Fed hiked rates, crypto responds

Dear member,

The banking crisis in the U.S. and a recent Fed rate hike have yet to stop crypto from rallying. With prices now at the fourth consecutive month of growth, Bitcoin, alongside Ethereum, gold, and silver, rode the wave up in response to the Fed’s 10th consecutive rate hike news.

Another sign of bullish sentiment is Bitcoin miners’ profit having recently hit a record $13.6b in profits. It signals increased network security and stability, attracting more investments and fostering overall crypto market growth.

As President Biden proposes a 30% DAME excise tax on U.S. mining, the small kingdom of Bhutan embraces an ambitious Bitcoin mining venture; Bitdeer aims to raise $500m for building eco-friendly hydropower data centers in Bhutan. Other recent notable raises include:

To date, Web3 gaming has secured over $7b in funding for the past 18 months, offering the potential for catalyzing crypto mass adoption. Several big named brands in other industries have also been taking active steps in reducing the barrier to entry in an effort to attract traditional consumers to Web3. This includes Mastercard, Samsung, Robinhood, Venmo, and more.

Adoption among the mainstream, celebrities, and high-net-worth individuals is clearly rising. One recent addition to this list is the world’s newest richest man, Bernard Arnaud. The owner of LVMH, the luxury goods conglomerate, Arnaud now owns NFTs.

Is this increase in Web3 adoption due to ease of use, regulatory clarity, or innovative products? It’s arguably a mixed bag of interconnected dependency; you can’t have one without the other.

Best regards from the Future,
RFTF.ai 

Market Intel

Bitcoin's 4th consecutive month of growth reminiscent of 2019 recovery from bear market. Recent bank closures of Silvergate and Signature Bank may impact crypto liquidity until new players emerge.

Late-stage VC fundraising dries up, including in crypto. Global VC investment down to $57b in Q1 2023 from over $200b a year ago due to war in Ukraine, banking system turbulence, high inflation, and rising interest rates.

Bitcoin miners' cumulative revenue reaches record high, despite challenges. Total input costs since 2009 reach $36.6b, profits grow 37% to $13.6b. Miners are vital for network security and controlling coin issuance, but sustainable mining practices are also crucial.

Gold, silver, Bitcoin, and Ethereum prices surge after Federal Reserve's rate hike. Gold hits $2,000/oz, silver up 6%, Bitcoin passes $29,000, and Ethereum over $1,900.

Funding Trends

Web3 gaming secures over $7b in funding in 18 months, outpacing other crypto sectors. Combining blockchain and gaming, enabling ownership and trading of in-game assets using crypto, Web3 gaming has potential to revolutionize gaming and drive crypto mass adoption.

Bitcoin mining firm Bitdeer aims to raise $500m to build crypto mining ops in Bhutan with Druk Holding & Investments to fund hydropower data centers, accelerating Bhutan's digital transformation and economic diversification.

CMCC Global launches $100m fund for seed and series A investments targeting Asia's blockchain opportunities, with focus on infrastructure, fintech, and consumer sectors.

Standard Chartered's crypto subsidiary, Zodia Custody, raises $36m from SV Ventures and SBI Holdings for international expansion, improving settlement services and ensuring compliance in the digital asset ecosystem.

Portals raises $2m in seed funding round led by Lightshift Capital. Platform simplifies Web3 and DeFi actions, bundles complex actions, enables staking for yield, and provides access to Web3 data through the Portals API.

AI-powered Pando secures $30m in Series B funding round led by Iron Pillar and Uncorrelated Ventures. Plans to expand global sales, marketing, and delivery capabilities, with a focus on the US market.

Web2 → Web3 Immersion

Mastercard launches verifiable and compliant wallet-to-wallet transactions, focusing on cross-border transactions. Working with wallet providers Bit2Me, Lirium, Mercado Bitcoin, and Uphold to facilitate transfers between US, Latin America, and the Caribbean.

Crypto.com partners with Samsung to offer optimized crypto app for Galaxy Z Fold devices, including the new Galaxy Z Fold4. App features improved trading and analytics capabilities, allows concurrent comparison of multiple tokens.

Robinhood introduces new features to simplify access to Web 3, including Robinhood Connect to fund wallets without leaving dApps or Robinhood Crypto accounts. Features aim to make crypto more accessible and user-friendly for customers.

Revolut launches in Brazil, offering foreign exchange, remittance, and crypto investments for 27 currencies, and global account creation. Claims to have a competitive edge over limited banking services in the region. The team already has a large team based in Brazil, says Revolut’s CEO.

Venmo introduces crypto transfer on and off-ramp in a simple, user-friendly way, offering more flexibility for users to move and manage crypto. Move to cater to growing demand for crypto-based services.

The Sandbox and Gamer Arena collaborate on exclusive gaming experiences, developing interactive gaming modules and events, providing rewards in GAU and SAND currency.

Sotheby's launches blockchain-based NFT marketplace on its Metaverse platform for secondary sales of digital art, processing payments in ETH or MATIC. Curated selection of leading artists rotating every few months, selected by Sotheby's specialists.

Sports Illustrated launches blockchain-based primary ticketing solution, Box Office, in collaboration with ConsenSys. Enables event creation and management, commemorative NFT tickets, post-event perks, and loyalty benefits via NFTs.

Regulatory Round-up

AU

Nigeria's SEC considers tokenized coin offerings on licensed digital asset exchanges backed by equity, debt or property, not cryptocurrency. Processing digital exchange applications for one year of 'regulatory incubation' with limited services offered under SEC monitoring. Waiting on agreement with nation's central bank before registering digital asset exchanges.

EU

Italy implements 26% tax on crypto profits for individual and business investors, aligning capital gains tax rate with crypto taxation. Shift in approach to digital assets may have broad implications for crypto market and influence future regulatory landscape.

UK tax advisers welcome changes to DeFi lending and staking treatment proposed by HMRC as the first step towards comprehensive tax framework. Capital gains tax charges for some DeFi lending and staking activities and not for all transactions to reduce burden on crypto users.

EU Commission launches pan-European Blockchain Regulatory Sandbox for innovative use cases involving DLT, offers legal certainty for decentralised tech solutions and allows regulators to enhance their knowledge and share best practices. The Sandbox will support up to 20 projects each year until 2026.

US

30% crypto mining tax proposed by Biden aimed to offset its environmental impact. The Digital Asset Mining Energy (DAME) excise tax would be equal to 30% of the cost of electricity used, to come into effect after a phase-in period.

The Raven Also Spotted

Ex-Coinbase CTO Balaji Srinivasan forfeits $1m Bitcoin bet, donates $1.5m to charity including Bitcoin Core and Give Directly. Srinivasan sees trouble ahead in the economy with areas close to breaking and fiat crisis due to rapid "de-dollarization" by countries.

ChatGPT ‘jailbreak’ claimed by Coinbase exec. Testing over 100 prompts, he predicts a 15% chance of Bitcoin becoming irrelevant by 2035 and 20% for Ethereum.

World's richest man Bernard Arnault owns an NFT collection, including a Tiffany pendant and a luxury watch with NFT display functionality, showing his growing interest in Web3 tech, while previously showing a "tepid" attitude towards it.

Ex-Meta engineers launch Sui blockchain mainnet to support 200+ decentralized applications ranging from DeFi to gaming. Testnet achieved up to 297k TPS, outpacing Solana's 4k TPS. However, SUI token price falls 70% in 24 hours after launch.

Commercial bank money will remain dominant despite digitalization due to the trust it engenders, Moody's report states. The report added that stablecoin usage could increase modestly, but cryptocurrencies lack the basic functions of money.