Last week was another prosperous week in the crypto market. Investors poured $76 million into digital asset investment products in the last seven days, marking the fourth straight week of positive inflows. The year-to-date inflows have reached $230 million, reflecting a positive shift in investor sentiment at the start of 2023. Bitcoin remains the main focus of investors, attracting $69 million, accounting for approximately 90% of the total inflows for the week. Ethereum received only $0.7 million in inflows amid uncertainty surrounding the upcoming upgrade.
Despite a 40% surge in the crypto market, VC investment was down 90% in January, according to CoinDesk. Venture capital funds are caught in a dichotomy. On one hand, the crypto industry is making massive gains, with many altcoins doubling and even tripling in value in the last month. On the other hand, funding poorly constructed projects have resulted in enormous losses for large-scale investors.
Recently, there has been a slowdown in deal speed with a shift towards more concentrated bets on high-conviction projects with product-market fit. However, if the industry keeps on this trajectory, there is no doubt the funds will flood the market once again. Here are all today’s top stories
- Ethereum has experienced a rise in on-chain activity, particularly in the NFT sector, according to a research report from Bernstein. Daily fees on the Ethereum blockchain have doubled to between $4 million and $6 million compared to the start of the year. ETH has gained approximately 35% during the same period. Analysts believe that Ether inflation will remain negative, with the potential for further deflation, due to increased on-chain activity. A crucial upcoming event for Ethereum is the Shanghai upgrade, set to take place in mid-March, which will allow for withdrawals of staked ether.
- FTX seeks to recover tens of millions of dollars given out by former CEO Sam Bankman- Fried in campaign contributions. The company is sending confidential letters to the political beneficiaries of its top executives, asking for the money to be returned by the end of February. FTX reserves the right to seek repayments through court action if necessary. The donations, estimated at up to $93 million, were made to dozens of politicians across the political spectrum. Despite some recipients trying to cancel out the scandal by making equivalent donations to charity, FTX warned that this will not prevent them from seeking recovery.
- A recent report from Recap has ranked the top cities in the world for crypto-friendliness and crypto-related start-ups and investments. The study focuses on several metrics to assess the state of the crypto industry in different countries. These include the quality of life score, the number, and impact of crypto-specific events, the number of crypto-related jobs, companies, and ATMs, the research and development spending as a percentage of the country's GDP, the capital gains tax rate, and the level of crypto ownership in each country. These metrics provide a comprehensive picture of the crypto industry in each country and how it affects the economy, society, and people's lives. London leads the race as the largest crypto hub in the world, with the highest number of people working in the crypto industry and a thriving startup ecosystem. Dubai comes second with 0% tax on digital assets, and a high interest from the adult population (66%) in cryptocurrency. New York comes in third with the highest number of crypto companies and, and investment in R&D. Singapore follows with 25% ownership of crypto and no capital gains tax. Los Angeles comes fifth, with a thriving crypto community, government support, and high R&D expenditure.
- Visa aims to facilitate the conversion of digital assets to fiat currencies on its platform. The payment giant is exploring ways to incorporate blockchain technology into its network to speed up money transfers. Visa's head of the crypto division, Cuy Sheffield, announced the company's vision for digital assets at the StarkWare Sessions 2023. The goal is to allow customers to seamlessly convert digital assets, such as USDC, to fiat currencies, similar to converting between dollars and euros in cross-border transactions.
- Binance recently acquired a large stake in the South Korean crypto trading platform, Gopax. The acquisition marks Binance's return to the South Korean market after a two-year absence. The funds came through the Industry Recovery Initiative, a finance-driven investment project in that Binance invested $1 billion. Although exact details are not yet public, Binance's Chief Business Officer, Yibo Ling, confirmed that the company acquired a significant equity position in Gopax. The main goal of the acquisition is to support customers and guarantee the safe withdrawal of their assets.
- The Dogecoin Foundation is set to launch a new version of its blockchain tool, Libdogecoin, according to Michi Lumin, a core engineer at Dogecoin. The updated version 0.1.2 will include improved features such as mnemonic/seed phrase generation, QR code creation, and better compatibility with Microsoft Visual C++ and Visual Studio, according to Lumin. The foundation aims to make it easier for developers to integrate their products with the DOGE ecosystem using Libdogecoin, which should drive innovation within the community. With recent developments in crypto payments on Twitter, there is growing interest in Dogecoin, now valued at $0.098, a 34% increase from Jan 1, 2023