Improving Collateral and the Excitement Behind NFTs
Improving collateral will reduce BTC volatility going forward, and NFTs are an overheated market that might open up many future opportunities.
IN THIS PUBLICATION:
- Bitcoin is exiting exchanges at the highest pace ever.
- Stablecoins are increasingly being used as collateral for crypto derivatives (instead of BTC), which is decreasing volatility in crypto markets.
- The NFT market, whilst currently very heated and potentially in a bubble, is opening up a universe of new opportunities that are likely positive in the long term.
- The first official day of BTC’s experiment as legal tender in El Salvador last week was welcomed with an unexpected flash crash. It’s fundamentally unclear what led to the correction - research houses like Delphi Digital primarily attribute it to a liquidity collapse rather than excessive leverage, whilst others flagged DDoS attacks by bad actors exacerbated the move.
- Elsewhere, Panama, Cuba, and Ukraine have all been progressing towards implementing Bitcoin into their legislative framework. Whilst not Tier 1 economies, we believe the majority of Bitcoin experiments will be made in economies of smaller scale and scope, so this progression is worth keeping an eye on.
- Brevan Howard, one of Europe’s largest hedge funds with $7 billion of AUM, has set up a new digital assets unit (read crypto), whilst Point 72’s Steve Cohen is reportedly investing in crypto quant trading firms.
- Visa bought a CyptoPunk for $150,000 joining the NFT party (NFT-related tokens currently have a +$20bn market cap). The US payments company has a history of buying commerce artifacts, so one should not see this transaction as a game-changer… but still.
- Union Investment, a $500 billion German Asset Manager, will be adding Bitcoin up to a maximum of 2% of its total assets. Crypto Blitzkrieg – you heard it here first.
- MicroStrategy continued its BTC purchases, with an additional $242 million purchase announcement earlier this week. They currently own 114,000 BTC, for which they paid a total price of $3.16 billion (average price of $27,713 per BTC), a “paper profit” of almost $2 billion (63% ROI).
- Coinbase’s CEO Brian Armstrong and the SEC have been going head-to-head over crypto lending. Whilst Brian’s tweets make for great headlines, we wonder if Coinbase IPO investors share the same enthusiasm, especially after a 25% drop in price since floating (and now trading below IPO price of $250).
- September has historically been the worst month of the year price-wise for BTC, but it also tends to mark the end of summer’s weakness towards Q4, a quarter that has made us accustomed to very strong performances (we also said that of Q2… and look what happened).
- Bitcoin is currently exiting centralized exchanges at the highest pace ever. As a reminder, this is usually seen as a bullish indicator given that it likely means fewer investors are interested in trading their holdings.