You can now own a football club with NFTs 🤯⚽️
GM,
This is Cryptonite, your twice-a-week shot to stay updated about the crazy world of crypto. We hit you with what’s relevant, upcoming and funny — minus the FUD.
Let’s get started 🔥
FTX bids for BlockFi 💵
What’s happening — Sam Bankman Fried’s goliath, FTX, has offered to buy crypto lender BlockFi for a mere $25 million, days after providing the option of a $250 million credit line to manage its liquidity problems.
At $25 million, this deal is a steal for FTX. For BlockFi, though, it represents a 99% decline from its last known valuation of $4.8 billion — which indicates that when shit hits the fan, valuations remain a vanity metric.
The buyout comes amidst a huge decline in major cryptocurrencies, which has caused crypto hedge fund Three Arrows Capital to go insolvent. Apart from BlockFi, other lenders like Celsius and CoinFlex are struggling, too — making this one of the worst periods ever witnessed by the crypto market.
Our take — FTX is pushing for takeovers in the market for now, and we expect many companies to go down in the coming few months as the bear market remains. If you’re an investor, diversify your portfolio and keep calm.
Regulations are coming 👀 👩🏽⚖️
It’s no surprise that countries want to regulate crypto. Yesterday, Europe joined the picture, signing a law known as Markets in Crypto-Assets (MiCA) to control and make life more challenging for the crypto players.
Here are the highlights:
Stablecoins like Tether and USDC will be required to maintain surplus reserves to meet investor buyback requests in case of mass withdrawals. They’re also limited to 200 million euros in daily transactions, in case they become huge.
Crypto platforms will be banned if they fail to protect investors adequately.
The exchanges have to store the data of all wallets that are connected to them.
Crypto firms operating in Europe will have to reveal their energy consumption and the impact of cryptocurrencies on the environment.
While the rules will go effective by 2024, it underscores that regulators are going apeshit with the recent turmoil in the crypto market, especially after the collapse of Luna.
Rules will not apply to private and unhosted (by a third party) wallets. Also, it won’t impose on transfers between individuals using crypto wallets that are not based on the service providers (Eg - Using meta mask to transfer to another meta mask wallet).
Our take — The crypto market is still nascent and filled with many loopholes. The regulations will mainly look to curb any exploitations and stop another Do Kwon from fooling investors. We believe in decentralisation but some form of oversight always helps investors in the long run.
Football goes Web3 ⚽️ 🥅
What Happened — Web3 brand WAGMI United has partnered with Adidas to launch NFT collections for its football club, Crawley Town FC, to give more power to the club’s fans in critical decisions.
Lil backstory: WAGMI was founded by Preston Johnson and Eben Smith last year to bring the world of sports and NFTs together. The company became the first Web3 platform to own a sports team by acquiring Crawley Town FC — a UK-based football club playing in the League Two of the English Football League.
Crawley Town is a small club with just over 2,000 fans. The club currently loses thousands of pounds annually and doesn’t have enough resources to compete well. WAGMI plans to change Crawley’s fortunes through NFTs and has set an ambitious goal of taking it to the Premier League.
How will NFTs help? By giving out NFTs, WAGMI will provide control of the club to fans, who, unlike in traditional sports teams, don’t have much of a say. NFT holders can vote on major decisions like player transfers and even have the power to oust Preston and Eben if the club fails to earn a promotion to League One by the end of their second season.
Why care? NFTs help build strong communities, leading to more partnerships for sports teams and helping create an additional revenue stream. At the same time, it gives fans a chance to participate actively in their beloved team instead of being a mere spectator.
Crypto Bytes ₿
📉 FTX's Sam Bankman-Fried says some small exchanges are already insolvent.
KPMG enters the multiverse to help clients and consumers on how to build experiences for web3
#Bitcoin and crypto hedge fund Three Arrows Capital has entered liquidation
France plans to adopt NFT ticketing for World Cup 2023, and Olympics 2024.
Binance Teams up With TikTok's Khaby Lame to Debunk Web3 and Crypto Myths.
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DISCLAIMER:
None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.