What's driving crypto's early Q4 rally?
Behold, The Doge Crown. Fashion brand Dolce & Gabbana auctioned both an IRL and digital NFT version of the regalia for about $1.25 million. [Image via UNXD and Dolce & Gabbana]
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Q4 started with a crypto rally. October is historically fruitful for crypto. What about this year?
Major brands are exploring NFTs. Does this mean NFTs are officially mainstream?
The week in numbers. Breaking down crypto’s most significant figures of the week.
An Uptober to Remember
Crypto rallies to kick off 2021’s final quarter. What’s driving the rise?
Welcome to October — a month with a distinctly un-spooky for crypto hodlers. In fact, BTC has seen October gains more than 77% of the time since 2013, and market watchers are eager to see if history will repeat itself. October started strong, with a rally driving Bitcoin back above $50,000 and the overall crypto market cap back above $2 trillion. But the question remains — will this be an “” to remember? Or will volatility return? Let’s dig in.
Some analysts are optimistic that Bitcoin ETF approvals are approaching. track the price of an asset (like BTC) or a basket of assets (like pharma stocks) — and can be bought or sold via conventional brokerages. In August, SEC Chairman Gary Gensler seemed to his support for at least one variety of crypto ETF: .
Federal Reserve Chairman Jerome Powell clarified he has “no intention to ban” cryptocurrencies. Prices of BTC and ETH rose by more than 10% the day after Powell’s statement during an appearance before the House Financial Services Committee on Thursday.
Inflation may be making BTC as a gold-like store of value. The leaders of the world’s top central banks that inflation, fueled by pandemic-related supply chain disruptions, will likely remain elevated for months. In the U.S., consumer prices rose 5.2% in August over the previous year, and in nations that use the Euro, rose 3.3% year-over-year — the biggest gain since 2009.
The rapid adoption of the Lightning Network is helping Bitcoin scale. The “layer 2” solution works like an HOV lane on a highway, allowing the entire network to move faster. As of September, the Lightning Network transfers of around 3,000 bitcoin (about $148 million). El Salvador’s Chivo wallet, which now has more than 2.25 million users, and Twitter’s new BTC tipping feature both run on the Lightning Network.
Why it matters... Around this time last year, crypto began its , with BTC racing from less than $11,000 to more than $60,000 in just five months. Kicking off the final quarter of 2021, contradictory signals abound, but crypto’s fundamentals are arguably stronger now than they were a year ago. Most importantly, more people are using crypto than ever before — in more ways than ever, from NFTs and DeFi to buying groceries in El Salvador .
I Want My NFT
Will TikTok and the NFL help NFTs go fully mainstream?
This year’s hot NFT summer has turned into an unseasonably warm NFT autumn. Sales volumes to a record $10.7 billion in the third quarter of 2021, while September notched a 1.7 million total transactions — conducted primarily via OpenSea, which saw an extra trading uptick this Sunday (thanks, ). In just the last few days, some of the biggest fan-driven brands in the world announced new NFT projects. Here’s how they break down:
The NFL has partnered with Dapper Labs, the sports-NFT juggernaut that helped create (which has seen sales volumes of almost $800 million this year). A week earlier, Dapper Labs announced a similar deal with Spain’s , home to F.C. Barcelona and Real Madrid. The NFL, which has been to embrace crypto than some pro sports, its roughly 300 million fans are eager to collect unique video-highlight “Moments” like “Hail Murray” — a from Arizona Cardinals quarterback Kyler Murray.
TikTok, which has 1 billion monthly users, announced its first NFT collection. will based on six of the platform’s most popular clips from creators including Lil Nas X, Grimes, and Gary Vaynerchuk. The first drop, set to launch today, features artist Rudy Willingham’s for Lil Nas X’s “Montero (Call Me By Your Name)” — all 81 frames are available as NFTs. TikTok Top Moments will include both one-of-one and more affordable “limited edition” NFTs. Proceeds, TikTok says, will “largely” go to the creators.
Why it matters… TikTok and the NFL feel like different universes in many ways, but they’re both huge brands with deeply engaged fanbases — which should help NFTs take another step towards truly mainstream adoption. The metaverse might even get a boost from another big brand with a passionate user base: Twitter recently it will be incorporating NFT verification of avatar pictures, making it easier than ever for collectors to show off their digital goods.
Smart contract bug hits major DeFi protocol Compound
Compound is a decentralized lending and borrowing platform. It allows crypto holders to add to (or borrow from) lending pools with interest rates that are automatically generated according to supply and demand.
No user funds were impacted by the bug, which was accidentally introduced during a recent community governance . Instead, as much as $162 million in COMP tokens (reserved for future mining rewards) began showing up in some users’ wallets, to Compound founder Robert Leshner.
Because Compound is a decentralized protocol, there’s no admin with the authority to immediately repair the bug. Fixes require a community voting process that involves “time locks” — a security feature intended to prevent sudden protocol changes.
Numbers to Know
that Bitcoin miners are making per day as of October 4 — a 488% increase since the last in May 2020. (The Bitcoin network cuts block rewards in half roughly every four years.) Earnings are still down from May’s peak of around $60 million a day, just before China cracked down on the industry.
held in a wallet owned by the city of Miami as of October 5 — just weeks after the municipal cryptocurrency launched in late August. As The Washington Post , Miami mayor Francis Suarez “estimates the effort could generate as much as $60 million for Miami over the next year and ultimately ‘revolutionize’ how the city funds programs that address poverty and other societal issues.”
Amount netted by Italian fashion brand Dolce & Gabbana for nine NFTs, including an item called The Doge Crown. Five of the NFTs include both “real world” and virtual versions of designer objects (a dress, a men’s suit, and two crowns) while the other four are solely digital items based on by the couture brand’s designers. “We are moving toward a virtual reality world,” a blockchain expert . “Luxury goods will be part of that.”
Total amount internet influencer Gary Vaynerchuk’s “VeeFriends” NFT series on Friday. The biggest seller? A sketch titled “Empathetic Elephant” went for $412,500. Holders of VeeFriends NFTs also get access to an event called VeeCon — its debut is scheduled in Minneapolis next May.
What can you do with a crypto wallet?
Send and receive crypto from anywhere in the world
Secure and store your private keys
Interact with decentralized finance apps
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