Kraken is on Track to Launch Bank 'Very Soon' Despite Regulatory 'Weird Place' (3 minute read)
Despite a challenging regulatory environment, Kraken is apparently moving ahead with plans to launch its own bank. This launch comes on the heels of Kraken's settlement with the SEC over its staking services. It's also in the midst of uncertainty surrounding Silvergate, one of the largest crypto banks, and its solvency. With one crypto banking option potentially being lost in Silvergate, Kraken could be a welcome addition to the ecosystem's banking options with solid banking relationships and a "diversified group of banks all around the world". |
Tether's USDT Stablecoin Market Share Rises to Highest Level in 15 Months (2 minute read)
Tether's USDT has surpassed 54% market share among stablecoins, and it has gained $5 billion in market cap since mid-February bringing it to $71.6 billion. These gains come mostly at the expense of rival stablecoin BUSD, which came under scrutiny when Paxos was ordered to stop minting BUSD. The stablecoin subsequently shrunk from a $16 billion market cap to below $9 billion. Stablecoins have become increasingly important in the crypto economy, with a peak market capitalization of $188 billion in May 2022. Even though Tether is facing scrutiny from regulators due to its lack of transparency, USDT remains the most traded cryptocurrency, with a 24-hour trading volume of $27 billion. |
Amazon NFTs Will Be Tied to Real-world Assets, Token Possible (2 minute read)
Reports surfaced yesterday that Amazon's rumored NFT marketplace is scheduled to launch on April 24. While an Amazon spokesperson declined to comment on the matter, two sources say the marketplace will launch by this May at the latest. It will reportedly be marketed to Amazon Prime customers in the US first. There is very little known about what the marketplace will actually provide, but there is speculation that the NFTs will be tied to real-world assets. While it is unclear what protocol will be leveraged or if a token will be involved, one source stated referred to the structure as a "very walled garden". |
Tornado Cash Fork, Privacy Pools, Deployed on Optimism Testnet (3 minute read)
Privacy Pools, a successor to coin mixer Tornado Cash, was recently deployed on Optimism's testnet. It allows users to make anonymous transactions and uses zero-knowledge proofs to prove that funds in the anonymous transactions are not connected to criminal activity. The protocol is still experimental code and has not been audited, but it gives users "the option to help regulators isolate funds, without revealing their entire transaction history. |
Thoughts on Crypto Risk Premia (2 minute read)
The thread discusses the idea of risk premia and how to assess it in crypto in light of the abundant counterparty and rug risks in the space. While the 20% yields you run across in crypto could sound enticing, you have to make sure and account for the fact that counterparty or rug risk is relatively extremely high. Often, if you look at investments from this perspective, the adjusted yield would be lower than what you could expect in the traditional investment landscape. The thread also discusses how to find alpha or inefficiencies while remaining risk-averse and not overexposing oneself to illiquid trades. |
How to Survive in Crypto Long-Term (Without Getting Lucky) (7 minute read)
This article lays out strategies for making it in crypto in the long-term. In order to make it in crypto, it's important to understand that it's a PvP landscape and there's no one out there to save you if you make a mistake. BTC and ETH are generally the safest bets for the long-term investor, but outside of that, long-term investing in crypto has generally not been a great strategy. For example, very few tokens that were in the top 100 coins by market cap 5 years ago still are now. Since crypto markets are still not very efficient, you can sometimes 10x and 100x on smaller projects, but these outcomes are rare. Because of this, small bets give traders the chance to make these multiples without risking their entire portfolios. While this article just outlines one person's opinion, it's a good reminder to avoid FOMO and take a more logical approach to investing in crypto. |
Ethereum Developers in Conference at the "Wild West" are Warming to Compliance (4 minute read)
At ETHDenver, it was clear that developers and founders have become more accepting of the need to comply with rules and regulations in order to survive. Projects such as Lexproof, Yug Network, kycDAO, and Opolis are all working to increase compliance in crypto and account for things like KYC and accredited investor verification. While some companies that invested early in tackling the hard problems around compliance are reaping the rewards now, others such as stablecoin projects, are under scrutiny by the SEC. Although the legislative branch is unlikely to pass new laws for the digital asset industry in the near term, the SEC's aggressive stance will likely remain and the crypto space is adapting to the more adversarial regulatory environment. |
Coinbase Purchases One River Digital in Move Into Asset Management Business (2 minute read)
Coinbase has purchased One River Digital Asset Management, a subsidiary of a hedge fund named One River Asset Management founded by Eric Peters. The new company will be renamed Coinbase Asset Management and Peters will serve as its CEO and chief investment officer. The purchase is part of Coinbase's plan to bring more institutional capital into the crypto space. Coinbase previously invested in One River Digital and partnered with the firm at the start of last year to offer a platform for wealth managers to provide crypto exposure to their clients. |
Shocking New Case Filed by the SEC (1 minute read)
The SEC has recently filed a case alleging that selling crypto mining equipment and offering hosting services for it constitutes an "investment contract" under Howey, although the SEC has never issued guidance on this before. This is just the latest in a growing line of cases where it seems the SEC is attempting to extend its jurisdiction. |
The Economies of Crypto (6 minute read)
Cryptocurrencies like Bitcoin and Ethereum are really more like digital nation-states than traditional technology and can be thought of as economies, with intrinsic and extrinsic value in their own right. In this essay, Raoul Paul breaks down the dynamics of these economies. |
A Tweet to the SEC Staff from a Former SEC Staffer (2 minute read)
This thread breaks down how the SEC has been given the authority to exempt entire classes of securities from federal securities laws and has used it in the past. This same authority could be used to craft a tailored regime that protects investors while preserving capital formation in the crypto industry and is what the rest of the world is doing. |
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