Robinhood Wallet Soon?

Good morning. Today we've got a weekend update (spoiler: it's rough), a potential crypto-ban from the Kremlin, Robinhood entering beta testing for its crypto-wallet, and more!

Bonus Content Coming: I'm targeting early next week the end of the month to have my notes out from Messari's Crypto Theses for 2022. I'll include a link to my notes in this newsletter, however, the full report is definitely worth a read. The report is now in podcast form and can be found here.

Market Update (as of 8:15am ET):

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Top 5:

1. Weekend Update: Tough few days
It's been a rough week for crypto investors with Bitcoin, Ethereum, and the broader market dropping to levels that are 50% off all time highs. Bitcoin fell to just above $34,000 early Saturday morning before bouncing back to around $36,000 on Sunday evening. Ethereum followed a similar pattern, hitting $2,300 on Saturday before recovering to $2,500 as of this writing. Stocks and crypto have both been hit by concerns over interest rates, supply chain issues, and ongoing coronavirus fears.

Editor's note: as of this morning, prices have fallen below levels mentioned above. See Market Update section or check out coinmarketcap.com for more details.

2. Robinhood Deploys Beta Crypto Wallets Allowing Select Customers to Transfer Off Platform
Robinhood is taking the first steps to deploy its crypto wallet, a product in such demand that there are 1 million customers on a waiting list to get access. 1,000 users are currently beta testing WenWallets and the company plans to have 10,000 users in testing by March before rolling out to the rest of the list. Current Robinhood functionality allows users to buy and sell crypto, but prevents them from taking that crypto off the app. WenWallets, in its current iteration, will allow crypto to be sent to external wallets (off Robinhood) with a daily limit of $2,999 to avoid record keeping requirements under the Bank Secrecy Act. Further functionality will be added to the wallet during the beta testing phase.

SSS (sat-sized summary): Robinhood has entered the beta testing phase for its crypto wallet that will allow users to send crypto to external wallets. I'm interested to see if this rollout will put pressure on other exchanges to reduce their trading fees as Robinhood currently has no-free crypto (and stock) trading.

3. Bank of Russia Wants a Bitcoin Ban. Here's How That's Gone in Other Countries
Last week, the Bank of Russia issued a report that calls for a complete ban on cryptocurrencies in the country. The ban would prevent mining, payments, purchases, and any activities related to crypto and would also prevent financial institutions in the country from handling transactions of digital assets. Russia contributes 10% to the overall Bitcoin hashrate, but it's hard to imagine that a ban would cause any significant impact to the overall network given the ban in China took out more than half of Bitcoin miners globally. Currently, nine countries have laws explicitly banning cryptocurrencies: Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, Tunisia and, China. None of these countries would be considered bastions of freedom.

SSS: The Bank of Russia issued a report that proposes to ban all cryptocurrency related activity in the country. If the ban were to go into effect, Russia would join a short list of countries that currently have explicit cryptocurrency bans. To me it's interesting that two of the most well-known totalitarian governments in the world, China and Russia, are attempting to ban decentralized currencies/computing. I think it's an opportunity for the US and other democracies to lead and take economic advantage of a society-changing technology.

4. Solana Suffers Network Instability During Brutal Week for Crypto
Over the last week the Solana network has been dealing with issues related to duplicate transactions. On Saturday, the Solana website posted an announcement that engineers have released version 1.8.14 that “will attempt to mitigate the worst effects of this issue," and that further improvements will be rolled out over the next 2-3 months. The notice also stated, “the last 24 hours have shown these systems need to be improved to meet the demands of users, and support the more complex transactions now common on the network.” Poor network performance during periods of high volatility is a major issue and the below tweet from the CEO of Ava Labs, the Avalanche blockchain developer, appears to be a direct reference to Solana's issues.

SSS: The Solana network performed poorly over the last week as high volatility put stress on the network. Competitor chain, Avalanche, has performed well and the CEO of their development company wants you to know. He makes a good point though. Periods of high volatility are when users most need to be able to interact with the network.

5. Crypto Exchange FTX US Vying for CFTC Sign-off on Margin Trades
Cryptocurrency exchange FTX is making a push to offer leveraged derivatives trading on their platform. The company has added a board of directors, which is a Commodities Futures Trading Commission (CFTC) requirement, and will also be required to submit a risk model. If approved, FTX would be the only US-exchange approved to offer that type of trading.

SSS: FTX is making a play to get regulatory approval to provide leveraged derivative trading to its customers. The road to regulatory approval is long and still uncertain, but the expansion of crypto-products is a sign of a maturing industry with a wide range of investor demands.

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.