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El
Salvador's plans to build the world's first "Bitcoin City"
https://www.reuters.com/markets/rates-bonds/el-salvador-plans-first-bitcoin-city-backed-by-bitcoin-bonds-2021-11-21
and Adidas's entry were the bright spots for digital assets in a
week that saw major cryptocurrencies clobbered by fears over the
new coronavirus variant Omicron.
Bitcoin was down 0.5% on Monday and has lost about 17% of its
value from a record $69,000 over the past 19 days. But rival
currency ether and tokens linked to the metaverse and
decentralized finance applications have fared better.
Adidas's move made waves after the German sportswear retailer
said it was partnering with Coinbase Global Inc in a tweet
https://twitter.com/adidasoriginals/
status/1463571957249630223, although Adidas shares did not join
that celebration.
The company also bought
https://twitter.com/adidasoriginals/
status/1462873002350202882 a piece of virtual land called "adiVerse"
in the blockchain-based world The Sandbox, with the German
company hinting it would build that out to offer virtual reality
products, and comes at a time it has warned of a sales hit due
to supply chain snags.
"That's something big because it is also a hint of what's about
to hit the fan in a couple of months in the NFT space: the
Adidas sneakers and other branded virtual clothes, shoes and
objects," said Ipek Ozkardeskaya, senior analyst at Swissquote.
The price of SAND, the virtual currency used to buy property and
other items, jumped 90% to $7.18 on the news, according to
CoinGecko, receiving a second boost since Facebook rebranded to
Meta Platforms Inc late last month.
MANA, the speculative currency used in leading blockchain-based
online world Decentraland, surged 36% to $4.90. Land and other
items on Decentraland are sold in the form of non-fungible
tokens (NFTs).
Besides the selloff triggered by news of Omicron, last week's
biggest headwind to bitcoin and ether came from an Indian
government announcement of a bill that would ban most private
cryptocurrency transactions by the country's estimated 15
million to 20 million crypto investors.
'SURVIVE WINTER'
Bitcoin traded around 4,376,477 Indian rupees ($58,296.12) on
Indian exchange WazirX, a light premium to prices outside the
country, reversing from a 15% discount on Tuesday after the
announcement.
"If it is a blanket ban, in combination with China, you're
talking two centres of the world's population that are
effectively frozen out of crypto," said Simon Peters, crypto
analyst at eToro.
Elsewhere, El Salvador's president announced plans to build the
world's first "Bitcoin City," funded initially by bitcoin bonds.
El Salvador adopted bitcoin as legal tender in September.
Average daily trading volumes across all digital asset product
types fell by an average of 13% through Oct-end to Nov. 19,
while net inflows averaged $203 million, half that in October,
according to data from CryptoCompare.
It showed that while assets under management in bitcoin-related
products have fallen 9.5% to $48.7 billion in the first three
weeks of November - the largest month-on-month fall since July -
assets in ether products rose 5.4%.
Decentralized finance-related token Solana (SOL) & Litecoin-based
products returned 22.0% and 14.9% respectively in the 30 days to
November 19, with daily trading volume in the 21Shares Solana
ETP nearly tripling to $6.3 million, CryptoCompare noted.
A patch of virtual real estate in Decentraland sold for a record
$2.4 million worth of cryptocurrency on Nov. 23, the buyer -
crypto investor Tokens.com - and Decentraland said.
Meanwhile, the approaching December holiday season could
increase volatility, while the U.S. Federal Reserve's stimulus
taper could be bearish for bitcoin, analysts said.
"There should be more agnostics focusing on the fact we are in a
bad part of the cycle for crypto here - the corrections could be
epic," said Brent Donnelly, president at market insights firm
Spectra Markets.
"Make sure you can survive winter."
($1 = 75.08 Indian rupees)
(Reporting by Lisa Pauline Mattackal and Medha Singh in
Bengaluru; Additional reporting by Tom Westbrook in Sydney;
Editing by Vidya Ranganathan and)
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