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Global Recession?
Exploring the potential impact of an economic recession on the crypto market:The Federal Reserve's monetary policies, particularly interest rate adjustments, play a crucial role in the economy and can affect the crypto market.During a recession, the Fed typically lowers rates to stimulate activity.Bitcoin, often considered a hedge against financial market instability, may offer an alternative investment, while stablecoins could also play a significant role in preserving capital.Institutional investors' participation in the crypto market during a recession could stabilize or exacerbate volatility.
The Global Crypto Roundup
Bitcoin HODLing Reaches New HeightsLedger’s cold and rough weeksThe SEC targets two big playersHong Kong’s new crypto ruleEl Salvador’s Volcano EnergyLouis Vuitton enters NFT marketApple lists Axie Infinity game on the AppStoreUSDT and USDC stablecoin reserves are changingLast month: Fed raises rates despite bank failuresFirst Republic Bank DownCoinbase recently announced of the launch of its international exchangeProposal in French senate would permit cryptocurrency promotion by influencers70% Drop in Crypto Hacks
Ledger's cold wallet under Fire
Ledger is going to need to Recover last month. On Tuesday, they announced a new product designed to give piece of mind to less tech-savvy users. How? By creating a backup of the Ledger wallet’s seed phrase, splitting it into three, and keeping them in three separate companies.Well friends, when Crypto Twitter heard this it damn near lost its mind. Some of the complaints were about new security risks from things like ID verification. But the biggest uproar was about the fact that Ledger had previously been clear that the seed phrase *could* never leave the hardware device. Despite the turmoil, Ledger is right that for mainstream audiences, seed recovery is an important user experience.
USDT and USDC stablecoin reserves are changing
Tether, the issuer of USDT, the largest stablecoin in the ecosystem ahead of Circle's USDC, has just released its first quarterly report on its reserves for the beginning of 2023. According to the release, reserves have never been higher, with $2.44 billion in excess. The company also revealed the share of Bitcoin (BTC) and gold in its reserves, which amount to $1.5bn (2% of the total) and $3.4bn (4% of the total), respectively.
Circle's USDC, meanwhile, has been losing market share since its depeg related to the collapse of Silicon Valley Bank. In fact, to avoid a repeat of history, Circle said it is reducing its exposure to the U.S. government, avoiding holding Treasuries with maturities beyond June.
First Republic Down; Interest Rates Up
Last month, beleaguered First Republic Bank finally had its fate sealed. After months of speculation, culminating in a significant amount of frantic jockeying and market turmoil last week, First Republic Bank was finally put into FDIC receivership with a pre-negotiated plan to be sold to JP Morgan Chase.When all was said and done, First Republic nudged Silicon Valley Bank out for the title of “Second Biggest Bank Failure in US History.” Many folks on Twitter have been sharing this chart showing how big 2023’s failures have been compared to 2008…and it doesn’t look good.Luckily we had an FOMC meeting this week, so Powell and the Fed could calm markets by ending the tightening cycle, right? Nah, they hiked another 25 bps in defiance of any concern about overall financial stability.At this point, the Fed is assuming they have the tools to deal with banks in their Bank Term Funding Program. But with the debt ceiling debate getting more contentious and the FDIC getting hammered with these failures ?
Does the US Hate Crypto Now ?
Last month saw a crypto hearing where Congressional Democrats circulated talking points that the crypto industry was not sincerely interested in better regulations.As if that weren’t enough, President Biden tweeted that part of the problem with the debt ceiling was Republicans wanting to protect tax loopholes for “rich crypto investors.”Bittrex filed for bankruptcy after being targeted by the SEC.Of course, the industry isn’t just rolling over. Andreessen Horowitz and Blockchain Association all filed petitions against the SEC’s proposed custody rule, which they argue would be represent a defacto ban on financial advisors interacting with crypto.The American giant Coinbase established in the territory since 2012 and listed on the NASDAQ exchange continues its war against the US regulator to have clear regulatory answers.Darkhorse Democrat candidate Robert F. Kennedy Jr gave a rousing speech about the importance of a non-sovereign store of value.Florida Governor Ron DeSantis formally launched his beat-Trump presidential campaign. During a Twitter Spaces event with Elon Musk, he said “I think the current regime, clearly, they have it out for Bitcoin, and if it continues for another four years, they’ll probably end up killing it.” Presidential candidate Vivek Ramaswamy became the second candidate in the US elections to accept donations through Bitcoin.Amid the SEC’s enforcement actions, the U.S. House Republicans are seeing to provide a path for tokens to be treated as commodities rather than securities.Will companies announce moves to Europe as MiCA comes online?
Coinbase recently announced of the launch of its international exchange
Coinbase recently announced the launch of its international exchange. With this expansion, institutional users outside of the US will be able to trade perpetual futures. Many have welcomed the move, emphasizing that "crypto is global" and that the platform's increased presence in more countries will help to further legitimize the industry and allow more people to access cryptocurrencies. While a section of the community rejoiced at the recent development, others see the move as a result of U.S. regulations. regulators. John Deaton, founder of CryptoLaw, asserted that the SEC had "done a miserable job" in safeguarding the interests of investors. The attorney criticized the commission for failing to maintain markets that are fair, organized, and efficient
The SEC targets two big players
The astronomical summer is fast approaching in the western hemisphere, but crypto winter vibes are still in the air. This week the industry was chilled with news of enforcement action against two of the most founding digital asset players in a quick 1-2 succession – Coinbase and BinanceThe charges against the two companies differ and seem unrelated to one another. While allegations against Binance could target primarily and individually CEO Changpeng CZ Zhao, the accusations towards Coinbase include a much broader spectrum, if not the entire industry some would argue.In the event that the lawsuits succeed, they could transform the crypto market by asserting the SEC's authority over it – a long-standing point of contention between the SEC and CFTC themselves.There are more than a few silver linings here: if the ongoing SEC vs Ripple case is anything to go by, we are looking at a lengthy process, where the crypto community will undoubtedly look to take a united stand. And there still are powerful forces in play in the space.Only time and BTC will tell, the latter commendably resilient.
Hong Kong’s new crypto rule
At the top of the last bull run, China turned its back on crypto, banning mining and then trading. That prohibition extended across China’s sphere of influence, and as late as last fall, Hong Kong looked like it was headed towards a significantly restrictive crypto policy.This year, there has been an about-face. Chinese state-owned banks are reportedly soliciting crypto companies to open accounts in Hong Kong. On Tuesday, Hong Kong’s Securities and Futures Commission announced its plans to allow retail trading of cryptocurrencies as early as this year, adding that it will accept applications from exchanges to offer such services from June 1.The rules aren’t totally freewheeling. To be considered for sale to retail, for example, tokens must be listed in at least two major indices. Moreover, the SFC believes that stablecoins shouldn’t be offered until new stablecoin-specific regulations can be implemented.
El Salvador’s Volcano Energy
A volcanic surge in the world of Bitcoin mining. Volcano Energy ignited the industry with a staggering $1B commitment to develop a massive 241 MW Bitcoin mine in El Salvador's Metapán region. Among the investors joining the eruption is none other than stablecoin giant Tether. With 169 MW of solar energy and 72 MW of wind energy, this groundbreaking mining site will unleash a computing prowess exceeding 1.3 exahash/second (EH/s), with the local government playing a pivotal role in the planning and execution.
Proposal in French senate would permit cryptocurrency promotion by influencers
A new amendment to pending legislation, which was approved by the French Senate's Committee on Economic Affairs, would permit registered cryptocurrency companies to engage social media influencers for advertising and promotional activities.Currently, advertising for cryptocurrencies and related services is prohibited in France. However, the proposed legislation seeks to change this by allowing influencers to advertise cryptocurrencies, subject to certain conditions.
Bitcoin HODLing Reaches New Heights
Investors are hanging onto their Bitcoin (BTC) – aka HODLING – longer than ever, according to data from Glassnode. The proportion of BTC that's been held for at least a year has climbed to a record 68%, while 55% of Bitcoin has been held for at least two years, and 40% for three years.Glassnode data reveals that a significant proportion of Bitcoin, approximately 68%, is now being held for a year or longer. This surge in long-term holdings is considered a potentially bullish sign by many analysts. The increased tendency to hold onto BTC instead of selling it indicates investor confidence and optimism about future price appreciation.As Bitcoin HODLing continues to gain traction and long-term holder supply reaches new heights, the market anticipates potential bullish trends and the possibility of a supply squeeze in the near future.
Louis Vuitton enters NFT market
The "Treasure Trunks" collection draws inspiration from Louis Vuitton's iconic luggage trunks and includes a custom-made physical Louis Vuitton trunk, a highly sought-after luxury item valued at tens of thousands of dollars. The NFTs are Soulbound tokens (SBT) and non-transferable, reserved exclusively for the original owner.Owning a Louis Vuitton Treasure Trunk NFT provides personalized products, early access to new items, and bespoke experiences, further elevating the brand's exclusivity. Starting from June 8, individuals residing in the United States, Canada, the United Kingdom, France, Germany, Japan, and Australia can join a waitlist. Selected registrants will be invited to acquire a Treasure Trunk through a dedicated website, with the option to make purchases using cryptocurrency or fiat currency.Louis Vuitton's introduction of the "Treasure Trunks" collection reflects the luxury industry's strategic use of blockchain technology and NFTs to offer privileged membership programs. Esteemed brands like Balmain and Ralph Lauren have also embraced this trend, providing exclusive brand access to discerning clientele.
The BRC20 phenomenon
The "BRC20" phenomenon has largely animated the bitcoin community during the last few weeks to the point of congestion and exploding transaction fees. Even crazier, in just a few days, the market capitalization of the BRC20 has gone from less than $125M to more than $1B. The most valuable of the BRC20, ORDI, has even been listed on some exchanges. Naturally, this meteoric rise was quickly followed by a sharp correction of -50 to -90% for some tokens.
This new trend is dividing the community. While some are warning about the risks associated with the Ordinals protocol and are even calling for a soft fork of the blockchain to ban it, others are reminding people of Bitcoin's freedom fundamentals
FTX customers' refunds in jeopardy because of the US ?
The Internal Revenue Service (IRS), the agency responsible for collecting income and certain taxes in the United States, has filed 45 claims against FTX and its subsidiaries for a whopping $44 billion. These claims have been classified as "Admin priority", giving the IRS priority over other creditors, including FTX's injured customers. The methodology used by the IRS is questionable, however, as some industry professionals have questioned the amounts requested by the federal agency.
Apple lists Axie Infinity game on the AppStore
In a major milestone for the crypto industry, Axie Infinity has secured approval from Apple to list its popular play-to-earn game on the AppStore. Starting on 17 May, 2023, users can enjoy Axie Infinity’s Origins card game on Apple devices.
70% Drop in Crypto Hacks
Blockchain surveillance firm TRM Labs has released a new report saying that crypto hacks were down 70% in Q12023 from a year earlier. The average size per hack is also down – from $30M to $10.5M. The firm suggests two events might have impacted this. The first was the arrest of Avraham Eisenberg who attacked Mango Markets, and the second was the sanctioning of Tornado Cash by the US Treasury
