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OCT 22, 2023

G20 adopts a new crypto regulation roadmap. Yuga Labs restructures. Solana on the rise and Avalanche losing ground.

by Meta Investor

I have created a long piece on the current escalating geopolitical conflict, but it was way too long to combine with the market news, so it’s coming in a few days as a separate post.
Stay tuned and let me know your feedback at: feedback@metainvestor.gg

The G20 adopts a new regulatory roadmap for crypto assets

The G20 Finance Ministers and Central Bank Governors (FMCBG) adopted a new regulatory roadmap for crypto assets (Communiqué, article, paper, article).
  • The roadmap was proposed by IMF-FSB in their Synthesis paper (paper).
  • This paper outlines the risks of missing regulations in the crypto space, like market manipulation, insider trading, or monetary and fiscal policy effects.
  • Recommendations should be mostly finished by 2023, and implemented by the end of 2025.
  • IMF plans to use its global outreach to encourage more consistent regulatory standards across the globe.
  • Overview of global regulations by complyadvantage.

Highlights from the paper

  • Mandatory Registration: All crypto exchanges must register with the regulatory body and follow standard financial reporting.
  • Issuance Oversight: Approval required from the regulatory body for new digital currency/token issuance.
  • Wallet Monitoring: Wallet providers to implement KYC and AML procedures; suspicious transactions to be reported.
  • Consumer Protection: Clear information on risks and benefits of digital currencies mandated for consumers.
My take: Many builders around me keep saying the same. We don’t mind the regulations as long as it is transparent and understandable. The worst thing is the uncertainty and governments taking U-turns on the regulation.
This feels like a good step forward in reducing the uncertainty and proposing clearer guidelines. But from reading the paper there’s still a lot of ambiguity and depends on how the individual countries will interpret the guidelines.

Yuga Labs restructures

Yuga Labs fires people in an attempt to narrow down the focus, and start working closely with the community again (post, CEO announcement, @yugalabsgaming).
  • The main focus will be —> Otherside
  • “We are going all-in on our Otherside strategy. Every ongoing digital connection will be part of and reinforce the Otherside evolution. This encompasses gaming, entertainment experiences, interactive social connections, and a range of unique initiatives coming from Eric Reid and team.” ~ Daniel Alegre, CEO of Yuga Labs

Communities

  • BAYC: keep empowering “Made by Apes”, the whole community ecosystem, and APeFest. Plus, “we’ll also be launching a major, versatile, and continuous gaming experience scheduled for 2024 and beyond.” —> Otherside.
  • CryptoPunks: working on education, engaging experiences, and streamlining Punks app.
  • Meebits and 10KTF: these teams will become part of Otherside. “Meebits is a collection built for the metaverse, while the 10KTF shop will finally have a permanent home.”
  • Otherside: The Otherside team will build out new gaming experiences into 2024 through third-party partnerships. 2024 will be the year we will showcase the Otherside platform with live experiences that our communities and partners will love.
My take: I have said it a few times, I feel Yuga’s focus was too scattered and we have seen it on the LOTM and Forge experiences and feedback from the community —> very bad, even for a beta.
I’m still bullish on the Otherside and keep buying land as the price plummets, but so far I’m also disappointed with the LOTM and “Ponzi” type of game.
Bringing more of Yuga’s extensive IP into the Otherside will be challenging, but also a strong catalyst, bringing the land price much higher - there’s still only 10k land in circulation with another 10k planning —> potential airdrop to people interacting with the ecosystem.
For APE coin, I DCA, but low amounts since I see it still too inflationary compared to the value behind. In the long term, I’m bullish on both ApeCoin and Otherside.

BTC jumped 10% on fake Spot ETF approval news (article)

  • Cointelegraph published this information on X. After a few hours then deleted the post and wrote an apology to the readers (article, Post).
  • We discussed what could the Spot ETF approval mean for the price of BTC (here)
My take: While it is dangerous to see how easily the market can be manipulated, a 10% movement in a single day is happening in traditional markets as well as investors react to important news, like earnings calls or employee strikes.
Both Amazon and Apple saw movements of more than $160B on both sides.
I’m still bullish on the future BTC outlook and the potential institutional inflow once the Spot ETF gets really approved - probably Q1’24.

The US Government still holds $5.6 Billion (194k BTC) in seized Bitcoin (dashboard, article)

  • Over the years, the US government seized a substantial amount of crypto assets.
  • Most important are the events of Silk Road, Bitfinex hack, and recently FTX holdings.
  • The US is gradually selling these positions, but when the court rules in favor of liquidating the assets, like in the case of FTX, it needs to happen with as low an impact on the markets as possible.
  • That means the government shouldn’t dump all the holdings at once and therefore crash the market. Rather they follow a process and sell it over time → before in the form of auctions, now through exchanges.
Source: https://dune.com/21co/us-gov-bitcoin-holdings
Source: https://dune.com/21co/us-gov-bitcoin-holdings

Q3 reports are in

21 Shares gives the overview of the market as a whole (21 Shares report) and Messari focuses on individual projects (Reports, SOL, AVAX).
  • The narrative remains: Scaling solutions over Ethereum Killer; RWAs; Decentralization
  • Solana is on the rise. Market cap +17% QoQ and TVL +32% QoQ. NFT mints +316% QoQ.
  • 87.5% of the NFT mints were free collectibles by DRiP, and regarding the market cap, FTX/Alameda SOL reserves are yet to be liquidated over the next 2 years.
  • Avalanche is losing the ground. TVL -28.8% QoQ, total daily transactions -45% QoQ (C-Chain drives the decline, Subnets are up by 5% QoQ)
Source: https://messari.io/report/state-of-solana-q3-2023
Source: https://messari.io/report/state-of-solana-q3-2023
Source: https://messari.io/report/state-of-avalanche-q3-2023
Source: https://messari.io/report/state-of-avalanche-q3-2023

X to start charging users $1 annual fee (post, article)

  • Not A Bot subscription model should start in New Zealand and Philipines (high concentration of bots)
  • Within the first test period, existing users won’t be affected. New users who don’t subscribe will be able to only read posts, watch videos, and follow accounts.

Ripple wins again (article, article, article)

  • On Thursday, the SEC dropped its lawsuit against Ripple executives.
  • The SEC also voluntarily dismissed the case with prejudice, meaning it cannot be filed again.
  • However, some analysts believe the SEC dropped the charges to avoid a lengthy trial and to bring the case before an appeals court faster
Binance loses another C-suite but finds EUR fiat partner (article, article)
Mastercard demonstrates interoperable CBDC for trusted Web3 commerce in Australia and beyond (press release)
Tether has frozen 32 addresses, containing $873k, that were found to be linked to illicit activity in Israel and Ukraine (announcement)
Ember Sword, once a very hyped game opened registrations for their Alpha playtest that will happen between 27th and 29th October. Registration: https://embersword.com/ultra-deep
Metalcore is launching a pre-registration for their open Beta, you can claim a free NFT vehicle on signing - https://www.metalcore.gg/
On Wednesday I’ll publish the one about World War III risk, whether to panic, and how I adjust my portfolio based on the news.
Wish you a great week ahead.
Matt.
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