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Round Tripping

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Crypto Recaps

Round Tripping

a weekly recap of the crypto ecosystem

tolks
Mar 27, 2023
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as always, thanks for reading, follow me here & reach out at contact@pageone.gg

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.

Twitter avatar for @brian_armstrong
Brian Armstrong @brian_armstrong
5/ Going forward the legal process will provide an open and public forum before an unbiased body where we will be able to make clear for all to see that the SEC simply has not been fair, reasonable, or even demonstrated a seriousness of purpose when it comes to its engagement on… https://t.co/G2F3wHa0Jw
9:31 PM ∙ Mar 22, 2023
5,820Likes476Retweets

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.

Binance outflows from coinglass

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.

Arbitrum overview from DefiLlama

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

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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:

Twitter avatar for @pythianism
Vance Spencer @pythianism
It is becoming clearer every day that operation choke point has massively backfired - catalyzing not only a global bankrun, but the reinvigoration of the crypto industry and those who support us We truly live in epochal times
8:45 PM ∙ Mar 23, 2023
452Likes58Retweets

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.

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