5 October

“Bank of America has launched digital assets research coverage nearly three months after forming a crypto group. Digital assets are a $2 trillion market with 200 million users, according to a Bank of America press release, and the sector is “too large to ignore.”

We believe crypto-based digital assets could form an entirely new asset class.

Bitcoin is important with a market value of ~$900bn, but the digital asset ecosystem is so much more: tokens that act like operating systems, decentralized applications (DApps) without middlemen, stablecoins pegged to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) enabling connections between creators and fans.

Bank of America noted that venture capital investments in digital assets and blockchain technology surpassed $17 billion in the first half of 2021, “dwarfing” the $5.5 billion from the same period last year.

This creates a new generation of companies for digital assets trading, offerings and new applications across industries, including finance, supply chain, gaming and social media. And yet we’re still in the early innings.”

See Also: ‘Not Just Bitcoin’: Bank of America ‘Bullish’ on Ethereum, DeFi and NFTs

The cryptocurrency is up about 15% over the past week as traders appear to be exiting short positions. Analysts are waiting for the U.S. Securities and Exchange Commission (SEC) to approve a bitcoin exchange-traded product (ETF), which could happen in a matter of weeks.

It would open the floodgates for institutional adoption and hopefully result in a spot-backed ETF being approved in the not-so-distant future, which would allow ordinary people to include the asset easily.”

“The working group published not one but three new reports on Thursday exploring customer needs, technological design alternatives and financial stability implications of a general purpose or “retail” CBDC – meaning a digital currency issued directly by a central bank – that would coexist with private payment systems.

The prevailing fear is that the use of any CBDC would require a shift of funds out of bank deposits and into digital cash. Should CBDCs rapidly replace bank deposits, they could reduce banks’ ability to lend, leading to instability in the financial system. But if it happens slowly, with enough time for banks to adjust, the report says the effects of such a shift would be manageable.

The report lays out a number of design options that could help control CBDC take-up and the crowding out of banks including setting holding and transactional limits on CBDCs, and considering different ways of remuneration. For example, a CBDC can be non-interest bearing like cash, in which case it would seem less attractive.

Polygon’s count of unique daily addresses active either as sender or receiver rose to a record high of 566,516 on Saturday, surpassing Ethereum for the first time. Non-fungible tokens (NFT) adoption and gaming have fueled the growth in Polygon’s user base.

Since July, traders on Polygon OpenSea [the NFT marketplace] have multiplied 45.5x, and NFTs sold by 17.5x. Second, gaming is taking off. Arc8 is one example, achieving 104K DAU [daily active users] days after launch.”

Trading volume has been trending upward on the marketplace over the last week following wider declines throughout much of September. Leading the charge this time around are pixel-based toad avatars, which are suddenly coveted by collectors. To date, the collection has yielded $88 million worth of trading.

Despite some recent doom-and-gloom chatter around the declining market, OpenSea’s final numbers actually weren’t far off of August’s, with more than $3 billion between both Ethereum and Polygon-based sales.”

See Also: Dapper Labs Acquires Influencer Platform Brud, Launches Unit Focusing on DAOs

“El Salvador is looking to bolster adoption of its government-issued Chivo Bitcoin wallet by offering discounts on petrol purchases of $0.20 per gallon to consumers who pay using BTC.

The state company Chivo negotiated with the largest gas station companies in our country, so that starting tomorrow, their stations will sell each gallon of fuel $ 0.20 cheaper, with Chivo wallet.”