Crypto has been consolidating in the $34–37.5k range after breaking $34k on Monday. Given the lack of meaningful bounce in previous bouts of >10% market sell-off (11/16, 12/3, 12/30), it’s been a painful grind lower, with each rip an opportunity to sell (that never came). Bearish sentiments are further reflected in the derivatives markets; on the Futures side, March basis is trading at 4–5%, whilst June basis is trading 6–7% across major CEXs; on the options side, 25d skew remains at firmly positive territories, although coming off from local top on 1/24 (30d skew @ 2.5)
- Given extended price action + bottoming technical indicators (e.g. RSI close to last Mar’20 level) + chatters of TradFi funds taking risk off their books (especially platform funds, e.g. Millenium, P72), many are viewing the next couple of weeks as potential dip-buying opportunities. From investment perspective, it’s hard to not perceive 50% drawdown as good entry-levels, but we remain cautious given lack of perceived pain (vs. Mar’20 or May’21) and still-elevated open interest (BTC OI = 406k BTC), and think further downside is in play.
On the ETH and alts side, most underperformed bitcoin (exception: $ATOM), and bearish sentiments are reflected in their perp funding rates (3d average annualised funding rates: SOL -12%, FTM -16%, MATIC -31%, DOT -17%, etc.)
On the TradFi side, risk assets ($ES, $NQ) also found some base, but remain ~9% and ~15% off the highs. All eyes on FOMC meeting tonight, and given high correlation, crypto market would continue to look at TradFi for directions.
It’s still a BOOOOOOL market on NFT side; NFTs have been rather unaffected by macro uncertainty, and have held well in ETH terms (narrative in force: NFT are ~luxury watches)
- OpenSea monthly volume continues to set new ATH, with MTD volume of $3.77bn (Chart 2), but trending downwards (Chart 1); similar story with trade counts (Chart 3)
- Floor prices of both blue-chip and ‘normal’ NFT projects (Chart 4, 5, 6) also well-supported in ETH terms; BAYC especially saw 28% increase in floor price following rumours that Yuga Labs may be fundraising at $5bn valuation
- Google search volume affirms interest in NFT as it hits ATH (Chart 8)
1. Crypto-native ($SPELL, $LOOKS)
Abracadabra to introduce NFT-backed loans
- What is Abracadabra: a lending/stablecoin protocol, 13th largest DeFi protocol by TVL (Source: DeFillama), and its stablecoin Magic Internet Money ($MIM) is #32 by marketcap and 6th largest stablecoin
- What are they introducing: Private loans backed by NFTs, where collateral (NFT) would be transferred to the loaning party in case the loan is not repaid on time. Financialisation of NFT is being explored by both CeFi (3AC and Nexo launched NFT lending desk, Kraken to develop NFT marketplace offering token-backed loans) and DeFi participants (NFTi, FloorDAO, Bami) with varying approaches (p2p, common pool, etc.)
LooksRare continues to shine
- LooksRare continues to post smashing trading volume (Chart 9), largely driven by wash trading (Chart 10). At 622% APR, $LOOKS token prices have been supported despite broader market sell-off. However, staking emission will be cut by >50% starting 2/9 and likely to see further downside on $LOOKS price next week
2. Web2 companies venturing into Web3
Twitter launches support for NFT profile photos
- What’s the deal: the NFT profile photos have hexagonal border (vs. round border), but of course sneaky Twitter users have right-click-save the same image, and mint a visually identical NFT, and use that as profile picture. Currently, the verification is done via OpenSea API, i.e. a third party verification, instead of interacting directly with blockchain
- What else is Twitter doing: Twitter has been at the forefront of integrating Web3 and creator monetization to their platform, including tipping in crypto, etc. Twitter is also growing its in-house crypto team to explore NFT tooling, membership tokens, DAOs, etc.
Youtube is exploring NFT features for video creators
- What’s the deal: Youtube is looking to Web3, and that they’re focused on expanding the YouTube ecosystem to help creators capitalize on emerging technologies, including things like NFTs. It marks the first time Google is becoming involved with NFTs.
PleasrDAO is raising $69 million for its treasury at purported valuation of $1bn
- What is PleasrDAO: art collecting DAO; it collects “culturally significant” NFTs, with collection including genesis piece of pplpleasr’s Uniswap v3 NFT (below), Wu-Tang Clan album, Doge NFT, etc. PleasrDAO also made headlines when they fractionalized Doge NFT on fractional.art, bringing $4mio purchase to implied valuation of $700mio (currently at $51mio)
Cyber raises $6.7mio, led by Variant and participation from 3AC, TCG, and many other NFT collectors (e.g. Cozomo de’Medici, Art Blocks Founder, etc)
- What is Cyber: startup that builds virtual showrooms for NFTs
Autograph raises $170mio in Series B
- What is Autograph: a sports and entertainment NFT platform created by American football player Tom Brady
Carry1st raises $20mio in Series A led by a16z, with participation form Google and Avenir, and founders of Sky Mavis and YGG
- What is Carry1st: African gaming publishers that partners with global content owners, with value proposition that Africa is the fastest growing mobile gaming market in the world, driven by a population of 1.3 billion and an average age of 19; Africa is expected to have 2x the number of gamers than in North America in 5 years