Wednesday, 2 November 2022

Market Summary

Market Summary 2 November 2022

Bitcoin Price: US$ 20,330.74 (-0.03%)
Ethereum Price: US$ 1,578.48 (+0.32 %) 


Arbitrum Activity Accelerates After the Nitro Upgrade

  • NBA star Steph Curry files an application to trademark “Curryverse” where players can earn NFTs through online gaming.
  • GameStop‘s NFT marketplace goes live on ImmutableX. The platform has been in public beta since Jul. 2022.
  • Coinbase seeks permission to file an amicus brief in support of Ripple in its legal battle with the SEC.
  • STEPN launches MOOAR, the first NFT marketplace to adopt a membership model.
  • Nikolai Mushegian, an early developer of MakerDAO, was found dead in Puerto Rico.
  • Since August, weekly transactions on Arbitrum are up by over 550%. At the time, Arbitrum had 9% of the weekly transactions on Ethereum. Today, Arbitrum has 62% of the weekly transactions on Ethereum. Is Arbitrum gaining adoption?
  • Weekly active users on Arbitrum have also spiked in the past two weeks. Since Oct. 10, weekly active users have grown 125% to reach a new all-time high of 282K, even surpassing numbers recorded during the Arbitrum Odyssey event.
  • Arbitrum has dropped hints about a much-anticipated airdrop of the ARBI token. Much of the activity is likely from speculators trying to boost their on-chain activity in the hopes of receiving a larger airdrop.
  • Additionally, the recent success of platforms such as GMX has attracted more users to Arbitrum. Users could also be taking advantage of the various yield farming opportunities offered by protocols on Arbitrum.
  • Finally, the Nitro upgrade was activated on Aug. 31, leading to faster and cheaper transactions on Arbitrum. After the upgrade, the average number of new contracts deployed on Arbitrum increased from 1.8K per week to 6K per week. This is an important marker for on-chain development activity.


MoneyGram app adds bitcoin, ether and litecoin crypto trading tools

  • MoneyGram, a publicly traded peer-to-pay payments company, has added crypto investment tools to its mobile app as fellow fintech firms bolster offerings in the sector.  Available in the majority of U.S. states today, users are now able to buy, sell and hold bitcoin, ether and litecoin, the company said in a statement.
  • The move follows previous forays into crypto by the company, which recently partnered with Stellar to enable payment settlements and local currency payouts using USDC. It also holds a minority stake in crypto cash exchange and crypto infrastructure provider Coinme, which provides the crypto trading tools. 
  • “Cryptocurrencies are additive to everything we’re doing at MoneyGram,” CEO Alex Holmes said. “From dollars to euros to yen and so on, MoneyGram enables instant access to over 120 currencies around the globe, and we see crypto and digital currencies as another input and output option.”


Fed Preview: Crypto Market Sees Smaller Rate Hikes From December but Major Banks Warn ‘Slower Doesn’t Mean Lower’

  • Risk assets, including cryptocurrencies, have recently found a footing on hopes the Federal Reserve will pivot away from jumbo interest rate hikes from December to end the so-called liquidity tightening sooner than expected, and will signal that at its Nov. 2 meeting.
  • However, major investment banks believe the Fed could keep the doors open for continued jumbo rate hikes, and a potential switch to smaller rate hikes would not necessarily imply an early end of liquidity tightening.
  • The Fed has raised the borrowing cost by 300 basis points (bps) this year, roiling risk assets. The central bank is expected to deliver its fourth 75 bps hike on Wednesday, lifting the borrowing cost to the 3.75%-4% range. It could signal a step down to 50 bps hike in December.
  • The markets appear to have run ahead of themselves in pricing a slowdown in terms of both frequency and magnitude of rate hikes starting from December. Traders expect the rate hike cycle to peak at around 4.8%, down from the terminal rate of 5% priced two weeks ago, according to the futures tied to the Fed funds rate. Bitcoin has gained 10% in two weeks, while the dollar index has dropped by over 2%.
  • Inflation remains sticky, suggesting the Fed has little room to turn dovish and halt rate hikes anytime soon, which is a negative sign for risk assets.


Terra-Victim Invictus Capital Defaults on $1M TrueFi Loan

  • Failed crypto hedge fund Invictus Capital failed to repay a loan from decentralized lending protocol TrueFi, according to TrueFi’s loan data dashboard.
  • The firm missed paying down its $1 million loan denominated in Binance USD (BUSD) stablecoin, which was due to mature on Oct. 30. The debt was uncollateralized, meaning that Invictus did not pledge any assets against it, and secured the loan by its reputation and good financial standing at the time.
  • TrueFi warned investors in a Twitter post in early October that Invictus might fail to repay the loan. New World Holdings, Invictus’ Cayman Islands-based parent company, entered into voluntary liquidation after suffering a blow in the crypto rout initiated by the multibillion-dollar implosion of once-top blockchain project Terra. Invictus reportedly moved investor funds to Terra’s failed stablecoin USTC and to crypto lender Celsius Network that went bankrupt in July.


Despite $27M Loss, MicroStrategy Records Improved Q3 As Bitcoin Holds Steady

  • Despite posting a net loss for the third quarter, MicroStrategy booked a dramatic improvement from the preceding three months amid muted bitcoin volatility. 
  • MicroStrategy executives said during an earnings call Tuesday that the firm plans to continue buying and holding bitcoin, with no plans to sell.   
  • The Virginia-based business intelligence firm reported a net loss of $27 million in the third quarter — a drastic improvement from its $1.1 billion net loss in the prior three-month period. 
  • MicroStrategy’s digital asset impairment charges — which comes into play if the market value of bitcoin decreases below the market-adjusted purchase value of the firm’s  — were $700,000 during the third quarter, compared to $918 million in the second. 


Crypto exchange Bitmex cuts 30% of workforce following CEO departure: Exclusive

  • Crypto exchange Bitmex has cut its workforce by 30% as part of a pivot away from the exchange’s “beyond derivatives” strategy, which included a push into spot trading, brokerage and custody services.
  • “We are pivoting from our Beyond Derivatives strategy, and will return much of our focus aiming at providing the crypto derivatives trading experience people will turn to,” a Bitmex spokesperson said in an email. “We are going to refocus on liquidity, latencies and a vibrant derivatives community including BMEX Token trading.”
  • “As an undesirable consequence, we had to make changes to our workforce,” the spokesperson added. “Our top priority is to make sure all employees who will be impacted have the support they require. Each of them have been instrumental in the remarkable journey Bitmex has taken from its roots as a small startup to one of the top crypto exchanges in the world.”
  • Last week Alexander Höptner departed from his role as CEO of Bitmex after less than two years with the company. Bitmex’s Chief Financial Officer Stephan Lutz was appointed as the exchange’s interim CEO. The exchange employed roughly 180 people as of September.


Crypto Exchange Binance to Use Twitter as Web 3 ‘Sandbox,’ Help Musk Fend Off Bots: Exec

  • Binance chipped in $500 million as an equity partner with Elon Musk to buy Twitter in hopes of using the social media platform as a “sandbox” to deal with Web 3 issues, according to the exchange’s chief strategy officer, Patrick Hillman.
  • “We look at this as a massive historic opportunity for R&D [research and development],” Hillman told CoinDesk TV’s “First Mover” program Tuesday. “[It’s] a chance to take a prestigious Web2 platform and use it as a sandbox to start taking apart some of the challenges that we’ve seen become synthetical in the Web2 space.”
  • Hillman said the world’s largest cryptocurrency exchange by volume is looking to be a “critical partner” in Twitter’s growth and innovation and would turn to “Web3 solutions” to solve some of the challenges on the platform, such as non-fungible token (NFT) user authentication and whether the platform could be used as payments system to “create small micro transactions.”


NFTs Get a New Place to Live, With Ripple Aiming for Mass Adoption

  • Ripple Labs, whose XRP token is the world’s sixth-largest cryptocurrency by market cap, has gotten into non-fungible tokens (NFT).
  • As of Oct. 31, the blockchain supports NFTs (through a standard Ripple calls XLS-20) after a vote approved rolling out the technology. The move comes after Ripple a year ago created a $250 million fund to explore NFT innovation on its XRPL blockchain.
  • David Schwartz, chief technology officer of Ripple Labs, told CoinDesk in an interview this week that the goal is to enable mass adoption of tokenization – representing ownership of real-world things through NFTs – by offering lower costs, higher speeds and improved security over existing blockchains. Ethereum is among the incumbents.
  • “You’re going to see projects based on things like carbon credits and real estate ownership and all these different use cases,” he said in an interview. “Anything that you can own all or some of that is unique, that can be represented by an NFT.“


Early MakerDAO Developer and Stablecoin Pioneer Found Dead in Puerto Rico

  • Nikolai Mushegian, an early developer of MakerDAO, the largest decentralized finance protocol, as well as a contributor to multiple crypto projects, was found dead on Friday in San Juan, Puerto Rico, according to local news outlet El Nuevo Dia.
  • According to the news article, a 29-year-old man identified as “Nicolai Arcadie Muchgian” was dragged by water currents close to Condado Beach. Beach patrols managed to retrieve his body from the ocean but there were no vital signs. The area is known for its dangerous strong oceancurrents that have caused several fatalities, according to the paper. (CoinDesk obtained a copy of a press release from the Puerto Rico Police Department consistent with the details reported by El Nuevo Dia.)
  • Mushegian contributed to the development of multiple blockchain projects and was heralded as a prolific architect of blockchain-based decentralized financial platforms and stablecoin systems.
  • Most notably, he was MakerDAO founder Rune Christensen’s original technical partner on the project and worked on the protocol and its decentralized stablecoin DAI between 2015 and 2018, according to his personal website. He was not involved in the protocol’s development lately, a MakerDAO contributor told CoinDesk.
  • He also co-founded the automated market maker Balancer and Reflexer’s RAI, which is an ether-backed stablecoin and a fork of DAI.


Uniswap Surpasses Bitcoin as Fed Rate Hike Decision Nears

  • Dogecoin isn’t the only alternative coin outshining bitcoin. Decentralized exchange (DEX) Uniswap’s UNI token was recently up 5.1% over the past 24 hours and has risen more than 10% during the past week despite mixed news highlighting its expansion but also its alleged popularity among scammers.
  • UNI also rose more than 16% in October. Its surge coincides with a more dramatic late-October spike by DOGE, which was recently trading over 13 cents, a more than 10% gain from Monday, same time, and its highest point since late April. The popular meme coin rose more than 100% in October, most of the increase occurring in the last week of the month as billionaire entrepreneur Elon Musk neared completion of his purchase of Twitter.
  • Meanwhile, bitcoin (BTC) and ether (ETH), the two largest cryptocurrencies by market capitalization, spent a second consecutive day trading sideways, albeit tinted more green than red. BTC was holding comfortably over $20,000, its most recent support line, while ether continued to hover over $1,500, where it climbed last week.


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