Overall market capitalisation dropped remained steady around the $1tn mark, pulling back from weekly highs around $1.03tn over the weekend
According to industry monitoring site Defi llama, total value locked in DeFi this week across all blockchains and platforms dropped slightly from last week’s figure, to $54.1bn
Digital assets experienced a week of mixed performance, starting strongly but tapering off in the face of continued interest rate hikes from the US Federal Reserve. Digital asset exchange Binance was confirmed as a significant investor in Elon Musk’s long-awaited Twitter takeover, Hong Kong moved towards a much more pro-crypto stance than mainland China, Fidelity showcased increasing interest from institutional investors, Visa continued their involvement in the digital asset ecosystem, more traditional finance powerhouses moved into digital asset services, and a whole raft of Singaporean banks and institutions engaged with digital assets and DeFi.
New research from financial services giant Fidelity ($4.5tn AUM) indicates that despite declining market values this year, institutional acceptance of digital assets has increased
The latest Fidelity Institutional Investor Digital Assets Study found that around 60% of institutional investors had allocated towards crypto assets in the first half of the year; up 6% from the same survey last year
Fidelity’s study also showed that four out of five institutional investors believe that “investment portfolios should include digital assets”
General enthusiasm for digital assets was highest in Europe, where 86% of respondents agreed with the above statement
Tom Jessop, president of Fidelity Digital Assets indicated that increased institutional presence is a sign of a strengthening digital asset industry; “While the markets have faced headwinds in recent months, we believe that digital assets fundamentals remain strong and that the institutionalisation of the market over the past several years has positioned it to weather recent events”
More than 1,000 institutional investors across Asia, Europe, and the USA were surveyed, and despite this being the fourth edition of Fidelity’s Digital Assets Study, they remarked it was the first time that their research took place during a bear market
High potential upside and innovative technology were cited as the key appeals of the asset class, but notably—in a year during which most major asset classes have crashed—there was a large decline in perceptions of crypto being “uncorrelated to other assets”
Another new report this week showcased growth in Web3 adoption and development to go along with the growth in institutional interest
The Alchemy Web3 report revealed significant increases in downloads of Web3 and Ethereum development software (tripling year-on-year), monthly deployment of verified smart contracts, and the release of decentralised apps (DApps)
In a departure from official mainland China policy, Hong Kong moved towards a “friendlier regulatory regime” regarding retail and institutional digital asset trading
A statement from the Hong Kong government indicated a consultation process to determine how retail traders “may be given a suitable degree of access” and that regulators will consider “property rights for tokenized assets and the legality of smart contracts”
Sources told Bloomberg that from March next year, licenced digital asset platforms will be able to extend trading capabilities to retail investors
Those familiar with the matter claimed that regulators are keen to allow the listing of larger-cap digital assets, such as Bitcoin and Ether, but won’t specifically endorse any particular coins or tokens
There may be a checklist of criteria that crypto assets must fulfil in order to trade in Hong Kong, such as “market value, liquidity and membership of third-party crypto indexes”
Much like Japan’s recent softened regulatory approach to digital assets, this move is perceived by analysts as an attempt to restore economic confidence, encourage the development of a local digital asset industry and halt brain drain
Ravi Menon, MD of the Monetary Authority of Singapore, stated in an interview that the nation aims to remain a hub for digital assets, but doesn’t wish to concentrate on the trading of cryptocurrencies
He added “We accept that cryptocurrencies have a place in the larger digital ecosystem because they are the tokens native to the blockchain that powers much of this activity… They need to have an expression in the formal financial sector… We need to tilt the business model more towards use-cases, where the revenue stream comes from those use-cases”
Following the conclusion of Elon Musk’s long-running Twitter takeover saga, digital asset exchange Binance were confirmed as a key backer, contributing $500m in equity investment
Binance CEO Changpeng “CZ” Zhao indicated that they would push for broader integration of digital assets across Twitter, stating “We aim to play a role in bringing social media and Web3 together in order to broaden the use and adoption of crypto and blockchain technology”
In a public Q&A session on Tuesday, Zhao anticipated the implementation of a wide range of digital assets on Twitter, not just Musk’s favoured memecoin DOGE, or Binance’s proprietary BNB Coin
Speaking of BNB, the news of Binance’s involvement had a discernable effect on the the asset’s value, driving it to an all-time high ratio against Bitcoin, despite BNB’s dollar value being far below its May 2021 peak
Other digital asset-adjacent investors contributing funding to Musk’s takeover included VC giants Sequoia and Andreessen Horowitz (a16z), both of which have invested heavily in the blockchain and Web3 sphere over the last few years
The beleaguered exchange didn’t name a buyer, but sources told Bloomberg that they’ve been in talks with venture capital fund V Ventures, a subsidiary of Thoresen Thai Agencies Pcl
Since being granted protection from creditors in August, Zipmex have been busy restructuring, and this buyout could signal a conclusion to their bankruptcy saga
Bitmex representatives told industry publication Coindesk “We are going to refocus on liquidity, latencies and a vibrant derivatives community including BMEX Token trading. As an undesirable consequence, we had to make changes to our workforce”
Bitcoin miners have also been hit hard by the ongoing crypto winter and increased global energy prices; mining giant Core Scientific recently warned of cashflow problems, and is now “working with restructuring lawyers at Paul Hastings as the company weighs a potential bankruptcy”, according to sources
Following on from China’s extensive e-Yuan trials, India became the second country with a billion-plus population to officially launch pilot programs for a CBDC
Under the initial stages of the Reserve Bank of India’s (RBI) trials, selected banks will be able to use the e-Rupee “for settling secondary-market transactions in government securities”
Data from the Clearing Corp. of India showed that nine participating banks “traded 2.75 billion rupees ($33.3 million) of bonds” with maturities ranging from 2027 to 2032
On Monday, RBI also announced that retail applications for the e-Rupee would be trialled within a month across various locations
One day prior, the Monetary Authority of Singapore also revealed the results of their preliminary research on a CBDC—codenamed Project Orchid—and released a report regarding further trials of “Purpose Bound Money” (PBM)
PBM is akin to programmable money; it “enables senders to specify conditions, such as validity period and types of shops, when making transfers in digital dollars”, and Singaporean authorities plan to trial it over a range of government applications
Participants in Project Orchid encompass a range of local banks and payment operators, including DBS, Network for Electronic Transfers (NETS), OCBC, and UOB
London-based financial services firm Marex became the latest “TradFi” institution to seek exposure to digital assets and the emerging world of DeFi this week
They launched their digital asset proposition by hiring finance veterans Ilan Solot (ex-IMF) and Mark Arasaratnam (e-commerce) as co-heads of digital assets
In a statement on Tuesday, Marex declared “Our main thesis is that crypto is graduating into the mainstream. The problem is that it remains a complex space for institutions to interact with, especially given the intricacies around self-custody and security risks"
The firm said their focus would lie in assisting "crypto exchanges and family offices in building HNWIs-focused bespoke structured products”, alongside market-making services
This development comes just a week after their derivatives division, Marex Solutions, partnered with Coinbase Prime “to broaden institutional digital hedging and crypto investment capabilities for both organisations”
Adam Eling, COO of digital assets at Apollo, said in a press release “As we explore creative ways to apply blockchain technology across Apollo’s business, we look forward to collaborating with Anchorage for the safekeeping of client assets”
Diogo Mónica, president of Anchorage Digital, said that institutional custody proves the long-term appeal of the asset class; “It’s the validation of this incessant drumbeat that [crypto] is here to stay. This is a very long-term horizon process and technology, and that for the large institutions, it doesn’t really matter that there is volatility short term”
Apollo previously invested in Anchorage’s Series D funding round, concluded in December 2021
What happened: VC news—Quarter-billion fundraise kicks off
How is this significant?
New SEC filings on Monday revealed that digital asset investment firm Coinfund is raising $250m for seed-stage investments across three separate parts of their proposed Coinfund Seed IV fund
This comes within three months of their Coinfund Ventures I fund announcement, a $300m fund dedicated to digital asset firms “showing commercial traction”
Her new firm, Double Down, initially aimed to raise $20m for their first fund, but exceeded that target within a month
As a veteran of Bain and family office investing, Kala believes her fund is well-positioned to take advantage of the current crypto winter; “I’m used to doing real diligence and being disciplined, and I think with a lot of LPs that has resonated… I’m not going to fly by the seat of my pants, especially given market conditions”
Blockchain interoperability project Evmos raised $27m through a token sale led by Polychain Capital, with funds earmarked for developer recruitment, partnerships, and decentralised app (DApp) development
What happened: Banking industry news: Singapore seeks tokenisation innovation
How is this significant?
Despite Singapore’s recent steps away from retail trading of digital assets, the city-state remains dedicated to the asset class on a more institutional level, as evidenced by recent developments in the local banking sector
Local media reported “live tests” in DeFi, featuring “the trading of digital assets across liquidity pools and platforms”
The Monetary Authority of Singapore (MAS) carried out transactions of tokenised deposits with smart contracts on a public blockchain in the first pilot of their “Project Guardian” study
According to Singaporean newspaper The Straits Times; “ Project Guardian, launched in May by MAS, aims to explore the use of public blockchains to build open and interoperable networks that enable digital assets to be traded across platforms and liquidity pools”
The deposits featured “tokenised Singapore Government Securities, Singapore dollars, Japanese government bonds and Japanese yen”, and were conducted between DBS, JP Morgan, and Japan’s SBI Digital Asset Holdings
Han Kwee Juan, DBS Group head of strategy, said “We wanted to show it was possible to tokenize government securities and cash within a DeFi liquidity pool…we wanted to create an institutional-grade DeFi venue which regulators would be comfortable with”
MAS confirmed two other banking industry pilots; one led by Standard Chartered to “explore the issuance of tokens linked to trade finance assets”, and the other featuring HSBC, UOB and Marketnode collaborating on “native digital issuance of wealth management products”
DBS also confirmed themselves as the first banking user of a new digital asset platform being launched by the Singapore Exchange’s SGX Group
Additionally, stablecoin issuer Paxos announced plans to make at least 130 hires in Singapore across 3 years, after securing a central bank licence for digital token payment services
Neobank Revolut widened the scope of their digital asset offering, allowing clients to directly spend from their digital asset balance, and increasing the number of available digital assets to over 100
Payments and remittances firm Moneygram also moved into digital assets, allowing US-based users of their mobile app to buy, sell, and hold Bitcoin, Ether, and Litecoin
Payments giant Visa had a busy week in the digital asset space, sealing a major partnership alongside numerous patent filings
The firm partnered with digital asset exchange Crypto.com for the largest sporting event in the world, collaborating on a FIFA World Cup NFT series called The Visa Masters of Movement
As well as honouring classic World Cup goals, football fans will be able to generate their own NFTs through LED movement-tracking pitches at the official fan festival in Doha that generate digital art of their best football moves
Industry publication Coindesk also reported that Visa recently filed trademarks across a broad range of digital asset subjects, including Metaverse, NFT, and digital wallet applications
South African newspaper The Times reported this week that leading local supermarket chain Pick n’ Pay now accepts payments via Bitcoin, conducted through the Lightning Network scaling solution
This implementation follows a five-month trial across ten stores, and has now been rolled out to a further 29 locations nationwide—but according to The Times, they aim to integrate it in all 1,628 stores within the next few months
A Pick n’ Pay spokesperson praised the user-friendly nature of the Lightning Network, stating “The transaction is as easy and secure as swiping a debit or credit card. Customers scan a QR code from the app and accept the rand conversion rate on their smartphone at the time of the transaction. The service fee for each transaction is minimal, costing the customer on average 70c (about 4 cents) and takes less than 30 seconds”
In other international news, the Indonesian stock exchange (IDX) signed a memorandum of understanding with Singapore’s Metaverse Green Exchange (MVGX) to develop an Ethereum-based carbon registry for emissions trading
Bo Bai, MVGX co-founder told TechCrunch that blockchain technology prevents the double-counting problem, and maintains accountability for climate actions; “The infrastructure provides an immutable record of the creation and ownership of the credit, as well as a tamper-proof record of the performance of the green project with which the carbon credit is associated, to date”
Finally, Norway became the latest nation to embrace the Metaverse, with the nation’s tax authority partnering with Ernst & Young in the blockchain-based Decentraland virtual world to deliver taxation services and education to a younger audience