Round Tripping
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tl;dr: Barry coins & DCG remain front & center, Telegram’s TON & it’s future growth, monitoring stablecoins total market cap, SUSHI’s fee decision, & The Fed’s rug pull
BTC dominance 38% | ETH dominance 17% | DeFi TVL $39B |
Total Crypto Market Cap $833B | Stablecoin Market Cap $139.5B |
Crypto market wise, last week was another quiet week until some Friday night fireworks and speculation surrounding Barry coins commenced. Before we get to DCG and Friday night, slowly improving inflation data that was released last Tuesday morning enabled BTC, ETH, and broad macro markets to rally higher until King Jerome put markets back in their place.
On Wednesday, the Fed announced a 50 basis point rate hike that was followed by Powell reiterating the central bank’s commitment to fight sticky inflation. Backing up the strong verbiage was a market-surprising change in the Fed’s projected “terminal rate”. Before delving too deep into convoluted macro jargon, and for my own sanity, risk-assets across the board sold off late Wednesday and through the week’s closing as seventeen of nineteen boomers raised their projected “terminal rate” on the “dot plot” above 5% signaling more interest rate hikes than previously anticipated (and they say our ponzis are bad).
Alright, now, let’s get back to Barry’s coins and their Friday night party. For those unfamiliar, Barry Silbert is the Founder and CEO of Digital Currency Group which is the parent company of Grayscale, Genesis, Foundry Digital, Luno, and Coindesk.
Grayscale & Genesis have endured a turbulent year leading to GBTC continuously making new discount to NAV lows (in part because of the regulatory failures of everyone’s favorite protectoooor Gary) and uncertainty around the future of DCG owned entities after Genesis, which is the largest prime broker in crypto, suspended withdrawals from Gemini Earn and new loans last month.
That uncertainty escalated Friday as the famed Barry coins, lead by Filecoin, aggressively sold off leading to increased speculation that DCG was dumping tokens to improve its liquidity.
DCG, and its subsidiaries, have undoubtedly made some bad decisions over the past year, including substantial losses to 3AC & FTX, but they’re also some of the longest standing, competent teams that are in part responsible for the growth of the crypto space since 2015. A mass dumping of tokens late on a Friday night incurring large slippage losses on long-held positions seems unlikely as altcoins, Barry coins or not, throughout the entire crypto ecosystem extended losses over the weekend.
Monday morning then provided some DCG news as Grayscale announced they’ll explore how to return up to 20% of its GBTC capital to shareholders if their ETF conversion fails, Gemini says they’ve been in ongoing conversations with DCG in an effort to find a resolution as soon as possible, and Barry finally tweeted again. A positive conclusion to DCG’s troubles would be a massively welcomed development, but it remains unclear as to how/when that occurs.
Outside of the ongoing DCG uncertainty, there are several other interesting market developments I’ve been monitoring over the past week+ including:
Binance’s stability despite the FUD — processed $6B of withdrawals on the 13th, continued operations as crypto assets held declined from ~$70B last month to ~$55B today due to withdrawals and price declines, Binance US buying Voyager, and BUSD’s market cap decreasing 20% this month
Stablecoin Market Cap — speaking of BUSD, total stablecoin market cap continues to slowly decline (-1.52B this week) which results in capital leaving the ecosystem and less in-ecosystem dry powder waiting to deploy. Broadly speaking it’s one of the best metrics to monitor for overall market health and growth potential as their use is a clear PmF for global market participants.
Continued exodus of BTC & ETH from exchanges which both recently reached four-year lows. Signifies the growing, and necessary, increase in self-custody, embrace of DeFi, & decreased potential sell pressure
TON, Telegram, & the potential massive growth flying under the radar
Briefly over the weekend Telegram’s The Open Network (TON) entered the top 20 tokens by market cap after rallying 40%+ over the past thirty days. Telegram is committed to integrating crypto into their platform of more than 700 million users as they recently sold $50M worth of available TG usernames (including @news for $1.7M) on TON (a la ENS). Telegram’s founder, Pavel Durov, also confirmed they’ll continue to build decentralized tools for TON including native, non-custodial wallets & DEXs.
It’s easy to imagine the future growth and adoption of easily and natively sending crypto within Telegram chats while the complexity of crypto transactions is abstracted away on one of the biggest social netowork sites in the world. Unfortunately, TON’s valuation is already approaching the top 10 while the actual token is relatively illiquid and currently only available on CEXs decreasing its desirability. With that being said, the available users to tap into and its non-existent altcoin & NFTs make me believe TON will be one of the most discussed ecosystems throughout 2023.
We’ve partnered with Parsec to provide P1 and our readers with top notch data and analytics. We’ve been using Parsec for months and are happy to support their team of chads - use code PAGE1 for 20% off Parsec’s NFT membership.
funding:
Amber Group, embattled crypto lender, raises $300M series C in down round
Aztec Network, builders of privacy/zk scaling solutions & zk.money, raises $100M
Nillion, decentralized data network, raises $20M+
Blocknative, crypto infra company & ETH block builder, raises $15M series A
Evertas, crypto insurance provider, raises $14M series A
Dogami, crypto game “enabling players to adopt/raise virtual dogs”, raises $7M
Frontrunner, decentralized sports prediction markets, raises $4.75M seed
Soohoo.io, cross-chain DeFi infra provider, raises $4.5M
Spaceport, crypto-enabled monetization of IP protocol, raises $3.6M pre-seed
Decent, no-code NFT infra protocol for creator monetization, raises $3.5M seed
Anima, on-chain AR pet creators & first on-chain AR developers, raises $3M seed
news:
Metamask integrates native PayPal log-in to enable users to buy & transfer ETH directly to their crypto wallet
WisdomTree launches nine new blockchain-enabled funds, still plans to launch its digital wallet in Q1 2023
Apple planning to allow installation of iOS apps from external sources as a result of upcoming EU regulations, decision should boost mobile crypto payments, applications, & NFT apps as builders can now escape Apple’s 30% cut
Binance US is acquiring Voyager for $1.022B
Canada enacts ban on margin & leverage trading for crypto assets
Hong Kong debuts first crypto ETFs that track BTC & ETH futures on CME
Magic Eden launches rewards system for discounts & perks; Magic Eden also adds support for MATIC NFT minting & trading
Coinbase announces asset recovery tool, will eventually allow users to withdraw ~4k previously unsupported, “trapped” ERC-20 tokens
Trump sells out 45k NFTs as digital trading cards that were minted on MATIC
Elizabeth Warren proposes an idiotic new bill that would require crypto miners, validators, & wallet providers to register as money service businesses (KYC)
tokens & protocols:
SUSHI — vote passes to direct 100% of SUSHI fees to the protocol treasury that will stay in place for “one year or until new tokenomics are implemented”
SUI — provides details on the SUI token allocation before upcoming launch
AVAX — Avalanche Summit II returning to Barcelona May 3rd-5th
MPL — introduces Maple 2.0 with smart contract overhaul & new product features
REN — issuer of wrapped tokens & renBTC is imminently shutting down after Alameda acquired the project in February 2021
zkSync — updates their ongoing launch of zkEVM with Fair Onboarding Alpha partners entering Q1 2023 and users for the Full Launch Alpha in Q2
BTRFLY — Redacted Cartel outlines their protocol plans for 2023
ConsenSys zkEVM — ConsenSys announces they’re building a zkEVM that is now available in a private beta testnet
Intmax — building a zkRollup launches testnet v1 for developers, public in Q1
CRV/zkSync — CRV to launch on zkSync in 2023 boosting the zkEVM’s outlook
reading:
“Why I’m Less Than Infinitely Hostile to Cryptocurrency“ — Scott Alexander
Astral Codex Ten is one of the most popular substacks in the world and last week Scott, from his perspective of a somewhat skeptical outsider, provided rational thoughts on why everyone should just leave crypto and its users alone.
Most of Scott’s thinking centers around the usual overlooked, global benefits crypto provides that apply to everyone who doesn’t live comfortably in a country with reliable banking systems (spoiler: an enormous amount of people). The fundamental benefits that Scott highlights include escaping countries financial and/or political instability, defending against rampant inflation, stablecoins reliability for developing countries, and preserving the freedom to transact.
“Vietnam uses crypto because it’s terrible at banks…if your country has a triple-digit inflation rate, you might prefer to use an alternative currency, which Venezuela’s authoritarian government tries to prevent…I think a lot of Westerners want to think of developing-world users as a boring sideshow…but about 66% of crypto users live in the developing world…if people are looking in and only seeing the monkey gifs, that’s not crypto’s fault.“
around the ecosystem:
redphonecrypto with another amazing yearly edition of 69 crypto theses for 2023
Avi Felman & Jonah Van Bourg launch “1000x“ crypto markets podcast
kelxyz_ from Messari provides a comprehensive “Solana Ecosystem Overview”
Packy McCormick with a deep dive on Aleo and the Zero-Knowledge Proof future
tweets:
Lastly, thank you all for the continued support! We’re actively looking to expand our platform and relationships in the form of protocol partnerships, potential guest posts, sponsorships, branding, etc. so reach out to me or terv to discuss any ideas.