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Bond Yields Surge While Inflation Falls; Judge Rejects SEC’s Ripple Appeal; and Strong September Job Numbers
Recently we’ve been talking a lot about the importance of rates and this week will be no different since this is one of those all-important factors that can act as a tremendous tailwind or strong headwind for both crypto and traditional markets. The recent surge in bond yields has been the dominant factor driving market moves, leading to rising interest rates and a corresponding decline in stock prices. That being said crypto markets have remained relatively resilient to these as the divergence from the stock market performance continues to hold.
While it may seem that higher bond yields will continue to be the prevailing trend, some analysts argue that there is a compelling case for rates to reach their peak soon. They anticipate a decline in inflation, slower economic growth, and the conclusion of the Fed’s interest rate hikes will exert a more substantial influence, potentially leading to a reversal in the current bond yield trajectory. That said the recent strong job numbers provide a counterpoint to this narrative.
In light of the September jobs report (over 330,000 jobs added), it became evident that the labor market is putting up a fight. Payroll growth exceeded expectations and showed acceleration compared to recent months. However, one silver lining was the further moderation in wage growth, which some experts believe could signal a more favorable path for future inflation. This nuanced view suggests that while bond yields have been on the rise due to strong economic data, the labor market dynamics may still offer potential clues about the future direction of both interest rates and inflation. What do you think will happen? Let us know in the comments below! :)
Quick Hitting Alpha
· Uniswap v3 is live on the ZkSync Era Layer 2 network via Oku integration.
· Kraken is set to acquire Dutch-based exchange Coin Meester BV (BCM) as part of its European expansion.
· El Salvador’s Volcano Energy, a renewable energy and crypto mining firm, has partnered with Bitcoin mining software provider Luxor Technology to launch Lava Pool, the nation’s first crypto mining pool. Lava Pool will harness El Salvador’s geothermal energy resources for environmentally sustainable Bitcoin mining.
· OpenSea has launched a no-code hub enabling users to create and mint NFTs without coding skills or blockchain experience.
· Hong Kong’s Securities and Futures Commission (SFC) has formed a task force in collaboration with the Hong Kong Police Force to supervise virtual asset service providers and combat illegal activities on crypto exchanges, following a high-level meeting between the two parties.
· Avalanche’s on-chain activity has surged by 130% in just two days following the launch of Stars Arena, a low-cost Layer 1 platform aimed at rivaling Friend Tech. Stars Arena has quickly gained over 300,000 users.
· India is in the process of building a worldwide database that will include data from all cryptocurrency exchanges, including those on the dark web. This database is being developed to facilitate the detection of crypto-related crimes and is scheduled to launch by March 2024.
· Christian Louboutin, the iconic fashion designer celebrated for luxury heels, has unveiled two limited-edition NFT collections in partnership with Marvel. These NFTs will be offered to Louboutin customers as part of an exclusive physical shoe and accessory collection purchase.
· The International Monetary Fund (IMF) is cautioning against the potential rise of an alternative financial system through unregulated cryptocurrencies. This perspective, shared by web3 proponents, underscores the disruptive potential of decentralized web3 technology, despite its relatively short history of just over a decade.
In The News
In a unique turn of events, a trader on Taiwan’s MaiCoin Max crypto exchange recently became 10 million NTD ($310,000) richer, not from trading success but due to the exchange’s tax compliance. Taiwan’s “Uniform Invoice Lottery” system mandates that retailers providing official receipts, which double as lottery ticket numbers, must send electronic copies to tax authorities. These authorities conduct monthly draws, including a 10 million NTD grand prize. As every trade on MaiCoin generates taxable events, including profit from spreads and service fees, top traders can accumulate numerous virtual receipts, increasing their chances of winning. This creative tax receipt lottery, dating back to the 1950s, encourages tax compliance and occasionally rewards everyday consumers with unexpected windfalls.
For casual crypto enthusiasts exploring investment options, focusing on established cryptocurrencies like Ethereum and Bitcoin may be the wisest choice. The crypto market has transformed into a competitive PvP arena, making altcoin investments complex and time-consuming. While major cryptocurrencies might not promise astronomical gains, they offer a degree of safety during uncertain market phases. Alternatively, staking your ETH can inject dynamism into your portfolio. The crucial consideration here is risk-adjusted returns; investing in riskier altcoins should yield superior returns, a feat that many projects may not achieve. Drawing parallels with 2019, a bear market, pre-halving year, and pre-election year for the US, can shed light on the importance of prudent investment decisions in the dynamic crypto landscape.
Sotheby’s and Ledger have joined forces to offer a unique partnership that blends the world of traditional and digital art with secure on-chain custody solutions. The collaboration includes a co-branded Ledger Nano X, exclusively provided to buyers of premier digital art auction lots via Sotheby’s, and educational content developed through Ledger Academy, published on Sotheby’s Metaverse. The partnership aims to introduce the next generation of art collectors to the world of web3 and ensure the security and maintenance of digital artwork. Starting in 2024, purchasers of top digital art auction lots will receive a limited edition co-branded Ledger Nano X, featuring Sotheby’s iconic deep blue color and offering user-friendly access and white-glove concierge onboarding services.
Judge Analisa Torres has denied the US Securities and Exchange Commission’s (SEC) motion to appeal its loss against Ripple Labs, the issuer of XRP. In July, Judge Torres ruled that retail sales of XRP did not meet the legal definition of security but found Ripple had violated securities laws by selling XRP to institutional investors. The SEC sought to appeal this decision, but Judge Torres rejected the motion, stating that the SEC failed to show controlling questions of law or substantial grounds for differences of opinion. The lawsuit against Ripple prompted some exchanges to delist XRP, but after the July ruling, many crypto firms announced plans to relist or explore relisting the token.
Wirex has introduced W-Pay, a noncustodial crypto debit card service based on zero-knowledge proof technology and built on Polygon’s Chain Development Kit. This decentralized solution aims to enhance scalability and security in crypto transactions. W-Pay enables noncustodial wallets and DApps to issue crypto debit cards, eliminating third-party risks and giving users full control over their funds. Key features include ZK technology for swift and secure transactions, EVM compatibility, account abstraction, and integration of DApps and noncustodial wallets with traditional payment systems. Wirex claims this will usher in a new era of on-chain card payment services.
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