Wednesday, 7 December 2022

Market Summary

Market Summary 7 December 2022

Bitcoin Price: US$ 17,088.96 (+0.72%)
Ethereum Price: US$ 1,271.32 (+0.95%) 

 

Solana’s Total Value Moved On-Chain Plummets

  • The daily total value moved on-chain for Solana is down 96% in the wake of the FTX collapse. Solana averaged $32.9B per day of total value moved from the beginning of October until the FTX collapse. Since then, Solana has averaged $1.4B per day.
  • Most of the value moved consists of transactions involving SOL, USDC, USDT, ETH, and SRM. While SOL and SRM are down 57% and 69% respectively since Oct. 1, they only account for a portion of the daily value moved on Solana.
  • Notably, the largest daily amount of SRM value moved since the beginning of October occurred on Nov. 13, only two days after the FTX collapse. On this day, $2.4B worth of SRM was moved, accounting for 73% of the daily on-chain value moved on Solana.
  • The number of daily active wallets on Solana is down 29% as well. Solana averaged 565K daily active wallets from the beginning of October until the FTX collapse. Since then, Solana has averaged 398K.

 

The Year Ahead for NFTs

  • When we map NFT trading volumes on OpenSea with Gartner’s Hype Cycle — which represents the maturity and adoption of new technologies in solving real business problems — we can infer that NFTs hit the peak of inflated expectations from late 2021 to early 2022.
  • Since then, transaction volume and attention have been down only. Cobie describes NFTs as just “altcoins with pictures.” We are in the trough of disillusionment. The only way forward is to build our way out, finding real-world use cases for the technology. Only then will we see mainstream adoption really take off.
  • While it’s easy to get caught up in the future of what this space could look like, we must also recognize where things stand today. The reality is that NFT trading activity peaked early this year and has since succumbed to the same pressures weighing on the broader crypto market. NFT trading volumes are down across the board, but the last few months have been particularly depressed; November was the lowest month for NFT marketplace volumes since June 2021.
  • Continue on Delphi

 

ConsenSys to Update MetaMask Crypto Wallet in Response to Privacy Backlash

  • ConsenSys, the company behind the MetaMask crypto wallet, said Tuesday it will release a series of updates to the platform in response to user backlash regarding its data-collection practices.
  • In a statement, the company explained how and why it was sharing MetaMask user internet-protocol information with Infura, the ConsenSys-made “RPC (remote procedure call) service” for reading and writing data to the Ethereum blockchain.
  • A change in wording to the ConsenSys user agreement last month revealed that MetaMask, by default, shared users’ transaction data with Infura alongside their IP addresses. The revelation sparked outrage in a vocal corner of the crypto community, with some users worrying aloud that their transaction data wasn’t as private as they assumed.
  • In its statement, ConsenSys clarified that it would only “collect wallet and IP address information in connection with ‘write’ requests, also known as transactions, when MetaMask users broadcast transactions through Infura’s RPC endpoints.”
  • “We do not store wallet account address information when a MetaMask user makes a ‘read’ request through Infura, for example in order to check their account balances within MetaMask,” the company said.
  • According to MetaMask co-founder Dan Finlay, the platform began collecting and sharing IP-linked transaction data with Infura in 2018 to prevent network overload and to monitor pending transactions.

 

Sam Bankman-Fried Hires Mark Cohen as His Attorney: Reuters

  • Sam Bankman-Fried has retained high-profile defense attorney Mark Cohen, reported Reuters on Tuesday, citing confirmation from Bankman-Fried’s spokesperson Mark Botnick.
  • A partner at Cohen & Gresser, Mark Cohen is a former federal prosecutor and recently represented Ghislaine Maxwell in her sex trafficking trial.
  • Though not yet formally charged with any wrongdoing, Bankman-Fried is reportedly being probed by both U.S. federal prosecutors and the Securities and Exchange Commission (SEC) for his actions with respect to FTX – the failed crypto exchange he once led – and its sister company Alameda Research.

 

Crypto Firm Orthogonal, Victim of FTX Contagion, Now Faces Internal Dissent

  • Rifts have emerged between defaulted crypto trading firm Orthogonal Trading and its own lending unit, Orthogonal Credit, after an apparent default on some $36 million of loans on the blockchain-based lending platform Maple Finance.
  • On Monday, Maple said it had severed ties with Orthogonal Trading after the firm failed to make a $10 million payment that was due, triggering defaults across all of its debt within lending pools for the stablecoin USDC and wrapped ether (wETH). Maple said Orthogonal Trading had misrepresented its exposure to Sam Bankman-Fried’s collapsed FTX exchange.
  • Now, officials with Orthogonal Credit have come forward with a Medium post claiming they were kept out of the loop on the depth of Orthogonal Trading’s financial troubles and weren’t aware of the hole in the trading book. Orthogonal Credit, which oversaw a $30 million stablecoin lending pool named Orthogonal Trading – USDC001 on Maple, was also booted from Maple’s protocol.

 

Hedge Fund Fir Tree Sues Grayscale for Details on GBTC: Bloomberg

  • Hedge fund Fir Tree is suing crypto investment firm Grayscale to obtain details about its flagship Grayscale Bitcoin Trust (GBTC) in order to investigate potential mismanagement and conflicts of interest, according to a report from Bloomberg.
  • Fir Tree wants Grayscale to resume redemptions and cut fees for the trust, which is the largest publicly traded crypto fund in the world, with $10.7 billion in assets. It allows U.S. investors to gain exposure to the price movement of bitcoin without buying the asset itself.
  • GBTC is selling at close to a record 43% discount to the price of the underlying bitcoin in the trust and is down almost 75% this year in the wake of bitcoin’s sharp decline and the collapse of several high-profile crypto firms such as FTX. Fir Tree wants to use the information it’s seeking to pressure Grayscale to resume redemptions, which are not immediately available to investors, and to cut fees from the current 2%, according to Bloomberg’s sources.
  • Fir Tree is known for making a large short bet against the stablecoin tether earlier this year.

 

Blockchain Data Provider Chainlink Launches Staking of Its Native Token LINK

  • Chainlink, a provider of price feeds and other data to blockchains, has introduced staking of its native token LINK to its network to help keep the protocol secure.
  • Chainlink Staking v0.1 allows people to earn rewards while helping the protocol become more secure. To do this, stakers will have to “commit LINK tokens in smart contracts to back certain performance guarantees around oracle services,” Chainlink said in a blog. This first phase of Chainlink staking will help secure data feeds.
  • “What staking does is it allows us to scale the system by creating incentives that allow the system to grow,” Chainlink co-founder, Sergey Nazarov said in an interview with CoinDesk.

 

Warner Music Group and Polygon team up on virtual vinyl platform

  • Polygon and Warner Music Group have teamed up with e-commerce platform LGND.io to roll out a multi-year web3 music program that will allow users to play digital vinyl on-the-go. 
  • The platform, called LGND Music, will support digital collectibles from any blockchain even though it has Polygon as its main partner. The tie-up also includes a collaboration with Dutch electronic music record label Spinnin’ Records, according to a company release.
  • Upon its launch in January, it will sell its own digital collectables, which will give customers access to special content and experiences from their favorite artists.
  • “We’ve been working for over a year to deliver the best-in-class blockchain experience for passionate music lovers all over the world, and look forward to innovative and unique content from all types of WMG artists,” Michael Rockwell, CEO of LGND Music, said in a statement.

 

Paraguay legislature strikes down crypto mining bill

  • Paraguay struck down a crypto bill that would cap electricity rates for mining operations.
  • The bill was generally aimed at regulating the commercialization, intermediation, exchange, transfer, custody and administration of crypto assets, CoinDesk first reported.
  • It was passed by congress in July but then vetoed by President Mario Abdo Benítez the following month.
  • Senator Fernando Silva Facetti at the time said that the president’s decision ignored “the existence of this activity that today functions in regulatory shadows.”

 

Bitcoin Underperforms S&P 500 as Stocks Have Overshot Fundamentals, Crypto Trading Firm QCP Says

  • While some expect bitcoin (BTC) to catch up with the recent rally in stocks, Singapore-based crypto options trading firm QCP Capital suggests otherwise.
  • According to QCP Capital, stocks have overtaken fundamentals and could soon fall back.
  • “We say this because the two-year Treasury yield, which has been a reliable indicator of the market’s direction all year, is, in fact, moving in line with BTC and ETH, while the S&P 500 and Nasdaq have rallied away,” QCP said in Monday’s market update.
  • Risk assets, including cryptocurrencies, have mostly moved in the opposite direction to the two-year U.S. Treasury yield this year as the Federal Reserve embarked on its most aggressive rate hike cycle in decades. The two-year yield closely tracks the near-term interest rate and inflation expectations.
  • While bitcoin and ether continue to respect the negative correlation with the two-year yield, stocks have decoupled since mid-October on hopes that inflation has peaked and the Fed will pivot toward liquidity-boosting rate cuts in the second half of next year.

 

Crypto taxes could bring in $2.5 billion for the EU, leaked draft suggests

  • Crypto traders beware: the European Union may have a tax surprise in store.
  • A European Commission proposal for taxing crypto estimates that taxes on crypto assets could raise as much as €2.4 billion ($2.5 billion), a leaked draft obtained by The Block suggests. The proposal, which is scheduled for adoption in the Commission this week, claims to close the “regulatory gap” and remove tax evasion opportunities for crypto investors as well as ensure member states avoid a tax shortfall.
  • Crypto service providers in the EU will need to report to national tax authorities, according to the draft, which defines crypto assets as those “issued in a decentralized manner, as well as stablecoins, and certain non-fungible tokens.” For rules to apply, a crypto asset must be used as means of payment or investment, with possible exceptions for “a limited network and certain utility tokens.”

 

Gemini forms ad hoc committee with creditors amid Earn freeze

  • Gemini formed an ad hoc committee with other creditors to coordinate and advocate for a resolution to the crypto exchange’s struggling Earn product — which paused customer redemptions on Nov. 16.
  • The update comes from Gemini’s co-founder Cameron Winklevoss, who tweeted that law firm Kirkland & Ellis “has been engaged as counsel by the Creditor Committee to advocate on its behalf.”
  • Winklevoss also claimed that returning user funds “is our highest priority and we are operating with the utmost urgency.”
  • The tweets follow news from earlier this month that crypto brokerage Genesis and its parent company, Digital Currency Group, owe $900 million to Gemini customers, according to the Financial Times. Gemini is reportedly attempting to recover the funds.
  • According to a CoinDesk report on Sunday, Genesis owes its creditors at least $1.8 billion.

 

O.G. Audio App Winamp Adds Ethereum and Polygon Music NFT Support

  • In its latest update, the classic Windows media player Winamp has integrated music NFTs into its platform. Winamp’s new feature will allow users to play audio files embedded in their non-fungible tokens, calling it a Web3 desktop upgrade.
  • Launched in 1997, Winamp’s latest version lets music fans link their Metamask wallet via Brave, Chrome, or Firefox browsers to Winamp. Winamp supports ERC-721 and ERC-1155 audio and video files and is compatible with Ethereum and Polygon.

 

Glassnode

  • The #Bitcoin protocol has just decreased mining difficulty by -7.3%, the largest downwards adjustment since July 2021.
  • Given depressed coin prices, rising energy costs, and debt burdens, the mining industry is under under extreme stress.

  • This difficulty adjustment is in response to falling #Bitcoin hash-rate.
  • This has resulted in yet another inversion of the Hash-ribbons, as the 30DMA dives below the 60DMA.
  • The last hash-ribbon inversion occurred in early June 2022.

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