Round Tripping
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tl;dr: everyone gets sued & everyone gets a zkEVM, USDT transferable in Telegram, alts keep bleeding, ARB’s PA & market participants left survived apocalyptic events
BTC dominance 45% | ETH dominance 17.5% | DeFi TVL $49B |
Total Crypto Market Cap $1.17T | Stablecoin Supply $132B |
Insanity is the new normal and this week was no different. As far as majors price action goes, things remain relatively unchanged from a week ago as BTC sits at 27k and ETH at 1.7k. There was some vol to be enjoyed around the FED’s announcement of a 25 bps hike on Wednesday, resulting in BTC and ETH touching just shy of 29k and 1.9k before they ultimately settled back below pre-hike prices (shocking).
The U.S. government’s attacks on crypto also unfortunately remained unchanged as the SEC continued its regulatory onslaught and the CFTC couldn’t let them have all the fun. As the dust settles on Monday afternoon, the regulatory action that took place over the past ~week includes:
Coinbase served Wells Notice from SEC focused on staking & asset listing
Binance & CZ sued by CFTC over regulatory violations
Sushiswap & head chef Jared Grey served SEC subpoena
SEC charges Justin Sun with “unregistered offer & sale of crypto asset securities”
Do Kwon arrested in Montenegro
On the bright side, Do Kwon was arrested and Coinbase is prepared to fight the SEC in court. Coinbase’s response to the SEC’s overreach came in a blog post titled, “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead.” and Brian Armstrong’s response on Twitter.
Two weeks ago in the March 13th edition of Round Tripping, I wrote, “thankfully, the legal system is disagreeing with the SEC’s recent overreach as a judge approved Voyager’s sale to Binance US, the SEC suffered the aforementioned setback in its GBTC case, & the house financial committee held a hearing questioning the Biden admin’s overreach in crypto regulation and Operation Chokepoint 2.0.”
We’re once again reliant on the legal system to provide boundaries on the SEC’s decision to regulate through enforcement instead of providing regulatory clarity. Fortunately, Coinbase will have their day in court to defend themselves, was rigorously evaluated by the SEC to IPO two years ago, and is as prepared, both legally and financially, as any company throughout the crypto space.
On the other hand, Binance’s situation is less clear as the allegations are thorough and further enforcement actions are likely. While the ideal scenario is an outcome that plays out similar to the enforcement actions against Bitmex that gave investors clearer guidelines and exchange confidence/reliability resulting in the entire asset class appreciating multiples higher, the magnitude of Binance’s size creates massive short term uncertainty. In the meantime, I’ll be monitoring Binance’s flows and volume which have already begun to take a hit.
Outside of the FED rate hike and the ongoing regulatory onslaught, L2s have been the focus of crypto markets. In the last week alone, we’ve seen:
zkSync launches their zkEVM Mainnet Alpha now open to all users
Immutable X & Polygon announce new gaming partnership & Immutable zkEVM
Polygon’s zkEVM is now live in Mainnet Beta
Arbitrum officially launches their token
While the effects of the zkEVM launches are felt on longer term timeframes, Arbitrum’s token launch provided some immediate insight. First, the market is becoming smarter as *everyone* was playing the buy ARB around $1, sell around $2 strategy which obviously didn’t occur. Second, the market (mainly alts, rotations, and on-chain) is suffering from a form of survivorship bias as the only market participants left have survived apocalyptic level events and are protecting capital at all costs by exiting rotations with small, if any, gains that bleeds the risk end of the spectrum dry.
Finally, the clouds of macro uncertainty and regulatory enforcement certainly impacted ARB’s price action to date, but the implications of the factors above combined with the most hyped token launch in years only gaining ~40% off the airdrop dumping lows doesn’t paint a great picture for the market’s willingness to entertain risk.
Moving forward, it’s difficult to envision what will propel the market short-term higher and alts look likely to continue bleeding. Hopefully I’m proven wrong and this week will result in significantly less regulatory action, banking calamities, and general chaos but it unfortunately doesn’t seem likely. Take care, frens.
As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.
funding:
CCP Games, studio behind Eve Online, raises $40M & announces plans for blockchain-based crypto MMO game set within universe of Eve Online
Tomi, DAO aiming to build “alternative internet”, raises $40M
Bitget acquires controlling stake in crypto wallet BitKeep with additional $30M investment @ $300M valuation
OP3N, “web3 WeChat”, raises $28M Series A @ $100M valuation
Seed Club, DAO-focused accelerator program, launches venture arm with $25M
Auros, crypto market maker hit by FTX collapse, raises $17M
Metatime, Turkish crypto exchange in development, raises $11M seed
Radix Tokens raises $10M @ $400M valuation ahead of Babylon mainnet launch
BH Digital raises $9M for new liquid token fund
Gryfyn, custodial crypto wallet solution, raises $7.5M
Turnkey, crypto security & custody company, raises $7.5M seed
Particle Network, middleware platform for crypto devs, raises $7M seed
CrossX, developing crypto trading venue, raises $6.35M seed
Sega, SOL-based derivatives platform, raises $5M to expand on ETH
news:
Sony files new NFT-related patents that would allow consumers to use NFTs both inside and outside the Sony ecosystem
Nasdaq says institutional demand for crypto remains elevated as the exchange will launch crypto custody service by the end of June
Xapo Bank, BTC custodian & licensed private bank, partners with Circle to integrate USDC payment rails as an alternative to SWIFT
Microstrategy buys 6,455 BTC for $150M @ average price of $23,238 per BTC
Telegram launches support for USDT to be transferred between users in chats
Circle applies for regulatory approvals in France, increasing European expansion
Bitwise launches BITC; “new type of bitcoin-linked ETF for professional investors”
Consensys launches MetaMask Institutional & staking services for large firms
Nexon, Asia gaming giant, taps MATIC for expansion of MapleStory universe
Magic Eden launches support for Ordinals, releases Bitcoin NFT marketplace
DEX to CEX volume ratio reaches new all time highs
tokens & protocols:
zkSync — Mainnet Alpha of long-awaited zkEVM L2 is now open to all users
RONIN — introduces Ronin Wallet Social Login enabling anyone to create a Ronin Wallet using their Google, Apple, Facebook, or Twitter account
MATIC — officially launches their zkEVM
IMX/MATIC — announced Immutable zkEVM by MATIC & gaming partnership
GHST — Aavegotchi completes multi-year token sale & announces the upcoming launch of dedicated chain “Gotchichain” powered by Polygon Supernets
TON — enables Telegram users to transfer USDT through chats
RNDR — proposes network expansion to Solana
UNI — launches portfolio monitoring service natively with Uniswap Web App
SUI — announces the heavily funded L1’s mainnet launch will be in Q2
AZERO — to launch smart contract functionality on mainnet March 29th
LOOKS — launches phase one of their NFT Aggregator
Opclave — built on OP stack, introduces ability for users to create and use non-custodial wallets with touch/face id without having seed phrases
Noble — introduces ATOM-based asset issuance platform
Dymension — presents IBC-based protocol for trust-minimized ORU bridging
FuelVM — modular execution protocol announces “Beta-3” testnet is now live
Hyperlane/Eclipse — partner to enable Hyperlane expansion to the Solana VM
Obligate — debt protocol records first corporate bond issuance on MATIC
Burnt/XION — chain purpose-built for consumer adoption exits stealth
DRPC — launches decentralized RPC network for ETH dApps
around the ecosystem:
Nic Carter’s follow up to Operation Chokepoint 2.0: “Did The Government Start A Global Financial Crisis In An Attempt To Destroy Crypto?”
Chris Burniske’s thread on the current state of crypto, banks, regulation & more
Matti’s “East of Eden” on Global Volatility & The Rise of Credible Neutrality
tweets:
Not financial or tax advice. This newsletter is strictly educational, is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.