The Cold War. And no, we’re not talking about the corporate rivalry between Ben & Jerry’s and Baskin Robbins… or the Russians.

So, what are we talking about?

It’s Crypto’s Cold War and it’s happening right now. So, put on your spy turtleneck and destroy the bug in your phone, we’re going deep undercover in today’s newsletter.

Espresso Shots

☕️ Crypto Companies Withdrawing From Silvergate 🥈 ❌

After the bank, Silvergate, has delayed an SEC hearing, resulting in a massive crash in the bank’s stock, several crypto companies are cutting ties.

Coinbase is just the most recent to distance itself, joining the likes of Crypto.com, Bitstamp, Circle and Gemini.

If controversy continues to swirl around Silvergate, we can’t wait for the debacle that will surely be called, “Silvergate-gate.”

☕️ Healthy Competition in the Metaverse 🥽 📺

Margrethe Vestager, the EU’s Commissioner for Competition and Digital Affairs, gave a speech yesterday on how Europe will conduct business in an increasingly digital economy.

Vestager’s speech focused on both Net Zero green initiatives and the Metaverse, calling her fellow enforcers and legislators to focus on restrictions that will prevent monopolies.

Because in the past, “dominance, entrenched positions, and abuses have rather been the norm.”

“We need to anticipate and plan for change, given the obvious fact that our enforcement and legislative process will always be slower than the markets themselves,” said Vestager.

“For example, it is already time for us to start asking what healthy competition should look like in the Metaverse, or how something like ChatGPT may change the equation.”

“Healthy competition? I live for healthy competition,” said Mark Zuckerberg, the CEO of a company that has acquired 91 others, including Instagram and WhatsApp.

☕️ Stepn on the Run? 🏃‍♂️👟

Stepn, a new “Move-to-earn” app, is still on track to release new features despite a tumultuous start.

Stepn, built on the Solana blockchain, incentivizes users to exercise with crypto and lets them pick out their own NFT sneakers.

Though in their first year of release, Stepn hit quite a few road bumps. They were the victim of several DDos attacks from hackers as well as a massive failure of its GPS function for users in Mainland China.

Despite their initial hurdles, Stepn intends to roll out a bevy of new features “soon.”

Unfortunately, those new features will include blisters, jock itch, and athlete’s foot.

Spilling the Beans

Crypto's Cold War ❄️ ⚔️

There’s a Cold War being fought by two of the world’s superpowers.

And like the last Cold War, it’s not publicized. There aren’t any troops on the ground. In fact, this war is so cold that nobody’s seems to want to talk about it.

That’s where we come in. To talk about it.

The Cold War we’re referring to is the Crypto Cold War between the U.S. and China.

It’s not a series of skirmishes, or an arms race, or even acts of digital espionage.

The name of the game is Avoidance.

And like when my mother found that stained clown costume under my bed, these two countries are masters of avoidance.

The US and China have taken vastly different tacks to crypto regulation. In China, it's been a quick and rapid clamp down on the technology and exchanges.

In the US, crypto adoption has grown while US regulators have largely looked the other way. In both cases the US and China are actively avoid crypto.

It's obvious that both countries are terrified of providing too much legitimacy to crypto. But it would seem that crypto is happening to these two countries whether they like it or not.

China has outright banned crypto. But it would appear that crypto is starting to seep through the cracks in the form of Hong Kong’s eager adoption.

Hong Kong, contrary to Mainland China, is actually, actively welcoming crypto. The Securities and Futures Commission, the governing financial authority in Hong Kong, has moved to make retail crypto trading legal in their region.

And they’re really excited!

“We must keep up with the times and seize this golden opportunity to spearhead innovation development,” said Paul Chan, Hong Kong’s Financial Secretary.

Meanwhile, the U.S. has never had a full ban on crypto. Yet, we keep seeing American lawmakers attacking crypto in case after case, claiming “unregistered securities.”

The frontman for the American crypto wars is of course, the SEC's Gary Gensler.

They SEC and Gensler have recently gone after Kraken for staking, BUSD for unregistered securities violations, and is currently investigating the crypto-friendly bank, Silvergate.

The SEC claims that it wants to protect Americans from risky investments, but the existing framework for securities doesn’t seem to mesh with crypto at all.

We think all of this fear is deriving from America’s own Crypto After-School Special, the story of how one promising, young American lost or maybe stole billions of dollars:

Sam Bankman-Fried and FTX...

But regardless of public or institutional sentiment, it may be too late to put America’s crypto paste back in the bottle.

It’s hard not to notice how massive crypto has become in the US, from Binance and FTx US to Gemini and Coinbase.

But what America and China are failing to realize in their mutual avoidance, is that each nation stands to make a lot of money from crypto, if they get it right.

And we’re not talking about investing government money that could be lost. We’re talking about the simple taxation that comes with widespread acceptance and regulation of a commodity.

We like to think of China and the U.S.’s crypto attitudes as a reverse space race in which the objective is to see who can go the longest without going “to the moon”.

Though the citizens of both countries are literally screaming for lunar exploration. It’s profitable, it’s decentralized, and it’s the unavoidable next step.

Because just like Wallace and Gromit, we all want to taste the moon cheese.

Meme of the Day

Look, crypto made it to the moon!

Crypto 101

Bull & Bear Markets: This is one of those rare instances when traditional financial terms transition perfectly into crypto.

A bull market occurs when assets are on the rise, usually over the course of a prolonged period of time. A bear market is when those same assets are falling, similarly over a longer period of time.

Crypto is currently in the midst of a bear market, one that began in early 2022.

The Last Sip

In keeping with the EU’s Dreams for the Metaverse, here are some of our favorites instances of healthy competition.

• Color War on the last day of camp.

• The Red Sox and the Yankees.

• The IRA’s terrorist movements to fight for independence from the English.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.