Gm degens, this Debrief brings to you a weekly curation of key updates & alpha from the cryptoverse.
It's time to dive into another wild week in the world of crypto! So, grab your coffee, strap in, and let's go! ☕
Estimated reading time: 5 minutes.
Here’s what’s inside…
1️⃣ Highlights from the Market 📈
2️⃣ Big Story of the Week ✨
3️⃣ Crypto Expert Takeaways 🎧
4️⃣ Crypto Twitter Roundup: Top 3 Threads 🔥
5️⃣ Trending NFTs: This Week's Standouts 🃏
1️⃣ Highlights from the Market 📈
State of the Market - Essential Updates You Need to Know
1. How the Top 10 Coins are Faring:
It’s been largely a red week with most coins bleeding week-on-week
BTC is down ~2% on the week
Among top10 alts, BNB has held up the best, down only 2%
2. The Crypto Fear/Greed Index:
We finally see the index in “neutral” territory after a while
It is at 52, which is the lowest in the current runup (post the March pullback)
This cooling down of sentiment is healthy for a sustained bull market
Source: Crypto Fear & Greed Index
3. Top Trending Category - Prediction Market Coins:
In a red week, prediction market projects have held up relatively well
Gnosis is the top performer, up ~7%
This is likely driven by a proposal for deploying it on Uniswap v3 passing with nearly 100% consensus
4. Funds Flow Summary: A Look into the Big Boys’ Activity:
TLDR; Record-breaking outflows from short-bitcoin amount to US$23m
Last week, digital asset investment products experienced a total outflow of US$54m, marking the third consecutive week of depreciating sentiment towards this asset category.
Bitcoin's outflows amounted to US$32m during the same period.
Despite a sharp uptick in positive sentiment within the US, evidenced by inflows of US$18m, short-bitcoin faced the highest ever recorded weekly outflows of US$23m.
Blockchain stocks also suffered a downturn in sentiment last week, with total outflows reaching US$7.3m.
2️⃣ Cracks in the Vault: 2023's Banking Crisis 🏦⚠️
Bank failures have been echoing through the financial system in 2023, leading to a growing sense of unease.
As the second largest bank collapse since 2008, the failure of First Republic Bank has sparked discussions about the industry's future. A look at the banking crisis reveals new complexities, with issues like rapid deposit growth and uninsured commercial deposits playing major roles in the downfall of several banks.
Ram Ahluwalia breaks the situation down on a recent Bankless Podcast episode. Here are the key takeaways 👇️
🎙️🔮 Bank Failures - A New Norm?
One question that everyone seems to be asking is: Is this the new normal?
The speakers touched upon the recent bank failures and how they have altered the banking landscape.
They shed light on the role of Swell, a decentralized staking as a service protocol, and urged listeners to take action.
This raises a critical question – are we witnessing a blip or a significant trend in the banking industry?
📉🏦 Unseen Fault Lines
A recurring theme in the 2023 bank failures has been the impact of uninsured commercial deposits and rapid deposit growth.
Banks, flush with deposits driven by quantitative easing, used these funds to buy securities.
When interest rates increased, these banks found themselves sitting on a ticking time bomb of unrealized losses.
💔💰 Silicon Valley Bank: A Case Study of Negative Equity
Silicon Valley Bank's negative equity in 2020, driven by losses in its hold-to-maturity portfolio, serves as a stark example.
The market's initial indifference quickly changed as the extent of the bank's issues became apparent.
The subsequent confidence loss has been further fueled by short sellers and rumors, indicating how fragile market sentiment can be.
🏙️📈 Commercial Real Estate: A New Player in Town
The low-interest-rate environment has lured a new player into the commercial real estate market, a domain traditionally dominated by banks.
However, factors like the work-from-home trend have driven up vacancies, increasing the risk of debt defaults.
Over the next four years, a staggering $2 trillion in commercial real estate debt needs to be refinanced, adding to the banking industry's challenges.
👮♂️📜 Stepping Up Regulation: A Look at the Future
With increasing bank failures, the call for tighter regulation grows louder.
While complete nationalization seems unlikely, a trend toward consolidation, with larger banks acquiring smaller ones, is becoming more prevalent.
This shift could have significant implications for the public interest.
📱💳 The Banking Sector's New Challengers
Big tech companies like Apple, Google, and Amazon pose a potential threat to traditional banking.
Their vast consumer base, capital, and technological prowess could enable them to disrupt the banking sector.
While this could pave the way for decentralized banking, it's crucial to also encourage smaller entrepreneurs and venture capitalists to ensure a competitive and innovative industry.
You can watch the podcast episode here 👇️
3️⃣ Crypto Expert Takeaways 🎧
Bite-sized alpha from an Illuminati Round Table chat
💵 How to Successfully Fundraise in Web3
In this engaging conversation, Ben and Kadeem discuss Balaji's recent $BTC bet, Ben's background in finance and crypto, and his experience with angel investing.
Here’s a snippet from this discussion 👇️
As a founder, when do you know the right time to raise?
• Ben begins with the basics explaining that you look to fundraise because you’re a startup and need capital to fulfill your roadmap.
• He also acknowledges the other side explaining that you’re an investment and need to generate a return on your capital.
• He says you need an investable business with a use case that will appeal to investors.
• Ben says that just because you can fundraise doesn’t mean you should.
• He talks about how VCs are constantly looking to invest and need to look at the project and its vision, if there is a long-term proposal in mind, what are the stakeholder's expectations, etc.
📑 Check out the full round table recap here
🎧️ Listen to a clip from this Twitter Space 👇️
4️⃣ Crypto Twitter Roundup: Top 3 Threads
Essential CT News & Alpha to Catch Up On
🎭️ Understanding BRC-20 Tokens: Behind the Hype
BRC-20 token talk is everywhere on CT. Read this to get caught up 👇️
This thread by arndxt explores the differences between BRC-20 and ERC-20 tokens, their functionality, storage, usability issues, current problems, and potential future developments.
BRC-20 tokens, residing on the Bitcoin blockchain, lack the smart contract capabilities found in ERC-20 tokens, limiting their functionality and interaction with other protocols.
Storage of BRC-20 tokens involves a workaround solution, which may lead to vulnerabilities in the face of future Bitcoin updates.
Usability issues such as high transaction fees and scalability problems are prevalent with BRC-20 tokens, further complicated by the 10-minute block approval time.
Despite being in early stages with fewer innovative projects, BRC-20 has already spawned over 5,000 tokens and is gaining industry recognition.
Current interest in BRC-20 is driven more by fear of missing out (FOMO) than by its technological advancement, which is still in a nascent stage compared to ERC-20.
With novelty, comes uncertainty and the need to prove itself
After $PEPE run-up to 1.5B MC, crypto latest craze is now onto a 800% pump for BRC20 tokens.
To find out the underlying gems, I dived into what kind of future BRC20 can bring us🧵 https://t.co/L6evh99TeY
— arndxt (@arndxt_xo)
May 8, 2023
🐸 Meme Coins: Unmasking the Power Play
Ever wondered about the hidden strings attached to your favorite meme coins?
hoeem breaks down crucial aspects related to the distribution and control of the “Ben” memecoin 👇️
The wallet "ben.eth" holds a substantial 23% of the circulating supply of a specific cryptocurrency. This single holder has significant influence and potential to impact the coin's value.
Apart from "ben.eth", there are four other interconnected wallets, namely "hot.izebel.eth" and "jezebel.eth", which hold 6% of the total supply.
A risk exists when a group of influencers who own a majority of the supply pump a low-cap meme coin, as they can decide to sell, leaving other holders at a loss.
There are inconsistencies between statements regarding presales of the coin. It's important to note that on-chain data doesn't lie and should be interpreted carefully.
Tools like Bubblemaps can help in understanding the distribution and potential risks associated with meme coins.
What happens when crypto influencers in a Ben “DAO” walk into a bar?
They promote a meme coin called $BEN whilst early investors hold 35% of the total supply.
It’s not a joke, let’s investigate: 🧵👇 https://t.co/edldW8kWIe
— hoeem (@crypthoem)
May 8, 2023
⚔️ Meme Wars: Episode 1
CMS Intern delivers on the memes as always. This one is a must-watch! 👇️
Meme Wars: Episode 1 — The Rise of $PEPE https://t.co/BArhpsP2Mn
— CMS intern (@cmsintern)
May 5, 2023
5️⃣ Trending NFTs: This Week's Standouts
NFTs that are hotter than your altcoins
The following collections have been creating waves this week (Stats Source: https://www.nft-stats.com/)
1) LO-FI PEPE NFT
7-Day Volume: $3.17M | NFTs Sold over 7 days: 6.8k
“We are a group of $pepe bulls taking control of the meme market. Our vision is to promote $pepe and support the memetic online art movement into the traditional art marketplace.”
Check out their website.
2) Walt's Vault NFT
7-Day Volume: $390k | NFTs Sold over 7 days: 2.3k
“Walt’s Vault is a magical, hand-crafted collection that brings a new character and a nostalgic art form to life on the blockchain. .”
Do you think the current banking failures will be bullish for BTC & crypto?