Thoughts on Crypto’s utility phase, Twitter partnering with eToro and more

This article is not intended to be financial, investment or trading advice. This article is for information and solely for education purposes. It does not protect against any financial loss, risk or fraud.

Cryptocurrencies are unregulated in the UK. Capital Gains Tax or other taxes may apply. The value of investments is variable and can go down as well as up.

Bakkt CEO Says Bringing Utility to Crypto Starts With Payments

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Education around the potential utility around specific key use-cases.

• As the industry is moving into the utility phase, the next use-case beyond simply trading is payments.
• The importance of exploring stablecoins and other digital asset use cases that can enhance settlement timeand reliability, as well as introduce innovative features at the protocol level.
• Gavin Michael (Bakkt CEO) believes that remittances are a logical application, as the ability to include invoice numbers in payment protocols will simplify reconciliation through Enterprise Resource Planning (ERP) systems.
• Michael questions how the industry can optimize payment use cases, particularly in micropayments and cross-border remittance, and how it can improve on the current payment rails. He believes that crypto is not seeking to replace the existing infrastructure but rather provide a new payment rail that is effective across various use cases.

 

What would this mean for the market?

• Payments is the most logical use-case for crypto beyond trading and by supporting the traditional financial system is where Crypto/blockchain can prove its place in the industry.
• Bitcoin was initially designed so that people could send money easily to each other via the internet and this still remains such a strong use-case for Crypto in general as it can leverage all of the innovative technologies that blockchain offers.

 

Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance

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Twitter users will be able to access stocks, crypto and other financial assets.

• This is the next move from Elon Musk to turn Twitter into a ‘Super app’. Musk first mentioned this idea last summer, stating that “There’s no WeChat equivalent out of China.”
• The new partnership with eToro will expand the existing Twitter cashtags that currently allow users to view real-time market data from TradingView on index funds.
• The expanded Cashtags will include a far greater range of available assets that can be tracked. Also, users will be able to go directly to the eToro website via a button on the market data page and then also buy and sell the assets of choice.
• This news comes after Elon Musk rebranding the corporate name of Twitter to ‘X Corp’.
• Musk tweeted that buying the company was an “accelerant to creating X, the everything app.”

 

What would this mean for the market?

• Financial Super Apps are popular in Asia, with WeChat being the most notable example in China and Grab in Singapore. The concept is that a user does not need to ever leave the app for anything that they might want to do, financially.
• What’s interesting is that Twitter is moving in this direction but from a completely different starting point than many other companies trying to do the same thing, coming from the social media angle.

 

The Ethereum Shapella Upgrade was successful

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The upgrade meant that users can now withdraw their staked ETH.

• The Shapella upgrade has brought forth two withdrawal options for staked ETH – partial and full. With partial withdrawals, validators' balances are automatically distributed with ETH to sustain their validator status by ensuring their balance remains at the minimum 32 ETH. Conversely, full withdrawals require the validator to be shut down, with the entire staked balance being withdrawn.
• Enabling the withdrawal mechanism is anticipated to offer Ethereum users increased flexibility in managing their assets.
• All eyes were on the unlock pressure and then the price movement of Ethereum as one theory was that a large number of holders would unlock and then sell their Ethereum.
• However, after a large initial unlock (of now over 1 million Ethereum coins), the amount of Ethereum being withdrawn is trending downwards.
• Ether's price has stabilized at approximately $2,100 per coin, with the staking Annual Percentage Rate (APR) hovering just below 5%. This refers to the interest rate earned for running an Ethereum validator.

 

What would this mean for the market?

• Only around 15% of Ethereum’s supply was staked. This was probably due to the uncertainty around when holders would be able to withdraw their Ethereum.
• One expectation now is for more institutional investors to start staking Ethereum as the price volatility may decrease and more accessible yield due to the upgrade.
• The initial positive price movement of Ethereum is promising and such an event in Crypto helps push the industry forward, especially after all of the Black Swan events that happened in the last 12 months.