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26 May 2023

Monthly Market Recap – April

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This article is not intended to be financial, investment or trading advice. This article is for information and solely for education purposes. It does not protect against any financial loss, risk or fraud.

Cryptocurrencies are unregulated in the UK. Capital Gains Tax or other taxes may apply. The value of investments is variable and can go down as well as up.

Written by Jamie Brew

As Q1 ended on a high, there was hope and expectation that the strong volumes and price movement would continue into April and further into Q2. However, this was not the case as April saw a sharp decline in the spot trading markets on centralized exchanges, around 40% (according to date by CCData). Seemingly, the shockwaves from the collapse of 3 large U.S. banks took slightly longer to affect the market sentiment than first thought.  

Bitcoin Price and Spot Volumes

In April, the trading volumes for cryptocurrencies on the spot market decreased by 43.8%, as reported by The Block’s legitimate volume index. The total spot volume for April came in at $400.5 billion. In contrast, the March spot volume was over $700 billion. These were the lowest spot trading volume numbers since last December and the second lowest in over 12 months.  

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Source: The Block Research 

NFT Performance and Volumes

In April, the NFT marketplaces on Ethereum saw a monthly volume of $1.27 billion, which was a decrease of 7.1% compared to the previous month. Despite a decreasing trend, Blur has continued to attract volume from OpenSea since the launch of its BLUR token in February. In April, Blur accounted for 49% of NFT volume, displacing OpenSea (47%) for the third consecutive month. However, with the launch of its Pro platform, OpenSea are fighting to regain market share from Blur, as seen when compared to March.  

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Source: CryptoArt, The Block Research 

Market Sentiment

Another indicator for the market health is the Fear & Greed Index and how it developed in April. At the beginning of the month, the score was 61 – which is Greed. What does that mean? Well, if the score was 0, that would indicate “Extreme Fear” meaning that the general sentiment is extremely low, and investors are worried about the market situation. If the score was 100, that would indicate “Extreme Greed” meaning that investors are becoming too greedy and the market could be due for a correction. Usually in a “Bear Market” or “Crypto Winter” the sentiment is “Extreme Fear” and in a “Bull market” the sentiment is usually “Extreme Greed”. By the end of April, the market sentiment score was 60 - which is “Greed”. 

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Source: https://alternative.me/crypto/fear-and-greed-index/ 

News Recap

Burger King stores in Paris began to accept Bitcoin, powered by a partnership between Instpower, Alchemy Pay and Binancy Pay. The news marked a significant step forward for the mainstream adoption of digital currencies. It demonstrates that businesses are becoming more open to exploring alternative forms of payment and catering to the evolving preferences of their customers. 

Gate.io's cryptocurrency payment service, Gate Pay, has partnered with CityPay.io, a Georgian startup specialising in crypto payments. Through this partnership, more than 600 merchants in Georgia can now benefit from cryptocurrency payment options for their goods and services. By joining forces with CityPay.io, Gate Pay users gain access to a wide range of merchants throughout Georgia for their daily transactions. These include hotel bookings, supermarket shopping, and restaurant payments. 

Several e-commerce platforms around the world are adopting NFTs as a means of powering their next wave of innovation. The first in April was Ticketmaster, which introduced a feature that allows artists to offer exclusive event access to NFT holders, known as "token-gated ticket sales." This feature is compatible with Ethereum-based tokens stored in digital wallets such as MetaMask or Coinbase, giving artists control over the features of the tickets. Customers can access presale tickets, specific seats, custom travel packages, and other rewards. 

The next was Flybondi, an Argentinian budget airline, which announced that it would issue tickets on the Algorand blockchain. The airline launched Ticket 3.0, which builds upon its existing partnership with NFT ticketing company TravelX that began in September 2022. The new Algorand blockchain-based NFT ticketing technology allows passengers to change their name, transfer or sell their "NFTickets" independently, providing more flexibility for travellers. Enabling customers to purchase tickets in advance without defining their travel plans or specifying who the travellers will be. As a result, Flybondi can reduce customer service costs and generate additional revenue through trading fees. The airline has added 2% royalties to the NFTs smart contract so that the fee is taken once sold on the secondary market. 

Nike was the third company that announced the release of its "first digital-creation collection" on Swoosh, its blockchain-driven platform announced last year. Customers can purchase digital images of virtual shoe boxes, providing access to several digital versions of Nike's iconic Air Force 1 sneaker, introduced in 1982. Swoosh members can purchase one of the digital boxes. 

The fourth company was Ralph Lauren which combined the utilisation of NFTs with the acceptance of cryptocurrencies in its Miami Design District store through a partnership with BitPay. The company has also partnered with the online leisure community Poolsuite, gifting NFTs as part of a multi-tiered partnership. Commemorative Ralph Lauren tokens have been sent to Poolsuite NFT holders, allowing them to register for tickets to a private party at a Miami estate. Holders of Poolsuite's Grand Leisure collection can update their avatars with Ralph Lauren-inspired digital looks based on the retailer's recent runway show in Los Angeles. Over 2,700 addresses have received the NFTs. 

The long-anticipated news was that the Ethereum Shapella Upgrade was successful. The Shapella upgrade brought forward two withdrawal options for staked ETH - partial and full. With partial withdrawals, validators' balances are automatically distributed with ETH to sustain their validator status by ensuring their balance remains at the minimum 32 ETH. Conversely, full withdrawals require the validator to be shut down, with the entire staked balance withdrawn. Enabling the withdrawal mechanism will offer Ethereum users increased flexibility in managing their assets. 

All eyes were on the unlock pressure and then the price movement of Ethereum, as one theory was that many holders would unlock and then sell their Ethereum. However, after an extensive initial unlock, the amount of Ethereum withdrawn is trending downwards. 

MetaMask added two new fiat on-ramp solutions to their product offering. The first was announced that in Nigeria, Cryptocurrency users can buy digital assets through self-custody purchases with MetaMask Mobile and Portfolio Dapps without relying on centralised exchange platforms. This integration has made buying digital assets faster, more efficient, and cheaper, with instant bank transfers accessible anytime. 

The second solution was announced for the MetaMask Portfolio dApp, launched in September 2022. The dApp allows users to view their entire crypto, DeFi and NFT portfolio in one place. Before this, users had to rely on external sources to get a comprehensive report on their assets. MetaMask introduced a new "Buy Crypto" feature to enhance its services. It lets users purchase cryptocurrencies through different payment methods, such as debit or credit cards, PayPal, bank transfers, and instant ACH. 

Now available in over 189 countries, this service offers more than 90 tokens across eight different networks, including Ethereum, Polygon, Arbitrum, BNB Smart Chain, Avalanche Contract Chain, Fantom, Optimis, and Celo. MetaMask has partnered with several Crypto PSPs to provide the conversion of fiat to crypto on behalf of users. The new feature also considers various factors, such as the user's location and local regulations, to provide a personalised quote for each purchase. Once the user selects a quote, they will be directed to a third-party provider's website to finalise the transaction, and the purchased funds will be directly deposited into their MetaMask wallet. 

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Cryptocurrencies are unregulated in the UK. Capital Gains Tax or other taxes may apply. The value of investments is variable and can go down as well as up.

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