Biggest Takeaways From a16z’s State of Crypto Report, Crypto’s Role in US Election, FBI Arrests SEC Hacker

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1. The Three Biggest Takeaways From a16z’s State of Crypto Report 2024

Venture capital firm a16z just released its 2024 State of Crypto Report.

Here are my three most important takeaways:

1. Crypto activity and usage have hit an all-time high 

a16z shows that the number of monthly active crypto addresses hit an unprecedented 220 million last month, more than tripling since the end of 2023. 

This surge is in part due to Solana, which accounted for about 100 million active addresses.

NEAR followed with 31 million, Coinbase’s Layer-2 network Base had 22 million, Tron clocked in at 14 million, and the Bitcoin network saw 11 million. 

In absolute terms, Ethereum is still the go-to chain for builders, pulling in 20.8% of total interest, followed by Solana and Base.

2. Crypto is an important topic for many US crypto voters 

Crypto has become a hot topic in the U.S. election. 

A16z took a closer look at swing states and their rising interest in crypto. Pennsylvania and Wisconsin, both heavy battleground states, ranked fourth and fifth in terms of the biggest jumps in crypto-related searches since the 2020 election.

3. Stablecoins (and DeFi) are the killer use cases at this stage 

Stablecoins have quickly emerged as one of crypto’s most compelling killer apps, enabling fast, low-cost global payments. 

In Q2 2024, stablecoins facilitated a staggering $8.5 trillion in transaction volume across 1.1 billion transactions, more than doubling Visa’s $3.9 trillion in transactions during the same period.

And stablecoins seem largely unaffected by crypto’s volatile market cycles.

Stablecoins now account for nearly one-third of daily crypto usage, at 32%, second only to DeFi, which takes up 34% of daily active addresses.

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2. Crypto Very Important for Many US Voters

A survey showed that about 26 million United States voters are part of a “crypto voting bloc” that ranks pro-crypto policy as a top requirement when deciding who to vote for in the November election.

One in seven — or 16% — of 1,004 respondents said crypto was “extremely”  or “very” important in deciding who to vote for. 

The survey also found that at least 25% of Democrats and 21% of Republicans said a candidate’s stance on crypto would positively impact their likelihood of voting for them.

The survey also showed that two in five Black voters listed a candidate’s crypto policies as an important criterion for deciding who to vote for—more than double the proportion of white voters.  This is why Kamala Harris mentioned crypto as one of the important aspects of her new economic plan for Black men. 

What is the practical impact of all this? Regardless of whether Trump or Harris wins next month, crypto will also win as it is now a topic that voters care about.

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3. FBI Arrests Hacker Behind Fake SEC Bitcoin ETF Approval

The FBI arrested the man who hacked into the SEC’s X account and posted fake BTC ETF approval news. 

Eric Council Jr., 25, of Athens, Alabama, was arrested in connection with this January 2024 unauthorized takeover of the SEC’s X account,  in which hackers posted a fake message from the SEC Chair that caused the value of bitcoin (BTC) to spike by $1,000. 

This moved markets and made the SEC look like amateurs when it was revealed that their account was hacked. 

Two interesting points stand out. 

First, the SEC should have used 2FA, not a simple mobile phone authentication. The irony here is that the SEC itself recommends that firms use proper 2FA. A good example of do what I say and not what I do.

Second, there is no mention of whether the accused actually benefited from this crime outside of a BTC payment he allegedly received as a payment for this hack. 

My favourite part of the statement is how the accused, Mr. Eric Council, did it. I copy the text verbatim as it’s worth a read!

 “As described in the indictment, Council, who used online monikers including “Ronin,” “Easymunny,” and “AGiantSchnauzer,” received personal identifying information (PII) and an identification card template containing a victim’s name and photo from co-conspirators. Council then used his identification card printer to create a fake ID with the information.  Council proceeded to obtain a SIM card linked to the victim’s phone line by presenting the fake ID at a cell phone provider store in Huntsville, Alabama. 

He then purchased a new iPhone in cash and used the two items to obtained access codes to the @SECGov X account. Council shared those codes with members of the conspiracy, who then accessed the account – and issued the fraudulent tweet on the @SECGov X account in the name of the SEC Chairman, falsely announcing the SEC’s approval of BTC ETFs. Council received BTC payment for performing the successful SIM swap. Shortly after, Council drove to Birmingham, Alabama to return the iPhone used in the SIM swap for cash. 

He later conducted internet searches for “SECGOV hack,” “telegram sim swap,” “how can I know for sure if I am being investigated by the FBI,” and “What are the signs that you are under investigation by law enforcement or the FBI even if you have not been contacted by them.”

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Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with. This newsletter is for educational purposes only, and none of its content should be construed as investment or financial advice of any kind. 

Who is Henri?

Henri Arslanian is the co-founder and managing partner of Nine Blocks Capital Management, an institutional-grade hedge fund focused exclusively on digital assets, with a market-neutral crypto fund focused on generating alpha from inefficiencies in crypto markets using relative value, arbitrage, and quantitative strategies. 

Henri was previously a partner and global crypto leader at PwC. In that role, he advised many of the world’s leading crypto exchanges, investors, financial institutions, and tech firms on their crypto initiatives and numerous governments, regulators, and central banks on crypto regulatory and policy matters.

With over 500,000 LinkedIn followers, Henri is a TEDx and global keynote speaker, a best-selling published author, and is regularly featured in global media, including Bloomberg, CNBC, CNN, BBC, The Wall Street Journal, The Economist, and the Financial Times. 

Henri was named by LinkedIn as one of the 2022 global Top Voices in Finance and is the host of the CryptoCapsules™ social media video series as well as The Future of Money podcast and newsletter.