“While bitcoin rose by $3,000 on inflation data, the gains were more than reversed by day’s end as the interest rate markets priced in greater probability of faster and sooner Fed rate hikes. Equity markets witnessed a similar action.
The crypto rally on high inflation is a hint on where it’s headed as an asset class, but the sharp, late-day drop underscores the limitations. For now, bitcoin is still a risk-on asset.
Bitcoin’s reaction to inflation was seemingly more aligned to the stock market’s reading into the implications for a perhaps stretched speculative exposure rather than the dollar’s value erosion.
The comments suggest that the cryptocurrency needs to develop resilience to stock market sell-off to cement its position as a risk-off asset and attract more safe haven demand from traditional market investors. All things considered, traditional market observers believe bitcoin is yet to find its place as an inflation hedge. That said, they agree that the cryptocurrency has crossed the Rubicon.
As for becoming a mainstream asset, I don’t think there’s any doubt that it already is. It’s crossed the threshold now and will continue to gain acceptance. That secular theme is much more important than trading it around any economic data release or whatever theme the market is flirting with.”
“Taproot is an overwhelmingly positive upgrade to the Bitcoin protocol, but it is not itself enough for investors to get excited. There are a few potential drawbacks to the upgrade, but they’re minimal in the face of the benefits and only reveal themselves if Taproot is only partially adopted by network participants (only 54% of Bitcoin nodes enforce Taproot right now.
There are also a few misconceptions of what Taproot means for network participants, stakeholders and ultimately investors, the main one being that Taproot enables flexible smart contracting capabilities that will rival the most popular smart contract blockchain, Ethereum.
With Taproot, on-chain smart contracts are more viable by breaking up the execution of Bitcoin scripts. In addition, Taproot improves the usability of what are known as Discreet Log Contracts (DLCs) which can be used to construct more complicated Bitcoin smart contracts. However, the implication that Taproot will make Bitcoin a smart contracting blockchain is misplaced.”
“What started as a pie-in-the-sky dream last Thursday to form a DAO to bid on a copy of the Constitution has since become a full-on movement that’s attracted nearly $4 million in donations. “ConstitutionDAO” insiders now believe they have a real chance at actually winning the forthcoming auction at Sotheby’s.
The torrid progress the fledgling group has made in just five days is a testament to the organizational power of DAOs: Less than a week after someone hatched this plot, the project has attracted 11,000 social media followers, donations from 2,000 Ethereum addresses and a brain trust of a few dozen builders, investors and community members who now have the infrastructure in place to make a competitive bid for one of the world’s foremost cultural artifacts.
Across an increasingly chaotic Discord channel, these Web 3 upstarts are marshaling the expertise necessary to architect a legal entity capable of placing a bid, preparing to purchase insurance for the document in case of an auction win and identifying museum partners with the facilities to temporarily and securely house the prize – one of just 21 original copies in the world.
A DAO owning a copy of the constitution would be a remarkable testament to the power of direct democracy.”
“In what could be seen as a historic step toward the legitimization of the metaverse, the island nation of Barbados is preparing to legally declare digital real estate sovereign land with the establishment of a metaverse embassy.
The Barbadian Ministry of Foreign Affairs and Foreign Trade signed an agreement on Sunday with Decentraland, among the largest and most popular crypto-powered digital worlds, for the establishment of a digital embassy. The country has also retained legal counsel, as the embassy will set a number of unique precedents. So far experts have said that the embassy will be compliant with international law as well as the Vienna Convention.
This is a way for Barbados to expand its diplomatic missions beyond the 18 it currently has with 190+ countries around the world.”
“Pawnfi uses a smart contract escrow system to allow its customers to take out loans using their non-fungible tokens (NFT) as collateral while also offering appraisal and liquidation services. The company says its system is compatible with “liquidity provider tokens, tokenized rights and minor cryptocurrencies” in addition to NFTs.
Its most in-demand services are for “play-to-earn” gaming rentals, along with loans against high-value NFTs like CryptoPunks. As the space matures, Kayne envisions Pawnfi offering real estate lending in games like Decentraland and The Sandbox, a la “a metaverse Airbnb.”
ReNFT, a company that uses a similar escrow system to Pawnfi to let NFT holders monetize their digital assets by renting them out, raised a $1.5 million seed round led by Animoca Brands in October.”
“Paradigm, the venture firm launched by Coinbase co-founder Fred Ehrsam and former Sequoia partner Matt Huang, now has $2.5 billion for placing bets on the next generation of leading crypto projects. The bountiful war chest suggests continued enthusiasm among well-connected crypto investors as bitcoin and ether flirt with all-time highs.
This new fund will invest alongside our existing flagship fund across all stages and geographies.
Andreessen Horowitz made waves in June when it announced a $2.2 billion fund – the largest for a crypto fund at the time. Paradigm’s latest would appear to top that.”
“Bitcoin institutional holdings were down last quarter while many of the same firms upped their stakes in Ethereum-based products, according to SEC filings.
In the latest batch of regulatory filings, 10 new firms disclosed that they had ETHE in their portfolios. The two largest were NYC-based Tocqueville Asset Management, with 79,398 shares of the Ethereum trust, and San Francisco-based Main Management ETF Advisors, with 78,000 shares.”
“ParaSwap today announced the launch of its PSP governance token. The token is currently available to claim for some 20,000 eligible Ethereum addresses, and enables users to stake in liquidity pools in exchange for platform rewards, as well as participate in its newly formed decentralized autonomous organization (DAO) governance. ParaSwap famously resisted tokenizing for years.
We decided to prioritize the product over the token because our belief was that in order to have a token the reason had to be decentralization.”
“Lummis, an ardent crypto advocate, introduced a bill to rewrite a controversial tax provision that critics have said would stifle the U.S. crypto industry. In its place she proposed language that appeared similar to a compromise agreement considered earlier this year.
We need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader. I’m proud to introduce this bipartisan bill to ensure that our tax system reflects the realities of digital assets and distributed ledger technology.”