The Round Up: September 27th
China shakes the Crypto market, behemoth NFT fundraisers and Twitter's Creator Economy
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Pick #1: Drama in China hits global crypto markets
On Friday, The People's Bank of China announced that cryptocurrency transactions would be classified as illegal, indicating that crypto did not have âlegal tender statusâ and was contributing to âcriminal activities in the country,
Itâs been a rough week for global crypto markets off the back of the Evergrande issues. With this announcement from the Chinese Central Bank, the tokens for huobi token (HT) and OKEx's OKB token (OKB) both plunged by over 15%.
This morning Huobi announced that they would de-active all existing users from Mainland China.
My Take: Itâs been a rough week across the crypto markets; the issues with Evergrande and Chinese regulation have accelerated calls of a market top from crypto bears.
I donât like calling the market, but both of these issues are catalysts for defi. Over-regulation will be a defi catalyst, fiscal irresponsibility from govt/companies will be a defi catalyst⊠these issues remind us of why leveraging software to create permissionless/trustless systems matter.
Oh, did I also mention that Coinbase withdrew their lend product as well this week? Rough times, Mr Armstrong.
Pick #2: August, a great month for NFT fundraising
Last week Sorare, a fantasy soccer NFT platform, raised a massive $680mm round led by Softbank Vision Fund 2, valuing the business at $4.3bn. Not to be outdone, Dapper Labs also raised $250mm at a $7.6bn valuation, led by Coatue Management.
Both announcements come off massive activity in August, with $2.1bn in venture funding across the crypto market.
Opensea had a great month in August, source: Dune Analytics My Take: For all the FUD in the last two weeks, these fundraise announcements remind us the rapid evolution of the market. Many of you have asked me my thoughts on 2018, and my mental model is simple: this is not the same.
In 2018, the lack of capital meant that many teams shutdown, investor appetite dried up, which across the board, choked market activity. The amount of institutional investors who have raised $bns for crypto funds are just coming live⊠this will be deployed in the next 12-18 mos.
Pick #3: Twitterâs Creator Economy
Last week, Twitter enabled bitcoin tipping for iOS users today as part of its âturning fans into fundsâ strategy, integrating BTC payments via the Lightning network.
Source: Twitter
Further, Twitter also plans to roll out an NFT authentication feature, allowing the holders of NFTs to be verified owners on Twitter (take that, Jpeg copy+pasters!)
My Take: Twitterâs strategy looks to be reflective of a broader mandate from Dorsey to use his two key properties - Twitter / SQ - to lead the way for main-stream use-cases for crypto. Twitterâs specific focus on a âcreatorâs hubâ makes alot of sense, and hopefully, finally introduces monetization that the TWTR leadership team have been trying to find for 8+ years.
Sidenote: Who wants to take bets with me on when TWTR & SQ merge?
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Disclaimer: Donât take this newsletter as investment advice, all of this content reflects my opinions and ideas on where the world is going. As always, DYOR and stay safe - itâs the wild west out here.