Monday, May 9th 2022

Crypto Three Things (5/9)


The below content and projections are the opinion of the authors. Any conclusions or takeaways are their own. This should not be considered as investment advice. Investing involves the risk of loss and returns are not guaranteed.

1) Crypto faced steep sell-off over the weekend, mimicking last week’s stock market’s slide

  • Bitcoin fell more than 9% this past weekend; since May 1st, it is down over 15%.
  • The Bitcoin Fear and Greed Index is at 11, indicating there is “Extreme Fear” in the market.
  • Crypto markets continue to be highly correlated with equity markets, and more specifically growth equities.

Titan’s Takeaway: Bitcoin and its crypto peers haven’t been spared from inflation jitters and interest rate anxiety. As broader financial markets adjust to rising interest rates and overall volatility moderates, crypto markets should return their focus to fundamentals, with external factors playing a smaller role in price moves.

2) NFT-focused investment firm Sfermion looking to raise $100M to invest specifically in gaming NFTs

  • Chicago-based Sfermion, who made their name by collecting rare NFTs such as CryptoPunks and Meebits, has backing from Marc Andreessen, the Winklevoss brothers, and others.
  • The firm will study new crypto games to understand which NFTs have the potential to generate outsized demand in the future.
  • Managing Partner Andrew Steinwold said that by loaning some of the NFTs out to gaming tournaments, the firm can expect to earn an annual yield of 5% to 40%.

Titan's Takeaway: Although the metaverse remains in the earliest stages of development, we expect more specialized investment firms to raise capital for these seemingly niche opportunities.

3) Alphabet plans to build out Web3 team in bid to provide blockchain services to large enterprise customers

  • The Web3 division will live under Google’s Cloud computing unit, and will provide blockchain-as-a-service to their largest customers.
  • Alphabet’s push further into crypto comes as competitor, Microsoft Azure, decided to end its blockchain services last year.
  • James Tromas, a former Citigroup executive who joined Google several years ago, will lead the blockchain team.

Titan's Takeaway: Just three months after Google parent Alphabet said it was looking into Web3, the company seems to have made good on its plan. As investors in both Alphabet and crypto, we’re encouraged to see traditional tech players investing resources to meet their enterprise customers’ burgeoning demand for blockchain.

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