Weekly Wrap V2: Barry Silbert may have summed it up perfectly when he said, “there’s literally never a dull day in crypto”.
And sure enough, the last seven days haven’t been any different.
This week saw digital asset prices plunge deeper in the red as the Federal Reserve hit growth assets with a “sledgehammer”, causing global markets to continue their descent. Alongside this, governments started to get more serious about regulating the crypto industry with new draft bills giving special attention to stablecoins.
But first, let’s kick this off with some good news and take a look at where the biggest slices of capital were allocated this week.
Fundraising continues at an unrelenting pace
Whether the market is on the up or on the decline, there’s always plenty of action on the fundraising front. These are some of the more notable investment announcements over the past week:
- Sports metaverse startup LootMogul secured US$200 million to boost game development, including “virtual sports cities around the world”;
- Digital Transformation Capital Partners, originally the venture capital arm of German telecommunications company Deutsche Telekom, has committed US$300 million to a Web3-focused fund;
- Blockchain startup Hyperlane, a platform to help developers connect disparate applications across blockchains, raised US$18.5 million in seed funding;
- 3Commas, an automated crypto trading bot platform, raised US$37 million to “advance bot technology, expand the trading ecosystem and enhance developer tools”;
- Cryptography network Lit Protocol raised US$13 million to “hire developers creating decentralized ownership and interoperability across protocols”;
- Bug bounty security platform Immunefi secured US$24 million to enable the company to scale and “amass talent”; and
- FTX, one of the largest crypto exchanges in the world, is in talks to raise a further US$1 billion at a monstrous US$32 billion valuation.
It seems as if bear markets are truly where the future is being built.
Regulators rolled in and Do Kwon just kept running
As authorities around the world converged on various aspects of digital assets, Terraform Lab’s founder Do Kwon took to Twitter to claim that he “was not running”. This is despite information from the South Korean police — who had to ask Interpol to help track Kwon down — suggesting otherwise.
The head of the SEC, Gary Gensler continued his quest to crack down on cryptocurrencies, claiming that Proof-of-Stake (PoS) tokens should be viewed as securities under US law.
However, the main focus of this week was stablecoins, which became firmly fixed in the sights of regulators as a draft bill hit the floor of US Congress. The bill outlined that algorithmic stablecoins unbacked by cash or “highly liquid assets” — essentially anything that looks like Terra’s now-disgraced not-so-stablecoin, UST — could be completely banned within two years time.
Regulators
The bill also stipulated that non-bank stablecoin providers must submit to oversight from state regulators and the Federal Reserve. While these new provisions may not be too much of a burden for providers like Circle (USDC) and Binance (BUSD), Tether (USDT) may have an alternative view. It has a somewhat troubled past when it comes to providing details about what backs the nearly US$70 billion worth of USDT currently circulating through the crypto economy.
Stablecoins copped some added attention back home in Australia too, with Liberal Senator Andrew Bragg introducing a new bill that will clamp down on privately-issued stablecoins, in addition to outlining conditions for any interaction with China’s new CBDC.
Bragg also used the bill as an opportunity to criticise the current Federal government’s inaction on crypto regulation, saying that regulatory uncertainty is “squandering” an opportunity for Australia to establish itself as a leader in the digital asset space.
Regardless of the recent regulatory uncertainty in the crypto landscape, some of Australia’s most forward-thinking digital asset firms are still unrelentingly bullish on the future of the country’s crypto industry.
Weekly wrap V2: Sport NFTs go brrrrrr
Overall, transaction volumes on NFTs on retail platforms like OpenSea and LooksRare struggled to hold ground, despite some impressive numbers from Solana-based NFTs projects being posted last week.
This lack of activity didn’t however phase sporting codes, with different organisations announcing the launch of their respective NFT ventures. The PGA Tour announced it will be launching its own NFT platform in collaboration with Tom Brady’s Web3 brand Autograph. Closer to home, the Australian Football League (AFL) continued to integrate Web3 tech into their fan engagement strategy.
While NFTs can be a really cool way for sporting organisations to capitalise on their IP war chest, simply minting “digital trading cards” seemingly leaves much of the potential utility of NFTs at the door.
Weekly Wrap V2: Crypto got slammed by the Fed’s “Sledgehammer”
Unfortunately, this week wasn’t too much better than the last.
On Wednesday, the crypto market digested the reality of the Fed’s 75 basis point rate increase and began to come to grips with a more long-term hawkish view from the Fed.
This saw the price of Bitcoin (BTC) drop 2% on Wednesday immediately following the announcement. It has since recovered ground and is currently trading for US$19,300 down just 2% over the past seven days.
Ethereum (ETH) fared far worse for the week, continuing its downward slide following a “sell the news” style sell-off post-Merge. ETH is currently changing hands for US$1,300 a piece, down roughly 10% for the week.
Of course, the Fed and its handling of inflation isn’t entirely to blame for these. Supply chains remain fragile and energy markets strained amid the ongoing conflict in Ukraine, both of which have contributed to the inflationary environment that caused the Fed to whack risk assets over the head.
Anyway legens, that’s all the important stuff that happened in the ”never dull” world of crypto and Web3 this week. Weekly Wrap V2 singing off.
