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Bitcoin Is Surging—So Why All the Crypto Layoffs?

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The American crypto industry had plenty to celebrate this week: Bitcoin came within inches of reaching its all-time high price, crypto ETFs rang in new milestones on Wall Street, and next week’s presidential election appears poised to boost the ecosystem regardless of who wins. 

You’d hardly notice, then, that it was one of the worst weeks ever for America’s top crypto employers. On Tuesday, Ethereum software giant Consensys laid off 20% of its global workforce. Hours later, DYdX, a New York-based decentralized crypto exchange, cut its team by 35%. The next morning, Kraken, one of America’s largest crypto exchanges, slashed its headcount by 15%. 

Rounding out the week, Coinbase reported a disappointing Q3 that missed targets, and an overall decline in customer activity. What gives?

Experts told Decrypt a multitude of factors may be at play—ranging from shorter term election- and regulation-related anxieties that may resolve soon, to more existential issues concerning the place for crypto-native companies in an industry increasingly populated by traditional finance giants.

“This is definitely the most bearish bull market of all time,” Alex Tapscott, managing director of digital assets at Ninepoint Partners, told Decrypt

While rosy headlines about crypto’s rising tides may appear omnipresent, that narrative really only pertains to Bitcoin, which is more than ever “in a league of its own,” Tapscott said. 

And even Bitcoin’s strength is no longer necessarily the crypto industry’s gain.

“Yeah, Bitcoin’s price went up a lot, but where did that inflow go?” Owen Lau, a senior analyst at investment firm Oppenheimer & Co., told Decrypt. “It’s going into traditional finance companies, as opposed to crypto-native companies.”

With Wall Street titans like BlackRock scooping up billions of dollars worth of Bitcoin trades through its exchange-traded fund thanks to brand trust and rock-bottom fees, crypto exchanges like Coinbase and Kraken are getting left out in the cold, Lau said. Companies tied to sagging cryptocurrencies like ETH—such as Consensys—are faring even worse, he added. (Disclosure: Consensys is one of 22 investors in Decrypt, which is editorially independent.)

Fears related to regulatory uncertainty and the looming presidential election may also be playing a substantial role in chilling crypto activity and investment—at least for the moment. 

 

Kristin Smith, CEO of the Blockchain Association, a leading crypto lobbying group, told Decrypt that while she is optimistic that both a Trump and Harris administration look poised to bring regulatory clarity and support to crypto, the current U.S. Security and Exchange Commission’s hostility to the industry has done substantial damage to business that won’t be remedied until next year at the earliest. 

“A lot of the capital, I think, is sitting on the sidelines, and is nervous about coming into this space until they see some more clarity,” Smith said. “So I do think the regulatory issues and the political issues are a big factor in all of this.”

Earlier this week, the Blockchain Association launched an initiative to track how much money leading crypto firms have spent on lawsuits initiated by the SEC. It says that figure is already in excess of $400 million. On Tuesday, when Consensys announced it would lay off 20% of its staff, the company’s CEO, Joe Lubin, said the staff cuts were linked to the “many millions of dollars” Consensys has spent defending itself against the SEC in court.

And yet, some experts insist crypto’s woes won’t fade away even if the U.S. government embraces the industry. Oppenheimer’s Lau thinks the current landscape of crypto-native companies—particularly centralized exchanges—is much too overcrowded, and that many such companies will end up either dying out or getting acquired by traditional finance firms. 

“I don’t know why the market would allow 200 exchanges in the world,” he said. “It doesn’t make sense to me.”

Ninepoint’s Tapscott, meanwhile, thinks it’s going to take a lot more than getting rid of SEC Chair Gary Gensler to unleash a true crypto bull market. 

“It’s not just the election,” he said. “If you look at previous cycles, there’s always been some set of new applications or capabilities that got people really excited.”

Tapscott points to the landmark innovations of decentralized applications (dapps) or NFTs, both of which propelled crypto markets to then-unprecedented highs. 

“This time around, is there something that has galvanized people in quite the same way?” he said. “I think the answer is, not yet.”

While the prospect of politicians and Wall Street embracing crypto is certainly exciting, Tapscott added, that development has not been sufficient to kickstart a true industry-wide bull run—and can’t replace the zeal generated by a bonafide new use case for blockchain tech. 

“How do you do something with the technology that wasn’t possible before?” he said.

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MicroStrategy Boosts Convertible Notes Offering to $2.6 Billion to Buy Even More Bitcoin

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MicroStrategy’s thirst for Bitcoin cannot be quenched, despite holding over $31 billion worth.

Barely two days after announcing a plan to sell $1.75 billion worth of convertible notes as a means to buy up more of the world’s top cryptocurrency, the firm said on Wednesday that it has expanded that offering to $2.6 billion worth of notes. 

Michael Saylor, MicroStrategy’s co-founder and executive chairman, said the move was made due to “high demand” for the new notes over the last 48 hours. 

As with those initially offered on Monday, the additional zero-interest senior notes announced today will mature in 2029 and are available only to qualified institutional buyers. They will be eventually redeemable for cash, MicroStrategy stock, or a mix of both. 

That’s a mighty tempting offer for many Wall Street investors, given the recent, explosive growth of MicroStrategy’s stock. The company, which owns over 331,000 BTC—1.58% of the token’s total possible supply—has seen its stock balloon by over 870% in the last year, in the wake of Bitcoin’s surge. Earlier this month, the stock reached an all-time high.

If MicroStrategy manages to raise another $2.6 billion to buy up more Bitcoin, it would be able to purchase some 27,450 BTC at current prices. 

While MicroStrategy once billed itself as a business intelligence and software company, the company’s bold Bitcoin wager has upended not just its value to shareholders, but also the way it now sees itself: as the “world’s first and largest Bitcoin treasury company.” 

Edited by Andrew Hayward

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Marathon Digital Issues $850M Convertible Note Sale to Repurchase Debt, Acquire Bitcoin

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Bitcoin mining company Marathon Digital Holdings (MARA) is issuing $850 million in convertible notes, with the option to expand to $1 billion, as part of plans to repurchase existing debt, acquire Bitcoin, and fund corporate initiatives amid a recovering crypto market.

The Fort Lauderdale, Florida-based firm said Monday it plans to use $199 million of the expected $833 million in net proceeds from the sale to repurchase $212 million of its existing 2026 convertible notes, according to a statement.

The remainder will be allocated to acquiring additional Bitcoin and for general corporate purposes, including working capital, strategic acquisitions, expansion of assets, and repayment of other debt, the company said.

Convertible notes are a type of debt-based financial instrument that a company sells to raise capital. The notes are typically converted into equity shares at a later date, enabling investors to hold partial ownership of the company.

Marathon’s latest offering comes as several firms globally begin acquiring and holding Bitcoin on their balance sheet following a market rally that has catapulted the price of the world’s oldest crypto to more than $94,000.

The most prominent include MicroStrategy, holding up to $30 billion in Bitcoin, and Japan’s Metaplanet, which has scooped up more than 1,000 BTC this year, worth roughly $93 million to date.

Meanwhile, Semler Scientific (SMLR) acquired nearly $18 million in bitcoin earlier this month, the company said in a statement. 

Starting December 1, 2027, holders of Marathon’s convertible notes can ask the company to repurchase them for cash, though terms may change if major events like mergers, acquisitions, or delisting occur.

The notes, which mature on March 1, 2030, can also be converted into cash, MARA stock, or a mix of both, the company said.

The Bitcoin miner’s stock traded at $19.86 on Tuesday, up 9% on the day, while its after-hours price remains little changed, Google Finance data shows.

Edited by Sebastian Sinclair

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Bitcoin Multisig Company Casa Makes Self-Sovereignty Easy

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Company Name: Casa

Founders: Nick Neuman, Jameson Lopp and others

Date Founded: Late 2017

Location of Headquarters: Remote

Website: https://casa.io/

Public or Private? Private

Being self-sovereign isn’t easy — especially if you aren’t technically-minded.

The team at Casa gets this and this is why, for over six years, the company has been helping customers secure their bitcoin in multisig wallets (also referred to as multi-key vaults).

The company was the first to offer an easy-to-use version of such a product that also came with customer support. It was Casa’s plan from the onset to be there for their customers, as this type of support was lacking in the broader crypto industry.

“The service element was what was missing from a lot of solutions out there,” Casa co-founder and CEO Nick Neuman told Bitcoin Magazine.

“People need help doing this stuff, especially for large amounts of money. It was always the plan to support customers, because it was impossible to get support from exchanges or hardware wallets,” he added.

“So, we just took a very support-heavy and user experience focused approach to everything.”

Casa’s approach has paid off, as the company has become a household name in the Bitcoin and crypto space, and has come a long way since Neuman first had the idea for a company like Casa seven years ago.

How Casa Started

It was toward the latter part of the 2017 bitcoin bull run when Neuman had grown tired of his previous work in finance and tech, and found himself down the proverbial Bitcoin (and crypto) rabbit hole. By February 2018, he had an idea for a company and entered himself into a hackathon to attempt to bring the idea to life.

“I participated in the first ETHDenver hackathon,” said Neuman.

“I went in with an idea that I called key split, which was basically taking a private key using Shamir secret sharing and creating a social recovery mechanism,” he added.

“I recruited a couple of people at the hackathon to build it with me, and we ended up winning.”

Neuman quit his job and set out to start a company around this technology he and his team had created. But word had gotten out about his victory at ETHDenver, and the previous CEO of Casa, who was the head of the company before it pivoted to offering multisig wallets, reached out to Neuman, asking him to come on board.

It was after learning that Casa had just recruited Jameson Lopp, self-described “professional cypherpunk” and now Chief Security Officer at Casa, that Neuman decided to join the team.

“I was like, ‘Well, Jameson’s going to be an unfair advantage,’” recalled Neuman with a chuckle. “Instead of starting my own company, I’m going to join.”

Soon after Neuman came on board, Casa retired its then flagship product, the Casa Node, and the company shifted its focus to user-friendly multi-key vaults, a much needed product at the time. Before Casa, multisig software was so complicated that even Neuman himself struggled to use it.

“There was the Armory multisig wallet and the Glacier protocol,” recounted Neuman.

“Glacier wasn’t even software. It was like a giant GitHub repo that you had to follow in order to set up your cold storage. Armory was super janky, too. I remember trying to use it once, and I couldn’t figure it out,” he added.

“We were the first to create multisig that was usable.”

How Casa Works

Casa offers users two main set ups. The first is a five-key vault, which includes three keys on three different hardware wallets, one on the user’s phone (which is backed up securely in the cloud) and one that Casa holds.

This was Casa’s first multisig product, which it rolled out while the company primarily focused on serving customers with a high net worth in bitcoin. Casa learned an important lesson while serving these clients, which was that even if developers create easy-to-use software, people still want an expert there supporting them as they use it — especially if they’re securing a lot of value.

“When you’re dealing with millions of dollars worth of Bitcoin, you really want to have an expert there who helps make sure that you don’t make a mistake,” said Neuman.

Casa’s other main product is for those who might not be sitting on bitcoin whale-type wealth, but who still hold enough bitcoin where a less-than-ideal security setup has the potential to keep them awake at night.

This product is Casa’s three-key vault, which the company brought to market in early 2019. It includes a key on a hardware wallet, a key on the user’s phone (which can be swapped out for another key on a second hardware wallet if the user prefers) and a key that Casa holds.

Casa began offering this setup because it “always wanted to be able to offer great security and usability to as many people as possible,” according to Neuman.

New Casa Services And Features

In the past year, Casa has further broadened the services it offers.

Two weeks ago, it announced its Enterprise Plan, which enables companies to more easily secure their bitcoin treasuries.

“We’ve had businesses using Casa for self-custody for years, but they were always using our retail plans and just making it work,” explained Neuman.

“We changed that, though, because I think corporate treasuries holding bitcoin has been popularized by MicroStrategy. We actually see that as a growing trend that’s worth taking advantage of, and we’re hearing from more Bitcoin companies that are storing bitcoin on their balance sheet that they need help with security,” he added.

This summer, Casa also began enabling users to replace hardware wallets used in their vaults with YubiKeys.

“We see people struggle with hardware wallets all the time, and so we were thought ‘How can we make this simpler?’” said Neuman. “We pieced together a couple of new pieces of technology that have passkey and and YubiKey key capabilities and were able to build something that hadn’t been done before.”

And in March, Casa launched Casa Inheritance, a service that makes it easier for the loved ones of Casa users to access the bitcoin secured in the vaults in the event of a user’s death.

“With Inheritance, we heard from our customers all the time ‘Okay, I feel good about my Casa setup, but I’m worried about what happens if I die,’” explained Neuman. “So, we built that feature to make it super easy for their family to recover the bitcoin in case the main account holder dies.”

Normalizing Multisig

Despite all of the work Casa has done in the last six years, some still have an emotional block when it comes to switching to a multisig setup. Whether it’s because this type of wallet format was more difficult to enable years ago or because it’s understandably anxiety-provoking to make changes to one’s bitcoin security, people seem to drag their feet when it comes to using a multisig setup — even if they really want to — according to Neuman.

“They hear the word ‘multisig’ and they’re like, ‘That’s too hard,’” explained Neuman. “What they don’t realize is that to get started with multisig with Casa, you can use your same hardware wallet, and it is literally the same amount of effort as using a hardware wallet, but you significantly improve your security by doing it.”

Neuman thinks that more people will come around and that multisig will become more widely adopted, especially during a bull market.

“It takes the price of bitcoin going up where people suddenly have more value to secure,” said Neuman. “And it takes people hearing from their friends ‘Yeah, I’m doing multisig and it’s not as hard as it sounds.”

For those that do get the urge to try Casa, the company is allowing people to try the service at no charge for a month.

Neuman feels that as more users come on board, it will not only benefit them, but potentially the industry at large as well.

“If we can make it out of this bull market without another massive blow up like FTX because we’ve helped more people self-custody in a way that they feel good about, that feels like a real win to me.”



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