Google Wades Deeper into Crypto, Emmer Fights Back Against CBDCs
Market Update
- Equities are attempting a rebound following their worst day of the year. The $SPX and $NDQ are both trading 0.3% higher. Yields are also starting to show signs of exhaustion, as both the US 2Y and US 10Y are down over 1.0%. Traders anxiously await the Federal Reserve's latest meeting minutes to gain further color regarding its future hiking agenda. Meanwhile, Coinbase is trading lower on the day, despite beating analyst expectations on both the top and bottom line after yesterday's close, likely due to a continued waning of user numbers (select metrics below). The crypto market is finally showing signs of retreat after posting impressive gains relative to equities last week, with $BTC (-3.0%) and $ETH (-3.3%) lagging behind the bounce in equities. Among the top large-cap performers are $LDO (+2.4%) and $RPL (+2.8%), as well as $STX (+17.6%) and $XTZ (+5.0%), the latter of which is likely benefitting from Google's announcement that it would provide infrastructure to the Tezos network.
Figure: Select Coinbase 2022 Results
- According to an announcement released this morning, Google Cloud is set to become a validator on the Tezos network, enabling corporate customers to deploy Tezos nodes to build Web3 applications on the network. The move is a positive development for the Tezos ecosystem, providing further validation and recognition from a major player in the tech industry, but perhaps the more significant element of this press release is Google's continued appetite to serve the crypto ecosystem. In addition to this development, the search giant recently forged a partnership with Coinbase, launched a cloud-based Ethereum node service, and spun up a Solana validator.
- In an apparent effort to safeguard Americans' financial privacy, US Representative Tom Emmer has introduced a bold new bill that could restrict the Federal Reserve's ability to issue a central bank digital currency (CBDC). The "CBDC Anti-Surveillance State Act" would prevent the Fed from issuing a digital dollar directly to individuals, block the central bank from using a CBDC to implement monetary policy changes, and would demand transparency for any digital dollar-related projects. Emmer believes that anything less than this could lead to the creation of a dangerous surveillance tool. As a crypto-friendly lawmaker, Emmer has been a vocal advocate for innovation in the industry, urging the government to ease up on harsh regulations. In addition to being a positive development for privacy advocates, this bill also highlights an interesting subplot in the battle against CBDCs. Emmer's bill likely could have excluded the part about direct issuance from the Fed and still deliver on privacy protection goals. However, this language regarding direct issuance was included. In a world where the Fed supplants credit issuance as the primary vehicle for money creation, the structure of money markets would significantly change and potentially reduce the earnings of credit-issuing banks. Observing how the banking industry acts toward any potentially egregious CBDC legislation will be interesting to observe.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Solana's recent stallout shouldn't have come as much of a surprise given the presence of price having advanced to a critical downtrend line that lined up right near its 50% retracement level of the prior high to low decline from last August. This area at $26.50-$28.50 looks important as resistance given these factors along with approximating prior lows from last June and October which were broken on $SOLUSD violent pullback in the month of November 2022. Recent consolidation this week doesn't look too bearish, however, and likely provides buying opportunities for rallies back to the mid-$30's over the next couple months. As daily charts show, last month's resistance was just exceeded earlier this week, which structurally puts $SOLUSD in a much better place technically. While short-term weakness has played out over the last couple days, the area at $22-$23 stands out as an attractive support zone to buy dips. Once Solana starts to stabilize again and turn back over $27.12, no real resistance should occur until $33 which could have some significance, followed by November 2022 peaks at $38.79. Overall, momentum has begun to improve, and structurally this has begun to show technical evidence that an upcoming rally is likely between now and mid-April.
Daily Important Metrics
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All metrics as of February 22, 2023 12:40 PM
All Funding rates are on bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $464B | $24,044 | ↓ -2.62% | ↑ 45% | |
 ETH | $200B | $1,636 | ↓ -2.49% | ↑ 37% | ↓ -8.58% |
 ADA | $13B | $0.3854 | ↓ -2.44% | ↑ 56% | ↑ 11% |
 MATIC | $12B | $1.37 | ↓ -2.41% | ↑ 79% | ↑ 34% |
 DOGE | $11B | $0.0853 | ↓ -1.20% | ↑ 22% | ↓ -24% |
 SOL | $8.9B | $23.64 | ↓ -6.35% | ↑ 139% | ↑ 94% |
 DOT | $8.2B | $7.06 | ↓ -3.51% | ↑ 62% | ↑ 17% |
 LINK | $3.8B | $7.48 | ↓ -3.58% | ↑ 35% | ↓ -10% |
 NEAR | $2.1B | $2.45 | ↓ -4.30% | ↑ 93% | ↑ 47% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -47% | $11.58 | ↓ -2.53% | ↑ 40% | ↓ -5.45% |
| BITW | ↓ -58% | $8.97 | ↓ -2.45% | ↑ 67% | ↑ 22% |
| ETHE | ↓ -53% | $7.42 | ↓ -2.83% | ↑ 56% | ↑ 11% |
| BTCC | ↑ 0.98% | $4.38 | ↓ -3.31% | ↑ 45% | ↓ -0.58% |
News
QUICK BITS
CoinDesk Solana-Themed Storefronts Close Shop, Ending Experiment in IRL Blockchain Evangelism Solana Spaces will close its New York City and Miami locations by the end of February. |
CoinDesk Voyager’s Binance US Sale Plan ‘Full Steam Ahead,’ Counsel Says A vast majority of Voyager’s creditors are voting in favor of a plan to sell assets to Binance US, a New York court was told today. |
MARKET DATA
CoinDesk Coinbase Off to a Good Start in 2023: JPMorgan One of the biggest contributors to revenue in the fourth quarter was from Coinbase’s relationship with Circle, the report said. |
CoinDesk BUSD Stablecoin Temporarily Plunges to $0.20 on Binance Binance USD (BUSD), the third-largest stablecoin by market cap, spiked to a low of $0.20 against the DAI stablecoin as liquidity dried up on Binance. |
DOSE OF DEFI
Decrypt.co Uniswap Traders Can Now Buy NFTs With UNI, SHIB or Any Ethereum Token Uniswap NFT is looking to out-engineer the competition by allowing traders to buy NFTs using any Ethereum-based token. |
CRYPTO INFRASTRUCTURE
Decrypt.co Google Cloud Broadens Web3 Slate By Joining Tezos ‘Bakers’ The tech giant is already a validator for Solana and Aptos and now has a Web3 fan at the helm of YouTube. |
The Block Obol to bring distributed validators to Ethereum this year Obol is testing and rolling out its distributed validator network on Ethereum over the next six to nine months. The post Obol to bri... |
REGULATION
The Block Self-hosted wallet ban avoided in new draft of EU’s anti-money laundering bill The shift from "self-hosted wallets" to "self-hosted addresses" in the EU's anti-money laundering regulation clarifies policymakers' intentions to oversee non-c... |
Decrypt.co FTC Objects to Voyager Digital Restructuring Plan, Citing Ongoing Investigation The FTC called language in the plan a "disguised discharge" to protect Voayger from being held accountable for "deceptive and unfair marketing." |
FUNDRAISING AND M&A
The Block Web3 database developer Polybase raises $2 million in pre-seed funding Polybase, a crypto startup developing a privacy-focused decentralized database, raised $2 million in a pre-seed funding round. The p... |
The Block ConstitutionDAO members raise $2.8 million for multi-signature wallet Den IDEO CoLab Ventures led Den's $2.8 million raise to build a multi-signature wallet that helps DAOs execute transactions quickly. The... |
WEB 3.0
CoinDesk Web3 Wallet Bitski Releases New Mobile Wallet and Browser Extension The company’s goal is to onboard more people to Web3 and NFTs with new user-friendly experiences that also prioritize security. |
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