Nickel Research Centre

Nickel News Roundup - Week 3

20th January, 2022 

Market Overview:

Digital assets traded in a tight range this week, declining slightly from Sunday onwards.

  • Bitcoin traded predominantly between $42,000 and $43,400, with weekly highs and lows outside the range of $44,240 and $41,250 respectively
  • Bitcoin is currently priced at $41,950, down around 4.2% from last week
  • Ether performed in a similar fashion, with additional downside movement; dropping from a weekly high of $3,389 to a low of $3,056
  • Ether is currently priced at $3,129; a 6.6% weekly decline
  • Total market capitalisation declined slightly from last week’s snapshot to $2.09tn, dropping just below $2tn to a current value of $1.98tn
  • Total value locked in DeFi dropped to $92.4bn, according to industry analytics platform DeFi Pulse

Digital asset markets experienced a fallow week in terms of performance, but another bumper crop of news and adoption. Some of the biggest brands in the world—Walmart, Microsoft, and Mastercard—all featured, whilst elsewhere there were acquisitions of banks and derivatives exchanges, new venture funds worth billions, and even the creation of new energy-efficient hardware that could mitigate one of the key complaints about Bitcoin.


What happened: Trademark filings reveal increased digital asset consideration by Walmart

How is this significant?
  • Walmart, one of the largest retailers in the world, appears to be developing its own digital assets and NFTs in recognition of forecast metaverse growth, according to US Patent Office filings that emerged this week
  • CNBC were the first to report on the trademark filings, one of which pertains to “providing a digital currency and a digital token of value for use by members on an online community via a global computer network”
  • Trademark attorney Josh Gerben told CNBC that the filings appeared to have much consideration behind them surrounding all aspects of digital assets; “There’s a lot of language in these, which shows that there’s a lot of planning going on behind the scenes about how they’re going to address cryptocurrency, how they’re going to address the metaverse and the virtual world that appears to be coming or that’s already here”
  • Several of the trademarks relate specifically to virtual goods and shopping inside a virtual space within the metaverse
  • When asked for comment, a Walmart representative stated “Walmart is continuously exploring how emerging technologies may shape future shopping experiences”

What happened: Microsoft invests nearly $70bn in metaverse push

How is this significant?
  • One of the world’s largest tech companies bought one of the world’s largest video game developers this week, as Microsoft agreed a deal to acquire Activision Blizzard for $68.7bn with a stated goal of metaverse development
  • The video games industry is widely regarded as being at the vanguard of metaverse development, due to existing capabilities of gathering groups in virtual spaces and transacting in digital goods
  • Microsoft Chairman and CEO Satya Nadella said that “Gaming is the most dynamic and exciting category in entertainment across all platforms today, and will play a key role in the development of metaverse platforms” and described the acquisition as providing them with “the building blocks of the metaverse”
  • The move follows another major gaming industry acquisition last week, when Grand Theft Auto parent company Take-Two Interactive bought mobile games specialists Zynga for $12.7bn, with Take-Two CEO Strauss Zelnick citing “Web3 opportunities” as a benefit of the companies combining expertise
  • The Take-Two acquisition had the short-lived title of largest gaming industry acquisition ever, before Microsoft’s deal this week more than quintupled the record

What happened: BNY foresees digital assets as a “source of meaningful revenue” by 2023

How is this significant?
  • In an interview this week BNY Mellon’s Chief Financial Officer Emily Portney believes digital assets could begin providing “meaningful” revenue to America’s oldest bank by next year
  • Recognising a collaboration with fintech unicorn Fireblocks as “foundational to everything we’re going to do” in the realms of digital assets, she sees BNY Mellon “leading the charge” on bringing crypto assets into traditional banking infrastructure
  • Portney forecasts more regulatory clarity in the United States within the first half of this year, which would allow banking institutions to become more proactive with crypto
  • A key aspect of future growth, according to Portney, is overcoming the SEC’s reluctance to approve any spot-based ETFs; “There are proposals in front of the Securities and Exchange Commission that haven’t yet been approved on whether ETFs can actually hold digital assets directly versus futures”

What happened: Paradigm leads $110m Series B round for Bahraini digital asset exchange

How is this significant?
  • Paradigm, creators of the world’s largest digital asset VC fund, co-led a $110m funding round for Bahrain-based digital asset exchange Rain Financial
  • The round successfully concluded on Tuesday, and was co-led by established Silicon Valley VC Kleiner Perkins
  • Other backers included Global Founders Capital, Cadenza Ventures, and JIMCO
  • Rain Financial was the first officially licensed digital asset exchange in the Gulf region, and aims to use the funding to double its workforce this year, and increase its presence in the wider MENA region, alongside subsidiaries in Turkey and Pakistan
  • Despite much wealth, the region has lagged behind others in digital asset adoption, but backers hope the funding will help increase investment interest in the region; Paradigm’s Casey Caruso said in a press release that “We believe Rain [Financial] is a crucial piece of the puzzle for bringing the Middle East deeper into the new crypto economy”

What happened: Intel develops energy-efficient Bitcoin mining chip

How is this significant?
  • Computer hardware manufacturers Intel is reportedly about to launch an energy-efficient upgrade to current Bitcoin mining options, according to industry press reports this week
  • Dubbed the “Bonanza Mine” chip, it’s described as “ultra-low-voltage energy-efficient Bitcoin mining ASIC”—characteristics which directly address one of the key public concerns about Bitcoin; the carbon footprint of its mining process
  • Intel General Manager Raja Koduri described blockchain as “something we are working on” in a December interview, building on previous decisions not to limit mining-specific performance of hardware like rivals Nvidia have done

What happened: Digital asset exchange agrees deal to purchase German private bank

How is this significant?
  • BXM Operations, the parent company of digital asset exchange BitMex, released a press statement this week confirming an agreement to acquire Munich-based Bankhaus von der Heydt
  • Founded in 1754, Bankhaus von der Heydt is one of the oldest and most prestigious private banks in Germany—and one of the first to integrate custody of digital assets
  • BXM CEO Alexander Höptner sees the regulated entity as a gateway into wider trading opportunities across the German-speaking region; a “goal of establishing a one-stop shop for regulated crypto products in Germany, Austria, and Switzerland, and thus becoming a strong player in Europe”
  • Terms of the deal were not publicly disclosed, and remains subject to approval by German regulators

What happened: American Bankers Association aims to grow crypto accessibility with NYDIG

How is this significant?
  • In a blog post this week, Rob Nichols, president of the American Bankers Association (ABA), confirmed that an increasing number of American banks are seeking to provide Bitcoin and digital asset access amidst growing consumer interest
  • The ABA invested in NYDIG last month in order to improve their digital asset capabilities, having recognised 2021 as “the year that cryptocurrency went mainstream”
  • Nichols believes that digital assets present an opportunity too important for the industry to ignore, writing “even with mixed opinions on the value of cryptocurrency as an asset class or as a basis for a product set, ABA believes strongly that banks should have access to the tools, partners and regulatory frameworks that allow them to meet their customers’ needs. NYDIG offers a solution that accomplishes just that, and ABA is proud and excited to support their efforts and take this sensible step into the crypto business on behalf of our member banks across the country”

What happened: Mastercard partners with Coinbase on upcoming NFT marketplace

How is this significant?
  • Mastercard announced this week that they have partnered with Coinbase for their upcoming NFT marketplace—a move which includes several aspects designed to make NFTs easier to transact and more accessible
  • Unlike existing NFT marketplaces, users will be able to buy the tokens without having to use digital assets as payment; Mastercard’s existing payment infrastructure will be integrated, allowing people to purchase directly with cash
  • Eliminating the need to not only pay with crypto assets, but hold them in your wallet (for example to pay the network gas fees required to mint them initially) simplifies the process for potential first-time NFT buyers
  • Furthermore, NFTs will be classified as “digital goods” by the two companies, opening up a broader audience to purchase them, in comparison to a more investment-aligned “digital asset” classification
  • Mastercard noted that the “collaboration is part of Mastercard’s broader work to support the crypto ecosystem with new tools for crypto wallets and cybersecurity protections”
  • In other NFT news this week, Soros Fund Management, Sequoia China, and the Winklevoss brothers contributed to a new funding round for Animoca Brands, doubling the metaverse-builder’s valuation to $5bn
  • Coinbase also featured in the news outside of the NFT space this week, acquiring regulated futures exchange FairX, signalling the first step in creating their own derivatives marketplace

What happened: Former CFTC chair joins digital asset firm as policy advisor

How is this significant?
  • Christopher Giancarlo, former chair of the US Commodity Futures Trading Commission, joined crypto asset investment firm Coinfund this week as their new policy advisor
  • Giancarlo headed the CFTC for five years, and was known for maintaining a generally positive stance towards digital assets throughout his tenure
  • Commenting on his appointment, Giancarlo said he wants to “help this new asset class achieve mainstream adoption”

What happened: FTX launches $2bn digital asset VC fund

How is this significant?

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