Square CFO Amrita Ahuja breaks down the company’s long-term growth strategy and how it positions itself for success

Amrita Ahuja, Square's chief financial officer
Amrita Ahuja, Square’s chief financial officer

  • Square, a digital payments company, is expanding its narrative to include businesses of all sizes. 
  • CFO Amrita Ahuja told Insider about how cryptocurrency is influencing Square’s financial growth.
  • This article is part of the “CFO Project: Future of Finance” series that drills down on what’s on the agendas of some of today’s most influential financial executives. 

Square, which recently changed its name to Block, equips sellers with tools including point-of-sale systems, marketing capabilities, banking solutions, payroll functionalities, and physical hardware. 

The digital payments company led by Jack Dorsey, who recently stepped down as Twitter’s CEO, reported a gross profit of $1.13 billion in the third quarter, while its Cash App offering generated $512 million. 

Though revenue growth slowed from past quarters, the company nearly doubled its payments in Q3 — $15.5 billion — for businesses with more than $500,000 in annual sales. Previously, small businesses with annual payment sales of less than $125,000 outperformed these larger sellers. 

This is positive news for Chief Financial Officer Amrita Ahuja. Square has been appealing for smaller businesses, but Ahuja told Insider she’d worked to expand its narrative: It wants to support small and large businesses alike with not only payments but software and integrated solutions, hardware, and financial services. Ahuja said that explaining its rapidly growing Cash App to people was also key to its messaging. 

Previously, Ahuja was the chief financial officer of Blizzard Entertainment, where she focused on the intersection of digital media and video-game publishing. Ahuja told The Wall Street Journal this year that she became excited about Square because of its impact on small-business owners like her parents, who had immigrated from India and owned a day-care center in a Cleveland suburb.  

Square’s earnings report said it ended the third quarter “with $7.4 billion in available liquidity, with $6.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as $500 million available to be withdrawn from our revolving credit facility.”

Ahuja said this financial statement put Square in a position for long-term success. 

“We believe we have a strong balance sheet that affords us the flexibility to invest for the long-term both organically and opportunistically inorganically, and we expect our balance sheet to grow over time,” she said. 

Ahuja said Square’s investments tended to be long-term ones. While it’s willing to adapt, the company has a strong belief that investing over long periods will show the strongest returns, she said.

“As we measure effectiveness of those investments, we think about compelling unit economics and about efficiency in returns on those investments across product development, sales and marketing, and customer operations,” she said. 

Ahuja said she believes artificial intelligence/machine learning and cryptocurrency and blockchain technology will disrupt commerce and other fields in the future. 

Ahuja said AI and machine learning would help companies like Square launch products in industries that were otherwise restricted because of a lack of technology or inadequate risk models. These new capabilities, she said, could open the funnel and provide more people access to automation tools.

“AI/ML will enable companies and their employees to be more efficient — the potential to quadruple revenues while only doubling employees,” she said. 

And Ahuja said she believes that while crypto will perhaps initially be used as an asset like gold, it will act more as a currency in the future. “The verifiability, transparency and independence of blockchain technology and cryptocurrency will be disruptive,” she said. 

Ahuja said that she wanted Square to build skills in both of these areas and have a strong understanding of their capabilities. 

One way Square is staying ahead of the curve is through investments in its newest business unit, called TBD, which is focused on building a decentralized, open platform to exchange bitcoin. This is in addition to the development of Square’s hardware wallet, a product that Square says will normalize bitcoin storage. It’s also said to be considering developing a bitcoin mining system to help make mining more accessible. 

According to Bitcoin Treasuries, Square held about 8,000 bitcoins valued at about $376 million as of Tuesday.

To further solidify its place in the cryptocurrency industry, Square has committed $10 million through its Bitcoin Clean Energy Investment Initiative to support a more sustainable bitcoin ecosystem, Ahuja said. 

The Cambridge Bitcoin Electricity Consumption Index has estimated that the cryptocurrency uses more energy than nations like Sweden, Insider reported earlier this year. A Bloomberg report in July estimated that bitcoin-mining machines worldwide used the same amount of power as Bangladesh.

“We hope this initiative accelerates the transition of the entire blockchain to clean power rather than only removing the carbon for the bitcoin that Square processes,” Ahuja said. 

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Some federal lawmakers and their staffers are all in on cryptocurrency speculation as Congress mulls how (or how not) to regulate the coins

US Senator from Wyoming, Cynthia Lummis.
Sen. Cynthia Lummis of Wyoming has invested in cryptocurrency.

  • At least five lawmakers invested in brokerage firms involved in crypto or other digital assets in 2020 and 2021.
  • At least 21 congressional staffers have also invested in the market.
  • Crypto experts predicted that the number of federal lawmakers investing in crypto would grow.

Lawmakers are torn about how to regulate cryptocurrency. But that hasn’t stopped some members of Congress and their senior staffers from investing in it.

At least one senator and four US House representatives have bought stock in cryptocurrency-related companies or invested with brokerage firms that work with this emerging market, according to an Insider analysis of federal records detailing the lawmakers’ personal finances for 2020.

Meanwhile, Congress has been introducing legislative proposals aimed at better regulating crypto. 

Sen. Cynthia Lummis, a Republican of Wyoming who sits on the Senate Banking, Housing, and Urban Affairs Committee, is an outlier among her colleagues. In 2020, she reported investing up to $250,000 in Unchained Capital, a bitcoin-based financial-services company. She’s among a handful of members of Congress who accept cryptocurrency campaign contributions.

 

But Lummis was several days late reporting a purchase in August of up to $100,000 in Bitcoin. Lummis’s spokeswoman Abegail Cave told Insider that the Wyoming senator “has gone above and beyond to comply with federal law and Senate Ethics requirements regarding financial disclosures.”

Rep. Jeff Van Drew, a Republican of New Jersey, reported up to $250,000 in “an investment trust” operated by Grayscale, the world’s largest digital-currency asset-management firm. The office of Van Dew did not respond to Insiders comment on what kind of investment trust he has with the firm.

Democratic Rep. Jake Auchincloss, a 33-year-old freshman of Massachusetts, reported up to $15,000 in Flipside Crypto Investor Holdings.

 

Rep. Barry Moore, a Republican of Alabama, reported investing up to $15,000 with a brokerage firm in Coffee, Alabama. The description of the firm on his financial disclosure said “crypto currency.” His office did not respond to Insider’s request for comment on which brokerage firm he was using. His disclosure said the firm paid $2,501 to $5,000 in dividends in 2020.

Jim Newman, the husband of Rep. Marie Newman, a Democrat of Illinois, has traded stock in the cryptocurrency exchange Coinbase at least 16 times. The most recent trade, a sale valued at $50,001 to $100,000, occurred in November.

 

Also in November, Newman’s husband purchased up to $50,000 worth of stock in Grayscale Bitcoin Trust.

Congressional ethics officials say that the “most comprehensive approach” for lawmakers to “eliminate conflicts of interests and the appearance of them” is to form what’s known as a qualified blind trust, a financial vehicle the House or Senate ethics committee approves that a trustee manages independently.

Most members of Congress have not established qualified blind trusts, which are often expensive and time-consuming to establish.

Senate Minority Leader Mitch McConnell at the US Capitol on October 07, 2021.
A staff director for the Senate Republican Communications Center under Senate Minority Leader Mitch McConnell invests in crypto.

Staffers charge into crypto

Lawmakers are not the only ones getting in on the cryptocurrency action.

Insider identified 21 high-ranking congressional staffers or their spouses who in 2020 and 2021 bought or sold cryptocurrencies, including ethereum and dogecoin, a cryptocurrency originally created as a joke among crypto enthusiasts that’s grown in value over the past year.

The tally is part of the exhaustive Conflicted Congress project, in which Insider reviewed nearly 9,000 financial-disclosure reports for every sitting lawmaker and their top-ranking staffers.

Senior staffers and some other aides on Capitol Hill are bound by federal law to file timely reports about all their stock transactions and other outside earnings if they make more than $132,552 annually. That’s generally the salary minimum for chiefs of staff; the staffers and aides also include chief counsels, legislative directors, and staff members who work on committees and advise lawmakers on policy.

The extent to which other Capitol Hill office employees with lower salaries hold cryptocurrency and crypto-related stocks is unknown because they are not required to disclose it.

Kristin Walker, Lummis’ chief of staff, told Insider that she started investing in bitcoin in the summer of 2020, before Lummis was elected and before she came to work on the Hill.

“Wyoming has been at the forefront of digital assets for the past few years, and I learned about it through Wyoming’s efforts,” Walker said.

Another crypto investor was Scott Sloofman, the staff director for the Senate Republican Communications Center under Senate Minority Leader Mitch McConnell. He purchased between $1,001 to $15,000-worth of Coinbase shares in April. He did not respond to Insider’s inquiry about his investments. 

More senior staffers than lawmakers have invested in cryptocurrency does not come as a surprise to Ron Hammond, the director of government affairs for the Blockchain Association. 

“There has been a massive uptick in staffers who either have crypto or are really interested in the issue, and I think it’s more of a generational thing,” Hammond, who worked on Capitol Hill as a former congressional staffer for many years.

The average age of members of the House at the beginning of the current 117th Congress was 58.4 years, according to the Library of Congress. The average age for senators was 64.3 years.

The idea of lawmakers and congressional staffers investing in cryptocurrency is exciting, Hammond said. 

“For those who want to get involved in crypto legislation, it’s important to maybe have some foot in it,” he said. “It does help increase your knowledge about how everything is supposed to work or you know what some flaws may be.”

Elizabeth Warren
Sen. Elizabeth Warren, a Democrat of Massachusetts, is a crypto skeptic.

Congress tries to get a grip on digital assets

Crypto chatter has ratcheted up on Capitol Hill in recent months as supporters and opponents of digital assets sketch out their respective visions about what the future might hold. 

In early June, Democratic Sen. Mark Warner of Virginia and Republican Sen. Roy Blunt of Missouri proposed tightening cryptocurrency rules to better trace electronic payments to ransomware attackers

A few weeks later, Rep. Maxine Waters, a Democrat of California who also chairs the House Committee on Financial Services, told attendees at a subcommittee hearing that she and her colleagues are “committed to providing not only more transparency in this minimally-regulated industry, but to ensuring that appropriate safeguards are in place.”

“So we have begun a thorough examination of this marketplace,” the 16-term lawmaker announced during a two-hour discussion weighing whether cryptocurrencies would lead to financial independence or fiscal ruin. 

Along the way, House lawmakers quietly passed a bipartisan bill instructing the Federal Trade Commission to provide Congress with recommendations “to further protect consumers from unfair or deceptive acts or practices in the digital token marketplace.” 

Come late July, Rep. Elissa Slotkin, a Democrat of Michigan who also chairs the House Homeland Security subcommittee on intelligence and counterterrorism, urged administration officials to lay out their wish list now for stronger cryptocurrency curbs. “If you need changes to legislation, if you need resources, we want to hear more from you, not less,” Slotkin said during a 90-minute discussion tagged “terrorism and digital financing.” 

Earlier this month, Sen. Elizabeth Warren, a crypto skeptic who’s characterized it as “unreliable tech” with “unpredictable fees,” said the industry harmed the planet by necessitating huge, energy-sucking mines, computer facilities designed to solve complex math problems to obtain the digital coins.

 

“Cryptomining has huge environmental costs & is raising energy prices for consumers. Bitcoin alone consumes as much energy as Washington state,” the Massachusetts Democrat tweeted.

A few days later, House lawmakers quizzed the CEOs of a half-dozen crypto-focused companies about their business practices.

The six witnesses, who handle everything from the logistics of mining bitcoin to branching out into other blockchain-based investments, spent four hours answering questions about the pros and cons of cryptocurrencies and their place in the modern economy. 

Daniel Gallagher, the chief legal officer for the financial-services company Robinhood, tried to manage expectations ahead of the hearing, telling CNBC that “it’s a stretch to believe that there will be legislation coming out on crypto anytime soon.”

Representative Tom Emmer sitting down at the House Financial Services Committee meeting
Rep. Tom Emmer, a Republican from Minnesota, is a cryptocurrency advocate whose re-election campaign committee accepts bitcoin. His personal financial records indicate that he personally does not invest in crypto.

Crypto associations bulk up lobbying efforts

The flurry of talks surrounding regulation has prompted more cryptocurrency associations to strengthen their lobbying efforts on Capitol Hill.

By August, cryptocurrency interests had collectively spent $2.4 million lobbying the federal government, including Congress, according to OpenSecrets, a nonpartisan research organization that tracks money in politics.

The interests lobbied against portions of the bipartisan infrastructure bill that would impose new tax-reporting requirements on crypto brokers that could pave the way for stronger regulations.

The lobbying efforts were unsuccessful. President Joe Biden signed the infrastructure bill into law in November. The crypto-broker policy is expected to raise $28 billion over 10 years to help fund infrastructure projects, according to the Joint Committee on Taxation.

Five years ago, the House created the bipartisan Congressional Blockchain Caucus to consider policymaking. One of the leaders of the group was Mick Mulvaney, a Republican congressman from South Carolina who later became President Donald Trump’s chief of staff. 

The current chairmen of the caucus are GOP Reps. Tom Emmer of Minnesota and David Schweikert of Arizona and Democratic Reps. Bill Foster of Illinois and Darren Soto of Florida. None reported holding any cryptocurrencies in their 2020 financial disclosures.

Emmer told MinnPost in October that he started reading about crypto after one of his staffers left the book “The Age of Cryptocurrency” on his desk back in 2015 or 2016. He has introduced several crypto-related bills, including the Securities Clarity Act, which would allow regulators to categorize cryptocurrencies as either a commodity, a security, or a currency. 

But overall, lawmakers have been slow to embrace cryptocurrency because it hasn’t been around for a long time, Najah Roberts, the founder of Crypto Blockchain Plug, a brick-and-mortar cryptocurrency exchange and education center, told Insider.

“They are afraid of that technology,” she said.

Roberts said she hoped more lawmakers would invest in the market.

“It will be great if they do because then that will give them a better understanding on how to acquire the asset, how they feel about securing the asset,” she said.

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White supremacists have made massive profits through bitcoin, new analysis suggests

Bitcoin
Prominent far-right figures like Stefan Molyneux and Andrew Anglin have made massive profits off cryptocurrencies, new research suggests.

  • A new Southern Poverty Law Center analysis identified far-right figures who made profits off crypto.
  • Among the figures identified were Stefan Molyneux and The Daily Stormer’s Andrew Anglin.
  • According to a post on its website, The Daily Stormer only accepts donations through cryptocurrency.

Some white supremacists who invested early in bitcoin have made massive profits off it and other cryptocurrencies, generating tens of millions of dollars in wealth, new research suggests. 

An analysis released Thursday by the nonprofit Southern Poverty Law Center (SPLC) identified more than 600 cryptocurrency addresses used by white supremacists and other far-right extremists.

The research says that figures who have championed white supremacist views — including Andrew Auernheimer, Andrew Anglin of The Daily Stormer website, and right-wing commentator Stefan Molyneux — were early investors in bitcoin and “turned a substantial profit from it.”

“The estimated tens of millions of dollars’ worth of value extreme far-right figures generated represents a sum that would almost certainly be unavailable to them without cryptocurrency, and it gave them a chance to live comfortable lives while promoting hate and authoritarianism,” according to the SPLC’s analysis on its Hatewatch blog. 

The analysis goes on to say that “nothing is inherently criminal or extreme about” cryptocurrency and that “most of its users have no connections to the extreme far-right.”

“However, the far right’s early embrace of cryptocurrency merits deeper analysis, due to the way they used it to expand their movement and to obscure funding sources,” said Hatewatch’s report.

Molyneux, who runs the philosophy podcast “Freedomain” on his website, was banned from YouTube along with the white nationalist Richard Spencer and the former Ku Klux Klan leader David Duke in June 2020 as part of a crackdown on channels that featured hate speech. Molyneux’s Twitter account was suspended a little over a week later, Screen Rant reported.  

In addition to cryptocurrency, Molyneux appears to make money through soliciting donations on his website, from fans of his purchasing membership to his virtual “Freedomain Community,” and by selling books. Molyneux has 10 philosophy-themed books listed for his sale on his website.

Aurenheimer, or “weev,” became known online as an internet troll and 4chan personality before he later started writing articles containing white supremacist rhetoric for the neo-Nazi and far-right website the Daily Stormer, according to the SPLC

Anglin is the founder of the Daily Stormer, according to the SPLC. In February, Anglin wrote a post on the Daily Stormer website telling readers they can only donate to the website using the anonymous cryptocurrency Monero. The website decided to switch from bitcoin to Monero in 2020 because “the media” had started pointing a light on “right-wing sites” accepting bitcoin donations, he wrote in the post, citing a CNN investigation into far-right extremists soliciting cryptocurrency donations.

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Indian PM Narendra Modi’s hacked Twitter account told 73.4 million followers that the country would distribute 500 bitcoins among its citizens

Narendra   Photo by Drew Angerer:Getty Images
Indian Prime Minister Narendra Modi

  • Indian PM Narendra Modi’s Twitter was hacked on Sunday and said the country had adopted bitcoin.
  • The tweet said that India had bought 500 bitcoins and would distribute them to residents.
  • The Indian government has been the target of more than 30,000 cyberattacks so far this year.

Indian Prime Minister Narendra Modi’s Twitter account was hacked on Sunday, broadcasting that the country had accepted bitcoin and would start distributing it to citizens.

Modi’s Twitter account, which has more than 73 million followers, was “very briefly compromised,” announced the prime minister’s office on Sunday.

“The matter was escalated to Twitter, and the account has been immediately secured,” it said. “In the brief period that the account was compromised, any Tweet shared must be ignored.”

The hoax tweet said that India had “officially accepted bitcoin as legal tender” and that the government “officially bought 500 BTC” that it would distribute to Indian residents, CNN reported. At press time, 500 bitcoins would be worth $24,455,200.

“The future has come today! #BTC,” the tweet read with several emojis (which Modi does not regularly use on his Twitter handle) and a potential scam link, according to a screenshot posted online. 

 

 

Cryptocurrencies like bitcoin are not recognized in India as legal tender.

This isn’t the first time a Twitter account linked to Modi has been compromised. Last September, @narendramodi_in, the Twitter account of Modi’s personal website and mobile app with around 2.6 million followers, encouraged people to donate cryptocurrency to a COVID-19 relief fund.

Nor is this the first time a high-profile Twitter account has been hacked for a crypto hoax. In July 2020, 130 Twitter accounts, including former President Barack Obama, Kim Kardashian, Bill Gates, and Elon Musk, tweeted links to a bitcoin scam. Twitter’s stock lost $1.3 billion in value following the breach.

The Indian government has been the target of over 30,000 cyberattacks this year up to the month of October, The Times of India reported, citing government figures. In 2020, the country’s government organizations faced more than 50,000 cyber security incidents, according to the outlet.

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Billionaire investor Chris Sacca has cheered on day traders, warned them about the dangers of debt, and revealed he owns crypto. Here are his 12 best tweets from the past year.

chris sacca, lowercase capital, sv100 2015
Chris Sacca.

  • Chris Sacca championed amateur traders but urged them not to use borrowed money.
  • Sacca ended up $4 million in debt as a college student by trading on margin.
  • The billionaire investor said he owns several crypto tokens, and underlined the importance of NFTs.

Billionaire investor Chris Sacca has cheered on meme-stock buyers, warned rookie traders about the dangers of debt, and trumpeted non-fungible tokens (NFTs) in tweets over the past year.

The Lowercase Capital founder and former “Shark Tank” star — who shifted his focus to tackling climate change and social-justice issues in 2017 — also reflected on his ill-fated day trading as a college student, and revealed he owns a variety of digital tokens. 

Here are Sacca’s 12 best tweets about meme stocks, crypto, and day trading over the past year:

1. “To everyone who got into trading stocks this year, I have a little hard truth for you: You’re not actually that good at it. You just caught a wild bull market. Take some money off the table.” (December 23, 2020)

2. “To the angry Robinhood bros who got into trading stocks this year: I was wrong. You’re amazing. This has nothing to do with the market. It’s all you and your mad skillz. Don’t take profits off the table. Double down, on margin. Borrow everything you can. Stonks never go down!” — responding sarcastically to backlash from day traders. (December 24, 2020)

3. “What percent of retail ownership of crypto is supported by leverage? What about stocks? I am beyond worried about the debt lessons that a generation of app traders weren’t around to learn a cycle ago.” (December 26, 2020)

4. “It’s fun to read about home traders making bank. 20 yrs ago, I was one of you. Today I’m here to tell you: *Don’t trade with money you don’t own.* I know because I did that. I kited my student loans, YOLO’d them to $12m, and then, in an f’ing blink, I woke up $4m in debt.” (January 28, 2021)

5. “Debt has no fucks to give when the price collapses. Debt doesn’t care who gets the last chair when the music stops. Debt haunts, lingers, & binds. Debt doesn’t care about your green paper gainz screenshot, because two weeks later it sees the all-red screen that you never post.” (January 28, 2021)

6. “I have axes to grind against a lot of the guys you’re wrecking, and I love to hear about real people stacking chips. But, please, from someone who has been there and knows the hopelessness and depression ahead: Don’t trade what you can’t afford to lose.” (January 28, 2021)

7. “I get what’s going on with NFTs. Very cool and I am a collector at heart. But I have a feeling this is going to be the tech that finally turns me into the ‘Yeah, but I only listen on vinyl’ guy.” – Sacca added that he doesn’t believe NFTs are in a bubble. (February 21, 2021)

8. “Wow. @beeple. $69m for a purely digital work. No matter how you feel about NFTs, don’t look away from this. It’s okay to not get why someone would pay that, and it’s okay to be bummed about the climate impact. But don’t be willfully ignorant about what’s happening.” — (March 11, 2021)

9. “Only invest what you can lose. Don’t borrow. Spread it around multiple investments. And, overall, assume you are going to lose your money and be pleasantly surprised if you get back more than you put in. Good luck.” — (March 16, 2021)

10. “My only strong crypto opinions: 1) the climate impact bums me out 2) but that is the market impetus for a lot of clean energy innovation, 3) it’s exciting, and 4) I have a lot more to learn. Disclosure: I own a broad basket ranging from early BTC/ETH to shitcoin lottery tickets.” — (May 15, 2021)

11. “Oh, Stanford would’ve never accepted the likes of me. Those were Georgetown Law student loans levered all over the online brokerages. And, to be clear, I lost my face in the end. Seven figures in debt with nothing to show for it. I don’t recommend it.” — recalling how he traded on margin as a college student. (September 20, 2021)

12. “I got so much shit for this tweet. It’s not fun to be right about it. I have been long this market and taken my lumps with everyone else. Just tried to help people not trade with money they don’t own. Now my inbox is filling up with requests to bail strangers out of margin debt.” — referring to the first tweet on this list. (December 3, 2021

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‘Rich Dad Poor Dad’ author Robert Kiyosaki expects a market crash and economic crisis — and plans to buy gold, bitcoin, and real estate when prices tumble

"Rich Dad Poor Dad" author Robert Kiyosaki
Robert Kiyosaki.

  • Robert Kiyosaki expects markets to crash and the US economy to slump into a depression.
  • The “Rich Dad Poor Dad” author plans to buy bitcoin, gold, silver, and real estate once prices fall.
  • Michael Burry of “The Big Short” and GMO boss Jeremy Grantham also see a bubble about to burst.

Robert Kiyosaki warned investors to brace for a sweeping market crash and painful economic downturn, and signaled he’s planning to scoop up several assets once prices plunge, in a tweet on Thursday.

“Crash and Depression coming,” the “Rich Dad Poor Dad” author said. “Gold, silver, bitcoin, real estate will crash too.”

“Ready to buy more gold, silver, bitcoin, real estate after crash has crashed,” he continued. “Be aware. Take care.”

Kiyosaki has been tweeting about an impending crash for more than a year, so the personal-finance guru’s latest warning should be treated with skepticism. Yet it’s worth noting that unlike some other bearish commentators, he freely admits that he intends to capitalize on the next sell-off, and frames it as a buying opportunity as well as a worrying prospect.

“The good news is the best time to get rich is during a crash,” the founder of Rich Global and Rich Dad Company tweeted in June this year. “Bad news is the next crash will be a long one.”

Unlike Michael Burry of “The Big Short” fame, who took a knife to his stock portfolio last quarter in anticipation of a market crash, Kiyosaki appears to be snapping up assets even at current prices.

“I am buying more gold, silver, bitcoin, ethereum, rental real estate, and oil,” he tweeted last month. “What are you buying?”

Kiyosaki, Burry, and GMO cofounder Jeremy Grantham are just some of the high-profile commentators sounding the alarm on the current market and warning the bubble is about to burst. Billionaire investors including Leon Cooperman, Stanley Druckenmiller, and Charlie Munger — Warren Buffett’s right-hand man — have also warned the speculative frenzy won’t last.

Read more: JPMorgan markets guru Marko Kolanovic unveils his 20 global ideas for investors to maximize their returns in 2022

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Florida Gov. Ron DeSantis proposes letting business pay state fees with cryptocurrencies

Ron DeSantis
Gov. Ron DeSantis of Florida. Paul Hennessy/SOPA Images/LightRocket via Getty Images

  • Florida Governor Ron DeSantis proposed letting businesses pay state fees with crypto in his budget plan.
  • He also suggested exploring ways to use blockchain technology for car titles and Medicaid payments.
  • He said he wants the state government to be “crypto friendly.”

Florida Gov. Ron DeSantis proposed letting businesses pay state fees with cryptocurrencies. 

The Republican governor announced the idea in his 2022-23 budget proposal released Thursday. In his “Freedom First Budget,” DeSantis suggested providing $200,000 to the state’s financial services department in order to give them the ability to accept state fees from Florida corporations in cryptocurrency.

He also proposed allocating another $500,000 to exploring the use of blockchain technology to maintain and provide motor vehicle titles and to authenticate Medicaid transactions and identify potential fraud. According to a report from Fortune, DeSantis said he’s hoping to make the state government “crypto friendly.”

“Florida encourages cryptocurrency as a means of commerce and furthering Florida’s attractiveness to businesses and economic growth,” he wrote in the proposal.

Florida, and more specifically Miami, has become a crypto hub. The massive bitcoin convention this year took place in Miami, whose mayor, Francis Suarez, has since agreed to take his paycheck in crypto.

Miami is quickly becoming the Wall Street for crypto companies, as businesses like FTX, eToro, and Blockchain.com, among others, have expanded their footprint on the city. The Miami Heat’s stadium was recently rebranded to FTX Arena, and Blockchain.com moved its headquarters to Miami from New York.

On top of that, a cryptocurrency called “MiamiCoin” has even been introduced in the hopes of generating enough revenue to replace income from taxes.

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Bitcoin’s price could surge by another $500,000 as institutional investors search for uncorrelated assets, Cathie Wood says

Cathie Wood of Ark Invest
  • Bitcoin’s price could surge to $550,000 as institutional investors ramp up allocations to the space, according to Cathie Wood.
  • Wood told CNBC on Thursday that institutions are seeking exposure to uncorrelated assets and crypto fits the bill.
  • “The move by institutions into bitcoin could add $500,000 to bitcoin’s price if they moved into the tune of roughly 5% over time,” Wood said.

The price of bitcoin could surge to more than $500,000 as institutional investors begin to allocate to the relatively new cryptocurrency space, Ark Invest’s Cathie Wood told CNBC in an interview on Thursday.

Wood explained that institutions are always in search of investments that are uncorrelated to traditional asset classes like stocks and bonds, and crypto fits that bill.

“I think institutions are moving in [to crypto] right now,” Wood said, adding that they currently prefer the two largest cryptocurrencies, bitcoin and ether. As a whole, according to Wood, institutions barely have any exposure to the space.

“The reason institutions are moving in is to some extent this is a new asset class with correlations very different compared to other asset classes,” Wood explained. A study conducted by Ark Invest found that the asset with the closest correlation to bitcoin is real estate.

That runs counter to the commonly held belief that cryptocurrencies are risk assets that move in tandem with broader moves in the stock market. For example, amid the Omicron-induced stock market sell-off last week, bitcoin entered a bear market, falling more than 20% from its recent high.

“Institutional managers have to look at new asset classes that are evolving, that have low correlations, that’s the key to diversification, and it’s the holy grail in terms of asset allocation,” Wood said. 

If institutions moved roughly 5% of their portfolio to bitcoin over time, Wood believes it would add $500,000 to the current price of bitcoin, to about $550,000 based on bitcoin’s current price. That represents potential upside of 1,000% from current levels. 

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Ethereum transaction fees are running sky-high. That’s infuriating users and boosting rivals like solana and avalanche.

Crypto ethereum ether
The ethereum network is at the heart of the modern crypto ecosystem.

  • Ethereum transaction fees are running red hot as people pile onto the network for NFTs and DeFi.
  • Yet the high costs are infuriating users and sending many towards other blockchains such as solana.
  • Developers are scrambling to fix the problem, which could threaten ethereum’s top-dog status.

Transaction fees on the ethereum blockchain are running red hot as NFT-mania clogs up the network.

It’s a problem that’s infuriating people and sending many looking elsewhere, to cheaper blockchains such as solana and avalanche.

Some even think it could be an existential threat to a cryptocurrency network that bills itself as the future of finance.

The ethereum network runs ether, which has a total market value of more than $500 billion, making it the world’s second-biggest cryptocurrency after bitcoin.

But the network is also at the centre of the modern crypto ecosystem. It’s the foundation on which non-fungible tokens (types of crypto collectibles) and decentralized finance are built. Both NFTs and DeFi are now huge industries.

Ethereum is running on surge pricing

On ethereum, people pay a “base fee” to have their transactions verified by other users known as “miners.”

Yet those fees have rocketed as interest in NFTs has soared, and more people try their hand at DeFi.

Imagine ethereum as a bit like a ride-hailing app that is struggling to add new drivers, in a city that’s just seen a huge influx of people. Now, for each ride (or transaction), people have to pay a huge surge price to get drivers to pick them up.

The average transaction or “gas” fee on the ethereum network rose to as high as $63 in November. That was its second-highest level ever, behind May’s record high of $70, according to crypto exchange Kraken’s analysts.

Read more: A currency strategist at UBS shares the 3 trends he believes will shape the crypto market in the next 12 months

People are regularly paying more than $100 just to deposit, say, $50 worth of cryptocurrency on DeFi platforms – and that’s making many extremely angry.

“Gas fees are insane,” said one user on the ethereum Reddit page. Another said: “If the ethereum network can’t fix its gas fees, it won’t be used by the average consumer.”

Some are looking to solana

Not all crypto fans are upset. Networks such as solana, avalanche, and cardano are positioning themselves to profit.

Solana’s transaction fees are minuscule, just a fraction of a penny. The network is also much faster, handling many thousands of transactions per second, compared with double-digit figures for ethereum.

Solana’s native token sol has risen more than 400% over the past 180 days, according to Coingecko. Avalanche is up more than 500% over the same period, while ethereum has gained around 80%.

“Some of those headwinds for ethereum I think have caused people to ask themselves, ‘What else do I want to own at this point?'” Pete Humiston, head of research at Kraken, told Insider.

Developers are working on it

So why can’t ethereum simply expand the network?

Ben Edgington, a developer at ethereum-focused company ConsenSys, said it’s a philosophical point.

Increasing the capacity of a decentralized crypto network would mean forcing users to deal with ever-increasing data and to upgrade their hardware, he told Insider.

“If we crank up transaction throughput, that will exclude those with more modest resources from participating,” Edgington said. It would then no longer be very decentralized.

Developers are scrambling to work out other solutions, such as expanding a second ethereum layer. That would effectively enable many activities to happen away from the core network, which would remain accessible.

It’s far too soon to say high gas fees are a crisis for ethereum, according to Jack O’Holleran, CEO at ethereum development company Skale Labs. In fact, he said, they’re a symptom of the network’s huge success.

“There’s so much momentum from a developer perspective around ethereum,” he told Insider. “The best quality teams and projects and platforms are all building on ethereum. It’s the system that connects into everything.”

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An anonymous bitcoin whale reportedly bought $150 million worth of the cryptocurrency during its recent price crash

Bitcoin ATM
Bitcoin

  • An anonymous bitcoin holder bought more than $150 million during the digital currency’s recent plunge, The Independent reported. 
  • The third-largest holder of bitcoin now has about $6 billion of the cryptocurrency. 
  • Bitcoin’s price crashed by nearly 30% over the weekend but has been recovering since the drop. 

A big holder of bitcoin scooped up millions of dollars worth of the cryptocurrency during its recent crash that pushed the price down by nearly 30% to below $50,000, The Independent reported Wednesday

The third-largest holder of bitcoin bought more than $150 million of the digital currency, scooping up more than 3,000 bitcoins over the past couple of days, the report said, citing data from BitInfoCharts, a blockchain monitoring service. 

The anonymous bitcoin holder’s portfolio stood at around $5.9 billion with the new purchases. The holder’s crypto address first shows activity in February 2019, when bitcoin traded in the $3,000 range and the holder has logged a profit gain of about $3.4 billion.

Bitcoin during Wednesday’s session was up 3% at $50,815. Its price on Saturday crashed by about 27% and slid under $42,000 as part of a broader crypto-market crash. Analysts said the selloff was driven by a mix of concerns including the new Omicron coronavirus variant and increased chances the Federal Reserve will tighten monetary policy. 

Analysts also said the crash was exacerbated by market structure, with many traders using derivatives and borrowed money. 

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