Velvet.Capital blog

Weekly DeFi & Crypto Alpha

Greener Pastures Ahead for Crypto?

Goodbye, January! And hello FeBRRRRuary (see what we did there Chairman Powell?)! The month kicked off with some big news from the Federal Reserve as they announced a .25% hike in interest rates. The rate hike was in line with expectations and was paired with dovish commentary from the Chairman where he alluded to the fact the hikes could be about done (the market is pricing in maybe 2 more this year) and won't be exceeding the current rate of .25% in the future. For a frame of reference, this takes the interest rate range to 4.5%-4.75%, the highest since October 2007.

Now you might be tired of hearing about interest rates but they're not tired of dominating the news just yet so you still need to be paying attention! But, trust us, this is good news for the crypto world. Low-interest rates are an excellent thing for risk assets across the board. Inflation looks to have peaked and is now declining and the US economy still remains relatively strong despite all the recessionary rhetoric. If these trends continue the Federal Reserve will most likely turn from hawkish to dovish pretty quickly and we see that as a potential catalyst for crypto markets and risk assets more broadly. The return of the bull may be closer than we all think! In the mean time, we keep building!

At Velvet.Capital, we understand the fast-paced nature of the crypto markets. Our goal is to provide our frens with valuable insights and the top news from the crypto-sphere- and have some fun along the way! Let us know what you think - all suggestions welcome!

(Don’t forget to take a look at what the future of DeFi has to offer: Velvet.Capital.)

Now let’s jump into some news!

Quick Hitters

· Uniswap to Deploy on BNB Chain.
· The SEC has charged Caroline Ellison and Gary Wang with fraud.
· MetaMask is opening ETH liquid staking directly from the wallet with Lido and Rocket Pool.
· Bank of America analyst Alkesh Shah says central bank digital currencies (CBDCs) and stablecoins will define money in the future.
· Bitcoin topped $23,000 for the first time since August, as Ether tops over $1,600.
· Binance's SWIFT payments partner Signature Bank says it will no longer support crypto transactions valued at less than $100,000.
· The European Parliament's Economics and Monetary Affairs Committee passed new requirements requiring banks to hold more capital against potential crypto losses, which will take effect once approved by the European Parliament.
· ZEBEDEE announced a partnership with Fountain, a listen-to-earn platform allowing podcast listeners to earn Bitcoin.
· 1inch Network announces Hardware Wallet
· Spatial Labs raised $10M in seed funding round led by Blockchain Capital and Jay-Z's venture capital firm Marcy Venture Partners.

In The News

Jeremy Allaire, CEO of Circle, expects US congress to emphasize stablecoin regulation this year. “Stablecoins are the lowest-hanging fruit,” Allaire told CoinDesk, “It’s the most straightforward. It’s a foundational piece… “What's happening is that members of Congress are realizing that they better get even more educated...This is not a put your head in the sand and hope it goes away issue.” Congress has had a bad track record of being at worst dismissive and at best passive regarding crypto regulation. Unfortunately, what they’re finding out is that it is too important to ignore.
New Hampshire is the most recent state to attempt to attract blockchain entrepreneurs and businesses to their jurisdiction. “[The New Hampshire Government wants to act] as a leading jurisdiction for the development of sound and effective proposals to clarify current laws and to support law enforcement in its efforts to protect New Hampshire consumers and investors,” said Republican Governor Chris Sununu is a recent statement. New Hampshire has been receptive to crypto, based on its legislative proactiveness and historically Libertarian population. Wyoming has similar aspirations but has struggled to attract crypto talent and entities to want to move to Cheyenne.
“NFTs are about signaling wealth… but what if we want to create NFTs that are not just about who has the most money, and that actually try to signal something else?” – Vitalik Buterin
NFT collection Pudgy Penguins recently announced a push to adopt use of SBTs with its upcoming “soulTransport.” Soulbound Tokens (SBTs) are non-transferable NFTs, with distinct utilities such as identity, credentials, ratings, etc. “SoulTransport will begin with a limited amount of individuals and clubs, but as we test use cases, soulTransport will become accessible to all,” Pudgy Penguins tweeted. “As we develop new uses for SBTs and their involvement in our digital identity thesis, allowing users to deploy their own SBT is a step in that direction.” SBTs are an interesting innovation in gaming, as users get more autonomy around their likeness and items.
According to Coindesk, more than 1 in 3 senators and representatives in US congress took contributions from SBF or other senior executives at FTX. Most of the politicians surveyed said they donated said money to charities, others report they had conversations with the US DOJ about setting aside some of that money to compensate certain FTX victims. This shows the political aspirations of SBF, who signaled a move to use his newfound wealth to jockey political favors in Washington. 2022 was the year of FTX, and hopefully the end of hypercentralization.

Description automatically generated
Sleepagotchi, a sleep-based mobile app, recently raised $3.5M. Sleepagotchi is attempting to gamify sleep: users claim digital collectibles based on attaining their sleep goals. Founders Anton Kraminkin and Alex Karatkou site Duolingo, Pokemon Go, and fitness apps as inspiration. “Sleepagotchi sits at the intersection of gamification, incentivized health behavior, and community building. Through a unique framework of utilizing collectibles to encourage good sleep behavior, the company will change how people interact with their health and fitness goals and collaborate and compete in gamification for good,” said one of the angel investors, in a statement.