This blog post recaps Runa’s TL;DRs in October.
FYI: Runa’s weekly TL;DRs are posted to our LinkedIn account at the end of every week. Follow us on LinkedIn here to get our weekly TL;DRs on your newsfeed.
Crypto Performance:
- Runa’s sector indices, which are built using liquid tokens and are market-cap weighted, were mixed for the month. The two largest assets by market cap, Bitcoin (+5%) and Ethereum (+18%), posted positive returns in October, which boosted the Currencies and Protocols sectors respectively. DeFi was another positively performing sector, while the Gaming/Metaverse and Utilities sectors finished in the red.
- Dogecoin (+105%) was the top performer, as investors speculated that it may become usable for payments on Twitter following the social media platform being acquired by longtime $DOGE admirer, Elon Musk.
Notable News:
- GoldenTree Asset Management, a $50 billion privately owned asset manager most well-known for their credit and EM strategies, announced a $5 million holding of $SUSHI, the governance token for the decentralized exchange (DEX) SushiSwap. In a forum post to the Sushi community, they offered insight into their investment and offered to help with the tokenomics and general design/strategy of the protocol. Forum post here: https://lnkd.in/eSprFPWd
- $ENS, a domain name registry protocol built on the Ethereum blockchain, posted all-time highs in domain name registrations and renewals in September. This was an impressive accomplishment given the market downturn and significant decline in NFT trading volume.
- The U.S. Securities and Exchange Commission (SEC) announced it was launching an investigation into Yuga Labs, the company behind NFT project Bored Ape Yacht Club, regarding whether or not their token, ApeCoin, or any of the NFTs issued by Yuga could be considered securities. This action marks yet another notable crypto project placed firmly in the crosshairs of the SEC, further exasperating the adversarial relationship that currently exists between the industry and the regulator.
- Robo-advisor Betterment rolled out four diversified crypto portfolios that clients can allocate funds to on their platform. These portfolios provide broad crypto market exposure while also giving investors the option to focus their investment into a particular sector such as DeFi or the Metaverse. While allocations are limited to 5% of a user’s total deposited funds, this could be an important step towards giving retail investors access to the broader crypto market.
- A few months ago, Reddit announced a partnership with Polygon (+16%) in which they would mint 40,000 NFT avatars on Polygon’s blockchain. Users could buy the NFTs for $10-$100 and use them as profile pictures on Reddit (users also received licensing rights to use the NFTs outside of Reddit). In October it was reported that ~3 million wallets have been created as part of this initiative, and all 40,000 NFTs were purchased.
- At Runa, we think a problem with current NFT markets is that everything of value is very expensive: for someone with a couple hundred dollars or less it is almost impossible to access the NFT market without just throwing those dollars away. We see this activity as something of a testament to the demand for well-marketed, reasonably priced NFTs.
- Crypto exchange Binance was an equity investor in Elon Musk’s acquisition of Twitter. Binance contributed $500 million of capital and plan to consult Musk on how blockchain and Web3 can help to realize his vision for the platform. This marks yet another social media platform considering adding Web3 offerings to their product following previous integrations from both Instagram and Reddit, Inc.
Runa Updates:
- Research:
- Increasingly, crypto assets are functioning not as currencies but assets granting their owners ownership and governance of open-source blockchain technology that is able to capture quantifiable value. Max Williams and Charlie Perkins published a piece that details four strategies that DeFi projects use to re-allocate the value they capture. Where possible, the authors make analogies to traditional finance (e.g., stock buybacks and dividends). Read the article here: https://lnkd.in/gsVrn5kb
- Alex Botte, CFA, CAIA and Jennifer Murphy had their most recent research published on CFA Institute’s Enterprising Investor blog. In this piece, the authors delve into how we at Runa adapt and apply concepts from traditional finance to digital assets. Read the article here: https://lnkd.in/gyXgSEdC
- Upcoming Events:
- Max is speaking about DeFi and NFTs at Oppenheimer’s 5th Blockchain & Digital Assets Summit on November 17.
- Past Events:
- Jennifer spoke on a CFA Society Philadelphia webinar regarding investing in digital art and collectibles.
Questions? Thoughts? Feedback? Shoot us an email! info@runadigitalassets.com
