Ciaran Lyons
Crypto proponents would be wise to keep their eyes on nonfungible token (NFT) and metaverse trademark applications this year, which are “reliable signals” of future-use plans.
Speaking to Cointelegraph, intellectual property lawyer Michael Kondoudis said while many people may think big corporations are just jumping onto the NFT trend as a novelty, “it is not possible” to register a trademark in the United States with no intention to use it.
Despite a relatively low cost for filing an application — ranging from $250 to $350 per class of goods/services — Kondoudis explained when a company submits a trademark application, it requires a sworn statement that the applicant has a “bona fide” intent to use the mark in the future for the listed products and services.
He noted, however, that these applications “undergo substantive review” and may be rejected for a number of legal and technical reasons.
2023 has already seen a string of major companies filing for NFT-related trademark applications and Kondoudis has been active on Twitter, bringing them to the public’s attention.
Trademark trends so far in 2023
Kondoudis noted “the first trend for 2023” was liquor companies filing for NFT trademark applications.
This year has already seen new filings from well-known alcohol brands such as Absolut Vodka, Chivas Regal whisky and Malibu Rum, he noted.
Irish Distillers International, makers of Jameson Irish whiskey, was the latest liquor company to file for an NFT trademark application on Jan. 18.
Kondoudis said 2022 saw a diverse range of sectors filing for NFT trademarks — from grocery stores, pet food brands, sports teams and leagues, cities, casinos and even game shows.
He believes the sheer number of filings confirms NFTs and the metaverse have the attention of “corporate America.”
NFT patents give companies the edge
Kondoudis is confident consumers will see companies act on their NFT patents in the future, noting:
“These trademark filings are reliable signals of future plans to use marks for the products and services listed in the applications.”
Speaking to Cointelegraph, Ralph Kalsi, CEO of Blockchain Australia believes diving into the NFT patent space can bring significant growth opportunities for companies.
Kalsi said as NFTs continue to gain popularity, companies holding patents in the space can capitalize on the possible growth by licensing their technology or developing their own NFT-based products and services.
He believes the NFT patent space is a “promising area” that can establish a company as a leader by being an early adopter of NFT technology.
He added that it’s advantageous in the early stage of NFTs to own related patents as it could provide a competitive edge and prevent others from using “similar technology without permission.”
According to a Jan. 5 tweet from Kondoudis, applications relating to NFTs totaled 7,746 in 2022, a nearly 260% increase from 2021.
In a separate tweet on the same day, he added applications pertaining to the metaverse totaled 5,850 last year, a nearly 206% increase from 2021.
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Ciaran Lyons
Institutional investors are “not giving up on crypto,” with recent data pointing to as much as 85% of Bitcoin buying being the result of American institutional players, according to Matrixport’s chief strategist.
Markus Thielen, the head of research and strategy at the financial services firm, told Cointelegraph the evidence shows that institutions are not “giving up on crypto” and is an indicator that we might be entering a new “crypto bull market now.”
The data was shared in a Jan. 27 report from Matrixport, which suggests that it can be distinguished whether a digital asset is more favorable by retail or institutional investors at any given time based on whether that asset is performing well in the United States or Asian trading hours.
The report stated that if an asset that trades 24 hours “performs well” during U.S. trading hours, it indicates that U.S. institutions are buying it, while an asset that sees growth during Asian trading hours indicates that Asian retail investors are buying it.
The report cited that Bitcoin is up 40% this year, with 35% of those returns occurring during U.S. trading hours, meaning there is an “85% contribution” associated with U.S.-based investors, indicating that U.S. institutions are buyers of Bitcoin right now.
Thielen added that previous data shows that institutions typically first start buying Bitcoin before investing in other cryptocurrencies. He noted:
“If history is any guide, then we should see the outperformance of layer 1 and altcoins relative to Bitcoin.”
While the report highlighted that news regarding other projects positively impacted token prices such as Lido DAO (LDO) and Aptos, the crypto rally only started once the U.S. inflation data was released on Jan. 12.
It was also mentioned that Ether appears to be performing well during U.S. hours, indicating “institutional flows” into the cryptocurrency, however, APT is doing well around the clock.
“Aptos is seeing a mix of strong returns during U.S. trading hours AND during Asia trading hours.”
The report concluded that this “should be a very positive sign for Bitcoin” as institutional adoption continues.
In earlier comments to Cointelegraph, economist Lyn Alden believes that Bitcoin is currently playing “a bit of catch-up,” getting back to where it would have beenwithout the FTX collapse occurring.
Alden warned that there is “considerable danger ahead” for the second half of 2023, citing liquidity conditions being “good right now” partly because of the U.S. as a significant factor.
Alden explained that as the U.S. Treasury is drawing down its cash balance to keep the country’s debt levels low, it pushes “liquidity into the financial system.”
Meanwhile, popular trader and market commentator TechDev posted a Twitter update on Jan. 26 showing the price correlation between Bitcoin and gold, stating that if Bitcoin continues to follow the price of gold, it might even “crack the $50,000 mark.”
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Brayden Lindrea
The United States Securities and Exchange Commission (SEC) has been probing traditional Wall Street investment advisers that may offer digital asset custody to its clients without the proper qualifications.
A Jan. 26 Reuters report citing “three sources with knowledge of the inquiry” said the SEC’s investigation has been going on for several months but accelerated after the collapse of the crypto exchange FTX.
The investigations by the SEC have not been known before as the agency’s inquiries are not public, said the sources.
As per the Reuters report, much of the SEC’s efforts in this inquiry are looking into whether registered investment advisers have met the rules and regulations around the custody of client crypto assets.
By law, investment advisory firms must be “qualified” to offer custody services to clients and comply with custodial safeguards set out in the Investment Advisers Act of 1940.
Cointelegraph reached out to the SEC to seek clarity on the matter but did not receive an immediate response.
If adopted, our best ex rule would help ensure that brokers have policies & procedures in place to uphold one of their most important obligations: to seek best execution when trading securities, whether equities, fixed income, options, crypto security tokens, or other securities. - Gary Gensler (@GaryGensler) January 24, 2023.
The recent revelation suggests the SEC hasn’t turned a blind eye to traditional investment firms in the digital asset space, Anthony Tu-Sekine said, who leads Seward and Kissel’s Blockchain and Cryptocurrency Group, in a note to Reuters:
“This is an obvious compliance issue for investment advisers. If you have custody of client assets that are securities, then you need to custody those with one of these qualified custodians.”
“I think it’s an easy call for the SEC to make,” he added.
On Nov. 15, 2022, the Wall Street Blockchain Alliance (WSBA) wrote a letter to the SEC to seek clarity on what potential amendments, if any, apply to the “Custody Rule” as it pertains to digital assets.
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This Daily Dose was brought to you by Cointelegraph.
