⚡️Weekly Crypto Newsletter 9.12.21
Enjoy industry highlights for the week.
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General News
Doja Cat Launches NFT
The price of XTZ skyrocketed 25% after musician Doja Cat announced the launch of an exclusive NFT collection. Doja Cat has 3.4M followers on Twitter and 14.3M on Instagram. The American songwriter and rapper has an outsized influence on pop culture. Buying her NFTs will give users exclusive ownership over digital content and VIP access to events. The musician opted to launch on Tezos, citing its greener approach.
Transaction volume on Tezos has been steadily climbing since March 2021. Given the musician’s profile, this NFT launch could help catalyze a big XTZ run. Unless the broader market tanks, I expect XTZ to go on a nice run in the coming months. I’ve recently started to explore DeFi protocols on Tezos and I haven’t discovered anything of quality. The liquidity profile is poor, functionality is clunky, UI needs a dramatic overhaul, and they lack key analytics tools. However, this means there’s opportunity for early adopters. This upcoming NFT boom on Tezos will onboard many new users. These new users will inevitably come across DeFi protocols and many will experiment with them. This will help bootstrap liquidity and bring new capital into the Tezos ecosystem. In other words, DeFi on Tezos will undergo its first expansionary phase.
Pantera Capital Raises $369M Since July
Pantera raised almost $400M for its new blockchain fund to place bets across the crypto ecosystem. This is short of their $600M target but they’re leaving fund open indefinitely, meaning they could get there eventually. Pantera is known for buying early stage protocol tokens and more well known digital assets like Ethereum. This raise comes as other funds are also collecting capital to invests in the digital asset space. The biggest raise was Adreessen Horowitz’s $2.2B fund, its third for crypto bets.
Despite the ramblings of bears, money keeps pouring into the digital asset space. Funds have massive war chests that will be deployed over the coming months. This is perfectly aligned with the last leg of this cycle.
DeFi News
Algorand Set to Receive Hundreds and Millions for DeFi Growth
The Algorand Foundation has unveiled a new fund positioned to allocate money toward DeFi projects looking to build on its chain. The funds could invest 150 million ALGO to fuel early growth of the DeFi ecosystem. A few Defi primitives likely to get built out first include decentralized exchanges, money markets, options markets, synthetic assets applications, and NFT platforms.
The foundation has revealed the first two grants to build out the infrastructure. This includes $5M for oracles and $5M for bridges. Oracles are required to route information and bridges help connect siloed blockchains so they can interact with each other.
Institutions Dominated DeFi in Q2
According to Chainalysis, institutional investors dominated DeFi transactions. Their soon to be released Global DeFi Adoption Index report stated:
“Large institutional transactions, meaning those above $10 million in USD, accounted for over 60% of DeFi transactions in Q2 2021, compared to under 50% for all cryptocurrency transactions.”
Despite NFTs dominating headlines, DeFi continues to lure in more large players in major economies. Also, the mid cycle correction revealed how durable and resilient the DeFi market is. While major exchanges experienced down times, all decentralized exchanges remained operational. For this reason, I suspect if anything breaks in the legacy markets it may propel more institutional investors into DeFi.
OTC Action
Asia: Strong bids for ADA, DOT, and ICX.
Europe: Robust demand for alts and notable SOL profit taking.
Americas: Trading volume tripled after the dip. Big buy orders for ADA, ETH, and SOL.
Altcoin Index: The index fell to 33 after hitting a local high of 55. According to this indicator we’re already in altcoin season.
Crypto Fear & Greed Index: The index dropped to 31 after the dip but has risen to 32 since.
My Outlook: Unless the macro changes, this market is primed to go higher. Funds are aggressively deploying capital and often times are competing for early rounds. As this money makes its way into the market we’ll see capital rotation. Profits will be recycled from one investment to another. This in my opinion the last leg of the bull market and it’s where investors make most their gains.
Portfolio Update
This last few weeks I converted a few my alts into SOL and Solana DeFi alts. I used my SOL to buy blue chip NFTs and deployed my DeFi alts across a few protocols on Solana. Also, I converted some of my LINK and WAX tokens into TEZOS. Lastly, sometime this week I’m thinking about getting exposure to ALGO as well.
Token of the Week
Algorand is a blockchain protocol that aims to be simultaneously scalable, secure, and decentralized. It’s proof of stake which uses staking system to verify new transactions and produce new crypto tokens. The price of the chain native token ALGO has doubled over the last week and is up over 6x for the year. With their recent announcement of a $300M DeFi fund they’ve attracted the attention of VC investors. I believe we’re going to witness a tremendous amount of capital flow into the Algorand ecosystem. This is not only bullish for ALGO but also for all the layer-2 protocol tokens. My tentative game plan is to buy ALGO and use the profits to purchase layer-2 protocol tokens as they get listed.
Notable Tweets
