A new kind of Bitcoin NFT

Did DOGE backfire for Elon?

June 06, 2023

Welcome back. Looking back on the month of May, the theme for crypto markets was more tortoise, less hare. Compared to the frenzy in May last year when Terra came crashing down? That’s probably a good thing. But enough about the past…what are your crypto predictions for June? Hit that reply button.

Because if the first week of June is any indication, it’s going to be a wild ride. In the last days, the SEC has sued both Binance and Coinbase over alleged securities law violations. We’re keeping a close eye on the impact of this move by the SEC—and you can bet we’ll have your in-depth look at 1) how the chips fall and 2) what it means for the rest of crypto in next week’s edition.

In the meantime, today’s lineup: Ordinals gain even more momentum, crypto exchanges flee Canada, and Elon gets into DOGE trouble. Let’s dive in.

—Angelina

When Ethereum NFTs Go Bitcoin

A few weeks back, we covered the new BRC-20 Bitcoin token standard that’s recently taken the crypto world by storm. And now there’s another new kid on the Bitcoin block—all thanks to Ordinals.

Enter: BRC-721E.

What’s special about BRC-721E? The new token standard introduced last Monday allows investors to migrate their Ethereum NFTs to Bitcoin by converting those NFTs into Ordinals (aka Bitcoin-based NFTs).

Here’s how it works:

  • First, the Ethereum NFT is sent to a burn address. When a token is burned, it’s effectively removed from circulation in the Ethereum network.

  • Next, the BRC-721E standard converts the former Ethereum NFT into an Ordinals NFT by inscribing it onto a satoshi on the Bitcoin blockchain.

  • After the inscription is complete, the NFT becomes visible on the Bitcoin-based NFT marketplace Ordinals Market.

One thing to note: Migrating NFTs to Bitcoin via BRC-721E is a one-way street—once the Ethereum NFT is burned, there’s no turning back.

Gaining momentum: According to data from Dune Analytics, Ordinals surpassed 10 million inscriptions last Monday, up 7 million since the beginning of May. Thanks to the protocol, Bitcoin even made the No. 2 spot on the network leaderboard for NFT trading volume (second only to Ethereum). Impressive, considering that Ordinals protocol has only been around since January.

Zoom out: Bitcoin-based NFTs, despite being so new, are shaping up to be more than a fleeting fad. Following BRC-20 tokens, the new BRC-721E standard is just the latest instance in which the Ordinals protocol sparked significant builder momentum on Bitcoin, which has for some time been short on major innovation.

Bye Bye Bybit

Crypto exchange Bybit announced its exit from Canada on Wednesday, citing “recent regulatory developments” in the country.

  • Bybit’s existing Canadian customers won’t be able to make new deposits after July 31 and are being urged to wind down their positions by September 30.

  • Any positions left open at that time will be liquidated.

And it’s not just Bybit. Binance, OKX, Paxos, Blockchain.com, and dydx have all withdrawn from Canada in recent months. Why? In February, the Canadian Securities Administrator revealed new rules that impose significant compliance requirements on crypto exchanges.

Who benefits? Crypto exchanges that commit to staying in Canada now have the chance to gobble up the market share of their departing competitors. Case in point: Kraken’s customer deposits in Canada rose 25% after Binance announced its exit from the country in May.

Big picture: With “only” 38 million citizens, Canada’s share in the global crypto market is relatively small. But paired with the U.S.’ lack of regulatory clarity, Canada’s move to crack down on crypto makes the entire North American market less attractive to crypto companies—accelerating the crypto industry’s move offshore.

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Elon Musk’s DOGE Troubles

Elon Musk isn’t called “the Dogefather” for nothing—his takeover of Twitter effectively doubled DOGE’s price. But some Dogecoin investors aren’t happy with Musk’s influence on the memecoin…

What happened: On Wednesday, plaintiffs in a class action lawsuit against Musk accused him of insider trading.

  • They allege that Musk deliberately used Tweets, paid influencers, his 2021 appearance on SNL, and other “publicity stunts” to manipulate DOGE’s price and make himself rich.

  • An example: when he sold $124 million worth of DOGE in April after briefly replacing Twitter’s blue bird logo with Dogecoin’s Shiba Inu, sending DOGE up 30%.

FYI: These allegations might be new, but the lawsuit itself isn’t. Investors filed their initial complaint back in 2022, long before Musk became Chief Twit.

In other news:

  • Tether’s market cap hit an all-time high of $83.2 billion.

  • The EU formally signed its landmark crypto regulation (MiCA) into law, making it the first major jurisdiction in the world with tailored crypto rules.

  • Circle ditched all long-term U.S. Treasuries from its USDC backing reserves to prevent a second depegging.

  • Popular bridging protocol Multichain lost its server access because its CEO went missing.

  • Avalanche hit 1 million monthly users for the first time ever.

Crypto Job Board

And that’s what you need on your radar today in crypto.  Don’t forget to shoot me a reply with your market predictions for June. Catch you back here on Tuesday!