Sometimes the brightest flames burn too bright for this world.

You either die Chris Farley or live long enough to see yourself become David Spade.

This is what happened with NFTs. Often hyped, always controversial, with varying degrees of utility, NFTs came into this world briefly, only to have their candles snuffed out.

But, how? A steady decline in popularity coupled with legal action from the SEC — which means this may finally be the death of Non-Fungible Tokens. And we’re gathered for the funeral.

But this isn’t just a funeral, it’s also a celebration of life. So yes, you can wear those pastel shorts that your wife hates.

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Espresso Shots

☕️ Robinhood Growth and Expansion 🏹 📈

Robinhood, the finance app, is now the holder of the world’s fifth-largest Ethereum wallet, at $2.54 billion in ETH.

This discovery was made by Arkham Intelligence, who later clarified that those holdings represent user balances held in custody.

But as that balance grows, so too does the trading platform.

Robinhood announced this week that its wallet would now offer swaps for Bitcoin, Dogecoin, and of course, Ethereum.

It seems that the amateur trading app has become a financial titan unto itself.

And that’s keeping with the moral of the traditional Robin Hood, who stole from the rich so he could become incredibly rich himself.

☕️ Kroll Hack Could Reveal FTX Creditors 🪓 💳

Kroll, a company working as a claims agent for creditors in the FTX collapse, admitted they were victims of a data breach and sensitive information may have been leaked.

Chief among that sensitive information is the identities of FTX creditors, including names, addresses, and emails.

Creditors who published affiliate links or used an FTX PNL card are currently, particularly vulnerable.

It’s a sobering development, but in our office, we’re still affectionately referring to the Kroll data breach as “The Kroll Show.”

☕️ Jesus Has Entered the Chat 😇 💬

A new AI program, Text with Jesus, allows users to converse with Jesus, Satan, and other biblical superstars.

The app is built on ChatGPT, and, like much of organized religion, the best features are hidden behind a paywall. If users want to talk to Mary Magdalene or Judas Iscariot, they’ll have to pay $2.99 a month.

Christians are sensitive and this app sounds pretty controversial, but Text With Jesus is walking the line like a pro.

The website clearly states that “the app is a tool for reflection and learning, not a replacement for prayer or personal faith.” Hysterically, the top FAQ is “Am I really talking to Jesus? Isn't this blasphemous?”

But Stéphane Peter, the app’s developer, said in an interview with The Washington Post that he’d received “pretty good feedback” from religious leaders.

With the success of Text With Jesus, don’t be surprised to see future AI projects featuring Buddha or the Dalai Lama as humanity continues to conflate robots with God.

But naturally, the talking memoji of the Prophet Mohammed will have to be left on the cutting room floor.

Spilling the Beans

Here Lies NFTs (2017-2023) 🪦 😵

Yes, we’ve gathered here today to finally lay NFTs to rest. It’s a… sparsely attended service. By the end, NFTs didn’t have many friends. They had become distinctly unpopular.

Why? Because they cost a lot of people a lot of money.

Take Justin Bieber, for instance, who purchased a Bored Ape, the closest thing NFTs offered to a “sure thing” for $1.3 million in 2022, just to watch his investment depreciate 95% in value to around the $60,000 mark.

It’s a sobering example. And part of that depreciation is that it feels like the public was never quite sure what to do with NFTs.

Yes, they’re supposedly valuable, digital art. But Picasso wasn’t releasing collections of thousands of near-identical paintings?

And when big brands stepped in, the situation just got worse. Mattel. Nike. Ralph Lauren. McDonald’s just released a Singapore-exclusive collection of Grimace NFTs, entirely missing the point.

It’s kind of like when Wendy’s X (formerly Twitter) account began tweeting like Gen-Z and “clapping back” against other brands. It’s cringy, it’s late, and makes everyone want to distance themselves from whatever practice a fast food PR team is adopting.

It doesn’t just feel like NFTs are losing popularity and traction, they very much are.

The NFT market is currently at a mere $8.9 million trading volume, the market’s lowest point in two years.

And just when you thought things couldn’t get any worse, this week, the SEC has hammered the final nail in NFTs’ coffin.

The SEC is currently levying its first unregistered securities case regarding NFTs against Impact Theory, a Los Angeles-based media company.

Impact Theory offered multi-tiered NFTs to investors, what they called “Founder’s Keys.” The Keys were set at three levels, “Legendary,” “Heroic,” and “Restless,” according to value.

But what makes Impact Theory stand out among the ocean of NFTs, and what certainly drew the punitive eye of the SEC, were the promises and advertising around the Founder’s Keys.

Impact Theory encouraged buyers to think of the keys as investments in their company. Investors could get in on the ground floor as Impact emphasized they were “trying to build the next Disney,” as the SEC charges read.

Even more damning, Impact promised “tremendous value” should their efforts be successful. Now, we’re certainly not pro-SEC here, but that language sounds a lot like an investment contract.

The SEC has long been warring against crypto in the form of these unregistered securities suits. But the NFT community simply doesn’t have the enthusiasm, backing, or resources of a Coinbase or Ripple, to weather an attack from the SEC

As the case against Impact Theory goes on, we expect the publishers behind NFT collections to retreat back into their holes for fear of further reprisal. And in those holes, they will wither and die.

Frankly, we don’t think that NFTs will be able to recover from this. Even without SEC intervention, the dawn was setting on the NFT empire.

The best thing we can do is move on. Look to the bright spots in crypto, the Bitcoin ETFs, a bull market, and further Web3 integration.

It’s time to close the book on NFTs and resign them to a dark chapter of crypto’s history.

So, with this, we shovel the last of the dirt on the grave of NFTs and say our goodbyes.

C’mon, let NFTs rest. It’s time to head to the reception where we’ll eat twelve deviled eggs, hit the open bar a little too hard, and hold an NFT widow in a questionably long embrace.

Premium Market Report

Bull Run Intact? Long-Term Holders Defy Bearish Sentiment ⌛ 🐻
Source: CoinDesk + CoinDesk

📃 Summary:

• Long-term bitcoin holders are accumulating and refraining from trading or using BTC as collateral based on analysis of position changes.

• Roughly 40% of bitcoin supply has been unmoved for over 3 years, an all-time high according to data from Bitfinex.

• Some long-term holders exited positions during July's bitcoin price drop from the $29,000-range low.

• Powell indicates restrictive monetary policy will persist until the 2% inflation target is reached.

• CME FedWatch tool shows a roughly 12% chance of rate hike at the September Fed meeting, unchanged from conditions pre-speech.

☕️ Our Take:

Meme of the Day

So are we have an individual funeral for each of the 10,000 Bored Apes? Or just one big group wake? 🙋🏼‍♂️🤔

Crypto 101

Series-E Funding: This is the last round of funding for a company and the end of the business lifecycle.

Well, yes, some businesses do continue to Series-F fundraising, but that’s just more fundraising without any defining features.

During Series E, a profitable company is faced with the decision to go public and launch an IPO. Yes, a company can decide against going public and continuing into Series F, but that almost always leads to diminishing returns.

We hope you’ve enjoyed our Series A through E fundraising series. And yes, we know we went D-A-B-C-E, but “Star Wars” also started in the middle and everyone seemed to enjoy that.

The Last Sip

While we try to visualize our final goodbye, here are three events we’re certain would occur at the NFT funeral.

3. The NFT ashes will be scattered amongst the waves of the OpenSea.

2. Kevin McCoy plays a bagpipe, badly.

1. Justin Bieber climbs atop the casket in a desperate attempt to recoup his losses.

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.