The Most Anticipated Upgrade In Crypto is Coming.....Eventually
The Fed's Tightrope Act Continues as Crypto Markets Play the Waiting Game.
The Fed’s tightrope act continues as crypto markets play the waiting game.
Overview
Fed: Playing good cop/bad cop.
ETH merge delayed…
BTC: Important support holding strong.
BlackRock “studying” crypto.
Anchor + Polkadot.
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What did the Fed say to move crypto markets?
“I’m forecasting that this is pretty much the peak, it is going to start to come back down,” Federal Reserve (Fed) Gov. Chris Waller said yesterday.
Waller noted that interest rates should begin to falter demand and that oil prices have retreated after the Russian invasion-induced spike.
In what seems like a good cop/bad cop game, Waller’s comments helped the markets gain traction after a rocky start to the week.
Various analysts have rejected optimism as an effort to calm negative market sentiment. Nevertheless, the Fed still plans to raise rates by an estimated two basis points (bps) in the upcoming meeting, which the markets give an 84% probability.
Though it’s good for the markets, the dovish tone comes with a grain of salt. Words are just words, and the Fed has recently utilized this particular tool to manipulate market moves. Chances are Waller is trying to steady the ship for the time being.
To the surprise of nobody, the ETH merge is pushed back…
Yes, hard as it is to believe, it turns out Ethereum’s merge with the Beacon Chain, heralding the full transition to a proof-of-stake (PoS) consensus mechanism, may not be coming in June after all. In a tweet posted yesterday, developer, Tim Bieko, stated that “It won’t be June…”
The upcoming merge has been cited as a potential bull-run catalyst, and while that may remain the case, it appears that we’ll have to continue doing what we’ve become accustomed to: wait!
Market update 🌍
The inflation games continue. The markets reacted positively to Federal Reserve Governor Chain Waller’s comments today, and took the statements as a green light. Hesitantly, bitcoin (BTC) climbed 2.68% to US$42,147 today, showing a nice bounce from a strong uptrend level discussed in yesterday’s Morning Brew. However, there is still a lot of fear in the crypto markets, noted by the Bitcoin Fear and Greed Index, which rose a modest three points to 28.
Altcoins additionally took the opportunity to climb, with centralized exchanges (CEX) +1.4%, decentralized finance (DeFi) +1.4%, and smart contract platforms +1.4% leading the categories. A handful of projects with recent catalysts made the notable climber chart: Frax Share (FXS), Aave (AAVE), GMX (GMX), and Redacted Cartel (BTRFLY). The fast climbers highlight the importance of staying up-to-date with project changes.
Source: Trading View
Newswatch 📰
VC funding is through the roof. The Block Research releases a report noting that the blockchain/crypto sector has received a high of US$12.5 billion in venture funding in Q1, 2022, 36% went to non-fungible tokens (NFT) / gaming. Venture funding has increased for seven consecutive quarters, according to the report.
BlackRock hits the books. During a conference call with Wall Street Journal, BlackRock CEO Larry Fink said the company is studying the crypto sector "broadly". This comes after the Circle announced a US$400 million strategic partnership with the firm earlier this week. Blackrock is the world's largest asset manager with US$10 trillion in assets.
Crypto payments expansion. Custody platform, Fireblocks, partners with payments giant, FIS, to accelerate crypto adoption. The two giants set to advance the payments services for crypto to over 6,000 global customers. Clients of FIS will gain access to moving, storing, and staking crypto if plans move as attended.
Uniswap in court. A class-action lawsuit accuses Uniswap Labs and its investors of fraud. The user, who lost funds to fraudulent pump and dump schemes listed by Uniswap DEX, blames the protocol for listing unregistered securities and failing to list them with the (Securities and Exchange Commission) SEC. The tokens mentioned in the lawsuit are EthereumMax, Bezoge Earth, Matrix, Samurai, Alphawold Finance, Rocket Bunny and BoomBaby.io.
Helium teams up with Microsoft. The Helium (HNT) ecosystem announces the integration of Microsoft IoT central with the Helium Console. Microsoft IoT users can now leverage the Helium Network's massive coverage to expand the range of IoT solutions. Helium benefits from the integration with increased usage and data transfer.
On-chain ⛓
USDT to Polkadot. USDT stablecoin issuer, Tether, launches the stablecoin on the Kusama network (KSM) and, in turn, brings the largest stablecoin (by marketcap) to the Polkadot (DOT) network.
Do Kwon at it again. The Luna Foundation Guard (LFG) increased its BTC holdings by 2508 bitcoins today and currently sits on 42,406 BTC (approximately US$130,840,744 at the time of writing).
Nervos mainnet upgrade. Nervos (CBK) announces its mainnet upgrade for May 10, 2022. The upgrade will “have more new features, including a crypto-friendly instruction set, virtual machine versioning, extensible block headers, and new cryptography standards”.
NFT & metaverse update 🐵
Writer’s take
While the Fed talks the smooth game, some worrisome cracks appear on the finance sector's edges. We recently saw Sri Lanka and Russia default on debts. Barclays Bank has lost 450 million in pounds (approximately US$591,014,250 at the time of writing) on a so-called bond blunder, and a sell-off in 116 million shares of Deutsche Bank points towards increasing pressures from inflation. So, while the rhetoric is "everything is under control", a flurry of activity is taking place underneath the surface. Nobody knows where the tides of fiscal mismanagement will lead, but the indicators point towards the Fed eventually going back to what it does best — printing money to bail out the system. It's likely just a matter of time, despite the lulling effects of sweet talk.
-Gabri