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Market Overview Market Overview by Josh Burke, DeFi Trader
Crypto Round up
Over the past couple days, crypto markets have been experiencing low volatility as investors eagerly await upcoming US macro data and listen to 14 Federal Reserve speakers scheduled for this week. Traders remain cautious and are closely monitoring market indicators. Bitcoin (BTC): The Bitcoin network has been steadily making progress in resolving its congestion issues. After reaching an all-time high of over 500,000 unconfirmed transactions on May 7, there has been notable improvement. Currently, 184 blocks need to be cleared to process the majority of transactions that are still stuck in the network's mempool.
Bitcoin-Ether Correlation:
The correlation between Bitcoin and Ether has dipped below 80% for the first time in 18 months. This suggests a potential decoupling of the two major cryptocurrencies, indicating that their price movements may become less correlated in the future.
Crypto Startup Funding:
According to Blockworks Research, in the past week, crypto startups collectively raised approximately $56 million across 13 companies through various funding rounds. This indicates continued investor interest and support for innovative projects in the crypto space.
Liquid Staking Derivatives (LSDs):
Liquid staking derivatives have seen significant growth, with over 440,000 Ethereum added in just two weeks. We believe this reflects this reflects the increasing popularity of staking as a means to earn passive income and participate in blockchain networks.
Bitcoin Cash (BCH):
The price of Bitcoin Cash has rallied ahead of a mainnet upgrade, scheduled to go live at noon UTC on Monday. This upgrade will enable developers to issue tokens on top of the network, among other enhancements.
Graph of the Week:
Number of Wallets Holding More than 1 Bitcoin Since Inception
The number of Bitcoin wallet addresses holding 1 whole BTC or more has surpassed the one million mark on May 13.
NFT Markets NFT Markets by Matthew Linares, Senior Analyst
NFT Royalties: The Ongoing Debate Around Equity and Fairness in NFT Marketplaces
NFT marketplaces have ushered in a new era for creators’ intellectual property protection and royalty earnings. However, the subject of NFT creator royalties has become a point of contention, sparking debates around fair compensation for artists and creators.
Creator royalties are proceeds the original NFT creator earns from subsequent sales after the primary sale. These royalties are primarily enforced via mechanisms in the NFT's smart contract or by the marketplaces from which the NFTs are sold. Typically, these royalties, ranging from 2-10% of a sale, provide a perpetual income stream for creators.
Through 2022, royalties were a consistent feature on most platforms. However, the scenario began to change as some platforms like Sudoswap started opposing creators’ royalties and enabling users to bypass the intended royalties of the creator. The debate around royalties then intensified, with marketplaces caught between safeguarding creators' interests and meeting the demands of market participants for low-fee trades. This tension escalated into a rivalry between marketplaces like Opensea and Blur, with the Blur offering reduced transaction fees and an optional royalty system. This system proved to be preferential by the market as Blur quickly gained market share from Opensea. Faced with this competition, even staunch proponents of royalties like Opensea acquiesced and made royalties optional.
Many creators have expressed concerns about these changes, as royalties have been a significant source of income. As of now, the future of royalties remains uncertain, with marketplaces, creators, and collectors all pulling in different directions. As a result, many NFT projects are migrating to creator-centric platforms that offer more flexible and protective models for royalties.
Axie Infinity crypto game now on the App Store
Sky Mavis, the creator of Axie Infinity, announced the availability of the latest version of its game, 'Axie Infinity: Origins', on Apple's App Store in select Latin American and Southeast Asian countries. This step is aimed at recapturing users lost after a challenging 2022. The game enables players to battle, collect, and trade non-fungible tokens (NFTs). Sky Mavis is hopeful that Apple's policies will evolve to favor in-app purchases for NFTs and linkage to third-party marketplaces. The company cites significant growth potential, with 70% of its users coming from referrals and 'Axie Infinity: Origins' already being the most-played web3 game.
This strategic move by Sky Mavis indicates a bullish sentiment for the broader NFT and web3 gaming market. By integrating NFTs within a popular gaming ecosystem and gaining a foothold on a platform as influential as Apple's App Store, it sets a significant precedent for the acceptance and mainstream adoption of NFTs. This could potentially catalyze a broader shift in the digital economy and further stimulate the expansion and maturation of the NFT space.
Lastest News: Curated by Sam Eisner, Associate
Ripple has acquired #Swiss digital asset custody company Metaco. Ripple expands into the institutional crypto #custody market, predicting the niche will hit $10 trillion by the end of the decade. A deal worth $250 million will see Ripple become the sole shareholder of Metaco which will continue operations as an independent brand. Metaco offers tokenization tools and custody infrastructure for firms to scale new business models in the crypto economy.
EY has started an Ethereum-based platform for enterprises to track their carbon emissions and carbon credit traceability. The EY OpsChain ESG made the announcement at the firm’s Global Blockchain Summit in London. The platform is now available in beta version on the EY Blockchain SaaS platform.
MetaMask has started rolling out Ether purchases via PayPal for users in the United States.
A new blockchain network aimed at financial institutions is in the works from a conglomerate of participants in the finance and tech space, including the likes of Microsoft and Goldman Sachs. According to the announcement on May 9, the Canton Network will be a privacy-enabled interoperable blockchain network aimed at those working with institutional assets. It will allow the synchronization of financial markets that were “previously siloed.” The network will begin testing its capabilities in July, which include extensive privacy controls and the ability to achieve the scale and performance needed by major financial institutions. Participants in the network currently include BNP Paribas, Cboe Global Markets, Digital Asset, Paxos, Microsoft, Goldman Sachs, Deloitte and others. Cathy Clay, executive vice president of Cboe Global Markets — one of the partners in the project — said that, when leveraged, blockchain technology can potentially “unlock” new opportunities in the market.
Samsung Electronics and the Bank of Korea have joined forces to spearhead research and innovation in offline central bank digital currency (CBDC) technology. The partnership seeks to eliminate internet dependency by ushering in a new era of seamless offline payments. Both entities will conduct joint research aimed at catalyzing the development of a CBDC ecosystem.
Liechtenstein is planning to add Bitcoin (BTC) as a payment option for government services. Any crypto received as payment will likely be immediately exchanged for Swiss francs, Liechtenstein's national currency, Prime Minister Daniel Risch explained.
Regulatory Roundup:
The U.S. Chamber of Commerce, a heavyweight in the business industry representing the interests of more than 3 million organizations, called out the SEC on Thursday in a show of support for Coinbase, slamming the financial watchdog's regulatory approach toward the digital asset industry. It filed an amicus brief in support of Coinbase, which took the SEC to court last month. The exchange wants a court to force the SEC to respond to its so-called “petition for rulemaking” filed last July, which asks the SEC to propose and adopt rules for digital assets and answer questions related to regulation. The U.S. Chamber of Commerce said, “The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach,” further stating that the "regulatory chaos is by design, not happenstance.”
Marathon Digital, a U.S.-based bitcoin mining firm, disclosed a new subpoena from the U.S. SEC. The firm indicated that the subpoena relates to its mining facility in Hardin, Montana and that the SEC “may be investigating whether or not there may have been any violations of the federal securities law.” Marathon says it is cooperating with the SEC.
United States state legislators in Texas have voted to amend the state’s Bill of Rights and add a provision recognizing the right of individuals to possess, retain and utilize digital currencies. The decision was made on Wednesday, May 10. Bill HJR 146, introduced by State Representative Giovani Capriglione, declares that individuals have the right to use a medium of exchange that is mutually agreed upon, which includes digital currencies, cash, coin, bullion, or scrip, for trading and contracting goods and services, and that this right cannot be violated.
Florida Governor Ron DeSantis signed a bill restricting the use of central bank digital currencies (CBDCs) in the state. The governor urged state lawmakers in March to draft the bill. The new law prohibits the use of a United States federal CBDC “as money within Florida’s Uniform Commercial Code (UCC).” It also bans the use of CBDCs issued by foreign governments and calls on other states to use their commercial codes to institute similar prohibitions.
U.S. Sen. Ted Cruz (R-Texas), introduced legislation to prohibit the Federal Reserve from developing a direct-to-consumer central bank digital currency which could be used as a financial surveillance tool by the federal government.
New York State Democrat Latrice Walker introduced Assembly Bill 7024, which seeks to amend the criminal procedure law to authorize the use of dollar-pegged stablecoins as a form of payment for bail bonds.
Binance said it is pulling out of Canada after the country's regulators turned up the heat on the crypto sector.
A former Coinbase product manager was sentenced to two years in prison for insider trading—the first of its kind in the crypto world. Ishan Wahi, 32, and his associates—including his brother, Nikhil—made over $1.5 million by using inside information to invest in new digital assets just before they were listed by America’s biggest crypto exchange. U.S. Attorney Damian Williams said, “Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.”
*PLEASE SEE IMPORTANT DISCLOSURES BELOW* Best, Criptonite's Team DISCLOSURE: The opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates. The author may hold investment positions in some of the assets discussed. Nothing in this email or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. Wave is federally regulated by the US Securities & Exchange Commission as an investment adviser. Registration with a federal or state authority does not imply a certain level of skill or training. Additional information including important disclosures about Wave Digital Assets LLC also is available on the SEC’s website at www.adviserinfo.sec.gov.
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