All Been Crypto — Week 17 Dec 2021

Price wise the past week was relatively uneventful and most expect this sideway to continue into year end. Even Elon’s Doge tweet and resulting spike faded quickly leaving the token almost flat WoW. News flow wise however it was actually a very eventful week and while I usually try to stick with highlighting 3 major headlines this week I had to make it 4. We saw Binance seemingly changing their mind on Singapore, another Bitcoin Core Dev stepping down, SOL network outrage again and of course more happening in the NFT space with lending, M&A and more real-world use cases. Enjoy reading and feel free to get in touch for questions/ feedback/comments. Here to help you on your journey

Bat Tai Chi — btc21@mail.com

HEADLINES:

Binance shuts down Singapore Trading Platform

You might have seen this headline of Binance withdrawing from Singapore, well it’s not quite like that but then it also is. They pulled out their individual license application but this comes after last week’s acquisition of an 18% stake in HGX a private security exchange that already has the license. What this means though is that CZ’s negotiations with Singapore Gov were probably tougher than we thought and sweetened investment terms for sovereign wealth money were probably not enough to grant them exemptions. Might open up for Dubai or Europe to be announced as the new headquarters. Can’t imagine they have the same commitment to a minority stake exchange now would tie in with the rumors I’ve been hearing about a hiring freeze in some Asian jurisdictions. Ultimately it’s a bargaining game and in order to break into traditional institutions Binance will have to gain regulators approvals which is why I think Middle East looks interesting also from a time zone perspective. Expecting an announcement from them soon.

Bitcoin Core Devs stepping down

Developer Samuel Dobson this week announced that he will be stepping down as a Bitcoin Core developer after three years “because he can’t take the necessary time as he nears the end of his PhD.” The project has already lost two key developers since October so with Dobson’s departure, the number of developers with direct access to the Bitcoin code has dropped to five, according to an updated listing on the Bitcoin Forum. The shrinking of the Bitcoin Core team, which undertakes all the basic developments about the Bitcoin network, brings many risks for the future of the network. There’s been a debate about the whys and timing and Cobra has a good twitter thread on this. Some of the responses that strike me as most plausible are increasing regulatory scrutiny and media attention. But that would mean they likely come back anonymously (hopefully). Meanwhile adoption continues to grow with L2 lightning approaching 4k BTC locked and Chainalysis announcing they’ll start support next quarter.

NFTs — Lending, Physical World Commercialization and Taxes

So much to cover this week, first of all on the increase in usage and utility. You can now borrow against your NFT with Nexo launching NFT lending service in collaboration with 3 Arrows Capital. They are collateralizing your Punk or Board Ape and lend you against the ‘asset’. Likely them picking which assets to collateralize bringing value to the collection so closely watching who’s next. Then we starting so see more of real world commercial value emerging too with one of the Board Apes recently being licensed for a craft beer release. I bet we’ll see a lot more NFT IP being commercialized in real world. Just to prove that point Nike bought RTFTK a virtual Sneaker Designer this week. Finally want to share my take on the recent headline you saw about a Board Ape selling for a fraction of its last price. Now I’m no tax expert (certainly not in US) but we all know NFT gains are taxed at least in US and so should also be subject to financial year end loss harvesting. Have been hearing speculation that this might be behind some of the much lower on chain transaction prices of blue chip NFTs. Remember this happened before with Punks too…I’m not saying fat fingers cant happened but there might be a bit more to it…who knows?

SOL DDoS or not?

The Solana network had another turbulent week. Multiple reports said they experienced a network outage and DDoS. However, co-founder Raj Gokal claims that neither was the case and that the NFT game SolChicks was responsible for the low performance. What we know is that transactions dropped to 1k per second far from the 50k the protocol boasts itself with. Remember this is not the first time SOL network experiences issues. In Sept there was a 17h outrage that was only resolved after devs restarted the mainnet beta. So of course, critics were ready to feed on this again and calling SOL not sufficiently decentralized. And while I agree on the importance of decentralization this incident seems to me just like a normal network overkill that points more towards capacity bottle necks and reminds me more about Crypto Kitties than a boogeyman DDoS attack. Apparently even telegram service was impacted because of the traffic on the SolChicks group. SOL price action or the lack of would support this view too. Outside of that Opera announced last week a partnership with SOL to bring Opera Android users seamless access to Solana dApps. Ironically they praising SOLs low transaction fees and latency and said this was the main reason for cooperation. But then again would you expect a Web2.0 asking for decentralization.

QUOTES:

Regulating crypto assets and currencies is essential, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located offshore, which makes it easier for an individual to trade in them despite the ban

IMF Chief Economist, Gita Gopinath

On the whole, it is difficult to see a justification for the existence of crypto-assets in the financial landscape

ECB Executive Board Member, Fabio Panetta

This acquisition [RTKFT] is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture

John Donahoe, President and CEO of Nike.

Tesla will make some merch buyable with Doge & see how it goes

Elon Musk