Crypto News Bites 2022/12/6
AXS +50% / Coca-Cola NFTs on Crypto.com / $36m loan default on Maple Finance / Nexo leaving US. FTC & EU more crypto regulations
Top News Summaries
Inflows slow but buying BTC.
Coca-Cola’s 10k NFTs on Crypto.com. AXS +50% on update.
Orthagonal $36m loan default on Maple Finance. Nexo leaving US.
FTC investigates misleading crypto ads. EU regulator to address off-shore crypto companies
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Crypto markets followed traditional markets lower, interestingly BTC & ETH down around 1% which was less than S&P & Nasdaq down 1.7%. BTC’s 30 day correlation to S&P hit -0.8 last week following the fallout from crypto exchange FTX’s bankruptcy, but seems to be reverting. Perhaps crypto will be correlated to equities at the next big macro event, which in my view is the FOMC on 14 Dec.
Axie Infinity AXS surges as much as 50% before pulling back to below +30%, as the company releases their decentralization strategy and also upcoming development plans. Not a surprise that leveraged traders got hit on that volatility, with $3.4m shorts vs $0.9m longs liquidated.
Silvergate SI 0.00%↑ drops another 8.5% as a class-action lawsuit was filed against the crypto-friendly bank claiming they were responsible for fraudulent losses in the FTX collapse. CEO once again seeks to reassure investors that deposits are safe.
US listed BTC mining stocks fell following the broader equity market. Not surprisingly names that recently bounced after a period of underperformance such as TeraWulf WULF 0.00%↑ and Marathon MARA 0.00%↑ were hit harder. Expecting continued industry consolidation as miners with stronger balance sheets absorb less efficient companies.
Adoption
Coca-Cola teams up with crypto exchange Crypto.com CRO and digital artist GMUK to release 10k NFTs celebrating FIFA World Cup. Interestingly, Crypto.com supposedly has the highest Vegas odds of being the next exchange to file for bankruptcy.
Reverse adoption? Nexo to phase out the US side of its operations, saying it was a dead end in talks with US regulators. Get any funds off centralized finance and learn to self-Custody!
'Metaverse' loses out to 'goblin mode' as Oxford's Word of the Year.
Follow the Money
Last week was slower in terms of volumes into crypto investment products, which saw some minor outflows. However looking deeper there were $11m inflows into BTC products and $11m outflows from the short BTC products for a net $22m turnaround. Perhaps investors are starting to believe the short term bottom is in, which happened for equities back in October.
Uniswap-based defi protocol Panoptic raises $4.5 million in seed round from investors including Gumi, Coinbase, Jane Street. The protocol allows for trading perpetual options.
Defi lending protocol Aave acquires Sonar, a mobile social gaming app that supports NFT-based avatars, in an effort to expand Lens Protocol for identity across web3 consumer products.
FTX Bankruptcy Fallout
Orthogonal Trading, which runs a crypto hedge fund, has defaulted on $30m worth of loans on Maple Finance MPL, a decentralized finance (defi) protocol. Price of MPL -20%. Orthogonal had funds stuck in FTX. Maple in my view was a centralized finance (cefi) protocol masquerading around as a defi protocol.
Update on the known firms with exposure to FTX.
FTC investigating crypto firms over misleading advertising. FTX has sped up regulation of the industry, and I expect also heavy handed restrictions over lighter ones.
EU financial regulator to address off-shore crypto companies. Through MiCA regulation, EU member states can bring down ads and websites of non-EU-authorized entities.
Exchanges continue to rush to provide proof they remain solvent. KuCoin engages auditor Mazars to provide factual findings report. Step in the right direction for cefi to provide clarity.
Dark Side of Crypto
Australian exchange Swyftx lays off 40% of staff.
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 AXS CRO MPL
no news is good news...