Beeple's NFT Sells for Over $69M ... What?

What you need to know today in crypto and beyond

March 11, 2021

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Top Shelf

Today's must-reads

WHAT THE BEEP?! Beeple's latest non-fungible token (NFT) sold for $69.3 million at a Christie's auction. This appears to be the highest price paid yet for an NFT, a type of token used to authenticate digital goods. The work, "EVERYDAYS: THE FIRST 5000 DAYS," a retrospective of the artist's body of work, looked set to close at around $20 million before being bid up in the final moments.

UNVERIFIED APPS: A CoinDesk investigation found a litany of fraudulent crypto wallets available for download on Apple and Google app stores. These illegitimate apps, designed to scam users out of their crypto (especially during times of market exuberance), are listed despite quality control mechanisms in place. Scams are common in crypto; these fraudulent apps serve as a reminder for those venturing into the world of decentralization to not trust but verify.

STIFF COMPETITION: Digital assets management firm Grayscale has halted inflows to the Grayscale Bitcoin Trust (GBTC) after the fund traded at a 15% discount. The fund, managed by CoinDesk's sister firm, is a way for institutional investors to gain exposure to the cryptocurrency. Despite increased competition from Canadian exchange traded funds (ETFs) and alternative bitcoin trusts, the market is not a zero-sum game: Israeli pension company Altshuler Shaham recently plunged $100 million into GBTC, while a proposed ETF could place up to 15% of its funds in the Grayscale investment vehicle.

– Daniel Kuhn

Sound Bite

Overheard on CoinDesk TV

Exchanging blows?
In Coinbase's S-1 filing with the U.S. Securities and Exchange Commission (SEC), it referenced Binance, by name, as a long-term threat. The two cryptocurrency exchanges are among the largest and fastest-growing financial platforms in the world. But they've taken different paths to getting there.

By some metrics, Silicon Valley-based Coinbase is valued at $100 billion, an estimate that Binance CEO Changpeng "CZ" Zhao considers "very low," he said on CoinDesk TV Thursday. He admits the rival Coinbase exchange has basically cornered the U.S. market, "and [the] U.S. is a big market."

Binance, meanwhile, has taken the global approach. Founded in China, Binance has gained a foothold on nearly every continent. It expands by setting up regional units and partnering with local exchanges, sometimes, as Coinbase alleged, with "varying degrees of regulatory adherence."

While Zhao is committed to the global perception of his firm (even going as far as saying the company has no headquarters), he rejects the characterization that Binance isn't wholly regulatory compliant wherever it does business.

"For any new internet business, when they first start they will not have super strong geofencing, [know-your-customer], [anti-money laundering] regulatory controls. But we actually enabled that very, very strongly," he told First Mover. "This is somewhat counter to popular perceptions of Binance because we started outside the U.S."

Just as Coinbase and Binance have had different paths to success, they may also have completely different exits. "Right now we have no plans on going public," CZ said. However, Binance is thinking about taking itself public another way: by becoming a fully decentralized, open protocol.

"In 30 years, there will be no centralized exchanges. Everything will be decentralized," Zhao said. Presumably that'd include Coinbase, too.

Watch the full segment and stick around for U.S. Representative Warren Davidson's interview.

– D.K.

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Introducing "The Hash," news analysis on CoinDesk TV

From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy.

We cut through the hyperbole and confusion to explain what's happening in this fast-changing industry and why it matters to investors, companies and governments.

On "The Hash," a daily panel show, CoinDesk journalists Zack Seward, Benjamin Powers and Will Foxley choose five of the day's big stories to hash out and analyze. With a personality-driven, fast-paced, entertaining format, it presents themes ranging from serious to fun.

Watch "The Hash" daily on YouTube or CoinDesk.com.

Off-Chain Signals

What others are writing....

Will Venezuela continue to be a bitcoin adopter now the government has accepted dollarization? (Decrypt)

30% of U.K. investors feel they've "missed the boat" on cryptocurrency (Decrypt)

France is auctioning off 611 bitcoin seized from hackers. At current prices, the haul is worth at least $30 million. (Bitcoin.com)

NFTs aren't on "the blockchain." They're on a particular network and some are better than others, says Fortune's David Morris.

Mashable says bitcoin is bad but NFTs are "even worse" (for energy consumption).

– Ben Schiller

The Takeaway

Putting the news in perspective

Web tenets

One year ago, exactly, the World Health Organization declared COVID-19 to be a pandemic. Throughout the following 12 months of misery, misinformation and great societal change, the cryptocurrency industry has emerged to be fairly robust. The core stricture of decentralization – of money, of governance and of information – has been thoroughly vetted and found useful, if not, correct.

Societal change has been both small- and large-scale, from the acceleration of e-commerce and work from home to the loss of trust in experts and institutions. As we continue to adapt to this new world, whether permanent or temporary, crypto will play an increasingly important role.

It shouldn't be interpreted as gloating to say that some of crypto's loudest proponents were early to sound the alarm on the novel coronavirus. Calls to "prepare for the worse" encouraged many crypto firms to preemptively switch to remote work. Some, like soon-to-go-public Coinbase, plan never to return to the office.

But it's not just work that has gone digital. Under lockdown and other pandemic precautions shopping, socializing and entertainment have all become increasingly web-mediated. So has our awareness of the extractive nature of centralized internet businesses.

Deplatforming has been a far-too-common occurrence across the ideological spectrum, while researchers are increasingly cognizant that the perils of misinformation are directly related to the market structure of centralized internet monoliths. Tech backlash has taken many different forms, though one recent survey found that large majorities of people in the U.K. and U.S. support greater tech regulation.

Google, Zoom and Amazon have boosted returns, in some sense at the loss of consumer privacy and choice. These firms make their money through trading user data. And while they've become essential to daily life, they're also fragile and prone to exploitation.

Decentralized alternatives to basic web services have yet to gain a foothold in the wider world. It remains to be seen whether this interconnected arena of protocols and apps, sometimes called Web 3.0, will be resistant to annoying occurrences like Zoombombing or even the more pressing threat of mis- or disinformation. But it will provide a genuine escape pod from the current web.

Censorship-resistance, user-owned data, persistent and securely pseudonymous digital identities have become important in a world where anyone can be knocked off a web platform for any reason. That will be the case even in a post-vaccination world.

– D.K.

What are bitcoin and ether's value propositions for investors?

A new report by CoinDesk Research explains how the two most popular cryptocurrencies by market capitalization behave in the market, how their infrastructure differs, and what on-chain metrics say about them.

Download "Bitcoin + Ether: An Investor's Perspective" from the CoinDesk Research Hub.

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