FT Flips Bullish on Bitcoin

GM everyone!

We’re right here on the brink of potentially groundbreaking developments for Bitcoin, and the anticipation couldn’t get much more electric.

We’re talking (of course) about ETFs, so let’s begin by assessing the state of play at this late stage, and we’ll also check in on TradFi’s shifting attitude towards Bitcoin.

Here’s what’s in today’s issue:

• Sam shares his thoughts on decision time for the BTF ETFs, Satoshi’s wallet getting sent 26.9 BTC, Coinbase’s EU derivatives acquisition & Azuki’s new ANIME token.
• This week on chain.
• This week’s trending coins by Rebecca.

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BTC ETFs at the Final Line

There has never before been an ETF saga like the spot Bitcoin ETF saga, but it seems like we really are at the final line now.

All updated filings are finished and in, and the SEC has no more feedback for applicants, while it’s reported that BlackRock expects approval on Wednesday, with rumors that trading can, in the event of approval, start on Thursday.

The question then is–if the SEC doesn’t deliver the biggest rugpull in the history of crypto–what happens next?

There’s an expectation of big inflows but disagreement about the time scale for this to play out, while one hint that attitudes are already changing for the better in the world of traditional finance, is an article in the Financial Times that is unequivocally in favor of allocating to BTC if the ETFs come through.

This may be significant because if we want to measure sentiment in the parts of TradFi that, until now, never liked crypto, then the FT is a good yardstick.

Fee Wars!

There’s a competition going on as to who can offer the lowest ETF fees and thereby grab early demand, with Ark, Bitwise and Invesco/Galaxy all offering zero fees for limited initial periods.

BlackRock $2 Billion ETF Injection?

Also helping ramp up anticipation is the suggestion that BlackRock is planning to inject an initial $2 billion into its BTC ETF. This claim came from the Head of Digital Asset Research at VanEck, Matthew Sigel, who said,

“I heard from a pretty well placed source that Blackrock has more than $2 billion lined up in week one in new incremental flows from existing Bitcoin holders who are adding to positions — I can’t vouch for that. But you know, that’s what everyone is doing. Just making phone calls and trying to find the folks who can write checks into these products.”

VanEck Commits 5% to BTC Devs

Another ETF contender, VanEck, has shown a commitment to Bitcoin’s core values and the health of the network, by pledging to hand over 5% of the profits from its proposed spot BTC ETF to Brink, an organization that supports Bitcoin Core developers, and that 5% commitment comes on top of a starting $10,000 contribution.

26.9 BTC Sent to Satoshi’s Wallet

Crypto can be a mysterious place sometimes, as was the case over the weekend when 26.917 BTC, worth around $1.2 million, was purchased on Binance and transferred to the first ever Bitcoin wallet, which was created back in 2009 and can only belong to Bitcoin inventor Satoshi Nakamoto.

So what actually is going on with this strange transaction?

Satoshi is, famously, pseudonymous and no longer active, so any BTC sent to the Genesis Wallet can be regarded–as things have stood for the past fifteen years, at least–as being gone forever, meaning it’s a matter of speculation as to why anybody would throw away over a million dollars in BTC like this.

Was it someone’s unusual way of bringing attention to Bitcoin before ETFs launch? Or simply a gesture in tribute to Satoshi from a BTC whale for whom 27 BTC is no big deal?

There’s even a theory that it was an attempt to make Satoshi reveal his identity, in light of new IRS rules requiring US citizens to declare $10K+ crypto receipts (although as a side note, there are plenty of hints that Satoshi isn’t a US citizen.)

Or alternatively, did Bitcoin’s legendary architect simply decide now is the time to add to his stack?

Ok, probably not the last option as it’s speculated that Satoshi already controls around 1.1 million BTC, so maybe we’ll just have to chalk this one up to the enigmatically unpredictable nature of the blockchain space.

Coinbase EU Derivatives Acquisition

A great thing about major exchange Coinbase is that besides being ever-willing to take on the SEC, it never stands still, and Coinbase is now looking to expand its crypto-focused derivatives offerings into the European market.

Although the exact details have yet to be revealed, Coinbase has stated that it is in the process of acquiring an EU-based holding company that possesses a MiFID II license.

MiFID stands for Markets in Financial Instruments Directive, and MiFID II is an important piece of EU legislation concerned with the regulation of securities and derivatives markets.

Coinbase has stated on the matter that, “this license would help expand access to our derivatives products by allowing Coinbase to offer them to eligible European customers in select countries across the EU.”

If the plans go through, then they would fit in with the sense that the EU–with its new framework of bespoke crypto regulation, MiCA–is fully open for business when it comes to crypto and Web3.

Is Azuki Back and What Is ANIME Token?

Azuki has long been regarded as an upper tier NFT collection, ranked just below Bored Apes when it comes to OG PFPs on Ethereum, but it’s also true that the project had a less than ideal 2023, releasing the heavily criticized Elementals side collection and then watching floor prices plummet.

However, Azuki is causing a stir again, generating rumors around what looks like some kind of involvement in a project called Weeb3 Foundation, along with speculation about the possibility of an incoming new token.

The hype kicked off because last Saturday, Azuki retweeted an X post from the aforementioned Weeb3 Foundation. Weeb3’s X account was only set up last month, but it sounds intriguing, with mention of an “open anime universe” and a token called ANIME.

That alone has been enough to fire up the NFT degen crowd, as Azuki collections–both original and Elementals–were then rapidly swept, and floor prices on the original PFPs surged from around 6 ETH to over 8 ETH.

The Weeb3 post was also RTed by several other anime-styled projects–including San FranTokyo, which also saw floor prices increase–suggesting that whatever Weeb3 Foundation is building might involve multiple collaborations.

This all also contributed to Ethereum reclaiming its position as the top NFT chain, with NFT trading volume climbing above that of Solana and Bitcoin, both of which have been putting Ethereum in the shade recently.

So is Azuki back? Can classic PFPs generate FOMO again? And is Ethereum ready to rip? It’s the early stages of a bull market so all these things are viable, but reply to this email and let us know what you think about the prospects for Ethereum and NFTs in 2024.

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The situation for Bitcoin is looking good if we assume that the more long-term holders, the better, as the percentage of supply that has not moved for at least three years continues to increase in waves. 

This indicates that an ever-increasing amount of BTC is in the wallets of buyers with conviction.

Concurrently, we can see that only around 20% of supply is in the hands of very short-term traders (holding for six months or below), and what’s more, around another 20% of supply hasn’t moved for at least seven years. This is especially relevant as we move towards ETF approval, as it appears there are many holders who simply aren’t affected by volatility.

Speaking of volatility though, BTC whale activity has increased to its highest level since the middle of 2022, and peaks in whale activity tend to come before BTC makes a move.

And with those ETF decisions and the halving almost upon us, there are plenty of BTC price action triggers lined up, so strap in for the ride.

Turning our attention to the Ethereum ecosystem, it’s all happening on L2s, and in fact, the combined TVL of Ethereum L2s has slightly surpassed the combined TVL of all other L1s, with both around the $20 million mark and both trending up, meaning we now have what looks like a healthy competition taking shape.

As for where ETH is flowing to within the ecosystem, it’s time–if you weren’t already–to pay attention to Arbitrum, which is picking up a huge share of activity, particularly on its Arbitrum One chain (Arbitrum’s other branch is Arbitrum Nova, which tends to be favored by Web3 gaming projects.)

And here’s another way of looking at that comparison between Arbitrum One and its competitors, which really emphasizes the way Arbitrum is currently dominating, while we can also see that Arbitrum DEX volumes are registering significant increases, actually hitting a new all-time high as they approach $2 billion 24 hour volumes.

Staying on the subject of Ethereum Layer 2s, Mantle Network growth is still early but looks solid, with TVL climbing in stages since launch to now approach $150 million, while volumes have been increasing significantly over the past three months.

When it comes to alternative Layer 1s, Solana transaction volumes have absolutely soared recently when looked at on a one year scale, but they become a gentle blip that’s nowhere near the 2021/22 peaks when we zoom out, suggesting–from an optimistic point of view–that there is still a very long way to go if the next couple of years play out well.

And switching our attention to a notable DEX on another Layer 1, a look at Osmosis, on the Cosmos network, shows that the amount of OSMO (the Osmosis token) that’s being staked, is moving upwards, with amounts climbing especially sharply since December, in line with gains in the token price.

Finally, let’s take a quick look at stablecoins, where we can see that over the past month, Solana has been the top chain for stablecoin transfer volumes, hitting over $113 billion this week, while Ethereum did a little under $103 billion.

Stablecoin transfer volume (USD, 7 day)

We can also discover that Tron, which is reportedly achieving relatively wide adoption as a store of value and digital payment method in emerging markets, has become a dominant chain for stablecoin transactions, with a highest ever transfer volume of over $360 billion in December.

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Here are my key takeaways from the trends this week and the new year has kicked off with a ton of launches and developments.

1. GAMEE is the gaming token and subsidiary owned by Animoca Brands that’s completed its staking contest with a prize pool of $12K. Animoca Brand’s Chairman has also posted an article online about the use case for its Moca ID. 
2. Sei is a Layer-1 built using the Cosmos SDK that’s reached a new all-time high of $0.87 and its memecoin SEIYAN has skyrocketed 380% in the past week.
3. Celestia is a modular data availability network that’s announced Lyra Finance will be migrating over to the ecosystem. Manta has already saved over $500K in DA fees since migrating to Celestia. 
4. GMT is the governance token for STEPN, the move-to-earn app that’s launched a 2023 recap NFT giveaway. The creators of the app have also launched a new game in public beta called Gas Hero.
5. Tectum is a Layer-1 blockchain that’s gaining attention after launching its mainnet staking program T12 Staking on January 1. Tectum has also announced a Softnote app is coming in Q2 this year. 
6. Shido is an upcoming Layer-1 blockchain that’s planning to complete its mainnet in January. The Shido beta testnet is seeing increased usage with 12,000 holders of SHIDO, over 2,100 accounts, and 115,000 transactions.
7. Injective is an L1 blockchain and DEX protocol that’s seen its proposal go live for its Volan mainnet upgrade. Injective has also reached the milestone of over 400M on-chain transactions and Trust Wallet has been announced as a network validator.
8. Solana is a Layer-1 blockchain that’s seen its blockchain explorer Solscan acquired by Etherscan. Solana’s memecoin madness has moved on from BONK to BORK and Solana’s monthly NFT volumes have overtaken Ethereum’s for the first time ever. 
9. Sui is a Layer-1 blockchain that’s seen KuCoin Labs announce a strategic investment in ISSP, which is Sui’s first cross-chain inscription protocol. Sui has also hit a new all-time high of $250K in daily DeFi fees. 
10. Cosmos Hub (ATOM) powers the Cosmos ecosystem and it’s teasing an announcement on January 9 which will reveal the date and location of its 2024 Cosmoverse conference.
11. Alephium is a Layer-1 sharded blockchain that’s seen 3 new dApps launch on Alphland.
12. Kaspa is a Bitcoin and Ethereum hybrid coin that’s launched its testnet 11 to the public to allow testing of the new Rust codebase.
13. Ethereum validators have been forced to wait over 5 days to withdraw staked ETH after bankrupt lender Celsius clogged the queue. Celsius made up 32% of all ETH waiting to be withdrawn.
14. Powerledger is a software company that’s seen its co-founder Dr Jemma Green collaborate with best-selling author and former FBI negotiator, Chris Voss, on the launch of a new book called “Empathy and Understanding in Business.”
15. Niza Global is a newly launched financial ecosystem that’s completed its fourth burn of the NIZA token with 250M tokens permanently destroyed.

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Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.

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Lark and the Wealth Mastery Team

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