MARKET WRAP

1. Major Cryptos Regain Last Week Amid Inflation (and Ethereum Merge) Optimism

CoinDesk – September 11, 2022 at 10:48pm EST

Cryptos

The two major cryptos by market cap performed notably better than last week. $BTC held above $21K to finish out the week, and $ETH reached nearly $1800 over the weekend. Despite the good performance this week, BitBull’s Joe DiPasquale shares that he is “skeptical of a continued rally from here on in the absence of fundamental macroeconomic improvements,” referring to the FOMC meeting later this month. Most other major cryptos were slightly down, with DOGE and SHIB down over 2% each.

Insights

Ethereum’s Merge – the “merge” of the Beacon PoS chain with Ethereum’s PoW mainnet – has already begun, so to speak, and bullish investors have been preparing to reap the rewards of a successful transition. On the other hand, macroeconomic investors have begun to show more optimism in the face of declining energy prices, a signal that inflation is ameliorating somewhat. 

Equities

Equities markets tracked closely with the crypto rally, seeing Nasdaq finishing the week up 2.1% and the S&P 500 and DJIA up 1.5% and 1.2%, respectively. Tomorrow, the US Bureau of Labor Statistics will release the latest Consumer Price Index (CPI). If a slight decline is evident as expected, the rally could see a slightly longer lifespan, but investors should take care. St. Louis Fed President Jim Bullard indicated his support of a third straight 75 basis-point rate hike. 

Takeaways

The coming week is going to bring investors’ focus back to the CPI reading from the Bureau of Labor Statistics. If the CPI does decline, investors may see some gains in the short term. However, the main event is undoubtedly The Merge, which is expected on September 15th but could happen as soon as tomorrow. While Buterin bulls might be eager for the price of $ETH to soar, investors who own $BTC should take care to understand how the landscape shifts moving forward. See below to read about how the Merge affects more than Ethereum.

2. Ethereum Merge: An Explanation Shorter Than Vitalik’s Bulge

Ethereum.org – September 9, 2022

What is The Merge?

The Merge upgrade is a migration that involves the combination of Ethereum’s current Proof-of-Work execution layer, the mainnet, with its Beacon Chain, a Proof-of-Stake consensus layer that already exists but is currently used only as a staging area for computers operating the network. This merge occurs in two stages: Bellatrix, which happened last week, is a network upgrade on the consensus layer that improves the Ethereum Virtual Machine (EVM), and Paris, which is the execution layer that will transition all validation activity from PoW to PoS. The latter is triggered when the Terminal Total Difficulty (TTD) is reached.

What happens after the Merge?

Once the Beacon Chain assumes the validation processes of the legacy Proof-of-Work model, Ethereum as we know it will be merged seamlessly with it. This means that the entire transaction history, collection of smart contracts, and live balances of every Ethereum holder since July 2015 will be kept intact, and that information will be stored in the Beacon Chain. For most users, this means that there is nothing that needs to be done by investors in order to retain their holdings.

Why is this important for investors?

The Merge signals the switch of Ethereum from PoW, leaving Bitcoin as the only major cryptocurrency operating on the energy-demanding PoW validation model. As a result, it is entirely possible that legal entities take this opportunity to impose sanctions of some kind upon PoW blockchains. On the other hand, Ethereum’s Merge leaves many Ethereum miners without operational requirements, which could result in their transition over to Bitcoin. And yet, on a proverbial third hand, many Ethereum “killers” like Solana, Avalanche, and Polkadot may find their value proposition as eco-friendly Ethereum alternatives to be less valuable.

None can know how the Merge will play out exactly, but it is inevitable that Ethereum will receive a huge performance boost if the Merge happens seamlessly. This could offset any of the repercussive waves mentioned above. Certainly, do your own research, and understand that none of this is investment advice. Click here for additional resources.

3. Norway’s Central Bank Is Planning a Central Bank Digital Currency.

Norges Bank – September 12, 2022

The project is still in the testing phase and is prototyped upon Ethereum’s infrastructure. According to the bank, the current testing phase is scheduled until the summer of 2023. It will provide in-depth insights into how the Norwegian Digital Currency should proceed in the future.

4. 140K $BAB Tokens Minted

BscScan

More than 140,000 Binance Account Bound (BAB) tokens have been minted since the protocol went live last Saturday (10/09). Each of these tokens will represent a single verified Binance user, making it the first Soulbound token in the BNB ecosystem. However, compared with tens of millions of users on the Binance exchange, the number of people minting BAB is negligible in the meantime. The utilization of the BAB token is also yet to be disclosed.

5. MicroStrategy Seeks to Accumulate More $BTC

Sec.gov – September 9, 2022

MicroStrategy is looking to buy more BTC by selling up to $500M worth of its stake, according to an SEC filing recently. Also, from the report, a class A common share from MicroStrategy was trading at $234.50 on the open market. The company’s accumulated BTC holding bears a price tag of approximately $2B at the time of writing.

6. Ford Prepares to Drive into the Metaverse

CoinTelegraph – September 9, 2022

American car manufacturer Ford has filed 19 trademark applications for its products, claiming plans for virtual vehicles (Mustang, Bronco, Lincoln, Explorer, and F-150 Lightning), clothing, and an NFT marketplace. Furthermore, the company also revealed that it plans to create “downloadable virtual goods,” including vehicle parts, accessories, and clothing for use in virtual worlds. Regarding the NFT marketplace, Ford wants to promote tradable digital art and some services featuring NFTs. This systematic entrance of Ford into the metaverse industry comes after it massively cut its workforce to overcome a difficult period. 

7. Singapore-based DBS Bank Teams Up with The Sandbox

DBS – September 9, 2022

A new partnership between DBS, a Singapore-based consumer bank, and The Sandbox has come about, geared toward the creation of a new interactive metaverse experience known as DBS BetterWorld. The collaboration aims to build new services for DBS clients in the virtual world. The bank will get a plot of land (3x3) to create a metaverse exclusive property named after the project. The partnership is taking place against the backdrop of DBS planning to expand crypto offerings. DBS joins other banks in investigating commercial prospects in the metaverse after JP Morgan launched a lounge in Decentraland, HSBC joined Sandbox, and Union Bank of India introduced the “Uni-Verse.”

8. Puma Introduces “Black Station” Metaverse as Virtual Sneaker NFT Showroom

The Block – September 8, 2022 at 3:57pm EST

Puma joins Adidas Originals as the latest sportswear brand to run an NFT campaign. This collection, known as “Futrograde” is viewable in Puma’s metaverse space known as Black Station. The new NFTs are paired as redeemable digital assets to physical apparel collections, known as “phygitals.” Puma is among a number of firms like Tommy Hilfiger and Prada to release NFTs that can be “minted” and redeemed as physical items.