Bitcoin’s Validation - Chung's Weekly Digest (8/12)

Coinbase-Blackrock Partnership

Bitcoin ($BTC) pumped on a few positive pieces of news that saved the crypto market from crashing further as crypto market sentiment improves. Blackrock, one of the largest asset managers in the world, is giving its American institutional investors direct Bitcoin exposure with the launch of a spot Bitcoin private trust. 

The world is still waiting for the U.S. Securities and Exchange Commission (SEC) to allow spot Exchange Traded Fund (ETF) for retail investors. If Blackrock is allowed to offer direct exposure to Bitcoin for institutional investors, this move legitimizes crypto as an investable asset class.  

The U.S. Consumer Price Index (CPI) data remained unchanged for the month of July at 8.5% leading to a spike in Bitcoin’s price. The price of gas fell in the month of July offsetting increases in food and shelter indexes. 

However, the worst is not over as the exuberance could be hampered by the next FOMC meeting scheduled to take place on Sept. 20-21 as another significant rate hike is expected. 

Although in the short term, inflation will likely hamper investors’ confidence in crypto, governments' excessive money printing (as occurred during the pandemic) will likely compel institutions to seek safer havens. The dollar will devalue over time, and alternative asset classes could offer an escape route for these institutions.  

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Weekly Recap

• A Solana hack compromised more than 9K wallets. 
• CZ says the best investments are done in bear markets.
• Lifeform receives support from Binance Labs.
• Binance Card launches in Argentina. 
• Trust Wallet announced as a partner for Instagram NFTs. 
• Axie Infinity holds an art contest. 
• CZ denies ownership of troubled WazirX Exchange.
• Chainlink will not support integration with Ethereum’s PoW after the Merge.
• Coinfest Asia brings major crypto players to Bali. 
• Coinbase and Blackrock forge partnership. 
• SecondLive celebrates first anniversary with Soulbound tokens.
• Everdome secures $10 million commitment from GEM Digital Limited. 
• Binance’s co-founder Yi-He to lead Binance Labs.
• Crypto.com gets regulatory nod in South Korea.
• Vitalik believes ZK-Rollup will beat Optimism as the top layer-2 solution for Ethereum.

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Market Sentiment

The market sentiment has significantly improved as Bitcoin reclaimed a $450 billion market cap. Ethereum, on the other hand, reached a two month high surging past $1,900. It is now consolidating just below the $1,900 mark, suggesting that the market’s enthusiasm for the long-awaited Merge is not abating. 

‍OKX and LinkedIn conducted a study focusing on Web 3.0 which concludes that the blockchain ecosystem is experiencing a sustainable boom and talent demand in the space continues to be strong. 

Demand for talent is directly linked to development in the space. Countries adopting a proper regulatory framework will have a head start in this new economy as adoption picks up momentum. 

The rally in the crypto market will likely continue in the next few days as interest builds up on Ethereum. However, the next FOMC meeting will likely result in a short-term sell-off as traders would likely choose to lock in profits and not be exposed to risks.

Coins to Watch

• Solana ($SOL) - Solana is one of the leading contenders for the second spot in the smart contract network category. Ethereum’s problem of scalability will not be resolved with the Merge, hence the main beneficiaries may be BNB Chain and Solana. 
• Solana has been consistently building, reducing the frequency of outages. 
• Losses from the recent Solana hack have been contained. Security lapses are an essential part of growth. 
• $SOL has a better risk/reward ratio compared to the likes of $BTC or $ETH.
• Cronos ($CRO) - $CRO is the native currency in the Cronos Chain. It is also an exchange coin.
• Crypto.com is starting to stamp its presence in more jurisdictions.
• The list of utilities for $CRO is listed here. 
• $CRO would likely follow the path of $BNB, as it shares an almost identical ecosystem. 
• If $CRO comes close to its previous all-time high, an investor can achieve a 6.4x return on investment based on its current price. 

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