March 2023: Cometh Crisis, Cometh Crypto

March 2023: Cometh Crisis, Cometh Crypto

April 3, 2023

In the crypto world this month, one infamous twitterati has taken the main stage: Balaji Srinivasan, ex-Coinbase CTO and former a16z partner, who’s on stage with a $1 million bet. A bet that Bitcoin will reach $1 million by June this year.

You can be a Bitcoin believer, sure. Those who have truly believed in the decentralized economy have stuck through, bear and bull. But to gamble $1 million with a term of 90 days… that’s a wild bet, given Bitcoin’s current price of ~$28,000 (at time of writing).

So why take such a risk?

According to Balaji, the world will eventually rename Bitcoin as “digital gold”, calling nations, companies and individuals to acquire it in large quantities, which will push Bitcoin’s value rapidly. This is his hyperbitcoinization theory – a theory, if proven, will make crypto a true alternative currency and the decentralized economy the new financial system.

But there are several layers to Balaji’s bet. He’s not just betting on the value of Bitcoin. He’s also betting on hyperinflation, the collapse of the US dollar, and in the grand scheme of things: the complete loss of confidence in the financial system. By taking the bet, Balaji is trying to make more people aware of the deeper truth behind the current banking crisis. As investment analyst Lyn Alden stated in her recent newsletter, $17.6 trillion in deposits are backed up by just $3 trillion in cash, of which perhaps $0.1 trillion is physical cash. In the age of digital bank runs that unfold in a matter of hours, this presents a huge systemic risk.
As Balaji put it, “Just as in 2008, the bankers lied. This time, the central bankers, the banks, and the bank regulators have lied to all dollar holders and depositors.”

A watershed event for crypto adoption

While the banking crisis is far from over, the fragility of the traditional financial system has already been exposed. Whether the long-trusted banks and the Federal Reserve can be trusted is still a matter of debate for many people. Maybe Balaji’s $1 million bet will be the game changer that helps everyone realize. Maybe it’ll take another bank run. 

Just like Balaji, we’re committed to unveiling the truth, and helping everyone understand the value of the alternative decentralized financial system. 

Our Chief Financial Officer Andrew Economos shared his views on the US banking crisis, and the potential positive implications for digital assets. In his article, Andrew provides a holistic overview of how and why the banking crisis occurred, and why it may be a watershed event for the institutional adoption of crypto.

Read the piece 

For those who prefer to watch, Andrew sat down with CNBC News to delve into the details further. In his segment, he explains how crypto is further detaching from the traditional financial markets, signaling a pivotal moment for the digital asset world.

CEO Alessio Quaglini continued the conversation on Forkast News, noting that thorough evaluation of counterparty risk is still paramount even when it comes to long-trusted traditional financial institutions.

Alessio further elaborates his point with Blockworks, providing commentary on how Bitcoin was built for moments like today’s banking crisis. He sheds light on the alternative financial system, and the fully transparent counterparty risk with DeFi. 

Read the article

Story time

Throughout the on-going storm, we’ve been committed to providing a safe haven for institutions of all stripes. Perhaps custody hasn’t always been the ‘it’ topic. But the many failures we’ve seen over the past year have served as a valuable lesson: independent custody and segregation of digital assets is not a ‘nice to have’, it is essential.

As more people start realizing the importance of custody, we’ve naturally received more interest in what a company like Hex Trust does, and how it all began. Check out our CEO’s interview with Elliptic on how Hex Trust was founded, what regulatory developments are ahead for digital assets, and the role custodians play in strengthening the industry. 

Read the interview 

Gryfyn launches officially 

Meet Gryfyn: your home for Web3 experiences. Onboarding the next billion users in Web3 requires making every aspect as easy as possible for the end user, and Gryfyn was created to make that happen. 

Together with Animoca Brands, we’ve officially launched the NFT-centric custodial wallet for the Web3 community, raising $7.5 million to help drive Web3 adoption.

Read the announcement

Hex Trust has entered the chat

Business is as usual, and our team’s been busy connecting with the rest of the digital asset industry this month. Some events we took part in:

📍WOW Summit Hong Kong 

📍AWS Industry Forum 

📍Reap’s Networking event 

And we had the great pleasure of co-hosting multiple side events around the world. Our Paris Blockchain Week Happy Hour co-hosted by Hex Trust, Kiln, Bitpanda, Animoca Brands, LeadBlock Partners and Gryfyn was a huge success. To celebrate the re-opening of Hong Kong as a global crypto hub, we also co-hosted a VIP cocktail night together with BitMEX. Check out our team in action.

We’ve spent the past few months dedicated to growing our presence in Europe, one of our new regional hubs, so we were super excited to make some new friends in Paris at our Happy Hour event. We’ve also been growing rapidly on the other side of the world in Dubai, where we recently became the first and only fully operational digital asset custodian in the region. Let us know if you’re in the area and would like to connect with us! 

To support our expansion, we’ve been rapidly growing our regional team in Dubai. One team member who’s been a big help in getting our operations started there is Emmanuel, our Head of Business Management (spot him in the picture above). A world traveler and lover of mountain biking, Emmanuel has been a big help to our international expansion, and will continue to play a key role in Hex Trust’s continued growth.

Get to Know Emmanuel

No one’s really sure how Balaji’s bet will turn out. Whether he’ll lose or make $1 million is uncertain. But we’re sure of one thing: the fragility of our financial system has been exposed, while Bitcoin and other digital assets held up well during this period, behaving exactly as they were meant to in periods of fiat crises. More people are finally starting to appreciate what a decentralized financial system offers. Full digital ownership, transparency, and democratization of financial markets to name a few. As the preferred custodian for Web3 ecosystems, we are ready to secure the permissionless future and accelerate institutional adoption.

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