After a swift 14 days of up only on our favorite crypto coins, the DoJ decided to put a damper on the move with an announcement of “international enforcement action” against a major crypto entity. This quickly turned out to be a nothing burger. The DoJ decided to take action against Bitzlato, a Russian exchange, on an alleged $700M money laundering operation. Raise your hand if you or somebody you know has been affected by Bitzlato. Exactly, nobody even knows who or what this entity is. Good job fed bois, you’re really doing your part.

In other news, the rumor mill is swirling with a potential Chapter 11 bankruptcy for Genesis, which is expected to hit by sometime next week. These two headlines induced some volatility, whipsawing BTC and ETH around 8% to the downside. Now is the time to decide if your entries are truly generational bottoms. Are you willing to round trip your bags?

- 0xPibblez

The MVRV of Bitcoin just went above 1. The MVRV ratio tracks market value (market cap) divided by realized value. Realized value sums the market value of all coins at the time they last moved on the blockchain. From the graph above, in the previous three cycles, when the MVRV decreased below 1 and subsequently recovered back above 1, that generally marked the cycle bottom at least in terms of $ prices. As the market recovers, the MVRV increases and spikes up and has a blowoff top, but as we can see the peaks of each cycle have been smaller than the last.

Sommelier Finance, an automated liquidity management app-chain built on the Cosmos SDK, just announced the launch of their latest stablecoin strategy. Due to its app-chain infrastructure, Sommelier is able to leverage Ethereum’s synchronous composability to create more complex strategies than dApps like Yearn and Arrakis can produce. If their strategy is able to maintain its backtested alpha shown above, it has the potential to become the best non-RWA, non-incentivized stablecoin yield opportunity on Ethereum. Word on the street is their projected 2.5% APY at $50M TVL is underselling the true backtested results, and the strategy may actually produce 5-6% APY at $50M TVL! I believe leveraging app-chains to improve the Ethereum DeFi experience is going to be a narrative we hear more about next cycle, with the Sommelier team pioneering the concept. You can read more about this strategy here.

Ethereum Roadmap Part 1: The Merge

The Merge’s roadmap extends beyond the individual event, including further upgrades to establish a simple, robust, and decentralized proof of stake implementation

Agoric: Hardened Javascript for Easy dApp Development

Agoric is a smart contract platform that leverages Javascript to onboard the next wave of web3 developers

The Next Bankruptcy Domino May Be Genesis

The crypto lender reportedly warned investors about filing for bankruptcy if it couldn’t line up sufficient financing

Selling the Top: Peter Thiel’s VC Firm Made $1.8B From Crypto

Founders Fund reportedly no longer has a big investment in crypto after closing down most of its eight-year bet

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.

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