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Weekly Trends 22/11 – 27/11

  • 29/11/2021

  • Prominent crypto investor Coatue, known for backing Chainalysis, invested $300 million in Niantic’s metaverse project.

Niantic, the developer of the popular augmented reality (AR) mobile game Pokemon Go, is planning to build a “real-world” metaverse with newly raised funding.

The company officially announced Monday the completion of a $300-million raise from the technology-focused investment manager Coatue, bringing the company’s valuation to $9 billion.

“Niantic is building a platform for AR based on a 3D map of the world that we believe will play a critical role in the next transition in computing,” Coatue general partner Matt Mazzeo said. “We are excited to partner with Niantic because we see this infrastructure supporting a metaverse for the real world and helping to power the next evolution of the internet,” he added. Niantic did not explicitly say that its metaverse would implement any aspects of blockchain technology, non fungible tokens (NFT) or cryptocurrencies.

“We’re building a future where the real world is overlaid with digital creations, entertainment and information, making it more magical, fun and informative,” Niantic founder and CEO John Hanke said.

Pokémon GO remains a huge success: numbers of active users of Pokemon Go worldwide have skyrocketed from 164 millions users in 2016 to 603 millions users in 2020.  It raised more than $ 1 billion in 2020 and is expected to exceed that amount of revenue in 2021, according to data from statista.  Niantic’s metaverse project will be easier to take giant steps towards mass adoption with this large amount of active users.

  • Republic of Palau Partners with Ripple to Develop Digital Currency Strategy

Republic of Palau has partnered with San Francisco, US-headquartered crypto solutions provider Ripple to explore the creation of its national digital currency. The partnership will first focus on developing avenues for inter-border payments that could be facilitated by this digital currency that will be backed by the US dollar, if all goes according to the plans. As part of the deal, Ripple will provide tech, business, design, and policy support to Palau. The government of Palau wishes to provide people with an alternate to bank currencies with expanded financial access.

According to the announcement, if Palau gets a national digital currency, the authorities there are open to experimenting with its use cases on decentralised public blockchain called XRP Ledger (XPRL).

  • India’s Government Seeks to Ban Private Cryptocurrencies with a New Bill 

Briefly on November 24, USDT/INR fell to 67 after the new bill was made public. The bill is set to ban all private cryptocurrencies in the nation and will be introduced in the upcoming winter session of its Parliament. The documents also layout framework to create CBDC – digital rupee

→ It is a reminder that what causes crypto volatile is regulation uncertainty. Same thing happened in China a few months ago when people rushed to sell USDT for RMB after the Chinese government said they would ban cryptocurrency exchange activities.

  • The US Federal Reserve discussed Taper as the interest rate increase.

As inflation accelerates in the US, the Fed wants to speed up asset purchases and increase interest rates around the first half of next year. FOMC (Federal Open Market Committee) said it will reduce Treasury purchases by $10 billion and mortgage-backed securities by $5 billion per month. At the end of the Tapering period, the Fed plans to increase the interest rate to reduce inflation at around 2%.

In fact, the global pandemic has been a major factor causing Bitcoin prices to increase. The cost of borrowing is low, and many people in the US receive “free money” from stimulus checks, thus they can invest in high risk and high return assets including Bitcoin and cryptocurrency. 

Source: Huobi Research & FRED

The last time that Fed put taper on Quantitative easing (QE) was the 2013-2014 period. The Bitcoin price movement during that tapering period is shown in the above graph. 

The taper is going to affect the cryptomarket in the following ways. Firstly, it will reduce the money (capita) supply to the market, thus slowing down the market liquidity growth rate. This means the price of assets (Bitcoin and stocks) is less likely to rise wildly. Secondly, the amount of capital remaining in the market after the Taper ends will keep the asset prices high. 

  • Boba – Layer 2 for Ethereum

A new layer 2 platform jumped out of nowhere and accumulated $531.67 million in Total Value Locked. Boba has surpassed Optimism in terms of  TLV (TVL for Optimism is $351.51 million).

There are a few reasons explaining Boba’s sudden growth. First of all, OolongSwap accounted for 87.22% of the TVL with $463.72 million. What drives investors’ interest to Oolong is its high APR. For example,  APR for BOBA-ETH is 96.65% (OLO) + 4.14% (LP), and for OLO-USDC is 1,578.56% (OLO) + 7.46% (LP). Secondly, Boba is a rebrand of OMG Network and then it fork Optimism’s code, therefore, Boba already has a certain number of users. Boba rewards BOBA tokens to OMG Network holders on the rate of 1-to-1. 

According to Boba’s tweet, One unique feature to Boba is it allows users to withdraw from the network (to Ethereum) in less than 10 minutes. While users have to wait 7 days to withdraw for other optimistic rollups.

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