Halving on the horizon

Dear member,

The crypto market's recent fluctuations have been a focal point of discussion, with a significant outflow of $486m in July. This, juxtaposed with Bitcoin's struggle to break the $31,000 barrier, paints a picture of a market in flux. The decreasing dominance of Bitcoin in the crypto space suggests a burgeoning interest in altcoins, a trend worth watching for our venture fund readers and startup founders.

With a staggering 70% of Bitcoin held by long-term investors, the tradable supply is thinning out as we’re slowly approaching the 2024 Bitcoin Halving. This scarcity, combined with the halving event, could be a precursor to substantial price shifts, a crucial insight for our web3 enthusiasts.

The transition from Web2 to Web3 continues to gain traction. Gucci's venture into the metaverse with the Gucci Vault, in collaboration with Matierial, is a testament to luxury brands embracing the digital realm. Etihad Airways' heritage-celebrating NFTs and Bandai Namco's AI-driven virtual pet NFT game further emphasize the confluence of traditional sectors with blockchain innovations.

While regulatory updates remain pivotal, it's essential to highlight the U.S. Court of Appeals' reversal of the SEC's decision on futures calls, potentially reshaping the crypto derivatives landscape.

As the crypto landscape oscillates between market challenges and innovative breakthroughs, with Bitcoin volatility at historic lows, the hint of a seismic move grows louder. Stay informed, keep vigilant, and be steady.

Here's to another week of opportunities and insights in the decentralized world.

Best regards from the Future,
RFTF.ai 

Market Intel

Crypto market loses $486m in July, De.Fi reports. The near half a billion dollars in outflow marks the highest since 2022.

Bitcoin investor sentiment slumps as BTC’s price struggles to surpass the $31,000 mark. The current 33% annualized 50-day volatility is the lowest in 6 months, contrasting with the higher volatility seen in 2022. Bitcoin's dominance in the crypto market has also decreased, indicating a shift in interest towards altcoins. The decreasing on-chain Bitcoin activity and concerns in the options market suggest potential challenges for Bitcoin's price in the near term.

$530m worth of Bitcoin Options nears expiry, with a max pain point at $29,500. More people currently predict Bitcoin's price will rise than fall, as shown by a put/call ratio of 0.38. Lately, Bitcoin's price has been stable, making it more likely to hover near this "painful" price when the options end.

Tradable supply of Bitcoin dwindles pre-2024 Halving, potentially leading to significant price movements. Up to 70% of the total Bitcoin supply is held by long-term holders, with 50% held by those who haven't sold for over 2 years.

Looter behind $61m Curve hack returns assets following talks with one of the victims, Alchemix. The recovery of nearly $10m in ETH and alETH sparked hope for the recovery of most of the stolen assets, with affected platforms previously offering a 10% return bounty.

Funding Trends

$129m in funding secured last week by crypto projects from VCs and other investors. Infrastructure projects dominated the week, with most deals being in the seed or pre-Series A stages.

HashPort secured $8.5m in a Series C funding round led by Sumitomo Mitsui Banking, The University of Tokyo, Edge Capital Partners and Japanese billionaire entrepreneur Yusaku Maezawa. The firm seeks to link TradFi with DeFi and will use the funds to enhance its platform and services.

Solv Protocol raised $6m in a funding round from Laser Digital, a subsidiary of Japanese banking giant Nomura Securities, and other notable names like UOB Venture Management, Mirana Ventures, and Matrix Partners. The Singapore-based platform provides tools for organizations to raise funds and has attracted over $29.16m in TVL with $100m in trades since its Q2 launch.

AI metaverse company Futureverse's co-founders, Shara Senderoff and Aaron McDonald, launched a $50m venture fund "Born Ready" to invest in tech ventures that can work with Futureverse or The Root Network, a metaverse blockchain. Previously, Futureverse secured $54m in a Series A round to advance The Root Network's decentralized metaverse applications.

Web2 → Web3 Immersion

Gucci launches the Gucci Vault, a digital space in the metaverse, in collaboration with Matierial. The space will offer exclusive NFTs and digital items, including a duffel bag. Users can also earn rewards by engaging with the platform, and these rewards can be stored in the Matierial wallet.

Etihad Airways collaborated with EY Zero1 to launch a series of NFTs that celebrate the airline's heritage. These NFTs will be available for purchase on EY Zero1's platform and will showcase key moments from Etihad's history.

Google Cloud announced plans to run a validator node on the Celo network. This move is part of Google Cloud's strategy to support the growth of public blockchains and enhance its position in the blockchain ecosystem.

Gaming giant Bandai Namco launched an AI-driven virtual pet NFT game. This game allows players to train, raise, and trade virtual pets, with each pet being represented as a unique NFT.

Amazon Prime partnered with Mojo Melee, an NFT game on the Polygon network, to offer free NFTs and in-game currency to Prime subscribers. This collaboration will last for 6 months and will include monthly drops of free in-game content.

Gala Games titles will be available on the Elixir Games Launcher. This partnership aims to provide players with a range of digital asset products and services, enhancing user engagement and expanding the gaming catalog.

Tel Aviv Stock Exchange (TASE) partnered with crypto custodian Fireblocks to offer a range of digital asset products and services. This collaboration builds on the success of Project Eden and aims to revolutionize the industry by providing institutional-grade digital asset solutions.

The Sandbox metaverse game will release a series of officially licensed Elvis Presley NFT avatars. These avatars, minted on the Polygon network, will be playable in The Sandbox and are part of an effort to celebrate and continue the legacy of Elvis Presley in the digital realm.

Regulatory Round-up

APAC

Hong Kong's regulatory environment is tightening, with the Securities and Futures Commission (SFC) introducing new rules. These rules mandate that all crypto exchanges operating in the city must be licensed.

HSBC-owned Hang Seng Bank places limits on crypto companies to basic banking services. This move is seen as a cautious approach towards the volatile crypto market.

Shanghai has unveiled its regional blockchain development plan, dubbed “Pujiang Digital Chain,” aiming for 2025. The city plans to establish itself as a global blockchain hub, integrating the technology into public services and the local economy.

Australia’s Bendigo Bank takes a stance against cryptocurrency, blocking all transactions related to crypto platforms due to concerns over regulatory clarity and the potential for financial crimes.

EMEA

Binance has become the 1st global cryptocurrency exchange to receive an operational license from Dubai's financial authorities, marking a significant milestone in the platform's expansion.

International

The Russian government has legally recognized digital currencies issued by other countries. This move comes alongside the adoption of a law regulating Russia's own digital ruble.

North America

The U.S. Court of Appeals for the D.C. Circuit reversed the SEC's decision on futures calls, deeming it "arbitrary and capricious." The court's decision could have significant implications for the crypto derivatives market.

The House Financial Services Committee approved 4 crypto-related bills, potentially paving the way for the first crypto-specific legislation in U.S. federal law.

6 firms have filed applications with the SEC to launch Ether futures ETFs. This move indicates a growing interest in Ethereum-based financial products.

The U.S. Internal Revenue Service (IRS) has clarified that staking rewards can be taxed as income once tokens are received, providing clarity for crypto investors.

Western Union is partnering with the Philippines-based BDO Unibank to study the potential impacts of a US Central Bank Digital Currency (CBDC) on overseas remittances.

The House Financial Services Committee approved several crypto-related proposals, including the Financial Innovation and Technology for the 21st Century Act (FIT 21), aiming to clarify the jurisdiction of the CFTC and SEC over digital assets.

The Raven Also Spotted

Yat Siu, the founder of Anomica Brands, believes that the integration of blockchain technology into gaming will be the catalyst for mass adoption of cryptocurrencies. He emphasizes the importance of user experience and the potential of play-to-earn models in driving this adoption.

Only 5% of VC-backed crypto firms find product market fit (PMF). Companies that achieve PMF have a higher chance of success, while those that don't may struggle to gain traction. The crypto space, with its rapid changes, makes PMF even more essential.

July witnessed a significant increase in crypto hacks, with over 50 attacks resulting in losses of hundreds of millions. $165m was stolen from various platforms, excluding the $209m drained from the Multichain platform. The DeFi sector, in particular, has been heavily impacted, with TVL dropping by $3.5B.

China and Asia are the primary crypto buyers, despite the West's focus on the US in terms of crypto. The US's increasing debt and regulatory challenges make it less favorable for crypto, while China's trading volume, even with a crypto trading ban, suggests a more significant role in the global crypto market.

Leading U.S. presidential candidates seen as less favorable towards Bitcoin, based on analysis by Grayscale. However, there's a possibility of a CBDC supporter being in the White House in the next term, indicating a potential shift in the U.S. government's stance on digital currencies.

The SEC Chair is shifting focus from a crypto-centric approach to AI, exploring the risks, implications and potential of artificial intelligence in the financial sector.