Crypto News Bites 2022/11/28
Big macro week / Elon's plans for TWTR causes DOGE, MOB, MASK spikes / Nexo, AAX, CoinList the latest centralized finance with issues? / NFT futures
Top News Summaries
Elon Musk’s company plans for Twitter causes spikes in DOGE, MOB, MASK
Nexo paying 10% yield on stablecoins when defi paying 1%. Hmm.
AAX, who suspended withdrawals 2 weeks ago due to technical maintenance and liquidated all futures, supposedly deleted their YouTube channel. CoinList users report unable to withdraw funds, CoinList says custody partner undergoing maintenance.
India retail CBDC next month, Texas Governor says BTC good for power grid
WBTC updates multisig list - one signer was Blockfolio owned by FTX
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Crypto markets traded sideways over the weekend with BTC hovering around 16500 and ETH 1200 the past few days. With the FTX bankruptcy drama that started 3 weeks ago, investors could still be waiting for the next negative announcement from another crypto company, which is currently DCG and its units Genesis and Grayscale. No news is good news. Quite a number of upcoming macro events, which may affect crypto: Tue’s Sep home prices, Wed’s China NBS manufacturing PMI, EU flash inflation rate, US GDP est, ADP employment, Fed chair Powell’s speech, Thur’s China Caixing Manufacturing PMI, US personal spending, ISM Manufacturing PMI, and Fri’s Non-Farm Payrolls. Eventually crypto could decouple from equities/traditional finance, but I doubt it’ll happen anytime soon.
Twitter payments
Or perhaps it happened already? DOGE spiked over 20% and almost hit $0.11 before coming off to +10% around $0.099. Continued speculation that Elon Musk, a vocal supporter of the grandfather of memecoins, to power payments for Twitter after the new owner of the social media platform tweeted out the slides from his company talk. Mask Network MASK which provides privacy to social media also spiked 15%.
There is also speculation that Twitter would use Signal Protocol for encrypted messaging as a blogger shared screenshots of the code for Twitter’s iOS app referencing signal_protocol. MobileCoin MOB, which is used for payments in Signal, spikes 4x before settling down to a 2.4x gain as of the time of this writing.
Government
Crypto adoption by the Indian government. The Reserve Bank of India (RBI) is working with 5 local banks on the retail pilot of their Central Bank Digital Currency (CBDC). The wholesale version commenced on Nov 1, and the central bank to launch the pilot of the retail version in December. India joins a handful of countries piloting or launching their CBDC, with many more in the planning/research stage.
Greg Abbott, the Governor of Texas, claims BTC is good for the power grid, wishes to become the center of BTC development and promoting BTC/blockchain innovation by revising and passing regulatory laws. Hear it from the man himself.
DAOs
Migration of the multisig of WBTC DAO to a new one with active signers. The DAO needs 11 of 18 signers to be able to make any changes (e.g. replace a custodian, upgrade the contract) but over the 4 years some signers have become inactive or have lost their keys. One of the original 18 signers was Blockfolio, which was acquired by now bankrupt FTX. Interesting to think about continuity/succession planning for DAOs, e.g. what happens when less than 11 signers have access?
Follow the Money
Good to see that there is some risk appetite for larger crypto companies in this type of market. Crypto lender Matrixport is looking to raise $100m at $1.5b valuation, already has commitments for half. The valuation is 50% higher than back in 2H 2021.
Another good datapoint for blockchain games, $150m raised by Fenix Games to create a new blockchain gaming publisher.
NFTs
For price speculation on bluechip NFTs, could consider NFT futures. Nftperp.xyz, which disclaimer I have yet to do any due diligence on, is a NFT perpetual futures protocol that went live on a private beta. Instead of trading a bluechip NFT collection such as Bored Ape Yacht Club, which on NFT marketplace OpenSea costs 2.5% marketplace fee + 2.5% royalty fee, and has a high cost of capital where the current floor price is 73 ETH or ~$88k, a speculative trader could just trade the perps which cost 0.3% each leg + funding costs.
Surveillance
Earlier I mentioned Metamask announced they collect your IP addresse and Ethereum wallet address. Chainlist.org now shows which RPC Servers track their users and the degree with which they track it (green no tracking, orange limited tracking, red tracks IP, blank no data)
Dark Side of Crypto
Crypto Twitter has concerns that centralized crypto lender Nexo might be next to blow up. Currently paying 10% yield, when decentralized finance protocols have 1% yield while US treasuries are 4%.
Crypto exchange Lemon Cash lays off 40% of its staff, despite closing $44m funding round earlier this year. Yet another victim of the crypto winter, despite being in Latin America where adoption is high.
Crypto exchange AAX, who suspended withdrawals over two weeks ago citing a tech upgrade/maintenance, who then started liquidating futures positions, have now supposedly deleted their YouTube channel with all the videos. I have mentioned before it is better to be safe than sorry, learn to self-custody.
Users reporting that they are unable to withdraw funds from CoinList, a crypto crowdfunding platform. CoinList says custody partner is undergoing maintenance, then says they are upgrading their internal systems. Hmm where have I heard that before…
Another fallout of crypto winter / FTX bankruptcy. Miami club owners saying business is slumping, as crypto regulars have “completely disappeared”. Gino LoPinto, operating partner at the club E11even, told the FT that the company has only brought in $10,000 in the past three months, after raking in more than $6 million last year — much of which came from crypto clients.
Ongoing Trends
Bankruptcy of 2nd largest crypto exchange FTX causes contagion risks. How many funds & protocols have yet to announce their exposure? Learn to self-Custody!
Decentralization no longer just a tagline. Centralized to decentralized movement for remaining crypto traders & investors.
Global crypto adoption and increased regulation, launches of Centralized Bank Digital Currencies.
Bitcoin mining industry consolidation as margin squeezed on low BTC prices and higher costs (electricity, funding, hashrate difficulty etc).
Macro: US CPI peaking & potential slowing of Fed rate hikes / Russia Ukraine war may be thawing / China pivoting from zero-Covid policy, small steps to re-opening.
Tokens Mentioned Today
BTC ETH DOGE MASK MOB WBTC