Magnet Crypto Review | The weekly roundup of all things blockchain

Issue #72

Written by Magnet Capital | Dec 18, 2023 11:27:06 PM

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.62T, down (-1.0%) from last week.

Below is the weekly performance of the top crypto assets. 

News Headline Highlights

  • The US Securities and Exchange Commission (SEC) and investment firms including BlackRock and Fidelity have held several meetings this last week to hash out technical details for a possible spot bitcoin ETF. This could indicate that the SEC is close to making a decision on whether to approve such a product. Publicly shared memos show that firms and the SEC have been going over details about how the redemption process would work for a spot bitcoin ETF. 
  • Crypto fund inflows at asset managers such as 21Shares, Bitwise, CoinShares, Grayscale and ProShares added another $43 million last week, marking an 11-week streak of $1.8 billion.
  • BlackRock has modified the structure of its spot Bitcoin ETF to allow "Authorised Participants" to create new shares in the fund with cash, allowing them an exposure to Bitcoin even without a licence to own cryptocurrency directly.
  • The FTX debtors estate filed its amended Chapter 11 Plan of Reorganisation, which contains a provision that treats cryptocurrency claims as their value in cash at the time of the bankruptcy filing on November 11, 2022. The price of most cryptocurrencies have recovered since the bankruptcy; the price of Bitcoin was around $17,000 at the time, and now trades above $42,000.
  • SBI Holdings, a Japanese financial services firm and Saudi Aramco, the Saudi state-owned oil giant, are contemplating a partnership in digital asset investment and semiconductor production ventures. The two entities recently signed a memorandum of understanding (MoU) to establish cooperation, which includes the establishment of SBI Middle East in Riyadh as a regional base for operations.
  • S&P Global Ratings announced the launch of its stablecoin stability assessment, which aims to evaluate a stablecoin's ability to maintain a stable value relative to a fiat currency.
  • Ledger, the largest digital asset hardware wallet producer, fell victim of a crypto hack last week. The Paris-based startup saw its Ledger Connect Kit software compromised leading to hundreds of thousands of dollars being drained from users’ wallets.

 Crypto Asset Project Updates

  • In a recent letter shared with U.S. legislators, Tether’s CEO elaborated on his methods to prevent unsavoury individuals from using the company’s USDT stablecoins, including by onboarding the Secret Service and FBI to the company’s platform. Tether froze wallets on the U.S. sanctions list last week, and claims to have frozen 435 million USDT so far. 
  • Magnet Portfolio Company Update: Lyra, a decentralised options protocol, launched a trading competition on their new Lyra Chain, an Ethereum roll-up using the OP Stack. The trading competition is for BTC options expiring on January 12, 2024 to coincide with the SEC decision on ARK’ BTC ETF proposal.

Regulation Station

  • FASB has officially adopted Fair Value Accounting for Bitcoin for fiscal years beginning after Dec 15, 2024. This upgrade to accounting standards will facilitate the adoption of BTC as a treasury reserve asset by corporations worldwide.
  • The US Securities and Exchange Commission (SEC) denied a petition by Coinbase seeking new rules from the agency for the digital asset sector, which the country's largest crypto exchange then sought to challenge in court. The five-member commission, in a 3-2 vote, said it would not propose new rules because it fundamentally disagreed that current regulations are "unworkable" for the crypto sphere, as Coinbase has argued.
    • Commissioner Uyeda and Peirce (the 2 votes) disagreed with the Commissioner’s stance, commenting "Any exploration of these issues should include public roundtables, concept releases, and requests for comment, which would afford us the opportunity to hear from a wide range of market participants and other interested parties".

The Weekly Deal Room

  • LINE NEXT, the South Korea-based NFT arm of messaging giant LINE, raised $140m in a private round.
  • Andalusia Labs, an Ethereum L2 with native risk management, restaking, and AI infrastructure, raised $48m in a Series A.
  • Dynamic Labs, a web3 authenticator platform, raised $13.5m in a Series A led by a16z. 
  • Farcana, a third-person multiplayer shooter game, raised $10m in a Seed Round from Animoca Brands, Polygon Ventures, Fenbushi Capital and others.
  • Lolli, a bitcoin and cashback rewards application, raised $8m in a Series B led by Bitkraft Ventures.
  • Metagood, a blockchain technology and digital asset company, raised $5m in a Seed Round led by Sora Ventures.
  • NFT Perp, a perpetual futures DEX for NFTs, raised $3m in a Series A from Maven 11 Capital, Mechanism Capital and others.

Metric of the Week

A non crypto related chart today - the price of Gold following approval of a US ETF rallied 350% in a multi year rally. This performance is largely attributed to the increased accessibility of Gold to traditional asset allocators. With Bitcoin speculated to be less than a month away from approval of an ETF in the US, there is much speculation on what the increased access might do to the price in coming years. 

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