# Boomerang 7/26/23 By [Kintsugi Research](https://paragraph.com/@research.kintsugi) · 2023-07-26 --- BTC boomerangs to range last seen in June 2022. ![](https://storage.googleapis.com/papyrus_images/53cbd541fd5ee77008faf510e14247ff2651452b18ff7a01c526458470b20c68.png) **Bird’s Eye View** ------------------- **Tailwinds** 8 BTC ETF applications backed by credible institutions head towards SEC final deadline Q1 2024 ![](https://storage.googleapis.com/papyrus_images/c29c6c0bb423dd51262c275acabc70e8cdf0cf5ec146686ed4bb6abb03076d3c.png) [Arthur Hayes](https://cryptohayes.substack.com/p/massa) describes Bitcoin at the intersection of AI x robotics x macro megatrends ![](https://storage.googleapis.com/papyrus_images/01fbd5162c94553cf504588a6bca61ee1382b25f7773425c74241bfee50c16f0.png) Institutional adoption considerably expands addressable market. ![](https://storage.googleapis.com/papyrus_images/e6fdb0e7a603a0c09b23312d348ef928290070d7fa1b59ad13a84d2fa10becde.png) Many expected economy to be worse off than it is… ![](https://storage.googleapis.com/papyrus_images/239fb8d7bac47b9697f4f8b58df7847055de9fc67ecfcaf31325870db14ec65a.png) **Headwinds** [PacWest bank failure](https://www.nytimes.com/2023/07/25/business/pacwest-deal-banc-of-california.html) is a reminder we aren’t out of the woods yet. ![](https://storage.googleapis.com/papyrus_images/d7a06f7fceaba6bf1ab47e477a13ea6cd1d0b92979ce050861e13f252c1fb1e1.png) While bank failures happen even during euphoric phases of the market cycle… ![](https://storage.googleapis.com/papyrus_images/baea7cda6e00e9581839eb45c01890445fe20179321b35793b53e50b78c68b47.png) 3 of the 7 [largest bank failures in history](https://www.bankrate.com/banking/largest-bank-failures/) happened this year, more to come? ![](https://storage.googleapis.com/papyrus_images/35d0978a8cf412a05a68ec967a2094821fee9d0be4e9393a2097b5f18669d021.png) Other Narratives ---------------- ### Crypto native securitization (RWAs) Securitization is a $14 trillion US market Tradfi embraces on chain assets ![](https://storage.googleapis.com/papyrus_images/72fd072a1686a26866c7154cd55407915ed11f61fe5ff8ff350294c38694107e.png) Defi embraces off chain assets ![](https://storage.googleapis.com/papyrus_images/70fbcadfd7a720769881d74f405a342eafa2598c22f0e3e3bbaf6027a6c86bb3.png) Web3 [securitization ecosystem](https://www.notboring.co/p/everything-is-broken) is robust ![](https://storage.googleapis.com/papyrus_images/9ef56a2c7569183fec75a13e5ed9bb7f77b7ae0f2f75325796a590f9d6ffc77b.png) [Centrifuge](https://centrifuge.io/) launches on chain ecosystem for structured credit ### Crypto native stablecoin From [Dust on Crust](https://entrepreneurshandbook.co/dust-on-crust-300d4b5cf3ec) by Arthur Hayes: > USD fiat stablecoins simply won’t be allowed to scale to the size needed to take crypto trillions of dollars higher in market cap (assuming you believe total crypto market cap is positively correlated to the total amount of USD stablecoins outstanding). It is just too risky to the US financial system to have all those dollars in the hands of organisations that must immediately liquidate their debt holdings to make good on their promises to their customers. And so, while the three majors (USDT, USDC, BUSD) might continue to exist, there is a ceiling on how large they can grow their deposit base in aggregate. > > … > > But this is not a reason for concern. We, the crypto faithful, have the tools and the organisations needed to support $1 trillion or more worth of NakaUSD outstanding. If this solution were embraced by traders and exchanges, it would lead to a large growth in Bitcoin derivatives open interest, which would in turn create deep liquidity. This would help both speculators and hedgers. It would become a positive flywheel that would not only benefit the member exchanges, but also DeFi users and anyone else who needs a USD token that can be moved 24/7 with a low fee. > > 1 NUSD = $1 of Bitcoin + Short 1 Bitcoin / USD Inverse Perpetual Swap ![](https://storage.googleapis.com/papyrus_images/05df7e7decf43dc33fce45c1170d60b6850135ecd62b1abc1042289259852e2f.png) ### GPU cloud Coreweave [raises $421M](https://www.businesswire.com/news/home/20230531005132/en/CoreWeave-Secures-200-Million-Series-B-Extension-Bringing-Total-Round-to-421-Million) series B Together [raises $20M](https://techcrunch.com/2023/05/15/together-raises-20m-to-build-open-source-generative-ai-models/?guccounter=1) for open source AI models > Together is using former crypto miners for GPUs and other hardware to build virtual server farms. It has leased thousands of GPUs to help power Together’s cloud service for AI developers. Crypto miners [seek new life](https://www.wsj.com/articles/crypto-miners-seek-a-new-life-in-ai-boom-after-an-implosion-in-mining-92a181fd) in AI boom ### Web3 Animation Studios [Atrium](https://atrium.art/) is a production studio for Web3 native IP * 20eth trailer for Nouns DAO minted as NFT ([proposal](https://nouns.wtf/vote/195) and [result](https://twitter.com/AtriumNft/status/1622726466948694018)) * Nouns Movie ([proposal](https://houseofnouns.wtf/nouns/proposals/245?tab=voting) | [part 1](https://twitter.com/nounsmovie/status/1671551690313711616?s=20)) * [On1 Force trailer](https://twitter.com/NonFungibleFilm/status/1667207428193275905) * [Neon Garden](https://twitter.com/steveg60117/status/1638315904806289408?s=46&t=0lnVuZ5BiZHPaCqlRKSh5A) * [NFTNow](https://twitter.com/nftnow/status/1671561777455169539?s=20) & [CoinDesk](https://twitter.com/CoinDesk/status/1671549530959912963?s=20) articles Macro Indicators ---------------- Cautious about euphoria in equity markets ![](https://storage.googleapis.com/papyrus_images/09cced0eb7f71c51e8fd396768fe87499e4422353f277de4e0dd168d5a1b3409.png) Problems still looming in banking sector (bank failures and inflation linked debt) ![](https://storage.googleapis.com/papyrus_images/46ad67cd5615465a6aaaa8585a8d2de32b0c3a21002262b696118753bbf38134.png) EOY recession still a possibility. ![](https://storage.googleapis.com/papyrus_images/0f45288aa1f345b3f7bfc7e37ac2aa9bb2a4d1a568e209a963c02319e08ab755.png) Recession was priced in as of Q4 2022 but maybe not anymore? ![](https://storage.googleapis.com/papyrus_images/2768804f07248c3435ba08fedbae495c55afe327d4eb30c44f073311313d4839.png) On Chain Indicators ------------------- L2 TVL shows durable demand for fast and cheap transactions: * [Arbitrum $2.1B](https://defillama.com/chain/Arbitrum) * [Polygon $964M](https://defillama.com/chain/Polygon) * [Optimism $921M](https://defillama.com/chain/Optimism) \*[$25B TVL on Ethereum](https://defillama.com/chain/Ethereum) Bitcoiners embrace layers to expand utility of BTC network. ![](https://storage.googleapis.com/papyrus_images/618bd60cae07a57a8c340dad6cd62d835a7b331011076e9a78116689f3fcc670.png) Short term holders driving price action since FTX collapse in Q4 2022 ![](https://storage.googleapis.com/papyrus_images/ddcc77d747d17ab4600076b863971f91e4acf0c1bb301f09275f52d4d029db2b.png) Bollinger Bands separated by 4.2% indicating historically low volatility ![](https://storage.googleapis.com/papyrus_images/99751449b84704fe6b19e8ed7605dc2bddbfb11913cd648d2b5deff353ec7e9c.png) Declining stablecoin market cap evidence of risk on rotation and shift to RWA collateral ![](https://storage.googleapis.com/papyrus_images/7c7a4c9737fd48668048210715b7b13ad38f9fe946c5e414821cb103f4e9ba26.png) > On June 21, MakerDAO purchased another $700 million worth of U.S. Treasuries to bring its total holdings to $1.2 billion. The protocol’s $2.3 billion worth of RWA collateral is now the protocol’s largest collateral type comprising 49% of Maker’s assets. ![](https://storage.googleapis.com/papyrus_images/8990d0bc4ed82efb91ce595583b0baba7a56ca8c593aeac51e7b64943c47922f.png) Crypto x Culture ---------------- [RTFKT x NVIDIA 3D Avatar](https://www.nvidia.com/en-us/on-demand/session/gtcspring23-s52562/) Keynote Wilder World to [launch racing game by EOY](https://twitter.com/WilderWorld/status/1683889658718195715) Gmunk [Geometra exhibit](https://twitter.com/W1curates/status/1683366380400197632) in London [88eth Pak 1/1](https://twitter.com/seedphrase/status/1682816528222236674) sale Aku avatars [on Reddit](https://twitter.com/AkuDreams/status/1684247761938415629) and [Beats collab](https://twitter.com/beatsbydre/status/1673722893535158274) [130 eth xcopy 1 yr loan on](https://twitter.com/NFTfi/status/1683910814976147456) NFTfi [Sam Spratt](https://twitter.com/SamSpratt/status/1683848682351763456) memo [Louis Vuitton x Pharrell](https://twitter.com/LouisVuitton/status/1680962486470602760) in Web3 OpenSea [enables trades](https://twitter.com/opensea/status/1682077991029932032) Botto [13eth sale](https://nft.christies.com/nft/suffice-nuance) at Christies **Other References** -------------------- 1. [Pantera summit: Defi highlight](https://panteracapital.com/summit2023-defi-highlight) 2. [Macro Compass: Sticky what?](https://www.dropbox.com/scl/fi/1k6ovr1wh6s9sj6aeeuep/20230712124808_12_07__tmc_report__sticky_what.pdf?rlkey=vgiuzya3pjltq3n65co4q0oq7&dl=0) 3. [TBL: Can US Fiscal Deficit Cause Inflation?](https://thebitcoinlayer.substack.com/p/can-the-us-fiscal-deficit-cause-inflation) 4. [Arthur Hayes: Massa](https://cryptohayes.substack.com/p/massa) 5. [Macro Compass: Liquidity Illusion](https://www.dropbox.com/scl/fi/dthl3ljig23kyreoxfsf0/20230721025724_21_07__tmc_report__the_liquidity_illusion.pdf?rlkey=wotd71y4wz14mbymdg5efm6w6&dl=0) 6. [Runway ML research papers](https://research.runwayml.com/selected-papers) 7. [WSJ: Fed isn’t ready to declare victory on inflation](https://www.wsj.com/articles/why-the-fed-isnt-ready-to-declare-victory-on-inflation-e882b4d9) 8. [GCR: Scaling rendering for the future](https://globalcoinresearch.com/2023/04/26/render-network-scaling-rendering-for-the-future/) 9. [Bloomberg: Economists rethink forecasts](https://www.bloomberg.com/news/articles/2023-07-21/us-recession-becomes-closer-call-as-economists-rethink-forecasts) 10. [Coindesk: Tokenize Everything](https://www.coindesk.com/consensus-magazine/2023/07/18/tokenize-everything-institutions-bet-that-cryptos-future-lies-in-the-real-world/) 11. [BCG: Relevance of asset tokenization](https://web-assets.bcg.com/1e/a2/5b5f2b7e42dfad2cb3113a291222/on-chain-asset-tokenization.pdf) 12. [Centrifuge in Q2 2023](https://centrifuge.mirror.xyz/IhV9xHnoq54Fkf_zwTVGMu0rPMLNdcOB0HhKP7oB9go) 13. [Oliver Wyman: Institutional Defi](https://www.oliverwymanforum.com/future-of-money/2022/Nov/institutional-defi.html/) 14. [An Unreal Primer on Real World Assets](https://docsend.com/view/u53utyp2j4ycg7r6) 15. [Blocktower embraces RWAs](https://messari.io/report/blocktower-credit-embraces-real-world-assets) 16. [WSJ: Stock market shrugs off recession signals as rally builds](https://www.wsj.com/articles/stock-market-shrugs-off-recession-signals-as-rally-builds-e775deee) 17. [NotBoring: In defense of strategy](https://www.notboring.co/p/in-defense-of-strategy) 18. [Glassnode: Whale Watching](https://insights.glassnode.com/the-week-onchain-week-30-2023/) 19. [TBL: Markets are euphoric time to be cautious](https://thebitcoinlayer.substack.com/p/markets-are-euphoric-time-to-be-cautious) 20. [Introducing worldcoin](https://worldcoin.org/cofounder-letter) --- *Originally published on [Kintsugi Research](https://paragraph.com/@research.kintsugi/boomerang-7-26-23)*