Top Stories of Last Week

Regulatory

  • Japan’s Financial Services Agency announced it will implement FATF “travel rule” for nation’s crypto industry to tackle money laundering, requiring virtual asset service providers to share transaction data of senders and recipients in the country by April 2022. FSA requested Japan Virtual and Crypto Assets Exchange Association advise members to prepare for implementation.
  • Tether published attestation verifying it had $35 billion in assets backing a similar amount of USDT token last month. Produced by Cayman Islands-based accounting firm Moore Cayman, document examines Tether’s holdings as of Feb. 28, 2021, finding company had at least $35.28 billion in total assets against total liabilities of $35.15 million. Attestation is first third-party verification Tether has produced indicating reserves match amount of USDT in circulation since 2018.

Project Development

  • Bakkt launching digital wallet app with companies such as Starbucks among roster of merchant partners. Bakkt is aiming to aggregate cryptocurrency holdings with other digital assets. Customers can use Bakkt to reload Starbucks Card through Starbucks app for iOS. Other partners include Best Buy, Choice Hotels, Fiserv and GolfNow.
  • Visa processed USDC payment on Ethereum for new service that they plan to introduce to partners later this year. Crypto.com sent USDC transaction to account at Anchorage custody under Visa’s name. Crypto.com issues Visa cards which allow users to spend coins in their Crypto.com wallet. New program will allow Crypto.com to pay card provider in USDC going forward.

Institutional

  • Morgan Stanley giving handful of its mutual funds ability to invest indirectly in Bitcoin through cash-settled futures contracts and Grayscale’s Bitcoin trust. Initial rollout features five Morgan Stanley fund families: Institutional Fund, Institutional Fund Trust, Europe Opportunity Fund, Insight Fund and Variable Insurance Fund, with each fund able to invest up to 25% of total assets in Bitcoin.
  • Goldman Sachs confirmed it is close to offering crypto to private wealth management clients and appointed a new global head of Digital Assets Group, Mary Rich. Rich said offering is “full spectrum” of investments in Bitcoin and digital assets “through physical bitcoin, derivatives or traditional investment vehicles.”
  • BlackRock allegedly has “started to dabble” in Bitcoin market, according to regulatory filings showing asset manager held $6.5 million in CME Bitcoin futures contracts earlier this year.
  • Chicago Mercantile Exchange will launch smaller-sized bitcoin futures contracts, with new contracts sized at one-tenth of one bitcoin and will be available for trading on May 3, cash-settled based on CME CF Bitcoin Reference Rate.
  • PayPal announced PayPal’s Checkout will allow BTC, ETH, BCH, and LTC to be seamlessly converted into U.S. dollars or other fiat currencies when making purchases, meaning merchants will not actually be recipients of cryptocurrencies. Company said product is rolling out to some PayPal customers in U.S. and will be available broadly to customers in U.S. in coming weeks.
  • Digital asset manager 3iQ Corp announced agreement with CoinShares to launch new Bitcoin ETF called 3iQ CoinShares Bitcoin ETF. Trading under ticker BTCQ, vehicle for investing in bitcoin without holding digital asset itself will be listed on Toronto Stock Exchange in early April, pending regulatory approval.
  • Sumitomo Mitsui Trust Bank launched first asset-backed securities token in partnership with Securitize. Instrument is first security token compliant with FIEA to launch and received a-1 rating from Rating and Investment Information, Inc. Token was created by tokenizing paper-based beneficiary certificates representing investor ownership to underlying asset.

Exchanges

  • Coinbase will begin public trading of stock on April 14 and will also hold first-quarter earnings call on April 6, providing financial outlook for 2021. $100 billion debut would make Coinbase more valuable than Uber.

Fundraising

  • Dapper Labs announced $305 million funding round from Kevin Durant, Michael Jordan, Coatue and 30 other athletes, among others, placing Dapper’s current valuation at $2.6 billion. Dapper’s NBA Top Shot platform raked in nearly $500 million in sales and has seen its secondary trading market eclipse $2 million in volume daily.
  • Blockchain analytics firm Chainalysis announced it secured $100 million in Series D funding, pushing company’s valuation above $2 billion.  Paradigm led round, with additional participation from Addition, Ribbit Capital, and Marc Benioff.
  • Crypto wallet startup imToken raised $30 million in Series B round led by Qiming Venture Partners, with participation from IDG Capital, Breyer Capital, Longling Capital, Hashkey Capital, SNZ, and Signum Capital, among others.
  • Enjin secured $18.9 million in private token sale led by Crypto.com Capital, DFG Group and Hashed. Additional support for raise came from Hypersphere, BlockTower, Blockchain.com Ventures, Fenbushi, Iconium, HashKey, Arrington XRP Capital, and DeFi Alliance, among others. Funding was conducted via new token EFI, which Enjin says has been created as currency for transaction fees that can earn by staking Enjin Coin on Efinity.
  • Crypto venture firm Dragonfly Capital launched new fund worth $225 million to invest in DeFi protocols, NFT projects, Ethereum Layer 2 solutions, and CeFi infrastructure. Sequoia China backed fund as strategic limited partner, and other partners in fund include OKEx, Huobi, Bitmain, and Bybit.
  • SuperRare raised $9 million funding round led by Velvet Sea and 1confirmation, with participation from Mark Cuban, Chamath Palihapitiya, and Marc Benioff. Artists are generating over $25 million in total sales per month on SuperRare.

Defi / NFT

  • Aave reportedly working with Layer 2 Polygon to address congestion on Ethereum blockchain. Aave will be exploring scalable sidechains with Polygon to escape high transaction fees and will use a soon-to-be available smart-contract bridge that will port assets from one network to the other
  • NFT marketplace OpenSea planning to integrate Ethereum scaling solution via decentralized protocol Immutable X, which will provide instant trade confirmation, increased scalability and zero gas fees.

Things to Watch This Week

  • Korean Premium
    • A significant premium on the price of cryptocurrencies in Korea has re-emerged, reaching levels not seen since the last bullrun in 2017 and temporarily during the collapse of March 2020. At the time of this publication, the Korean premium was over 15% across the board on major currencies, increasing from 6% on March 30th. The premium reached levels as high as 40-60% during the peak of the market in 2017 before collapsing in early January 2018, in line with the Bitcoin market top and subsequent correction that followed afterwards. It should also be noted that a 20% tax will be implemented on cryptocurrency trading gains beginning next year, thus leading some analysts to believe that this Korean demand could continue to increase over the next few months. It will be important to monitor the reawakening of this premium this week to see if its current growth rate continues.   
  • Bitcoin Mining Difficulty
    • Bitcoin’s mining difficulty posted a large increase recently to set a new high, with the network’s hash rate increasing from 156 EH/s to 165 EH/s. This 5.82% jump was the largest in months, since a 10.7% increase on January 10th. The amount of computing power that has been added recently was somewhat expected, as delivery of preorders placed in 2020 were marked to be received beginning in the spring of 2021. A sizeable increase in these deliveries should be coming throughout Q2, and the next difficulty adjustment is already marked at a 4% increase, with roughly 11 days left in this current period. As we hit unprecedented levels in Bitcoin mining metrics and with thousands of new machines set to hit the market soon, it will be important to keep an eye on how this dynamic evolves going forward.  
    • Jeremy Allaire@jerallaire
      1/6 Major USDC news today – @Visa has become the first major payments network to support USDC as a native currency and settlement system on its network. This is massive news, and marks a major turning point in mainstream adoption of crypto. businesswire.com/news/home/2021…

      2/6 With USDC being the fastest growing dollar digital currency in the world, connecting its use to existing global networks will accelerate its adoption as both a store of value and medium of exchange. Crypto dollars FTW! circle.com/en/usdc

      3/6 What does this really mean? A customer who has USDC in a wallet, and a card attached to their wallet (there are now dozens of these) can spend at any Visa accepting merchant, and the USDC is used to settle the transaction with Visa instead of the legacy banking system.

      4/6 For Visa, this means they get the money as fast as a blockchain moves funds, without reversal risk, without the time delays and costs of SWIFT, ACH, etc. Huge!

      5/6 This is “Over-the-Top” (OTT) money, and a major step in our mission to build a new global economic system on a more open, global, safe and inclusive foundation built on crypto and blockchain tech.

      6/6 Huge congrats to @cuysheffield and the team at @Visa for really putting your money where your mouth is and embracing the future, we welcome you with open arms in the movement towards an open internet of value!

      The Crypto Dog@TheCryptoDog
      April is the best month for Bitcoin.
      PlanB@100trillionUSD
      #bitcoin currently in between 2013 and 2017 tracks

      Alex Gladstein@gladstein
      Important to keep in mind: Bitcoin’s Proof-of-Work was invented to escape Proof-of-Stake financial systems, where the largest asset owners can unduly influence the rules of the game. Thanks to PoW + full nodes, neither miners nor the biggest BTC hodlers can change the protocol.

      In the coming year, we will see many people increasingly try to argue that Bitcoin should shift to Proof-of-Stake for various reasons. This would defeat the entire purpose of Bitcoin.

      Most recently, @Noahpinion argued that Bitcoin should move to Proof-of-Stake in Bloomberg. By doing so he demonstrates that he does not understand how or why Bitcoin work. @nic__carter did a great job dismantling his argument here:
      medium.com/@nic__carter/n…

      “Ethereum is moving to Proof-of-Stake to save the planet, why won’t Bitcoin do the same?” You will hear a lot of this nonsense in the coming years.

      honkasalo@mhonkasalo
      Bitcoin vs. Ethereum — daily transaction fees (7DMA).
      Joseph Young@iamjosephyoung
      The differences between 2017 #Bitcoin rally and 2020.
      No Tether FUD
      Exchanges regulated
      India FUD no longer effective
      China FUD no longer effective
      Better regulation in Asia
      Conviction from long-time HODLers
      All-time low $BTC exchange reserves
      Explosive institutional demand
      William Clemente III@WClementeIII
      HODL Ratio suggests we are at the equivalent of ~$3k-$4k in 2017 This #Bitcoin Bull Run still has a ways to go
      Image
      _Checkmate checkonchain.com@_Checkmatey_
      The beauty of checkonchain.com charts is that there are probabilities and psychological levels baked into the metrics. I have not tweaked the values of the probability bands since 2019 and they are picking up support and resistance levels like a boss. Few.
      glassnode@glassnode
      #Bitcoin Active Supply charts provide insight into the proportion of $BTC supply older than 1yr. ‘Peak HODL’ is reached where the volume of 1yr+ supply hits a maximum, often near last cycles ATH. After this, old coins are typically spent in bull markets as HODLers take profits.
      Mira Christanto@asiahodl
      DeFi has legit traction and real use. Does 3.3% dominance make sense? Could it go to 10%? Easily
      Travis Kling@Travis_Kling
      Another unbelievable month. Q1 2021 will go down in the history books as one of the most bullish periods ever for #Bitcoin and crypto broadly.

      John Street Capital@JohnStCapital
      The @coinbase team is set to DL on April 14th & discuss 1Q results on April 6th. They did $1.3B in ’20 revenue & $527M in ’20 EBITDA. Trying to extrapolate based on % ADV of $BTC / $ETH & adj for px (fees denom in BTC) theres a chance they did greater #s in 1Q21 than all of ’20

      1/ Over the past 8 quarters $COIN revenue has been b/w 0.071%-0.181% of $BTC / $ETH trading volume in the quarter. There are adj for a # of other assets, general price direction (there’s FX / commod risk to USD) & other variables but serves as a decent approximation.

      2/ At $1.75-$2.75B of 1Q revenue / $800M-$1.2B of 1Q EBITDA that would put $COIN on $7B-$11B run-rate in ’21E revenue / $3.2B-$4.9B of run-rate EBITDA which would be greater than all of $ICE ($6.9B / $2.8B) $NDAQ ($3.1B / $1.6B), $CME ($4.8B / $3.2B) & $CBOE ($1.4B / $840M)