🔥 Yeezus x NFTs
Kanye West files for NFT and metaverse trademarks, Morgan Stanley expects significant crypto VC drop, Binance Labs raises $500M crypto fund and more.
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Crypto Market Update 📈
The global cryptocurrency market cap stood at the $1.25 trillion mark, falling 4.25% over the last 24 hours. The total crypto market volume rose 15.64% to $96.63 billion during the same period.
Bitcoin (BTC): $30,139.37 (-4.61%)
Ethereum (ETH): $1,834.25 (-5.18%)
Tether (USDT) : $0.99 (-0.01%)
Binance Coin (BNB): $304.85 (-3.33%)
Top Stories 📰
1. Ye files for NFT, metaverse trademarks
Four months ago, American rapper Kanye West, now formally known as Ye, stated his anti-NFT stance via a handwritten note on Instagram that urged people to quit asking him to "do a f**cking NFT."
But apparently, he's had a change of heart…as he said that he would.
According to 17 new trademark applications filed last month around the rapper’s Yeezus alter ego, Ye's now planning to mint NFTs. It also includes mentions of potential “metaverse experiences” and “providing an online marketplace for buyers of crypto and/digital collectibles, currencies, tokens, and assets.”
Additionally, some of the applications extend outside the crypto space.
Unfortunately, these filings only reveal the basic descriptions of potential product offerings, and it's still unclear if there's an immediate intent to use the trademarks.
Celebs and NFTs: Since last year, rappers and celebrities have been doubling down on NFTs. From Nas selling royalty rights of his songs to Azealia Banks' audio sex tape, artists are consistently trying to find new ways to build exclusivity and hype around their upcoming projects.
But they aren't the only ones doing it. Even professional athletes like Tom Brady and David Beckham and YouTubers like Logan Paul have entered the Web3 arena to make big gains. After all, it’s a $3 billion market that’s expected to grow to $13.6 billion by 2027.
Why it matters? The recent crypto market crash has renewed scrutiny of celebrities shilling crypto and luring investors to put their money into fraudulent schemes. Some European regulators have issued checklists to encourage people to research before buying into celebrity-endorsed schemes.
2. The era of “easy money” is over
That's what Morgan Stanley said regarding the venture capital expected to flow into the crypto space this year.
In a new report, Morgan Stanley strategists said that the ~$33B of VC funding (7% of global VC investments) poured into crypto/blockchain companies last year may slow down significantly in 2022.
They said that while investments continued to pour into the crypto industry despite the bearish market sentiments, it could slide down as much as 50% if the industry mirrors the trends seen in other VC categories.
“Activity across eight of the most important VC bellwether markets over the past 12 months has reset 50% from peak; worsening performance of some of the largest tech/crypto investors who are prioritizing existing holdings over deploying further dry powder, and the exit of ‘tourist capital’ as both token and equity investments become more challenging during a crypto bear market – a similar pattern seen during 2018/19,” the report said.
The report also traced the flow of venture capital into the space. Here’s how it looks:
Early 2020: money mainly flowed into financial services and crypto infrastructure.
Late 2020-mid-2021: investments focused mostly on DeFi applications.
Late 2021 into 2022: NFTs and gaming firms saw the most investment.
It further cited the 25% YTD drop in the Nasdaq and the 61% decline in stock prices of all software, internet, and fintech companies compared to pre-pandemic levels as proof that "growth at all costs is no longer being rewarded."
Along with VCs, hedge funds are also pulling back their investments in the space. While they participated in over 50% of capital raised in 2021, they were involved in only 10% of the deals this year. Instead, they will now focus on larger, unicorn-status firms.
Why it matters? The bull market of 2021, combined with massive US dollar liquidity, triggered record VC investments. But such deals have declined amid growing inflation and supply chain worries. That said, the markets are cyclical, so there's hope that the bulls will return. It's just going to take a bit longer for major VC deals in Web3 and DeFi to come to fruition.
Deal Street 🤑
Binance Labs raises $500M crypto fund
Investment capital keeps flowing through the crypto space despite falling crypto prices. Last week, Andreesen Horowitz (a16z) raised a $4.5 billion crypto fund to invest in crypto and Web3 projects. Today, Binance Labs, the venture arm of crypto exchange Binance, has raised $500 million for investments in Web3, blockchain, and other value-building technologies. Global institutional investors like Breyer Capital, Whampoa Group, DST Global Partners, and private equity funds participated in the round. "The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social, and more,” Binance’s founder and CEO Changpeng Zhao said. Since 2018, Binance Labs has in more than 100 projects, including Dune Analytics, Polygon, STEPN, Axie Infinity, and The Sandbox. The fund intends to invest in companies in three stages: incubation, early-stage venture and late-stage growth.
Web3 infrastructure firm InfStones raises $66M
California-based blockchain infrastructure provider InfStones has raised $66 million in a new funding round led by SoftBank Vision Fund 2 and GGV Capital. Other firms such as INCE Capital, 10T Fund, SNZ Holding, and A&T Capital participated in the round, bringing the company's total funding raised so far to over $100 million. Founded in 2018, InfStones provides an Amazon Web Services-like node management platform and application programming interface for Web 3 developers. It has 10,000 nodes in more than 50 blockchains, including Polygon, Solana, and Ethereum. “The funding will help us with product development consistent with our product strategy and road map, move into new markets, expand our team, and advance web3 adoption,” InfStones CEO Zhenwu Shi told Techcrunch.
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