[Daily] Meta trashes NFTs

Good morning! Welcome to The Daily Moon. Mike Winkelmann aka Beeple has opened a gallery for digital art. Two years after a $69.3 million record NFT sale, Beeple wants to build an artist community. This 50,000 sq ft studio in South Carolina is where Beeple will create and showcase his NFTs. So, just an art gallery then? 🤔

As of Tuesday, 8PM IST

The crypto markets continued their rally even as equities were cautious. Bitcoin was headed towards $26,000 on sudden buyer interest. Ethereum was bullish due to the Shapella buzz. S&P 500 and Nasdaq gained on brisk buying. Back home, Sensex and Nifty were down for the fourth day in a row over selloff in banking, IT, and metal stocks.

Bitcoin Breaks Out

The last few days were a whirlwind ride with back-to-back bank crashes. Bitcoin escaped relatively unscathed. It's erased Friday's losses and topped $25,000. Short sellers who bet on BTC's fall took a big hit.

How’s the mood?Bank stocks plunged amidst the failure of Silicon Valley Bank. A technical indicator called FRA-OIS is at a three-year high of 54. FRA-OIS shows how costly it is for banks to borrow US dollars from each other. It’s a sign that TradFi has reached a breaking point.

Meanwhile, crypto conglomerate DCG claimed that financial services institutions such as Deutsche Bank, HSBC, and Santander are still open to crypto clients.

Crypto shining Investors have turned to crypto, which crossed the $1 trillion market cap on Tuesday. Bitcoin gained over 23% since Friday and became the standout winner. Short traders played a part in it:

1. Traders bet millions of dollars in short positions in hopes of a BTC crash.

2. More than $100 million in short positions were liquidated, which means traders faced losses. Short sell failures help BTC’s bull rallies.

A reassurance from US President Joe Biden about the safety of bank deposits was another factor that aided the BTC bulls.

The Cyprus factorThe discontent with TradFi nudged investors towards Bitcoin. We saw a glimpse of it in 2013 when the common public in Cyprus were forced to part with cash to bailout the country. That’s when a lot of people realised that it was better to switch to decentralised tokens. The current SVB crisis seems to be another Cyprus moment for Bitcoin.

ETH Is Fearless

Ethereum is on a bull ride. Its Shapella upgrade happened on Tuesday and investors are keen to swap stablecoins for ETH. The chaos caused by SVB has worked well for the second-largest crypto.

What’s changed?We told you how USDC-issuer Circle had exposure in SVB. This led stablecoin HODLers to swap their tokens for ETH. From trading activity and swaps alone, Ether earned $10 million in profits. The spike in activity triggered an increase in gas fees. Consequently, ETH surged ~7%.

There's RAI tooA wallet named after Ethereum co-founder Vitalik Buterin had a role in this rally. The person behind the wallet spent over $700,000 to mint a stablecoin called RAI and then swapped it for USDC. Here’s the fun fact: RAI isn’t pegged to any fiat currency but backed by Ether. One RAI can be redeemed for ~$2.8 worth of ETH.

Meta Breaks Up With NFTs

It began less than a year ago, and is already being shut down. Meta will end its NFT run on Facebook and Instagram.

Why?To focus on payments. The commerce and fintech head at Meta tweeted about winding down digital collectibles. But apparently they’ll “focus on other ways” to support creators, people, and businesses.

And there’s some “streamlining” happening with Meta Pay. After trials in May 2022, Meta launched NFTs internationally in June.

The community is unhappyThere was unequivocal criticism from the crypto community. Some called it a short sighted move. Others accused Meta of making NFTs the scapegoat because it didn’t let them “exploit creators”. The best response, though, was from the guy who excitedly launched NFTs on Facebook last year.

Meta’s burnt a lot of money on its metaverse ambitions. But kinda bizarre that it wants to scale back on digital art in favour of payments. Talk about priorities.

US Probes Terra Crash

Do Kwon can’t stay away from the news for very long. Almost a year after the fall of his Terra-Luna tokens, the US Justice Department has begun an investigation.

Wait, is this new?Yeah, it’s hard to keep up. An arrest warrant was issued in Do Kwon’s home country South Korea. Then there was a red notice from Interpol for his arrest. In February, he was accused of securities fraud in the US. Now, there’s the potential of criminal charges being added to the list.

Where is he?That’s the burning question, especially for those who lost their life savings in the Terra crash. Do Kwon was active on Twitter, at least until February. He’s denied being on the run. From Singapore to Dubai and then Serbia, nobody’s been able to find him yet. However this ends, it calls for a movie someday.

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