April Monthly Market Update
Welcome to our monthly wrap-up newsletter, where we scan the metaverse for the most important pieces of information that you need to know; from DeFi to stablecoin, markets to regulation, we’ve condensed it for your convenience.
Markets
The U.S. economy contracted for the first time since the pandemic, declining by 1.4% for the first quarter of 2022; Bitcoin and the broader crypto market moves were muted in response to the news. The critical factor of the GDP decline was trade inventories, perhaps caused by supply chain issues, whereas consumer spending and business investment remained strong; a positive post-pandemic sign.
U.S. tech stocks that outperformed in the pandemic, including Netflix, PayPal, Shopify and Zoom, have plummeted from their all-time highs as the threat of inflation and interest rates continue. Netflix fell an astonishing 35%, in a day, on Wednesday, shedding more than $54B in market value, as it reported declines in its subscriber base. By comparison, Bitcoin's worst one-day drop was about 40% on March 12, 2020 - triggered by the first wave of the Covid-19 pandemic. The Nasdaq 100 index of tech names are down almost 17% this year, but many of the most widely-held names are down even more.
In other news, crypto investors made $163 billion in gains in 2021, according to Chainalysis, increasing from $32.5 billion in 2020.
Source: “2021 Cryptocurrency Gains by Country” by Chainalysis
Institutions
It has been a busy month for institutional adoption of cryptocurrencies across the globe. Circle, the company behind USDC stablecoin, struck a deal with America's oldest bank BNY Mellon to become the primary custodians of its USDC reserves. Fidelity launched Digital Asset Account, allowing account holders to have a portion of their retirement savings allocated to BTC. Goldman Sachs makes its first BTC backed loan. MetaMask expanded their institutional offering by integrating new crypto custodians, and Fintech giant Stripe released a feature that lets Twitter users get paid in stablecoins.
It's been a strong year for institutional adoption. We saw:
BNY announced a new business unit to focus primarily on digital assets,
Fidelity launched its own digital assets business,
Fidelity launched a BTC exchange-traded product in Europe,
JPMorgan Chase bought blockchain analytics company TRM Labs and,
Last month Goldmans placed its first OTC crypto option trade.
This month, the Panamanian Legislative Assembly has passed a bill regulating the commercialisation and use of cryptocurrencies. Once signed by the President, it will enable residents of the country to pay their taxes and civil debt using digital assets.
Australia almost launched its first three BTC ETFs. The exchange listing the Bitcoin Spot ETF from Cosmos Asset Management, Cboe Australia, released a statement late Tuesday stating that "standard checks prior to the commencement of trading are still being completed".
Regulation
Britain's chief financial minister declared that the U.K. intends to be a crypto powerhouse. The U.K. aims to become "a global hub" for crypto, "the very best place in the world to start and scale crypto-companies," John Glen, economic secretary to the Treasury, said in a speech. The U.K. will set up a sandbox to enable crypto companies to innovate and experiment, and the government plans to work with the Royal Mint to mint its own NFT.
Binance obtained in-principle approval to offer its digital asset services in the Gulf emirate. Abu Dhabi is the third jurisdiction in the region to permit Binance to operate, following Dubai and Bahrain.
BTC
Bitcoin 2022, the crypto conference in Miami, ran this month, drawing in 35,000 attendees. This year BTCMiami was joined by the likes of Jordan Peterson, to Serene Williams. The interest was palpable. More familiar names such as Peter Thiel, El Salvador's President, Nayib Bukele, Sen. Cynthia Lummis, Cathie Wood, Michael Saylor and Block TBD lead Mike Brock attended the event.
This month, the Central African Republic adopted BTC as legal tender, the second to do so after El Salvador.
Source: “The Miami Bull” - Bloomberg
ETH
The Ethereum Foundation released a report including the foundation's mission statement, philosophy, and 2021 financial summary. Here's a snapshot of Ethereum's progress from Q1 2022 (year over year):
Network Revenue increased 46% from $1.6 billion to $2.4 billion
The Average Transaction Fee fell 80% from $14.93 to $2.98
ETH Staked rose 111% from 5.2 million to 10.9 million
DeFi TVL increased 82% from $49.1 billion to $89.5 billion
The Layer-2 TVL increased 964% from $686.9 million to $7.3 billion
As of March 31, 2022, the Ethereum Foundation holds $1.3 billion in cryptocurrencies and $300 million in non-crypto investments and assets.
All values in USD.
Disclaimer
This content is for general information purposes only, not investment advice. Cryptocurrencies including Bitcoin are volatile and fluctuate on a day to day basis, thus trading such requires proper diligence and sound judgement in order to evaluate the risks associated. Nothing in this newsletter constitutes an investment or legal recommendation, nor should any data or content mentioned in the newsletter be relied upon for any investment activities.You should consider seeking independent legal, financial, taxation or other advice to check how the newsletter information relates to your unique circumstances.
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