Crypto

• Surprising a pessimistic market, global liquidity rebounded, prompting expectations of increased buying pressure in the new year, as the Fed appears to remain on hold.
• The crypto market is expected to benefit from a structural shift, with Bitcoin (BTC) emerging as a frontrunner after breaking out of a prolonged bear market consolidation.
• Solana is anticipated to outperform in the coming year, driven by mean reversion, market share normalization, and narrative developments.

• The guest on the show is Michael Lee, a dealer in rare photographs and the director of the Lee Gallery.
• The discussion explores the differences between the primary and secondary markets in art, as well as the challenges of finding liquidity and pricing inventory.
• Michael shares his views on NFTs and explains the capital-intensive nature of being a secondary market dealer in the art industry.

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• Blockchain gaming peaks industry interest with unprecedented content quality. With the combined market cap of almost 200 leading projects being less than DOGE, there is ample room for future growth.
• In 2023, 133 deals closed, securing $1.1B in funding, marking a 66% drop from 2022. Anticipating a reversal in the next ~6 months due to increased attention and capital.
• High Web3 project costs drive competition for <1M gaming-inclined wallets. A battle for player liquidity will favor projects with versatile user bases, efficiently funneling between games for market dominance.

• The stage is set for a potential resurgence of NFTs in 2024. As crypto wealth increases, spending on NFTs for “flexing”, identity, and entertainment will rise.
• A few NFT Character Brands could explode into mainstream consciousness and grow exponentially. Others will remain as niche communities.
• Ethereum will lose market share in NFTs, and Solana could catch up.

• BTC is up ~140% since its bottom 1yr ago. Prior instances imply BTC is in the early innings of a new bull cycle with most of its expected gains ahead.
• Market breadth is expanding as we are seeing industry wide participation in recent weeks.
• Onchain borrowing activity is picking up, as are average lending rates and utilization rates on stablecoins, which are some of the most popular assets to borrow during market uptrends.

• Web3 and NFTs is a green field opportunity for forward-thinking brands. It can create win-win opportunities for brands and consumers. Adidas, Nike, TIME, and Gucci capitalized early.
• The next generation of brands embracing NFTs can draw valuable insights from previous brand experiments, learning from their successes while avoiding their mistakes.
• We pinpoint four fundamental pillars that can propel brand engagement in the real world. And how NFTs are powerful tools that can enrich each pillar

• Traditional equities confer specific rights to their holders, such as voting power and dividends. Tokens offer distinct advantages, including implementation versatility, composability—especially within DeFi—and other functionalities unattainable with securities.
• The innovative designs of tokens play a pivotal role; they not only channel value back to the token holders but also exert a direct impact on the token’s market value.
• In this report, we explore four value accrual mechanisms implemented by tokens. These include: (i) Buyback and Burn; (ii) Real Yield; (iii) Tax-Tokens; and (iv) Book Value Tokens

• Crypto prices are still tracking our expected cycle trend, and the next big test is whether we see another period of consolidation — or if the breakout is finally near.
• We outline a few notable risks in the near term that may stand in the way of the next crypto uptrend: stagnant liquidity, buyer exhaustion, further tightening in financial conditions
• We don’t see these risks as long-term trends and view any downside volatility as an opportunity to increase exposure to the best assets at even better entry prices.

• JPEX may be the biggest financial fraud in Hong Kong’s history, impacting government’s ambition to become a global centre for virtual assets
• SFC appeared to have no direct jurisdiction and powerless in the protection of investors in the JPEX case
• Web 3.0 and Virtual Assets are rapidly evolving, regulators may need to take a more dynamic approach in regulating such activities

• China further expanded the use of the digital yuan by enabling consumers to use it to pay utility bills. 
• The digital yuan, also known as the e-CNY, is a legal currency in digital form issued by the central bank.
• The People’s Bank of China (PBOC) recently updated its e-CNY mobile wallet app, adding new features that allow users to pay water, gas, electricity, heating and phone bills with the digital yuan.