David Canellis

This is Cheatsheet, a primer on what’s happening in crypto today.



Bitcoin has broken another price record, now trading above $72,000 for the first time ever.



Still, <a href="https://blockworks.co/price/btc">BTC</a> isn’t the best performing crypto in the top 100 over the day: that’s floki (<a href="https://blockworks.co/price/floki">FLOKI</a>), the dog coin, which has gained 19.4% as of 7:45 am, ET.



Blockchain-powered video streaming platform Theta Network (<a href="https://blockworks.co/price/theta">THETA</a>) trails slightly amid continued interest in decentralized computing.



Pyth Network (<a href="https://blockworks.co/price/pyth">PYTH</a>), the oracle network tipped as a rival to Chainlink (<a href="https://blockworks.co/price/link">LINK</a>), is third for the day with 18.2%.&nbsp;



<a href="https://blockworks.co/price/near">NEAR</a> follows with 13.3% gains, itself boosted by buzz around its <a href="https://near.org/blog/near-tasks-launches-ai-marketplace-on-near-to-revolutionize-the-future-of-work">potential</a> for use in AI development. Bitcoin and ether (<a href="https://blockworks.co/price/eth">ETH</a>) are both up by about 3%.



Dog-slash-hat memecoin dogwifhat (<a href="https://blockworks.co/price/wif">WIF</a>) is meanwhile the worst performer, down more than 8%.



<h2 class="wp-block-heading">On-chain mail</h2>



Bitcoin’s price is still going up — for now — as miner treasuries shrink to their lowest point in almost three years.



<ul class="wp-block-list">
<li>Miner treasuries have altogether <a href="https://cryptoquant.com/asset/btc/chart/miner-flows/miner-reserve?miner=all_miner&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=line">reduced</a> by 14,128 BTC ($1 billion) so far this year.</li>



<li>Most days over the past month have seen net outflows from bitcoin miners.</li>



<li>They still hold 1.82 million BTC ($131 billion) — the highest US dollar value on record.</li>
</ul>



Miners, on the surface, appear to be playing the role opposite to ETFs: offloading their bitcoin as institutions snap up coins on behalf of ETF shareholders.



Bitcoin kept on crypto exchanges has also been trending <a href="https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve?exchange=all_exchange&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=line">downward</a> over the past year, hitting its lowest point since Jan. 2018 earlier this month: 2.019 million BTC ($126.02 billion at the time).



Bitcoin is up 15% since then, leading to an uptick in net inflows to crypto exchanges. There’s more than 14,000 additional BTC on exchanges over the month to date, equal to $1 billion at current prices.



<ul class="wp-block-list">
<li>Yield-focused Ethereum layer-2 Blast is rocketing up the TVL <a href="https://defillama.com/chains">charts</a> — now $830 million, up 161% over the past week to eclipse Mantra, Base and Sui.</li>



<li>Hyperliquid, a DEX for perpetual swaps on Arbitrum, saw more volume than any other such platform over the past day, $1.623 billion to dYdX’s $1.482 billion.</li>



<li>Binance Smart Chain saw more daily DEX volume than any other chain on Sunday — $2.474 billion to Ethereum’s $2.042 billion — a first since last May.</li>
</ul>



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="4287" height="2700" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=1024&amp;h=1024" alt="" class="wp-image-82176" style="width:840px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=4287 4287w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=408 408w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=414 414w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2024/03/Bitcoin-Miner-Reserve-USD-All-Miners-1-1.png?w=80 80w" sizes="(max-width: 4287px) 100vw, 4287px" /><figcaption class="wp-element-caption">Miners have historically played influential roles in bitcoin markets during bull cycles</figcaption></figure>



<h2 class="wp-block-heading">Crypto business</h2>



With bitcoin again at record highs, all crypto stocks are set to open higher on Monday, except two: Toronto-headquartered Bitfarms and China-based SOS.



<ul class="wp-block-list">
<li>MicroStrategy and Coinbase persist as market favorites, up 8.2% and 6.9% respectively before the bell (as of 7 am ET).</li>



<li>Miners Bitfarms and SOS have both slipped more than 5.5%.</li>



<li>CleanSpark is by far the best performing mining stock over the past month — climbing nearly 130%.</li>
</ul>



Open <a href="https://www.coinglass.com/BitcoinOpenInterest">interest</a> (OI) on bitcoin futures is going parabolic, $33.72 billion as of this morning, a new record, up 10% since Friday and nearly double since the start of the year.



Bitcoin OI had previously topped out at just over $24 billion in Apr. 2021, during the last bull market.



Ether (ETH) open interest is also at record highs, now $12.67 billion and more than double since the start of the year.



<ul class="wp-block-list">
<li>Solana (SOL)’s OI is retracing from its own peak late last week, down to $2.07 billion from $2.25 billion, per CoinGlass.</li>



<li>US-listed bitcoin ETFs are now up more than 42% on their <a href="https://twitter.com/BitMEXResearch/status/1766359858893262958">inflows</a> to date.</li>



<li>Crypto held by the US <a href="https://platform.arkhamintelligence.com/explorer/entity/usg">government</a> through criminal seizures is now valued at $15.64 billion.</li>
</ul>



<h2 class="wp-block-heading">On the ground</h2>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">whenever anyone says that technology&#39;s winners are known and permanent, I point them to this chart <a href="https://t.co/7YHdoBBCpt">pic.twitter.com/7YHdoBBCpt</a>&mdash; sarah guo // conviction (@saranormous) <a href="https://twitter.com/saranormous/status/1766950026067202265?ref_src=twsrc%5Etfw">March 10, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Is Bitcoin the eventual IBM of crypto?</figcaption></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">L1s are overpaying for security. Issuing tokens at 2 digit inflation rates is not longer necessary given that they can use <a href="https://twitter.com/CelestiaOrg?ref_src=twsrc%5Etfw">@CelestiaOrg</a>, <a href="https://twitter.com/eigenlayer?ref_src=twsrc%5Etfw">@eigenlayer</a>, ICS, mesh security and other alternatives to lower their security budget. This means that current validators will evolve to more… <a href="https://t.co/tBSHMxxYuc">https://t.co/tBSHMxxYuc</a>&mdash; Federico (@fekunze) <a href="https://twitter.com/fekunze/status/1766956692170817660?ref_src=twsrc%5Etfw">March 10, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Token inflation is an elephant that turns invisible as prices go up</figcaption></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">A slowing of <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$GBTC</a> outflows could have a profound impact on prices. Having picked up again in $ terms, there is a more definite trend lower when measured in <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a>. Additionally, as Grayscale loses market share (now down to 50%) these outflows become less significant. <a href="https://t.co/GBARFB1Ac3">https://t.co/GBARFB1Ac3</a> <a href="https://t.co/KPUvd60V5n">pic.twitter.com/KPUvd60V5n</a>&mdash; Quinn Thompson (@qthomp) <a href="https://twitter.com/qthomp/status/1767029328603189692?ref_src=twsrc%5Etfw">March 11, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">GBTC’s ETF market share is down to 50%</figcaption></figure>



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Cheatsheet: Bitcoin miner treasuries now worth $131B — a new all-time high

Jack Kubinec

Bitcoin mining firms are deepening their financial war chests as speculation arises around potential spot bitcoin ETF decisions early next year.



Twitter co-founder and longtime bitcoin bull Jack Dorsey led a $6.2 million seed <a href="https://www.prnewswire.com/news-releases/jack-dorsey-leads-seed-round-in-support-of-oceans-mission-to-decentralize-bitcoin-mining-globally---announces-launch-at-future-of-bitcoin-mining-conference-301999073.html">round</a> in Mummolin, the company supporting the launch of a decentralized bitcoin mining pool called OCEAN.&nbsp;



Meanwhile, the Canadian mining company Bitfarms <a href="https://investor.bitfarms.com/news-events/press-releases/detail/220/bitfarms-announces-closing-of-c60-million-private">closed</a> a private $60 million share sale with US institutional investors.&nbsp;



OCEAN is a non-custodial mining pool, meaning miners can lend computing power with ASIC interfaces and receive rewards directly from the bitcoin network without the company taking custody of the mined bitcoins.&nbsp;



“It went back to the principle of protecting bitcoin,” Dorsey <a href="https://www.youtube.com/watch?v=_PH5sKrkzZY">said</a> at a live event this week promoting OCEAN. “We need the people to have more independent, sovereign options [to mine bitcoin].”



It is Dorsey’s second round of 2023, joining his seed investment in bitcoin “voucher” provider Azteco in May.&nbsp;



Read more: <a href="https://blockworks.co/news/dorsey-funding-bitcoin-voucher-service">Twitter co-founder Dorsey leads $6M investment in bitcoin voucher service</a>



Bitfarms operates mining facilities in Quebec, the US state of Washington, Argentina, and Paraguay. The day before the private placement closed, the company <a href="https://investor.bitfarms.com/news-events/press-releases/detail/219/bitfarms-initiates-transformative-fleet-upgrade-that">announced</a> the purchase of 35,888 T21 bitcoin miners and said the high-energy miners come at the most attractive price point the company has seen since 2020.&nbsp;



November was a busy month for bitcoin miners on the funding side. Abu Dhabi-based Phoenix Group <a href="https://www.globenewswire.com/en/news-release/2023/11/21/2783783/0/en/Phoenix-Group-s-IPO-Sees-Unprecedented-180x-Oversubscription-from-Retail-Investors-Signifying-Strong-Market-Confidence.html">raised</a> $370 million via an initial public offering ahead of its listing on the emirate’s ADX stock exchange. Northern Data Group <a href="https://ir.northerndata.de/news/corporate-news/northern-data-group-secures-eur-575-million-debt-financing-facility/">secured</a> a $623 million debt financing facility from Tether Group, the company behind USDT, partly to scale its bitcoin mining operations.&nbsp;



<h2 class="wp-block-heading">Warner Music Group invests in Web3 fan engagement platform</h2>



Warner Music Group joined a group of investors including CMT Digital, Winklevoss Capital, and the NEAR Foundation to raise $3.5 million for a startup blockchain fan engagement platform named MITH, as Axios <a href="https://www.axios.com/pro/media-deals/2023/11/30/mith-fan-platform-jack-harlow">reported</a>.



MITH allows creators to make tiered membership platforms for fans. MITH members can store collections and rewards on their profiles. The rapper Jack Harlow’s “Private Garden” membership <a href="https://www.privategarden.us/memberships">platform</a> launched earlier this month on the Polygon blockchain, according to Axios.&nbsp;



MITH’s raise is the latest funding round for a platform using Web3 monetization tools to connect celebrities with their fans. Modhaus, a platform for K-pop fan engagement, <a href="https://blockworks.co/news/3-startups-90m-raises">raised</a> $8 million in November.&nbsp;



<h2 class="wp-block-heading">Other notable fundraises</h2>



<ul class="wp-block-list">
<li><a href="https://blockworks.co/news/cross-chain-protocol-investor-funding">The cross-chain protocol Wormhole raised $225 million</a> at a $2.5 billion valuation. Tier-1 investors in the round <a href="https://cryptorank.io/funding-rounds">were</a> Coinbase Ventures, Multicoin Capital and Arrington XRP Capital, per CryptoRank.&nbsp;</li>



<li>Coinchange <a href="https://x.com/coinchangeio/status/1729828234366222707?s=20">raised</a> $10 million for its platform that simplifies DeFi yield and compliance for financial businesses. </li>



<li>Decentralized physical infrastructure (DePIN) provider Grove <a href="https://medium.com/decentralized-infrastructure/grove-announces-7-9m-fundraise-to-fuel-decentralized-infrastructure-growth-0671362fae45">raised</a> $7.9 million with participation from Placeholder VC, Avon Ventures, and Druid Capital. DePIN refers to computing infrastructure, like wireless networks or file storage, that isn’t controlled by a centralized entity.</li>
</ul>



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Funding Wrap: Bitcoin miners bag cash ahead of ETF decisions

Sebastian Sinclair

Looking to the future, policymakers in Arizona referred an <a href="https://www.azleg.gov/legtext/56leg/1R/bills/SCR1007P.pdf" target="_blank" rel="noreferrer noopener">amendment</a> to the state constitution in the Arizona State Legislature last week, seeking to exempt digital assets from property taxation.



Following its second reading on Jan. 23, the resolution now has a small shot of making it to a ballot initiative. If approved by a majority vote in the legislature and subsequently passed by voters, the amendment would make crypto tax-exempt at the state level.



It would also make it one of the more favorable states for tax purposes, alongside Wyoming, which passed a law <a href="https://blockworks.co/news/daos-favor-classic-tax-havens-passing-up-crypto-friendly-us-states">recognizing a DAO’s legal status</a> as akin to a limited liability company. 



Arizona had originally toyed with the idea of making <a href="https://blockworks.co/news/arizona-considers-making-bitcoin-legal-tender">bitcoin legal tender</a> early last year, but that bill was subsequently <a href="https://legiscan.com/AZ/text/SB1341/2022" target="_blank" rel="noreferrer noopener">shelved</a> shortly after being introduced.



On a federal level, all individuals are required to pay income and capital gains taxes, but individual US states approach taxation differently, with some eschewing the concept of capital gains or personal income tax altogether at the state level.



Income tax at the state level is triggered when a user produces additional income deriving from mining, staking or airdrops, while capital gains (or losses) are triggered when a cryptoasset is disposed of on the basis of its cost basis and sale price.



Aside from Arizona, here are four other “friendly” states based on regulatory and tax advantages ahead of the federal tax filing deadline come April 18.



<h3 class="wp-block-heading">Wyoming</h3>



Wyoming, long-viewed as one of the country’s most progressive crypto regions, does not collect personal or corporate income tax. The state also began regulating the industry early on by introducing a financial <a href="https://wyomingbankingdivision.wyo.gov/banks-and-trust-companies/financial-technology-sandbox" target="_blank" rel="noreferrer noopener">technology sandbox</a> for testing financial products and services.



As mentioned, it formally legalized DAOs in 2019, allowing for clearer guidelines on how those entities would be taxed. Typically, LLCs don’t pay taxes on business incomes, but instead, members are required to pay taxes on their share of the LLC&#8217;s profits.



The state also passed its <a href="https://blockworks.co/news/legal-expert-avanti-may-face-uphill-battle-getting-fed-payment-access">charter for banks</a> dealing in digital assets back in 2019 making it possible for crypto firms to both hold customer cash deposits and custody crypto — later able to be traded on exchanges.



High electricity prices have caused some crypto miners to balk at setting up shop in the state, though Wyoming has recently attempted to tackle the issue by introducing two bills that may result in bitcoin <a href="https://blockworks.co/news/pro-crypto-wyoming-not-yet-pro-enough-to-attract-bitcoin-miners">miners paying less</a>.



<h3 class="wp-block-heading">Texas</h3>



Like Wyoming, Texas allowed for <a href="https://www.dob.texas.gov/sites/default/files/files/news/Industrynotices/in2021-03.pdf" target="_blank" rel="noreferrer noopener">chartered banks</a> to custody digital assets in June 2021, which was viewed at the time as a way to tap into the state&#8217;s booming domestic crypto market. 



Coinciding with its cheap electricity — beneficial to crypto mining activity two years ago — the state also features no income tax.&nbsp; Still, Texas does not recognize crypto as legal money and instead is concerned with the asset class as a taxable commodity on a transactional basis.



The state does not require firms, such as exchanges, to obtain a money transmitter’s license. It also passed its <a href="https://freemanlaw.com/cryptocurrency/texas/" target="_blank" rel="noreferrer noopener">Texas Virtual Currency Bill</a> in 2021 which provides a legal definition of digital assets. There is no income tax in the state.



Miners too benefit from a favorable framework that was put in place for firms to profit from 10-year tax abatements and tax credits, alongside additional state training for their workforce.&nbsp;



<h3 class="wp-block-heading">Florida</h3>



Florida, like Wyoming and Texas, does not feature a state income tax.&nbsp;



The state has a number of high-profile politicians opting for local crypto and blockchain regulation, including Miami Mayor Francis Suarez, who previously pushed for city residents to <a href="https://www.newsweek.com/miami-passes-resolution-allow-paying-city-workers-bitcoin-attempt-woo-big-tech-1568784" target="_blank" rel="noreferrer noopener">receive their paychecks</a> and pay for their property taxes in bitcoin.



While the state’s governor <a href="https://blockworks.co/news/desantis-says-florida-should-be-willing-to-accept-taxes-in-crypto">Ron DeSantis floated the idea</a> of allowing businesses to pay taxes using crypto to Florida’s Legislature’s 2022 session, his proposed measures failed to pass. 



As such, the state currently does not address the sales and use tax treatment of transactions involving crypto though, like Wyoming, a money transmission license is not required courtesy of changes made to <a href="https://www.flsenate.gov/Session/Bill/2022/273" target="_blank" rel="noreferrer noopener">House Bill 273</a>.



<h3 class="wp-block-heading">Colorado</h3>



Colorado, unlike other states listed, does tax income at 4.55% including wages and salaries deriving from crypto activity.&nbsp;



The outlier here is that Colorado is attempting to position itself as a crypto-friendly state by ensuring broader digital asset use cases for tax purposes.



In September of last year, Colorado’s Department of Revenue <a href="https://blockworks.co/news/colorado-residents-can-now-pay-state-taxes-with-crypto-for-a-fee">began accepting crypto as an additional form of payment</a> for all resident taxpayers, becoming the first US state to do so.&nbsp;



That includes individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax.



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These 5 Crypto-friendly US States Show Initiative on Tax Laws

Ben Strack

<div id="highlights-block_623a31d85db6e" class="highlights">
 <ul>
 <li>Maple Finance “is the rails on which the lending business of the future will be running,” the CEO said</li>
 <li>Traditional asset managers are showing increased interest in lending to crypto miners</li>
 </ul>
 
</div>



Crypto lender Maple Finance has surpassed $1 billion in loans in relatively short order and is now looking to connect crypto mining borrowers with traditional asset managers willing to float voluminous loans.



The company offers undercollateralized lending infrastructure for institutional lenders and corporate borrowers.



Founded in May 2021, Maple hit the $1 billion mark in 10 months following its largest loan — $77.5 million — to digital assets quantitative trading firm Alameda Research.



“We are excited about the growth on the platform over the past year and we look forward to continuing to originate new loans with the Maple team,&#8221; an Alameda spokesperson told Blockworks in an email.&nbsp;



Sam Bankman-Fried, the CEO of crypto exchange FTX, founded Alameda in 2017 in an effort to provide liquidity via market-making to digital asset markets.



Maple <a href="https://www.maple.finance" target="_blank" rel="noreferrer noopener">aggregates loans</a> on behalf of large borrowers. Rather than a borrower negotiating deals and maintaining contact with a dozen prospective lenders, one entity assesses the borrower’s risk and manages a collateralized asset pool.



Maple CEO Sid Powell told Blockworks that the company’s pools provide an “evergreen source of capital.”&nbsp;



“Alameda doesn’t have to go and find those parties — the delegate does that,” Powell said. “And Alameda doesn’t have to manage individual relationships; they just have to have one point of contact.”



Institutions looking to source yield through lending often don’t know where to start, he added, saying many lack the crypto-native know-how to negotiate an annual percentage yield (APY) or lack the bandwidth to properly source counterparties.



<h3 class="wp-block-heading">The future of lending?</h3>



Maple “is the rails on which the lending business of the future will be running,” Powell said, because the startup offers a comparably low-cost way to gain exposure to the growing field of blockchain-based fixed-income products.



A high-performing underwriter or risk assessor at a company such as JPMorgan or Goldman Sachs can leverage their expertise and relationships to run a Maple pool, according to Powell.



“You don’t have to go out and raise $200 million by talking to 20 different institutions or family offices,” he said. “You can set up the next Genesis, Celsius or PIMCO yourself.”



Crypto lender <a href="https://cms.blockworks.co/celsius-dips-into-defi-delegating-30m-in-ether-on-maple-finance/" target="_blank" rel="noreferrer noopener">Celsius recently became</a> the first centralized finance institution to deploy its services on Maple. Celsius last month moved to issue and manage under-collateralized loans from a $30 million pool of wrapped ether (WETH) for the first time.



<h3 class="wp-block-heading">A future focus on miners</h3>



Maple Finance is targeting $5 billion in originated loans by the end of this year.



About $3 billion is projected to come from Maple’s existing business, while $1 billion would come from its Maple Solana offering, set to launch at the end of the month.



In January, Maple unveiled its bid to <a href="https://cms.blockworks.co/maple-finance-scoops-up-lending-protocol-avari-to-hasten-launch-on-solana/" target="_blank" rel="noreferrer noopener">acquire DeFi lending protocol Avari</a> to expedite the platform’s launch on the Solana blockchain. Daniel Kim, Maple’s head of capital markets, said at the time Solana “has uniquely captured the interest of the largest capital markets participants.”



The remaining projected $1 billion in loans is expected to come from institutions lending to miners. Traditional asset managers and banks — even if they’re reluctant to invest directly in crypto — are showing an increasing interest to act as a counterparty for such loans, Powell said, adding that there’s a particular appetite for US miners tapping renewable energy.&nbsp;



Maple is targeting a lending pool for miners, initially amounting to $100 million or $200 million, by the end of the second quarter.



“Because it’s the oldest crypto industry, it’s the one that most people are familiar with and one that we see some of the highest levels of appetite for,” Powell said.



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