The Wolf Den #705 - Remember Web3?
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In This Issue:
Remember Web3?
Bitcoin Thoughts And Analysis
Legacy Markets
The History of Bitcoin Maximalism
Goodbye Bittrex
Arbitrum Upset The Community
The Real Story Behind Web3 Gaming | Pavel Bains, MixMob
Remember Web3?
Just a year ago, Web3 was one of the most popular trends and themes in the world of crypto and beyond. If companies in the technology, media, fashion, or gaming industries weren't developing a metaverse, NFT collection, or cryptocurrency project, they were viewed as lagging behind the times. Around this time last year, Citi published a research report stating that “the metaverse economy could be an $8 trillion to $13 trillion total addressable market by 2030.”
To put the magnitude of $8 trillion into perspective, that's roughly the size of the Federal Reserve's balance sheet at present. To give you an idea of the scale of $10 trillion, that's approximately the value of all the gold in the world. And if you're wondering how colossal $13 trillion is, consider this: the combined market capitalization of Apple, Microsoft, Saudi Aramco, Alphabet, Amazon, NVIDIA, Berkshire Hathaway, Tesla, Facebook, Johnson & Johnson, TSMC, and Visa amounts to about $13 trillion.
So maybe Citi’s prediction was a little optimistic.
Maybe not. It remains to be seen.
But Citi was not alone. This McKinsey report from June of last year states that “with its potential to generate up to $5 trillion in value by 2030, the metaverse is too big for companies to ignore.” Gartner said in this study that, “by 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social and/or entertainment.”
During the Web3 craze, if you weren't building something in the metaverse, you were likely making bullish predictions about it. However, it's time to come back to reality. While there's no doubt that the web will continue to evolve, the attempt at Web3 in 2022 was ahead of its time.
We need to reset our expectations and start again at Web 1.0 first principles.
The first iterations of the technology were simple, able to perform basic calculations and store data on massive machines like the Altair 8800. In time, the transmission and storage of data improved, leading to the shift into the Web2 phase. Platforms were built around the ideas of ease of use, user-generated content, and interoperability. PayPal, Facebook, Microsoft, AWS, and other examples of Web2 have made it easy to connect with anyone in the world with a phone and internet connection. However, exchanging value and democratizing data are still difficult, which is where Web3 comes in.
As the concept of Web3 began to surface, major corporations rushed in without a sense of direction or purpose. Facebook became Meta, but nothing else changed. Disney scrapped its metaverse division, fashion brands failed with NFT releases, DAOs have struggled to govern themselves democratically, and gamers weren't interested in pathetic crypto games that were hardly playable.
To succeed, Web3 needs to evolve more naturally, like Bitcoin or Ethereum, and not by shoving NFTs down consumers' throats and ranting in crypto jargon. The road to Web3 will be challenging, but remains inevitable. The internet wasn't rushed, so there's no sense in rushing this.
But we will get there.
The current 'death' of Web3 is the same cycle seen for Bitcoin time and time again. Think of it more as a reset than a death. Web3 will emerge stronger and much improved.
It just won’t happen tomorrow.
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Bitcoin Thoughts And Analysis
Bitcoin price has barely moved for almost 3 weeks. As you can see, the last two weekly candles were dojis, indicating a pause and indecision. Both candles had nearly the same opening and closing price - for the entire week. And both candles opened and closed right at $28,000.
As you can see, the last 2 candles also wicked through resistance at $28,600, the lows from the 2021 bull market. This is the key resistance. If you were to zoom into the daily, you would see that we have NINE daily candles that have touched this level, with zero managing to close above.
The market is indecisive, and we need to see candles closing above $28,600 to start to get renewed bullish sentiment. For now, chop.
Legacy Markets
Crude oil futures experienced their largest surge in almost a year after OPEC+ announced a production cut of over 1 million barrels per day, raising inflation concerns and prompting central banks to consider tightening monetary policy further. Brent crude and West Texas Intermediate also experienced significant gains. Energy stocks in Europe, such as BP Plc and TotalEnergies SE, rose by more than 4%. Surging oil prices have forced traders to reassess their positions, with the odds of a quarter-point interest rate hike in May increasing to 65%. The production cut is expected to exacerbate inflation, which may lead central banks to extend or strengthen their interest rate hiking cycles.
Key events this week:
Eurozone S&P Global Eurozone Manufacturing PMI, Monday
US construction spending, ISM manufacturing, light vehicle sales, Monday
Eurozone PPI, Tuesday
US factory orders, US durable goods, Tuesday
Australia rate decision, Tuesday
Cleveland Fed President Loretta Mester speaks, Tuesday
Eurozone S&P Global Eurozone Services PMI, Wednesday
US trade, Wednesday
UBS annual general meeting, Wednesday
US initial jobless claims, Thursday
St. Louis Fed President James Bullard speaks, Thursday
US unemployment, nonfarm payrolls, Friday
Good Friday. Many markets closed, including US stock and bond markets
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:19 a.m. London time
S&P 500 futures fell 0.1%
Nasdaq 100 futures fell 0.6%
Futures on the Dow Jones Industrial Average rose 0.3%
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0849
The Japanese yen fell 0.5% to 133.51 per dollar
The offshore yuan fell 0.3% to 6.8943 per dollar
The British pound was unchanged at $1.2337
Cryptocurrencies
Bitcoin rose 1% to $28,349.5
Ether rose 1.3% to $1,811.93
Bonds
The yield on 10-year Treasuries advanced seven basis points to 3.54%
Germany’s 10-year yield advanced six basis points to 2.36%
Britain’s 10-year yield advanced five basis points to 3.54%
Commodities
Brent crude rose 5.2% to $84.04 a barrel
Spot gold fell 0.2% to $1,964.51 an ounce
The History of Bitcoin Maximalism
Bitcoin maximalism is not a new phenomenon limited to crypto Twitter. Its roots go back much further to the early days of Bitcoin Talk forums, where discussions about Bitcoin and other growing ideas were prevalent. Since then, Bitcoin maximalism has remained a significant force in the crypto sphere. If you're interested in delving deeper into the history of Bitcoin maximalism, Jameson Lopp's blog is an excellent resource on the topic.
Goodbye Bittrex
Many of today's OG crypto investors and traders began their journey on Bittrex, a cryptocurrency exchange founded in 2013. Sadly, the exchange is winding down its U.S. operations this month, marking the end of an era for many of us. According to Bittrex's blog, the reason for shutting down is regulatory requirements, which likely put the exchange in a difficult financial situation. Trading on Bittrex ends on April 14th, with withdrawals closing on April 30th, so it's essential to plan accordingly if you have funds on the exchange.
In their statement, Bittrex mentions that the current U.S. regulatory and economic environment makes it economically unviable to continue operations. Regulatory requirements are often unclear and enforced without proper discussion or input, leading to an uneven competitive landscape. Although Bittrex made great strides in maturing the crypto space, operating in the U.S. is no longer feasible. As a result, Bittrex's founders will focus on helping Bittrex Global succeed outside the U.S.
With both Poloniex and Bittrex gone, many wonder who will be next. It's possible that more casualties will occur as the regulatory landscape continues to evolve.tw
Arbitrum Upset The Community
Confusion and disappointment have erupted within the Arbitrum community, a popular ETH layer 2 scaling solution, after the Arbitrum Foundation started selling tokens without what the community believed was proper authorization. As a result, members of the community are questioning whether their tokens represent a respected vote, while the foundation maintains that there was simply a miscommunication.
Last week, Arbitrum conducted a successful airdrop to 300,000 wallets, and token holders were granted voting rights on proposals such as AIP-1, which covered fiscal and governmental protocol concerns. However, the community voted against the proposal, but the foundation began spending its budget before the community finished voting or approval, leading to the current issue.
I want to clarify that the summary above is a very general overview. The details of this issue go much deeper, which I why I suggest this thread and this blog post if you want a further discussion around Arbitrum’s governance. The challenge with DAOs is that there needs to be some understanding of rules, structure, and organization before a community vote can take place, which is where the current misunderstanding began. This creates a "chicken and egg" problem. However, I do not believe that this is the end of Arbitrum, nor do I think that they are intentionally dumping on their community. It's likely that this issue will be resolved, and the positive sentiment towards Arbitrum will return. After all, the community loved the platform just last week.
The Real Story Behind Web3 Gaming | Pavel Bains, MixMob
Don’t miss my interview with Pavel Bains, founder of MixMob! Pavel shares his experience starting his crypto journey with Bluzelle, a GameFi blockchain network, and how he is leveraging his gaming background to build MixMob - a unique game combining elements of Mario Kart and Clash Royale. In this episode of The Wolf Of All Streets podcast, Pavel delves into the world of web3 gaming, discussing its potential and when we can expect to see the first web3-native AAA games hit the market. Get ready to explore the intersection of gaming and blockchain technology in this insightful conversation.
In this episode with Pavel, we discussed:
Bluezelle
When will we see great games in Web3?
MixMob
Problems in Web3 that have to be solved
Web3-native AAA games
Pavel’s way into crypto
Regulation issues
Solana
Grand vision for web3 games
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.