1. Crypto winter enjoying a brief respite
- The total market cap of the crypto ecosystem, is down over 60% from its 2021 all-time highs, but bounced from $780 billion to $920 billion in the last few weeks.
- The Fed onslaught of 7 rate hikes totaling 4.25% in 2022 has decimated crypto valuations. The recent rebound is alongside other risk assets stemming from an expected slower pace of tightening or even a Fed pause.
- Investors should exercise caution interpreting this as an all-clear sign. Crypto specific risks and a persistent Fed remain headwinds.
2. Bitcoin and Ethereum in focus
- Bitcoin is approaching its next halving event in May 2024. Prior halvings (the amount of BTC awarded to miners is cut in half) have seen BTC prices advance in anticipation.
- Ethereum is slated to undergo another upgrade (the Surge) late 2023. This could be more consequential than 2022’s Merge.
- The Surge should magnify the quantity of transactions across the Ethereum blockchain network - a plus for real economy use cases
- Starbucks launched Odyssey, extending its customer loyalty program with Web 3 technology and NFT’s, offering customer Journeys focused on coffee, connection and community.
- Bitcoin miner Core Scientific filed for Chapter 11 bankruptcy but has since obtained financing from others, including Blackrock, to continue operating as it works through reorganization.
- Senators Elizabeth Warren (D) and Roger Marshall (R) introduced the Digital Asset Anti-Money Laundering Act of 2022, aligning crypto with traditional banks regarding illicit activity.
- Rep Patrick Henry, Chairman of the House Financial Services Committee announced the first Sub-Committee on Digital Assets and Financial Technology and Inclusion.
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