Where to begin? In a decade of covering crypto I've seen a lot of crazy things, but never a week like that. In the past, there have certainly been one-off incidents that turned the industry upside down—like the 2014 Mt. Gox hack, or Tesla buying $1.5 billion worth of Bitcoin, or Elon Musk shilling Dogecoin on SNL—but never a cascade of events like we just saw.
In the coming days, there will be plenty of think pieces about what caused the craziness. And just maybe there will be some earnest self-reflection as to why the crypto community tolerates the people who triggered much of the current mess in the first place. But for now, let's take a breath and take stock of just what the hell happened in crypto's craziest week ever. Here are seven key moments.
1. Terra goes up in flames: Until a week ago, Terra was the hottest thing in crypto: its governance token LUNA was a top-10 coin by market cap, and its dollar-pegged algorithmic stablecoin UST was the No. 4 stablecoin. And then, pop! Both went just about to zero. (LUNA is trading at a fraction of a fraction of a cent, while UST bottomed out at 13 cents.) Plenty of projects have collapsed before Terra, but never one this big and never in such spectacular fashion. The crypto world will be talking about this disaster for years to come—and autopsying why so many in the industry were so quick to put their faith in Terra's high-risk structure.
2. $200 billion of crypto value vaporized in 24 hours: That's from a Bloomberg story on Thursday, which followed earlier reports that the crypto markets had already lost more than $1 trillion before the Terra crack-up. To put this in perspective, $200 billion is more than the entire market cap of Bitcoin in 2020. If you want to put a positive spin on the carnage, you can note that much of the collapse was driven by macroeconomic forces (it's not just crypto bleeding red this month) and that the crypto market is now big enough to survive a loss of that magnitude. But still. $200 billion!
3. COIN collapse: On Thursday, Coinbase shares (COIN) bottomed out at $40.83—a 90% drop from its debut price of $381 in April of last year. This is the flagship company of the crypto industry and, unlike many tech firms, has been profitable for most of its existence. Coinbase's spiral, which had been ongoing well before this week's market meltdown, mostly reflects that Wall Street still does not know how to value crypto. (On Friday, shares began climbing back to near $70).
4. Secretary Yellen says no systemic risk: This news got buried among the market madness, but it's a big deal that the Treasury Secretary told Congress this week crypto poses no "systemic risk" to the broader U.S. economy. The "systemic" term is a technical one and would have subjected the industry to a punishing set of new regulations.
5. Tether breaks the buck: Stablecoins are supposed to be stable. This week called the whole concept into question. Tether (USDT), the largest stablecoin by far, briefly dipped to 95 cents before recovering. Tether has broken its peg in the past but, coming amid the Terra debacle, its latest slip was terrible timing—and will only increase scrutiny of Tether's opaque accounting practices.
6. SBF takes a piece of Robinhood: FTX CEO Sam Bankman-Fried revealed he has taken an 8% position in HOOD, which could presage a full takeover. If that comes to pass, it would be an ironic turn for Robinhood, which was once seen as a Silicon Valley darling and a serious rival to Coinbase. Now its growth has slowed, it's cutting 9% of its workforce, and the stock is down 70% in a year.
7. Musk says "maybe not" to Twitter: It wouldn't be a crazy week in crypto without some Elon antics. Sure enough, the Tesla CEO kicked off Friday by suggesting he might not buy Twitter after all; the stock reacted poorly. He later clarified he's "still committed" to buying Twitter, but what happens next is anyone's guess. Twitter is the industry's most important communication platform, and Musk its biggest influencer, so it all matters.
Those were just seven news moments in a week full of many more of them—including an impending default by El Salvador thanks to mismanagement by the country's Bitcoin bro president. Crypto went on its craziest rollercoaster ride yet, and my biggest takeaway is that most in the industry will be fine. WAGMI, as they say. Unless you're a Terra bagholder.
This is Roberts on Crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt Executive Editor Jeff John Roberts. Sign up for the Decrypt Debrief email newsletter to receive it in your inbox every Saturday. And read last weekend's column: The Bitcoin Bloodbath Will Get Worse. This Is Fine.