Friday, 17 December 2021

Market Summary

Market Summary 17 December 2021

Bitcoin Price: U$47,632.38  (-2.52%)
Ethereum Price: U$3,958.11 (-1.52%)


Prices Rebound, Avalanche Dev Activity, & DEX Volumes

  • Crypto assets rebounded after Fed Chariman Powell’s speech yesterday. In fact, risk assets as a whole began to climb, with the NASDAQ up 2.15% at yesterday’s close.
  • Crypto markets were jittery in the days leading up to the FOMC meeting, likely in preparation for an overly hawkish Fed. However, the outcome of the FOMC meeting was what most expected– three potential rate hikes in 2022 and a quicker taper of asset purchases. Given most of this was priced in over the last couple of weeks, risk assets almost instantly responded in a positive way.
  • Development activity on Avalanche’s C-Chain has grown meaningfully this year, with over 400 developers and 70K unique contracts deployed. Amongst other things, growth accelerated in late July with the arrival of Chainlink price feeds on Avalanche’s mainnet. This provided developers the tools to accelerate application deployments.
  • In the past month alone, unique C-Chain developers have doubled from 200 to 400. With the recent launch of AvaLabs’ Subnet-EVM, it seems reasonable to expect the number of developers to continue multiplying. The Subnet-EVM eases the deployment of EVM-compatible blockchains using a single JSON file, reportedly taking just 90 seconds.
  • Institutional demand for crypto assets has been making headlines quite frequently in recent months. Whether it’s NYDIG raising $1B in funding from the likes of WestCap and Morgan Stanley, or Anchorage raising $350M from Goldman Sachs, a16z, and others.
  • This institutional demand is also reflected in Coinbase’s data. Over the first three quarters of 2021, institutional capital has flowed into the exchange at lightning pace. The first three quarters of 2021 has resulted in 5.7x more institutional inflows to Coinbase than the entirety of 2020.
  • Total volume was over $1.1T through the first nine months of the year, with institutional demand responsible for 68% of that. While retail saw a massive surge in H1 2021, their contribution to Coinbase’s total volume declined by 7.5% in Q3.
  • Interestingly, almost 60% of Coinbase’s Q3 2021 volume came from “other crypto assets”, compared to 50% in Q3 2020. Long-tail assets like SHIB and DOGE have been extremely popular with Coinbase’s retail clientele — maybe even institutional investors.
  • A slew of regulatory hearings around DeFi in the United States has put the niche in a tight spot. Former U.S. Treasury Assistant Secretary, Amias Gerety, championed DeFi, stating that the “right laws and regulations should be technology-agnostic”. However, there were people who weren’t quite as sold on DeFi, as evident from Senator Warren’s comment that DeFi is “the most dangerous part of the crypto world”.


Valkyrie launches innovative balance sheet ETF

  • Issuer Valkyrie Funds launched a new exchange-traded fund (ETF) yesterday which holds public firms with bitcoin on the balance sheet.
  • The Valkyrie Balance Sheet Opportunities ETF aims to give investors exposure to bitcoin by holding firms that directly or indirectly invest in, transact in or hold bitcoin on their balance sheets. That includes firms like MicroStrategy, Block (formerly Square), Tesla, Coinbase and PayPal among others. 
  • The fund plans to limit its exposure to mining companies in order to mitigate risk related to firms dealing directly in the bitcoin ecosystem Valkyrie Funds co-founder Steven McClurg told the TD Ameritrade Network. 


HSBC and IBM create successful multi-ledger CBDC demo

  • On Thursday, HSBC and IBM announced the successful test of an advanced token and digital wallet settlement between two central bank digital currencies, or CBDCs, in a cloud environment. The experiment consisted of transactions between CBDCs, eBonds, and forex. IBM’s Hyperledger Fabric and enterprise technology provider R3’s Corda served as the basis of the distributed ledger facilitating the transactions.
  • The project was overseen by central bank Banque de France as part of a series of tranche projects to implement a digital Euro. Previously the French and Swiss central banks reported positive results on a pilot run of the digital Swiss Franc and Euro. Nevertheless, the two financial institutions issued caution on the subject, citing regulatory concerns.


Circle and Endaoment to create USDC-based disaster relief fund for communities impacted by deadly tornado

  • Circle, the company that created the USDC stablecoin, announced a partnership with public charity Endaoment to create a disaster relief fund. The fund will help mid-western American communities impacted by last week’s deadly tornadoes. The two entities hope to raise $1 million in grants to support the American Red Cross and local non-profits.
  • Via Endaoment, blockchain enthusiasts will be able to directly contribute USDC or other cryptos using connected wallets with a minimum donation of $20. The funds will be distributed in $20,000 intervals to seven participating charities, the Team Western Kentucky Tornado Relief Fund, Center for Disaster Philanthropy, Team Rubicon, All Hands and Hearts, Midwest Food Bank NFP, American Red Cross, and Mutual Aid Relief. At the time of publication, the fund has received over $4,600 in donations.


‘I’m a huge believer in crypto technology,’ says former US SEC chair

  • Former chairman of the U.S. Securities and Exchange Commission, or SEC, Jay Clayton, was appointed by ex-President Donald Trump to serve in 2017. 
  • In his tenure as head of the SEC, Clayton often defended Bitcoin (BTC) as a store of value. This past Wednesday, during an interview with CNBC’s Squawk Box show, Jay shared his thoughts on cryptocurrency and how it should be regulated going forward.
  • The former SEC chair said that he is a “huge believer in crypto technology” and that its efficiency advantages in the financial system and tokenization are enormous.


Universities including Berkeley, MIT, Harvard, Oxford to form EduDAO to promote Web 3.0 innovations, financed by BitDAO treasury

  • On Thursday, BitDAO, one of the world’s largest decentralized autonomous organizations with over $2.5 billion assets under management and its partner Mirana Ventures, announced the creation of EduDAO with eight of the world’s top universities including the University of California Berkeley, MIT, Harvard and Oxford University.
  • EduDAO is financed by the BitDAO treasury and will allocate $11 million each year to funding project grants, research and standalone product development with $33 million in initial capital. The funds will go to academic research for next-generation blockchain and Web 3.0 technologies.


Social token platform Rally hires Novi legal exec as Meta’s crypto exodus continues

  • Social token platform Rally has hired Rob Collier, formerly the head of consumer legal for Meta’s Novi, as its general counsel, the project announced Thursday. 
  • Collier’s hire is the latest in a series of additions to Rally’s executive team. The firm brought on Bremner Morris from Patreon to lead the company as chief executive officer after the exit of Kevin Chou. Chou is working on another project in the digital asset market.

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