Ben Strack

<div id="highlights-block_62509aac252fa" class="highlights">
        <ul>
                <li>Direxion originally filed to launch its Bitcoin Strategy Bear ETF in October but withdrew the application</li>
                <li>AXS Investments’ Short Bitcoin Strategy fund would be the firm’s third ETF in the US</li>
            </ul>
    
</div>



<p>After ProShares <a href="https://cms.blockworks.co/proshares-plans-etf-mutual-fund-betting-against-bitcoin/" target="_blank" rel="noreferrer noopener">filed earlier this week</a> to launch an ETF that would allow investors to essentially bet against bitcoin, two other fund issuers followed suit.</p>



<p>AXS Investments revealed its plans to launch a Short Bitcoin Strategy ETF (SBCO) in a Wednesday <a href="https://www.sec.gov/Archives/edgar/data/1587982/000139834422007061/fp0074776_485apos.htm" target="_blank" rel="noreferrer noopener">regulatory disclosure</a>. The product seeks investment results corresponding to the inverse (-1x) of the return of the CME CF Bitcoin Reference Rate for a single day.</p>



<p>The actively-managed fund would invest most of its assets in short positions on cash-settled bitcoin futures contracts traded on exchanges registered with the Commodity Futures Trading Commission (CFTC).</p>



<p>It seeks to remain fully invested in contracts offering inverse exposure to the Bitcoin Reference Rate “without regard to market conditions, trends, direction or the financial condition of a particular issuer,” the filing notes. The fund does not take temporary defensive positions.</p>



<p>Similarly, Direxion <a href="https://www.sec.gov/Archives/edgar/data/1424958/000119312522098855/d308614d485apos.htm" target="_blank" rel="noreferrer noopener">filed to launch</a> a Bitcoin Strategy Bear ETF on Thursday that would offer managed short exposure to CME bitcoin futures contracts.</p>



<p>The fund manager <a href="https://cms.blockworks.co/proposed-direxion-etf-would-offer-short-exposure-to-bitcoin-futures/" target="_blank" rel="noreferrer noopener">originally</a> filed to launch this ETF in October but <a href="https://cms.blockworks.co/sec-asks-direxion-to-withdraw-bitcoin-etf-application/" target="_blank" rel="noreferrer noopener">withdrew the proposal</a> about a week later upon the request of the Securities and Exchange Commission.&nbsp;</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Direxion files Short Bitcoin ETF using an existing filing, jumping ahead of AXS and Proshares!<br><br>Direxion Bitcoin Strategy Bear ETF goes effective Jun 6 vs AXS and ProShares Short BTC ETFs&#39; Jun 20<br><br>*Direxion already had a Short <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw">#BTC</a> ETF filed since Oct&#8230;?<a href="https://t.co/NlprelgCt2">https://t.co/NlprelgCt2</a> <a href="https://t.co/dPWFf59PdQ">pic.twitter.com/dPWFf59PdQ</a></p>&mdash; ETF Hearsay by Henry Jim (@EtfHearsay) <a href="https://twitter.com/EtfHearsay/status/1512183882996670464?ref_src=twsrc%5Etfw">April 7, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>In addition to investing in swaps or futures contracts, the Direxion ETF may also short bitcoin futures ETFs. ProShares, Valkyrie Investments, VanEck and Global X launched such ETFs last year.</p>



<p>“The fund will generally maintain its short exposure to bitcoin futures during periods in which the value of bitcoin is flat or declining as well as during periods in which the value of bitcoin is rising,” the disclosure states.</p>



<p>None of the three funds would invest directly in bitcoin. The filings did not indicate expense ratios for any of the proposed products.</p>



<p>While AXS Investments has just two ETFs trading in the US with about $65 million in assets, according to ETF.com, Direxion has 82 ETFs that manage roughly $27.5 billion.</p>



<p>Spokespeople for Direxion and AXS Investments did not immediately return requests for comment.</p>



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Issuers Race To Launch Short Bitcoin Futures ETFs

Jacquelyn Melinek

<div id="highlights-block_61e1df04302f8" class="highlights">
        <ul>
                <li>Axie Infinity was anticipating an “aggressive target” of 250,000 users by the end of 2021, but finished the year with a community of 2.9 million members</li>
                <li>Campbell estimates that less than 20% of Axie Infinity’s universe has been deployed and told Blockworks that there is a lot more work to be done</li>
            </ul>
    
</div>



<p>Axie Infinity, a popular play-to-earn (P2E) game, experienced serious growth — and serious growing pains — in 2021. But this year, its focus will be all about gameplay, according to Andrew Campbell, an Axie Infinity program lead who spoke to Blockworks.&nbsp;</p>



<p>2022 is all about launching its battle experience, Origins, and a land-based gaming experience, Project K, said Campbell, whose official title is program lead for Esports and content creator programs at Sky Mavis (the company that develops Axie Infinity).</p>



<p>In addition to updating game graphics, animations and <a href="https://cms.blockworks.co/btc-stumbles-on-6-8-cpi-print-axie-infinity-teases-future-gameplay-markets-wrap/" target="_blank" rel="noreferrer noopener">gameplay</a>, Campbell said, “We’re creating more options, more complexity and less random elements,” he said. </p>



<p>Each of these games will include a number of new features that will affect the economy balance, the company said in a <a href="https://axie.substack.com/" target="_blank" rel="noreferrer noopener">post</a>. Origins is targeted for a second quarter 2022 release, Campbell noted.</p>



<h3 class="wp-block-heading"><strong>Growing pains</strong></h3>



<p>Sky Mavis launched Axie Infinity in May 2018 as a virtual world P2E game where users earn cryptocurrency rewards that can be sold on centralized exchanges like Binance or can be swapped for ether, USDC or Axie governance tokens (AXS) on Axie Infinity’s decentralized exchange.</p>



<p>Specifically, players can trade, battle and breed NFT pets called Axies — which is similar to a Pokémon-style investment opportunity. The big difference is that there is a market for in-game resources, such as Axie&#8217;s body parts and appearances, that are open and controlled by players, the company <a href="https://www.notion.so/axie/Axie-Infinity-Media-Kit-e02838bee25441838850c21f116af319" target="_blank" rel="noreferrer noopener">said</a>. </p>



<p>During the second half of 2021, Axie Infinity saw an unexpected jump in players and transaction volume with a monthly cumulative transaction volume of about $3.8 billion in December 2021, up from $206 million in transaction volumes in June 2021, according to data from Token Terminal.&nbsp;</p>



<p>By the end of 2021, the game’s total revenue reached about $1.3 billion, compared to $18.8 million six months earlier. </p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="463" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png" alt="" class="wp-image-15428" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-14-at-3.36.38-PM-1024x463.png?w=1421 1421w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Monthly cumulative transaction volume vs. cumulative total revenue since launch.<br>Source: Token Terminal</figcaption></figure>



<p>The Axie team was not prepared for its success, according to Campbell. Originally, it was anticipating an “aggressive target” of 250,000 users by the end of 2021, but finished the year over 1,000% higher with a community of 2.9 million members.</p>



<p>“We never expected to have this many users, so we were not prepared for that,” he said. “Our servers couldn’t handle it.”</p>



<h2 class="wp-block-heading"><strong>Managing the growth</strong></h2>



<p>Due to its massive growth in such a short timeframe, Axie developers had to focus on scaling its infrastructure to accommodate demand, Campbell said. This focus slowed down the launch of the next phase of the game, which is  Origins.</p>



<p>Instead the Axie team spent the better part of a year building out blockchain components made specifically for the game, which consisted of staking as well as an Ethereum-linked sidechain <a href="https://whitepaper.axieinfinity.com/technology/ronin-ethereum-sidechain" target="_blank" rel="noreferrer noopener">Ronin</a> and its DEX <a href="https://axie-infinity.gitbook.io/katana-docs/" target="_blank" rel="noreferrer noopener">Katana</a>.</p>



<p>“Now we’re set for the foreseeable future in terms of scaling in that regard, but it really slowed down our progress of launching Origins and [Project K].”</p>



<p>In October 2021, Axie Infinity launched a staking program for its governance tokens, Axie Infinity Shards (AXS) and Smooth Love Potion (SLP), which introduced a new component to its gaming ecosystem. As a result, AXS holders can stake their tokens and, in the process, earn rewards over a five-and-a-half-year span, Blockworks previously <a href="https://cms.blockworks.co/axie-infinity-rolls-out-staking-program-shakes-up-gaming-business-model/" target="_blank" rel="noreferrer noopener">reported</a>.</p>



<h3 class="wp-block-heading"><strong>The ‘tip of the iceberg’</strong></h3>



<p>2021 was an eye-opening year for the team, according to Campbell — not just in the growth of the game’s user base but also in expansion plans for Axie beyond gameplay.</p>



<p>On top of the game’s growth story, its parent company Sky Mavis closed <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">$152 million</a> in a Series B funding round, bringing its valuation to $3 billion at the time of the raise. The capital will be used for staff expansion, scaling infrastructure and to build its own distribution platform, according to Sky Mavis.</p>



<blockquote class="wp-block-quote"><p><strong>“We see this whole world being very user-generated in some way and really has a huge ceiling in terms of different things you can use your Axies for,” said Campell. “I think it gets really exciting when you start thinking about the different games that people could build around Axies and the different applications that people will be able to build on Ronin and plug into the blockchain universe.”</strong></p></blockquote>



<p>Campbell estimates that less than 20% of Axie Infinity’s universe has been deployed and said there is a lot more work to be done.&nbsp;</p>



<p>“This is really just the tip of the iceberg of how we think about this project and this giant universe we’re trying to deploy,” he said. “We say this a lot, but this is just the beginning,” he added.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Axie Infinity Program Lead: 2022 Will Be ‘All About Gameplay’

Sam Martin

<div id="highlights-block_9395deceadc1e6f2393411af7d750ead" class="highlights">
        <ul>
                <li>Bitcoin’s weekly outflows reached a five-month high with nearly $3 billion worth of BTC leaving centralized exchanges</li>
                <li>The inflation outlook for December remains unclear as shipping and energy costs begin to rollover.</li>
            </ul>
    
</div>



<p>BTC rallied to near $50,000 after the 6.8% CPI print before erasing the gains and trading below $47,500.</p>



<p>Real yields on the US 10-year are at their lowest level since the 1940s.</p>



<p>The inflation outlook for December remains unclear as shipping and energy costs begin to roll over.</p>



<p>Bitcoin’s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges.</p>



<p>Axie Infinity teases future aspects of gameplay and provides an overall update of the largest blockchain-based game.</p>



<h3 class="wp-block-heading"><strong>Latest in Macro:</strong></h3>



<ul>
<li>S&amp;P 500: 4,712, +0.95%</li>



<li>NASDAQ: 15,5630, +0.73%</li>



<li>Gold: $1,782, +0.36%</li>



<li>WTI Crude Oil: $71.95, +1.42%</li>



<li>10-Year Treasury: 1.482%, -0.005%</li>
</ul>



<h3 class="wp-block-heading"><strong>Latest in Crypto:</strong></h3>



<ul>
<li><a href="https://blockworks.co/price/btc">BTC</a>: $48,348, +0.97%</li>



<li><a href="https://blockworks.co/price/eth">ETH</a>: $4,043, -2.61%</li>



<li>ETH/BTC: 0.0836, -3.31%</li>



<li>BTC.D: 41.19%, +1.54%</li>
</ul>



<h3 class="wp-block-heading">6.8% CPI print</h3>



<p>After a <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">6.2% Consumer Price Index (CPI)</a> print for the month of October, November&#8217;s numbers showed a 6.8% year-over-year inflation rate. This is the highest inflation rate since June of 1982, <a href="https://twitter.com/JackFarley96/status/1469300999860989955?s=20" target="_blank" rel="noreferrer noopener">according</a> to Jack Farley.</p>



<p>Moreover, the 10-year real yield is also officially at its lowest level since the 1940s, <a href="https://twitter.com/TaviCosta/status/1469312450445123584?s=20" target="_blank" rel="noreferrer noopener">per</a> Crescat Capital portfolio manager, Otavio Costa. Real yields are calculated by subtracting the prevailing inflation rate from the nominal Treasury yield, thus providing investors with the real rate of return of bond yields.</p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="791" height="578" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png" alt="" class="wp-image-12432" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=791 791w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/10-year-real-yield.png?w=80 80w" sizes="(max-width: 791px) 100vw, 791px" /></figure>



<p>Container shipping rates have begun to roll over, which should help ease CPI prints going forward.</p>



<p>&#8220;If the Fed errs, the bond market and its deflationary signals will say, &#8216;Told you so!&#8217; Long yields are very low considering low jobless rates and inflation, and inflation expectations are falling. Note the 5-yr-5-yr forward TIPS break-even spread and container shipping rates,&#8221; <a href="https://twitter.com/TimmerFidelity/status/1469336106764316685?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Jurrien Timmer, Director of Global Macro at Fidelity.</p>



<p>US President Joe Biden also signaled ahead of today&#8217;s CPI number that, &#8220;the information being released tomorrow on energy in November does not reflect today&#8217;s reality, and it does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market,&#8221; according to a <a href="https://www.reuters.com/business/biden-says-inflation-data-due-friday-will-not-reflect-recent-drop-some-prices-2021-12-09/" target="_blank" rel="noreferrer noopener">Reuters report</a>.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="553" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg" alt="" class="wp-image-12433" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/inflation-exp-1024x553.jpg?w=1193 1193w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Fidelity</figcaption></figure>



<h3 class="wp-block-heading">BTC fake-out</h3>



<p>Similar to last month when <a href="https://cms.blockworks.co/bonds-sell-off-on-6-2-cpi-print-bitcoin-liquidations-spur-correction-markets-wrap/" target="_blank" rel="noreferrer noopener">BTC rallied to an ATH</a> following the CPI print for the month of October only to quickly erase the gains shortly thereafter, the same thing happened today. BTC rallied close to $50,000 before dropping below $47,500 moments later, according to data from <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">CoinMarketCap</a>.</p>



<p>&#8220;Bitcoin is below the short-term holder cost basis, which currently sits at $53K. Until this is reclaimed, not bullish. Not saying I am a &#8216;giga bear&#8217;, just cautious until the market shows me otherwise. Happy to flip bullish if reclaimed. Bearish confirmation would be a failed underside retest of the band,&#8221; reads a <a href="https://www.blockwareintelligence.com/p/blockware-intelligence-newsletter-35b?r=fg8t4&amp;utm_campaign=post&amp;utm_medium=web" target="_blank" rel="noreferrer noopener">Blockware Intelligence Newsletter.</a></p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/on-chain-cost-1024x576-1.jpg" alt="" class="wp-image-12434"/><figcaption class="wp-element-caption">Source: Blockware Intelligence</figcaption></figure></div>


<p>Some other bitcoin highlights from an <a href="https://medium.com/intotheblock/macro-conditions-dominating-cryptos-outlook-f323bdec3043" target="_blank" rel="noreferrer noopener">Intotheblock report</a> include:</p>



<ul>
<li>Bitcoin recorded a modest increase in the fees generated by its blockchain as network activity picked up during the crash</li>



<li>BTC&#8217;s weekly outflows reached a&nbsp;five-month high&nbsp;with nearly $3 billion worth of BTC leaving centralized exchanges</li>



<li>Bitcoin’s underperformance comes at a time when both the dollar (DXY) and the volatility index (VIX) are at their highest in months</li>



<li>Year-to-date, bitcoin has significantly outperformed traditional markets, potentially leading to profit-taking activity amid uncertain conditions</li>



<li>Bitcoin&nbsp;<a href="https://app.intotheblock.com/coin/BTC/deep-dive?group=derivatives&amp;subgroup=perpetual&amp;chart=all&amp;utm_source=hs_email&amp;utm_medium=email&amp;_hsenc=p2ANqtz--3HthPON7RdkqvpuHQkAo5sKcLDqom_ZNmPoINz_cKzhRZDdo6RhGdAF5Y5S0AsAjgyfRx" target="_blank" rel="noreferrer noopener">perpetual swaps’ funding rate</a>&nbsp;remain near zero, pointing to neutral expectations in the near-term</li>
</ul>



<h3 class="wp-block-heading">Axie Infinity December update</h3>



<p>An <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">Axie Infinity development update</a> that was released last night shows that the popular play-to-earn game is approaching 3 million community members and significant progress in the battles, land and origins game development.</p>



<p>For comparison, there are roughly 4.1 million unique addresses in DeFi, <a href="https://dune.xyz/rchen8/defi-users-over-time" target="_blank" rel="noreferrer noopener">according to data</a> from Dune Analytics.</p>



<p>The report continues by comparing Ronin usage, the Ethereum sidechain that Axie Infinity is built upon, to activity on the Ethereum base layer. &#8220;Today, Ronin’s transaction volume has grown to roughly 4x the number of daily transactions of the Ethereum chain, and that growth has pushed us all to prepare for significant scale in 2022!&#8221; according to the report.</p>



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ronin-activity-1024x879-1.jpg" alt="" class="wp-image-12436"/><figcaption class="wp-element-caption">Source: Nansen </figcaption></figure>



<p>Land gameplay is <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">still under development</a> and set to roll out in the first half of 2022. The team continues to work on resource production, gathering, and crafting mechanics and even teased what some of the in-game art will look like:</p>



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/axie-art-1024x491-1.jpg" alt="" class="wp-image-12438"/><figcaption class="wp-element-caption">Source: Axie Infinity Development Update </figcaption></figure>



<p>The <a href="https://axie.substack.com/p/dec2021" target="_blank" rel="noreferrer noopener">update continues</a> by adding, &#8220;We also continue to make significant progress with our next generation battles experience, where we provide opportunities for players to experience a full, brand new storyline, non-blockchain “starter” Axies, the ability to attach power-ups to Axies, and much more.&#8221;</p>



<p>Sky Mavis, the <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">developers</a> behind Axie Infinity, are also working on graphical special effects for the game and leaked some of what they have been working on:</p>



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Origin VFX Leek!" width="1024" height="576" src="https://www.youtube.com/embed/wrbEyQZGipc?start=11&#038;feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



<h3 class="wp-block-heading">Non-Fungible Tokens (NFTs)</h3>



<p>Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="332" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png" alt="" class="wp-image-12450" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.24-PM-1024x332.png?w=2048 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="283" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png" alt="" class="wp-image-12451" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-10-at-4.36.32-PM-1024x283.png?w=80 80w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


<p>If you made it this far, thanks for reading! I am looking forward to catching up on Monday.</p>



<hr class="wp-block-separator has-css-opacity"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator has-css-opacity"/>


BTC Stumbles on 6.8% CPI Print; Axie Infinity Teases Future Gameplay: Markets Wrap

SOL Flips USDT in Market Cap; Axie Infinity Ronin DEX Goes Live: Markets Wrap

MANA, SAND, AXS Explode on Facebook’s Meta News; ETH Beats ATH: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Bitcoin dominance up sharply on today&#8217;s rally</li>
                <li>US Bank launches crypto custody service to satisfy demand</li>
            </ul>
    
</div>



<p>The NASDAQ and Dow Jones closed the day up 1.25% and 0.92% respectively. </p>



<p><a href="https://cms.blockworks.co/banking-giant-launches-custody-services-for-bitcoin/" target="_blank" rel="noreferrer noopener">US Bank</a> will be launching a crypto custody solution powered by NYDIG. It will only offer bitcoin, with the intention to support additional coins over time.</p>



<p>Brazil is set to vote on a bill within the next few days to <a href="https://finance.yahoo.com/news/bitcoin-set-become-legal-payment-154644863.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly90LmNvL0JBQnlBVm9vYkY_YW1wPTE&amp;guce_referrer_sig=AQAAAIQkO8ZzOBl0aoKUt_nsS8PkNhQvgAetH_aKIpgFeO8PjIkkHSdHhQRJrnpSnq7NWLBdGiBiQm5yAJ6q53KgD-3lxKUM5sM9pqaafhXhPkopI_WhwJyacAXLboQPCauMMhMFi3TvNJAT3mOrXLQkMlipNxkp99NiPznVHFDCoIQm" target="_blank" rel="noreferrer noopener">regulate</a> Bitcoin in a way that encourages its use. </p>



<h3 class="wp-block-heading">DeFi/NFTs/Gaming</h3>



<ul><li>The game studio behind Axie infinity, Sky Mavis, received $152 million in a <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">series B funding</a> round led by Andreessen Horowitz. <a href="https://coinmarketcap.com/currencies/axie-infinity/" target="_blank" rel="noreferrer noopener">$AXS</a> was last trading at $130, down 6% after its remarkable run the past week. </li><li>ThorChain-based decentralized exchange, ThorSwap, <a href="https://finance.yahoo.com/news/thorswap-raises-3-75m-private-141222643.html" target="_blank" rel="noreferrer noopener">raised</a> $3.75 million in a private token sale. <a href="https://coinmarketcap.com/currencies/thorchain/" target="_blank" rel="noreferrer noopener">$RUNE</a> was last trading around $8.90. </li><li>Nexus Mutual (<a href="https://coinmarketcap.com/currencies/nxm/" target="_blank" rel="noreferrer noopener">$NXM)</a>, an insurance protocol built on top of ethereum, passed <a href="https://twitter.com/NexusMutual/status/1445327767474688007?s=20" target="_blank" rel="noreferrer noopener">proposal 157</a> to allocate nearly $50 million to earn ETH2.0 staking rewards through Lido Finance(<a href="https://coinmarketcap.com/currencies/lido-dao/" target="_blank" rel="noreferrer noopener">$LDO</a>), a liquid staking solution. </li></ul>



<h3 class="wp-block-heading">TradFi</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>China turns to <a href="https://www.reuters.com/world/asia-pacific/china-turns-stranded-australian-coal-combat-power-crunch-trade-2021-10-05/" target="_blank" rel="noreferrer noopener">abandoned coal mines</a> in Australia to combat coal shortages.</li><li>US ISM Sep services PMI data came in higher than expected at 61.9 vs. 61.7 in August. Yields on the 10-year treasury rose to <a href="https://www.cnbc.com/quotes/US10Y" target="_blank" rel="noreferrer noopener">1.534%</a> on the news. </li><li>US gas prices locked in their highest close in 12 years due to <a href="https://twitter.com/DeItaone/status/1445464140466704394?s=20" target="_blank" rel="noreferrer noopener">supply concerns</a>. </li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>“This month all eyes are on the SEC’s potential approval of a bitcoin ETF, and this is all the more relevant given two recent developments 一 at a conference last week, Gary Gensler reiterated his preference for a bitcoin futures ETF rather than one based on spot prices, which is relevant given that the proposals up for consideration this month are largely futures-based. Also, on Friday, the CME revealed that it was doubling the limits on initial BTC futures positions. Notably, the day that this new rule will come into effect is October 18th, the same day a decision by the SEC on the ProShares Bitcoin Futures Strategy ETF is due. This could be a coincidence, or it could be the CME planning for a potential surge in futures volumes,&#8221; said Noelle Acheson, Head of Market Insights at Genesis </p>



<h3 class="wp-block-heading">Bitcoin and Ethereum</h3>



<p>BTC dominance, or the percentage of the total crypto market capitalization BTC makes up, is up 5.16% over the last month. Historically speaking, rising BTC dominance sets the stage for alt coin rallies in the future. </p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="910" height="661" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png" alt="" class="wp-image-8975" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=910 910w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=359 359w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=301 301w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/BTC.D_2021-10-05_17-44-29.png?w=80 80w" sizes="(max-width: 910px) 100vw, 910px" /><figcaption>Source: Trading View</figcaption></figure></div>



<p>Perpetual funding rates for BTC are mixed across different exchanges, implying that traders are divided on whether to take a short or long position.  </p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="718" height="339" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png" alt="" class="wp-image-8978" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=718 718w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-5.56.51-PM.png?w=80 80w" sizes="(max-width: 718px) 100vw, 718px" /><figcaption>Source: https://app.laevitas.ch/dashboard/btc/derivs</figcaption></figure>



<h3 class="wp-block-heading">Top 10 coins excluding stablecoins</h3>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="362" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png" alt="" class="wp-image-8979" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-05-at-6.00.16-PM-1024x362.png?w=1374 1374w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: CoinMarketCap</figcaption></figure>



<ul><li>Despite all of the turbulence in traditional financial markets, bitcoin has shown a lot of strength over the past week, last up more than 23%. This is a narrative bitcoin investors would like to see continue. There will be a decision on a futures-backed ETF this month which could be another catalyst for an end of year rally. </li><li>The poor performance of alternative layer-1&#8217;s tells us that money is rotating into the blue chips; BTC and ether. </li></ul>



<h3 class="wp-block-heading">Regulatory News</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Minnesota congressman, Tom Emmer, took to<a href="https://twitter.com/RepTomEmmer/status/1445461291145981958?s=20" target="_blank" rel="noreferrer noopener"> Twitter</a> to call out Gary Gensler for attempting to classify some digital assets as securities. He believes that would hurt retail investors more than it would help them. </li><li>Rep. Patrick McHenry (R-NC) introduced the <a href="https://republicans-financialservices.house.gov/news/documentsingle.aspx?DocumentID=408154" target="_blank" rel="noreferrer noopener">Clarity for Digital Tokens Act</a> today. This bill aims to keep innovation in the US and provide legal clarity to those involved with digital assets. </li><li>SEC chairman, Gary Gensler, echoed Jerome Powell&#8217;s comments that the US has no intentions <a href="https://www.bloomberg.com/news/articles/2021-10-05/sec-chief-signals-crypto-ban-like-china-s-won-t-happen-in-u-s" target="_blank" rel="noreferrer noopener">to ban crypto</a>. </li></ul>



<h3 class="wp-block-heading">What else we are looking out for&#8230;</h3>



<ul><li>ADP employment numbers on Wednesday</li><li>Initial and continuing jobless claims on Thursday</li><li>Nonfarm payrolls, unemployment rate and average hourly earnings on Friday</li></ul>



<p>That is all for today. Let&#8217;s do this again same time tomorrow. </p>



<hr class="wp-block-separator"/>



<p><strong>Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.</strong></p>



<hr class="wp-block-separator"/>


Bitcoin Dominance Rises; SEC Chief Confirms US Won’t Ban Crypto: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Bitcoin posts strong gains despite turbulence in traditional financial markets</li>
                <li>Fed&#8217;s Bullard expects &#8220;more inflation than we are used to for some time&#8221;</li>
            </ul>
    
</div>



<p>The NASDAQ and Dow Jones closed the day down -2.14% and -0.94% respectively. </p>



<p>Facebook shares dropped 4.89% due to <a href="https://www.marketwatch.com/story/facebooks-very-very-bad-day-services-go-down-as-stock-plunges-in-wake-of-whistleblower-revelations-11633365581" target="_blank" rel="noreferrer noopener">whistleblower</a> revelations, and outages on Instagram, Facebook and WhatsApp. </p>



<p>The Fed is set to <a href="https://www.wsj.com/articles/fed-prepares-to-launch-review-of-possible-central-bank-digital-currency-11633339800?mod=latest_headlines" target="_blank" rel="noreferrer noopener">launch a review</a> of a potential central bank digital currency (CBDC) as early as this week. </p>



<h3 class="wp-block-heading">DeFi/NFTs/Gaming</h3>



<ul><li>$AXS continues its incredible run-up, last trading near $140. With 12.5 million $AXS <a href="https://stake.axieinfinity.com" target="_blank" rel="noreferrer noopener">staked</a> and roughly 18.3 million in the <a href="https://explorer.roninchain.com/address/ronin:a99cacd1427f493a95b585a5c7989a08c86a616b" target="_blank" rel="noreferrer noopener">community treasury</a>, more than 50% of the circulating supply is off the market. </li><li>OpenSea <a href="https://dune.xyz/PierreYves_Gendron/opensea---metrics" target="_blank" rel="noreferrer noopener">monthly trade</a> volume is down roughly $400 million, or 12%, from August to September.</li><li>$LUNA enters price discovery on hype around <a href="https://cms.blockworks.co/terras-columbus-5-sets-sail-heres-what-to-expect/" target="_blank" rel="noreferrer noopener">Columbus-5</a> and the ecosystems&#8217; first NFT projects, last trading around <a href="https://coinmarketcap.com/currencies/terra-luna/" target="_blank" rel="noreferrer noopener">$49</a>. </li><li>Societe Generale, the third largest bank in France, submitted a <a href="https://forum.makerdao.com/t/security-tokens-refinancing-mip6-application-for-ofh-tokens/10605" target="_blank" rel="noreferrer noopener">proposal</a> to the MakerDAO community. </li></ul>



<h3 class="wp-block-heading">TradFi</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li><a href="https://www.reuters.com/business/energy/exclusive-commodity-traders-face-big-margin-calls-gas-prices-soar-2021-10-04/" target="_blank" rel="noreferrer noopener">Large commodity</a> trading houses face margin calls as gas prices soar higher.</li><li>Oil hits seven-year highs as <a href="https://www.marketwatch.com/story/why-the-oil-market-is-both-bullish-and-on-edge-after-the-opec-oil-output-decision-11633368733" target="_blank" rel="noreferrer noopener">OPEC+ leaves</a> output hike policy unchanged.</li><li>Many <a href="https://www.reuters.com/article/us-markets-funds-bonds/column-hedge-funds-most-bullish-on-10-year-treasuries-since-2017-idUSKBN2GU1DP" target="_blank" rel="noreferrer noopener">hedge funds</a> are long the dollar and government notes, expecting slower growth. </li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>“Due to Marathon’s positive track record, our growth trajectory, our position as one of the largest holders of bitcoin among publicly traded companies in the U.S., and the broader maturation of our industry, we were able to obtain a $100 million revolving line of credit with Silvergate Bank, which is secured by our bitcoin holdings and USD. This instrument is consistent with our strategy to focus on agility as it enhances our ability to act opportunistically and in a manner that is efficient for both our business and our shareholders. By having this line of credit in place, we believe Marathon is better positioned to continue growing over the coming quarters,&#8221; said <a href="https://ir.marathondh.com/news-events/press-releases/detail/1259/marathon-digital-holdings-announces-bitcoin-production-and" target="_blank" rel="noreferrer noopener">Marathon Digital Holdings CEO</a>, Fred Thiel </p>



<h3 class="wp-block-heading">Bitcoin and Ethereum</h3>



<p>BTC and ether were last trading around $49,200 (+1.0%) and $3,400 (-1.0%), respectively. Options traders are taking a more bullish stance on BTC, with the put:call ratio sitting near .74. </p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="867" height="504" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png" alt="" class="wp-image-8907" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=867 867w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=449 449w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=377 377w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-4.04.07-PM.png?w=80 80w" sizes="(max-width: 867px) 100vw, 867px" /><figcaption>Source: app.laevitas.ch</figcaption></figure></div>



<p>Ethereum has now settled nearly $6.2 trillion in trades over the last 12 months. </p>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="450" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg" alt="" class="wp-image-8912" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=800 800w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/FA2-LHvXoAE9prk.jpg?w=80 80w" sizes="(max-width: 800px) 100vw, 800px" /><figcaption>Source: Ryan Watkins of Messari</figcaption></figure>



<h3 class="wp-block-heading">Layer 1 total value locked (TVL) comparisons</h3>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="960" height="351" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png" alt="" class="wp-image-8918" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=960 960w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/Screen-Shot-2021-10-04-at-3.59.48-PM.png?w=80 80w" sizes="(max-width: 960px) 100vw, 960px" /><figcaption>Source: Defi Llama</figcaption></figure>



<ul><li>Terra ($LUNA) crossed $10 billion in TVL overnight, possibly contributing to its rapid price appreciation. It also remains one of the cheapest coins when looking at the market cap/TVL metric.</li><li>Solana ($SOL) looks rather expensive with a market cap/TVL of 4.31. </li><li>While there is little debate that most of the innovation in the space occurs on top of Ethereum, its TVL dominance has dropped from 98.22% on January 1st, 2021 to 68.78% today. The L1 battles are in full swing.  </li></ul>



<h3 class="wp-block-heading">Commodities and the dollar</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Natural gas was up 5.77% today due to the ongoing energy shortages around the world, per business insider. </li><li>Coal was also up 5.13% due to energy shortages, per business insider. </li><li>The DXY index is down -0.25%, according to MarketWatch.</li></ul>



<h3 class="wp-block-heading">What else we are looking out for&#8230;</h3>



<ul><li>ADP employment numbers on Wednesday</li><li>Initial and continuing jobless claims on Thursday</li><li>Nonfarm payrolls, unemployment rate and average hourly earnings on Friday</li></ul>



<p>That is all for today. Let&#8217;s do this again same time tomorrow. </p>



<hr class="wp-block-separator"/>



<p><strong>Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.</strong></p>



<hr class="wp-block-separator"/>


Stagflation Worries Drag Down Equities; Bitcoin Shows Resilience: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Bitcoin surges on positive remarks from Jerome Powell; $47 million of short positions liquidated</li>
                <li>Not your key, not your coins: hackers exploit Coinbase MFA flaw to steal from 6,000 customers</li>
            </ul>
    
</div>



<p>Digital assets were up big across the board Friday with equities following suit. </p>



<p>The UK joins China in a <a href="https://www.reuters.com/business/energy/european-gas-prices-hit-all-time-highs-russian-flows-slump-2021-10-01/" target="_blank" rel="noreferrer noopener">power crisis</a>, setting the stage for European gas prices to hit all-time highs.</p>



<p></p>



<h3 class="wp-block-heading">DeFi/NFTs/Gaming</h3>



<ul><li>Borrowing and lending protocol, Compound, experienced a bug in a recent update which sent users nearly $90 million in crypto by error. Leaders in the Compound community took to <a href="https://twitter.com/rleshner/status/1443730726751506432?s=20" target="_blank" rel="noreferrer noopener">Twitter</a> to beg for the money back, even threatening reporting wallet addresses to the IRS.</li><li>The Biden administration is <a href="https://www.wsj.com/articles/biden-administration-seeks-to-regulate-stablecoin-issuers-as-banks-11633103156" target="_blank" rel="noreferrer noopener">considering</a> ways it can impose bank-like regulations on stablecoins to avoid any systemic risk they may cause if left unregulated. </li><li>Axie Infinity&#8217;s governance token, $AXS, surges to an all time high as <a href="https://cms.blockworks.co/axie-infinity-rolls-out-staking-program-shakes-up-gaming-business-model/" target="_blank" rel="noreferrer noopener">airdrops conclude and staking is announced</a>. $AXS broke $111 for the first time as of this writing. </li></ul>



<h3 class="wp-block-heading">TradFi</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li><a href="https://www.washingtonpost.com/us-policy/2021/10/01/white-house-debt-ceiling/" target="_blank" rel="noreferrer noopener">Memos</a> from within the White House seriously exploring the possibility of &#8216;minting the coin&#8217; to avoid breaching the debt ceiling. </li><li>OPEC members <a href="https://twitter.com/DeItaone/status/1443928970588721168?s=20" target="_blank" rel="noreferrer noopener">say</a> the world needs more investment in oil and gas and that the current energy crises should be a &#8216;wake-up-call&#8217; for the world.</li><li>The <a href="https://www.atlantafed.org/cqer/research/gdpnow" target="_blank" rel="noreferrer noopener">Atlanta Fed</a> has revised its Q3 real US GDP estimate to 2.3%, down from 6.0% in the beginning of August. </li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>&#8220;Right now if I take a step back and put on my &#8216;I&#8217;m a 2-year-old&#8217; hat, the communists (China) are trying to make housing more affordable and they are trying to let capital markets work and let somebody (Evergrande) take a loss to learn a lesson. And the capitalists (America) are doing the exact opposite. We are trying to make housing as expensive as we can and build as much political fragmentation in our society over it as possible.&#8221; </p>



<p>-Luke Gromen in regards to the Evergrande situation on <a href="https://www.theinvestorspodcast.com/bitcoin-fundamentals/luke-gromen-on-china-evergrande-macro-bitcoin/" target="_blank" rel="noreferrer noopener">Bitcoin Fundamentals podcast Episode:045</a></p>



<h3 class="wp-block-heading">Bitcoin</h3>



<p>Supply held by long-term-holders, or supply held for longer than 155 days, is at an all-time high as Bitcoin surges </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="571" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg" alt="" class="wp-image-8882" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=468 468w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/LTH-BTC-1024x571.jpg?w=1352 1352w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<h3 class="wp-block-heading">Other Top Crypto Movers</h3>



<ul><li>$DYDX is one of the biggest losers today, down 8.5% to $21.30 after a spectacular run earlier this week</li><li>$LUNA is also trailing the market today, last trading near unchanged at $37.95 despite the market wide run up</li><li>$AXS is by far the biggest winner today, up 54% to $111. Check out the <a href="https://stake.axieinfinity.com" target="_blank" rel="noreferrer noopener">staking dashboard</a> and the <a href="https://explorer.roninchain.com/address/ronin:a99cacd1427f493a95b585a5c7989a08c86a616b" target="_blank" rel="noreferrer noopener">community treasury</a></li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul><li>The DXY index dropped -0.19%, according to MarketWatch.</li></ul>



<h3 class="wp-block-heading">Commodities</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>The November gas price at the Dutch TTF hub, a European benchmark, hit an all time high of 100 Euros per megawatt hour, according to Reuters.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<p><a href="https://techcrunch.com/2021/09/22/coinbase-to-propose-a-federal-regulatory-framework-for-crypto-to-u-s-officials-within-the-next-month/?tpcc=ECTW2020" target="_blank" rel="noreferrer noopener">Brian Armstrong</a> announced that he has met with more than 30 crypto firms, 25 members of congress and/or staff, four major law firms, and three trade groups about regulatory proposals for the industry. </p>



<p><a href="https://twitter.com/DeItaone/status/1443973168151023618?s=20" target="_blank" rel="noreferrer noopener">G</a><a href="https://twitter.com/DeItaone/status/1443973168151023618?s=20">M</a> plans to launch at least 20 new electric vehicles in North America by 2028. Many subject matter experts believe this could put severe supply pressure on the precious metals used in EVs. </p>



<p><a href="https://twitter.com/BitcoinMagazine/status/1443880967572164623?s=20">E</a><a href="https://twitter.com/BitcoinMagazine/status/1443880967572164623?s=20" target="_blank" rel="noreferrer noopener">l Salvador</a> has mined their first Bitcoin blocks using geothermal heat from volcanos to power miners.</p>



<p>That&#8217;s all for this week, folks. See you all back here on Monday!</p>



<hr class="wp-block-separator"/>



<p><strong>Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.</strong></p>



<hr class="wp-block-separator"/>


Bitcoin Showing Strength; Global Energy Shortages Persist: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Federal Reserve Chairman Jerome Powell confirms that the Fed has no plans to ban bitcoin</li>
                <li>Subpoena that was allegedly served at Mainnet event is neither confirmed nor denied by the SEC </li>
            </ul>
    
</div>



<p>Equities continued their struggles today while the crypto market posted gains.</p>



<p>China faces a power crisis, paving the way for spot coal prices to take another leg higher.</p>



<p>Federal Reserve Chairman Jerome Powell <a href="https://twitter.com/blockworks_/status/1443612299584024582?s=21" target="_blank" rel="noreferrer noopener">confirmed</a> that the Fed has no intention of banning bitcoin but that stablecoins are like money market funds or bank deposits and need to be regulated properly. </p>



<h3 class="wp-block-heading">DeFi/NFTs/Gaming</h3>



<ul><li>Visa <a href="https://www.coindesk.com/business/2021/09/30/visa-unveils-proposed-interoperability-platform-for-stablecoins-cbdcs/" target="_blank" rel="noreferrer noopener">announced</a> plans to roll out a &#8216;permissioned&#8217; Layer-2 targeting stablecoins and central backed digital currencies (CBDCs).</li><li>The Terra ecosystem successfully launched <a href="https://cms.blockworks.co/terras-columbus-5-sets-sail-heres-what-to-expect/" target="_blank" rel="noreferrer noopener">Columbus-5</a> earlier today. </li><li>Popular play-to-earn game Axie Infinity rolled out <a href="https://twitter.com/AxieInfinity/status/1443476351403663363?s=20" target="_blank" rel="noreferrer noopener">staking</a>. </li></ul>



<h3 class="wp-block-heading">TradFi</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>St. Louis Fed model sees loss of 818,000 jobs in September, per <a href="https://twitter.com/DiMartinoBooth/status/1443638816892461063" target="_blank" rel="noreferrer noopener">Danielle DiMartino Booth </a></li><li>According to a Tweet from <a href="https://twitter.com/TimmerFidelity/status/1443629628044812303" target="_blank" rel="noreferrer noopener">Jurrien Timmer</a> of Fidelity, The Fed is expected to start tapering in November by $15 billion per month.</li><li>China has <a href="https://www.scmp.com/economy/china-economy/article/3150457/china-power-crisis-thermal-coal-inventory-nears-record-low" target="_blank" rel="noreferrer noopener">issued</a> an order to top energy companies to ensure supplies at all cost. </li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>&#8220;Overall, September was a bearish month, mostly due to regulatory concerns, including SEC&#8217;s negative comments and China’s decision to declare all crypto transactions and businesses illegal. Price action in October would also largely depend on the behaviour of the regulators. As final decision dates for several ETFs are approaching, we would see a lot of action in the markets in the next 2 months,&#8221; Oleg Smagin, Head of Strategy at Delio, said.</p>



<h3 class="wp-block-heading">DeFi</h3>



<p>Decentralized exchanges are proving to be the cash cows of DeFi </p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="800" height="450" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg" alt="" class="wp-image-8824" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=800 800w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Defi-Annualized-Revenue-1.jpg?w=80 80w" sizes="(max-width: 800px) 100vw, 800px" /><figcaption>Source: Ryan Watkins of Massari</figcaption></figure></div>



<h3 class="wp-block-heading">Today&#8217;s Featured Video/Podcast</h3>



<ul><li>Alyse Killeen and Blockworks&#8217; co-founder Jason Yanowitz sat down to <a href="https://youtu.be/9xoM_RIVUt4" target="_blank" rel="noreferrer noopener">discuss all things bitcoin in the VC space. </a></li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul><li>The DXY index dropped -0.12%, according to MarketWatch.</li></ul>



<h3 class="wp-block-heading">Commodities</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Natural gas rose 6.65% according to the WSJ.</li><li>Spot coal prices were up 3.93%, per Business Insider.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">So <a href="https://twitter.com/AxieInfinity?ref_src=twsrc%5Etfw">@AxieInfinity</a> just airdropped $2M+ worth of AXS tokens into my Ronin wallet as part of their October 2020 snapshot&#8230; <br><br>I pinch myself every day in this space 🤯</p>&mdash; seedphrase.eth (@seedphrase) <a href="https://twitter.com/seedphrase/status/1443618593372086276?ref_src=twsrc%5Etfw">September 30, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">FINALLY — Umbrel unveils no set-up <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> node. Plug it in for personal sovereignty <a href="https://t.co/dnPEFIQoOv">pic.twitter.com/dnPEFIQoOv</a></p>&mdash; Bitcoin Magazine (@BitcoinMagazine) <a href="https://twitter.com/BitcoinMagazine/status/1443199428668628999?ref_src=twsrc%5Etfw">September 29, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Remember all the drama around Mainnet when the SEC allegedly served a subpoena to a speaker before going on stage? It&#39;s possible this was a completely false rumor. There seem to be no eyewitnesses who can confirm it, &amp; the SEC won&#39;t say either way. 🤔🤷‍♂️<a href="https://t.co/5J9ioHKqej">https://t.co/5J9ioHKqej</a></p>&mdash; Jake Chervinsky (@jchervinsky) <a href="https://twitter.com/jchervinsky/status/1443595962782523393?ref_src=twsrc%5Etfw">September 30, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h3 class="wp-block-heading">We are looking out for</h3>



<ul><li>Federal Reserve Chairman Jerome Powell will discuss pandemic recovery on Friday.</li></ul>



<p>That&#8217;s all for today, folks. Let&#8217;s do this again, same time tomorrow. </p>



<hr class="wp-block-separator"/>



<p><strong>Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.</strong></p>



<hr class="wp-block-separator"/>
