Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
It’s been a week of red, with the prices of most cryptocurrencies trending down. Meanwhile, one meme coin continues to attract the attention of crypto traders.
(as of 1:30 AM UTC, May 5, 2023)
PEPE’s surge since the end of April has naturally led to profit-taking. The token’s market capitalization reached US$582 million on Tuesday, then dived to US$397 million the following day. A research analyst in Nansen told The Block that major holders who bought PEPE early were selling their holdings when liquidity was thin.
In one case, an individual attempted to swap US$2.2 million worth of PEPE but only managed to receive US$650,000 worth of ETH because of slippage. This demonstrates the risk of exiting a position in a token that doesn’t have deep enough liquidity to absorb exits and shocks in the market.
There are some red flags in PEPE’s rapid rise. While CoinGecko ranks the meme coin at #55 based on market cap at the time of this writing, CoinMarketCap places it at a much lower #2615. On Friday morning, PEPE’s market cap was above US$949 million, although CoinMarketCap says this can’t be confirmed because it is unable to verify the token’s circulating supply.
PEPE’s own website carries this statement: PEPE has “no intrinsic value or expectation of financial return. There is no formal team or roadmap. The coin is completely useless and for entertainment purposes only.”
When investing in cryptocurrency or any other volatile asset, it’s important to have a clear plan in terms of trading goals and the time horizon for an exit. Aside from conducting research to ensure your acquisitions fit your objectives, it’s crucial to be clear-eyed about your trading strategy. Find out more by reading our blog about trading styles.
Web3 News
- Former Coinbase CTO Balaji Srinivasan has settled a high-profile Bitcoin bet he made in March by donating US$1.5 million of his own money to charity organization Give Directly, Bitcoin core developers, and James Medlock, the other party involved in the bet. Srinivasan made the bet to prove that the US economy is in such bad shape that people will turn to cryptocurrency instead. He insists that the American economy will enter hyperinflation and Bitcoin will be a safe haven, eventually reaching a market cap of US$19.3 trillion. The current market cap of Bitcoin is US$555 billion, and would need to increase by 3,369% to hit US$1 million per coin.
- CryptoLaw founder John Deaton warns that the SEC is “exploiting the legal uncertainty about crypto” and pushing the boundaries of securities law in its litigation against companies like Ripple (XRP). Deaton argues that the SEC’s claim that every XRP sale is a securities sale based on its “very nature” goes beyond the scope of the 1933 Securities Act and could have significant economic and legal repercussions if left unchecked. He highlights that many retail investors purchased XRP with no information about Ripple Labs, and that the token itself is a bridge asset for cross-border payments, not an investment contract under the Howey test.
- According to a research paper by Privacy Affairs, cryptocurrency accounts that have been hacked and verified are being sold on the dark web for as little as US$30 and as much as US$1,200. The figures reveal a significant rise from 2022, when verified exchange accounts were purchased by hackers for around US$250. Apart from cryptocurrency accounts, login credentials for social media accounts, as well as account information for credit cards and online bank accounts, are also available for sale. As a result, the need for personal security is now more critical than ever.
- A recent Greenview Capital survey of 68 crypto project founders highlights Lisbon, Berlin, and Paris as top global crypto hubs. The study reveals that 70% of respondents believe regulation, especially the Markets in Crypto Assets (MiCA) framework, is the most significant development for the crypto space this year. MiCA’s clarity and comprehensive framework offer centralized companies distinct advantages and insight into regulators’ thinking. As a result, European protocols are witnessing an increase in optimism and growth within the sector.
- As the UK government considers regulating the crypto industry, players in the field, such as a16z, are urging them to differentiate between centralized finance (CeFi) and decentralized finance (DeFi). The consultation, launched in February to create favorable conditions for crypto asset service providers and investors, focused primarily on CeFi while also soliciting input about DeFi. However, some are concerned that lumping the two together could hinder innovation. Amid the on-going discussions, it’s clear that UK Prime Minister Rishi Sunak aims to make the UK a crypto hub.
Crypto Tech
- Trust Wallet has partnered with Web3Auth to simplify access to Web3 services using existing social login credentials. The integration offers a multi-party computation (MPC) solution, removing the need for a seed phrase and allowing users to access Trust Wallet with their Google, Apple, Telegram, and Discord accounts. The beta version of the MPC feature will soon be available, facilitating access to 70+ blockchains.
- Stardust and Polygon have partnered to offer game developers and studios scalable, cost-effective, and chain-agnostic development solutions for Web3 games. The collaboration aims to address the “Pokemon Go Launch” problem, where a game’s success overwhelms its infrastructure. The partnership’s ultimate goal is to allow games to scale and reduce costs, attracting mass market users to play alongside crypto enthusiasts.
- Jeff Burton, co-founder of gaming giant Electronic Arts, has joined Canadian blockchain gaming company P2Earn as Chairman of its Board of Advisors. P2Earn is a publicly listed Web3 gaming guild that plans to offer gamers an online platform, equipment, and access to video game NFTs in exchange for a percentage of their winnings. The platform is set to launch on Polygon by the end of Q2 2023. Play-to-earn gaming caught fire in 2021, but fell out of favor as players criticized the simplistic gameplay and emphasis on financial rewards. P2Earn is betting that it will have a second life ahead.
Stories You Might Have Missed
- Mastercard is developing the Mastercard Crypto Credential to enhance blockchain transaction verification and address security and compliance vulnerabilities. The offering aims to establish verification standards and provide necessary technology for various use cases across the sector. Mastercard is collaborating with Aptos Labs, Ava Labs, Polygon, and the Solana Foundation to bring this offering to application developers. The Mastercard Crypto Credential will utilize CipherTrace, a crypto intelligence firm, to help verify addresses and support compliance with cross-border transaction regulations.
- LimeWire, the peer-to-peer file-sharing service that was shut down in 2010, has been resurrected on the blockchain as an NFT marketplace. The new LimeWire is a platform for content creators, artists, and brands to create membership-based communities for their most passionate fans. It aims to help creators build recurring revenue streams by providing a platform and framework for direct fan membership. LimeWire is offering a community token, LMWR, that will fund the new platform. The token was launched on May 2, 2023. Within the first two hours, LimeWire had raised over US$2 million.
- On May 2, SI Tickets, a subsidiary of Sports Illustrated, introduced the “Box Office” platform, a Polygon blockchain-powered event management and ticketing solution developed in collaboration with ConsenSys. Additionally, SI Tickets and ConsenSys are developing a “Super Ticket” using NFT technology to enhance the event experience with exclusive content, offers, and loyalty benefits, such as expedited entry, drink coupons, and post-event content.
- Sotheby’s auction house is launching a peer-to-peer secondary marketplace for NFT art through its Web3 arm, Sotheby’s Metaverse. The integrated sales system will be fully on-chain via the Ethereum and Polygon networks, and users can pay in either ETH or MATIC. Sotheby’s Metaverse will continue to honor artist royalties through smart contracts on its resale platform that automatically pays artists according to their selected on-chain royalty rate. The platform will launch with works from 13 leading digital artists, and artists featured on Sotheby’s secondary marketplace will rotate every few months.
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