Lydia Moynihan
Tech
Pubkey’s owner Thomas Pacchia sees a revitalization of Bitcoin in NYC.
Stefano Giovannini
“We are so back,” crowed Bitcoin investor Aubrey Strobel.
It was a celebratory “told-you-so” moment last week for Strobel and her ilk, as Bitcoin blew past $70,000 for the first time — making a remarkable recovery from the deep plunge of just a year ago.
And New York City is poised to become the epicenter of the industry, according to more than two dozen crypto evangelists interviewed by The Post.
Patrons at Greenwich Village’s Pubkey, a bar for Bitcoin lovers by Bitcoin lovers, were living it up on a recent Tuesday night.
“Bitcoin is basically the digital version of gold,” Samir Tabar, CEO of Bit Digital, a publicly listed bitcoin miner, told The Post. “Bitcoin has and will continue to take over what gold used to represent: a rare commodity used to hedge inflation. I imagine it must be painful for boomers to accept the kids got it right.”
All the money newly pouring into Bitcoin is thanks in part to the Security and Exchange Commission’s January approval of ETFs — an investment vehicle similar to a mutual fund that trades on traditional exchanges, just like stocks or gold — that has given customers at 11 investment-management behemoths like Fidelity and BlackRock exposure to Bitcoin.
This past week’s Bitcoin high was an exponential increase from January 2020, when it could be purchased for as little as $7,000, and even from last year when the digital coin fell to less than $17,000 in January after having climbed to $68,000 in November 2021.
Investors like Meredith, a 68-year-old retiree from Brooklyn, say the volatile market is worth it. She first bought in around 2019, when Bitcoin price was $10,000.
“My peers are doing traditional investments but hopefully more people my age will put it in a portfolio,” Meredith, who asked us to withhold her last name, said. “The FOMO is real!”
With huge Wall Street firms now funneling billions into Bitcoin, it’s giving cryptocurrency the grown-up makeover it needed — and pushing NYC to the forefront.
“Bitcoin is entering the world of traditional finance, and New York City is the capital of finance,” said investor Anthony Pompliano, an early crypto investor who has held his Bitcoin through the volatility. “Bitcoin’s capital is now New York City.”
And the rate of money flowing into the funds isn’t just continuing but accelerating, according to analysis from Alex Thorn, Head of Firmwide Research at Galaxy.
But even before the ETFs were approved earlier this year, venture capitalists, founders and groupies were setting up shop in the city.
Pompliano, who has a loyal social media following, left New York City for Miami in 2020 but returned last year because Manhattan is still the center of finance.
“New York City and Miami have different strengths. Miami can help you save 10% on your taxes, but I felt New York could help us [grow] 10 times our profits,” he added.
Miami, which Mayor Francis Suarez wanted to make the “crypto capital of the United States or the world,” has seen its digital currency MiamiCoin fall by 99% since 2021. And the FTX Arena — home to the Miami Heat — was redubbed the Kaseya Center, for a local software company, after its one high-flying crypto exchange namesake went bankrupt and founder Sam Bankman-Fried was convicted of defrauding investors.
Strobel has held onto her digital coin through the highs and lows and said she is seeing acolytes and advocates flooding into NYC.
“New York has taken what San Francisco used to offer —the venture capitalists, the crypto startups looking to incubate here. So many companies are springing up here,” said Strobel, who also hosts her podcast “The Aubservation” from a studio at Pubkey. “There’s an electricity and energy.”
Stefano Giovannini
Pubkey is a central part of the crypto renaissance in New York. The bar’s name is a reference to “public key,” which is a special code necessary to access Bitcoin. And, yes, you can pay for your drinks in Bitcoin.
On any given night, billionaire and Galaxy Digital founder Mike Novogratz may be speaking on a panel, a crypto fund might have rented the space for an event, or someone could be recording a podcast in the bar’s upstairs studio.
Thomas Pacchia — who opened the bar with Greg Minasian and Andrew Newman in 2022 after working as a capital markets lawyer, an early employee at Fidelity labs Bitcoin incubator, a digital asset hedge fund founder and designer of NYU Stern’s crypto syllabus — said we are seeing the revitalization of crypto in New York.
“Our first cohort of customers were crying in their beer when we opened. There were folks who had invested in FTX and lost money,” he told The Post. “Now business has picked up and we’ve seen a lot of people come back to the city. The ETFs have helped.”
He’s also seeing a far more diverse crowd than simply the 20-something crypto bros that were pushing digital coins a few years ago.
Representatives from the Human Rights Foundation have been to multiple events, as they embrace the technology as a way of circumventing corrupt governments and empowering people to have diverse finances. Pacchia also sees artists, retirees and teachers who want to learn more about Bitcoin begin stopping by.
This time, he adds, there seems to be a longevity and a maturity to the rally.
“Last time, there was mania around NFTs and meme coins … people were scarred,” Strobel said. “I hated that people associated Bitcoin with that.”
NFTs, or non-fungible tokens, are unique files that live on the blockchain and are used to signify ownership of digital art. For a while, they looked like a sometimes tacky cash grab, as everyone from Madonna to Logan Paul promoted their own.
After digital artist Beeple sold an NFT in March 2021, NFTs rocketed from oblivion (just 100 were sold in 2017) to an obsession, with more than 1.5 million NFTs sold in a single month in 2021. The market ballooned to $40 billion at its apex.
Since then, though, around 95% of those who bought NFTs — an estimated 23 million people — have seen their “investments” become worthless, according to a report from a crypto research firm dapp Gambl.
Two million have lost money on cryptocurrency investments, according to research firm Storm Gain. Around $27 billion has been lost in NFT and crypto scams alone, according to research from Comparitech — and some buyers have lost their life savings.
But EFTs, Strobel said, show “This is a Bitcoin renaissance and it’s restoring trust in the space.”
Pacchia said he has recently sold a few more “whales”: a $100 specialty cocktail made with Ichiro Malt and Grain whisky, Barolo Chinato and Chartreuse V.E.P. Verte and named in homage to a large Bitcoin holder who can move the market. The beverage must be bought with Bitcoin and comes with a T-shirt and pin.
One point of contention among crypto fans, however, is New York’s BitLicense, which firms need to have if they want to buy or sell digital currency in the state. Getting the license — which can cost more than $100,000 according to CoinDesk — is cost-prohibitive for many startups.
While New York faces challenges when it comes to regulation, other cities have their own set of issues.
Cities like Austin and Nashville, both located in states that don’t have income tax, have attracted Bitcoin fans but don’t have the scale needed to create an entire ecosystem the way New York does, according to several chatty Pubkey patrons.
Funnily enough, Pacchia said, only 5% of people at his bar choose to pay in Bitcoin.
“Of course, most Bitcoiners don’t want to spend anything,” he noted. “They just want to amass.”
Meet NYC’s Crypto Champions
Name: Brandon Dixon, 24
Occupation: Finance
Neighborhood: Hoboken, NJ
When did you buy crypto? “I bought Bitcoin and Ethereum in 2022. I went down the rabbit hole when I was at Penn State. I was introduced in a class and was inquisitive and read the Bitcoin white paper. Once I realized the potential of the tech I was confused it wasn’t getting more buzz.”
How much was it? Around $20,000
Is NYC the center of crypto? “It has potential, but we need more crypto-forward regulation.”
Name: Rein Wu, 31
Occupation: Predx.ai CEO (started a AI/web3/crypto company)
Neighborhood: Journal Square, NJ
When did you buy crypto? “Bitcoin in 2020. I was interested in decentralization and motivated to learn more.”
How much was it? “Around $9,000.”
Is NYC the center of crypto? NYC is a great place for cryptocurrency. You need the tech in place and marketing to make it a hub. In San Francisco there was just tech and not enough marketing. In NYC you have both.”
Name: Marc, mid-50s
Neighborhood: Riverdale, The Bronx
Occupation: Media
When did you buy crypto? “I bought Bitcoin in 2012. I lurked on forums, got on Twitter and fell down the rabbit hole. Early Bitcoiners are like early Christians — they’re so passionate.
How much was it? Between $10 and $20
Is NYC the center of crypto? “The center of cryptocurrency is an oxymoron, so hopefully there is no true center of crypto.”
Name: Meredith, 68
Neighborhood: Brooklyn
When did you buy crypto: “I bought Bitcoin in 2019. I read “Digital Gold,” and I’m a believer that it has great potential as the future and as a store of value. I was excited about it from the beginning.”
How much was it? Around $10,000
Is NYC the center of crypto? “NYC is the center. People are super engaged.”
