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What’s behind the momentum? Plus, a deep dive into the adorable world of NFT
penguins.
View in browser

08.21.21

This IRL pudgy penguin will one day grow up to be a Pudgy Penguin NFT. [Enrique
Aguirre Aves via Getty Images]

Greetings from Coinbase Bytes,

Whether you’re a crypto chart watcher, a soccer superfan, or a *squints at
notes* penguin enthusiast, this week’s Bytes has you covered. First up, we
explore some of the forces propelling crypto’s market cap back to the $2
trillion mark for the first time in months. Also this week: the Pudgy Penguin
NFT phenomenon, Lionel Messi’s new crypto contract, and much more. Let’s get to
it.

   
 * Crypto market revisits $2 trillion
 * The penguin NFT craze explained
 * Lionel Messi’s crypto bonus



Bitcoin

$49,018.65

+2.48%

Ethereum

$3,232.49

-2.77%

Cardano

$2.41

+12.66%

Dogecoin

$0.32

+11.34%

Polkadot

$27.90

+22.84%

Solana

$73.97

+64.74%

Bitcoin

$49,018.65

+2.48%

Ethereum

$3,232.49

-2.77%

Cardano

$2.41

+12.66%

Dogecoin

$0.32

+11.34%

Polkadot

$27.90

+22.84%

Solana

$73.97

+64.74%

Price changes are for the past week, ending on Aug 21, 2021 at 09:09 PM UTC

See the latest prices



MARKET UPDATE

Crypto market revisits $2 trillion despite regulatory uncertainty. What’s behind
the run-up?

This week, crypto’s total market cap crossed the $2 trillion mark for the first
time since May. The reversal was especially striking given recent headlines
around China’s mining crackdown and regulatory uncertainty. Just last month, the
market was below $1.2 trillion — so what sparked the rebound? Let’s dig in.

   
 * Global financial firms are citing institutional clients’ growing appetite for
   crypto. A July Fidelity survey found that 7 in 10 institutional investors
   expect to buy digital assets. And in response to tenfold growth in corporate
   demand, DBS, Southeast Asia’s biggest bank, launched new crypto services this
   week. “We are confident about doubling our investor base by the end of the
   year,” said the bank’s capital markets director.
 * Venture capital is flowing into the crypto space at record pace. Ten
   companies have raised nearly $4 billion this year, half in the past two
   months. Crypto exchange FTX, for instance, raised a record-breaking $900
   million in July. (Coinbase Ventures was one of the investors.)
 * Individual retail traders are helping propel the altcoin market. The Wall
   Street Journal reports: “Many so-called altcoins, or alternatives to bitcoin,
   have seen their prices surge recently — a sign that retail investors are
   active as they search for digital assets with small market capitalizations
   and potential for big gains.”
 * Ethereum, home to much of DeFi and major NFT markets like OpenSea, is up
   around 20% since the London Fork upgrade. Meanwhile, Cardano revisited $2.00
   after a long awaited announcement about smart-contract functionality, and
   Bitcoin rallied above $48,000 over the weekend for the first time since May. 
 * The booming NFT market is breaking records. This week, Solana hit all-time
   highs after Degenerate Ape NFTs launched on its blockchain. Meanwhile, NFT
   marketplace OpenSea and NFT game Axie Infinity have seen combined revenues
   north of $400 million in the last month.



Why it matters… Crypto moves fast and is notoriously hard to predict. Just a
month ago, many analysts were warning that a “crypto winter,” like the one that
followed the late-2017 bull run, was imminent. Now, a historically broad array
of crypto has powered the overall market close to all-time highs.

Learn about the ETH economy



BIRD IS THE WORD

Pudgy Penguins power late-summer NFT boom

If you spend any time on crypto Twitter — or even just reading The New York
Times — you’ve probably noticed a proliferation of Pudgy Penguins wearing
accessories like fisherman hats, eye patches, and overalls. They’re the latest
craze to pour gas on an already fiery NFT market driven in substantial part by
gaming and collectibles. Let’s examine the undeniably cute trend.

   
 * Pudgy Penguins and Bored Ape Yacht Club represent the rising popularity of
   “community NFTs.” Exclusivity is likely part of the appeal. Fans often use
   their NFTs as online avatars and fervently discuss their purchases and swap
   memes in dedicated Discord channels. 
 * Penguin fever seemed to escalate following the New York Times article, with
   sales totaling more than $13 million. Daily sales north of $2 million
   remained common as of Tuesday.
 * Other recents hits range from NFTs based on Fortune magazine’s recent
   crypto-issue cover (which went for over $1.3 million) to the series of 140
   NFTs that Twitter gave away for free in June and have since seen trade
   volumes topping $6 million on OpenSea. 
 * A new development? Groups of NFT fans teaming up to buy hot items via tools
   like PartyBid. “PartyBid is cool…,” noted VC investor Fred Wilson on his
   popular blog. “But what is cooler is that these NFT experiences are operating
   at the interaction of gaming, communities, and social nets.”
 * Will these projects have enduring value? Hard to say. Some prominent voices
   in the NFT community have cautioned fans about potentially overpaying for hot
   collectibles, only to be left holding the bag when the hype recedes.



Why it matters… As crypto prices fell earlier this year, NFT sales volumes also
tumbled — leaving some to wonder if crypto-based digital art and collectibles
had been a fad. But with crypto rising, a wide variety of NFT projects have
benefitted. Cryptopunks, which pioneered the NFT collectible concept in 2017,
have cracked the traditional art market and frequently trade for hundreds of
thousands of dollars. And while Pudgy Penguin prices have already experienced
intense volatility, they remained the biggest NFT project on OpenSea as of
Tuesday morning. 

Learn about NFTs



GAME CHANGER

What soccer superstar Lionel Messi’s new crypto contract means for the future of
sports

The worlds of sports and crypto have intersected over and over this year — with
everyone from Tom Brady and Saquon Barkley to the Dallas Mavericks making
headlines. But Lionel Messi, soccer's biggest star, may have just literally
changed the game with his new crypto contract. Here’s how it works:

   
 * Argentine superstar Messi gets paid in crypto as part of a two-year contract
   (which includes an annual salary of $41 million plus bonuses) to play for
   French club Paris Saint-Germain. In an effort to engage with its global
   fanbase, the team launched its own cryptocurrency, PSG, last year. Messi’s
   welcome package includes a large number of PSG tokens. 
 * Such fan tokens can bring diehard supporters into team decisions by voting
   (via the Socios blockchain) on everything from uniform designs to which
   players should win MVP awards. Tokens can also be traded between fans around
   the world and make holders eligible for promotions.



Why it matters... Fan tokens could make sports fandom far more interactive, and
top sports franchises are taking note. This week, the LA Clippers announced it
would join the Socios platform. Formula 1 racing teams Aston Martin and Alfa
Romeo, the UFC, and soccer clubs including Arsenal, Manchester City, and
Barcelona (Messi’s old squad) have all also launched tokens of their own.



TAKES

Doge days of summer edition, featuring Elon, Dionne, and Mark Cuban

   
 * Doge fest… For the price of $125 (or roughly 380 DOGE), you can attend
   Dogepalooza's inaugural edition in Sugar Land, Texas on October 9. Soul
   legend and recent Dogecoin convert Dionne Warwick will headline. The
   festival’s mission? To “change the world” by living the Doge motto: “Do Only
   Good Everyday.”
 * Doge whisperers... Dallas Mavericks owner and billionaire entrepreneur Mark
   Cuban told CNBC, “The community for Doge is the strongest when it comes to
   using it as a medium of exchange.” In response to Cuban’s quote, Tesla CEO
   Elon Musk tweeted, “I’ve been saying this for a while.”
 * Jersey Doge… Premier League soccer team Watford F.C. will sport Dogecoin
   logos on all three of their uniforms' sleeves this season thanks to a new
   sponsorship with sports betting company Stake. Sports site the Athletic broke
   the news and commented, “It’s a controversial choice, to say the least.” 



Read up on Dogecoin



TOKEN TRIVIA

What is Axie Infinity?

A Cardano’s long awaited smart-contract upgrade B The first Premiere League team
to offer NFTs to fans C Paul Bunyan’s nickname for his trusty axe D A
crypto-meets-Pokémon NFT game

Find the answer at the end of the email.

Learn about Axie Infinity



NOW TRADING ON COINBASE

AXS

AXS is an Ethereum token that powers Axie Infinity, a blockchain-based game
where players can battle, collect, and build a digital kingdom for their pets.

UST

TerraUSD is a decentralized stablecoin running on Ethereum that attempts to
maintain a value of US$1.00.

IOTX

IOTX is an Ethereum token that powers IoTeX, a platform that aims to connect IoT
devices (such as cameras and sensors) and decentralized applications.

REQ

REQ is an Ethereum token that powers the Request Network, a protocol for
creating and requesting payments.



Trivia answer

D A crypto-meets-Pokémon NFT game



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