“Cryptocurrencies’ valuations stagnate as investor hype cools despite active developers, Nvidia’s competitor emerges in South Korea, The future of AI and Web3.0.”
TradFi & Global Market News
Global Market: S&P 500 & NASDAQ
The markets took a downturn from the high on Feb 2 as investors are starting to cool off the AI hype. The S&P500 closed out on Friday with the 2024 high of 4958.61 before dipping sharply on Monday’s opening. The tech-heavy NASDAQ index also witnessed a similar trend, peaking on Friday with a valuation at 15628.95 before the price decline on Monday. This is the first time since 1987 that the market closed with twice as many stocks in red as in green. Megacaps like the “Magnificent Seven” have frayed into two camps, with Nvidia standing above these giants as the 2023 biggest winners for their crucial role in spurring the rollout of AI development infrastructure to catch the waves of the hype. On one hand, Amazon, Microsoft and Meta have seen strong sales performance to bolster their AI spending in 2023. However, despite this, most of these sectors are witnessing job cuts, with layoffs reaching a three-quarter high as of the turn of the new year.
On the other hand, Apple, Alphabet and Telsa have been dragging the index, likely due to poor growth performances. In Tesla’s case, they are even at risk of dropping out of the top 10 most valuable companies in the US. Investors are keeping an eye out for falling interest rates to rejuvenate investments. However, analysts expect more minor cuts until the latter half of 2024.
Global Market: FTSE100
In the UK, the stock market stagnates by the end of Monday, maintaining the position of 7606. The CIPS UK services PMI survey reading scores are above the 50.0 threshold at 54.3, beating previous estimates of 53.8 and signalling active expansion in the services sector. PM Rishi Sunak cites the outperformance of their European counterparts as a vital sign of a “brighter future”; however, signs show that the UK has merely avoided a recession. To further dampen spirits, the OECD has predicted that inflation in the UK will remain the highest in the G7 nations at 2.8%, albeit 0.1% lower than November predictions, in 2024.
Semiconductor News: Rebellions
Nvidia’s rise to the top of the AI ecosystem has revealed substantial supply gaps as one of the only reliable AI semiconductor manufacturers to meet global demand. This has opened an opportunity for new players, one of which is Rebellions. Rebellions is a South Korean start-up launched in 2021. It has recently raised $124million in Series B to expand its chip portfolio from its previous successes in Atom, a data-centre-focused chip and ION, an edge computing chip. Its newest chip, Rebel, is set to tackle a wide range of GenAI demands compared to the current market offerings, which include Large Language Models and hyperscaler cloud services.
Rebellions relies on a mutually beneficial partnership with Samsung Electronics to develop and mass produce these chips by 2025. In turn, Samsung gets first access to install these chips in their HBM3E memory chips, which will aid in developing their own GenAI model, Samsung Gauss. Rebellions can also leverage past partnerships with telecom KT to onboard them as the first customers to test Rebel’s application for cloud neural processing networks. Still, they should be wary of competition as OpenAI also looks to develop their own chips in South Korea.
DeFi & Digital Assets News
Cryptocurrency Market: Bitcoin & Ethereum
Cryptocurrency prices across the board have been stagnant over the past month. Bitcoin closes Monday just above 42000 while Ethereum closes above 2250. This reflects a significant slowdown in hype amongst the new cryptocurrency products on the market. Nevertheless, over the past week, there has been over $708million worth of inflows into cryptocurrency-related investment products. Unsurprisingly, over 99% of it has been allocated to Bitcoin following the launch of Bitcoin ETFs, but more surprisingly, Solana has seen a $13million inflow, about 10 that of Ethereum. The buzz surrounding Solana likely stems from increased network usage as the Solana-based trading aggregator, Jupiter, facilitated $500million worth of trades, becoming the largest on-chain trade platform for a moment in anticipation of their token airdrop last Wednesday.
Developer News: Ethereum
The signals above suggest that Web3.0 developer activity is at an all-time, bringing blockchain technologies even closer to the fiat markets than ever before. In 2023, Ethereum saw a 31% increase in downloads of their software developer kits from the previous year to 106.4 million downloads. A key driver is the growth of Ethereum Virtual Machines, which encourage cross-chain code exchanges between compatible layer-1 chains like Avalanche and BNB, as well as the rise in smart contracts issued on layer-2 chains like Polygon built upon Ethereum.
Ethereum also runs Ethereum Name Services (ENS), a domain name protocol. They have recently partnered with the largest web registry, GoDaddy, to enable users to connect their internet domain names to their ENS addresses and, more pertinently, their crypto-wallets for no additional costs. It is a simple move that repositions cryptocurrencies into the subconscious of internet users, streamlining the familiarity of traditional internet identification with the use cases of technology, which will likely pay dividends in the future.
Application News: Artificial Intelligence (AI)
AI and Web 3.0 have been the fastest-growing innovations in recent years, attracting about 11% of VC funding in crypto-related innovations in 2023, leaving investors to ponder a potential intersection of their trajectories. The decentralised nature of blockchain could be the vehicle to lubricate code-sharing channels between AI developers while being protected by robust security features for model validation. Conversely, blockchain technologies could use on-chain AI tools to moderate bandwidth issues. Fundamentally, both technologies will be pivot in reshaping the individual’s power in societies. In tandem, both technologies could make one-man companies a reality, having full ownership of their product and finances.
As for now, scalability issues are plaguing various chains, and AI is seeing a slight decrease in interest again. While such technologies may not mature enough to steady investment, it would be foolish to take your eyes off how this space develops in the next few years.
In Other News…
Short Updates:
Apple Watch – Apple has re-released their Series 9 and Ultra 2 Apple Watches without the pulse oximetry feature following a patent dispute with medical device maker Masimo. Masimo has won a similar lawsuit against True Wearables, resulting in a warning against the sale of their devices in December 2022.
Opportunity Spotlight
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