Crypto Markets Unfazed by Fed Rate Hikes and EU Regulatory Vote
The majority of the largest coins by market cap were in the green for the week. Bitcoin rose a little less than 7%, while Solana and Ethereum climbed nearly 12%. Overall, it as a bullish market response to the Federal Reserve’s rate hikes
Bored Ape Yacht Club (BAYC), the third most valuable NFT collection in the world, released a coin this past Thursday called ApeCoin, APE for short
APE is currently available on popular exchanges such as Coinbase, FTX, Binance, Gemini, and Crypto.com (via protocol)
After its initial coin offering (ICO), the coin exploded in value to $39.40 before settling at its current trading value of $9 - $15. Almost a year after founding in April of 2021, the BAYC is finally expanding its value proposition beyond NFTs and into the DAO space just a week after announcing its acquisition of CryptoPunks and Meebits. Get ready for a DeFi megabrand
If you’re already a crypto native, feel free to skip to “Table Talk.”
NFT MINTING AND SECONDARY MARKETS
This week, we’ll put it all together to talk about how to purchase an NFT of your very own. NFTs can be purchased in two ways: during the “mint” and on a “secondary market.”
WHAT DOES IT MEAN TO MINT AN NFT?
Minting an NFT refers to the process of linking digital art to a blockchain like Ethereum or Solana. Basically, it’s taking an image file and adding it to the blockchain for a fee (the blockchain’s transaction cost—gas cost for Ethereum) plus the listed price (also called a mint price) determined by the individuals who are offering the NFTs.
The actual process of minting an NFT involves having enough of the crypto asset the NFT collection is looking for in your crypto wallet (usually ETH or SOL) and then connecting it to the mint website. In most cases, there’s a button that says either “mint” or “connect wallet.” You’ll need to have the browser extension for your wallet installed into your web browser and have logged yourself in to connect your wallet. Once you tap the “connect wallet” button, an additional window should pop up from the browser extension for your wallet asking if you want to authorize the connection. From there, you can hit the button that says “mint” and as long as the balance in your wallet is greater than the transaction fee plus the mint price, you can purchase an NFT. You should see the NFT you own (which will be a random NFT from the collection) appear in the collectibles section of your wallet once the transaction has been processed.
The “mint date/time” is when participation in this process (minting) is first available for an NFT collection. High-demand collections usually sell out very close to their mint date/time. If you’re interested in a collection: set your calendar alerts and make sure you have enough ETH/SOL/etc. in your wallet. Collections only have a limited number of NFTs they offer, so make sure to hit “mint” before they’re all gone.
Let’s say you missed the mint, or you want to own more NFTs of a collection; what do you do then? That brings us to buying NFTs on a “secondary market.”
HOW TO PURCHASE AN NFT ON A SECONDARY MARKET?
We’ll be explaining the process in reference to the two largest multi-collection secondary marketplaces by volume: OpenSea and Magic Eden, but the process is similar across platforms (via The Motley Fool).
NFT collections typically partner with a secondary market and create a page where owners can list NFTs from that collection they’d like to sell. Unlike a mint, when purchasing on a secondary market, you can decide what the NFT you receive looks like instead of a random one returned by the mint, but usually at a significant premium.
Scroll through and decide the one you’d like to purchase.
Similar to the minting process you have to connect your crypto wallet to OpenSea and Magic Eden in much the same fashion. OpenSea only supports Ethereum and Polygon NFTs, while Magic Eden only supports Solana NFTs.
You can either bid below the asking price or purchase at the buy now price in standard listings. If you’re bidding below the asking price, the lister must accept the lower bid. In auction listings, the highest bid within the time window and above the ask price wins. Just like with minting, the NFT you own should appear in your wallet once the transaction has been approved.
We recommend trying both yourself. Begin by trying a secondary market purchase as those transactions typically have better user interfaces. Then, you can graduate to tracking an upcoming collection and participating in the mint. We’ll be releasing some exciting updates about our next NFT collection CRYPTOPONGZ next week!
THE FED RAISES RATE HIKES
This past Wednesday, the Federal Reserve voted unanimously to increase the federal funds rate for the first time in more than three years (via CNBC).
In an effort to reduce 40-year-record-high inflation numbers due to supply chain concerns and the effects of the Ukrainian/Russian war, amongst other things, rates increased by a quarter of a percent (via WSJ). Chairman Powell hedged expectations, though, saying he believes it will take two quarters to see the positive effects of the altering in rate hikes.
The Fed also noted that it expects to raise rates six more times before year's end. They’ll determine the precise amount increases at their meetings in the ensuing months.
While it remains to be seen whether the rate hikes will move the needle on inflation, cryptocurrency prices were not negatively affected, at least initially, by the rate hike. The general crypto market’s lack of negative price movement was likely influenced by the stock market reacting bullishly to Powell’s message and general public sentiment that this action by the Fed was essentially inevitable (via Fortune).
According to Bloomberg, days of lentil soup and bus riding are ahead for most of us. Bummer.
SECRET NFT RIDDLE SOLVED
Three people solved a hidden puzzle created by the NFT company Larva Labs, which won them a Meebits NFT and $64. You might remember the Meebits collection from its sale to Yuga Labs last week. At the time of this writing, the Meebits floor price is a little under 4 ETH or approximately $11K. Not a bad haul.
The group noticed a strange pattern of Ls in one of Lavra Labs’ NFT pieces that did not fit with the piece’s symmetry (via Twitter).
After doing some research, the L’s revealed a secret code: “Secret is in the pig numbers, LL” (via Twitter).
Guess we have to keep an eye out for secret puzzles and NFT prizes going forward.
EU MINING WOES AVERTED AFTER PARLIAMENT VOTE
Last week, we introduced “First Sip” readers to the Proof of Work (PoW) algorithm and BTC Mining. This Monday, the European Union (EU) Parliament voted on two versions of the Markets in Crypto Assets (MiCA) bill (via Protocol). The MiCA bill contains over 100 articles that aim to broadly address crypto reform and regulation within the EU. The more contentious of the two bills contained language that sought to ban all PoW mining and require those currency providers to “submit a detailed plan of their compliance with environmental sustainability standards” (via CoinTelegraph).
PoW mining is particularly environmentally intensive at scale because it seeks to make transaction validation on blockchains, like Bitcoin, computationally complex to protect their legitimacy. When you have thousands of computers running PoW algorithms, their energy consumption surpasses that of many nation-states like Finland, the Netherlands, and the U.A.E, to name a few (via Your Story).
This version of the MiCA bill was clearly targeting Bitcoin, Ethereum (both of which use PoW currently), and other blockchains modeled after them. However, the EU protected PoW-based currencies for now as the bill was voted down 30 - 23 against (via Protocol).
The environmental concerns about PoW mining are real, though, and this angle of attack against these networks will continue. Maybe consistent regulatory pressure will finally push Ethereum towards implementing Proof of Stake, which they have been promising since 2019 and even mentioned in the original Ethereum whitepaper from 2013 (via currency.com, MIT Technology Review).
The Fed inevitably raised the federal funding rate. Stock/crypto markets rose the rest of the week and were generally optimistic about the move. If the Fed continues to be telegraph their moves and raise hikes incrementally, markets could continue to react positively. Something to keep an eye on.
Three smart people won $64 and an NFT worth at least $11K by solving a secret NFT puzzle. Keep your eyes peeled for other non-traditional opportunities with massive upside in the space.
The EU voted to protect PoW-based cryptocurrencies after voting down a version of the MiCA bill that would have outlawed them. Regulatory pressure from the ESG angle will continue to affect PoW-based currencies.
Meme of the Week (via Reddit)
Coincidence? We think not.
Pat + Ari ✌️
Disclaimer: None of this is investment advice, financial advice, or trading advice. CRYPTOPONG does not endorse any of the cryptocurrencies, DeFi applications, or NFT collections mentioned in this article. Perform your own due diligence and/or consult a financial advisor before investing.