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- 🥜 This Time It's Different
🥜 This Time It's Different
PLUS: SEC strikes again
Today’s edition is brought to you by Polymarket
GM to all you crypto nuts. Crypto Nutshell #480 blowin’ in… 🌪️🥜
We're the crypto newsletter that's more adventurous than traveling through a portal to a world filled with mythical creatures... 🌌🦄
🚨Before we get into today’s newsletter, just a heads-up that this weeks Crypto Nutshell Pro newsletter will be sent out tomorrow. 🚨
What we’ve cooked up for you today…
🏦 The SEC won’t back down
🌀 This cycle is not like the others
📈 Don’t sleep on Ethereum
💰 And more…
Prices as at 1:55am ET
THE SEC WON’T BACK DOWN 🏦
BREAKING: SEC Goes After Another Crypto Firm, Slaps Immutable With Wells Notice
Here we go again…
Another week, another instance of the SEC going after crypto firms…
This time Web3 gaming firm, Immutable X, is the target.
In a statement posted on Friday, Immutable X announced that they had been issued a Wells Notice from the SEC.
As a reminder:
A Wells Notice is a letter sent to companies following an investigation by the SEC. It informs them that the regulator is planning a lawsuit against them.
Get this though…
According to Immutable X, the Wells Notice contains limited details on what the SEC is investigating… (You’d think they’d make that clear right?)
“With this action, the SEC is continuing to indiscriminately assert that tokens are securities. While not specified in the notice, we believe its claims are targeting the listing and private sales of IMX in 2021.”
Continuing on, Immutable X explains that they will take this case to court if needed:
“We are confident in our position, in the value digital ownership can bring to 3.1 billion gamers across the world, and in the power of blockchain to create a better internet. If required, we will fight for these rights, and those of our industry, vigorously.”
Immutable X now joins the growing list of companies targeted by the SEC, including:
Coinbase
Binance
Kraken
Uniswap
Open Sea
Consensys
Crypto.com
Immutable X’s native token IMX dropped ~5.60% as this news broke.
Gary Gensler continuously says that crypto firms need to register with the SEC and follow its rules.
But the crypto industry fights back saying that it’s not possible to register with the agency…
Mostly because the rules were made for more traditional entities…
So instead of slapping crypto companies with multiple lawsuits, why can’t the SEC just clarify the rules? 🤨
It’s baffling…
DON’T TRUST THE POLLS, TRUST THE MARKETS 🤑
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Biden dropping out of the election
Kamala Harris’ nomination
VP running mates
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When the Fed cut interest rates by 0.50%, 92% of economists had predicted a 0.25% cut. 😢
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THIS CYCLE IS NOT LIKE THE OTHERS 🌀
Earlier this week, Michael Saylor’s company, MicroStrategy, announced they plan on buying a lot of Bitcoin.
$42 billion dollars worth over the next 3 years.
When you crunch the numbers on it, this is ridiculous.
This cycle will not be like the others.
In case you missed the MicroStrategy announcement, we broke it down here.
In a nutshell, here’s the plan:
“Today, we are announcing a strategic goal of raising $42 billion of capital over the next 3 years… we plan to use the additional capital to buy more Bitcoin.”
When you break down the math on this, this is absurd.
MicroStrategy plans on buying $42 billion dollars worth of Bitcoin over 36 months.
$42 billion / 36 months = $1.2 billion of Bitcoin buying pressure per month.
After the 2024 Bitcoin halving, there is 450 new Bitcoin entering the market each day.
This equals 13,950 new Bitcoin each 31 day calendar month.
At current prices, this amounts to ~$1 billion worth of new Bitcoin entering the market each month.
Which means that MicroStrategy alone plans to buy more than the entire monthly supply of new Bitcoin. 🤯
The Bitcoin Therapist put it well:
Add on top the regular buying from Bitcoin ETFs, other institutions, and regular retail, and one thing becomes clear:
This cycle will not be like the others.
DON’T SLEEP ON ETHEREUM 📈
Last cycle, Ethereum had 2 very clear problems:
It was expensive to use
Transactions took a long time to confirm
But these problems are no more…
The development of Layer 2 networks have directly addressed these two problems, resulting in rapid growth of the Ethereum ecosystem.
Layer 2 networks are basically more efficient networks built on top of Ethereum.
They allow for increased transaction speeds and lower transaction costs.
For a deeper dive into what Layer 2’s are, check this article out.
Now, let’s get into the data…
The chart below shows the number of daily transactions on L2’s.
ETH L2 Daily Transaction Count
And as you can see, the growth has been crazy…
Currently L2’s are processing 20,044,029 transactions on average per day.
Daily transactions have increased by over 4x year-to-date.
And they’ve increased by over 20x since the start of 2023.
That’s nuts…
The next chart shows the amount of active addresses on L2’s.
And like the above, the growth has been crazy…
ETH L2 Active Addresses
Currently there are 2,490,603 daily active addresses on L2’s.
That number has increased by over 2.5x year-to-date.
And 19x since 2023…
Summing all of that up, the Ethereum ecosystem is currently processing 260.72 transactions per second (TPS).
And whilst that is still less than other Layer 1 networks such as Solana (~1053 TPS) and SUI (~854 TPS)…
It does represent a scaling factor of 24.11x.
Meaning that the Ethereum network is currently processing 24.11x more transactions per second compared to when it first launched.
Layer 2’s are clearly bringing more users, more activity and more innovation to the Ethereum ecosystem.
And as a little bonus, Ethereum is still the blockchain of choice when it comes to institutional adoption.
Today, UBS announced that it is launching its first tokenised fund on Ethereum.
(BlackRock also has a tokenised fund on Ethereum)
That’s bullish. 🐂
CRACKING CRYPTO 🥜
UBS launches its first tokenized fund on Ethereum blockchain. UBS Asset Management expands its "UBS Tokenize" initiative by issuing a money market fund on the Ethereum blockchain.
21Shares files Form S-1 with SEC for spot XRP ETF. The asset manager became the third firm to apply for listing and trading shares of a spot XRP ETF, following Canary Capital and Bitwise.
Stripe's $1.1B Acquisition Target, Bridge, Buys Web3 Wallet Platform Triangle. Bridge acquired Triangle for an undisclosed amount.
US government seeks return of $13 million in political donations from former FTX executives. The political groups are mostly Democrat-aligned and include the Senate Majority PAC, Emily’s List/Women Vote, and the Future Forward PAC.
WHAT WE’RE READING 📚
Want to get even smarter? Check these out.
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The Hustle (link) - Get Smarter on Business and Tech
Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
The Bitcoin ______ is the set of rules that define how the Bitcoin system operates. |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: A) Protocol 🥳
The bitcoin protocol is the set of rules that govern the functioning of bitcoin.
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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.
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