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Digital Assets update

MicroStrategy Liquidates $103M Worth Bitcoin

Alongside Bitcoin’s drop under $25,000, it is important to recall MicroStrategy’s CFO’s comments. The comments were regarding the possibility of getting a margin call at $21,000 on the company’s huge BTC holdings.

On the May 3 earnings call, Phon Le, the firm’s new Chief Financial Officer, described the collateralization method on MicroStrategy’s Bitcoin position. He assured that they need not put extra cash into their holdings. As MicroStrategy prepares its first margin call, investors are at ease. This is due to the large liquidity collateral at the company. The company’s current capital is more than sufficient to support the present position and begin a fresh one.

Coin Center takes US Treasury to court over alleged financial spying

Coin Center filed a lawsuit against the Treasury Department in federal district court — challenging the enforcement of Section 6050I’s reporting mandate. Coin Center, a Washingon, DC-based non-profit blockchain advocacy group, filed a lawsuit against the United States Department of the Treasury for allegedly provisioning an unconstitutional amendment in the controversial infrastructure bill.

The 6050I amendment requires individuals and businesses to report information related to all incoming transactions worth $10,000 or more, which includes the sender’s name, date of birth and Social Security number. Coin Center, in its announcement, highlighted how the amendment affects the entire crypto community, including the NGOs that receive anonymous donations and nonfungible token (NFT) artists who will have to reveal their client’s personal information to the government.

True Global Ventures doubles down on Web3 with $146M ‘follow-on’ fund

The TGV4 Plus Follow On Fund was led by a group of 15 general partners who committed over $4 million on average (over 40%) into the fund.

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Twitter and Stripe roll out USDC payout program for creators via Polygon

On Friday, Twitter (NYSE:TWTR) and Stripe announced the rollout of crypto payouts for Stripe Connect. As told by the two companies, a select group of creators on Twitter will soon be able to receive their earnings on the platform in the form of the USD Coin (USDC) stablecoin.

Crypto exchange Kraken is set to launch in UAE as regional competition heats up

Kraken will open an office in Abu Dhabi and become the first exchange to offer UAE dirham trading after receiving a full license to operate in the country, Curtis Ting, Kraken’s managing director for Europe, the Middle East and Africa, told CNBC.

A sense of “greater regulatory clarity” is the reason for the influx of cryptocurrency businesses in Dubai and Abu Dhabi, according to Citi.

The Middle East is one of the fastest-growing cryptocurrency markets in the world, making up 7% of global trading volumes, according to Chainalysis.

US Treasury Dept sanctions 3 Ethereum addresses allegedly linked to North Korea

The United States Treasury Department has added three Ethereum wallet addresses to sanctions allegedly linked to the hacker group responsible for the theft of more than $600 million in crypto from nonfungible token game Axie Infinity’s Ronin sidechain.

The new HM Treasury regulations: The good, the bad and the ugly

As the 2021-2022 United Kingdom tax year finished on April 5, 2022, Her Majesty’s Treasury announced they were paving the way for the U.K. to become a global crypto asset technology hub. This could mean that the previously not particularly crypto-friendly U.K. is changing its strategy and trying its hand at making crypto investments more attractive. But what are the potential scenarios at play?

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Crypto weekly headlines

The world’s largest investment company BlackRock will allow clients to invest in cryptocurrencies

The world’s largest financial asset management company BlackRock is preparing to offer customers products for trading cryptocurrencies. This writes CoinDesk, citing sources.

📌 The company, which manages more than $10 trillion in assets for institutional investors, intends to enter the cryptocurrency space with the addition of “trading support for clients and then its own lending institution.” In other words, customers will be able to borrow from BlackRock against cryptocurrency collateral.

📌 One source said that BlackRock, whose customers include pension, trust and government funds, plans to organize cryptocurrency trading through its Aladdin (from “Asset, Liability, Debt and Derivative Investment Network,” meaning Asset, Liability, Debt and Derivative Investment Network) investment platform. The timing of the initiative’s launch remains unknown.

McDonald’s plans to open a meta-universe with a virtual restaurant

McDonalds plans to offer a virtual restaurant with real and virtual goods, as well as home delivery of virtual goods.

This is evidenced by the new trademark applications that the company has filed. What’s interesting is that McDonald’s often trolls the cryptocurrency community, urging them to take their jobs after every Bitcoin drop.

Tesla made $627 million on bitcoin investments

In 2021, world-renowned electric car maker Tesla earned $627 million from its bitcoin investments.

📌 According to the company’s financial report for the last year, the company spent $1.5 billion buying bitcoins. Tesla sold $128 million worth of coins during 2021, and as of December 1, the value of coins on the company’s balance sheet reached $1.99 billion.

📌 Thus, the investment in the digital asset generated a profit of $627 million, while the profit of $499 million remained unrealized.

“We will continue to follow our investment strategy to meet our liquidity and risk reduction objectives. It includes purchases of U.S. Treasury securities, equities and digital assets.”
“We believe in the long-term potential of cryptocurrencies as an investment vehicle and a liquid alternative to cash,” Tesla said in the report.

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Crypto Stats and news for beginning 2022

The trading volume on decentralized Ethereum exchanges exceeded $1 trillion in 2021. The segment leader Uniswap accounted for more than 64% ($686 billion). SushiSwap exceeded $156 billion, Curve – $84 billion.

The year 2021 opened a lot of L2 solutions to the cryptocurrency community to scale Ethereum. The total blocked liquidity in such protocols exceeded $5.5 billion by the end of the year. Arbitrum remains the segment leader ($2.4 billion). The top three are dYdX and Loopring with almost $1 billion and more than $550 million, respectively.

Bitcoin is ‘integral part of digital asset revolution’, says IMF

IMF economist Tara Iyer said that “Crypto assets such as Bitcoin have matured from an obscure asset class with few users to an integral part of the digital asset revolution”, adding this transition comes along with financial stability concerns.

In absolute terms, the overspills from Bitcoin to global equity markets are significant, explaining about 14% to 18% of the variation in equity price volatility and eight to 10% of the variation in equity returns.

Pakistan’s central bank reportedly wants to ban crypto

Pakistan’s finance and law ministries are yet to make a decision on a potential blanket ban on crypto in the country. The State Bank of Pakistan (SBP) is reportedly seeking to ban all cryptocurrency transactions in Pakistan.

Pakistan’s Sindh High Court reportedly held a hearing related to the legal status of cryptocurrencies in the country, in which several Pakistani authorities, including the SBP, submitted a document to the court, arguing that cryptocurrencies like Bitcoin (BTC) are illegal and cannot be used for trade. 

Tether has blocked 160 million USDT 

According to Etherscan, stabelcoin issuer Tether recently froze three addresses containing over $160 million worth of USDT.

A company spokesperson stated that, Tether has blocked 3 addresses with a total of $160 million at the request of law enforcement, and at this time they can’t disclose details.

Recall: Tether has previously stated on multiple occasions that it regularly cooperates with regulators to oversee suspicious accounts, perhaps this is just the beginning

Visa survey finds 25% of firms willing to accept cryptocurrency payments

About 25 percent of small businesses in nine countries would accept cryptocurrencies as a form of payment, according to the latest Visa Inc. survey.

📌 The survey was conducted among 2,250 small business owners from the United States, Canada, Brazil, Singapore, Hong Kong, the United Arab Emirates, Germany, Ireland and Russia.

📌 The researchers found out that digital money can become a universal means of payment. In addition, Visa surveyed 1,000 other adults in the U.S. and 500 adults in nine countries.

“I think people feel safer with cryptocurrencies,” said Visa global director of commercial sales and acquisitions Janie Mundy.

📌 While the use of bitcoin and other cryptocurrencies has increased globally over the past two years, and digital assets are popular with investors of all levels, they are still not a payment instrument.

The number of U.S. cryptoinvestors increased by 70% in 2021

According to the latest survey conducted by cryptocurrency exchange Huobi, the majority of cryptocurrency owners from the United States made their first crypto investments in 2021.

📌 The survey covered 3,100 U.S. adults and was designed to gauge respondents’ knowledge of cryptocurrencies, their sentiments and attitudes toward the crypto market. The study found that 68% of respondents first learned about crypto and started buying it in 2021. 21% of respondents started investing more than two years ago. 12% of Americans surveyed made their first crypto investments in the last four years, and 9% got into digital currencies more than four years ago.

📌 However, according to the survey results, Americans are not investing too much in crypto. 46% of those surveyed have invested $1,000 or less in cryptocurrency. 25% reported owning between $1,000 and $10,000 in digital currencies.

On-Chain Data Shows Number of ETH Holders At All-Time High

There are now over 68 million Ethereum addresses holding a balance, showing steady growth despite a declining price.

The number of Ethereum addresses holding ETH is at an all-time high. Transactions are also trending upward, with the number of daily ETH transactions at approximately 1.2 million.

Coinbase partners with Mastercard

Coinbase has partnered with Mastercard to simplify the NFT buying process for regular users. 

Coinbase believes that: “Just as we first helped millions of people access Bitcoin in an easy and reliable way, we want to do the same with NFT.”

To recap: Coinbase recently launched a peer-to-peer NFT marketplace called Coinbase NFT. And the aggregate trading volume of NFT has grown almost 400 times in a year.

UK will tighten the terms of cryptocurrency advertising

📌 The U.K. Treasury Department announced that it will take tough action against “misleading cryptocurrency advertising. Such campaigns will be brought in line with the rules applicable to traditional finance, “ensuring their honesty and clarity.

📌 Only organizations already regulated by the Financial Conduct Authority (FCA) or the Bank of England will now be able to carry out crypto-advertising campaigns.

📌 The statement notes that while about 2.3 million Britons own cryptocurrencies, awareness of the asset class is declining. In this regard, most advertising is aimed at retail investors with low knowledge, which makes them bear significant financial risks.

📌 The agency emphasizes that strengthening consumer protection will not be accompanied by any risks for innovation.

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Bitcoin’s death has been announced 42 times this year vs. 124 times in 2017

📌 The cryptocurrency market has seen high volatility in recent days. And the price of Bitcoin has crossed the psychological level below $50k this month.

📌 If you consider the current time of cryptocurrency market, the number of times Bitcoin was “seen off” was 42 times, which is 3 times more than the entire year 2020 (14 times).

Also Bitcoin just made an All-Time-High versus Turkish Lira, which is in a free-fall !

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How exchanges created the last week crypto market crash

The owner of exchanges don’t really care the price. THey are doing business to print profit/revenue in every month/quarter. Binance is a big player in all exchanges. The last crash at last Saturday was definitely created by Binance.

Open Interest was swept out bigly. In the eyes of traders, this was crash/market bloody/nightmare/Fear but in the eyes of exchanges, this was harvest after long time accumulation of overleverage of long positions. That happened one time per month no matter where/how price btc is going

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When will the Bitcoin network be able to process the same volumes as Mastercard and Visa?

Since its inception in 2009, the Bitcoin network has had an impressive 99.987% uptime. In that time, it has grown to the point where it processes billions of dollars worth of transactions every day.

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Huge 2 billion dollars longs liquidations together with unexpected 400 million dollars shorts liquidations

So basically #BTC dumped from $69k to $42k

As a result of the collapse of bitcoin to 42,000, liquidations of ~ $ 2.4 billion were recorded. In total, the positions of more than 380 thousand traders were taken out. This is not a record yet, of course, but in history, such powerful plums often led to a rapid reversal.

– Funding rate is totally negative.

– BTC took support on 50 Day Moving Avg.

– 2.5 billion Long liquidations.

– Most of the leverage positions are out.

It means it is time for bounce !
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ETHEREUM is well on its way to becoming one of the most productive assets in the world

The Ethereum blockchain began in 2015, offering 72M $ETH to over 10,000 #Bitcoin  addresses who participated in the ICO.

Fast forward to today, there is now 118M $ETH from block rewards across 135,734,686 recorded wallet addresses.

Of the initial ICO participants:

-81% of these wallets have only 1% of their initial balances or less

-9.5% have an unchanged balance (lost?)

-only 64 have actually increased their ETH holdings

A large majority of ETH is placed in smart contracts on the network. To be exact, it’s upwards of 26.86% of the supply of ETH.

That’s about 31,825,848 ETH, or $143B.

This is significant not only because of the mere size, but for what they are being used in…

These are decentralized applications that power virtual economies, stable coins, and many other things home to Ethereum.

Of that 26.86% in smart contracts, 77% is locked in DeFi.

That’s an astounding 24.5M ETH, representing 20.67% of the total supply.

Still not impressed? Let’s talk about exchanges next.

The supply of $ETH on exchanges is reaching levels near three year lows, a trend that has been continuing since late 2020.

According to Glassnode, exchange balances for ETH have recently hit as low as just 14,246,767 ETH…

That’s about 12% the total supply of ETH, a figure down from 17.3% at the start of the year

Low exchange balances suggest that investors do not have any plans to sell, driving illiquidity & volatility further into the mix

Next we can take a look at staking…

With the ETH 2.0 deposit contract amassing upwards of 8,394,818 ETH, months before launch.

That’s 7.08% of the ETH supply, and this is expected to grow significantly as APY increases following the merge, with transaction fees going to validators.

So… what do we have so far?

We’ve covered the amount of ETH in smart contracts, the amount locked in DeFi, ETH held across exchanges, and the total that is staked, combined making up around 45.94% of all ETH in existence.

What’s next? This is where things get even more interesting…

Did you know, more than 50% of the supply of ETH hasn’t moved in over a year?

The further we go back, the smaller this number gets.

As little as 20% of the supply has been recorded as being active since October of 2017

It’s fair to say the actual circulating supply of ETH is a lot lower than commonly believed.

This will be even more evident with EIP-1559 burning a mind-blowing 1,016,743 ETH in just three months since being initiated.

That is nearly 1% of the entire total supply burnt.

What about layer two?

There’s quite a bit of ETH there, as well. In fact, there is a respectable 5,807,590 ETH bridged on to layer two networks…

which is about 4.9% of the total supply of ETH

As rollups continue to develop we can expect this number to grow exponentially

Let’s now talk about people using Bitcoin on Ethereum.

Bitcoin holders are wrapping their coins on to Ethereum to participate in DeFi at a tremendous rate

As of this writing, there are 312,566 #Bitcoin on Ethereum. That’s a shocking 1.4% the total supply of BITCOIN.

& I haven’t even mentioned NFTs yet, which are breaking records every day

If we took just the floor price of bored apes, land in $SAND, and crypto punks we would reach the combined valuation of $6.38B (at current floor price)

That’s roughly 1,409,944 ETH, or 1.18% of all ETH

When you also start to consider the fact that there are 13,636 dApps, and more than 300,000 ERC20’s deployed on the network, I think you’ll start to get what I mean by a “𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘪𝘷𝘦 𝘢𝘴𝘴𝘦𝘵”

Let’s recap…

We have:

smart contracts – 26.86%
exchange balance – 6.8% supply decrease
staking – 7.08%
dormant (lost) – ~20%
eip-1559 – 4% (annually)
layer two – 4.9%
btc on eth – 3.45%
nfts – 1.18%

That’s about 74.27% of the supply we can expect to HODL, & likely an underestimate.

My point of these statistics weren’t to just shill ETH, but to point out the very simple laws of supply & demand at play.

Blockspace on ETH is highly sought after, & new users are joining the network every day.

Layer two will only help to onboard millions of users with low fees

We are very quickly moving from the mindset of “I buy ETH because it appreciates,” to the mindset of “I buy ETH to do things.” @croissanteth