Is Bitcoin like Terra?

Good morning! Welcome to The Daily Moon. SBF’s broke. No, really. The last he checked, he just had $100,000 in his bank account. Now, it may even be $1,000 or $100. He does not know. Poor billionaire can’t catch a break. He probably needs to move to an island that doesn’t have an extradition treaty with the US.

The markets were stable. Bitcoin was at ~$16,800 and Ethereum rose to $1,260 levels. Nasdaq rose in early trade. Back home, Sensex and Nifty hit new record highs.

Wrapped And Rattled

Wrapped Bitcoin was always supposed to match Bitcoin’s price. Alameda’s collapse changed things. WBTC de-pegged and now trails BTC by 0.3%. Terra-Luna vibes, anyone?

FYI Bitcoin’s blockchain isn’t compatible with the Ethereum blockchain. WBTC was developed as an alt to run on Ethereum.

What’s the Alameda connection?Alameda was WBTC’s top merchant, having created over 100,000 tokens. When SBFs businesses sank, there were worries that WBTC would follow suit. FUD crashed the token. But the reality was something different:

1. WBTC’s custodian BitGo clarified that the token was backed 1:1.

2. Alameda deposited BTC to get WBTC in exchange.

This disclosure came a bit too late.

Why does it matter?Any de-peg brings back the Terra trauma. A lot of DeFi developers use WBTC on the Ethereum network. Payments get affected if there’s a price difference between BTC and WBTC. And there’s a chance the token may drop if there are way too many variations, way too often. This may have been a false alarm, but the market is so anxious that anything negative just creates a sell motion.

In related news, there were rumours about Wrapped ETH being de-pegged. Turns out it was a joke. No one was laughing.

Solana’s Still Trying Hard

We’ve got good and bad news. Let’s start with the bad news first. You’ve known that Solana's been on a downward spiral ever since SBF’s bankruptcy. It is getting worse. There are barely any returns. Sorry, SOL HODLers.

IYKYKThere’s something called the Sharpe ratio to measure investment returns. Anything above 0 means profits and anything below indicates losses. Data from Messari shows a -3.67 Sharpe ratio for Solana. To simplify, it’s loss-making to buy and hold. There’s also a ~58% drop in returns. So if you bought SOL at ~$32 a month ago, you’d have lost more than half the value.

What about the good news?Things are getting a little better. The token’s slightly up over the past week. Its NFT numbers crossed 8 million in Q3, a ~19% growth over the previous quarter. And with a new update, Solana’s glitchy times may soon be over.

Brazil Opens The Altcoin Door

The largest South American country is laying the groundwork for crypto payments. So, Brazil hasn’t exactly said pay via BTC, it’s all good, like El Salvador. It has put in place a framework, which will legalise crypto payments in some instances.

It’s done?Not really. It’s close, but not done. This bill will also include digital currencies and airline points and define what kind of payment methods are going to be ok to be used. The tokens will be regulated by Brazil’s version of an SEC and another government body. This government body is still to be decided. This law also creates licences for exchanges and lenders. The law will force exchanges to differentiate between user funds and company capital.

LFGThe bill has to be signed into law, and that will happen once the president approves it. If you’ve been following Brazil, that is not as simple as it appears.

Up Next: Military Metaverse

Who cares about a metaverse to hang out with your friends? No one. The real metaverse is being built for the military. A major UK-based metaverse infrastructure provider has partnered with Microsoft Azure to do just that.

How does this even work?Well, the two will create virtual military spaces that can be used for training military and private contractors. The two have provided a simulation to the British Army Collective Training Transformation Programme (CTTP) before.

Everything works—from B2B to B2G For the idea of the metaverse to succeed, mass adoption will be key. And what better way to do it than work with governments? The big boys of tech have been toying with the idea of B2B and B2G partnerships driving the Web 3.0 revolution. Microsoft and Meta’s partnership to deliver more experiences for work and play is another major example. Investments have been made. Now it’s time for these companies to make them work.

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