Your Weekly Update On All Things Crypto |
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Visa pilots transaction settlement in stablecoins |
Last Monday, payment processing giant Visa announced that transactions can now be settled in USD Coin (USDC), a dollar-pegged stablecoin co-founded by Circle and Coinbase. Visa is first rolling out this functionality with Crypto.com debit card transactions.
Cuy Sheffield, vice president and head of Crypto at Visa, said that the announcement represents an upgrade to Visa’s settlement capabilities by allowing crypto-native companies to formulate new business models without grappling with traditional fiat in their treasury and settlement workflows. These fiat-denominated cryptocurrencies are settled and cleared, treated like any of the other 160 fiat-denominated currencies that Visa clears and settles over its global rails.
This is a massive leap for the crypto industry, and maybe the largest driver of mass crypto adoption that we have ever seen, and it doesn't even relate to Bitcoin. It shows that the cryptocurrency revolution is about so much more than just Bitcoin. Stablecoins will play a major role in the adoption of cryptocurrency into the mainstream because they are simply quicker, less costly, and more efficient than the traditional financial system. |
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Pension Funds and Insurance Firms Become Most Recent Bitcoin Adopters |
Beginning in 2020 with Microstrategy's investment into Bitcoin, the leading cryptocurrency has been becoming more and more widely accepted as an option for institutional asset allocation. Bitcoin’s appeal among institutional investors is now spreading toward insurance firms and life and annuity companies, and this class of organizations is a heck of a lot bigger than the already active family offices and hedge funds.
The most commonly cited reason for the rapid adoption of this asset class is the rapid debasement of our currency supply. Pensions, endowments, and insurance firms represent over $18 trillion in assets in the United States alone and over $32 trillion globally. If all pension funds allocated between 2-5% of their portfolio into Bitcoin, that would be enough to roughly double its market cap alone.
Major family offices, corporations, hedge funds, insurance companies, and municipalities are all now starting to adopt Bitcoin. Pension funds are just the next logical progression. When the trickle of pension funds turns into a flood, we will see a shockwave sent through the price of Bitcoin. But it will pale in comparison to when we begin to see public announcements from national treasuries about their adoption of Bitcoin. However, as per an interview with Robert Gutmann, CEO, and co-founder of NYDIG, they are already taking orders from national treasuries.... It is going to be an exciting year. |
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Dapper Labs Secures $305M From Investors & Celebs |
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Dapper Labs, the Vancouver-based firm behind the two hottest dapps in the world, NBA Top Shot and Crypto Kitties respectively, announced a $305 million funding round last Tuesday. According to sources at the Wall Street Journal, the funding values Dapper at $2.6 billion.
The round was led by Coatue Management and had participation from over 40 additional investors, including high-profile athletes like Michael Jordan, Kevin Durant, and Kyle Lowry. Among them were venture firms with celebrity founders such as Will Smith's Dreamers VC, Ashton Kutcher's Sound Ventures, and Shawn Mendes' AG ventures. Venrock, Version One, Bolt Ventures, USV, and the Chernin Group were also involved.
Founded in February 2018, Dapper labs was built by Roham Gharegozlou's innovation studio and startup incubator, Axiom Zen. In 2019, Dapper released NBA Top Shot, a digital platform to collect, trade, and own Non-Fungible Tokens (NFTs) that capture 'jaw-dropping' moments in NBA history. It has since seen unprecedented growth, significantly leading weekly NFT transactions, reporting more than 800,000 accounts, and over $500,000 million in sales. Unlike CryptoKitties, which is based on Etherum, Top Shot is built on Dapper's own blockchain, Flow (FLOW), which has risen 588.6% since January 2021and has over 500 developers and 100 projects being built on it.
With the proceeds, Dapper Labs' team looks to scale NBA Top Shot, which is still in beta, and extend the "same magic" to other platforms. "We want to bring the same magic to other sports leagues as well as help other entertainment studios and independent creators find their own approaches in exploring open platforms," says Gharegozlou, who also acts as CEO. "NFTs unlock a new model for media that benefits the fans much more than advertising or sponsorships," he adds. In February, Dapper announced a deal with the Ultimate Fighting Championship, which is "coming soon" as per their website, and we wouldn't be surprised to see major soccer leagues next.
The round is part of the growing interest surrounding NFTs, a driving narrative throughout this bull-market, in the media, and this publication. As discussed in last week's newsletter, NFT's and platforms such as NBA Top Shot are pushing crypto into the mainstream, rapidly increasing its network and bringing millions of new users. Venture firms are capitalizing on the boom and actively investing in marketplaces like OpenSea and Rarible. |
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Bitcoin Setting Up For a Breakout |
Bitcoin has risen by a double-digit percent each of the last six months, and April looks to be more of the same. Bitcoin is forming a bullish ascending triangle on the daily chart and looks just about ready for a breakout. However, although the technicals look strong, it is more so the proven fundamentals that are driving the narrative. The small trickle of institutional adoption that we say in Jan/Feb is starting to turn into a flood. As per our story above, more conservative actors like pension funds and insurance companies are now entering the Bitcoin arena and driving even more demand for the asset. This trend is likely to accelerate throughout the year and will continue to drive buy-side pressure. In most cases, the large-scale institutions that are now buying have no history of selling. Therefore as the price continues to skyrocket, the "price-floor" for Bitcoin keeps rising with it.
See the trading-view chart here. |
Alt-Coins Breakout From Ascending Triangle |
As we predicted in last week's newsletter, Alt-coins broke their vertical resistance this week and have rallied in dominance versus Bitcoin. This rally was driven primarily by Oracles and the DeFi sector. We suspect that once Bitcoin breaks through its ascending triangle and starts to test new all-time highs, we will see a slight consolidation in Alt-Coin dominance as liquidity funnels back into the king coin for its next leg up. However, we expect the longer-term trend to remain in favor of alt-coins over the next few months.
See the trading-view chart here. |
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 | Aave has quickly become one of the top "Blue Chip" lending protocols in the DeFi space. With nearly $6 billion in value locked in the protocol, Aave ranks 3rd amongst all DeFi protocols in value locked. After a +60% pull-back from all-time highs, Aave is starting to print higher highs and higher lows, signaling it may be ready for another rally.
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| | | Uniswap is the largest decentralized exchange and currently resides in the top 10 of all coins by market cap. It currently has over $5.4 billion in liquidity locked on the platform, ranking 4th in all DeFi platforms. Uniswap is near the launch of V3 of their protocol which will bring increased yield to liquidity providers and more targeted liquidity spreads. This is a coin to watch as attention begins to shift again to DeFi.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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