Latest in Crypto, NFTs, and Web3

Hello, again, and welcome to the third issue of the Latest in Crypto, NFTs & Web3 newsletter. Many things have happened this week, as usual, in this fast-paced industry, so let’s jump right into it and break it down a little for an easier digest!

Crypto Retirement Plan in the USA

Fidelity Investments, one of the largest financial services corporations in the US, announced that they would be offering 401(k) investors access to bitcoin as an investment choice in their retirement plans if their employers allowed it. 

This move would certainly permit a lot of people to invest in cryptocurrencies and other digital assets without having to set up a “traditional” crypto wallet on an exchange. A lot of institutions, like the Department of Labour of the United States, have criticised and viewed this move with scepticism, but could this be potentially positive or negative for the industry and people as a whole? 

Institutional Regulations and Wider Adoption at a Global Scale

• Last Thursday, Panama passed a bill with the objective to regulate the use and commercialisation of crypto assets in the country. This bill treats crypto assets as a source of foreign income, therefore there would not be any capital gains taxes applied to transactions and commercialisation of crypto assets. This bill opens the door to private and public use of cryptos, even making it possible for citizens to pay their taxes with cryptocurrencies! The bill covers the trading and use of crypto assets, issuance of digital securities, new payment systems and the tokenization of precious metals.
• A Dubai-based crypto exchange company, Bybit, is looking to get in on the booming crypto industry in Brazil.
• The EU’s financial services commissioner, Mairead McGuinness, called for a new "global agreement on crypto" to protect investors and limit the environmental impact of mining, and suggested the United States and European Union should collaborate on this.
• Goldman Sachs is following the lead of other traditional banking giants and has just allowed a borrower to use crypto, Bitcoin in particular, as collateral for a cash loan.
• Argentina’s largest private bank, Banco Galicia, launches a crypto trading feature, allowing users to buy bitcoin, ether, USDC and XRP.
• Also, last Thursday, the US Congress introduced the Digital Commodity Exchange Act of 2022, an updated version of one introduced in 2020. The bill was put forward by a mixed group of both democrats and republicans, aiming to create a definition for "digital commodity" and to allow the CFTC to oversee companies issuing or letting people trade these types of tokens.

Yuga Labs raises a ton of money after the Otherside launch

This past weekend, Yuga Labs finally launched its Otherside metaverse project, generating over 285 million dollars for the company and breaking investment records in the Ethereum network. 

Apparently, a lot of this money was paid in high transaction fees, something the company (Yuga) has apologised for already and hinted at the idea of maybe giving something back to traders for these costly gas fees.

FIFA and Algogrand band together before the World Cup

FIFA made a deal with crypto platform Algorand as an official blockchain partner before the 2022 World Cup, set in Qatar this November. Algogrand will act as a “regional supporter” for Europe and North America at the World Cup and will also sponsor the Women’s World Cup in Australia and New Zealand in 2023. 

Algogrand will give FIFA an official blockchain supported wallet and assistance to further develop its digital assets strategy. Following the news, Algogrand’s ALGO token surged more than 20%, rising from $0.59 to $0.73.

On Mining

New York state’s proposed plan of banning crypto mining for two years might be becoming a reality soon. Experts warn this will most likely squash the state’s mining industry and maybe even the mining industry in the USA as a whole.

More Hacks in Paradise!

• You might remember, that last week it was the Bored Ape Yacht Club, well this week it was the DeFi platforms Fei Protocol and Rari Capital that were hacked, suffering a loss of over 80 million USD. After the hack, Rari emitted a communication saying that borrowing had been paused on a global scale and that no further funds were in danger. Fei Protocol offered the hacker that they could keep 10 million of the stolen funds, if only they agreed to return the remaining 70 million.
• This weekend, an army of bots took over the Solana-based NFT minting tool, Candy Machine. They flooded the chain with data freezing blockchain productivity for around a total of seven hours! The company still hasn't released any reports or statements as to what could’ve led to this.

Wikimedia will no longer accept crypto as donations

Wikimedia is the organisation behind Wikipedia, and it announced the other day that it will no longer accept cryptocurrencies as donations. The platform previously accepted Bitcoin, Bitcoin Cash and Ether via BitPay.

On Inflation

• US GDP declined 1.4% last quarter. This is the first decrease since the pandemic started back in 2020, and something completely different from what experts predicted.
• Policymakers in the USA are raising interest rates in their plan to fight inflation as prices continue to rise at the fastest pace since the 1980s. There is a lot of demand as people “get back to normal” as the pandemic slows down. This demand is certainly outpacing what companies can deliver since global supply chains are still fragile (pandemic + war in Ukraine). The Fed’s objective is to discourage people from borrowing money by making it more expensive to do so. This way they can combat inflation without sending the country into a recession.