How Did OpenAI Just Pump These Coins?
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Now, let’s dive into today’s crypto insights!
Here’s what’s in today’s issue:
- Sam shares his thoughts on AI coins booming with news from OpenAI, the ongoing crypto ETF saga, what happened to Yearn Finance and dYdX, Citi building on Avalanche & Coinbase commerce upgrades.
- This week on chain.
- This week’s trending coins by Rebecca.
AI Coins Run Amid Chaos at OpenAI
The drama all kicked off last Friday when, out of the blue, Sam Altman was fired from his position as CEO at OpenAI.
Some commenters observed that this was as if Apple had fired Steve Jobs after the iPhone took over the market, and that’s a pretty fair comparison: Altman co-founded and is a driving force at Open AI, and has been the public face of development during the most explosively successful year–so far–in the history of AI.
Then, after disbelief and criticism all round–and with OpenAI president Greg Brockman stepping down in discontent–news came through that under pressure from staffers and investors–including Microsoft–the OpenAI board was now looking to bring Altman and Brockman back to their former positions.
That return didn’t happen though, as finally, Microsoft CEO Satya Nadella announced that Altman and Brockman will be joining Microsoft to lead an advanced AI team there, while Twitch co-founder and former CEO Emmett Shear will be appointed as the new CEO of OpenAI.
As for why Altman was forced out, there are multiple theories circulating.
A popular one is that there is friction between accelerationists (whose priority is rapid progress) and decelerationists (whose priority is safety), with Altman leaning towards the former camp.
This has led to speculation that OpenAI co-founder and Chief Scientist Ilya Suskever, or the OpenAI board overall, wanted greater control in order to keep everything supposedly safe and under control.
A more straightforward concern is around Altman raising funds for other AI-oriented ventures, and there are also disagreements about OpenAI’s goals–whether it operates like a nonprofit developing AGI for humanity, or a for-profit shipping products, or as something in-between–and there may have been a combination of issues at play.
As for how this all relates to crypto, Altman is the founder of Worldcoin, which suffered an immediate crash on news of Altman’s departure from OpenAI, but then more than completely recovered, very quickly.
What’s more interesting though, is the effect of all this on other AI-related coins, as events triggered a resurgence in the ‘decentralized AI’ meta, which led to weekend gains for AI projects including Bittensor (TAO), Fetch.ai (FET), and SingularityNET (AGIX), while a micro-cap called KIZUNA skyrocketed.
If the AI field continues to be as turbulent and transformative as it is right now, then AI coins might be set to play a dynamic role in a wider crypto bull market.
Do you hold any AI coins in your portfolio, and which AI-related projects are you most bullish on? Reply to this email and let us know your top picks.
The Ongoing Crypto ETF Saga
Remember when crypto hype didn’t revolve exclusively around ETFs?
Don’t worry, dog coins and JPEGs are still around, but for now ETFs are center stage, so here’s where we’re currently at with the latest developments:
- The SEC is requiring spot BTC ETFs to use cash-create mechanisms, as opposed to in-kind. These are ETF technicalities, but one thing it shows for sure is that the SEC is engaging with operational details, which sounds positive.
- Global X and Franklin Templeton’s BTC ETF decisions were both delayed by the SEC, as was widely expected, and this means that January 10th now becomes a key date, as this is the final deadline for a decision on Ark Invest’s spot BTC ETF.
- Seeking comments on the Global X spot BTC ETF, the SEC has asked questions and requested input about several issues relating to fraud and market manipulation.
- Fidelity has filed for a spot ETH ETF, meaning it joins six other hopefuls (including BlackRock), and this comes as the SEC delays its decision on similar filings from Grayscale and Hashdex.
What Just Happened to Yearn Finance and dYdX?
Yearn Finance is a major DeFi platform, but its YFI token plummeted by over 43% in a matter of hours last Saturday, after a huge rise over the days prior.
Onchain activity indicates price manipulation, and Antonio Juliano, founder of advanced trading protocol dYdX, referred to “a targeted attack against dYdX, including market manipulation of the entire $YFI market.”
Prior to this, YFI Open Interest on dYdX had risen from $0.8 million to $67 million, and Juliano also tweeted that “all of this was driven [by] one actor”, that “this same actor attempted unsuccessfully to attack the dYdX $SUSHI market 2 weeks ago in a similar way”.
Juliano also believes that: “The $YFI price crash in the spot market seems like an intentional effort by a single actor (unsure whether the same or different one) to target the large OI on dYdX.”
These events caused dYdX to lose $9 million from its insurance fund–a hefty 40% chunk of the total it had–and dYdX is now reporting information to the FBI, and offering bounties for assistance in investigating what happened.
Citi Building on Avalanche
In another of many signs that the institutions really are coming to crypto, there’s news that global banking heavyweight Citi is looking at ways of using blockchains, and is developing specifically on Layer 1 chain Avalanche.
The aim initially is to provide institutional clients with on-chain FX trading, and development is taking place using AvaCloud, which enables the creation of customized blockchains operating as Avalanche subnets (so it’s kind of like Blockchain-as-a-Service.)
Citi’s plans are currently in a testing phase using Avalanche Evergreen Subnets (a category for enterprise applications), and the development is part of Project Guardian, which is being operated by the Monetary Authority of Singapore in collaboration with policy makers and the finance industry, in order to assess the benefits of asset tokenization and DeFi.
Coinbase Commerce Upgrades
Since 2018, Coinbase has been helping push forward the integration of crypto and regular commerce with its Coinbase Commerce platform, which allows merchants to accept customer payments in crypto.
Following on from that, Coinbase has now announced that it’s improving the service with an upgrade that can automatically convert all crypto payments into USDC. This works–through what’s called the Onchain Payment Protocol–across hundreds of cryptocurrencies on Ethereum, Polygon and Base, it provides instant settlement, and it can be integrated through standard, well known payments platforms such as WooCommerce and Primer.
It’s a development that provides a solution for users who are worried about price volatility, and is another welcome step towards integrating crypto and commerce.
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Looking across the whole crypto space, there’s positive data showing that previously active traders are now returning.
There’s a slight increase in first-time users too, although not to the same extent, but that’s a pattern that we might expect in the early days of a shift from bear to bull, as experienced traders step back in first, to be followed later (hopefully) by newer crowds bringing further liquidity.
The data also shows consistent increases in daily active users interacting with contracts across the top twenty protocols, actually taking user numbers to new all-time highs.
However, that said, these measures are based on active wallets, and it’s not the case that one wallet = one actual person, as many users utilize multiple wallet addresses.
Looking at Bitcoin, the orange asset has, of course, had a tremendous year to date, but how is it lining up against stocks, and is there currently much of a connection between these different asset types?
Looking at the correlation between BTC and the Nasdaq, the answer to that would have to be a resounding no, as their correlation has been falling steadily throughout the year, and is now–from being at above 60% around a year ago–down to just 12.8%.
We’ve recently been seeing some of the major altcoins giving substantial returns to anyone who scooped up the lows and held, but looking at gains from the beginning of October through to now, it’s important to keep in mind that most coins are still far away from their all-time highs of a couple of years ago.
Even SOL, which has seen huge returns during its current run, remains 77% away from its all-time high.
Developer activity is a great metric to look at when evaluating a blockchain’s long-term outlook, and Cosmos, along with Osmosis and Tendermint, which are both parts of the Cosmos ecosystem (Osmosis is a leading DEX, and Tendermint is a protocol for enabling networked blockchains), have shown impressive increases in weekly GitHub commits, which indicate developer activity.
Although it’s true that there’s debate as to how accurate a measure commits can be, it’s notable that Cosmos is up in third place according to this data point.
And to get an idea of which parts of crypto are currently generating interest, it’s clear that DeFi dominance–which looks at the DeFi market cap as a percentage of the overall crypto market cap–has spiked up sharply from this year’s lows.
Could we be in for a full-blown DeFi season?
It’s possible, but either way, this current activity looks positive, as it suggests engagement with working applications, and also, profits from DeFi may be rotated into other crypto sectors later on.
In the NFT space, Ordinals on Bitcoin are opening up a growing gap to give Bitcoin the largest share of NFT (or Ordinals) trading volume, pushing Ethereum into second place. This is a significant shift, as for the whole of the last crypto cycle, when NFTs first took off, Ethereum was the dominant NFT chain.
In fact, Bitcoin’s Ordinals protocol wasn’t even launched until the beginning of this year, so to have Bitcoin now positioned at the top is a rapid change.
That said, crypto is unpredictable and the situation could switch round again in the coming months, but Ordinals are an area to keep tabs on.
One other notable feature of the top rankings is that the Avalanche NFT space has experienced a surge in sales, putting the chain in fourth place for NFT volumes, and reflecting a growing awareness of what the network has to offer.
Here are my key takeaways from the trends this week and it’s been full of launches and token listings.
- Tectum is a Layer-1 blockchain that’s just minted the first-ever Bitcoin Ordinal Softnote NFTs.
- AllianceBlock is a protocol to bridge DeFi and TradFi that’s made a significant evolution in creating a data economy by launching Nuklai, a data marketplace.
- Bittensor is a decentralized machine-learning protocol that’s seen its TAO token rally 400% in 30 days to a new all-time high of $242.
- SingularityNET is a decentralized AI marketplace that’s launched AGIX staking on Cardano.
- Decimated is a post-apocalyptic game that’s been teasing some newly designed gameplay features.
- Kaspa is a Bitcoin and Ethereum hybrid coin that’s been listed on Binance for perpetual trading which saw the price jump 15%.
- Celestia is a modular data availability network that’s seen its newly launched TIA token hit a new all-time high of $6.52 on November 15.
- Dynex is a neuromorphic computing platform that’s teasing the launch of its new marketplace which will be coming soon. The team has also hosted an AMA livestream on YouTube.
- Sei is a Layer-1 blockchain built using the Cosmos SDK that’s received investment from Circle Ventures. As part of this new strategic partnership, USDC has launched on the network.
- Akash Network is an open-source cloud network that’s been nominated for ‘Crypto Project of the Year’ by Coinage Media.
- Zephyr Protocol is an untraceable stablecoin protocol that’s seen its ZSD stablecoin grow to over $600K after only going live in October.
- Fetch ai is a blockchain-based AI platform that’s seen its FET token jump 55% in the past week. Fetch ai has launched its updated wallet to v0.17.
- Solana is a Layer-1 blockchain that’s just finished its Hong Kong Hacker House in partnership with Circle. Solana-based DEX aggregator Jupiter has also launched an airdrop to over 950K Solana wallets.
- Render is an image and video rendering protocol that’s seen its token pump 25% after Binance announced it will be listing the token on its Japanese exchange on November 27.
- Ethereum has seen BlackRock and Fidelity file applications with the US Securities and Exchange Commission (SEC) for a spot ETF.
That’s all the crypto insights we have for you today! If you’ve found value in this free newsletter, trust me, diving deeper with Wealth Mastery Premium is a game-changer.
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Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
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