Round Tripping
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as always, thanks for reading and follow me here
tl;dr: the merge, CPI, and the chaotic week ahead, heavy private funding returns, Cosmos strength continues, the likely BTC rotation, and monitoring ETH PoW chainID
BTC dominance 37% | ETH dominance 19% | DeFi TVL $60B |
Total Crypto Market Cap $1.09T | Stablecoin Supply $154B |
Market Overview
After one of crypto’s calmest, orderly weeks that saw tokens climb higher as shorts were liquidated, chaos week is ahead of us. ETH’s long awaited merge, easily trackable through a quick “the merge” Google search, is tentatively taking place Wednesday night. Price action and volatility leading up to, during, and after the merge is obviously expected, but is uniquely further exacerbated by the release of CPI data Tuesday morning.
As I’ve written numerous times, the correlations between BTC/ETH and SPY/QQQ are broadly in control of the direction of crypto assets. Some relief to risk assets through an accommodative CPI print on Tuesday would reinforce the short-term merge bullish theory, while risk selling off due to a stagnant or elevated inflation print (unlikely imo) would likely trigger flows and algos to short-term sell despite a successful merge.
The idiosyncratic bid for crypto assets has been missing for months, and unfortunately a successful merge isn’t changing that in the near term. Parsing the data, narratives, and hindsight analysis of the price of ETH’s reaction to the merge will be difficult. As hard as it is to admit for some, ETH’s price will almost certainly be more impacted by the legacy market’s interpretation of CPI data Tuesday morning rather than on the merits of the technological accomplishment and issuance reduction as a result of the merge’s success.
As we head into the week ahead, there are numerous crypto specific positions to monitor before the merge as funds, large market participants, and institutions prepare for the event and subsequent PoW airdrop. More specifically, watching stETH, various LP positions, and liquidity further tightening in the coming days is paramount as theoretically swaps from assets to ETH occur to maximize exposure to ETH PoW tokens. Speaking of ETH PoW, the team behind it has yet to change the chain ID which would cause increased chaos and user’s loss of funds through various replay attacks. For most everyone, including myself, the potential attack vectors, MEV, arbitrage, etc. in the first few hours following the merge will be far too sophisticated to profit from. Sitting on your hands and observing remains the most optimal suggestion.
Outside of the merge, I’m continuing to monitor developments throughout the Cosmos ecosystem as ATOM’s strength and outperformance can’t be ignored ahead of the coming Cosmoverse conference (s/o Ansem). Obviously ETH and ETH/BTC are the current focus but historically speaking when this occurs and people are underexposed to BTC, BTC tends to claw back dominance. Along with Cosmos, I’ll be watching the BTC catch-up trade/rotation, SYN’s strength and the L2 narrative accelerated through Arbitrum, merge related tokens LDO, FOLD, etc., and DeFi/LP pools on the other side of a successful merge. Stay safe this week friends.
funding:
Mysten Labs, ex-Meta employees new L1, raises $300M @ $2B valuation
Singapore based Whampoa group plans to raise $50M for crypto hedge fund and to allocate $100M to crypto venture investments
Tessaract, crypto startup tokenizing energy markets, raises $78M
Arweave (AR) based software and venture studio Community Labs raises $30M to deploy to AR ecosystem and permit data storage ventures
MetaWeb Ventures raises $30M for first crypto venture fund
Crypto investment firm 21 Shares parent company raises $25M @ $2B valuation
Bloccelerate, crypto venture fund, has raised $20M of $100M goal for new fund
Fuel Labs, modular execution layer focused L2 through FuelVM, raises $80M
Revolving Games, blockchain-based game developer, raises $25M
Omni, noncustodial wallet, raises $11M @ $50M valuation
Spice AI, blockchain AI data company, raises $13.5M seed
Gameplay Galaxy, developers of NFT based blockchain games, raises $12.8M
Slide, user experience infrastructure crypto startup, raises $12.3M
Credix, SOL based DeFi credit marketplace, raises $11M
HQ Trivia pivots to NFTs through Internet Game launch and raises $7M seed
Dust Labs, SOL NFT software firm behind DeGods & y00ts, raises $7M
VerifyVASP, crypto compliance tech company, raises $5M @ $100M valuation
news:
FTX announces partnership with GameStop for “e-commerce and online marketing initiatives”
Sony music files trademarks for NFT-backed audio and video files
Google Cloud partners with Sky Mavis, Axie Infinity developer, to become Ronin Network validator
NFT platform Sorare partners with the NBA to develop free-to-play fantasy basketball game including digital collectibles (colloquially NFTs)
Solana to add support for Move VM within the next year
Coinbase to provide infrastructure for Enthusiast Gaming to build browser-based first-person shooter game EV.IO that rewards players in crypto
Delphi Digital to commit DeFi resources to developing the Cosmos ecosystem (ATOM) after reevaluating chains, teams, & options since LUNA’s collapse
tokens & protocols:
Frax Finance (FXS) launches native borrowing and lending market Fraxlend
Barnbridge (BOND) launches v2 with focus on sustainable fixed interest in DeFi
LayerZero, team behind STG, creates omnichain blockchain message explorer
BNB announces zk scaling solution zkBNB
Info and TLDR on HNT’s HIP-70 moving Helium to SOL
ETC reaches ATH hash rate as miners pivot before ETH’s PoS transition
MKR & Coinbase proposal to transfer $1.6B of Maker’s Peg Stability Module (PSM) to a Coinbase Prime custody account that would create an additional $24M of revenue a year for MakerDAO
Paradigm details GOO (Gradual Ownership Optimization) ahead of NFT drop
Binance announces “BUSD Auto-Conversion” will start on September 29th prioritizing its stablecoin to enhance dollar liquidity of cash equivalent stables
Carbon announced money market and new stablecoin for Cosmos ecosystem
Fuel Labs, modular execution focused L2 scaling, launches Fuel testnet
reading:
“Defending Privacy in Crypto” — Brian Armstrong, CEO of Coinbase
“Tornado Cash is an open source piece of software running on the Ethereum blockchain that preserves privacy by allowing users to deposit assets from one crypto address and withdraw them using a different crypto address…But in this case, Treasury went much further and took the unprecedented step of sanctioning an entire technology instead of specific individuals. “
Coinbase deservedly gets its fair share of shit and backlash regarding questionable products and decisions, including this insane assumption against our king Cobie, but their recently announced funding of a lawsuit deserves praise. Coinbase is often in a precarious limbo as the most front-facing publicly traded U.S. crypto company. Their recent decision to fund the lawsuit brought by six people challenging the Treasury Department’s sanctions on Tornado Cash is extremely admirable and echoes the earlier ethos of the company and founder Brain Armstrong.
around the ecosystem:
good thread & read on all things Berachain from Open Source Intelligence DAO
Onchain Wizard’s briefing “ETH Merge: What to expect”
Micheal Bentley with everything to know about borrowing ETH ahead of merge
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