MARKET WRAP

1. Crypto and Equities Face Headwind After FED Comments

CoinDesk – Apr 22, 2022 at 3:31am

After peaking at $42,965 this Thursday, Bitcoin (BTC) backed away, stooping nearly to $40K after comments from the Federal Reserve indicated the potential for a U.S. interest rate hike. Federal Reserve Chair Jerome Powell indicated that the decision to raise the rate by 50 basis points (0.5%) “will be on the table” for the upcoming Federal Open Market Committee in May. This comment is just one of many that corroborate the likelihood of tighter monetary policy, both for cryptocurrencies and equities alike, for 2022. 

For the time being, altcoins demonstrate greater success when compared to bitcoin, led in particular by Tron’s TRX token, which surged 14%, and The Graph’s GRT token, which rose 6%. This difference in performance may, however, be short-lived.

According to Blockchain Center’s Altcoin Season Index, there is certainly a risk-on appetite for the altcoin market, but it dwindles significantly over time. Over the short term, it appears that altcoins outperformed bitcoin over the past 90 days, with 29% of the top 50 cryptos accounting for this action. However, only 41% have done so over the past year, which is below the 50% mark that typically signals a shift from bearish to bullish sentiments. (NOTE: Altcoin Season Index now sits at 43%)

 

If altcoin buyers are quick to sell after seeing profits, it is likely that many of these tokens will see their upside limited over the short term.

2. DeFi Data Firm Nansen Makes Its First VC Investment in Gaming Analytics Project ZeroDrop

CoinDesk – April 21, 2022 at 10:12pm

On-chain data platform Nansen has completed its first external investment ever in a new web3 gaming project known as ZeroDrop. Leading with a $1.27 million seed round investment, Nansen’s venture is corroborated by Mechanism Capital, Mixmob, and various angel investors interested in the blockchain gaming industry. 

According to ZeroDrop’s press release this Thursday, the funds will be purposed toward “technology development and client acquisition” for their analytics tools, which target nascent GameFi and NFT projects. 

ZeroDrop, led by gaming veterans from companies like Electronic Arts (EA), Epic Games, LucasArts, and Activision, provides insights for targeted engagement campaigns within blockchain games using in-game data and wallet analytics indexed by Nansen. 

According to CEO Winston Ng, the team “has done this with EA and Epic games in the past” where they “take the game analytics, even web analytics, and combine them into what’s called cohort analysis.” 

The concept apparently aligned greatly with the data analysis Nansen conducts on wallets, so Nansen CEO Alex Scanevik was very keen on leading the seed investment round.

3. European Union Considers Banning Bitcoin Trading

Crypto Briefing – April 21, 2022 at 7:00am

According to a number of documents obtained by digital rights organization Netzpolitik via a freedom of information request, a number of EU officials have discussed demanding structural changes and imposing limitations upon Bitcoin and its trading in an effort to curb bitcoin’s high energy expenditure.

The documents are slightly outdated, covering the discussions held during a meeting in November 2021, and they vary in the specific sanctions and alterations that were being considered. One such document delineating the comments between Sweden’s financial supervisor and an environmental agency indicates that Bitcoin would have to make the shift from Proof-of-Work to Proof-of-Stake consensus for its continued trading in Europe. Per the speakers’ notes, there is a greater “need to ‘protect’ other crypto coins that are sustainable,” not “the Bitcoin community.”

Following this discussion, another speaker inquired about the possibility of imposing a blanket ban on trading Proof-of-Work assets. The answer to the question was redacted from the acquired document to protect the “ongoing decision-making process”, so it is safe to say that it is a possibility.

A disheartening statement for crypto enthusiasts closed the meeting. Officials, when asked how the disappearance of Bitcoin might affect consumers, responded that such people “do not need additional protection measures.” In light of the ongoing crisis in Ukraine, this statement is near damning for people who rely heavily on Bitcoin as a financial lifeline.

4. Emirates Airlines Plans to Enter Metaverse and Launch Its Own NFTs

Bloomberg - April 14, 2022

Emirates Airlines is planning to take a step further into the crypto metaverse by issuing its own NFT collection. The Airlines’ NFTs will have both utility and collectible value, which is intended to “boost revenue and improve customer service.”

Emirates Airlines has long since flown the metaverse skies with its VR App on Oculus. The app allows users to virtually experience how it feels like to be an Emirate's passenger, from economy seats all the way to a first-class cabin.

The move may not be such a surprise given that the airline is based out of the United Arab Emirates, where the luxurious city of Dubai, considered a crypto capital by many, exists. As such, the UAE is one of the leading regions in blockchain and other novel technologies, as is evident by the recent Binance Blockchain Week that took place there.

Sheikh Ahmed Hakim, the CEO of Emirates, disclosed that the company is moving in tandem with the macro technology plan for the region, and this particular NFT project likely falls under the hood of the “Dubai Blockchain Strategy”. 

5. Hackers Commandeer Apple iCloud Technology in Latest Phishing Attacks

CoinTelegraph - April 18, 2022

Widely-known crypto wallet MetaMask has issued an official warning to Apple device users, indicating that their seed phrases could be vulnerable to phishing attacks if their iCloud backup features are enabled.

iPhone, iPad, and Mac users that utilize iCloud to back up their device storage will have their seed phrases stored in their backups by default. As a result, accounts with weak passwords are easily susceptible to credential leakages. Even those with sophisticated passwords are vulnerable to exploitation, as well, since the cloud itself presents an additional failure point to be attacked.

The warning from MetaMask was issued in response to reports from an NFT collector known on Twitter as "revive dom," who reported on Friday that this precise security vulnerability allowed hackers to access his wallet containing $650,000 worth of digital assets and nonfungible tokens (NFTs).

The message was later echoed by “Serpent”, the founder of DAPE NFT, who has 277,000 Twitter followers. In his tweet, he described in detail how the phishing attack occurred from his perspective. He initially received a series of fraudulent text messages from an impersonator of the Apple support team. The messages requested that he reset his Apple ID password and return a call to the phone number to verify his ownership of the account. The spoofed called ID was then able to phish the six-digit One-Time Password (OTP) required to access the wallet and steal its contents. 

MetaMask has since urged its users to disable iCloud backups for MetaMask. 

6. Goldman Sachs Eyes Alliance with FTX For Regulation and Public Listing Assistance

CoinTelegraph - April 21, 2022

According to Financial Times, Goldman Sachs CEO David Solomon met with FTX founder Sam Bankman-Fried this past March with the prospect of collaboration on a variety of topics of interest, including the mitigation of regulatory compliance in the U.S. Reportedly, Goldman Sachs indicated its interest in assisting FTX, especially with regard to the Commodity Futures Trading Commission (CFTC). Aside from regulatory assistance, Solomon also indicated his intention to invest in FTX in future VC rounds. 

This recent alliance between Solomon and Bankman-Fried underscores a deepened relationship between Wall Street giants and high-growth crypto firms. Apparently, Goldman Sachs has also demonstrated interest in assisting FTX with getting listed publicly, but other close sources believe that Bankman-Fried will still opt for private funding for the time being.

This potential partnership between Goldman Sachs and FTX follows FTX’s recent CFTC application, which demands that traditional brokers like Goldman be removed from the markets in which its crypto futures exist. 

7. MakerDAO Deploys on Layer 2 Network StarkNet to Enhance DAI Stablecoin Functionality

CoinTelegraph - April 20, 2022

The creator of the DAI stablecoin and DeFi project MakerDAO has recently announced its plan to deploy its network on StarkNet, a decentralized, zero-knowledge rollup (zk-rollup) solution for Ethereum. The move expands upon MakerDAO’s continued approach to developing a broader multichain platform, which began in March of 2021 with the introduction of DAI token bridges on optimistic rollup platforms Optimism and Aribtrum One.

This integration functions to reduce transactional costs and improve throughput speed on the MakerDAO network, both for the DAI stablecoin as well as Maker Vaults, the Maker Protocol’s collateral feature. It is expected to be fully operational in Q3 of this year.

This collaboration with StarkNet signals MakerDAO’s goal of reducing the unsustainable gas fees it suffers today and employing greater security over multiple blockchains.