12th May 2023 > > PayPal and Freeport.

tl;dr

PayPal provides yet more access to cryptos, and Freeport provides another use-case for cryptos.

Market Snap (at time of writing)

Market Wrap

The last week has seen a steady decline from close to $30k to a position where the psychologically important $25k is looming. If you like your squiggles this may give you cause for cheer:

Moustache explains his interpretation:

“In September 2022, there was a bearish cross of the SMA 20/200 line for the first time on record. This gave many people the opportunity to buy $BTC at ~15k. And now? The SMA 20/200 is about to cross bullishly. Price above blue = Always bullish (see ‘15,‘19).”

Curious Cryptos’ Commentary – MetaMask and PayPal

MetaMask has announced (https://metamask.io/news/latest/metamask-and-paypal-all-you-need-to-know-about-buying-eth/) a collaboration with PayPal:

“MetaMask is the first web3 wallet to allow U.S. users to buy ETH easily with PayPal”.

Funding your MetaMask wallet with ETH can now be achieved directly within MetaMask using a few clicks or using PayPal and transferring to MetaMask.

PayPal isn’t the first financial tech company to provide this functionality within MetaMask – others include Coinbase Pay and Wyre for example – but it has the highest profile and the most trust. What we are seeing here is further development of the fiat on/off ramp paving the way for greater crypto adoption.

Curious Cryptos’ Commentary – Freeport

As reported on 2nd April 2023 Freeport is a venture to allow tokenised ownership of some iconic pieces of art:

https://freeport.app/

First up are four Andy Warhol prints which have been signed and numbered by the artist, and whose provenance is well documented.

The basic idea is that 10,000 shares are issued for each work of art. Those shares are sold to the public in blocks of 10 or more. It is expected that a secondary marketplace will be established to provide some degree of new entry/exit liquidity, and after a period of three to seven years the piece will be sold, and proceeds distributed to the shareholders.

For transparency, the CCC Treasury has invested the minimum amount of $198.50 for 10 shares in the James Dean print no. 86/190:

https://freeport.app/art/warhol-001-rebel-without-a-cause

Before doing so I tried to collate some price research, but that is difficult for assets like these. The only reliable price point I could find was a Sotheby’s auction on October 25th 2019 in which no.138/190 of the same print sold for $100,000 implying a share price of $10 at the time, as opposed to the near $20 I paid.

I am no art expert, but it seems unlikely to me that Andy Warhol’s work will ever fall out of favour. Would that same print sell for twice the price today? I can’t answer that question, but the ravages of QE (quantitative easing) have certainly inflated values of all hard assets versus the US dollar.

But apart from being a small and highly speculative punt which I currently value at zero, why should anyone care?

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There are a surprisingly good number of reasons why.

The tokenisation of hard assets from fine wines to commercial real estate, and the entire gamut of financial instruments is a development that will only grow from now. Tokenisation will improve access to previously expensive assets and dramatically increase liquidity in the secondary market.

Tokenisation is recorded on the blockchain, in this case as an ETH NFT (non-fungible token), proving ownership, driving adoption of blockchain technology.

Ventures like this provide yet another fiat on/off ramp to cryptos – you can use your debit or credit card to invest, and later sell your newly acquired James Dean or other NFT for cryptos.

Owners of the NFT can display the artwork in their own online gallery, or a copy in their own physical art gallery. This James Dean print will be on the walls of the art gallery in CCC Towers.

Finally, these NFTs are classified as securities. Investors are protected by US securities laws and - crucially - Freeport has registered its activities with the SEC (Securities and Exchange Commission) which has given its approval.

The many vocal critics of Gary Gensler, Chair of the SEC, should take notice and give credit where credit is due.

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None of these comments should be taken as advice to get involved. At the time of writing not many people have though the sale has been going for twenty four hours now.

But this is yet another concrete example of a use case for cryptos.