewal, who is in charge of enforcing SEC rules, said that Coinbase knew they were breaking federal securities laws, but they did it anyway.
After the SEC announced its lawsuit on June 6, the price of Coinbase’s shares fell by 15% before trading started.
The SEC’s lawsuit against Coinbase happened just one day after they also sued Binance. Binance is another crypto company that the SEC accuses of breaking securities laws and mixing up customers’ money. Binance is in trouble for breaking 13 different securities laws.
The U.S. Securities and Exchange Commission (SEC) has charged Binance, the world’s largest crypto exchange, and its founder, Changpeng Zhao. They’re accused of mixing up billions in user funds and sending them to a Zhao-controlled company in Europe.
The SEC says Zhao and Binance dodged their own rules to let rich U.S. investors keep trading on Binance’s unregulated international platform. It’s even claimed that an executive admitted the company acted as an unlicensed securities exchange in the U.S.
The lawsuit also suggests that Binance.US was created to protect Binance and Zhao from legal issues. Two former Binance.US CEOs, likely Catherine Coley and Brian Brooks, raised concerns about Zhao’s control over the company.
Between 2018 and 2021, Binance made $11.6 billion, mostly from transaction fees. The SEC claims that Binance knowingly had many U.S. customers and didn’t act, even though it’s against federal law to offer and sell unregistered securities. Binance’s compliance efforts in 2019 were mostly for show, according to the SEC.
Lastly, the SEC accuses Zhao of setting up a plan to help rich customers evade regulations using a VPN service to hide their location and fake compliance documents to cover their tracks.
Coinbase is a publicly traded company
But people in the crypto industry are confused about the lawsuit against Coinbase. This is mainly because Coinbase is a company that has publicly traded shares.
Binance’s boss, Changpeng Zhao, responded to the lawsuit against Coinbase by teasing the SEC.
If you have to pick a fight with everyone, maybe you are the one at fault. 🤷♂️
Paul Grewal, the top lawyer at Coinbase, said that the SEC’s focus on punishing rather than setting clear rules for digital assets is bad for U.S. business. He said we need new laws that create fair and clear rules for everyone instead of lawsuits. But for now, Coinbase will keep doing business as usual.
“The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation. In the meantime, we’ll continue to operate our business as usual.”
A lot of people in the crypto community are wondering how Coinbase could have gone public in 2021 if it was acting like an unregistered securities broker.
Payment apps may lack protection: A recent warning from the US Consumer Financial Protection Bureau emphasizes that the FDIC might not protect money stored in mobile payment apps. Customers could be concerned about whether their funds are insured, highlighting the risks associated with these platforms.
The US Consumer Financial Protection Bureau (CFPB) has advised Americans to keep their money in a secure, insured bank account rather than in an unprotected app.
The Bureau expressed concern over the growing use of peer-to-peer payment apps, which also handle cryptocurrency transactions, due to the increased risk of losing money if things go wrong.
The public has become more aware of the protection offered by the Federal Deposit Insurance Corporation (FDIC). This comes after the failure of several cryptocurrency platforms and a banking crisis that resulted in the loss of a huge amount of customer money.
Despite this, the CFPB warns that a lot of money is still being held in these payment apps, which aren’t covered by the FDIC.
Payment services don’t offer insurance for your funds
The CFPB says that many peer-to-peer apps like PayPal, Venmo, Cash App, Apple Pay, and Google Pay have features that work much like bank accounts, although Meta Pay doesn’t have that feature.
The companies behind these apps actually like it when you keep your money in their apps because they can then use your money for their own investments (within legal limits), while they hardly ever pay you any interest on the money you store. However, there is a risk involved for these companies, as they could potentially lose money on the investments they make.
The CFPB explains that if your money is in an FDIC-insured account and something goes wrong, whether you’re covered by their insurance is only decided after the fact.
Plus, the insurance only covers the bank’s failure. It doesn’t cover the failure of the payment app, which is usually controlled by state laws and not watched over by the federal government. Most of the time, these state laws are meant for transferring money, not storing it.
So, if you have money in PayPal or Venmo, it could be protected by this pass-through insurance when it’s in their partner banks, but not if they’ve used your money for investments. Also, it might not be clear to you where your money is actually kept.
More and more, these mobile payment services are letting you handle cryptocurrencies. But remember, payment apps may lack protection and cryptocurrencies aren’t insured, even though services like PayPal and Venmo let you keep crypto in your accounts.
In October 2022, the EU published a report to describe the risks of crypto assets investments.
According to the report. “The pseudonymity that prevails in crypto-asset markets makes it virtually impossible to assess the creditworthiness or aggregate exposures of participants.” The paper also talks about the leverage offered by crypto exchanges to individual investors, which can raise up to 125x.
While some jurisdictions try to adopt regulations to protect investors (e.g., MiCA), these regulations often fall short in the face of the ever-expanding crypto industry.
All in all, keeping your crypto investments is a very risky business, and you should be aware of the risks.
Why aren’t crypto insurance policies good enough yet?
Insurance companies still need to improve their crypto insurance plans. Right now, these plans don’t cover everything. To fully protect all your crypto assets, you might have to combine different plans. One might cover the loss of your private key, another might cover errors in smart contracts, and you might need a third in case your wallet company goes under.
What are the risks of investing in cryptocurrencies?
Cryptocurrencies are pretty risky. Their prices can go up and down much more than things like stocks. Future prices could also be impacted by changes in laws, which might even make cryptocurrencies worthless. Plus, cryptocurrencies are always at risk from cyber threats like hacking and theft.
Are cryptocurrencies insured by the FDIC?
No, they’re not. The FDIC insures normal bank accounts up to $250,000, but it doesn’t protect cryptocurrencies at all. If you’re not from the US, you should check your country’s financial authority and see their conditions for insured investments and their limitations.
Can I get insurance for my cryptocurrency investments?
Yes, you can get insurance that offers limited protection against cryptocurrency theft. But these policies often only cover specific situations. They generally don’t protect you against losses due to market changes, hardware damage or loss, sending cryptocurrency to someone else, or problems with the blockchain technology that supports the asset. If you want more comprehensive coverage, you’ll probably need to buy multiple policies.
Revolutionizing the crypto and NFT landscape, Reddit’s unique collectible avatars are on the brink of reaching a staggering 10 million users.
Reddit, a social media site, is nearly hitting 10 million users who have its special profile pictures, called “Reddit NFTs.” These were introduced in July 2022, so it’s been about 11 months.
Right now, data from Dune Analytics shows that there are about 9.9 million people who have these special profile pictures. Among these, around 7.7 million users only have one of these special profile pictures and do not have them in several accounts.
In simple words, Reddit started a marketplace for special profile pictures on the Polygon blockchain in July 2022. These pictures, known as NFTs, were made by independent artists and people who create content on Reddit.
After the marketplace started, the number of people having these pictures grew quickly but then slowed down to about 3 million by November. However, there was a big increase in 2023, with the number of accounts holding these pictures tripling in the last six months.
From the start of 2023, the number of people with these special Reddit pictures has grown by 80%. The total value of the special profile pictures market is $38.4 million, and there are 13.7 million of these pictures.
Also, there have been over 303,033 sales totaling up to $32.6 million, according to the data from Dune Analytics.
In May 2023, a Reddit user named “ContextMelodic4212” praised Reddit for its success but also pointed out that some of the growth might be because of bots.
According to this Reddit user, there are some problems with people using bots to grab or ‘scoop up’ these avatars quickly. “However, I can’t think of a better use case for this technology!”
On May 26, 2023, Reddit said it will now support the Rabbids NFT collection from the big video game company, Ubisoft. Reddit users can get these Rabbids NFT pictures for their profiles for free, and people are grabbing them really quickly.
Rabbids first appeared as part of a different video game, the 2006 game “Rayman Raving Rabbids.” Ubisoft, the company that made these games, was the first big video game company to create NFT items within their games in December 2021. They made a collection of Rabbids NFT pictures for a virtual reality game called The Sandbox in February.
During a Q&A session with the India section of Reddit on May 25, Sandeep Nailwal, who helped start Polygon, said he really likes Reddit NFTs. He said that Reddit is maybe the only big tech company that has figured out how to use NFTs well, and they’ve been able to get a lot of people interested in Reddit NFTs.
He also suggested that Reddit could improve its NFTs by having a secondary marketplace and a place for artists to launch their work. He thinks these changes could make Reddit’s NFTs even better.
CryptoSnoo NFT from Reddit
But Reddit already had its own NFTs, which were launched in the summer of 2021.
CryptoSnoo are a collection of NFTs from Reddit that features the popular Snoo mascot in different contexts.
CryptoSnoos are unique cartoon avatars that take the form of the Reddit logo. These are created as non-fungible tokens (NFTs), which means they are unique digital items stored on the Ethereum blockchain. Two years ago, in June 2021, Reddit started an experiment to auction off these special avatars.
Since the Reddit NFTs were well received, the users of the popular platform can still claim their CryptoSnoos.
Three CryptoSnoos named “Original Block,” “Helium,” and “Snoopermatic” were created on June 17, 2021. These NFTs are based on the original Reddit logo that Alexis Ohanian, Reddit’s co-founder, designed in 2005. Reddit put them up for auction on OpenSea.
CryptoSnoos come in three categories: “Legendary” which means they are one of a kind, “Rare” which means there are very few of them, and “Epic” which means they are limited edition. Reddit users can find these available CryptoSnoos in Reddit’s avatar builder.
But buying an NFT from the CryptoSnoo collection doesn’t mean you own the artwork it represents. Reddit’s rules state that these NFTs are only for fun, and you don’t get any commercial rights to the artwork. Also, Reddit has the power to take away your rights to the CryptoSnoo if you say bad things about Reddit or take any legal action against them.
So, while CryptoSnoos might seem like a fun way to own a piece of Reddit history, potential buyers should understand what they are getting into before buying.
