Top Stories of Last Week

Project Development

  • Pyctor, a collaboration involving ABN AMRO, BNP Paribas Securities Services, Citibank, Invesco, Société Générale, Forge, State Street, UBS and others, has been incorporated and is raising external money. Pyctor is a digital asset post-trade market infrastructure for global custodians, institutional issuers and other capital market actors. No comment on amount being raised or if project’s member banks were also taking part in investment round. 
  • Crypto custodian Fireblocks and payments platform First Digital Assets Group providing connectivity and support to allow financial service providers to plug into Diem. Rebranded project plans to emerge around end of this quarter, with a minimum viable project based around U.S. dollar stablecoin.
  • Bahamas Sand Dollar can now be converted into traditional Bahamian dollars using prepaid Mastercard, enabling users to pay for goods and services wherever Mastercard is accepted worldwide. Mastercard development will open Sand Dollar to more users, as it has previously only been available to individuals and businesses domiciled in Bahamas.

Institutional

  • NYDIG, Stone Ridge Asset Management’s bitcoin firm, filed with SEC for Bitcoin ETF. NYDIG’s filing lists Morgan Stanley as initial authorized participant in ETF.
  • Rick Rieder, chief investment officer at BlackRock Financial Management, stated in interview with CNBC’s Squawk Box that BlackRock has “started to dabble a bit” into crypto investments. “Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn’t espouse a certain allocation or target holding,” said Reider. “My sense is the technology has evolved and the regulations have evolved to the point where a number of people find it should be part of the portfolio.” Rieder did not specify what percentage of BlackRock’s assets under management may be in crypto.
  • MicroStrategy said it intends to offer $900M aggregate principal amount of convertible senior notes due 2027. Firm, whose Bitcoin holdings are worth more than $3.5B, said it intends to use net proceeds from note sale to buy more Bitcoin.
  • Ontario Securities Commission approved Evolve Bitcoin ETF to trade on Toronto Stock Exchange. Approval follows OSC’s approval of Purpose Investment’s bitcoin ETF, which debuted last week and has since accrued more than $400 million in assets under management. Evolve tapped CF Benchmarks as fund’s index provider, EY as auditor, Cidel Trust Company as custodian, Gemini Trust Company as sub-custodian and CIBC Mellon Global Securities Services as fund administrator. 
  • KPMG, BitGo and Coin Metrics announced offering that seeks to manage and monitor risks on blockchain networks, combining KPMG’s Chain Fusion services, BitGo’s custody technology and Coin Metrics’ data and intelligence products. Alliance seeks to deliver data and insights, proprietary analytics and crypto-asset services to support growth in institutional adoption.

Exchanges

  • Coinbase customers can now sign up to stake ETH into Beacon Chain contract. Coinbase will allow users to stake any amount of ETH in their account and earn up to 7.5% APR on staked ETH. Coinbase commission is 25% of rewards received. Coinbase also exploring avenues by which to give customers way to trade staked ETH “very soon.”
  • Robinhood announced it intends to implement cryptocurrency deposits and withdrawals, according to series of tweets from company’s Twitter account stating work on integration of cryptocurrency transfers has already begun, though no dates or specifics were provided on when it will go live. Robinhood also clarified crypto deposits would be custodied by their own wallets and added that company does not invest in cryptocurrency and will not use customer funds for its own benefit.

Mining

  • Nvidia announced efforts to ensure graphics cards end up in hands of gamers instead of cryptocurrency miners. Nvidia’s RTX 3060 software drivers will limit its hashrate by around 50% if it detects mining activity. New Cryptocurrency Mining Processor (CMP) is company’s offering of professional mining-specific product that doesn’t do graphics.
  • Chinese sports lottery firm 500.com inked share-swap deal to acquire cryptocurrency mining pool Bitdeer Technologies, including BTC.com. Agreement will see 500.com purchase all shares of Bitdeer-owned Blockchain Alliance with 10% of its own shares. Bitdeer Technologies is majority owned by Jihan Wu. 
  • Ebang announced closing of follow-up public offering, where investors agreed to purchase 14 million units at $5 per share. Each unit consists of one Class A ordinary share and one warrant to purchase one-half of one Class A ordinary share.

Fundraising

  • Blockchain.com raised $120 million from Louis Bacon’s Moore Strategic Ventures, Hayman Capital Management founder Kyle Bass, Access Industries, Rovida Advisors, Lightspeed Venture Partners, GV, Lakestar and Eldridge. Firm has now raised more than $190 million to date.
  • Radicle, a fully decentralized code repository, raised $12 million in funding and launched RAD governance token. Funding round was led by NFX and Galaxy, with participation from Placeholder, Electric Capital and ParaFi Capital. Naval Ravikant, Balaji Srinivasan and Meltem Demirors were also involved.
  • Polkadot parachain Clover Finance closed $3 million seed round for building bridge between Ethereum and Polkadot, in addition to planned future bridge with Bitcoin blockchain. Round was backed by Polychain, Hypersphere, Bithumb Global and Divergence Ventures. 

Defi

  • Bitwise announced launch of Bitwise DeFi Crypto Index, a vehicle for accredited investors to make diversified bet on DeFi through structure of a security. Fund is launching with small amount of seed assets with subscriptions occurring twice a week. Initially, constituents of fund will include Uniswap, Aave, Synthetix, Maker, Compound, UMA, Yearn.Finance, 0x, and Loopring.
  • Nexus Mutual received $2.7 million boost to foundation treasury to fund core development of protocol. Strategic contribution was led by Collider Ventures with participation from Nick Tomaino’s 1confirmation, Blockchain Capital, Version One, Dialectic, 1kx and several angel investors.

Other

  • Christie’s confirmed it is accepting ether as form of payment for coming digital art auction of work by digital artist Mike “Beeple” Winkelmann called “EVERYDAYS: THE FIRST 5000 DAYS.” The premium fee that the auction house charges on artwork’s sale price however must be paid in U.S. dollars.

Things to Watch This Week

  • Bitcoin and Ethereum CME Futures Expiry
    • The end of this week will bring us the expiry of both Bitcoin and Ethereum CME futures February contracts. Open interest in Bitcoin futures on the CME sits at just over $3.2 billion. Additionally, a sizeable expiry is also coming up for BTC options on February 26th as well, with approximately 63,000 BTC of open interest at this expiry. CME ETH futures completed its second week of trading, ranging between $50-100 million in daily volumes this week versus the $30 million in volume it averaged in its first week. This will be the first expiry for CME ETH futures. Expiry dates typically tend to see a good amount of volatility leading up to the date of expiration, so it will be important to monitor market movement this week as we approach February 26th.  
  • Bitfinex/Tether NYAG update 
    • This week will also possibly provide us with an update to the situation being faced by iFinex, the parent company of stablecoin issuer Tether and crypto exchange Bitfinex. In a letter dated January 19th 2021, lawyers for iFinex wrote that they planned to contact Judge Cohen “in approximately 30 days to either provide a final status update or to schedule a conference with the Court to discuss any open items.” That last update also brought us news that iFinex had largely completed the document production that the Office of the Attorney General had requested, although there remained supplemental items that needed to be completed that the parties requested a few more weeks to produce. While it seems unlikely that any final resolution to the case will be made this week, a significant update on the situation could affect market direction. We’ll be keeping an eye on any further developments. 
    • Christie’s@ChristiesInc
      Christie’s is proud to offer “Everydays – The First 5000 Days” by @beeple as the first purely digital work of art ever offered by a major auction house. Bidding will be open from Feb 25-Mar 11. Learn more here http://christies.com/Beeple | NFT issued in partnership w/
      @makersplaceco
      Image
      Jeffrey Gundlach@TruthGundlach
      I am a long term dollar bear and gold bull but have been neutral on both for over six months. Lots of liquid poured into a funnel creates a torrent. Bitcoin maybe The Stimulus Asset. Doesn’t look like gold is.
      Squawk Box@SquawkCNBC
      “I don’t own #Bitcoin. I’m not short Bitcoin,” says @BillGates. “I do think moving money into a more digital form and getting transaction costs down, that’s something the Gates Foundation does in developing countries.”
      WATCH

      Elon Musk  @elonmusk
      Tesla’s action is not directly reflective of my opinion. Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company.

      To be clear, I am *not* an investor, I am an engineer. I don’t even own any publicly traded stock besides Tesla. However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is “almost”.

      Mark Cuban@mcuban
      The problem: Brokers trade at the speed of light, but settle trades over 2+ days. This can happen again. Co-ordinated traders can hunt better capitalized platforms and make $gme style buys. Solution? Blockchain. @InjectiveLabs @mirror_protocol others
      youtu.be/_TPYuIRVfew

      While blockchain is the best long term solution, in the interim the solution 1 is to require stocks to be held for at least 1 minute.We need to decide what the purpose of the markets are: is it to raise capital and allow ownership or for machines to extract $$$ from investors

      We also need to have stress tests and liquidity transparency for all brokers. The customers of RH etc should have known their broker’s liquidity limits were being reached and the consequences of that issue (ending buys).

      Finally, let me jump on my soap box: Most likely the SEC will go after some small investors and blame them. What’s worse then attacking the small trader? The inability of that small trader to get a jury trial. The SEC’s use of ALJs instead juries is 100pct wrong and needs to end

      Alex Krüger@krugermacro
      Argentine government officials talking about issuing crypto currencies to get funding. I can guess what those currencies would be backed with: nothing. lanacion.com.ar/politica/cript…

      The idea of issuing crypto is catching on at the local governments’ level. Many local governments (local = provinces, municipalities) are cash-starved and not receiving as much funding from the federal government as desired.

      Could eventually end up with a myriad of Argentine shitcoins backed by either nothing or things such as mining royalty interests. Doing so would be against the law at present. But desperate governments are capable of desperate actions.

      Now think outside the box and see how local governments issuing shitcoins could catch on worldwide.

      Infinite tokens. And one corn to rule them all.

      Messari@MessariCrypto
      The evolution of content platforms: 1. Distribution era 2. Subscription era 3. Ownership era In the Ownership era, platforms will pay creators tokens proportional to the success of their content.

      “As society shifts from valuing companies to individuals, creators who leverage these new web3 platforms will be poised for greater success than those who remain on existing platforms.” –@masonnystrom
      READ MOREmessari.io/article/the-ev…

      Mira Christanto@asiahodl
      If this #Bitcoin rally is like 2017’s where are we now? At July 2017, with target price of $292,000
      Theta Seek@thetaseek
      The paradox of #ETH price (keen to hear opinions on it).
      The higher the #ETH price, the fewer #DeFi activities/players/users it attracts.
      Should #ETH and #DeFi token prices be inversely correlated in the mid – long term?

      Joseph Young @iamjosephyoung
      This Bitcoin rally is much more sustainable than previous bull cycles. Why? Whales are actively buying or accumulating Bitcoin, not selling or taking profit. This strengthens the foundation of the uptrend. (1/2)

      What I find interesting is that many whales have been buying in the $30k~$40k range. Possibly due to the Tesla news creating significant interest around the crypto market in general. This is a highly encouraging mid to long-term trend. Chart @whale_map (2/2)

      Maple Leaf Capital@MapleLeafCap
      FTX indicated Coinbase $CBSE pricing at ~$388 / share, that’s close to ~$97 Bn USD market cap. At that valuation it’s worth $ICE (which owns NYSE) and Nasdaq ($NDAQ) combined. Make of it what you will.

      Ashwath Balakrishnan@ashwath_22
      1/ Aggregators had a breakout year in 2020, with platforms like @1inchExchange and @zapper_fi recording significant growth The best part? YTD numbers indicate 2021’s growth is about to dwarf 2020’s

      2/ For the uninitiated, aggregators are platforms that gather information from DeFi protocols and make all of it accessible from a single interface 1inch Exchange, for example, aggregates liquidity from over 20 individual DEXes

      3/ 1inch, Matcha, and Paraswap facilitated $9.3 billion of volume in 2020 As of Feb. 16, @1inchExchange has recorded close to $10 billion – in just the first 46 days of 2021 This growth was incited by the launch of the 1inch Liquidity Protocol and the 1INCH token
      READ MORE
      REPORT LINKdelphidigital.io/reports/defi-a…

      Hunter Horsley@HHorsley
      1/ Exciting day for us at Bitwise! twitter.com/BitwiseInvest/… We’re inspired by what we see unfolding in DeFi, & by its potential to enable new things & reinvent our world. With this launch, I wanted to share a bit on the latest with us & how we see Bitwise’s role in crypto —

      2/ We, like most of you, want a future where crypto is for the many, not just the savvy few. Crypto is complicated & risky. And at a 1-5% alloc, most can’t spend a lot of time. Our goal is to help busy investors understand & access the opportunities.

      3/ That means doing a few things: A. Bringing crypto to them— wrapping crypto in funds to fit into existing workflows, systems, & rules. B. Education— without requiring technical knowledge. C. Partnering w/ the professionals entrusted to steward savings & capital for so many.
      READ MORE

      Avi@AviFelman
      1/ Market thoughts
      Large cap DeFi is sleeping at the moment, seems to be that all potenital buyers already are in. Need fresh capital either from 1) higher BTC prices or 2) retail to keep prices on the upwards trajectory

      2/ Small caps still look nice, likely to be hit less by rotation traders. On the BTC front, looks quite constructive. Saylor kindly giving the market another chance to buy Bitcoin in front of aggressive buys.

      3/ CAKE just hit 1b today, broader market still ignoring BSC. Making it a priority to uncover that ecosystem and find what people might be missing.

      4/ NFTs reaching absurdity phase, reminds me of August 2020 for DeFi, a wipeout in prices among NFTs names may be a nice pick up for a longer term horizon

      Ryan Watkins @RyanWatkins_
      There are definitely important takeaways from BSC’s rise such as: 1) User’s preference for convenience over sovereignty 2) EVM’s network effects 3) Binance’s continued dominance on the user experience. But as far as making sense of what’s going on now don’t overthink it.

      I get why people are mad though. Seeing people sell out for DeFi theater feels like a slap in the face. Ideally this industry is about more than just ponzinomics and fast money schemes. But apes gonna ape