April 2022
Investing in the crypto space can be an overwhelming task for many. The speed of innovation, the complexity of decentralized technology, and the solution of different blockchain protocols further complicate the investment research process. A common question from many first-time crypto investors is “what are the differences of all these cryptocurrencies?”
There is always a simple way to tackle a complicated problem. There are eight types of crypto categories, which can simplify the purpose of crypto assets, and help investors make asset allocation decisions.
- Store of Value (Bitcoin)
- Smart Contract / Programmable Money (Ethereum, Solana, Cardano, Polka Dot… )
- Stablecoins (USDT, USDC, PAXOS, IDK… )
- Payment Tokens (LTC, XRP, BCH, ZCash… )
- Loyalty Tokens (BNB, UNI, FTX, TEN… )
- Meme Coins (DOGE, SHIBA… )
- Security Tokens (Tokenized stocks, bonds, properties… )
- Non-Fungible Tokens (NFT)
Most institutional investors are mainly investing in the top 3 categories, while retail investors are more active in the other categories as the return profiles are more attractive (also means more risk). Although we do not make investment recommendations, the Tokenomy team strives to make crypto investment easier for everyone. Our educational and explainer videos on Tokenomy Academy and blogs provide a good resource for you to understand this space better. We hope you take advantage of these resources and embark on this exciting crypto journey together with us!
Team Tokenomy
The White House issued an executive order on cryptocurrencies. U.S. President Joe Biden has signed an executive order on March 9th, calling on the government to examine the risks and benefits of cryptocurrencies. It is a long-awaited directive for the crypto industry. There had been reports of a divide between White House officials and Treasury Secretary Janet Yellen leading to delays in the policy rollout. A video from Bitwise explains everything you need to know.
Ronin, the blockchain network tied to the popular play-to-earn game Axie Infinity, suffered an exploit resulting a loss of more than $600 million worth of crypto. The hackers took 173,600 Ether and 25.5 million USDC tokens in two transactions. The breach happened on March 23, but was only discovered a week later. This exploit is now ranked the second highest crypto heist project in the crypto hacking history.
Grayscale might sue the SEC if it rejects its Bitcoin ETF application again. Grayscale Bitcoin Investment Trust (GBTC) has been publicly traded since 2015, and it has been an SEC-reporting company since January of 2020. The SEC has continually denied spot ETF applications, whlie allowing Bitcoin derivatives-backed ETFs to trade. Michael Sonnenshein, CEO of Grayscale, said he was not shut to any option that would bring a Bitcoin ETF closer to reality.
Lawmakers have removed the ‘Bitcoin ban’ from latest version of EU’s crypto legislation.
Legislative language that appeared poised to bar proof-of-work tokens from the EU is gone from a bill that is set for votes in coming weeks.
Indians will begin paying a capital gains tax of 30% on crypto transactions soon after Parliament passed a controversial tax proposal in March 2022, sparking uproar and disappointment in the country’s crypto industry. In addition, Indians buying or selling crypto will have to pay a 1% tax deducted at source (TDS), as well as taxes on crypto gifts, with no ability to take deductions for losses. The crypto taxes will come into effect on April 1, while the TDS will start on July 1.
The Bank for International Settlements (BIS) Innovation Hub partnered with central banks in Australia, Malaysia, Singapore and South Africa to create two prototypes for an international settlement platform using multiple central bank digital currencies (CBDCs). The executive summary of the project report states that this “initial phase of the project successfully developed working prototypes and demonstrated practicable solutions, achieving its aim of proving that the concept of multi-CBDCs was technically viable”.
State Street, the centuries-old, Boston-headquartered bank, is working with U.S. regulators to roll out custodial services for cryptocurrencies once approved. The company has “mega plans” to offer digital wallet safekeeping services to clients, in the latest sign of traditional finance converging with digital assets.
Investment brokerage Charles Schwab applied to create a “Crypto Economy ETF”. The ETF fund is intended to track the performance of a Schwab Crypto Economy Index – a vehicle that tracks equities engaged in the world of digital assets. If the ETF is approved, it would trade on the NYSE Arca exchange.
Mainstream hedge funds continue to pile into crypto, with groups such as Brevan Howard and Tudor Investment allocating funds to cryptoassets. Brevan Howard bets on the direction of bitcoin, ether and other cryptocurrency prices, while searching for arbitrage opportunities. Tudor Investment, on the other hand, has been buying cryptocurrencies to try to protect against rising inflation.
Binance, the world’s largest digital asset exchange, has received licences to be a crypto service provider in Dubai and Bahrain, a key milestone as it sets up in the Middle East. FTX, another major cryptocurrency exchange, also has received a virtual-asset licence in Dubai and will set up a regional headquarters in the city.
Taiwan’s largest cryptocurrency exchange, MaiCoin, is reportedly raising a Series C funding round that could value it at $400 million. A report by Bloomberg on Friday indicated that the company is considering joining fellow exchange Coinbase in going public on the Nasdaq stock exchange in the US within two years.
Sberbank, Russia’s largest bank, will soon start issuing and exchanging digital financial assets (DFA). The bank says that companies will be able to make transactions on its blockchain platform in April 2022.
Ethereum miners brought in $1.19 billion in revenue in February. Most of these revenues came from the block subsidy ($1.09 billion) and only a small portion from transaction fees ($109.77 million). The numbers reveal a decrease in revenue totals for the third month in a row, with a month-over-month decrease of 15.3% between January and February. Total revenues were $2.07 billion in November 2021 and have been going down since. They hit an all-time high in May 2021, with a total of $2.4 billion.
Goldman Sachs executed the first over-the-counter crypto transaction by a major U.S. bank, a Bitcoin non-deliverable option (NDO) tied to Bitcoin’s price that pays out in cash, with Galaxy Digital on 21 March according to a press release. This is viewed as a notable step in the development of crypto markets for institutional investors.
- NFT, Gaming, and the Metaverse development. The Money Movement podcast, with Ari Meilich, Founder of Decentraland and Thor Alexander, Co-Founder at Big Time Studios, and VP Production at Decentraland.
- President Biden signed and released an executive order on crypto. The contents of the order have been subject to significant debate. Find out everything you need to know about this order. “The Breakdown” by Coindesk.
- Revisrting Bitcoin’s energy problem: Critics of Bitcoin’s energy use should consider its relative carbon density rather than the absolute amount of energy used. Coindesk’s George Kaloudis analyze the “emissions” of Bitcoin mining and provided a new perspective.
- Bitwise Asset Management 4th annual survey with financial advisors reveals the latest thinking on crypto allocations. 94% of financial advisors received questions about crypto from clients. Read the reports here.
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