Investment developments
Broader financial markets were eagerly awaiting the Federal Reserve’s (Fed’s) next moves following the collapse of three banks over the past week. On Wednesday, March 22, the Fed meeting finally took place, and it delivered 25 bps as expected by market experts. However, the tone of the Fed left the door open for a softening in future rate increases.
Prior to the meeting, Bitcoin (BTC) sold off a bit, but it managed to recover, rallying to a nine-month high of above $28,000. Meanwhile, the technical metrics that are often used to predict BTC’s path are showing bullish signals, indicating that the world’s largest crypto will continue climbing even further. Namely, the analytics firm Glassnode hosts a “Recovering from a Bitcoin Bear” dashboard which tracks numerous signals that indicate we’re entering a new bull market.
At the time of writing, BTC is trading above its 200-day Simple Moving Average (SMA). This usually indicates that the price momentum is shifting in a more positive direction. Similarly, when it comes to the number of new BTC address creations moved above its 365-day SMA, indicating that the demand for BTC is growing.
Another important indicator is the Realized Profit/Loss (P/L) Ratio, which indicates market profitability. At the time of writing, the 30-day SMA of BTC realized P/L was above one. When it is above one, that means that the BTC market is realizing more profits (in USD) than losses. Glassnode defines this metric as: “<…> this generally signifies that sellers with unrealized losses have been exhausted, and a healthier inflow of demand exists to absorb profit taking.”
Finally, according to data from CoinMarketCap, the global crypto market cap stands at $1.18 trillion, a 1.72% increase from March 23 to 24. Meanwhile, the total crypto market volume over the last 24 hours (March 24) is $54.39 billion, a 19.68% decrease.
The Crypto Fear and Greed Index, which uses six measurements to assess the current sentiment in the markets, shows the emotion of greed with a value of 61. The index rates market emotions from 1, extreme fear, to 100, extreme greed.
Crypto Fear & Greed Index. Source: Alternative
These recent readings suggest that risk appetites in crypto markets are strong. Similar to the previous week, the crypto markets have seen a lot of volatility, but the price action was overall more positive. We would still warrant caution as markets are not out of the woods yet.
Crypto Exchange developments
The US-based crypto exchange Coinbase can’t seem to catch a break when it comes to its relationship with the US Securities and Exchange Commission (SEC). Namely, Coinbase is facing a lawsuit from the SEC over alleged securities violations tied to its staking, asset listing, and wallet businesses. This lawsuit threat came in the form of the so-called Wells notice on March 22. Note: Wells notices are sent out by regulators prior to taking legal action against an entity.
Furthermore, the New York-based firm Paxos also received a Wells notice thanks to its issuance of Binance USD (BUSD), which is recognized by the SEC as an “unregistered security.”
Following these developments, Brian Armstrong, Coinbase CEO, took to Twitter to vent.
While we understand that this is all part of the journey to reforming our financial system, we are right in law, confident in the facts, and welcome the opportunity for Coinbase (and by extension the broader crypto community) to get before a court.
While SEC keeps pressuring exchanges, it seems that others are looking to move to more favorable regulatory environments. Thus, the Australian exchange Independent Reserve is eyeing a move to Hong Kong, thanks to its favourable regulatory framework which is set to launch in June of this year.
There are predictions that Hong Kong may become the central hub for the crypto industry. At the moment, it houses over 800 companies in the fintech niche with 10% of those operating in the crypto industry.
Web3 developments
According to data from DappRadar, trading of non-fungible tokens (NFTs) increased during the first quarter of 2023, amassing $311 million so far. Trading in virtual land, according to the report, sits at an all-time high, with 147,000 trades made so far, mostly through platforms such as Otherside and MG Land.
Otherside boasts a 237% increase in trading volume compared to the same period last year. The highest value land NFT sold was worth 186 ETH (roughly $2.85 million at the time of the trade). Finally, the report concluded that blockchain gaming and metaverse projects have seen $417.5 million of investments in Q1 2023.
Equally important, Paris Blockchain Week (PBW) is in full swing, the world’s largest conference tackling all things blockchain, crypto, and Web3. Almost all important industry experts and players convened in Paris this week to discuss the future of crypto. Among the various highlights, the discussions on how to CEX correctly in today’s environment and Metaverse regulation could potentially have the biggest sway on the future of Web3.
DeFi developments
Another Flash Loan Attack (FLA) took place in the decentralized finance (DeFi) space this week. This time Euler Finance was the victim of the attack, suffering $195 million in damages. This Ethereum-based lending protocol suffered losses over six transaction carried out by two attackers, according to MetaSleuth. Allegedly, the attackers used a multichain bridge to transfer funds from BNB Smart Chain to Ethereum in order to attack Euler.
Euler Labs responded to the attack via Twitter:
We are aware and our team is currently working with security professionals and law enforcement. We will release further information as soon as we have it.
DeFi continues to be affected by various malicious actors, exploits, and hacks, which is unfortunate for the entire crypto space. Over the last year, DeFi has lost $4 billion thanks to various hacks and exploits.
Tech developments
Microsoft and blockchain are usually not used simultaneously in the same sentence, but things seem to be changing. According to screenshots shared across the web, Microsoft added code that would incorporate a non-custodial crypto wallet into the company’s default Edge browser. The screenshots show a user interface of the wallet and the ability to buy crypto using Coinbase and MoonPay.
While these pre-production renders of a possible crypto wallet do not automatically guarantee that Microsoft will actually complete and include a wallet in Edge, it is still interesting to see what browser development might look like in the future.
While blockchain still enjoys huge popularity, AI-related technologies are the talk of the town in 2023. ChatGPT is seemingly revolutionizing industries left and right, and now Oncyber, a 3D world-building platform in the NFT space is looking to utlize it. Namely, the platform is apparently developing an AI-powered tool called Magic Composer that lets users customize their environments via text commands.
Users will be able to change almost any aspect of the environment by simply typing in the commands. The demo showcased adding statues, adding artwork, changing frames of pictures, changing the sky, etc. At the moment, we’re still awaiting public access to this innovative technology.
