Crypto Investor Briefing – September 2021

September 2021 

Many users have asked about Tokenomy’s position on NFT (Non-Fungible Tokens), as this latest trend is dominating crypto news headlines everywhere. It is indeed very exciting to see new applications on the blockchain technology being introduced to the market with creative token issuers and enthusiastic investors. As NFT’s total transaction volume exceeded over $2.5 billion in the first half of 2021, it still represents a fraction of the potential size of the virtual economy, which is estimated to be over $190 billion, as projected by some industry research analysts. 

As we take a deeper look at the NFT market phenomenon, it actually shares some similarities with the previous ICO and tokenization narratives in the 2017 crypto cycle. Tokenizing value certainly enables accessibility to the market, but it does not resolve the fundamental problem that is inherently unique to all private markets, which is “illiquidity”. Price discovery usually takes a long time due to the distinct nature of the assets, whether it be artwork, music, or other creative digital goods. As a result, these assets often change hands less frequently, with subjective pricing based on personal preferences. This is an interesting technology-enabled art business, which requires different approaches and skill sets to operate it. 

A recent article on the Verge explains the NFT market quite well through a series of FAQs. Although the ideas of digital ownership and copyrights are very legitimate arguments, NFT development remains nascent. We prefer to give it a little more time to observe the market acceptance before we dive into this art-oriented business. 

Christian Hsieh

CEO, Tokenomy 

  • According to Blockdata’s latest research, most major banks are investing in crypto and blockchain-related companies in 2021. Of the top 100 banks by assets under management, 55 have invested in cryptocurrency and/or blockchain-related companies either directly, or through subsidiaries.
  • Ethereum network burns more than 100,000 ETH, worth more than $315 million, in transaction fees in the first month after the London upgrade. The much anticipated EIP-1559 upgrade had a good start for the network transition from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) model. 
  • Facebook-backed stablecoin project, Novi digital wallet, is ready to come into the market, as many U.S. states have given approval for this product. David Marcus, who heads the development of this project, expressed his enthusiasm for this new product. 

  • During the Aspen Security Forum on August 3, 2021, SEC Chairman Gary Gensler gave a speech and declared the SEC’s view that current securities regulations are clear and almost all tokens are securities. Gensler stated that technology alone does not change the fundamental nature of a securities offering and more regulations will come after crypto platform operators. 
  • Morgan Stanley loads up on $240 Million in Grayscale Bitcoin shares. This recent purchase would make the investment bank the second-largest holder of Grayscale Bitcoin Trust (GBTC), after Cathie Wood’s ARK Investment Management company. 
  • U.S.-listed bitcoin mining firm Marathon Digital said it has signed a new purchase order to buy 30,000 units of Bitmain’s flagship bitcoin mining hardware, the AntMiner S19j Pro. The total deal is worth $120 million. 
  • MicroStrategy has purchased an additional 3,907 bitcoins for $177 million in cash at an average price of $45,294 per bitcoin. As of August 2021, the company holds 108,992 bitcoins acquired for $2.918 billion, at an average price of $26,769 per bitcoin.
  • BlackRock, the world’s largest asset manager, had nearly $400 million invested in bitcoin mining companies at the end of the second quarter, according to U.S. Securities and Exchange Commission (SEC) filings. GoldenTree Asset Management, a $45 billion asset manager, has also confirmed the addition of bitcoin to its balance sheet.
  • Interesting trend: Major European telecoms companies have been running Chainlink oracle nodes. Swisscom and Deutsche Telekom are both operating nodes that feed real-world and digital asset price data into the decentralized finance ecosystem. 
  • One of the crypto industry’s biggest advocates in the U.S. government is set to leave office later this month. Late last week, CFTC commissioner Brian Quintenz announced he would depart the regulatory agency. 
  • Former SEC Chair Jay Clayton joins crypto firm Fireblocks. The former securities regulator will work on market structure and customer needs at the crypto custody firm.
  • Paxos, the company behind the Paxos Standard stablecoin (PAX), has announced that it is changing the name of its crypto asset. PAX is now Pax Dollar under the name USDP. 

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