Crypto Whales Made a Big Splash

THIS WEEK IN CRYPTO

The NFT market surpassed $40 Billion in 2021, according to a new estimate from blockchain analytics firm Chainalysis Inc. Nearly $41 billion worth of cryptocurrency was sent to two types of Ethereum smart contracts associated with NFT marketplaces and collections from the beginning of 2021 through mid-December. The popularity of NFTs exploded in popularity last year with record-breaking, multimillion-dollar sales and celebrities, such as singer Shawn Mendes, socialite Paris Hilton, and former first lady Melania Trump jumping on the bandwagon.

Cryptocurrencies led by Bitcoin and Ethereum slumped as part of the broader tech selloff, showing their status among investors as risky assets quickly dumped in moments of market stress. The falls were triggered by Federal Reserve minutes that showed officials are eyeing a faster timetable for raising interest rates this year. As rates rise, holding volatile investments that produce little income becomes less attractive compared with government bonds. Bitcoin declined 6% while Ethereum declined 9%. Read more here.

Crypto firm Sygnum hits $800 Million valuation in funding round, as venture capital firms pour record-shattering amounts of money into the crypto industry. The financing was led by Sun Hung Kai & Co., and also included investors like Animoca Brands and Canada’s Meta Investments, according to a statement from Sygnum. Sygnum, based in Switzerland and Singapore, plans to use the proceeds to develop new offerings including yield-generating products and asset-management solutions for institutional clients, the statement said.

China launches an app for its own digital currency as it looks to expand usage. The app is available on China’s Android app stores and Apple’s app store. It allows users to open a digital yuan wallet and spend the currency. The new app allows users in 10 areas including major cities Shanghai and Beijing to use it. But now everyone can download the app, highlighting how China is trying to get more people to use the digital currency. Read more here.

Mozilla has begun accepting cryptocurrency donations, including Dogecoin. By partnering with crypto payment processor BitPay, Mozilla donations get converted into dollars to avoid any volatility associated with cryptocurrencies. However, after the announcement, many users and followers had a negative reaction to the decision, criticizing the foundation for concerns about the environment and for pitching Dogecoin and trying to legitimize crypto.

Bitcoin beat all equities in 2021. Goldman Sachs posted its 2021 Returns Scorecard ranking for equity benchmarks, indices, and capital markets. Bitcoin came out on top producing returns of 60%. Bitcoin beat out returns on oil, top tech stocks, S&P 500, Nasdaq, 10-year Treasuries, and gold. Even though Bitcoin is down 32% off its all-time high set in October 2021, it seems that the "first-among" cryptocurrencies is also first among all other capital markets when it comes to return on investment, according to Goldman Sachs data.

Web3 developers are at an all-time high and growing faster than ever. 18k+ monthly active developers commit code in open source crypto and Web3 projects. 4k+ monthly active open-source developers work on Ethereum, 680+ open-source developers work on Bitcoin. This is according to the 2021 Electric Capital Developer Report. The major ecosystems of Bitcoin and Ethereum still dominate the developer community but Polkadot, Solana, NEAR, Binance Smart Chain, Avalanche, and Terra are all growing faster than Ethereum previously did. Read more here.

Square Enix Holdings Co. issued enthusiasm on blockchain gaming, NFTs and the metaverse, triggering an 8% jump in the game maker’s shares. The embrace of NFTs and in-game blockchain token economies to incentivize players to create more content will enable self-sustaining game growth, according to Square Enix President Yosuke Matsuda. He believes that there will be a certain number of people whose motivation is to ‘play to contribute,’ to help make the game more exciting. Read more here.

Bitcoin could hit $100,000 by mid-2022, according to the founder of crypto lending platform Nexo. He sees two big reasons for big gains this year. One is that institutions are building out their treasuries and filling it with Bitcoin, he said, without providing any examples. Firms such as MicroStrategy and Square are among known examples of companies that have bought massive amounts of bitcoin. Another reason is his prediction that cheap money is here to stay which will be a boon for cryptocurrencies.

Chainlink's price popped as Crypto Whales made a big splash. A group called Whale Stats tracks the top 1,000 crypto wallets on the Ethereum blockchain to see what these whales are up to. Over the past 24 hours, these wallet addresses have traded Chainlink more than any other cryptocurrency. According to Whale Stats, roughly 6% of smart contracts over the past 24 hours have been on Chainlink, up 33% from yesterday. This is promising, but it will need to happen consistently over a longer period to establish a trend, says Motley Fool's Jon Quast.

Crypto is only going to get more correlated with broader risk assets as it gets more institutional adoption, says Darius Dale of 42 Macro. Institutional investors have risk constraints and somewhere else in the equity market or credit markets they have to take down the risk and so if the bull case on crypto is institutional adoption, investors in the cryptocurrency space have to also accept the fact that it's going to get increasingly correlated to the price moves and the S&P and the Nasdaq and things of that nature. That's the reason why most crypto is also down today after the Fed announcement. Source(22:52)

Miami Mayor Francis Suarez proposed that cities sign on to a “Crypto Compact” to promote innovation, after taking over as head of the U.S. Conference of Mayors on Monday. Suarez, who has courted technology workers and embraced Bitcoin as mayor, said that cities should proactively fight for a crypto regulation that “embodies success” instead of turning the burgeoning industry away, citing China as an example of the latter. It wasn’t immediately clear what concrete actions Suarez could call for in such a crypto compact.