Dispatch #84: Crypto Helps Emerging Markets Catch Up

In this patch of your weekly Dispatch:

• New gains analysis from Chainalysis
• Coinbase launches NFT platform in beta
• Australia approves Bitcoin spot ETFs

The Big Idea

Crypto’s Impact on Global Markets

Chainalysis has just released a report on crypto gains around the world in 2021. In total, global investors saw gains of $162.7B last year. That’s up massively from $32.5B in 2020. As you might expect, the biggest gainers are countries like the USA, United Kingdom, Germany, Japan, etc.

What’s most interesting though, is a comparison between several countries that have realized crypto gains and where they rank in the traditional economic order. Chainalysis points to:

• Turkey: 11th in GDP but 6th in crypto gains
• Vietnam: 25th in GDP, 16th in crypto gains
• Ukraine: 40th in GDP, 13th in crypto gains
• Czech Republic: 47th in GDP but 19th in crypto
• Venezuela: 78th in GDP, 33rd in realized gains

This shows both 1) the adoption pattern of crypto as an emerging market technology for functional utility for remittances and as a response to currency devaluation, as well as 2) the opportunity crypto represents for individual citizens within a nation to leapfrog their economic circumstances.

2021, it seems, was a very good year!

The Latest In…

NFTs

The biggest news this week in NFTs was the launch of the Coinbase NFT marketplace. So far, buying and selling are only live to a handful of beta users (although anyone can browse). Initially, the marketplace is only supporting ETH NFTs. Most significantly, Coinbase has ratcheted up the social features of the NFT discovery experience and is betting that the feature will increase engagement and help solve the problem faced by would-be NFT’ers who aren’t sure how to find cool new projects.

In other news, the metaverse community got excited about rumors of a forthcoming land sale for the Bored Ape Yacht Club “Otherside” metaverse. As a result, APE popped.

The Latest In…

Regulations

The Treasury Department’s Office of Foreign Asset Control (OFAC) added the Russian crypto mining company Bitriver to its sanctions list saying that it helps Russia monetize its natural resources. As you might imagine, there was a lot of chatter about this on Twitter, proving that crypto continues to play an important role in this evolving geopolitical situation.

In other regulation-related news, the UK’s Financial Conduct Authority has chosen an interim director for digital assets; Binance.US has left the Blockchain Association to form an in-house lobbying group, and a proposal from FTX.US around derivatives will be the focus of a public discussion with the CFTC next month.

The Latest In…

Institutions

It just wouldn’t be the crypto industry without Bitcoin ETF speculation, now would it? This week there was renewed chatter about the possibility of a US-based spot Bitcoin ETF. The reason? A recent BTC Futures ETF was approved based on a securities act that SEC Chair Gensler has previously cited as insufficient in terms of consumer protections. The logic here is that if the SEC is changing its tune there, maybe a spot ETF is to follow? In Australia, meanwhile, there is no need for speculation any longer. Next week not one but two Bitcoin ETFs will go live. This makes Australia the ninth country to approve a spot ETF.

The Latest In…

Nexo Community

It appears the Nexo team hasn’t had enough of socializing with the community during Bitcoin2022 and the Paris Block Week Summit. This week two of our colleagues took it to Twitter Spaces to meet with some of the most interesting projects right now.

• Our Co-founder Kalin Metodiev, CFA joined Mizar, the next-gen platform developing smart trading tools for a pro conversation. Click here for the recording.
• DeFi Strategist Kiril Nikolov joined MakerDAO for a lovely CeFi & DeFi integrations discussion. Listen to this gem here.

The Week’s Most Interesting Data Story

Believe It or Not, It’s Netflix

If you’ve been hanging around public markets at all this week, you know that the big story is Netflix. After reporting its first customer decline in over a decade, the company’s stock has absolutely tanked. On Wednesday, it was down 35%, losing $50B in shareholder value.

There are a few reasons it’s significant. Certainly, it has implications for the streaming industry. More broadly though, some are wondering if Netflix represents a sign of what’s to come with other tech stocks that have soared to unimaginable highs, sustained by a belief in the inevitability of growth. What if that growth isn’t as inevitable as it once appeared? Then again, Tesla blew away expectations last quarter, so who knows?

Hot Topics

What the Community Is Discussing

More US Mayors are going Bitcoin.

Supercycle back on the menu?

How’s that for girl power?

What to Watch for Next Week:

• Will Elon make any progress in his Twitter quest?
• Will sanctions pressure continue to build on crypto-related companies?
• Can the late-week market momentum continue?