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A Crypto Holiday Special: Past, Present, And Future With Ben Lilly



2022 is coming to an end, and our staff at Bitcoinist decided to launch this Crypto Holiday Special to provide some perspective on the crypto industry. We will talk with multiple guests to understand this year’s highs and lows for crypto.

In the spirit of Charles Dicken’s classic, “A Christmas Carol,” we’ll look into crypto from different angles, look at its possible trajectory for 2023 and find common ground amongst these different views of an industry that might support the future of finances.

Ben Lilly: “(…) for fundamentals… Nothing has changed. If anything, builders are building faster than ever before. All of us veterans know that right now are the most productive weeks you can have in crypto. It is a blessing to those that can weather such bearish times.”

And now, for a bonus round, we spoke with Ben Lilly, Co-Founder at Jarvis Labs, the on-chain analytics and token design firm tracking the crypto market. Lilly offered his views on the industry’s current state, why the Bear Market must be used as a time for building, and why the nascent class has matured. This is what he told us:


Q: What’s the most significant difference for the crypto market today compared to Christmas 2021? Beyond the price of Bitcoin, Ethereum, and others, what changed from that moment of euphoria to today’s perpetual fear? Has there been a decline in adoption and liquidity? Are fundamentals still valid?

A: In December 2021 we were discussing whether or not the U.S. Federal Reserve would follow through on rate hikes in the face of bubbling inflation. A year later, what we’ve seen is a strategic push on saying they will take two steps, and instead take three in a hawkish/bearish manner. It has not only hurt markets, but ensured markets could not find any solid footing to build momentum on.

This mentality led to a rapid hiking regime. The down wind effects were dollars as a currency were the asset to hold. And most everything else lost value to the dollar.

A lot of people like to say Bitcoin, Ethereum, and other assets “lost value”. This is a misnomer. We price things in U.S. dollars, and relative to the dollar, these assets lost considerable value.

What a lot of people are also slowly realizing is that most participants in crypto markets are and were speculators. This is rather unfortunate, in my opinion. And something I look to track better with data.


The drop in speculators (and many market makers closing up shops) has left a significant hole in liquidity. We are well aware of this. It is very difficult for market makers to run smoothly on some second tier exchanges as the books are pretty dry. We understand this well as we began to explore market making since our team has run autonomous trading systems for half a decade now. Clients are asking us more now than ever to do market making, so our team has begun ramping up these operations for 2023.

As for fundamentals… Nothing has changed. If anything, builders are building faster than ever before. All of us veterans know that right now are the most productive weeks you can have in crypto. It is a blessing to those that can weather such bearish times. I’m seeing some really impressive tech solutions coming to fruition right now. Our team is testing some of them currently and look to broaden our functionality onchain in the coming months – something we’ve been exploring for years now. To us, it’s a testament to the fundamentals of the industry only getting better.

Q: What are the dominant narratives driving this change in market conditions? And what should be the narrative today? What are most people overlooking? We saw a major crypto exchange blowing up, a hedge fund thought to be untouchable, and an ecosystem that promised a financial utopia. Is Crypto still the future of finance, or should the community pursue a new vision?

A: Operations that take place onchain are becoming more desirable than before. Our clients are pushing us in this direction, which tells us the don’t trust, verify mentality is becoming more prominent. I love hearing this and hope to push everything we do to be fully onchain in the years to come.

I’ll put it this way, never would I have imagined our team would be looking into zero knowledge technology to run part of our operations. To put it simply, the vision is the same, just more crystallized – a process that will keep happening as years pass.


Q: If you must choose one, what do you think was a significant moment for crypto in 2022? And will the industry feel its consequences across 2023? Where do you see the industry next Christmas? Will it survive this winter? Mainstream is once again declaring the death of the industry. Will they finally get it right?

A: The significant moment was GBTC sliding into negative NAV.

As the tide was pulled out in 2022, we learned what was really happening in the waters of crypto, and we see many blowups having origins with the Grayscale Trust product.

Three Arrows Capital, Genesis, DCG, BlockFi, Voyager, and others were all associated with the Trust and as the value of the Trust was more than the worth of all the shares outstanding (negative NAV), market dynamics caused spot demand to wane around April 2021.

The timing with this and what the U.S. Federal Reserve did with rate hikes was like a double edge sword where both edges were pointed in the same direction. Higher rates and lower spot demand due to a toxic Grayscale product meant the bear market sword cut twice as much.


As for 2023, I still think some of the worst is yet to come. I’m not necessarily referring to price here. I’m talking about operations not having enough cash to weather the winter. Revenues are down, new entrants to crypto are down. While I think this is good in a way because it rids the industry of poorly run businesses, it’ll cause some headline fears for the industry as companies close their doors.

It won’t be the end of the industry from my vantage point. Those that have capital have plenty of runway. And even those that don’t have multi-year runways are staffed by very passionate builders. By the end of 2023 we will see the market coming back to life with lots of excitement. I don’t believe it’ll be a full blown bull market by any means… It’ll be more about projects rolling out the things that they’ve been busy building for the year. You give a bunch of crypto devs a year to build, the results are jaw dropping.

Q: And, of course, we have to ask; many claim that the FTX collapse is setting the industry back to the 2018 bear market. Back to the Initial Coin Offering (ICO) era, to the so-called “Wild Wild West” days of crypto, what do you think about this idea, and where do you think the industry stands now? More importantly, what is Jarvis’ role in this context, and where do you aim to be in 2023 and beyond?

A: Crypto is maturing just like all of us do as we age. You ask anybody who has had ups and downs if they were set back to when they were a younger version of themselves… Most will say they are much wiser, and often the setbacks is how we truly realize our potential. Crypto is the same.

We discussed earlier about how onchain solutions are more in demand than ever… Well the industry had a bad go at centralized entities like FTX, which had one goal of making money, and not contributing to the space.

Bitcoin BTC BTCUSDT Crypto Holiday
BTC’s price moving sideways on the daily chart. Source: BTCUSDT Tradingview

The space will be wiser moving forward. And we hope Jarvis Labs can help push this mindset. Our team has been busy in many verticals. We have teams building software solutions, new metrics, dashboards, token designs, algorithms, and a few other things that we will unveil soon. But if I had to keep it to one role, it’s to help empower everybody to hold crypto to a higher standard. We can be better. Let’s be better.


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Over 77% Of Bitcoin Millionaires Wiped Out As Crypto Winter Rages



Bitcoin’s price has taken a hit since it hit its all-time high back in 2021, and as a result, the number of bitcoin millionaires has dwindled dramatically since then. These addresses holding more than $1 million in BTC peaked in November 2021 and have been on a steady decline since then.

Bitcoin Millionaires Suffer Losses

Back in November 2021, when the bitcoin bull market was in full bloom, the number of BTC millionaires had crossed 100,000 wallets. At its highest point, there were 108,886 wallets with more than $1 million worth of BTC in their balances, but according to data from BitInfoCharts, this number has dropped below 25,000.

At a current count of 24,533 millionaire wallets, more than 77% of bitcoin investors with the millionaire status have been wiped out in a little over a year. The majority of the losses came in the first half of 2022 and by June 2022, there were only a little over 26,000 BTC wallets with more than $1 million in their balances. 

Wallets holding at least $10 million worth of BTC also took a hit during this time. It was sitting at only 3,852 at the time of this writing. However, smaller investors have been on the rise. According to a report from Glassnode, the number of BTC addresses holding higher than 0.1 and 1 BTC reached new all-time highs on Tuesday, January 10.


This marked accumulation from these smaller addresses shows that investors are not deterred by the decline in prices. But rather, are taking advantage of the low prices to increase their holdings.

Bitcoin price chart from

BTC price holding steady above $17,000 | Source: BTCUSD on

BTC Profitability Declines As Well

The drop in the number of bitcoin millionaires is also in line with the decline in the profitability of the digital asset. Bitcoin started the year 2022 with only about a quarter of its investor seeing losses, but by January 2023, it has dropped drastically, and now only 51% of BTC investors are in profit.

Bitcoin investors in profit

Its large holder concentration has also dropped during this time. Only 10% of wallets are now classified as large holders, indicating a redistribution of BTC from whales to smaller holders. It also points to more decentralization with supply being more adequately distributed for market participants.

As for bitcoin’s price, it is still trading well below its all-time high price despite its recent recovery above $17,000. Data from Messari shows that the price of the digital asset is currently down more than 74% from its November 2021 high.

BTC is changing hands at $17,320 at the time of this writing. It is up 3.7% in the last week with a 24-hour trading volume of $16.2 billion.

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from TechBullion, chart from


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Terra And Do Kwon Lawsuit Voluntarily Dismissed, But Why?



The plaintiffs in a class action lawsuit against TerraUSD and its affiliated companies voluntarily dismissed their case on Monday.

Matthew Albright filed the lawsuit on behalf of others against Terraform Labs (TFL), Pte Limited, and other affiliates in the Southern District of New York Court in August 2022.

The plaintiffs alleged that the defendants falsely promoted, manipulated, and offered UST stablecoin and LUNA. Zhu Su, a cofounder of failed crypto hedge fund Three Arrows Capital (3AC), announced the voluntary dismissal of the class action lawsuit via a tweet on January 10.

Matthew Albright, the lead plaintiff in the case, filed a notice in Court stating a voluntary dismissal of the case against the defendants. The defendants include Terraform Labs, Do Kwon, Delphi Digital Consulting, Luna Foundation Guard (LFG), Jump Trading, Nicholas Platias, and three others.


Albright and his co-plaintiffs accused TerraUSD and the other defendants of falsely promoting UST, LUNA, and other related coins. According to the lawsuit, the defendants falsely projected the coins’ stability while laundering the profits from Terraform Labs into personal accounts.

3AC Blames FTX For TerraUSD’s Fallout

The lawsuit could be linked to the November tweets by 3AC’s cofounder Zhu Su that FTX and Alameda Research manipulated the crypto market. Zhu claimed that FTX was part of a conspiracy that resulted in the UST collapse.

Three Arrows Capital got hit badly by the crisis and went bankrupt shortly after due to severe exposure to Terraform Labs. Zhu Su and TerraUSD’s founder, Do Kwon, previously blamed Genesis and Alameda Research for UST and LUNA’s crash.

Terra And Do Kwon Lawsuit Voluntarily Dismissed
LUNAUSDT price enters in the green zone on the 24-hour chart l LUNAUSDT on

Nonetheless, TerraUSD and its affiliates also faced two other class action cases, which are still active. Bragar Eagle and Squire, P.C. law firm, and Scott + Scott, a securities and consumer rights litigation firm, filed the lawsuits.

Primary Cause Of TerraUSD Collapse, Was It A Hack?

Meanwhile, investigations on collapse remain ongoing. In a December 6 tweet, FatmanTerra alleged that TFL’s claims that UST recorded a hack attack are false. FatmanTerra, is an integral part of the puzzle in TerraUSD collapse, and its been reporting on the firm’s collapse for over a year. The Twitter user has been helping the crypto community to bring the founder of TerraUSD to justice.

According to Fatman’s tweet, Terraform Labs dumped over $450 million UST on the open market a few days before the implosion.


Fatman cited data from Cycle_22, an anonymous researcher who discovered Hodlnaut, a Singapore-based crypto lender’s insolvency. The data revealed that TFL started dumping millions of UST a few days before the depeg.

According to Fatman, dumping such an amount of UST within that short period reduced the stablecoin’s liquidity and weakened its peg.

The UST dump and the $2.7 billion removed by TFL through Degenbox contributed to the implosion. Fatman implied that Do Kwon and Terraform Labs withdrew real dollars from the ecosystem, making UST redemption impossible.

More so, the independent audit released by TFL and Luna Foundation Guard (LFG) to show its efforts in redeeming the UST peg were incomplete. According to the Twitter user, the audit did not account for the 47,000BTC sent to Jump Crypto by the LFG.

This revelation further increased the evidence against TFL and Do Kwon, who remains on the run from South Korean prosecutors.


Meanwhile, LUNA witnessed a 12.79% price surge in the past 24 hours and trades at $1.56. LUNA’s price rally happened during the ongoing developments on the 2.0 chain.

Jared from TFL revealed, via a tweet, that the current version of TerraUSD Station undergoes an automatic update, which is incompatible with the Classic. Jared told the Station users on Classic that an update to Station will occur on January 10, 2023. Cover image from Pixabay, LUNA chart from Tradingview.


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Gemini Earn Users Swindled By Barry Silbert?



Crypto Exchange Gemini co-founder, Cameron Winklevoss, sent another open letter regarding the Genesis borrowing agreement. This time, the executive addressed the Digital Currency Group (DCG) Board of Directors, Genesis’ parent company. 

In the letter, Winklevoss accused the current DCG CEO, Barry Silbert, of allegedly conspiring and defrauding Gemini Earn users. Gemini offered the latter, which allowed users to obtain a yield by lending its crypto assets to Genesis. 

According to the document, Genesis was operating under a negative balance sheet for years. The crypto lender was allegedly affected by the collapse of one of its major partners, Three Arrows Capital (3AC). Winklevoss wrote: 

These parties (Silbert and others) conspired to make false statements and misrepresentations to Gemini, Earn users, other lenders, and the public at large about the solvency and financial health of Genesis. They did so in an effort to mislead lenders into believing that DCG had absorbed massive losses that Genesis incurred from the Three Arrows Capital Ltd. (3AC) collapse (…).

Winklevoss Unveils DCG’s “Toxic Trade”

According to the document, DCG and Genesis lent over $2 billion to 3AC before its collapse. The crypto lender was left holding over $1 billion in debt, which was allegedly “absorbed” by the DCG. 


The Gemini co-founder claims that Genesis’ parent company never took on debt from the crypto lender. They allegedly used a financial solution to “pretend to” have fixed the issues. Publicly, the company announced that it “assumed certain liabilities of Genesis.”

Behind the curtains, Winklevoss claims that the DCG issued a promissory note, to be mature in 2032, to “cover” Genesis’ balance sheet hole. This note was used as a “misleading” instrument to maintain the crypto lender operating and using it to prompt up another DCG product, the Grayscale Bitcoin Trust. 

However, the collapse of FTX precipitated a liquidity crunch in Genesis. Genesis owes Gemini over $1 billion, and its customers are still awaiting a resolution. These events forced DCG to shut down its operations, locking Gemini Earn Users from their funds. 

Bitcoin BTC BTCUSDT Winklevoss Gemini
BTC’s price with small gains on the daily chart. Source: BTCUSDT Tradingview

DCG Replies, Is Winklevoss Pulling A “Stunt”?

As Bitcoinist reported, the Gemini co-founder sent a letter to Silbert one week ago. On this occasion, Winklevoss gave DCG a deadline to reach an agreement, January 8th. The date came, but the parties failed to announce a resolution. 

Now, Winklevoss said the following on the path forward, the introduction of a new DCG management, and the fate of Earn users: 

(…) Genesis lenders, including Earn users, have been seriously harmed and deserve a resolution for the recovery of their assets. I am confident that with new management at DCG, we can all work together to achieve a positive, out-of-court solution that will provide a win-win outcome for all, including DCG shareholders.

The DCG Board of Directors and Silbert replied to Winklevoss. The company called the letter an “unconstructive publicity stunt,” part of a strategy to wash his public image, per the statement. 


The Silbert-led company claims that Gemini was solely responsible for marketing and promoting Gemini Earn. DCG concluded:

We are preserving all legal remedies in response to these malicious, fake, and defamatory attacks. DCG will continue to engage in productive dialogue with Genesis and its creditors with the goal of arriving at a solution that works for all parties.


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