Welcome to Web3 pills, the daily crypto newsletter that’s here for you, even when the markets are tanking.
Here are your 💊’s for today:
Crypto dips as US Inflation higher than expected
Uniswap Labs raises $165 million Series B
Trending stories
NFT of the day
CRYPTO DIPS AS US INFLATION HIGHER THAN EXPECTED
More than any other factor, it’s clear that interest rates have had the most impact on cryptocurrency prices over the past year. For the better part of the last decade, interest rates have been close to 0%.
This means that money has been extremely cheap, which benefits risk-on assets such as high-growth stocks and crypto. However, that trend came screeching to a halt in early 2022, when it turned out that the so called “transitory inflation” wasn’t that transitory after all.
Since then, the Federal Reserve has been stepping in to tackle inflation with the only tool in its arsenal: raising interest rates. After multiple rate hikes, the Federal Funds rate is now up to 2.56%, which is the highest since 2008.
Many in the crypto and equities markets have been hoping for a Fed pivot, I.e. lowering interest rates, however in order for that to happen inflation needs to be tamed.
Unfortunately, it appears that inflation is still not under control after today’s CPI readout. The CPI rose 8.2% from September a year ago, which was above the 8.1% forecasted by economists, and was up 0.4% from the month before.
Perhaps even more concerning was the fact that “core” CPI (which does not include energy and food prices) rose another 0.6% from August, which was also well above expectations.
The CPI data today only means one thing: more rate hikes are surely on the way. And as we’ve learned the hard way this year, more rate hikes mean even lower crypto prices.
In the hours after the inflation readout, Bitcoin was down close to 4% and is now trading closer to $18,000 than any of us would have liked.
UNISWAP LABS RAISES $165 MILLION SERIES B
It’s not all bad news in the world of Web3 today, as DeFi protocol Uniswap has announced that they have raised $165 million in their Series B funding round. The funding round valued the protocol at $1.66 billion, which means their valuation matches their unicorn logo well.
The round was led by Polychain Capital, and also had participation from a16z crypto, Paradigm, SV Angel and Variant. The round marked one of the largest raises in the DeFi sector’s history.
Uniswap, which launched back in 2018, has established itself as one of the most bluechip projects on the Ethereum network, which continues to dominate Web3 in terms of network usage.
While Uniswap originally launched as a Decentralized Exchange or “DEX”, they’ve since expanded to support a large ecosystem of dApps and has even started making moves in the NFT space with it’s acquisition of NFT aggregator Genie, back in June.
Uniswap is also unique, in that it is one of the few dapps that actually generates substantial revenue on an ongoing basis. Even in the depths of a bear market, Uniswap has many days where it generates $1 million+ in revenue from trading fees.
I think the biggest takeaway from the Uniswap raise is that even in a down market the cream always rises to the top. As many DeFi projects suffer hacks or close their doors for good, top projects like Uniswap are going on the offensive.
This latest round of funding will give them the war chest they need to build through a bear market. Assuming they can come out the other side, they will be in a prime position to capitalize on the upside once the markets reverse course.
TRENDING ARTICLES
[Coindesk] October Becomes Worst Month for Crypto Hacks With Two Weeks to Go: Over $718 million has been stolen from DeFi protocols across eleven different hacks this month so far, per research firm Chainalysis.
[Blockworks] Coin Center Sues Over Treasury’s Tornado Cash Sanctions: The Treasury exceeded its regulatory authority as Tornado Cash is a “privacy tool beyond the control of anyone,” Coin Center said.
[Forbes] JPMorgan Chase cuts ties with Kanye: JPMorgan Chase has reportedly severed ties with Kanye West and his apparel brand Yeezy Inc.
NFT OF THE DAY
OpenSea recently announced support for NFTs on the Avalanche blockchain. To be honest, I don’t know much about Avalanche’s NFT ecosystem, however after a little exploring I stumbled across an interesting collection.
Conscious Lines, is a collection by Gabe Weis. He states that the artwork represents “16 years of meetings, 16 years of knowing that I had art in me that needed to get out.”
Gabe goes on to say that most of the pieces were ink drawings on archival paper that he “carried with [him] at all times for any meeting [he] was in.”
Most of the NFT collections I have highlighted in this newsletter have been utility-driven or community-based NFTs. Today, I picked an NFT that I simply loved because of the art.
The NFT above was sold for 250 AVAX last week.