Welcome to this 3rd edition of our Chain Reaction newsletter for the week commencing the 3rd December 2021. In the news this week we see a new local crypto ETF being announced, a new Ethereum proposal to reduce gas fees, and talk about Solana adoption potentially outgrowing Ethereum. We also kickstart our Getting Started in DeFi series with part 1 focusing on what articles, videos and podcasts to watch. All that more in the newsletter.
What you can expect in this newsletter
In the News
Videos of the week
Charts and Data
Around the world of social media
Education
In the news
AFR - Graham Tuckwell ‘quietly hopeful’ of winning crypto ETF race - ETF Securities were the first to launch a gold based ETF in and may well make a name for themselves with the first bitcoin ETF listing in Australia. They are looking to do so on the Chi-X exchange rather than ASX to get out to market quickly. First spot Bitcoin and Ethereum ETFs in Australia will certainly make some waves so make sure to check it out and register your interest here.
CryptoNews - Vitalik Buterin Proposes New EIP to Tackle Ethereum’s Sky-High Gas Fees - A new Ethereum Improvement Proposal (EIP) from founder Vitalik Buterin aims to tackle the skyhigh gas fees required to perform transactions on the Ethtereum network. The proposal aims to add a limit on the total transaction calldata and by doing so will see transaction costs (currently at USD 44) reduce by up to 5 times. This is a stop gap solution whilst the move to Ethereum 2.0 and its proof of stake model is in the works.
BetaShares - Black Friday sale - In this week's edition crypto insights from BetaShares we see Justin Arazdon take into account the impact on crypto markets thanks to Black Friday sales as well as the emergence of the new Covid-19 strain with Omicron. News includes more details on Bitcoin City in El Salvador and regulation coming out of Europe thanks to "The Regulation on Markets in Crypto Assets (MiCA)". All of this and Glass-Node metrics analysis as well as alt-coin news are in the full note.
TheBlockCrypto - Tiger Global leads $130 million raise for open banking startup TrueLayer - open banking firm TrueLayer closed $130 million which comes not long after rising $70 million in April this year. It enables bank-to-bank payments and could potentially cut out the need for card payments for users onboarding to crypto companies.
CryptoPotato - Invesco Launches Bitcoin Spot ETP With German Stock Market Operator - The Deutsche Bourse announced that Invesco would launch a spot bitcoin ETF on their Xetra digital stock exchange. It has an expense ratio of 0.99% and will go by the ticker BTIC. This is in contrast to the US where the SEC has approved a futures not spot Bitcoin ETF and in Australia, ASIC has approved a spot Bitcoin ETF but none have yet listed on the exchanges.
CoinTelegraph - Two Bitcoin funds launched in Singapore by MAS-regulated fund manager - In this article it highlights that Fintonia Group (a Singapore based fund manager) has launched 2 institutional grade Bitcoin funds in order to provide simple and secure exposure to bitcoin for professional investors. MAS is the Monetary Authority of Singapore and reaffirms Singapore as a global crypto centre.
NewsBTC - Solana Could Become The Next Bitcoin, According To FTX’s Sam Bankman-Fried - In this article, FTX exchange founder Sam Bankman-Fried highlights how Solana could outgrow Ethereum and become the next bitcoin given its plan to accommodate mass adoption. Given it has a plausible roadmap to scale to millions of transactions per second, Bankman-Fried sees that it could "become the base for other more DeFi applications in the future."
CoinDesk - DeFi Protocol Omicron’s Token Jumps 10-Fold After Namesake Covid Variant Emerges - Given the rise of the new Covid-19 variant, it was interesting to see that a coin named OMIC (Omicron) has been bid up from $70 to as high as $711. This is potentially signs of the space being in a bubble but when we consider that this sort of surge in price movements (up or down) happens in the equity markets (albeit in the cases of mistaken identity - see GME in the US and GME in Australia or Zoom Communications vs Zoom Technologies), this appears no different. Does seem like folks not doing their homework or looking under the hood but it didn't signal a top in the equity markets. That said, we shall see what happens here.
Videos of the week
The Defiant - Snowdog (SDOG) Rekt, Terra FUD, Adidas enters the AdiVerse - In this episode of The Defiant, they cover what happened with Snowdog, issues going on at the Terra protocol and Adidas joining the NFT space bringing a fashion lens to the metaverse (or Adi-verse) and partnering with The Sandbox and Coinbase. 8mins
ausbiz - Greater knowledge of cryptocurrency will drive it's adoption in Australia - 30th November 2021 - per the show notes "Binance Australia, has joined forces with money management app, WeMoney, to enhance the financial wellbeing and investment literacy of Australians through education and technical innovation. The goal is to increase the knowledge and creation of long-term wealth, particularly when it comes to digital assets and how they fit in alongside broader finance." 7mins
Investing in a Crypto Index Strategy | The Compound & Friends #24 - Per the show notes "On this week's episode of The Compound & Friends, Michael Batnick, Jeremy Schwartz, and Downtown Josh Brown introduce the all-new RWM WisdomTree Crypto Index!". Later in the show they talk about what Jeremy and colleagues have beend discussing with big heads of wealth management at big banks and the topics are mostly on regulation. Josh mentions then that he does not see how this can be a top in the crypto markets when the main players are still only concerned with the potential negatives. 42mins
Charts and Data
On-chain metrics commentary comes from BetaShares Justin Arazdon here - per his note "This week we take a look at the Bitcoin: Spent Volume Age Bands (SVAB) (7 day Moving Average). With the bitcoin price ~21% off its recent highs, this metric can provide some insight into who is selling at current price levels.
Citing data from on-chain analytics company Glassnode, you can see the downtrend in the purple bands (the darker the purple, the longer the coins have been held), noting that there was a peak from these sellers from about 24 October to 8 November when the price was between $61-68K. However, at current price levels these older coins are spending less as this correction plays out, highlighting that the volume is being driven by shorter-term holders or traders."
Top 10 cryptocurrencies by market cap as at 6th November 6:05pm AEST. A sea of red when we look at the last 7 days of price performance for the top 10. The 3 outside this group are DogeCoin, Avalanche and Shiba Inu. Terra moved up into the top 10 in this past week.
Post of the week
Interesting tweet from Matthew Kobach asking what sectors people expect to boom over the next decade. It has some great gems of answers in the commentary. From online review fraud to mental health practicioners and other healthcare as well as independent journalism. Worth a scroll of these comments. https://twitter.com/mkobach/status/1467204113620512771
Education
Getting Started in DeFi - Part 1 - We launched a new multi-part Getting Started series where we will be highlighting different areas of the DeFi landscape. These can be the building blocks to your knowledge and learning in this space and part 1 begins with some articles, videos and podcasts to be aware of.