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What's the chaos?🎢
Markets are on a wild ride. Why? The ETF wait continues. China wants its social credit system in the metaverse. Blackpink in Roblox's Area and Vitalik Buterin's recent wallet moves.
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The US SEC is playing hard to get on with their Bitcoin ETF decision.
It has consequences. You know it.
Impact: Big. Sentiments are swaying; markets are reacting.
The recent CoinShares report suggests that Bitcoin and its peers have been on a roller coaster due to the SEC's hesitance.
Expectations surrounding the spot Bitcoin ETF approvals took a hit. The anticipated verdict in the Grayscale Investments vs SEC case, which could transition the GBTC product into a spot Bitcoin ETF, remains elusive.
Numbers that matter 📊
Bitcoin's U-Turn: After a pleasant period of inflows summing up to $27 million till August 11, the big coin faced a brutal reversal with outflows hitting $42 million this week.
Ethereum's Dilemma: Not just Bitcoin's story; Ethereum also felt the jitters. Despite inflows of $2.5 million the previous week, it saw outflows of $9 million recently.
Last week? $29 million inflows. This week? A hefty $55 million outflows.
The downturn also affected blockchain equities, which faced outflows of $6 million during the same period.
Daily trading volume is at a mere $2.3 billion, a significant drop from $11 billion earlier this year.
Other contenders 🥊
When the slide comes, no one is spared either. Outflows 👇
Polygon - $0.9 million, Litecoin - $0.6 million, and Polkadot - $0.5 million
XRP's Silver Lining: Among the clouds, XRP shone with week-on-week inflows. Maybe it's celebrating the conclusion of its tiff with the SEC, where it wasn't seen as a security for individual investors. Although the SEC is gearing up for an appeal, for now, it seems XRP's having the last laugh.
Outflow Around the World 🌍
Canada - $36 million
Germany - $11 million
The US - $5.5 million
Switzerland - $3.5 million
The Crypto Fear & Greed Index indicates that current fear levels are the highest since the March Silicon Valley Bank (SVB) collapse.
The index rating is 38 out of 100, signifying a prevalent fear sentiment.
Jerome Powell, the Federal Reserve chair, will speak at the Jackson Hole Economic Symposium on Aug. 25, an event that historically triggers market volatility.
Also, there ain't no stop on action this week.
But, some traders believe Bitcoin might move into a consolidation phase, trading between $25K and $30K.
CoinShares Head of Research, James Butterfill.
“Market volumes remain well below average, primarily due to seasonal effects, leaving prices vulnerable to large trades. With the panic last week leading to a 10% decline in total assets under management, settling at $32.3 billion at the end of last week."
Trading Volumes 📉: Recent data from CryptoQuant underscores a tumultuous scenario. After a spike in broader crypto spot and derivatives volume during last week's crash, volumes have taken a nosedive. The latest Kaiko report echoes this sentiment, highlighting the lowest average daily volume figures since October 2020, when Bitcoin and Ether stood at $10,000 and $350, respectively.
TTD WTF 🙄
Craig Wright, who has consistently asserted he's Bitcoin's creator (Satoshi Nakamoto), has recently brought up a lawsuit.
The issue at hand? Wright’s crypto enterprise, Tulip Trading, alleges that it lost 111,000 bitcoin in a hack.
Devs Counter ⚔️: In a recent court filing, lawyers representing 12 developers debunked Wright's claims.
They're clear: Tulip Trading never possessed these bitcoins, to begin with. They further accused the company of relying on "cooked up" documents to demonstrate token ownership and illicitly regain control of the funds.
Bitcoin Core developers, backed by the Bitcoin Legal Defense Fund, have put forth claims that Wright may actually be admitting to a grand theft.
The plot thickens...🕵️♂️
The legal kerfuffle centres around Wright's alleged ownership of the missing Bitcoin. But Bitcoin core developers' lawyers beg to differ, citing insufficient and perhaps even forged documents.
A move to address crucial points before an actual trial. This legal manoeuvre hints at inconsistencies in Wright's claims.
Wright's company, named 'Tulip Trading Limited', takes its name from the famed Tulip bubble in the 1630s.
Case costs: Should things not go Wright's way, the Bitcoin Legal Defense Fund wants Tulip Trading to foot the bill - $1.63 million.
If Wright really is the owner of those Bitcoins, it implies he might have been behind the massive 80,000 BTC heist from Mt. Gox in 2014, which today translates to $2 billion.
Empowered Funds has filed to launch three bitcoin futures ETFs that will use the Ark Invest and 21Shares brands👇🏻
As Bitcoin's total supply vis-a-vis global population suggests, only a limited share of satoshis is available for each person.
Per Capita Bitcoin: Currently, every individual on earth can potentially own only up to 0.002625 BTC, roughly valued at $77.09 in today's market.
The journey to Bitcoin acquisition is neither smooth nor consistent. It has seen its share of bull and bear markets. However, the limited supply hints that owning even a small amount might be a big deal in the future.
Many experts believe that Bitcoin isn't just a passing fad – it's here for the long haul. Yet, because of its limited supply, not everyone can own a whole Bitcoin.
Apparently, for every 8,000 people, there's just 14.5 BTC available.
With the global population approaching eight billion and a maximum potential circulation of 21 million Bitcoin, it's clear that supply is tight. Factor in the coins potentially lost or held by Bitcoin's creator, and that supply shrinks further.
As major players (from wealthy individuals to countries) invest in Bitcoin, the average retail investor might find their piece of the pie shrinking.
The past teaches us lessons » those pizzas bought for 10,000 BTC in 2010 (worth almost nothing then but millions today) remind us of the potential future value of Bitcoin.
TTD Metaverse 🖼️
Since 2014, China has been meticulously rolling out its social credit score system. This system rates its citizens' reliability based on multiple factors.
Today's big news? China wants this system in virtual spaces too.
China aims to integrate the social credit system into the metaverse, with state-run China Mobile proposing a comprehensive "Digital Identity System".
As per the proposals, the end goal is to seamlessly integrate a person's inherent and societal traits with their digital identity, and then permanently archive this data.
Blockchain Dominance: China's been a global leader in blockchain patents in 2023, owning a staggering 90% of them. Their focus? Merging social aspects with blockchain technology.
The system's critics view it as a potential threat to national sovereignties and liken it to dystopian sci-fi scenarios.
China's metaverse vision is part of a larger "Industry 4.0" plan, combining AI, blockchain, machine learning, and cloud tech.
Blackpink Storms Roblox
K-Pop giants, Blackpink, have made their entry into the Roblox metaverse with "Blackpink: The Palace". This immersive space offers fans (Blinks) a dedicated hub to celebrate the band's iconic music and choreography.
Engaging Features ✨: "Blackpink: The Palace" enables fans to:
Interact with avatars of band members: Jennie, Lisa, Jisoo, and Rosé.
Buy custom outfits and emotes for their Roblox avatars.
Engage in challenges to earn Roblox's in-game currency, Robux.
Set to launch on August 25, fans visiting within the first 24 hours will receive a special badge for their Roblox profiles. Developed by British studio Karta, the Blackpink-themed Roblox world promises year-long updates.
K-pop in the Metaverse 🎤: The metaverse has seen a surge in K-pop presence. Blackpink bagged the "Best Metaverse Performance" award at the 2022 MTV VMAs. K-pop bands like Stray Kids and Sunmi had previously joined hands with Roblox, while groups like BTS and Twice expanded their reach through virtual concerts during the pandemic.
TTD MTM 💹
Ether saw a significant dip in its price this week. After a notable wallet associated with Ethereum co-founder, Vitalik Buterin, moved 600 ETH to the popular US crypto exchange, Coinbase, the cryptocurrency declined by 0.5% in over 24 hours.
In a broader context, Ether has been on a downward trajectory, dropping more than 10% in the past week. As of 12:25 p.m. ET, it was trading at $1,664.12, according to data from CoinGecko.
Recently, Buterin's wallet made some moves: 600 ETH, equivalent to roughly $1 million, was transferred to Coinbase. This transaction occurred about 11 hours prior to this report. The sharp-eyed folks at Etherscan link this to Vitalik's domain, Vitalik.eth. In addition, he settled a 251,000 RAI loan via the Maker protocol and withdrew 1,000 ETH, as reported by Lookonchain.
A Glimpse into the Past
In May, Buterin sent 200 ETH (then valued at $396,000) to Kraken. Simultaneously, the Ethereum Foundation shifted 15,000 ETH ($29.7 million) to the same exchange. At the time, some speculated this could indicate Buterin's caution regarding the market's direction.
Meanwhile Coinbase x Circle
Coinbase and Circle, the co-creators of the USD Coin (USDC) stablecoin, have made significant changes to their partnership. This was announced in synchronised posts on their respective blogs on August 21.
End of Centre Consortium: The Centre Consortium, previously responsible for governing USDC, will cease to exist as an independent entity. Its operations and governance will now be internalised. Circle will shoulder more responsibilities, which encompass handling smart contract keys and ensuring regulatory adherence.
Reason for the Change: The modification in their collaboration comes in the light of greater regulatory transparency. Both firms agree that the global clarity emerging around stablecoins negates the necessity for a separate governing body like Centre.
TTD Surfer 🏄
Web3 startup Rarimo has launched a "proof of humanity plug-in" for crypto apps to help distinguish real-life human users from AI bots.
Terra has temporarily shut down its website to protect users from ongoing phishing scams.
Thailand has warned Meta's Facebook to address crypto-related scams on its platform or face possible shutdown.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.