The Breakdown First Five - Tuesday, February 20, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Coinbase Ditches Bitcoin Payments

Coinbase Commerce caused quite a stir by ditching self-custodied Bitcoin as a payment option on their merchant platform. Bitcoin custodied with Coinbase can still be used and the explanation was that UTXO based coins are not compatible with their new EVM-based disintermediated system. Coinbase said only a tiny portion of customers even made use of the Bitcoin payment option. Many criticized Coinbase for not doubling down on lightning integration. 

4. Y Combinator: No Crypto, Thanks

Y Combinator have published their latest request for startups, making it clear that this year they are uninterested in crypto. NFTs and tokenized logistics are out, making way for AI iterations and healthtech. The sole crypto-related topic was stablecoin finance, both new issuers and new infrastructure for financial use cases. YC notes that the stablecoin wars are far from over, suggesting that only 7 million people have used payment stablecoins. 

3. Celsius Repayments

The Celsius bankruptcy saga is nearly complete as creditors receive their payments. $2B in crypto was distributed to 172,000 creditors, with around 75% of creditors collecting their distribution. Mashinsky is still facing prison time and the repayments can never undo the harm he caused, but at least this painful chapter in crypto history is almost over. 

2. 51% Impossible

A new paper from Coin Metrics has put some number around the idea that a 51% attack would be costly and impractical. The research found that a Bitcoin takeover would cost upwards of $20B and have no hope of paying itself, relegating the attack to only the most destructive state actors. Many nitpicked the analysis, suggesting their own pet Bitcoin attack would be more feasible, but the data and methodology to analyze this question is still groundbreaking.

1. Record Week for ETFs

According to Coin Shares data, last week was the largest ever week for crypto fund inflows. $2.45B was added to global crypto funds, almost all of it piled on top of the new US-based Bitcoin ETFs. Blackrock’s Bitcoin ETF has now gathered over $5B, more than the rest of their ETFs combined so far this year. Grayscale shed $623M in outflows, accelerating slightly but nowhere near the earlier pace.