Issue #38

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.2T, down (8.7%) from last week.

Below is the weekly performance of the top crypto and NFT assets. 

News Headline Highlights

• Societe Generale issued their first structured product as a Security Token directly registered on the Tezos public blockchain. This transaction completes a new step in the development of Societe Generale – Forge, a regulated subsidiary of Societe Generale Group, aiming at offering by 2022 crypto assets structuring, issuing, exchange and custody services to the Group’s professional clients.
• Big investors continue to feel bullish on Bitcoin, with $114m of new funds allocating to digital asset products last week alone. The cash flowed into big funds for accredited investors, such as Grayscale, 3iQ, and 21 Shares. Of this, $104m was allocated to Bitcoin only investment products.
• The US Securities and Exchange Commission (SEC) has sued Bittrex for failing to register as an exchange, broker, or clearing agency. The suit asserts that several assets that were listed on Bittrex, including Algorand and Dash are unregistered securities.
• Coinbase received necessary licensing to launch an exchange based in Bermuda and plans to launch the product imminently. This came shortly after CEO Brian Armstrong commented that crypto firms will develop in "offshore" havens unless the U.S. creates "clarity about regulation" for crypto.
• Additionally, Coinbase CEO Brian Armstrong said that the company is preparing to go to court to fight back against the US Securities and Exchange Commission’s (SEC) upcoming lawsuit on failing to register (despite Coinbase asking for a pathway to register).
• US Securities and Exchange Commission (SEC) Chairman Gary Gensler faced the House Financial Service Committee last week. During the hearing, Genlser was pummelled for the SEC’s lack of regulatory clarity and guidance provided to date and their methods of regulating via enforcement actions. A highlight (lowlight depending on frame of reference), included Gensler failing to answer a direct question from Committee Chair Patrick McHenry on if ETH is a security.

 Crypto Asset Project Updates

• Andreessen Horowitz is working on an Ethereum layer two scaling protocol called Magi that is built on the Optimism Stack. An April 19 Tweet from a16z engineer Noah Citron explained Magi is written in the programming language Rust and will “help improve the client diversity and resilience of the entire OP Stack ecosystem.”
• MakerDAO approved a proposal to transition up to $500 million in USDC to Coinbase custody for 2.6% yield. This latest approval is part of implementing an earlier decision to transfer up to $1.6 billion USDC to Coinbase to earn yield. 
• Global sportswear brand Nike will soon release its first non-fungible token (NFT) sneaker collection on its recently launched .Swoosh platform.

Regulation Station

• European Union lawmakers have approved MICA (EU Market's in Cryptoassets), a comprehensive digital currency framework. This is a big deal and will open the floodgates to startups and incumbents alike who want to operate business in the blockchain/crypto arena with regulatory oversight that is sensible.
• Members of the U.S. House of Representatives are circulating a new draft bill to provide a comprehensive regulatory framework for stablecoins in the U.S. 
• The US Securities and Exchange Commission (SEC) altered a proposed rule to make it more explicit that digital-asset exchanges and decentralised-finance platforms must register with the regulator. Magnet Quick Take: This rule has largely been deemed impractical to require a piece of global software to register with a regulator and in the absence of doing so from excluding access to it when it operates on a global and decentralised infrastructure.
• Canadian securities regulators in February gave a 30-day deadline for unregistered crypto trading platforms operating in the country to commit to a so-called pre-registration undertaking. Firms are required to follow tougher regulations on segregating customer assets and prohibited from offering margin or leverage to users in Canada.

The Weekly Deal Room

• Unchained Capital, a bitcoin financial services company, raised $60m in their Series B led by Valor Equity Partners.
• Berachain, a layer 1 blockchain focused on decentralised finance (DeFi), raised $42m at a valuation of $420.69m in a Series A led by Polychain Capital.
• Karate Combat, which mixes CGI broadcasts with a crypto-backed fan engagement system, raised $18m in a Seed Round led by BITKRAFT Ventures.
• MetaGravity, a UK-based virtual world and metaverse infrastructure developer, raised $9.5m in Seed funding.
• Fractal, who are building out a platform that facilitates more transparent clearing and settlement in digital assets, raised $6m in a Seed Round led by Hack VC.
• Swaap, a market neutral automated market maker, raised $4.5m in a Seed Round led by Signature Ventures.
• Yoz Labs, a web3 notification platform, raised $3.5m in a Seed Round led by Electric Capital.

Metric of the Week

The number of unique addresses holding more than 1 BTC or more than 10 ETH has continued to grow throughout 2022 and early 2023 despite the recent negative market sentiment. Growth such as this continues to validate the hypothesis that new users and holders continue to be attracted to the value proposition presented by crypto assets, particularly the two premier assets, Bitcoin and Ethereum.

Source: Coinmetrics