MAJR News 063
SEC delays Valkyrie Bitcoin Spot ETF, Metaverse token prices are flying paired with Facebook's Meta rebrand, Bitcoin Lightning network adoption accelerates, Polkadot and Ethereum hit new ATHs
MAJR NEWS BRIEF
Chris Dixon is a general partner at a16z, and gives Bankless listeners a masterclass in understanding the Web3 Metaverse in this episode.
The Metaverse which is commonly viewed as virtual reality is a massive theme in crypto. A digital world where users can look like any avatar, use virtual money, play games to boost reputation and buy digital goods. This has crypto written all over it. If you haven’t seen Steven Spielberg’s Ready Player One movie, than do that. Facebook has been telegraphing their metaverse play for a long time with their acquisition of Oculus, the VR headset for $2 billion in 2014. Last week Facebook rebranded as Meta and announced a $10 billion investment into their metaverse services and products. Post announcement, blockchain enabled virtual world tokens have been flying, up over 300% in the last week. Who knows how much Facebook (Meta) will allow users to control their VR world, but they’re going to have serious competition from user owned VR environments enabled by blockchain. The top metaverse projects are below.
The SEC has approved three Bitcoin futures ETF - ProShares, VanEck and the Valkyrie Bitcoin Strategy ETF. However, they’ve pushed Valkyrie’s Bitcoin Fund ETF which is a spot ETF vs. futures. A spot ETF would allows investors, especially retail investors to get exposure to the actual underlying digital asset vs. trading complicated paper contracts betting on the future price of the underlying.
“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised in the comment letters that have been submitted,” the SEC said in a statement.
Aaron Rodgers took to Twitter over Halloween dressed as Keanu Reeves from John Wick to announce his partnership with Cash App and that he put some of his NFL salary into bitcoin. He also said he will be giving a $1m in BTC to Cash App users. #PaidInBitcoin
Compass Mining, a bitcoin mining service provider signed a new 140 megawatt hosting deal with Canada’s Red Jar Digital, more than doubling their current capacity and bringing more hashrate to retail customers. The mining rigs plan on being live on site by end of January 2022.
More on Bitcoin
The Sandbox (SAND) is up over 244% this week following the Metaverse hype driven by Facebook’s rebrand to Meta and their $10 billion investment into their products and services. The Sandbox is a user owned Ethereum-based metaverse game that lets users own, customize and monetize their land plot NFTs in a shared world. They raised $93 million in a Series B round, led by SoftBank, Animoca (owner), Galaxy Interactive, Samsung Next, LG Technology Venture and many others.
Ethereum competitor, Polkadot (DOT) reaches new all-time highs breaking through $50 at a $54 billion market cap, up 16% in the last 24 hours. Polkadot is on a tear because they’re about to release an update deploying “parachains” for their network. Polkadot wants to be a fully interoperable blockchain and parachains are essentially their own blockchain that connect to each other via the main “Relay Chain” used for shared security. Developers can start to register for parachains on November 5. In order to get a parachain, you need DOT the protocol’s governance token. Hence the price increase due to demand. Kusama (KSM) is Polkadot’s test network for developers already has parachains live. It’s up 20% in the last 24 hrs.
Ethereum (ETH) hits new all-time high this morning breaking past $4,467 alongside Ethereum hashrate which also hit a new high. Miners could be trying to soak up the last bit of available ETH before it switches to Proof of Stake (POS) early next year. This past summer Ethereum updated it’s protocol and integrated EIP-1559 which burns a portion of the ETH transaction mining fees. Since the upgrade this August, Ethereum has burned over $3 billion of ETH essentially shrinking the annual supply. When ETH 2.0 and POS roll out next year, the overall supply of ETH could shrink 2% per year making it hyper-deflationary given the incentivize to stake coins for yield + applications locking up ETH as well.
More on Crypto
Supply chain disruptions has made headlines daily and are part of the problem driving prices higher for energy, food, toys and most physical goods. Other contributors are increased money supply, labor shortages, antiquated infrastructures and rising consumer demand. There are 25M shipping containers at sea at any given time. The average number of days ships are waiting to offload goods in LA is 12.8 days. To send goods from China to the US, it cost $17,377 per container, up 10x since pandemic.
Central banks may have to increase rates earlier than expected to ease inflationary pressures and to prevent bond investors from dumping government debt. Inflation in the UK ticked 3.1% in September above it’s 2% target and is forecasted to increase to 5% next year. The Reserve Bank of Australia stunned investors when they decided to stop yield curve control by not defending their target 0.1% interest rate. The Bank of Canada ended it’s government bond purchase program last week and moved up the time frame for raising rates. The ECB’s Christine Lagarde pushed back against market sentiment of accelerated timing for increasing rates. Fed Chairman Jerome Powell will address the US this Wednesday on the central bank’s forward guidance.
Digital Currency Group, the largest digital asset manager with over $50 billion in AUM and the owner of asset management firm Grayscale and the media company CoinDesk. DCG raised $700 million an investment round, the second largest in the crypto sector after FTX raising $900 million. The round valued DCG at $10 billion and was led by SoftBank. SoftBank began investing in the blockchain sector about 3 months ago and believes it’s going to be the next leg of the Internet. DCG also owns brokerage Genesis, which is expected to have $1 billion in revenue this year. DCG is still a private business and has no plans to go public. CEO Barry Silbert says he uses the Standard Oil model - stay a private company, be profitable and have divisions in all aspects of the market.
More on Macro
90 - 5 Mental Models for Web3 | Chris Dixon
Bitcoin and crypto adoption is here to stay. Don’t let your friends and family miss the opportunity of a lifetime. Click the button below to share the MAJR Newsletter.
For more breaking news and updates, follow us on Twitter @majrcreators
We’ve moved some content behind the pay wall. This is the free newsletter that drops on Tuesday and Thursday. Subscribe to get all MAJR content inclusive of podcasts, digital asset research and analysis and exclusive articles and media.
THIS IS NOT FINANCIAL ADVICE. IT’S IMPORTANT TO DO YOUR OWN RESEARCH. INVESTING IN CRYPTOCURRENCY OR ANYTHING FOR THAT MATTER COMES WITH RISK. THE INFORMATION PRESENTED IN THIS NEWSLETTER IS FOR INFORMATION AND ENTERTAINMENT PURPOSES ONLY.