Wyoming’s Crypto-related Revenue Has Been Limited, But Global Markets Have Also Experienced Challenges

State lawmakers in Wyoming have reportedly passed 28 different blockchain-related bills since the year 2019. However, cryptocurrency revenue has been quite limited, even though there have been several different initiatives that were introduced.

As covered, crypto VC investments have also shifted towards infrastructure development and moved away from speculative NFT, Metaverse projects. Globally, investors are looking for more real-world initiatives instead of placing bets on potentially high-risk crypto business models.

During the past few years, several cities, states and jurisdictions in the US have made a lot of progress when it comes to securing crypto investments. However, Wyoming Governor Mark Gordon says that the state is “the most crypto friendly place in the United States.” According to a report from Bloomberg, the Governor may have a valid point.

In fact, Wyoming has passed a number of bills which either refer to crypto-related terminology or are supported by a legislative committee that is focused on key aspects of blockchain technology.  As reported by Bloomberg, the current tally — 28 since back in 2019 — leads the country. Notably, this figure considerably outpaces second-place Utah with only 15 such bills.

Despite these efforts, the overall revenue from Wyoming’s crypto-focused economy might not have lived up to expectations.

This could very well be due to the fact that the global financial markets are facing a lot of uncertainty and investors are being a lot more conservative.

As noted in a Pitchbook report shared with Crowdfund Insider, in Q2 2023, crypto-asset prices maintained an upward trend, with Bitcoin and Ethereum up by over 50% YTD. However, the broader crypto ecosystem is still struggling to secure substantial investments, especially compared to 2022 and earlier when the BTC price peaked at nearly $70,000.,

In fact, global VC investments in crypto saw a considerable decline, “hitting a low of $2.2B for the quarter, the lowest since 2020.”

As noted in the update from Pitchbook, in the past, there has been “a correlation between VC crypto investments and crypto asset prices, typically with a delay of around three to six months.”

Therefore, if historical patterns persist, it is likely that VC investments “will see an uptick in the second half of 2023.” As stated in the update shared with CI, there has “been significant development around stablecoins, including DeFi blue chips Aave and Curve recently launching new stablecoins.”

On the regulatory front, MiCA in the EU has officially “passed and includes a stablecoin framework in the legislation; in the US, a new stablecoin bill was drafted and advanced past a committee in July.” The market is currently an oligopoly, but Pitchbook expects it to become “more fragmented in the future with new issuers coming to market (i.e., PayPal in August 2023).”

As explained in the report, MEV (maximal extracted value) “represents additional revenues that block producers can wring from users through excluding, including, and reordering transactions.” The $1B+ MEV market is “driving new startups to build solutions to create fairer MEV markets or to protect users from harmful MEV like front running and sandwich attacks.”

Based on these trends, it seems likely that Wyoming’s crypto-focused economy could become more progressive and the broader digital asset ecosystem may also begin to gain more traction as we head into 2024.

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