This Country is CRAZY About Crypto!

There is a country whose land mass is smaller than most US states, yet which exerts an outsized influence over the crypto market. A country whose crypto traders are so degenerate they put almost everyone else to shame. Forget Singapore, forget Hong Kong, forget the UAE. Welcome to South Korea, crypto’s crazy capital.

If you heard the news late last year that the Korean won had become the fiat currency most traded for BTC, you might have been forgiven for thinking that every one of South Korea’s 52 million people was apeing in. The truth however, is a little more complicated.

What is true though is that this relatively small country punches far above its weight when it comes to crypto and knowing what causes this phenomenon could give you an edge in the market someday.

So, in today’s video, we dig into Korea’s crypto obsession and examine the reasons why its relatively small number of traders are such a force in the global market. It’s a story that has its roots in the country’s language, culture and society and one which paints a fascinating picture of a nation that is not all it might seem to the outsider.

You can watch that video here.

 📈Crypto Market Forecast 📈

Crypto and macro both Iook set to serve us up some interesting dishes before too long. While there are no specific crypto factors on the menu this week, a few are starting to come into focus. For starters, we’ve got the pending spot Ethereum ETF applications. They’re expected to be approved in May at the SEC’s final decision date, but institutions have been pushing for an earlier approval.

On a more bearish note, the news that Circle has ceased minting USDC on Tron has led to speculation that Tether could follow suit. This would be significant given more than half of the USDT in circulation is on Tron. What’s spooky is that Tether didn’t confirm or deny this possibility when asked by CoinTelegraph. Note Tether has recently been working with law enforcement.

This begs the question of what impact the spot Bitcoin ETFs will have on the crypto market this week. For context, these ETFs have continued to see steady inflows. Logically then, BTC’s price should continue to rise. However, this assumes that there’s no sell pressure. By now you’ll know that there seems to have been some from the likes of Genesis and Celsius.

As we predicted in last week’s crypto review, BTC trading almost perfectly sideways has been rocket fuel for altcoins, particularly ETH. If this trend continues, then we should see the rallies move further down the risk curve, meaning that the money should flow out of ETH and into other large caps. The exception is cryptos related to narratives like AI, which have their own catalysts (more on those below).

This ties into the macro side of the equation, where we’ll be getting lots of economic data. In case you haven’t noticed, we’re living in a clown world. This means that weak economic data like people losing their jobs is positive for the markets, because it means that the Fed is more likely to lower interest rates. This will result in more borrowing, which will eventually result in higher markets.

With that in mind, lower than expected consumer confidence on Tuesday will result in a rally. If Q4 GDP is revised down on Wednesday, it will likewise result in a rally. If the PCE (the Fed’s preferred inflation measure) surprises to the downside on Thursday, markets will rally. We’ll have lots of statements from Fed members in between that will keep markets on edge too.

This all relates to something that market analyst Cem Karsan mentioned in a recent interview, and that’s that markets have historically been volatile as we approach the Q1 options expiry, which will occur on Thursday, 28th March. Obviously, this is a way away, but Cem believes that we could start seeing volatility as soon as this week. That’s code for a potential drawdown.

This wouldn’t be surprising given that macro clouds appear to be forming on the horizon. For example, Israel has announced that it will escalate its operations in Gaza by 10th March. This could lead to further escalation in the region, leading to more supply chain disruptions around the Red Sea, which run the risk of causing a resurgence of inflation in Europe and elsewhere.

Similarly, Russia is reportedly making advances in Ukraine. This has motivated the US and its allies to impose additional sanctions, which could have unintended effects on supply chains and geopolitics. Consider that the EU has sanctioned Chinese and Indian companies for the first time on account of them dealing with Russia. This could cause issues between the EU and both countries.

The silver lining is that crypto could benefit from these disruptions. After all, crypto has no borders or boundaries. The caveat is that not all cryptos are decentralised. The apparent pressures on Circle to stop issuing USDC on Tron could be a sign that the geopolitical rifts we are seeing could soon start to affect the crypto industry. Let’s hope that doesn’t start this week.

🤖Resurgence of the AI Narrative 🤖

These days, Artificial Intelligence (AI) seems to be the main subject of conversation in every room all around the world. From conversations about how the technology is being used to revive lost languages to how it should be regulated, or even how it is being banned in certain industries, the chatter has been endless.

This has been especially true in recent days.

In fact, the sentiment around AI has permeated the crypto market as well. Anyone watching the market over the past week would have noticed that many of the cryptos consistently posting double-digit gains on CoinMarketCap’s top gainers list have been AI-themed tokens.

This was largely due to three notable factors. The first was OpenAI’s announcement about the launch of Sora, its new text-to-video AI model that has captivated much of Crypto Twitter. As the popularity of OpenAI’s new project rose, so did the price of the token associated with its sister company Worldcoin.’In fact, Worldcoin’s WLD token set new all-time highs.

The second factor was Ethereum co-founder Vitalik Buterin’s social media post advocating for the use of AI-assisted auditing to identify and fix buggy code in the Ethereum network. Vitalik’s tweet led to an additional 10% surge among AI and AI-associated coins, including SingularityNET’s AGIX, Ocean Protocol’s OCEAN, The Graph’s GRT, and Fetch.AI’s FET token.

The third factor was GPU chip manufacturer Nvidia’s latest fourth-quarter financial results, which beat Wall Street's expectations. The firm recorded a revenue of $22.1 billion in Q4 – this marks a 265% increase from the previous year. Notably, Nvidia founder Jensen Huang stated that the surge in revenue was due to the rise in the global demand for accelerated computing and generative AI.  

The announcement saw the chipmaker overtake Tesla as the world’s most-traded stock and achieve a market capitalization of $1.67 trillion. This added a further boost to the AI crypto rally, with the total market capitalisation of AI coins ultimately seeing a 100% increase in under a month.

While many have questioned the viability of AI in crypto over the long term, it appears that the AI crypto narrative has finally evolved beyond just being a short-term hype play.

As outlined by ABCDE Investment Partner Lao Bai in his recent Medium post, the first concentrated explosion of AI crypto projects followed the successful launch of OpenAI’s ChatGPT at the end of 2022. However, many projects that launched at this time were nothing more than cheap attempts at monetising the AI hype.

But, now that some significant time has passed, Lao Bai states that we’re finally seeing a newly-emerging batch of AI projects that show a clear improvement in understanding the technology. Interestingly, he classifies these projects as each belonging to one of three main ‘AI+Crypto’ tracks.

The three tracks are the ‘assetization of computing power,’ the ‘assetization of models’ and the ‘assetization of data.’

The first track, assetization of computing power, involves projects offering decentralized computing power that can be used for either “AI training” or “AI inference.” Interestingly, Lao notes that more projects are working on AI inference than AI training, due to the former requiring far less computing power and communication bandwidth than the latter. This reportedly makes the decentralized implementation of the former much more plausible than the latter. Examples of projects in the first track include Akash Network and Render.

The second track ‘assetization of models,’ involves projects offering tokenized use cases of AI models. Notably, one of the more promising tokenized implementations of AI models is the tokenization of ‘AI agents.’ These AI agents can be traded as NFTs and owners of these NFTs will exclusively be able to gain access to the AI agent. Users can ask these AI agents to carry out specific tasks for them within the application or relevant ecosystem and also seek answers to queries posed to the agent. While the technical implementation is still a work in progress, projects such as Character.AI are actively working along this track. Examples of projects in the second track include Fetch.ai and Morpheus.

The third track ‘assetization of data,’ involves projects offering decentralised data collection for AI models. Similar to the first track, projects in this third track are part of the AI training stack. However, the projects in track three focus more on using decentralized incentives to source ethical personal and private traffic data to provide better and richer “feed” for large models. This also helps transform the currently centralized, labour-intensive task into decentralized work facilitated by token rewards. Examples of projects in the third track include Grass and Fraction AI.

Having said that, we have to note that we believe the number of AI+Crypto tracks will only increase as time goes on. University of Oxford students Mohammed Baioumy and Alex Cheema hint at some of these new tracks within their 127-page primer. We recommend you give it a read.

🔥Hot Deal of The Week 🔥

Anyone who has been through a full cycle in crypto, knows that bull markets move at the speed of light. There is just so much hype and FOMO that it is difficult for many to find the time to properly educate themselves about different projects and themes.

That is why it might be a good idea to use the time now to properly brush up on your crypto skills and learn from our Team and the smart folks in our community. You can do that for free on the Coin Bureau Discord!

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🔮 Video Pipeline 🔮

* ERC 404: What you need to know about this Ethereum update!
* Bitcoin Bank Report: The theoretical future of banking without bankers
* Quantum computing and crypto: Should we be worried?
* Asia crypto market report: What’s happening in Asia?

🏆What's New at CoinBureau.com This Week? 🏆

* Beyond Lightning Network: Exploring Bitcoin Layer 2s
* Top Sui Projects: Sui DApps, Games, NFTs & Wallets Explored!
* Decentralized Storage: Top 4 Storage Networks on Blockchain!
* M6 Labs Crypto Market Pulse: You’re Not Bullish Enough On ETH

📖Quote of the Week 📖

Don’t follow hype. Don’t hop on trends. Don’t outsource your investment decisions. And, most importantly, Do Your Own Research

“Risk comes from not knowing what you are doing” - Warren Buffet

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.