Top Stories of Last Week

Regulatory

  • Bitwise announced it has begun regulatory process to list its bitcoin fund on OTC Markets. If approved, Bitwise Bitcoin Fund will trade on OTCQX, which would mean that any investor with a traditional brokerage account can trade fund’s shares. Matt Hougan, chief investment officer of Bitwise, said listing should take place within “months” based on firm’s prior experience with crypto index fund BITW.
  • India’s Parliament considering government-backed bill that would ban private cryptocurrencies. Cryptocurrency and Regulation of Official Digital Currency Bill 2021 would prohibit cryptocurrencies and provide framework for creating official digital currency to be issued by Reserve Bank of India. RBI had previously prohibited crypto trading for two years before ban was overturned by Supreme Court in March 2020. Government’s definition of private could imply any digital currency that is not sovereign is seen as private currency, including bitcoin.
  • Crypto Broker AG announced it has been granted securities house license by Swiss Financial Market Supervisory Authority. Securities license invites Crypto Broker AG to join regulated Swiss crypto players in world of regulated security tokens and allows firm to hold funds in fiat currency for clients.

Project Development

  • Visa piloting suite of application programming interfaces that will allow banks to offer bitcoin services. Visa Crypto APIs program will let clients connect into infrastructure provided by Anchorage, a federally chartered digital asset bank, to allow customers to buy and sell digital assets within existing consumer experience.
  • BlockFi regulatory filings indicate new bitcoin trust product called BlockFi Bitcoin Trust. Fund has yet to raise money from investors and details about fund’s structure were not available. However, fund’s status as Rule 506(c) exempt offering gives BlockFi room to market trust publicly.
  • SWIFT partnering with People’s Bank of China’s Digital Currency Research Institute and bank’s clearing center to found company called Finance Gateway Information Services Company. Currently unclear what new venture’s mission is, with public records only saying it will be involved in information systems aggregation, data processing and technology consultancy. Beijing-based firm has US$12 million already invested and SWIFT contributed $6.62 million, while PBOC’s clearing center invested $4.1 million. 
  • Terraform Labs launched $10 million fund, Terraform Capital, to drive integrations of either dollar-pegged stablecoin, TerraUSD, or its governance token, LUNA, throughout DeFi by covering cost of security audits. Fund is setting up slate of security auditors to be ready to move and get new offerings out door with security assurances. Terraform stated they want to foment use of UST and LUNA, and are not worried about which blockchain project is built on. 

Institutional

  • California Public Employees’ Retirement System, California’s $441 billion public pension fund, increased stake in bitcoin miner Riot Blockchain nearly sevenfold in Q4 2020. CalPERS held 113,034 shares in RIOT worth over $1.9 million at end of 2020, according to filing, up from Q3 2020 when CalPERS’ 16,907 RIOT shares were worth $49,000.
  • North Island Ventures revealed $72 million VC fund helmed by Glenn Hutchins, co-founder of private equity firm Silver Lake Partners, with backers including names like Paul Tudor Jones; Josh Harris, co-founder of Apollo Group; former PepsiCo CEO Indra Nooyi, and rapper LL Cool J. VC fund has been quietly making VC investments in crypto and blockchain projects since early last year.
  • Hanwha Investment and Securities, the securities brokerage arm of Hanwha Group, reached agreement to buy 6.15% stake in Upbit operator Dumanu for 58.3 billion won ($52.24 million). Acquisition of 2.06 million shares is scheduled to take place on Feb. 22. A representative from Hanwha said that deal is long-term investment for company to keep up with fintech industry.
  • Canadian investment firm Ninepoint Partners completed C$230 million (US$180 million) initial public offering of its cryptocurrency fund which is now fully invested. Bitcoin fund is available in both U.S. dollars and Canadian dollars and is listed on Toronto Stock Exchange under symbols “BITC.U” and “BITC.UN.” Fund boasts lowest management fee structure for listed bitcoin vehicle in Canada.
  • Dan Tapiero launching $200 million fund called 10T Holdings to invest in cryptocurrency startups, per documents from SEC. Tapiero’s filing lists as investors Michael Dubilier and Stan Miroshnik, former CEO of Argon Group. 

Exchanges

  • Kraken making its spot price data available for use by DeFi applications and developers via its own Chainlink node, enabling it to broadcast its Oracle Rates to Ethereum and other blockchains. Oracle Rates will provide real-time price data feeds for decentralized applications, including derivatives contracts, lending, payments and stablecoins.
  • Coinbase tapped Nasdaq for its direct listing. Timeline is still unclear. Existing Coinbase investors have already been trading shares through Nasdaq’s Private Market platform.
  • Digiassets Exchange says it has received approval from Monetary Authority of Singapore to prepare for launch of digital asset exchange operations. SDAX will now be able to help clients raise funds and trade fractionalized and digitized assets. SDAX is backed by RHT Group.

Mining

  • Sino-Global Shipping announced plans to start mining cryptocurrency, naming Lei Nie as COO and Xintang Youas as CTO. Sino-Global reportedly sourcing mining machines from Bitmain.

Fundraising

  • Hashmasks, a non-fungible token project, raised over 7,600 ETH (about $10 million) from sale of more than 15,300 digital collectible cards. Each Hashmask is reportedly designed to be unique piece that is part digital art and part digital collectible. According to Hashmasks listing on OpenSea NFT marketplace, most expensive of lot on sale is priced at over 900 ETH.
  • NFT marketplace Rarible raised $1.75 million from 1kx to broaden decentralized market venue to include new governance structure. Round was also joined by Coinbase Ventures, ParaFi Capital and CoinFund, among others. Funds will be allocated for building out DAO structure for buying and selling NFTs on Rarible.
  • Casa raised $4 million in seed round led by Fidelity Investments’ Avon Ventures. Tioga Capital, Castle Island, Cadenza, Champion Hill, Compound VC, Precursor, Lerer Hippeau and Coinbase Ventures also participated in round. Casa will put funding toward improving reach of its self-custody bitcoin wallet. 

Defi

  • Yearn Finance suffered exploit in one of its DAI lending pools, with notice from a team member stating that: “Attacker got away with 2.8m, dai vault lost $11.1m.” An Aave flash loan was used to trigger vault draining. Vault attacked was Yearn’s v1 DAI vault, which updated to new investment strategy last month, which was to deposit all funds into “3pool” on Curve.

Things to Watch This Week

  • Ethereum CME Futures Launch
    • The CME will be launching their ETH futures product this week, marking an event that many investors have been anticipating for some time. Last week’s ETH run-up might be an indication as to the sentiment that this launch will have on markets this week, as it now creates another avenue for institutional investors to take part in the growing Ethereum marketplace. However, some will note how the CME launch of BTC futures in 2017 coincided with the sharp market drop that eventually led to the bear market of 2018. Nevertheless, it would seem that market conditions are currently far different from what we experienced at the end of 2017, and moreso, volume on ETH CME futures will possibly be very light to begin with to have any noticeable effect on its own. We will be keeping an eye on further developments and the market’s reactions throughout the week. 
  • GBTC Inflow
    • Grayscale’s GBTC experienced an inflow of over 14k+ Bitcoin between August 13 and 14, which coincides with the latter half of this week. If we’re to take into account the “Grayscale Effect,” the theory introduced by Jarvis Labs that GBTC unlocking events that happen six months after large inflows into GBTC coincide with significant increases in the price of Bitcoin, then it would bode well for price action going into the weekend. We’ll be monitoring to see whether this theory comes to fruition going forward.   
    • Su Zhu @zhusu
      The biggest difference between 2021 and 2017 is that crypto now consists of productive assets. The world is beginning to catch on now. They’re comparing the size of these assets w the size of noncrypto, and the corresponding levels of productivity. That’s why they’re buying.
      Mira Christanto @asiahodl
      @FTX_Official adds new features at an unprecedented pace. Here we value $FTT based on 1. Burn Yields, 2. Price/Sales, 3. Price/Earnings and those 3 metrics vs Growth. Thread on $FTT

      messari.io/article/valuin…

      FTX created innovative new products like basket trades, leveraged tokens, prediction markets, and tokenized stock trading. It has grown to be a major venue for futures trading: 2/
      CoinMetrics.io@coinmetrics
      It is widely understood that whilst there are 18.6m #Bitcoin in existence, many are lost and not available to the market anymore. That is why we’ve created free float supply, a more realistic representation of the market’s Bitcoin supply, 14.5m network-charts.coinmetrics.io/#661

      Willy Woo@woonomic
      Looks like @michael_saylor is bringing http://hope.com to the corporate community. Impacts are being seen already. Coins once again being scooped off exchanges.
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      $355m scooped off Gemini, a favourite exchange for regulated entities.

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      The coins moved to strong hands (RED), those who buy without much history of selling.

      PS. Yes, this is bullish.

      Eric Wall  @ercwl
      There’s literally mountains of capital still in the process of figuring out how to allocate to bitcoin. Many of the wealthiest HNWIs, hedge funds, institutions etc. are still doing their Bitcoin 101 with their advisors as we speak. Slowly. But this baby is nowhere near finished.

      I’m not going to give names. If you know me you know I’m not a moonboy. But I work in the space, we speak with the big lenders, OTC desks, exchanges, brokers, financial advisors to institutional capital allocators in the U.S. and in Europe. The sentiment is the same everywhere.

      I know there’s thousands like me on Twitter that are seeing, hearing, experiencing the same thing. We work in the same industry. Is there anyone that even disagrees with this? Some of you here have delusional expectations of only up. Doesn’t work like that. But it is happening.
      READ MORE

      glassnode@glassnode
      A staggering $325 million in transaction fees were paid on #Ethereum in January, almost doubling the amount of its previous record month (Sept 2020). In comparison: #Bitcoin January fees were $114 million (2.8x difference). 
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      Larry Cermak @lawmaster
      Binance now custodies nearly $10 billion of stablecoins. Makes you think

      For those uninitiated, that’s more than 25% of the total stablecoin supply sitting on one exchange
      Rafael Schultze-Kraft@n3ocortex
      “2% of accounts control 95% of all #Bitcoin ” Wrong. BTC ownership is much less concentrated than often reported – and has dispersed over time. Meanwhile, whale supply has increased – suggesting institutional investors arriving. Report: insights.glassnode.com/bitcoin-supply… THREAD

      1/ We split the #Bitcoin supply into network participants of varying sizes, treating miners & exchanges separately. Our estimates: – Whale, humpback (>1k BTC): ~31% – Fish, dolphin, shark (50-1k BTC): ~23% – Shrimp, crab, octopus (<50 BTC): ~23% – Exchanges: ~13% – Miners: ~10%
      READ MORE
      Alex Krüger@krugermacro
      People mostly remember how bitcoin hit its top on 2017 the exact day the CME $BTC futures launched, and proceeded to crash right after. They forget that the CME launch drove price from 6K to 20K, +225% in 2.5 months. The launch of CME $ETH futures is extremely bullish.
      Willy Woo@woonomic
      In terms of adoption, Bitcoin has roughly the same users as the Internet had in 1997. But Bitcoin’s growing faster. Next 4 years on current path will bring Bitcoin users to 1b people, that’s the equivalent of 2005 for the Internet.
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