This Week in Crypto 23.06.2023

Market Overview

• Crypto markets are rallying as institutional investors show increasing interest in digital assets. Multiple ETF filings raised hopes that the SEC might finally approve a long-awaited spot Bitcoin exchange traded fund. After BlackRock's entry into the space, WisdomTree, Invesco and Valkyrie are following the flow. Additionally, Deutsche Bank, a 1.4 trillion asset manager and one of Germany biggest financial institutions is seeking a digital asset custody license, highlighting the industry's recognition of the need for secure storage solutions. The Crédit Agricole’s CACEIS, a 5 trillion French asset manager, has also gained crypto custody in France.

• The federal reserve chair, Jerome Powells, testified before the house financial services committee, expressing his views on the staying power of cryptocurrencies as an asset class. He also discussed the recent interest rate pause, acknowledging the growing interest in digital assets. He also mentioned stablecoins, considering them a viable form of money and advocating for robust federal regulation.

• The International Monetary Fund (IMF) is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries.

" CBDCs should not be fragmented national propositions... To have more efficient and fairer transactions we need systems that connect countries: we need interoperability. For this reason at the IMF, we are working on the concept of a global CBDC platform. ” - IMF Managing Director Kristalina Georgieva

• A new institutional crypto exchange, EDX Markets (EDX), has been launched with the backing of financial giants: Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital, and Virtu Financial. It is a first-of-its-kind exchange that will address latent demand for digital asset trading by enabling safe and compliant trading of digital assets through trusted intermediaries. It differs from how crypto exchanges typically operate as it is a "non custodial” exchange, which doesn’t handle directly customers’ digital assets.

• Solana's NFT activity has doubled in May, averaging 60,000 daily transactions in May.The increasing on-chain NFT activity on Solana is producing some much-needed signs of recovery for the ailing network.

• Binance Coin (BNB) released a Layer 2 EVM Testnet based on Optimism for faster and cheaper transactions. opBNB is designed to bring more scalability, security, and cost efficiency to the BSC ecosystem.

Graph of the Week

Bitcoin Price

The Bitcoin surges past $30' 000 for the 1st time in months, since April.

NFT Markets by Gerard Barile, Principal

Nike has sparked anticipation in the gaming community by teasing an upcoming NFT sneaker hunt called "Airphoria" in the popular online game Fortnite. The short promotional video shared across Nike's social media channels featured the logos of Fortnite, Nike's Air Max sneakers, and its Web3 platform, .Swoosh, alongside Epic Games' Unreal Engine logo. The collaboration presents a significant opportunity for Nike to introduce Web3 technology to traditional gamers, given Fortnite's vast player base of over 242.9 million active users in the past 30 days. While specific details about the sneaker hunt and the integration of NFTs remain undisclosed, speculation within the NFT community suggests that Nike may have utilized Fortnite Creative 2.0 to create an NFT-related game.

Nike's .Swoosh NFT unit has been actively exploring integration within the gaming space. Earlier in June, it was announced that Nike's NFTs would be integrated into games developed by EA Sports, known for popular franchises like FIFA. However, the specific EA Sports games featuring Nike NFTs have yet to be confirmed. The involvement of .Swoosh in the Airphoria event, coupled with Epic Games' positive stance on NFT gaming, indicates the potential integration of NFTs in the collaboration. As fans await further details, Nike's foray into Fortnite opens up possibilities for the convergence of gaming and digital collectibles.

.

Lastest News: by Sam Eisner, Associate

• As noted above, BlackRock filed paperwork Thursday afternoon with the U.S. SEC for the formation of a spot bitcoin ETF with assets custodied by Coinbase. The SEC has notably rejected other fund management company attempts at opening a spot bitcoin ETF, including those from Grayscale, VanEck, WisdomTree, and many others. BlackRock, however, may be feeling more confident given only a single BlackRock filing has been denied across its 576 applications historically.

• The European Investment Bank issued its first blockchain-based digital green bond. a SEK 1B ($93M) green bond on the so|bond blockchain platform developed by Sweden’s SEB and Credit Agricole CIB. This is the EIB’s fourth digital bond, with each one issued on a separate platform.

• Cardano introduced a significant upgrade to its mainnet enhancing its network performance and addressing minor software issues.

• Digital payments firm Strike is expanding its Lightning Network-based cross-border payments service to Mexico, the largest market for remittances from the U.S., which accounts for around 95% of total remittances received by Mexicans from abroad.

• As noted above, EDX Markets, a crypto exchange aimed at institutional investors, launched Tuesday after a litany of finance behemoths announced its creation back in September 2022. The exchange’s major backers include Citadel Securities, Fidelity Digital Assets, Virtu Financial, Charles Schwab, Sequoia and Paradigm.

• Japanese exchanges are advocating for regulatory ease on margin trading restrictions.

Regulatory Roundup:

• The Hong Kong Monetary Authority (HKMA) is encouraging banking giants to accept crypto exchanges as clients, the Financial Times reported on June 15. While no restrictions hold Hong Kong banks back from accepting crypto clients, banks are wary of drawing regulatory scrutiny. Under the circumstances, HKMA is trying to motivate banks to take on crypto clients to further its aim of turning Hong Kong into a global crypto hub.

• A U.S. district judge ordered Binance’s American exchange to keep all assets in the U.S. and limit spending to expenses needed for regular operations. The order falls short of the Securities and Exchange Commission’s original request for a broad asset freeze. Earlier this week, a federal court judge questioned what evidence the agency had to support claims that customer funds were leaving the country. Binance.US had said that a broad asset freeze would cripple its business.

• United States senator Cynthia Lummis said that the “fight is far from over” as she re-dedicated herself to pushing for a positive regulatory framework for crypto over the weekend. The Republican from Wyoming reassured followers on Twitter that she is still working on proposed regulation, a revamped version of which had been expected to circulate in April. Her bill, co-sponsored by New York Democrat Kirsten Gillibrand, was first put forward last year, but is set to do the rounds again this year after some revisions. But the proposed legislation, known as the Responsible Financial Innovation Act, comes at a time of increasingly tense relations between regulators and crypto firms in the U.S.

• the UK's House of Lords passed the Financial Services and Markets Bill, potentially recognizing cryptocurrency as a regulated activity and stablecoins as legal payment methods.

*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.