Dispatch #177: A True Soul in Crypto

Feb 02 4 min read

Dispatch

In this patch of your weekly Dispatch:

Crypto & AI synergy 🤖
Inflation targets 🎯
Billions in profit 💲

The Big Idea

The Star Alignment for Solana

We’re starting with a little confession this week. January was so intense with spot Bitcoin ETF excitement, that we’ve possibly missed giving full credit to a true crypto giant – Solana.You see, ETF developments did well for BTC, currently at 2x from February 2023 levels. Solana, on the other hand, puts that to the ground. It posted a 600% increase – from around $20 to a high of $120. Naturally, it’s on Nexo.But what’s been behind this surge and what could we expect in 2024?

Increased Network Activity: In January, Solana's blockchain recorded a 30% surge in transaction volume compared to December's high of $735.8B. You can thank the memecoin mania for that mostly…
Enhanced Performance: Solana's fast transaction speeds and low fees contributed to its remarkable value increase. The blockchain's impressive 65,000 transactions-per-second capability continues to make it a top performer.
Institutional Adoption: Solana has been consistently gaining traction among traditional institutions, providing blueprints for blockchain node development on AWS and integrating data into Google Cloud’s BigQuery.

A look into Solana's future inevitably starts with a wink at the past when Solana was originally dubbed an “Ethereum Killer”. And if 2023 was anything to judge by, that appears to remain the mission. But how do you continue against the original “internet money”?

Solana’s 2024 Roadmap: Developer community growth through the introduction of token extensions and increased institutional support is in the roadmap and with over 2,500 members, Solana has solidified its position as a central hub for blockchain enthusiasts. The end goal? Network scalability that allows for over 1 million transactions per second. Over to you, Ethereum.

The Latest In…

Crypto and AI: Vitalik’s Four Scenarios

Ethereum founder Vitalik Buterin is not overly active on social media, but when crypto and AI appear closer to intersecting than ever, a signature blog post is in order. Buterin outlines the main challenge – openness. Securing something in cryptography requires it to be open-source; however in AI, an open model or even its training data significantly heightens vulnerability to adversarial machine learning attacks. Yet, there are four points of potential Crypto x AI intersection:

AI as a Player in a Game (Highest Viability): AIs participate in mechanisms where incentives originate from a protocol with human inputs.
AI as an Interface to the Game (High Potential, but with Risks): AIs assist users in comprehending the crypto world and guard against scams.
AI as the Rules of the Game (Tread Very Carefully): This involves blockchains, DAOs, and similar mechanisms directly engaging with AIs, akin to “AI judges.”
AI as the Objective of the Game (Longer-term but Intriguing): The concept involves designing blockchains and mechanisms to construct and maintain AI for broader purposes, utilizing crypto components for enhanced training incentives.

The Latest In…

Tether Makes the Money

Tether had a solid Q4 2023, clocking a noteworthy $2.9B net profit, a record high. Thanks to strategic investments in U.S. Treasuries and the rising values of Bitcoin and gold reserves, Tether's excess reserves grew to $5.4B. Notably, they ensured full coverage for their $4.8B in outstanding loans. This positive financial dance contributed to an impressive $6.2B net profit for the year. 🌟💰

The Latest In…

The Fed Needs More Time

The struggle to bring inflation down has already marked a 23-year high for interest rates. That did not deter the USA's Federal Reserve from dismissing immediate cuts in its latest statement. While target inflation remains at 2%, the Fed did not imply more increases, but chairman Jerome Powell emphasized the need for more data before considering further moves, thus downplaying March rate cut prospects. Market reactions were initially steady but declined after Powell's comments, leading to a Dow Jones drop and a Treasury yield plunge. The key rate remains between 5.25%-5.5%.

The Week’s Most Interesting Data Story

When Whales Surface

Apart from BTC’s recent rally up the charts, spot ETFs have also prompted the crypto whales (those with over 1,000 BTC) to make themselves felt. And where better than on a chart: these big spenders went on a $3B Bitcoin shopping spree last month, adding a massive 76,000 BTC to their stash, now weighing in at 7.8M coins.