Issue #78

Written by Magnet Capital | Jan 30, 2024 2:11:00 AM

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.70T, up (0.5%) from last week.

Below is the weekly performance of the top crypto assets.

News Headline Highlights

Bitcoin ETF update
- After 2 weeks of trade, ETFs have drawn in $760m in net new funds to Bitcoin ($5.8B in inflows and $5B in outflows).
- Both BlackRock and Fidelity now hold over $2B in BTC in their ETFs.
- Google has changed its ad policy to permit Bitcoin ETFs to pay for advertisement. In the hours after the change BlackRock and VanEck ads started appearing for US users.
- FTX's bankruptcy estate is reported to have sold 22 million GBTC shares (Grayscale’s Bitcoin ETF) worth ~$1B, according to private data CoinDesk reviewed.
- Bitwise teamed up with Hoseki to become the first BTC ETF to publicly disclose their Bitcoin address and allow anyone to verify their holdings in real time. Magnet Quick Take: Not only is this a first for Bitcoin ETFs, but it is the first ever ETF where the public can independently verify holdings. This is one of the powers of public ledgers / blockchains, and should become an industry standard for transparency and investor protection.
- Since Bitwise published its bitcoin wallet for its spot bitcoin ETF, many crypto users have sent small amounts of bitcoin to the wallet. Bitwise says that these assets will accrue to the benefit of its shareholders.
Venture Smart Financial Holdings (VSFG), a Hong Kong financial services company, aims to launch a spot Bitcoin exchange-traded fund (ETF) this quarter as the city pushes ahead with efforts to develop a digital-asset hub.
The number of global cryptocurrency owners grew 34% to 580 million by the end of 2023, as reported in research conducted by cryptocurrency exchange Crypto.com. Bitcoin holders grew 33% to 296 million in December from 222 million at the start of the year.
Franklin Templeton’s spot bitcoin ETF has lagged competitors, currently sitting 8th in AUM of the 9 new entrants to the ETF market. However, the firm’s head of digital assets expects it to grow faster they have to date, commenting “it’s just a matter of time” before financial advisors, which work with Franklin Templeton, will become more comfortable recommending spot bitcoin ETFs to their clients.
As anticipated, the US Securities and Exchange Commission (SEC) delayed its decision timeline on BlackRock's proposal for a spot Ethereum exchange-traded fund to March. Magnet quick take: just like the spot Bitcoin application, it is expected that the SEC will delay a decision on a spot Ethereum ETF as long as they can (May 2024).
Tesla, the electric vehicle maker led by Elon Musk, did not sell or buy bitcoin during the fourth quarter of last year, according to its latest quarterly report. Tesla is estimated to hold around 9,720 BTC.

Crypto Asset Project Updates

Polygon Labs will release a new solution called aggregation layer (or AggLayer) – aiming to connect blockchains with zero knowledge proofs. The first version of the solution is planned to be released in February, Polygon Labs said, enabling developers to connect blockchains to support unified liquidity. The objective will be to ensure uniform security across modular and monolithic chains, including those within the Polygon ecosystem.
Debate amongst the Ethereum community got heated last week as concerns about the dominance of Geth, the most widely used execution client for processing transactions, raised a red flag among community members. The central concern is the risk of a potential ‘black swan event’ due to the concentration of Geth among Ethereum validators.

Regulation Station

Canadian securities regulators proposed new rules aimed at providing greater clarity and risk mitigation measures for public investment funds dealing with crypto assets. The proposed changes to regulations would restrict what public investment funds can do regarding cryptocurrencies and set the standards for holding of crypto assets.
The Bank of England and His Majesty’s Treasury released the responses and their commentary from the UK digital pound consultation paper that was issued in Feb 2023. The Bank and HM Treasury received over 50,000 responses to the Consultation Paper from a combination of individuals, private firms, industry representative organisations, civil society groups and academics.

The Weekly Deal Room

Canaan, a crypto mining rig maker, raised >$50m through preferred shares financing from an undisclosed investor.
Sygnum, a crypto banking group based in Switzerland, raised $40m at a $900m valuation in a Round led by Azimut Holdings.
Polymer Labs, an Ethereum Layer 2 developer that employs the Inter-Blockchain Communication (IBC) Protocol and Optimism Stack to serve as the Interoperability Hub for Ethereum, raised $23m in a Series A co-led by Blockchain Capital, Maven 11 and Distributed Global.
Axiom, the developers of a ZK platform empowering smart contract developers to build data-rich, on-chain applications, raised $20m in a Round co-led by Paradigm and Standard Crypto.
Ingonyama, a company building a broad range of software libraries and hardware for compute-intensive cryptography, raised $21m in a Seed Round co-led by IOSG Ventures, Walden Catalyst and Geometry.
Dinari, a company developing issuing securities backed tokens, raised $10m in a Seed+ Round from 500 Global, Balaji Srinivasan, Alchemy and others.
Masa, a zk-data marketplace and network, raised $5.4m in a Seed Round led by Anagram.
Arcade2earn, a GameFi platform, raised $4.8m in a Private Round led by Crypto.com Capital.
Web3Intelligence, the builders of Dopamine dApp: gamified experience for investment in the decentralised finance (DeFi) world, raised $4.5m in a Private Round from DAO Maker, Shima Capital and Gate Ventures.
Bagel, a decentralised data platform aiming to support machine learning models, raised $3.1m in a Pre-Seed Round led by CoinFund.

Metric of the Week

The Bitcoin Network generates more annual revenue than some of the largest publicly traded companies in the world, including Spotify, eBay, Hermes, Chipotle, Hertz, and Hilton.

Revenue is captured by miners that process transactions and submit valid blocks to the Bitcoin blockchain.

Source: ARKInvest

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