Market updates

PayPal Introduces new crypto feature

PayPal introduced a new feature called Cryptocurrencies Hub, following the launch of its stablecoin, PayPal USD (PYUSD). This feature lets users manage and transact with Bitcoin and other cryptocurrencies within their PayPal accounts. Users can buy, sell, and use cryptocurrency to make PayPal payments. They can also exchange between PYUSD and other digital assets. Although users will see their crypto balances, they won't hold the actual digital assets. To access this feature, users need an active personal PayPal account and must provide specific personal details. There are mixed reactions to PYUSD; some believe it might promote mainstream adoption of cryptocurrencies like Ether, while others express concerns about centralization and control, especially given certain functionalities in PYUSD's underlying technology.

Asian Crypto ETF on horizon

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The U.S. is close to approving a Bitcoin ETF, with the possibility of similar approvals in Asia, including Hong Kong. However, critics of crypto ETFs point out that they prevent holders from directly accessing the primary feature of Bitcoin: self-custody of funds. Despite the criticism, the rise of crypto ETFs, like Canada's Purpose Bitcoin ETF which gained $400 million in assets within two days, suggests strong institutional interest.

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ETFs are big business; BlackRock managed about $3 trillion in ETF assets as of March 2023. Crypto ETFs' acceptance could mean market maturity, price stability, and innovation, leading to more diverse digital asset and DeFi ETFs.

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The introduction of crypto ETFs places a spotlight on the importance of institutional-grade custody. This refers to the safekeeping of crypto assets at a standard expected by institutional investors. The demand for such custody solutions is increasing, evidenced by asset managers like BlackRock partnering with entities like Coinbase for secure crypto storage. The crypto custody market grew from $32 billion in January 2019 to an estimated $223 billion in January 2022 and is expected to continue growing.

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Regulation remains a challenge, especially in the U.S., where concerns about fraud and market manipulation have hindered crypto ETF approvals. However, globally, clearer regulatory frameworks for digital assets are emerging in places like Singapore, Hong Kong, the UAE, and Europe. These frameworks can accommodate crypto market growth and enhance transparency and protection for investors. Given recent moves like Hong Kong introducing retail crypto trading, Asia may soon see its first crypto ETF.

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Friend.tech launches
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A new social trading application, friend.tech, allows users to trade "shares" of themselves after connecting their Twitter accounts. The invite-only platform, launched on Aug. 10, has already attracted over 12,500 traders and managed a trading volume of over 5,500 ETH (around $10M). This is notable, considering the combined trader count for leading NFT marketplaces, OpenSea and Blur, is approximately 10,000 in a single day. 

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Seraphim Czecher from Lido Finance sees potential in friend.tech, even though it's still in its early stages. Shares of Czecher are currently priced at 0.01 ETH ($20). Meanwhile, Crypto influencer Cobie holds the record for the highest share valuation at almost 1.5 ETH ($2,700). 

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While there have been previous attempts to create social-token platforms, like Bitclout, which gained and lost traction quickly, friend.tech offers a unique feature. Purchasing shares of an individual initiates a private chat room between the shareholder and the share issuer. Given that many influencers often disable direct messaging on platforms like Twitter, this feature might provide added value. Shareholders also earn a fee when their shares are traded.

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The app operates on Base, Coinbase's newly launched Layer 2 network, where it is currently the most popular application.