Hello and welcome to Overbit Insights for this week.
The story of an investigation by the US Securities and Exchange Commission (SEC), which governs exchanges in the United States, is our first item of the week.
According to a Wall Street Journal story, the SEC is looking into Uniswap, the largest DeFi exchange, and its creator Uniswap Labs. The SEC wants to know "how investors utilise Uniswap and how it is marketed."
Uniswap Labs stated that the company is dedicated to following the law. At this moment, the SEC's inquiry is being conducted under civil law rather than criminal law, and it may or may not result in charges being filed. However, the investigation coincides with a separate SEC effort to get insight into crypto lending services, including letters seeking information on whether digital assets should be SEC-registered.
Uniswap pitches users on its design independence, allowing them to make their currency swaps without central clearance. However, as crypto and DeFi have come under the scrutiny of regulators, Uniswap has been compelled to limit some of its independence, and just in July they banned trading in assets like tokenised equities in July, citing the "changing regulatory landscape."
Uniswap Labs stated at the time that while its software banned these trades, the underlying protocol, which the business developed on ethereum, is open source and would be unaffected. The Uniswap trading limits occurred shortly after SEC Chair Gary Gensler made remarks that clearly implied that digital assets such as tokenised stocks were likely to count as securities - and hence platforms supplying them would be barred from offering them.
Bitcoin approaches $50,000 after months of instability
Closing out this week's edition of Overbit Insights, we pivot over to the crypto markets. Despite many calls for a prolonged bear market after months of weakness, it seems Bitcoin has yet again defied the odds and breached the $50,000 to the upside as it continues its end-of-summer rebound.
Of course, this rebound didn't happen in isolation; the price change coincided with a rise in interest in DeFi and NFTs, with ether breaking above $4,000 for the first time since mid-May.
This recovery comes after Bitcoin was trading at a price between roughly $30,000 and $40,000 over the last several months, after dropping from a record of almost $65,000 in mid-April.
Reports show global cryptocurrency adoption has risen significantly over the past year, according to Chainalysis, a blockchain data firm, which would be a prominent factor in the ongoing rebound. According to this same report, global crypto adoption rose roughly 881% in the last year.
Looking back to the start of the year, the entire cryptocurrency market cap was just under the one trillion mark and breaching it was a big deal for the community as a whole. Now, this past Sunday, the global market cap stands at over double the past milestone, close to $2.16 trillion.
Regardless of day-to-day and week-to-week price fluctuations, it seems clear that for the entirety of 2021, the trend of cryptocurrency markets has been upwards. Though certain narratives will come and go, Bitcoin breaking back above the $50,000 level serves as a reminder of which asset is still considered the market leader.
Thanks as always for reading Overbit Insights! Take care until next time.