Crypto recently has been revolving more than usual around legal goings-on and TradFi complexities.
So, let’s start with a look at what’s happening at Genesis, especially regarding possible plans to offload its substantial GBTC share holdings.
Here’s what’s in today’s issue:
- Sam shares his thoughts on Genesis selling $1.4 billion of GBTC, FTX selling Anthropic stake, Facebook and Instagram allowing BTC ETF ads, US BTC miners reporting to EIA & Apple’s Vision Pro.
- This week on chain.
- This week’s trending coins by Rebecca.
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Genesis to Sell $1.4 Billion of GBTC Shares?
Analysis of the newly launched spot BTC ETFs has, up to now, focused a lot on the effect of heavy GBTC selling, which has undoubtedly affected early performance. Last week, this selling appeared to be starting to ease off, but is Genesis about to unleash further GBTC outflows?
As part of its bankruptcy proceedings, Gemini has filed a motion in court that would enable it to sell around $1.6 billion of assets. Of that, the vast bulk–around $1.4 billion–is made of Grayscale Bitcoin Trust shares, while around $200 million constitutes shares in Grayscale’s Ethereum and Ethereum Classic trusts.
However, on the positive side, the filing requests permission to use the cash from sales of assets to then obtain BTC for distribution to creditors, resulting in in-kind distribution and reducing any negative impact on the market.
We should find out what the court decides later this week, as Gemini has requested an expedited hearing for February 8th.
Overall then, we might be looking at an as-you-were situation, although even if there is some increased volatility, it’s unlikely to shake the conviction of long-term BTC holders as we approach the halving.
FTX to Sell Anthropic Stake as Lawyers Rake It In
We may be at the start of 2024, but the aftershocks of 2022 and its many crypto collapses still rumble on, resulting in more news related to bankruptcy and asset selling.
This time it’s connected to a name you may have hoped to forget, FTX, as the wrecked platform files a motion in bankruptcy court that would allow it to sell its 7.84% stake in AI startup Anthropic.
With the startup currently valued at around $18 billion, FTX’s stake would be worth around $1.4 billion, and so FTX’s creditors can realistically anticipate that their claims may eventually be paid in full.
However, one group that is certainly coming out of proceedings on top is FTX’s legal team. Reports indicate that the legal experts working on FTX’s bankruptcy have earned fees approaching $250 million, and former SEC officer John Reed Stark has called the whole affair a “highway robbery of highway robbers.”
What’s more, this all comes amid reports that any proposed restructuring and relaunch of FTX is simply not going to happen, with liquidation now the only realistic option.
Facebook and Instagram May Allow BTC ETF Ads
Even before the spot BTC ETFs were given the SEC stamp of approval last month, advertising campaigns were being set in motion, with VanEck pushing the BTC message, while Bitwise and Hashdex also released promotional videos (although, coming before SEC approval, these were about Bitcoin but didn’t directly mention ETFs.)
It makes sense for big firms to push their products to new audiences that may not be crypto native, and that might be about to become easier as, according to the Wall Street Journal, Facebook and Instagram are looking at updating their policies (which come from parent company Meta) and allowing advertising for BTC ETFs.
This comes after Alphabet allowed such advertising on Google and YouTube, and is a result of the SEC greenlighting ETFs and, effectively, giving the nod to BTC as a legit investment asset.
Extract from the Wall Street Journal
Big Firms Evaluate ETFs
When looking at the performance of the spot BTC ETFs, a sometimes overlooked factor is the necessity for large financial companies to perform due diligence on new products. Unlike crypto degens, major firms can’t just YOLO in to opportunities when they’re feeling bored, a point made by Rob Pettman of LPL Financial in a recent interview with Bloomberg, when he stated a requirement to,
“Make sure that [ETFs] are durable over time, that there is a good investment thesis. That’s ultimately the position that we normally come from when evaluating these. Time is going to tell on the investment thesis, and that’s essentially what we’re monitoring at the moment.”
US BTC Miners Report to EIA
Starting this week, the Energy Information Administration (EIA) in the US is requiring all commercial crypto mining operations in the US to report data, as part of a survey aimed at analyzing energy use in mining.
This might usually sound innocuous, except that in the US, there’s been a relentless wave of hostility from the authorities towards bitcoin and crypto. This was clear when Elizabeth Warren talked last year about gathering an “anti-crypto army”, and has been constantly apparent in the SEC’s attempts to classify anything that moves in the Web3 world as an unregistered security.
Perhaps the EIA has no ill intent towards crypto and is just behaving neutrally, but either way, there’s a sense of quiet trepidation about how its surveys might be used.
Is Apple’s Vision Pro a Metaverse Boost?
If you spend much time on X, you may have noticed an influx of videos showing people with VR headsets strapped to their faces, pointing at things that aren’t there. This is the future, according to Apple, and we’re now living in it, or at least you are if you coughed up $3,500 for the Apple Vision Pro.
Officially, this isn’t actually a VR headset, it’s called spatial computing, but still, by enabling a mixture of VR and AR, and through a product that–according to early reviews–actually works, we may be entering a new paradigm. Or, if you’re more skeptical, we may be about to bump up against the limitations inherent in heavy, strap-on headsets.
For now though, one thing spatial computing does look good for is immersive metaverse and gaming development, and Web3 VR/metaverse project Victoria VR has announced that it has a new metaverse app coming out for the Vision Pro, with launch scheduled for Q2 this year.
As a result, the projects’ token climbed sharply in price, although it’s yet to be seen exactly what developers have in store.
The question now is whether other Web3 metaverse projects can take advantage of the possibilities enabled by spatial computing, but what do you think?
Are VR and AR set to cross over with Web3 gaming and metaverse developments? Reply to this email and let us know what you think.
Starting with a look at the spot BTC ETFs, up to 2nd February, we’re looking at over $1.4 billion inflows, and it’s apparent also that outflow from GBTC has been continuing to decrease significantly.
We can also see six straight days in the black most recently, and also, aside from GBTC, Blackrock and Fidelity are opening up a clear gap on their competitors in terms of flow and total assets.
And if you prefer to think about it all in BTC terms, then here are the same figures, showing a spot ETF total flow of over 32,000 BTC.
This impressive start for the ETFs comes while the BTC price itself ranges above the $40K mark, and it appears that having the ETFs in place may provide the perfect setup to tap into any bullish price action post-halving.
Providing further hints as to what may be coming up, we also have whale activity, but it’s an ambiguous picture, with the numbers of small whale wallets decreasing, while the number of large whale wallets increases.
Overall, there is a 2.5% increase in wallets holding 1K to 10K BTC, and a 1.1% decrease in wallets holding 100 to 1K BTC, suggesting that coins are moving from big holders to bigger holders.
Last week was a good time for Chainlink, Immutable X, and Pyth, and this was reflected in their performance for social dominance, which indicates the extent to which they are being discussed online.
This kind of attention is vital, and in a bull market can fuel further price gains (which in turn fuels social dominance.)
One aspect of Bitcoin that is often cited as a negative by its detractors is its high volatility. However, is it still true that BTC is–by comparison to other assets–subject to wild variations? If we look at changes over the past five years, we can find that BTC is becoming steadily less volatile, while traditional assets are moving in the opposite direction.
In that period, BTC has become 16.8% less volatile, while, for example, the S&P 500 has become 53% more volatile, and private equity has become 86.6% more volatile.
At the same time, it should be noted that BTC is still the most volatile (at 56.5% overall), but it’s intriguing to imagine how the investing landscape might look if these trends continue over the long-term, remembering that BTC is touted as the hardest asset in the world.
Looking at the Sharpe Ratio (which measures risk-adjusted performance) on these assets, we can see also that returns on traditional assets are not changing to reflect the increased risk, through volatility, of holding those assets. The suggestion here again is that the investing landscape is altering, and Bitcoin is part of the equation.
Alternative Layer1 SEI is looking good at the moment, as it gathers momentum and picks up new users at pace, even adding 58K new addresses in one day. What’s also interesting is the way it’s being used: while it was perceived on launch as a chain developed with high speed trading in mind, the primary use for new users has been NFTs.
And finally, there’s been a huge amount of attention over the past week or so on Farcaster, the new decentralized social network, and we can see a big surge in the number of Daily Active Users. This traction looks solid, with plenty of Crypto Twitter chat related to the new platform, and Farcaster may be set to make a significant impact.
Here are my key takeaways from the trends this week and tokens have been pumping with the sound of airdrops and token listings!
- Syntropy is a network-as-a-service provider that’s integrated with MetaMask for testnet transactions and NOIA token utility.
- Tenset is an Ethereum blockchain-based project that’s teasing the launch of Alvara protocol in February and a Uniswap token listing on March 4.
- Jupiter is a Solana DEX aggregator that launched the airdrop of its JUP token on January 31. $700M in JUP tokens had been allocated across almost 1 million Solana wallets. 545 million tokens were claimed in the first 8 hours.
- Shiba Saga is a GameFi memecoin that’s launched its app in the Apple app store.
- ZetaChain is a Layer-1 blockchain that launched its ZETA token on February 1 with a listing on the major exchanges. The token price jumped 150% on its debut.
- Manta Network is a modular ecosystem for zk apps that’s gained 50% in 7 days. The MANTA-BNB Farm has officially launched on PancakeSwap and MANTA can be borrowed on ZeroLend.
- Pyth Network is an oracle network that’s seen Binance announce that PYTH will be made available through a direct listing.
- Celestia is a modular data availability network that’s announced a collaboration with Starknet to improve data availability for Layer 3 chains.
- Wen is a Solana memecoin that’s plummeted in price after its airdrop and token burn became a sell-the-news event.
- Ordiswap is a DEX on Bitcoin that’s announced a partnership with DWF Labs to develop the DeFi and infrastructure layer. The ORDS token has also been listed on multiple exchanges.
- Sui is a Layer-1 blockchain that ended January with a new all-time high of $1.63 and entered the top 10 cryptocurrencies by total-value locked (TVL).
- Myro is a Solana-based memecoin that’s pumped 90% in 12 hours and has reached 30,000 token holders.
- Solana is a Layer-1 blockchain that’s seen its DEX activity skyrocket after the JUP airdrop. The 24-hour daily trade volume of Solana DEX’s hit $1.14 billion which surpassed Ethereum’s $1.13 billion in trading volume.
- Magic Square is a Web3 app store that’s introduced an anti-bot solution in collaboration with Amazon Web Services. 1.5 million SQR tokens have also been staked on Bybit.
- Bittensor is a decentralized machine-learning protocol that’s been mentioned in an article by Vitalik Buterin. Its TAO token pumped 39% in 7 days, from $326 on January 25 to $452 on February 1.
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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