Snapshot 98

EU approved crypto licensing, potential bull cycle ahead, and US dollar CBDC might become reality

Apr 21, 2023
Snapshot 98

Wealth management firm Bernstein proclaims that a crypto bull cycle is upon us. Bernstein’s research, published earlier this week, notes that following a cleanup of ‘toxic crypto leverage’, strong bullish signals have come together — including macro catalysts aligning for Bitcoin, and continued volatility and speculation on traditional finance institutions. We’re ready.

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Market Spotlight

Note: Market prices captured in US$ at the time of reading. Explore more on Crypto‌.com/Price.


News Snaps

EU Approves Crypto Licensing

Regulators in the European Union (EU) voted in favor of the Markets in Crypto-Assets (MiCA) licensing framework, making the EU the first major jurisdiction to introduce a comprehensive crypto regulatory framework.

Shanghai Complete

Ethereum successfully completed its Shanghai Upgrade, which introduces an important new feature that allows validators who previously staked ETH to withdraw those tokens for the first time.

Rising Price Index

The US consumer price index rose 5% YoY in March, below market expectations. The data showed that, while inflation is still well above the Federal Reserve’s policy target of 2%, it is showing continuing signs of decelerating.

Crypto Bull Cycle Ahead

Private wealth management firm Bernstein published research this week proclaiming that a crypto bull cycle is upon us, following a cleanup of ‘toxic crypto leverage’ — including macro catalysts aligning for Bitcoin, and continued volatility and speculation on traditional finance institutions.

Potential US CBDC 

The US House Financial Services Committee published a draft version of a potential landmark stablecoin bill, with proposals including a moratorium on stablecoins backed by other cryptocurrencies and a request to study a Central Bank Digital Currency (CBDC).

Global Brands NFTs

This week saw two major brands debuting their next steps into Web3, as Nike unveiled its first NFT drop of virtual pairs of Air Force 1 sneakers through its .Swoosh NFT platform, and Starbucks launched its second NFT collection to celebrate its first store in Seattle.

What’s Ahead

US & Japan Interest Rate Decisions

Interest rates are mainly associated with fiat currency but influence the crypto market, as well. Two big decisions are coming up: 

The Bank of Japan will announce its interest rate decision on April 28, and the US Fed interest rate decision is due on May 3.


Research & Insights

Monthly Feature Article | Deep Dive Into Liquid Staking Derivatives

The concept of liquid staking is relatively new, and as such, the liquid staking derivatives (LSD) market is still in its early stages. Nevertheless, there are already around 70 projects providing LSDs, which allow users to trade their staked tokens without having to wait for the staking period to end. 

Here we highlight three of the major LSD protocols: Lido, Rocket Pool, and Frax Finance. 

Key Takeaways:

  • Liquid staking derivatives (LSDs) allow users to earn staking rewards on Proof of Stake (PoS) blockchains while retaining the ability to use their staked tokens on other decentralised platforms.
  • Based on the design of liquid staking protocols, there are three main liquid staking token models: rebasing tokens, reward-bearing tokens, and the dual-token model.
  • Various LSD protocols have different types of mechanisms to secure blockchain validation: 
  • Lido relies on node operators to run validator nodes on behalf of the protocol, who then receive a fee in return as a reward. 
  • A key feature of Rocket Pool is its minipool validator mechanism: Its nodes only need to deposit 16 ETH per validator, which is combined with 16 ETH from the staking pool to create a new validator, called a minipool. 
  • The Frax Ether validator mechanism relies on the Frax ETH Minter (frxETHMinter) smart contract, which creates new validator nodes whenever sufficient ETH (32 ETH) is available.
  • The liquid staking sector is expected to grow after the Shanghai Upgrade, given the relatively low staking ratio of Ethereum compared to other PoS chains.
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The full report, Deep Dive Into Liquid Staking Derivatives, is available to our Private members.


NFT Spotlight

See that light at the end of the tunnel, slowly but surely getting closer? Two days from now, on Monday, April 24, it shines even brighter, as Davansh Atry, a self-taught 3D artist from India, drops ‘Through The Light’, a collection that represents Atry’s journey as an artist. 

It’s a portal to a new dimension, a new world, filled with bright, vibrant colors and fascinating space, which can be whatever you want it to be. It is a drop fueled with hopes and dreams, a fantasy that we have all wished for at some point… 

and includes 🪂 NFT airdrops.

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See the light. Or check out Atry’s Collections and Twitter.


Product Picks

BTC Supercharger With a 10x Booster Bonus

The BTC Supercharger is live with a US$250,000 reward allocation and a chance to boost earnings by 10x. Simply deposit CRO tokens in the Supercharger pool and earn BTC rewards — 888 lucky winners will boost their earnings by 10x, up to 18%! Learn more.

GEL, SAND, SHIB Trading Competition

This week in the Crypto.com Exchange Trading Arena, users can win up to US$1,000 in USDC each by being in one of the top 20 Spot traders of GEL, SAND, or SHIB tokens. Simply spot trade a minimum of US$100 in any of the three tokens to be eligible. Click here to participate.


Crypto Level Up

What Is Altcoin Season?

Simply put, altcoin season is a period of time where altcoin prices significantly outperform Bitcoin’s (BTC). Top altcoins include ETH, XRP, and ADA. This phase is commonly viewed as the best time for individuals to diversify their digital asset holdings. 

Check out three factors that can bring on an altcoin season:

1. When interest in BTC dips

When the focus turns away from BTC to altcoins because of prohibitively high prices or after BTC holders sell their holdings, BTC’s dominance usually dips, as well. As the overall market cap grows during this time, a higher percentage is composed of BTC alternatives.

2. When new industry trends emerge

The launch of promising new altcoins or significant updates to existing ones have the potential to create excitement among cryptocurrency enthusiasts. This simultaneously drives up demand for said altcoins. Examples of industry trends include the advent of DeFi in 2020 and the skyrocketing popularity of NFTs in 2021.

3. When the economy as a whole is bullish

A booming economy tends to improve the risk appetite of both retail and institutional investors. This in turn positively affects the cryptocurrency market and even gives smaller market cap altcoins a leg up. As a result, the overall market cap of altcoins gets a boost.

More Details on Altcoin Season.


Crypto IRL

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Visualize the Crypto.com Obsidian Visa Card in a kaleidoscope of opportunities. And also at the Balloon Museum in Madrid with @pmbrsantos. 🎈

Hashtag #CryptoIRL with your Crypto.‌com Visa Card on your social profiles to get featured! Your 15 minutes of fame in the #CROFam awaits you!


Decoder

Utility Token

Utility tokens grant their holders certain privileges and access to services. Each utility token is unique to its ecosystem and cannot be mined. 

A utility token can serve just about any purpose a company or developer wants it to. In most cases, this type of digital asset allows its users to access products and services of a company. 
Examples of utility tokens are Basic Attention Token (BAT), Filecoin (FIL), and Siacoin (SC).


This Week in Crypto History

Grayscale Holds Almost 2% of Circulating Bitcoin Supply

In mid-April 2020, asset management firm Grayscale revealed in a quarterly report that it held 1.7% of the circulating Bitcoin (BTC) supply at the time. The company’s BTC holdings made up its Grayscale Bitcoin Trust (GBTC) investment product, which allowed individuals to purchase shares of GBTC to gain exposure to BTC without owning the cryptocurrency itself.

Since then, Grayscale has increased its BTC holdings to over 629,000 BTC, and it now owns approximately 3.2% of the current circulating BTC supply.


That’s it for this week’s Snapshot. Want more? Head over to our Insta feed for bite-size crypto lessons.

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