Crypto News Bites 2022/12/1
SANTA RALLY Powell could slow Dec hikes / Brazil approves BTC as payment / DTCC testing CBDC / Porsche 911 NFTs / OpenSea: creators earned $1.1b in 2022 / Telegram to build crypto wallet and DEX
Top News Summaries
Fed Chair Powell says could slow Dec hikes, risk on Santa rally. Brazil approves use of BTC as payment. DTCC testing CBDC in wholesale transactions.
Binance buys Japanese exchange Sakura. Animoca to start $1b-$2b metaverse fund.
Porsche to issue NFTs. Yes, the 911s. OpenSea says creators earned $1.1b this year.
Telegram CEO Durov plans to build crypto wallet, decentralized exchange
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Crypto markets had started to rally as Brazil approved the use of BTC as payment (more below), then rallied further when Fed Chairman Powell said they might slow rate hikes as soon as December after 4 consecutive 75bps hikes. Before his speech, markets were pricing in a 66% chance of a 50bps hike, which then moved to 79%. BTC and ETH rallied another ~2.5% for a 4% and 6% advance on the day. MATIC and FTM which had some news earlier the past week saw 10+% moves, with leverage coming back as futures open interest spiked 20% and 33% respectively.
Some upcoming macro data, where we hopefully won’t see any shocks that might derail this Santa rally:
Thur: Core PCE report, Initial Jobless Claims, US Manufacturing PMI, China Manufacturing PMI
Fri: Non Farm Payrolls, Unemployment Rate
Government
Should this be under adoption? As mentioned above, Brazil approved the use of BTC as payment and as an investment asset, only needing the President’s signature before it becomes law, which took 7 years with many legislative twists and turns to get here. Although it does not make crypto legal tender, having the 9th largest economy in the world recognizing BTC as payment is another step forward for adoption.
The tax man cometh. Crypto providers must report details of their EU clients’ transactions to national tax authorities, in a leaked bill set to be proposed by the European Commission next week. This could also apply to stablecoins, derivatives and NFTs. Once regulations are in place, institutional money can follow. With that said, two ECB advisors said regulation is not approval of crypto, and that BTC is on its last gasp before the road to irrelevance. Also, according to officials, the upcoming EU rule called Markets in Crypto Assets MiCA regulations would have stopped FTX-style mismanagement
Six exchanges, including Binance, Coinbase and Kraken, ordered by London court to disclose user data to help trace $10.7m funds hacked from an un-named UK crypto exchange in 2020. The order is one of the first applications of a new law in the UK.
Follow the Money
Binance acquires Japanese exchange Sakura Exchange BitCoin SEBC, paving the way for it to enter Japan as a regulated entity. Binance was headquartered in Japan before but a regulatory crackdown in 2018 caused the exchange to leave. It now calls Japan a market that will play a key role in the future of crypto adoption.
Blockchain game/VC group Animoca Brands plans to launch a $1b-$2b fund to invest in metaverse businesses. That said, the fund has not raised money yet so it would be interesting to track what commitments it receives to gauge investor sentiment.
Crypto exchange CrossTower to acquire institutional prime brokerage BEQUANT as the trend of consolidation during crypto winter continues. More interesting is CrossTower introducing an Environment, Social and Governance ESG crypto fund, which could bring in capital from traditional funds with ESG mandates.
Keyrock, a digital asset market maker, raised $72m series B led by Ripple. Keyrock’s CEO says the valuation was a significant lift from the 2020 Series A.
LedgerX, a subsidiary FTX acquired last year which is solvent but also had to file for bankruptcy protection as part of the group, will free up $175m for use in bankruptcy proceedings. Hopefully more funds will be found to repay creditors.
Adoption
The messaging app Telegram plans to build crypto wallet and decentralized exchange in the wake of the FTX exchange collapse, citing that blockchain projects should go back to their roots of decentralization. The CEO Durov also said $50m of usernames had been sold in less than a month through its blockchain auction platform Fragment, build on TON blockchain. Telegram’s move could bring huge adoption as they have 700m MAU being one of the top 15 social media apps.
The Depository Trust & Clearing Corp DTCC is testing the use of a CBDC in wholesale transactions alongside major banks, says could streamline settlements.
Reverse adoption? Maersk, the world’s largest shipping company, to discontinue the blockchain-based supply chain solution TradeLens it created in partnership with IBM. Its success depended on full global collaboration across the industry, but that never came to fruition. Maersk to further develop its digitization efforts.
Crypto bank Seba opens offices in Hong Kong, which will be the center for their APAC growth plans. The choice of Hong Kong is driven by the city’s supportive licensing framework, with the city announcing ambitions to reclaiming their status as a crypto hub. Seba HK to initially focus on market research and consultancy services.
NFTs
I might not be able to afford a Lambo yet, but perhaps I could buy a Porsche… NFT? Porsche announces it’s first NFT collection, releasing 7500 NFTs based on the classic Porsche 911 in January 2023. Holders can choose one of 3 ‘routes’ for their NFT, which 3D artist Patrick Vogel will prepare each NFT as a special 3D asset in the 3D graphics tool Unreal Engine 5.
OpenSea says NFT creators earned $1.1b in royalties this year, 80% were allocated outside the top 10 collections. This is despite some marketplaces that have moved to make creator royalty fees optional, causing many to forego paying creators in secondary market trading.
Other news
Phantom, the largest crypto wallet on Solana, to expand to Ethereum and Polygon. Compared to MetaMask, the largest crypto wallet across all blockchains, a few features stand out: No need to manually switch blockchains, in the same way users don’t switch web browsers to view different websites; Real-time warnings and human-readable details for transactions; and Useful NFT features built into the wallet.
Layer 1 privacy blockchain Secret Network SCRT says it resolved a risk from Intel hardware vulnerability. No funds were at risk. However this reminds us that crypto is still early/experimental technology, and risks are high.
RNS.id, a digital identity platform, integrates with zkSync, which is a layer 2 blockchain built on top of Ethereum to increase speed and reduce transaction costs. RNS.id allows the issuance of sovereignty-backed IDs, providing on-chain KYC and designed on a privacy engine to prevent personal data breach. RNS.id is supported by over 80% of crypto exchanges, and earlier in the year helped the Republic of Palau launch the world’s first sovereign digital residency IDs. This follows the adoption of digital identity documents (DIDs), as Dominica recently partnered with Huobi to issue DIDs.
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
Tokens Mentioned Today
BTC ETH MATIC FTM TON SCRT