Crypto signals upwards amidst billion-dollar drop

Dear member,

The crypto market is showing signs of maturity and stability, a trend that's becoming increasingly evident in recent market activities. Bitcoin's institutional accumulation phase appears to be complete, with major investors likely having filled their coffers during the two significant crashes in 2022.

This lull in activity might be a precursor to renewed upward momentum, a sentiment echoed by the decline in crypto-margined futures signalling market maturity. The 90-day price volatility of Bitcoin and Ether has hit a new multi-year low, making them less volatile than oil, a phenomenon last seen in 2016 and often followed by significant price moves.

This market stability is juxtaposed with a turbulent week that saw $1B in liquidations as Bitcoin and Ethereum plunged. Could the bankruptcy filing of Chinese real estate giant Evergrande have played a role? Whether it was a knee-jerk response to deepening negative sentiment or otherwise, the market's potential response to such news indicates a growing preference for risk mitigation, with traders shifting strategies to use USD or stablecoin collateralization instead of Bitcoin.

In the funding arena, the focus on early-stage founders and innovation continues to thrive:

The transition from Web2 to Web3 in the past week saw significant partnerships and initiatives. MetaMask's integration with Banxa, Zynga's Ethereum-based NFT game, and Amazon's partnership with Ripple for payments are just a few examples of how traditional tech giants are embracing the decentralized space.

Regulatory developments. From China's push for digital yuan adoption to Singapore's unveiling of new stablecoin regulations, the global regulatory environment is adapting to the evolving crypto ecosystem.

The past week's news paints a picture of a maturing market ready for the next phase of growth. The stability in market trends, coupled with significant funding for early-stage innovation and the gradual immersion of traditional tech into the decentralized world, sets the stage for what could be an exciting (and possibly explosive) period ahead.

Best regards from the Future,
RFTF.ai 

Market Intel

Institutional investors likely finished Bitcoin accumulation during 2022's two major crashes, says CryptoQuant. Large transactions occurred at cycle bottoms, but none have been seen since Bitcoin's price doubled since November 2022. The current lull may signal a precursor to renewed upward momentum, with Bitcoin at $29,400.

Traders are shifting strategies to mitigate risk by using USD or stablecoin collateralization instead of Bitcoin, indicating a growing preference for stability and risk mitigation in the market and reflecting a shift towards market maturity.

BTC and ETH appear less volatile than oil, with both coin’s 90-day price volatility hitting a new multi-year low (last seen in 2016) at 35% and 37% respectively, compared to oil's 41%. Technical analysts suggest that such periods of low volatility are often followed by significant price moves. Bitcoin's price went through a similar cycle in 2020 before the bull market picked up.

Bitcoin and Ethereum fell 9.04% and 10.5% respectively within 24 hours, leading to $992.1m in liquidations across exchanges. The largest was $55.9m for Ethereum on Binance. The plunge happened as Evergrande's bankruptcy news spread, with Bitcoin down 61.6% and Ethereum down 66.5% from their all-time highs.

Funding Trends

11 crypto startups raised nearly $60m this week, with Helio Protocol securing $10m from Binance Labs. Helio, which focuses on liquid staking derivatives, has $300m in total value locked and offers multi-chain staking services.

Kraken Ventures plans to raise $100m for its second fund, focusing on early-stage founders in the crypto and fintech sectors. The fund will invest in areas like decentralized finance (DeFi), Web3, digital assets, and regulatory technology.

Zepeto announced a $13m seed round for its ZTX initiative. Valued at over $1B, the South Korean metaverse platform Zepeto, in partnership with Jump Crypto, aims to boost crypto adoption with 3D environments and will launch 4,000 NFT houses on the Ethereum scaling network Arbitrum.

Crypto custodian BitGo raised $100m in a Series C financing round, bringing the company's valuation to $1.75B. The Palo Alto-based firm plans to use the new capital for strategic acquisitions and to expand its regulated custody, wallet, and infrastructure solutions globally, aiming to meet the growing demand for these services in the U.S. and worldwide.

ZetaChain secured $27m to support its chain-agnostic platform. The Layer-1 protocol, created in 2021, aims to provide standardized interoperability between networks, allowing non-smart contract chains to interact with the DeFi ecosystem. Over 13m transactions have been performed on its testnet by over 1.7m users.

Jada AI, an AI project that utilizes blockchain technology, raised $25 million from LDA Capital. The project aims to offer AI services to aid decision-making for organizations and scale operations. The capital will be used to grow the team and add new organizations, operating in a blockchain-based environment for efficient allocation of compute resources.

The UK has launched a £1B fund called the FinTech Growth Fund, backed by Barclays, NatWest, Mastercard, and others, to support early-stage companies. The fund will provide investments between £10m and £100m, aiming to reinforce the UK's image as a fintech hub and compete with Silicon Valley.

Web2 → Web3 Immersion

MetaMask partnered with Banxa to enable one-click crypto purchases using Apple Pay, simplifying the buying process, allowing users to purchase Ethereum and other ERC-20 tokens directly within the MetaMask app.

Gaming giant Zynga revealed its first Ethereum-based NFT game called Sugartown. The game will allow players to own, buy, and sell virtual items as NFTs, marking the creator of FarmVille Zynga's entry into the growing NFT gaming space.

Coca-Cola unveiled a new series of masterpiece NFTs on the Base blockchain. These NFTs represent digital art pieces and are part of Coca-Cola's broader strategy to explore and engage with the emerging NFT market.

Amazon announced a partnership with Ripple and will use its XRP cryptocurrency for payments. This collaboration is expected to enhance the efficiency of cross-border transactions and further legitimizes the use of cryptocurrencies in mainstream commerce.

Adidas and BAPE teamed up to create ultra-limited sneakers with digital twins. These digital replicas will be represented as NFTs, allowing owners to showcase their exclusive sneakers in virtual environments.

Crypto security firm Ledger integrated its Ledger Live app with PayPal, allowing customers to purchase cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash directly through the app using verified PayPal accounts. The integration is currently limited to US users.

Open Campus, TinyTap, and Code Green partnered to create educational content on climate change. The collaboration aims to educate younger generations through interactive games and includes a new climate change-centered course and a giveaway of up to 100 HEALV3RSE avatars and equipment NFTs.

Mastercard created a forum for crypto industry players to discuss central bank digital currencies (CBDCs). Initial participants include Ripple, Fireblocks, and Consensys. The program aims to drive innovation and efficiencies in the CBDC space, reflecting Mastercard's ongoing efforts to innovate in the digital asset ecosystem.

Regulatory Round-up

APAC

Over 10,000 companies have adopted China's digital yuan (CBDC). The People's Bank of China has been promoting the CBDC through various means, including discounts and lotteries, and aims to internationalize the yuan.

Singapore's central bank has unveiled new stablecoin regulations, positioning itself as a global leader in crypto regulation. The new framework will cover global stablecoins and aims to ensure consumer protection and financial stability.

EU
A spot Bitcoin ETF has been approved in the European Union and went live on the Euronext Amsterdam exchange on Aug. 15. In contrast, the U.S. SEC has delayed its decision on a similar ETF until early 2024.

EMEA

Abu Dhabi granted virtual asset firm M2 permission to offer crypto services. The firm is licensed to provide custody and trading services for virtual assets, reflecting the growing acceptance of crypto in the region.

International

As India wraps up its G20 presidency, the group is set to crystallize global crypto regulations. The G20 is working on a framework that includes Anti-Money Laundering (AML) standards and is expected to finalize it by October 2022.

North America

The Federal Reserve's new service, FedNow, is exploring DLT for micropayments and has chosen Hedera Hashgraph for its pilot. The project aims to enable real-time payments and settlements, enhancing the efficiency of the U.S. payment system.

The crypto mining industry has formed a lobbying group in Washington, D.C., aiming to influence policy and regulation, emphasizing the industry's potential to create jobs and its commitment to using renewable energy.

The Financial Innovation and Technology for the 21st Century Act (FIT Act) marks a milestone for the digital assets industry in the U.S. It's the most comprehensive crypto legislation voted on, signaling that crypto is here to stay and that Congress will determine the regulatory framework.

The SEC has extended the decision on Bitcoin ETF approvals until 2024. The cautious approach is due to the complex nature of the crypto market and the need to assess potential risks and benefits, reflecting the SEC's commitment to thorough assessments.

Valkyrie Investments filed for an Ethereum futures exchange-traded fund (ETF) with the SEC. Three other TradFi firms have also filed similar Ethereum ETF futures applications.

The Raven Also Spotted

50% were in favor of crypto-related figures, according to a Fidelity Investments’ Twitter poll asking followers to choose a new face for the $10 bill. The poll reflects the growing interest and influence of the crypto community.

Delphi Digital's co-founder Kevin Kelly has signaled a potential new crypto bull run, citing macroeconomic factors and the market's current structure as indicators of a positive shift in the crypto landscape.

Pro-Bitcoin economist and libertarian Javier Milei gains traction in Argentina's political scene, now seen as a favorite presidential candidate. His support for Bitcoin and criticism of the central bank resonates with a segment of the population frustrated with the country's economic policies.

China's deflation could negatively impact Bitcoin, according to Cointelegraph analyst Marcel Pechman. He explains that China's decreasing domestic consumption and reliance on central bank balance sheet expansion are red flags that may affect international economies, including Bitcoin. The Federal Reserve's balance sheet surpassed $8.9T, coinciding with the stock market index reaching its 4,800-point all-time high.