Wednesday, 22 December 2021

Market Summary

Market Summary 22 December 2021

Bitcoin Price: U$48,889.88  (+4.21%)
Ethereum Price: U$4,014.15 (+1.76%)


NFT Volumes Thrive, YFI Revamps, & GBTC Remains a Tough Sell

  • NFTs have made their way onto multiple L1 chains as Ethereum faces scaling problems and expensive transaction fees, which has made it challenging for some users to participate as the barrier to entry is rather high.
  • Other chains have tried to replicate Ethereum’s success in the NFT space and attract users, mainly by offering cheap transaction costs. Despite this, Ethereum still holds the throne for NFT volume.
  • Ethereum-based projects continue to attract brands as it remains the preferred L1 to launch NFTs. Recently, Adidas Originals launched an NFT in partnership with BAYC, PUNKS Comic, and gmoney. 
  • Yearn Finance has recently started aggressive buybacks, with ~$3.1M or 120.5 YFI being purchased, marking the largest buyback yet.
  • Yearn released a proposal suggesting the evolution of Yearn’s token economics, which suggests that the Treasury expects to direct ~$35-45M to buybacks annually.
  • The buyback enhances value accrual and incentivizes active governance participation for its token holders. So far, crypto markets interpreted the buyback positively. YFI is up 80% in just the last week alone.
  • Binance’s BTC open interest took a hit with the recent sell-off, and cash-margined positions have led to the recovery in OI. Cash margined OI recovered to pre-correction levels, while crypto margined OI is relatively flat.
  • However, there is little indicating whether these are long or shorts. Interestingly, Binance is the only exchange to have cash margined OI recover sharply (~$1b).
  • Grayscale’s GBTC discount has dropped past -20% versus NAV, a record low since inception.
  • This year, ProShares launched a Bitcoin Futures ETF ($BITO), which allowed investors to have exposure to Bitcoin without the lockup as well as a cheaper fee of 0.95%. This has made GBTC a tougher sell, as a 6-month lockup on a volatile asset is relatively unappealing.
  • Furthermore, Grayscale has seen difficulties in converting itself into a spot ETF. SEC Chair Gary Gensler has said that he prefers a bitcoin futures ETF over a spot one. Coinbase has spoken out about the matter and urged the SEC to approve GBTC into an ETF. If successful, we can see the discount on GBTC quickly cleared up by arbitragers.


Ubisoft pursues NFT initiative with following fan backlash

  • Earlier this year, gaming giant Ubisoft joined the network as a core channel node operator after the blockchain-based storage and computing startup became a part of Ubisoft’s Entrepreneurs Lab. On Tuesday, announced that it will offer a decentralized storage solution for Ubisoft Quartz in order to further incorporate nonfungible tokens (NFTs) into Ubisoft’s AAA games.
  • Players will be able to acquire dynamic NFTs called Digits on Quartz that will be used in Ubisoft’s Tom Clancy Ghost Recon Breakpoint game. Players can use Digits in-game and can also put them on sale on Rarible and Objkt marketplaces for others to buy. The metadata and the history of the item will be publicly available.


Ether’s growth as independent asset fuels ETH-BTC flippening narrative

  • The narrative surrounding Ether (ETH) of it fast transforming into an independent asset has been around for some time now. However, the last few months have seen this notion gain an increasing amount of mainstream traction, as is best highlighted by the fact that, since Oct. 1, ETH has showcased substantial northbound movement against Bitcoin (BTC). 
  • To put things into perspective, toward the beginning of November, the one-month realized correlation between the BTC/ETH pair dipped as low as 60%, its lowest ever in the currency’s decade-old history. Furthermore, since the start of the year, while Bitcoin registered gains of 105%, Ether went up by a whopping 505%, thus outperforming the flagship crypto by nearly five times.


Crypto exchange Kraken acquires staking startup Staked

  • On Tuesday, crypto exchange service Kraken announced that it had acquired Staked, a non-custodial staking startup.
  • Though details of the acquisition deal were not disclosed in the announcement, Kraken said that the acquisition was “one of the largest crypto industry acquisitions to date” and would help the exchange company “develop innovative new staking products for all our clients and expand the number of proof-of-stake networks supported on our platform.”


‘You don’t own Web 3.0,’ says Jack Dorsey, criticizing its centralized nature

  • In a series of tweets posted on Tuesday, Jack Dorsey, the co-founder and former CEO of Twitter, as well as the founder and CEO of Square (now Block), voiced his criticism over the direction of Web 3.0 development. Elon Musk, the CEO of Tesla, joined Dorsey in the mockery. On an unrelated note, the same day, Dorsey replied, “Bitcoin will” when asked if crypto will replace the dollar.
  • Within context, Web 3.0 is a decentralized version of the virtual world that will, in part, feature public blockchains, metaverse technology, nonfungible tokens and decentralized finance free from the grasp of centralized power sources, such as corporate servers. 
  • However, Dorsey took aim at the fact that venture capital firms, or VCs, and limited partnerships, also known as LPs, frequently fund Web 3.0 projects in direct competition with decentralized alternatives such as initial coin offerings. By owning a controlling stake, VCs and LPs can then pressure blockchain co-founders to comply with centralized regulations, such as collecting Know Your Customer (KYC) data,  that conflict with their core crypto philosophy. 


Crypto​.com partners with Los Angeles’ Angel City Football Club

  • Cryptocurrency exchange has inked another deal to expand its brand recognition in the United States with the professional women’s sports team Angel City Football Club.
  • In a Tuesday announcement, said it had partnered with the Los Angeles soccer team in an effort to increase the awareness of and access to crypto, blockchain and Web 3.0 among Angelenos, soccer fans and the athletes themselves. The exchange said it plans to continue looking for “unique and impactful ways” to invest in L.A., with the partnership aimed at encouraging “financial education, independence and financial empowerment” for women.


Parachains are Live! Polkadot Launch is Now Complete

  • Today is an exciting and historic day for Polkadot. After 5 years of research and development, and a multi-stage launch that began in May of 2020, Polkadot launch is now complete, with all auction-winning parachains currently producing blocks on the network.
  • The onboarding process for Polkadot’s first batch of five auction-winning parachains began with the start of lease period 6 at 10:07 pm UTC last night. As of this morning, all five parachains have now successfully onboarded to the network.
  • The winning parachains from Polkadot’s first batch of auctions were, in order, Acala, Moonbeam, Astar, Parallel Finance, and Clover. After building an impressive level of community support through crowdloans, to the tune of nearly 100 million total DOT locked, all of them are now successfully onboarded and producing blocks.


Metaverse infrastructure startup Render Network raises $30 million in token round

  • Render Network, a crypto startup that provides rendering tools to NFT and metaverse projects, has raised funds.
  • The startup did not disclose how much it has raised, but its lead investor, Multicoin Capital, told The Block that it has raised $30 million in a token round.
  • Other investors in the round included Alameda Research, the Solana Foundation, Sfermion, and angel investors Vinny Lingham and Bill Lee.


Crypto salaries are becoming a popular way to attract young talent

  • Athletes and politicians have made headlines as they opted to get paid in crypto earlier this year. Now, in an attempt to attract a younger workforce, companies are starting to offer crypto salaries. 


Crypto exchange BitMEX to launch and airdrop its native token BMEX

  • BitMEX, one of the oldest crypto derivatives exchanges, is set to launch its own token and will airdrop to both its existing and new users.
  • Announcing the news on Tuesday, BitMEX said its upcoming BMEX token will be airdropped by February 1, 2022, in its customers’ exchange wallets.

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