Crypto News Bites 2022/12/8
Canada's $388b fund abandons crypto / Taylor Swift $100m FTX deal luckily fell apart / Winamp music NFTs / US NFT Tax Guide / LINK staking / No ETH trading fees on Binance
Top News Summaries
FOMC next Wed. Canada’s $388b pension fund abandons crypto plans.
Taylor Swift could have been sponsored by FTX! Winamp (yes that one) enables music NFTs. US NFT Tax guide.
Nigeria forcing CBDC adoption. LINK staking. Binance US no fees for ETH trading.
November saw $1.3b in venture capital allocated across 135 blockchain-related deals, 3rd month of consecutive declines.
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Crypto markets fell, BTC -1.5% ETH -3% in a somewhat delayed reaction to the previous day’s equity move. Reuters reports that Canada’s biggest pension fund CPPI is ending their research into investing in crypto, perhaps as two of Canada’s largest pension funds have written off investments in bankrupt crypto exchange FTX and bankrupt crypto lender Celsius.
The FOMC rate hike next Wed on Dec 14 is by far the most important macro event crypto traders need to look out for, with markets pricing in a 77% chance of 50bps hike after 4 continuous 75bps hikes. The last datapoint for the Fed is next Tuesday’s US CPI (est 7.6% from prev 7.7%). Interesting to see the 30 day BTC & S&P correlation back to 0, and I suspect that could keep rising past FOMC.
BTC miner Marathon Digital MARA 0.00%↑ one of the largest publicly traded bitcoin miners, expects to recover only $22m of the $50m deposited with bankrupt mining center provider Compute North. Tough times for BTC miners as I have previously mentioned multiple times already.
Adoption
Singer Taylor Swift was in talks to sign a $100m sponsorship deal with FTX, reports the Financial Times. This was earlier in the spring, well before FTX’s bankruptcy drama. Why did I file this under adoption? The deal might have included a ticketing agreement involving NFTs. In related news, US Congress wants to grill Ticketmaster after the disastrous ticket sale for Taylor Swift’s upcoming Eras tour, bringing up the near monopoly the company has on primary ticketing market as well as other anti-competitive practices such as restrictions on ticket transferability etc. Kinda makes you wonder how much better it would be if there was some alternative method to decentralize power away from centralized entities, doesn’t it?
Winamp, the Windows media player from 1997 when playing MP3 music files was a thing instead of streaming songs, released a new version that lets users play music NFTs by connecting their Metamask wallets. Metamask is the most popular crypto wallet, and I strongly recommend learning to self-Custody instead of leaving crypto on any centralized exchanges.
Since we’re on the topic of old tech companies, video game maker Atari’s NFT collection, which was launched in September to celebrate the company’s 50th anniversary, can now become physical art. Through a new collaboration with print-on-demand company Pixels, Atari’s NFT holders can print framed prints and posters.
Best adoption is… forced adoption? Nigeria cash withdrawals limited to $225 a week at ATMs and at banks, to force the use of their Central Bank Digital Currency CBDC. Businesses can only withdraw $1125 a week, and any withdrawal amounts above those limits will see a fee of 5% for individuals and 10% for businesses. Nigeria’s gonna shoot up the rankings in the next crypto adoption survey!
US Taxes
For my US friends and all the fun they get from filing their taxes every year, Investopedia has released an NFT Tax Guide. Also as I mentioned previously, there is a protocol that allows you to sell your worthless NFTs for tax-loss harvesting, but I have not tried their service or done any due diligence on them. Even if I claim to have done dd, you should still do your own research DYOR.
Centralized Exchanges
Binance.US removes fees for trading spot ETH. Although I keep advocating for self-custody, centralized exchanges have their uses and users can always exchange their crypto and then immediately withdraw. Speaking of Binance, global auditor Mazars concluded that Binance’s BTC reserves are fully collateralized, following verification of proof-of-reserves against proof-of-liabilities. Note this is only for BTC, and not all crypto they hold / are liable for.
Robinhood HOOD 0.00%↑ has seen an increase in crypto market share after the collapse of FTX.
Follow the Money
November saw more than $1.3 billion in venture capital allocated to 135 blockchain-related deals. Q4 funding will probably decline for 3 consecutive quarters, and be the lowest quarter in USD since Q1 21. During 1H 22, there were 28 later-stage deals, with ~5 /month, while 2H 22 is on pace for only 4/mo.
Infrastructure firm Blockstream seeks fresh capital, but valuation could be below $1b compared to their Series B round in Aug 2021 valuing them at $3.2b. If traditional markets are expected to see another leg down until Q1-Q2 next year, crypto private equity could see even lower valuations.
Decentralized Finance (defi) derivatives protocol Perennial raises $12m in seed round from investors including Polychain Capital, Variant, Coinbase, Robot Ventures etc.
Animoca acquires majority stake in music metaverse gaming platform Pixelynx. I could have filed this under adoption, as I believe music NFTs are still largely under the radar.
The Mirror, a game platform helping independent developers without a backing of a large game publisher, raised $2.3m pre-seed round from investors including Founders Found, Konvoy.
Other news
Tether’s Chinese Offshore Yuan-pegged stablecoin CNHT is now available on the Tron network, and Bitfinex is the first exchange to enable their withdrawals & deposits via TRON. Previously CNHT was only available on the Ethereum network. The coin’s market cap of $3m shows how little adoption there is, even XSGD stablecoin pegged to SGD has a $51m market cap, while Tether’s EURT stablecoin pegged to EUR has $217m market cap. By the way did anybody notice that failed blockchain Terra Luna’s stablecoin USTC still has a market cap of $203m? Anyway, these all pale in comparison to the stablecoins pegged to USD. Perhaps true adoption occurs when stablecoins of other currencies play a larger role in crypto, likely when governments issue their Central Bank Digital Currencies CBDCs.
Chainlink, the oracle network which brings real world data onto the blockchain, has activated staking version 0.1 for it’s LINK token. Users who lock up, or stake, their tokens will receive additional token rewards, similar to a dividend. The limit is 7k LINK per wallet up to the initial cap of 25m LINK or roughly $171m.
There’s just so much more news, but I’m out of time. Have a great day!
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 LINK CNHT TRON