News

GM Defiers!

Bitcoin has been diverging from stock markets this year in a sign that investors may be taking a fresh look at crypto as a hedge against financial crises. Coinbase, one of the largest cryptocurrency exchanges, has launched a platform to offer perpetual swaps to international customers. And in the art world, Sotheby’s has made a bold move by launching its own NFT marketplace.

✍️ In today’s newsletter:

• Bitcoin’s correlation with equities falls to 12%
• Coinbase launches international exchange
• Sotheby’s unveils NFT marketplace
• Op-ed: How DeFi could help banks manage risk, prove solvency & stay relevant

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📈 Markets in last 24 hrs:

🎬 WATCH

Watch our video on why Balaji burned $1M to prove a point. And check out our podcast with Nader Dabit, director of developer relations at Aave/Lens.

Markets

Bitcoin Decouples From Stocks As Fed Decision Looms

TLDR Bitcoin’s correlation with equities has dropped to 12%, the lowest level since mid-2021. This decoupling suggests that Bitcoin is now behaving more like digital gold and could perform well during a period of stagflation. The correlation between Bitcoin and gold has also increased, while its inverse correlation with the US dollar remains intact.

SO WHAT The decreasing correlation between Bitcoin and equities suggests that the digital asset is becoming a more distinct and independent asset class. The potential for BTC to thrive in a period of economic turmoil and its correlation with gold makes it a potentially attractive hedge for investors.

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CEXs

Coinbase Looks Beyond The U.S. With International Exchange

TLDR Coinbase stock rose over 4% after the launch of an international platform which will initially serve non-US institutional clients and offer perpetual swaps on BTC and ETH with leverage of up to five times.

SO WHAT This move, along with similar efforts by other US-based exchanges, could put pressure on US lawmakers to create a more friendly regulatory environment for crypto companies.

NFTs

Sotheby’s Launches NFT Marketplace

TLDR Sotheby’s, the renowned auction house, has launched its own peer-to-peer NFT marketplace on Ethereum and Polygon that will feature a limited selection of handpicked artists. The platform will allow buyers to trade NFTs using ETH or MATIC tokens, with a 2.5% transaction fee.

SO WHAT The platform will honor creator royalties, which will be enforced using smart contracts. The move comes as NFT royalties paid have dipped by more than 60% in the past three months, with royalties paying users declining by nearly 75%.

Opinion

Is a Government Backstop the Only Solution?

How DeFi could help banks manage risk, prove solvency & stay relevant

TLDR The recent collapses of banks and financial institutions worldwide due to poor risk management and lack of transparency around deposit liabilities have led to calls for reforming the fractional reserve banking system. Governments and central banks have stepped in to backstop customer deposits, but this feeds the cycle of inflation and future bank rescues.

To repair customer confidence in banking, there is a need for commitment to stringent and effective auditing to improve transparency, risk management, accountability, and decision-making.

SO WHAT The emergence of DeFi and other decentralized technologies may provide new opportunities for ensuring real-time assurance of the solvency of banks and reducing information asymmetry between banks and depositors.

🔎 OUR REPORTERS ARE WATCHING

🌍 ELSEWHERE

• Sports Illustrated partners with ConSensys to launch NFT ticketing platform (Businesswire)
• White House Pushes for Punitive Tax on Crypto Mining (Coindesk)
• Celsius eyes merge of entities as creditors claim distinctions were a ‘sham’ (Cointelegraph)