Block 1: Key news
- BlackRock files application for Ethereum Spot ETF
Asset management giant BlackRock has apparently initiated an application to launch a Spot ETF on Ethereum, after registering the iShares Ethereum Trust in the US state of Delaware. This news triggered a significant rise in the price of ether, pushing it above the $2,000 mark. The move follows a similar strategy to that used for a Bitcoin spot ETF application, potentially anticipating approval from the SEC, which is currently reviewing several similar applications for Bitcoin. To date, the SEC has yet to approve any Spot ETF on a cryptocurrency.
- Will Grayscale turn GBTC into a Bitcoin ETF?
The Securities and Exchange Commission (SEC) is in discussions with Grayscale regarding the transformation of its GBTC into a Bitcoin Spot ETF, following a recent legal victory for Grayscale over the SEC. Michael Sonnenshein, CEO of Grayscale Investments, says Grayscale is not ruling out further legal action, and that no timetable has been discussed with regulators. He stresses that Grayscale is ready to operate GBTC as an ETF.
- HSBC continues its development in asset tokenization
HSBC is moving into asset tokenization by partnering with Swiss company Metaco, using its Harmonize platform to serve its institutional clients. This move aligns with the growing trend of real asset tokenization, which offers a modern and secure custody infrastructure to meet the demand of asset managers. Recently, HSBC also broke new ground by becoming the first major global bank to offer tokenized physical gold, enabling its customers to invest in gold with amounts less than a full bar.
- Robinhood comes to Europe
Robinhood, the trading giant, is expanding its operations in Europe, starting in the UK with brokerage services, then offering cryptocurrency trading in the rest of Europe. With $87 billion in assets under management and a market capitalization approaching $9 billion, Robinhood persists in its strategy of diversification. This expansion is also a response to the more favorable regulatory environment in Europe than in the United States, marking a significant turning point for the company in its international conquest.
Block 2: Crypto Analysis of the week
The non-fungible token (NFT) industry seems to be on the verge of obsolescence. Yet eulogies may be premature for this controversial but innovative market.
Devin Finzer, CEO of OpenSea, the leading NFT marketplace, has made a sobering statement. In the midst of a post-Sam Bankman-Fried trial media cycle, Finzer announced a significant downsizing, revealing that OpenSea would reduce its staff by 50%, while simultaneously hinting at a strategic pivot towards a revitalized "OpenSea 2.0".
The reason for the downsizing appears to be rooted in harsh economic realities. The precipitous decline in exchange volume - the cornerstone of OpenSea's revenue model - paints a murky financial picture. A compiled Dune Analytics dashboard vividly illustrates this decline: OpenSea's monthly exchange volume on Ethereum, which accounts for the vast majority of its transactions, peaked at $4.87 billion in January 2022, but plunged to just $49 million in October.
Even applying the company's standard 2.5% commission to Ethereum trading volumes, transaction revenue this year is a shadow of its former self. OpenSea's year-to-date revenues from Ethereum transactions are estimated at $62 million, compared with $484 million in revenues last year.
Beyond the numbers, and to make matters worse, OpenSea has had to face backlash from major industry players following the phasing out of "creator fees", also known as "royalties", which are the royalties traditionally collected by NFT creators on secondary sales.
This controversial decision, which is due to be fully implemented by February 2024, has ruffled the feathers of the NFT community. The decision prompted Yuga Labs, creator of the iconic NFT collection Bored Ape Yacht Club, to sever its ties with OpenSea in favor of a collaboration with competitor Magic Eden.
Despite the financial turbulence and operational changes at OpenSea, the pop cultural impact of NFTs remains undeniable among aficionados of this universe. Indeed, public awareness of NFTs was clearly heightened by the recent Simpsons Halloween special. The episode, imbued with the characteristic spirit of the series, offers a narrative steeped in the cryptic language of blockchain and the sometimes irrational exuberance of FOMO - Fear Of Missing Out - or the fear of missing out, which drives this market.
Here's a sneak peek at the episode:
Homer accidentally turns his son into an NFT. While he's upset about losing his son in the cryptoverse, his feelings are mixed when he learns that Bart is worth $1.5 million as the first human NFT. To save their son, Marge transforms into an NFT and enters the blockchain, which in the series is a train known as a "block train" with a talking NFT who explains that it's "powered by the most abundant fuel in the universe": FOMO." After accidentally killing another NFT, Marge discovers that its value has risen, and continues to rise with more and more murders. For the more curious, I'll say no more, you can enjoy this episode 3.0-style on your screens.
Fans of the non-fungible tokens relied on the fact that The Simpsons has a reputation for predicting the future (even Donald Trump's presidency was predicted in one episode). Their pop culture-based analyses confirmed, over and over again, that this episode certainly predicted the start of a new bull run for NFTs. Can you believe it?
Block 3 : Gainers & Losers
Block 4 : A few things to read
“L’heure de la fête!” Crypto Land célèbre la culpabilité de Sam Bankman-Fried (Wired)
Le secteur des guichets automatiques de crypto est toujours en plein essor (Financial Times)
L’ancien président du NYSE en pourparlers pour redémarrer FTX (WSJ)