Issue #23

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US884.6B, up 6.2% from last week.

Below is the weekly performance of the top crypto and NFT assets. 

News Headline Highlights

• A recent SEC filing has recalled that the BlackRock Global Allocation Fund, which manages ~$15T, is permitting ordinary and passive investors to allocate to bitcoin.  In the filing, BlackRock said: “The Fund may invest in cash-settled bitcoin futures that are traded on commodity exchanges registered with the Commodity Futures Trading Commission.”
• Hong Kong has announced plans to legalise retail crypto trading and crypto ETFs as early as June 1st, 2023, as part of a wider push to become a top Asian crypto hub.
• There continue to be more developments in the case against SBF and the collapse of FTX/Alameda.
• Wyre, who was valued at $1.5b in early 2022, laid off 75 employees amid reports the firm was planning to shut down. Since, they have limited customer withdrawals to 90% of funds held.
• Three Arrows Capital founders, Kyle Davies and Su Zhu, have been issued two separate subpoenas via Twitter, one from the Supreme Court of Singapore and the other from a USA bankruptcy judge. 
• The SEC has objected to Binance.US’s proposed $1B acquisition of Voyager Digital, the bankrupt crypto-lender.
• Indonesia plans to set up a crypto exchange this year before it shifts regulatory powers over such assets to the Financial Services Authority. Crypto assets in Indonesia are currently traded alongside commodity contracts under the supervision of the Commodity Futures Trading Regulatory Agency.

 Crypto Asset Project Updates

• During their first meeting of the year, Ethereum developers have committed to pushing ahead with a key software upgrade to enable PoS withdrawals. In an effort to do so in late Q1, several other proposed features of the ‘Shanghai upgrade’ will be delayed.

The Weekly Deal Room

Another quiet week for fundraising announcements as many are still yet to return to work for 2023. We expect this to persist through to mid-January when most workplaces are back from the break.

• Core Scientific, a bankrupt bitcoin miner, raised $17m in debt financing from Blackrock.
• MSafe, a multi-signature wallet solution for the Aptos and Move ecosystem, raised $5m in a Seed  Round led by Jump Crypto.
• Ondefy, a DeFi meta aggregator, raised $1m from investors including AngelDao, Paraswap and Stacker Ventures.

Metric of the Week

Bitcoin miners have been facing increasing pressures to stay profitable due to the fall in BTC price, the increase in hashrate and the fluctuations in energy costs globally. This has resulted in several significant mining operations defaulting on loans (often collateralised by mining equipment) or ceasing operations and filing for bankruptcy. 

As a result, miner sell pressure has weighted heavily on markets this last 4 months. However, it would appear that the great BTC miner cleanse of 2022 has finally subsided, at least for now.

This is demonstrated in the below chart which depicts the net miner positions (green implying miners accumulating BTC mined, red implying miners net selling BTC mined). Profitable miners do not necessarily need to sell BTC at depressed prices, whereas unprofitable or marginal cost miners often are required to sell all BTC earned to pay for current operations.

Source: Glassnode