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*Ninepoint Digital Asset Group, is a division of Ninepoint Partners LP.
(7 Day Change as of Feb 23, 2023 1:10PM ET)
Bitcoin Price: $23,841.68  (-4.23%)
DeFi Total-Value-Locked: $49.7B
Ethereum Price: $2,222.73  (-3.57%)
Crypto Market Cap: $1.09T
Bitcoin Range: $23,344 - $25,288
BITC.U Close: $7.03
Ethereum Range: $2,160 - $2,312
BITC.U NAV: $7.04
Bitcoin Dominance: 43.99   (-0.6%)
BITC.U Premium: 0.14%

SEC Takes Action Against Terraform Labs and Do Kwon Over Alleged Fraud

Terraform Labs, the company behind failed stablecoin TerraUSD, and co-founder Do Kwon are being sued by the United States’ Securities and Exchange Commission (SEC) for allegedly deceiving investors. The SEC claims Terraform and Kwon provided misleading information about the algorithmic stablecoin's stability and who was using it for payments. The SEC also describes Anchor Protocol and LUNA token as "crypto asset securities." The case comes after the collapse of TerraUSD, which reportedly triggered several crypto industry bankruptcies. Terraform Labs has yet to respond to the lawsuit, and the SEC's Enforcement Director dubbed the project "a fraud."

Bank of Japan Announces Central Bank Digital Currency Pilot Program for April 2023

Japan's Bank of Japan (BoJ) is set to launch a central bank digital currency (CBDC) pilot in April 2023, following its proof-of-concept testing that began in 2021. The pilot program aims to include private businesses to test a CBDC ecosystem. BoJ's executive director Shinichi Uchida announced the CBDC pilot in a speech at a CBDC committee meeting, highlighting the need to consult with the private sector on alternative data models and architectures for offline payments, among other crucial elements of the system. Meanwhile, Japan is considering lifting the ban on foreign stablecoins, which was imposed in 2022, allowing those that pass individual checks into the market.

Binance CEO Predicts Global Crypto Industry to Shift Non-US Dollar Stablecoins

Binance CEO Changpeng Zhao (CZ) has suggested that the crypto industry will start to use stablecoins pegged to the Euro, Yen, or Singapore dollar, following recent actions against the U.S. dollar-pegged stablecoin BUSD. CZ made the statement during a Twitter Spaces event, where he noted that the U.S. government's recent actions against U.S. dollar stablecoins will lead the global crypto industry to rely on other currencies to back stablecoins. CZ suggested that algorithmic stablecoins may play a more significant role in the crypto ecosystem in the future, but warned that they inherently carry risks that must be disclosed transparently to users.

How Different Governments Are Thinking About Web3

By Alex Tapscott

Hello From Sunny Bahamas! As you might have guessed, I am on vacation this week, but I thought it worth noting the news that amidst the fervor of ‘a regulatory clampdown’ in the U.S., Abu Dhabi’s government has launched its $2 Billion "Hub71+ Digital Assets" Initiative to Boost Web3 investment in the Emirate. Last week I wrote about how technology tools, capital and know-how is more distributed than ever and that Web3 will emerge globally, not in a single place like Silicon Valley.

Governments are competing in an open market and some are using capital and other inducements to tip the scales in their favour. Abu Dhabi's Hub71 has launched "Hub71+ Digital Assets," backed by over $2 billion, to support Web3 start-ups with access to corporate, government, and investment partners globally and in the United Arab Emirates (UAE). The initiative aims to provide a progressive regulatory environment, state-of-the-art blockchain, and a virtual asset infrastructure for Web3-based innovations. It is part of Abu Dhabi's efforts to attract innovative businesses and establish the UAE as a leader in the Web3 space. Anchor partners for the initiative include First Abu Dhabi Bank’s research, innovation center FABRIC, digital asset exchanges and service providers, and unicorn start-ups expanding to Abu Dhabi and global markets.

Will others follow suit? Time will tell.

Have a great weekend!

“What Chains Are Worth Betting On” With Jake Hannah of SX Bet

Join Andrew Young as he decodes the world of DeFi with special guest Jake Hannah, Co-Founder of SX Bet. Listen in as they discuss the NFT regulatory environment, exciting perpetual future projects, layer-2 blockchains, EVM-compatible chains, Polygon’s financial health, and the overall value capture of many of the top projects.

quant 1.png
Source: glassnode
Unpacking Ethereum’s 25% Drop in Exchange Balance Post-Merge
The Ethereum Mainnet underwent a significant upgrade on September 15th, 2022, known as The Merge. This shift replaced the original proof-of-work (POW) mechanism with proof-of-stake (POS). Since The Merge, Ethereum's balance on exchanges has decreased by 25%, driven by investors transferring their holdings to cold wallets and out of reach from retail investors. Alongside the ongoing burning of ETH, this trend creates a potential supply shortage. Bitcoin's balance on exchanges has only dropped by 11.5% in the same timeframe. As Ethereum's energy-efficient POS mechanism remains in place, and its overall supply continues to diminish, ETH's scarcity is becoming increasingly possible.
quant 2.png
Source: glassnode
Stablecoin Landscape: USDT Dominance Continues to Rise
The stablecoin market is undergoing significant shifts in relative supply dominance this year. USDT gained 3.9%, while USDC, BUSD, and DAI fell by 1.5%, 2%, and 0.4%, respectively. USDT now holds 54% of the market, outpacing its counterparts. BUSD's recent classification as an "unregistered security" has led to an issuance halt from the Securities and Exchange Commission; legal challenges may loom for USDC and DAI due to their US domicile. With its non-US origin, USDT's considerable market share growth will likely continue. These changes have far-reaching implications for the cryptocurrency market, particularly in exchanges and transactions.
quant 3.png
Source: The Block
DeFi Rides High: Crypto Market’s Year-To-Date Comeback in 2023
The crypto market has significantly rebounded in 2023, with Bitcoin and Ethereum up by 44.8% and 38.91%, respectively. The DeFi Index saw the most significant increase, rising by 60.98% YTD (the DeFi Index monitors top DeFi ventures, suggesting the growing appeal of this asset class to investors). DeFi allows for financial transactions to be managed on the blockchain, without the need for traditional financial institutions. If DeFi gains more traction, investors may increasingly be inclined to invest and gain exposure to the DeFi ecosystem.