Messi’s game-changing crypto contract
This IRL pudgy penguin will one day grow up to be a Pudgy Penguin NFT. [Enrique Aguirre Aves via Getty Images]
Whether you’re a crypto chart watcher, a soccer superfan, or a *squints at notes* penguin enthusiast, this week’s Bytes has you covered. First up, we explore some of the forces propelling crypto’s market cap back to the $2 trillion mark for the first time in months. Also this week: the Pudgy Penguin NFT phenomenon, Lionel Messi’s new crypto contract, and much more. Let’s get to it.
Crypto market revisits $2 trillion
The penguin NFT craze explained
Lionel Messi’s crypto bonus
Market Update
Crypto market revisits $2 trillion despite regulatory uncertainty. What’s behind the run-up?
This week, crypto’s total market cap crossed the $2 trillion mark for the first time since May. The reversal was especially striking given recent headlines around China’s mining crackdown and regulatory uncertainty. Just last month, the market was below $1.2 trillion — so what sparked the rebound? Let’s dig in.
Global financial firms are citing institutional clients’ growing appetite for crypto. A July Fidelity survey found that 7 in 10 institutional investors expect to buy digital assets. And in response to tenfold growth in corporate demand, DBS, Southeast Asia’s biggest bank, launched new crypto services this week. “We are confident about doubling our investor base by the end of the year,” said the bank’s capital markets director.
Venture capital is flowing into the crypto space at record pace. Ten companies have raised nearly $4 billion this year, half in the past two months. Crypto exchange FTX, for instance, raised a record-breaking $900 million in July. (Coinbase Ventures was one of the investors.)
Individual retail traders are helping propel the altcoin market. The Wall Street Journal reports: “Many so-called altcoins, or alternatives to bitcoin, have seen their prices surge recently — a sign that retail investors are active as they search for digital assets with small market capitalizations and potential for big gains.”
Ethereum, home to much of DeFi and major NFT markets like OpenSea, is up around 20% since the London Fork upgrade. Meanwhile, Cardano revisited $2.00 after a long awaited announcement about smart-contract functionality, and Bitcoin rallied above $48,000 over the weekend for the first time since May.
The booming NFT market is breaking records. This week, Solana hit all-time highs after Degenerate Ape NFTs launched on its blockchain. Meanwhile, NFT marketplace OpenSea and NFT game Axie Infinity have seen combined revenues north of $400 million in the last month.
Why it matters… Crypto moves fast and is notoriously hard to predict. Just a month ago, many analysts were warning that a “crypto winter,” like the one that followed the late-2017 bull run, was imminent. Now, a historically broad array of crypto has powered the overall market close to all-time highs.
Bird is the Word
Pudgy Penguins power late-summer NFT boom
If you spend any time on crypto Twitter — or even just reading The New York Times — you’ve probably noticed a proliferation of Pudgy Penguins wearing accessories like fisherman hats, eye patches, and overalls. They’re the latest craze to pour gas on an already fiery NFT market driven in substantial part by gaming and collectibles. Let’s examine the undeniably cute trend.
Pudgy Penguins and Bored Ape Yacht Club represent the rising popularity of “community NFTs.” Exclusivity is likely part of the appeal. Fans often use their NFTs as online avatars and fervently discuss their purchases and swap memes in dedicated Discord channels.
Penguin fever seemed to escalate following the New York Times article, with sales totaling more than $13 million. Daily sales north of $2 million remained common as of Tuesday.
Other recents hits range from NFTs based on Fortune magazine’s recent crypto-issue cover (which went for over $1.3 million) to the series of 140 NFTs that Twitter gave away for free in June and have since seen trade volumes topping $6 million on OpenSea.
A new development? Groups of NFT fans teaming up to buy hot items via tools like PartyBid. “PartyBid is cool…,” noted VC investor Fred Wilson on his popular blog. “But what is cooler is that these NFT experiences are operating at the interaction of gaming, communities, and social nets.”
Will these projects have enduring value? Hard to say. Some prominent voices in the NFT community have cautioned fans about potentially overpaying for hot collectibles, only to be left holding the bag when the hype recedes.
Why it matters… As crypto prices fell earlier this year, NFT sales volumes also tumbled — leaving some to wonder if crypto-based digital art and collectibles had been a fad. But with crypto rising, a wide variety of NFT projects have benefitted. Cryptopunks, which pioneered the NFT collectible concept in 2017, have cracked the traditional art market and frequently trade for hundreds of thousands of dollars. And while Pudgy Penguin prices have already experienced intense volatility, they remained the biggest NFT project on OpenSea as of Tuesday morning.
Game Changer
What soccer superstar Lionel Messi’s new crypto contract means for the future of sports
The worlds of sports and crypto have intersected over and over this year — with everyone from Tom Brady and Saquon Barkley to the Dallas Mavericks making headlines. But Lionel Messi, soccer's biggest star, may have just literally changed the game with his new crypto contract. Here’s how it works:
Argentine superstar Messi gets paid in crypto as part of a two-year contract (which includes an annual salary of $41 million plus bonuses) to play for French club Paris Saint-Germain. In an effort to engage with its global fanbase, the team launched its own cryptocurrency, PSG, last year. Messi’s welcome package includes a large number of PSG tokens.
Such fan tokens can bring diehard supporters into team decisions by voting (via the Socios blockchain) on everything from uniform designs to which players should win MVP awards. Tokens can also be traded between fans around the world and make holders eligible for promotions.
Why it matters... Fan tokens could make sports fandom far more interactive, and top sports franchises are taking note. This week, the LA Clippers announced it would join the Socios platform. Formula 1 racing teams Aston Martin and Alfa Romeo, the UFC, and soccer clubs including Arsenal, Manchester City, and Barcelona (Messi’s old squad) have all also launched tokens of their own.
Takes
Doge days of summer edition, featuring Elon, Dionne, and Mark Cuban
Doge fest… For the price of $125 (or roughly 380 DOGE), you can attend Dogepalooza's inaugural edition in Sugar Land, Texas on October 9. Soul legend and recent Dogecoin convert Dionne Warwick will headline. The festival’s mission? To “change the world” by living the Doge motto: “Do Only Good Everyday.”
Doge whisperers... Dallas Mavericks owner and billionaire entrepreneur Mark Cuban told CNBC, “The community for Doge is the strongest when it comes to using it as a medium of exchange.” In response to Cuban’s quote, Tesla CEO Elon Musk tweeted, “I’ve been saying this for a while.”
Jersey Doge… Premier League soccer team Watford F.C. will sport Dogecoin logos on all three of their uniforms' sleeves this season thanks to a new sponsorship with sports betting company Stake. Sports site the Athletic broke the news and commented, “It’s a controversial choice, to say the least.”
TOKEN TRIVIA
What is Axie Infinity?
A
Cardano’s long awaited smart-contract upgrade
B
The first Premiere League team to offer NFTs to fans
C
Paul Bunyan’s nickname for his trusty axe
D
A crypto-meets-Pokémon NFT game
Find the answer below.
Trivia Answer
D
A crypto-meets-Pokémon NFT game
