Games and crypto reunited at last

Welcome to The Daily Moon. Remember “Pharma Bro” Martin Shkreli, who was banned from the drug industry for jacking up life-saving pill prices? He is now back. Shkreli is setting up a crypto company to make it easier to design drug formulations. It’ll probably have a token attached to it. Let’s check if douchebag (DBG) is available.

The markets were on the edge. Bitcoin slipped below $21,000 and Ethereum fell to $1,400 levels. Nasdaq sank into the red in early trade. Back home, Sensex and Nifty recorded the second day of negative growth.

Online Games And Crypto Were Meant To Be

It’s a match made on Reddit. Digital assets met digital sports and sparks flew. With a similar user-base of predominantly youngsters with disposable income, crypto and e-sports could become closer allies.

How it beganThe friendship started in 2020-21 when the pandemic led to an interest in crypto and online sports. Partnerships were struck too. Esports firm TSM, for instance, was renamed TSM FTX after a $210 million deal with FTX. NFTs brought another dimension and added the ability to earn through e-sports. Axis Infinity’s esports division is the most prominent example. Similarly, e-sports platform MegaFans will offer a $100,000 crypto prize pool.

With 234 million players globally, e-sports is a full-fledged profession. Users consumed 71 million hours of content every day on the video-game streaming platform Twitch. With crypto looking to expand its user base, there is a market right here.

Where is the right fit?E-sports organisers paid out ~$236 million in prize money in 2019. Fiat currency payments often get delayed, and crypto is instantaneous. Some games require the use of handles and it’s difficult to associate names, handles, bank account numbers, and give out prizes in real-time. Large banks have stayed away from e-sports reward payments, so crypto is the next best alternative.

And with the popularity growing, the likes of PUBG are preparing to launch play-to-earn games with Solana. Fortnite has tokens too. At a time when fiat currencies are volatile everywhere, crypto could become an inflation hedge for gamers. Crypto would enable e-sports to become truly borderless.

SEC Has Coinbase In Its Crosshair

After labelling nine crypto tokens as securities, the US SEC has turned to the exchanges. Coinbase is being investigated for allegedly selling unregistered securities to Americans. Remember, the SEC is still investigating Ripple.

Making moves This is not Coinbase’s first rodeo. SEC had asked Coinbase to register with the regulator, and even wanted the crypto exchange to become a securities exchange. But Coinbase rejected the suggestion and blamed the SEC for the uncertain regulatory regime.

Now what?Coinbase will discuss its due diligence process with the SEC, in a bid to solve the matter amicably.

ICYMI Coinbase is in trouble. You can read more about it here.

DeFi Is DeFying Logic

The crypto market is on a zigzag path. But DeFi is on a contra route. On Monday, DeFi's total value locked (TVL) jumped 19% to $86.6 billion. Suddenly, DeFi has takers because Ethereum and Binance saw large inflows.

FYI TVL is the sum total of all digital assets held by Defi apps, including staked cryptos.

What’s really happening?There is an increase in the overall TVL for major crypto assets. Ethereum is on everyone's radar ahead of the Merge. Its TVL jumped from $46 billion to $55.4 billion between July 1 to 24. Binance Smart Chain came second with TVL moving from $5.97 billion to $6.64 billion. Polygon’s TVL rose by $240 million to ~$1.7 billion.

Will this continue?Speculative trading is at its peak. DeFi isn’t entirely divorced from this situation. Add to it the risks of interest rate hikes and recession, the upside could be momentary.

Fed Gives Jitters

A likely rate hike by the US Fed is just a day away and crypto is nervous. The global crypto market cap fell ~5% to $956 billion.

Bad newsThe Fed is supposed to announce a 0.75% interest rate hike. Bitcoin and Ethereum prices in reaction fell 4.5% and 9.5% respectively.

It gets worseTether’s USDT token finally regained the dollar peg. It is something it had lost on May 12, after Terra’s collapse. But the joy could be short-lived. It is expected that what took two months to correct will be lost in a matter of minutes.

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