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US Fed hikes interest rate, NFT market is apparently tanking, Nym raises $300M for developer fund, and more.
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Crypto Market Update 📈
The global cryptocurrency market cap rose to the $1.79 trillion mark, rising 2.17% over the last 24 hours. The total crypto market volume rose 20.50% to $96.83 billion during the same period.
Bitcoin (BTC): $39,526.83 (+1.47%)
Ethereum (ETH): $2,929.79 (+2.60%)
Tether (USDT) : $1 (+0.00%)
Binance Coin (BNB): $407.14 (+4.07%)
Top Stories 📰
1. Crypto rises as Fed hikes interest rates
The US Federal Reserve raised its benchmark interest rates by half a percentage point on Wednesday as they move to tighten monetary policy to combat rising inflation.
The announcement marks its largest interest rate hike since the turn of the century.
In addition, the central bank also approved plans to reduce its $9 trillion asset portfolio to cushion monetary stimulus that led to an increase in speculative assets such as stocks and crypto.
“Inflation is much too high. It is essential we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all,” Fed Chair Jerome Powell said during a press conference.
While the 50 basis points rise wasn't surprising, some hawkish comments hinted at a potential 75 basis point hike at the next meeting. But that seems unlikely as Powell said that the committee isn't “actively considering” it.
“Any FOMC guidance that does not include a 0.75 per cent interest rate increase would be bullish for both crypto and equities,” said Nick Mancini, director of research at Trade The Chain.
And that’s exactly what happened.
Following the news, the equity and crypto markets both shot up. The Nasdaq and S&P 500 gained over 3% and 2.9%, while digital currencies such as Bitcoin and Ethereum rallied about 3.5% and 1.2%. Overall, the crypto market cap gained around 6% in the last 24 hours.
Why it matters? Recently, Bitcoin often considered the digital equivalent of gold, has instead maintained a positive correlation with the stock market. According to Arcane Research, Bitcoin's 30-day correlation with Nasdaq stood at 0.70, while its correlation with gold was at -0.45, hinting at a possible long-term shift from being a safe haven to a volatile, risk-on asset.
2. Breaking news: The NFT market is collapsing...
...or is it
Two days ago, the Wall Street Journal published an article claiming that NFT sales dropped to a daily average of 19,000 this week, compared to 225,000 in September.
It cited the data from NonFungible, an NFT market analysis platform, further suggesting that the active wallets, which are used to store NFTs, also dropped by 88%.
But on-chain data from Dune Analytics' dashboard suggests otherwise.
In fact, analytics showed that the Ethereum-based NFT market volume per day in the US was the highest ever, with popular marketplaces like OpenSea witnessing around $1.1 billion in trading volume on Monday alone.
Data from another analytics platform, Nansen, showed that Blue Chip NFTs—safer, well-established NFTs like Azuki tokens and Bored Apes—are surpassing top art and gaming NFT collections.
One Twitter user, NFTstatistics.eth, pointed out that it could be because of the inclusion of sales volume from the play-to-earn game Axie Infinity, which hit an all-time high of over $40 million in November 2021 before falling to $500,000.
Further fueling this bearish sentiment, Tesla CEO Elon Musk changed his profile picture to a popular Bored Ape and tweeting: “I dunno... seems kinds fungible.” Soon, NFT Twitter reacted to Musk's tweet, with one notable Bored Ape holder, saying:
But it had the exact opposite effect on BAYC’s native token APE as it surged 19% to $17.64.
Why it matters? People have long debated the significance of NFTs, with proponents considering them to be the ticket to financial freedom while critics warning of the rampant frauds and scams. And while the current discussion centres only around Ethereum-based NFTs, rivals like Solana are quickly gaining momentum.
Deal Street 🤑
Nym raises $300M for developer fund
Swiss privacy startup Nym Technologies has raised $300 million in funding for its developer fund. Dubbed the NYM Innovation Fund, it will issue grants (between $50,000 to several million dollars) to developers to incentivize them to build on top of Nym's decentralized infrastructure. Investors include Andreessen Horowitz (a16z), Eden Block, Polychain, Tioga Capital, Greenfield One, and others. Nym hosts mixnets, a multistage system that uses cryptography and permutations to hide users' metadata footprints—generated by internet transactions, including crypto trades. The announcement comes a few weeks after Nym launched its native token NYM on several crypto exchanges, such as Huobi and OKX. In November, the company had raised a $30 million Series A funding round at a $270 million valuation. While Nym has created plans to issue open calls for additional proposals, the grants offered in the first round will go towards improving "privacy on the Internet for the common good."
Coinbase, Nexo join Amberdata's Series B
Amberdata, a California-based institutionally-focused digital asset data provider, has raised $30 million in a Series B funding round led by Knollwood Investment Company. The round included new investors such as Coinbase, Nexo, Nasdaq Ventures, Susquehanna International Group, and existing investors, including Franklin Templeton, Boldstart Ventures, and Citi. Launched in 2017, Amberdata provides comprehensive data and insights into crypto markets, blockchain networks, and DeFi to the world's largest financial institutions entering the digital asset class. The company had previously raised a $15 million Series A funding round led by Citigroup. The fresh capital will be used to create new product offerings and expand its presence across the US and internationally.
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