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*Ninepoint Digital Asset Group, is a division of Ninepoint Partners LP.
(8 Day Change as of Feb 10, 2023 9:45PM ET)
Bitcoin Price: $21,853 (8.25%)
DeFi Total-Value-Locked: $47.07B
Ethereum Price: $1,544  (7.87%)
Crypto Market Cap: $1.01T
Bitcoin Range: $21,636 - $23,720
BITC.U Close: $6.52 (as of Feb 9, 2023)
Ethereum Rang e: $1,535 - $1,650
BITC.U NAV: $6.50
Bitcoin Dominance: 43.32 % (1.65%)
BITC.U Discount: (0.30%)

UK Treasury Sheds Light on Upcoming Crypto Regulations

The UK Treasury has published a consultation paper on the country's upcoming cryptocurrency regulation. The 80-page document covers various topics, from algorithmic stablecoins to NFTs and ICOs. It seeks to put the UK's financial services sector at the forefront of crypto while avoiding strict control measures. Crypto companies will fall under the Financial Services and Markets Act 2000, but the Financial Conduct Authority will tailor the existing rules for the digital assets market. Crypto firms will not have to report market data regularly, but exchanges will be required to keep and make it available. The consultation will close on April 30th, and the British government welcomes responses from all stakeholders.

Australia’s Crypto Taxonomy: A Public Conversation

Australia's national regulators have opened a public consultation for their taxonomy of crypto assets. The Australian Treasury released a consultation paper on "token mapping," which proposes four types of crypto-related products: crypto asset services, intermediated crypto assets, network tokens, and smart contracts. We have developed our own token taxonomy, which you can learn about in this talk by Alex Tapscott (minute 20:00).

FTX Founder's Bail Guarantors Names to be Made Public

A U.S. judge has ruled in favour of several media outlets, including Reuters, that sought the names of two people who helped secure bail for FTX cryptocurrency exchange founder Sam Bankman-Fried. The names will be made public, but the judge has put his ruling on hold pending an expected appeal. The judge stated that the public has only a "weak" right to know who Bankman-Fried's guarantors are, but it outweighs the arguments for confidentiality. Bankman-Fried has been confined at his parents' home in California after pleading not guilty to fraud for allegedly looting billions of FTX customer dollars.

New Congress, New Opportunities: CFTC Seeks Authority on Crypto Regulation

The chairman of the US Commodity Futures Trading Commission (CFTC), Rostin Behnam, is pushing for the CFTC to have the authority to regulate non-security tokens in the crypto industry. Behnam is engaging with the new Congress to provide technical assistance in drafting legislation, citing bankruptcies and failures as reasons why regulation is necessary to protect customers and prevent financial market failures. The CFTC enforcement team has brought 69 crypto-related actions to date, and Behnam says the budget increases for the commission will help grow the team. The political makeup of Congress may determine if the CFTC is given additional authority, with a bill introduced in 2022 to clarify the roles of the CFTC and the SEC in crypto regulation.

Could a Fed Pivot Boost Bitcoin? 

By Alex Tapscott

Last Wednesday, The Federal Reserve announced a ¼ point interest rate hike, in-line with market expectations. Jerome Powell warned that inflation could remain elevated, which could justify further increases but acknowledged a marked slowdown overall. While hardly a “Mission Accomplished” the softer tone was cheered by investors who responded by pushing stocks higher for a fifth consecutive week. A strong jobs report on Friday threw some cold water on the rally, but despite a late week sell-off the NASDAQ still posted a more than 3% gain. As we wrote last week, Bitcoin has had a stellar start to the year, broadly in-line with other risk assets.

I shared my thoughts on the Fed impact on the market and Big Tech earnings on Bloomberg TV recently- you can check that out here: Alex Tapscott on Bloomberg TV.

Why the change in sentiment? The market has been pricing in a worst-case scenario for the past 6 months. The base case for most investors going into 2023 was that inflation was out of control, the Fed would need to keep hiking and the economy would implode (or at least have a recession) So far, the data does not support that view and the Fed has softened its tone. While we are not out of the woods, the worst case is no longer the base case and that's being priced in.

This Tuesday, Powell took the stage again at the Economic Club. The message this time was more muddled. He pointed out that inflation was pandemic-induced, boosting bets that it will be transitory overall. But he also said strong labour number would require more rate hikes.

Big Tech Earnings Give a Boost to the Market

Big tech earnings were mediocre, but not disastrous. Facebook beat on earnings and revenue (benefiting from exceptionally low expectations). Apple, Google, Microsoft and Amazon were a mixed bag. For the market as a whole, earnings are down 20% on a year over year basis, which has had some pundits calling this an ‘earnings recession’ but the numbers are being compared to Q4/2021 which was a goldilocks zone of high growth, pent up demand for services and goods (deferred from COVID), strong business spending and moderate inflation. So, the year over year comparison may not be helpful. So far, staving off a disaster is enough.

Speaking of earnings, we heard a lot on the earnings calls about cost cutting and belt tightening. We've seen it already in the job cuts to big tech and pledges to reduce headcount further if needed. In a zero-interest rate environment, investor reward growth at all costs. Now, they are rewarding profitability.

For equity investors, we are now in a “bottom line market" not a "top line market" meaning investors will reward management teams that can rein in costs and drive profits.

Web3, AI, and The Metaverse: The Three Horsemen of the FANG Apocalypse?

If macro conditions improve and these companies can execute on cost saving measures, I'm guessing the market will reward them and the stocks could do well short-medium term. But, bigger picture, we are also at a fascinating transitional moment in tech.

To wit, three new technology trends could transform the technology industry and our world: artificial intelligence, Web3, and the metaverse. This year will probably be the year of AI and machine learning, if the past 6 weeks is any guide. OpenAI’s natural language chatbot ChatGPT has grown to 200 million users in 2 months, the fastest adoption ever for an internet application. The explosive success of OpenAI has clearly caught the attention of investors and management teams at the big firms are responding. Just look at the earnings calls from this quarter: On the Microsoft earnings call, AI was mentioned 30 times. On the META call it was mentioned 37 times. And on the Google call, AI was mentioned a staggering 67 times! Google Executives are must be quaking in their Allbirds.

Now, these companies could find ways to harness these new technologies or they may find themselves the focus of disruption. Microsoft is probably best positioned in all three categories of AI, metaverse and Web3. But there is no guarantee they can steward these rough and uncertain seas of change. These tech giants have dominated their respective industries for so long that we assume their positions are unassailable when in fact history teaches us that the only constant is change.

“Web3 for Gamers: The Saga Experience” With Rebecca Liao of Saga
Join Alex Tapscott and Andrew Young as they decode the world of DeFi with special guest Rebecca Liao, Co-Founder and CEO at Saga. Listen in as they discuss Saga, Rebecca’s incredible past leading into Web3, Web3 Gaming and Entertainment ecosystems, and more!

Rebecca Liao is the CEO of Saga, a Web3 protocol for launching dedicated blockchains. Saga allows developers to create their own blockchains with just a single click. It provides dedicated runtime environments for high performance and low, predictable gas fees. Users can freely transfer assets between ecosystems using Saga's dedicated chains, which are IBC+ enabled. Rebecca was previously a Co-Founder and COO at Skuchain, a top blockchain company in trade and supply chain finance, reaching $5 billion in annual volume under her leadership. Rebecca is an Advisor to Sommelier Protocol, a Fellow at Stanford Law, Science, and Technology, and has a background in law, writing, and advising presidential campaigns with the Biden and Clinton administrations.

Tune in to the 81st DeFi Decoded episode to hear Alex, Andrew, and Rebecca discuss all things Web3 Gaming and learn more about Saga. What led Rebecca to dive into the world of Web3, and what is her experience with presidential campaigning? How does Saga work for users? Which ecosystems should we be most excited about?
Source: glassnode
#1 Miners Rejoice: The Hash Ribbon Suggests a Recovery for Bitcoin
The Hash Ribbon, a market indicator created by Charles Edwards, has recently shown positive signs for Bitcoin. The 30D Simple Moving Average (SMA) and the 60D Simple Moving Average are key components of the indicator. The 30D SMA is a line chart showing an asset's average price over 30 days, while the 60D SMA does the same over 60 days. The recent rise of the 30D SMA above the 60D SMA indicates a period of reduced miner income stress and is a signal of industry recovery. This suggests that the worst of miner capitulation, when mining becomes too expensive, may be over. 
Source: The Block
#2 Bitcoin's YTD Growth: A Catalyst for Increased Investment
The crypto market is heating up, and Bitcoin is leading the charge with a 37.84% YTD growth. A closer look at the addresses holding Bitcoin shows a promising trend, with addresses holding over $1,000, $10,000, and $100,000 worth of Bitcoin increasing by 18%, 28%, and 31%, respectively, since the start of the year. This suggests that investors are flowing money back into crypto and embracing it at all wallet sizes. It's a positive sign for the industry that showcases investor confidence is returning.   
Source: glassnode
#3 Cold Wallets, Hot Trends: How Bitcoin is Maturing as a Market
The Bitcoin market is demonstrating signs of maturity as exchange-held balances have shrunk to a multi-year low of 11.69%. The decline in exchange-held Bitcoin suggests a shift from short-term trading to a more long-term, HODL-oriented strategy. As exchange balances decrease, the illiquid supply is rising, demonstrating investors' preference to keep their investments in cold wallets and out of reach of retail investors. This trend is significant; a supply shock could be imminent if it continues.