White Star Capital Digital Asset Fund - newsletter #32
PayPal and Visa launch crypto payments on their networks, while Michael Jordan invests in Dapper Labs 🏀
Payment giants embrace crypto, NFT marketplaces raise record funding, and NFTs make it to SNL 📺
NFTs - you are probably reading this acronym for the umpteenth time in this newsletter and beyond over the past few months. In case our newsletter and other articles have not succeeded in breaking down “What are NFTs?”, Saturday Night Live might be able to help:
If SNL’s coverage wasn’t enough evidence of the segment crossing the chasm, we note that the number of users on NBA TopShot continues to grow, nearing 450k. The figure below highlights TopShot and other leading NFT platforms’ rapid growth, which shows no sign of stopping:
With Dapper Labs, OpenSea, and SuperRare all raising funds on the back of astronomical growth over the past few months, we are all set for an exciting period for the ecosystem ahead as they continue to launch new products and onboard new creators.
In other news, Visa and PayPal are now allowing consumers to settle payments and pay merchants using cryptocurrencies. The reach of these two payment giants’ two-sided network, with millions of merchants and billions of consumers, and the impact their move will have on the adoption of crypto payments cannot be overstated. Add to that the Starbucks partnership with Bakkt for its popular loyalty program, we are looking at widespread point-of-sale adoption within 2021. In the legacy finance world, Fidelity has filed for a bitcoin ETF, while Morgan Stanley and Deutsche Bank see crypto as breaking into the mainstream and are leaning into the space.
On the fundraising front, mature companies and quality new projects continue to attract record funding as new venture funds are coming up to keep pace. 2020 saw $1.1bn+ in M&A activity in the sector, with 2021 already set to break all records, notably with highly anticipated public market debuts from the likes of Coinbase, eToro, BlockFi, and Bakkt.
Last but certainly not least, Delaware’s “DAO Law” could prove as a turning point to the acceleration of DAO adoption, which has started to gain mainstream attention.
🏦 Enterprises & Institutions
Visa now offers settlement in USDC stablecoin on Ethereum blockchain
Visa will now settle payments in the USDC stablecoin on the Ethereum blockchain, as per a recent announcement on March 29. This makes Visa the first major payments network to use Ethereum and stablecoins as a settlement layer/currency.
PayPal now allows crypto spending at merchants
PayPal has started allowing US users to spend their cryptocurrency holdings at millions of online merchants globally. PayPal users will now be able to convert their crypto holdings into fiat to make purchases.
Fidelity files for a bitcoin ETF
Asset management giant Fidelity is seeking to create a bitcoin exchange-traded fund (ETF), the Wise Origin Bitcoin ETF, as per a new filing with the US SEC.
'Threshold being reached' on crypto as an investable asset class: Morgan Stanley
Morgan Stanley's wealth management unit has outlined a case for cryptocurrency as an emerging investable asset class in a new investor note sent to its clients.
Morgan Stanley plans to offer clients exposure to bitcoin funds
Morgan Stanley is reportedly providing its high-end clients with access to three funds that provide bitcoin exposure. As per the reports, two of the funds are from Galaxy Digital while the other is a joint effort from FS Investments and NYDIG.
Meitu adds to its bitcoin and ether holdings, bringing the total to $90m
Hong Kong-listed software firm Meitu has announced new cryptocurrency investments, purchasing $28.4m of ETH and $21.4m of BTC to bring its total crypto holdings to $90m.
French retail giant to launch Tezos-based stablecoin
Groupe Casino, a 120-year-old retail company headquartered in France, is launching a stablecoin pegged to the Euro. The stablecoin will be used in its stores’ loyalty programs as well as for trading.
Bitcoin ‘too important to ignore’: Deutsche Bank
In a recently published report, Deutsche Bank has said that bitcoin is now “too important to ignore”, given its $1tr+ market capitalization.
Naver, South Korea’s biggest search engine, invests in crypto space
Naver, the biggest search engine in South Korea, has disclosed that it has invested in Hashed’s new venture fund. This marks the entrance of another of South Korea’s largest tech conglomerates into the crypto space after its peer, Kakao.
Billionaire hedge fund manager Alan Howard is a shareholder in CoinShares
British hedge fund manager Alan Howard is the fourth-largest shareholder in digital asset manager CoinShares, which recently went public. An entity owned by Howard holds 8.24% of CoinShares.
Robinhood growing its crypto team this year says CEO
Vlad Tenev, CEO of brokerage platform Robinhood, recently said that the company is planning to grow its crypto team “hugely” this year.
Galaxy Digital names new CFO as it prepares for US Listing in 2021
Toronto-listed digital asset merchant bank Galaxy Digital said in its Q4 earnings release that it is actively preparing for a US listing, aiming for a listing in H2 2021. It also named Alex Ioffe as the company’s new CFO, who will assume the role on April 1.
Our overall takeaway
Visa and PayPal will now allow consumers to use cryptocurrencies for payments at millions of merchants. On the other hand, Wall Street giants continue to offer their clients new services to gain exposure to bitcoin and other cryptocurrencies. 🇺🇸 bitcoin ETF coming 🔜
⚖️ Government & Regulation
Bank of Japan to begin CBDC experiments later this year
According to central bank governor Haruhiko Kuroda, the Bank of Japan (BOJ) will start experiments on a central bank digital currency (CBDC) this spring.
Wyoming's State Senate passes 'DAO law' in a 28-2 vote
The upper chamber of Wyoming's legislature has passed a new bill that, if approved, would allow decentralized autonomous organizations, or DAOs, to become incorporated under state law.
Singapore’s sovereign wealth fund Temasek reportedly buying bitcoin
In a recent podcast with Robert Gutmann, CEO of New York Digital Investment Group (NYDIG), podcast host and investment strategist Raoul Pal stated that Temasek has been purchasing bitcoin. Robert Gutmann also talked about NYDIG being approached by other state-owned funds for similar investments.
Our overall takeaway
Bank of Japan is accelerating its CBDC efforts, while sovereign wealth funds are actively exploring investing in bitcoin. We are especially excited about Wyoming’s new bill, which can prove to be a milestone for DAOs to gain acceptance among regulators.
💰 Funding & Exits
NFT marketplace SuperRare raises $9m in Series A funding
SuperRare, one of the leading marketplaces for non-fungible tokens (NFTs), has raised $9m in a Series A funding round led by tech venture capitalists Velvet Sea and 1confirmation. Mark Cuban, Chamath Palihapitiya, and Marc Benioff (CEO of Salesforce.com) also participated in the round.
Hex Trust raises $6m in Series A round led by QBN Capital
Digital asset custodian Hex Trust has raised $6m in a Series A round led by QBN Capital. Kenetic Capital, HashKey, and Genesis Block Ventures were among the other investors in the round.
PureStake raises $6m in a funding round led by CoinFund
PureStake, a company that builds blockchain infrastructure for proof-of-stake networks, has raised $6m in a funding round led CoinFund. Coinbase Venture, Binance Labs, and ParaFi also participated in the round, among others.
DeFi lending protocol startup Liquity raises $6m in Series A funding
Decentralized lending startup Liquity has raised $6m in a Series A funding round led by Pantera Capital. Nima Capital and Alameda Research also participated in the round, among others.
Decentralized derivatives protocol Vega raises $5m in new funding
Vega Protocol, which is building a decentralized network for trading derivatives, has raised $5m via a token sale. The round was led by Arrington Capital and Cumberland DRW, with Coinbase Ventures, ParaFi Capital, and CMS Holdings participating as well.
Bitcoin rewards provider Lolli raises $5m in pre-Series A funding
Bitcoin rewards provider Lolli has raised $5m in a pre-Series A funding round. The round was led by Seven Seven Six, the venture capital fund founded by Reddit co-founder Alexis Ohanian, with participation from Serena Ventures and others.
NFT platform Recur raises $5m in seed funding
Recur, which is aiming to create a platform for perpetual and universal NFT royalties, has raised $5m in seed funding. The round was led by the DeFi Alliance, Delphi Digital, Ethereum co-founder Joe Lubin, and Gemini, among others.
Coinbase alum Soups Ranjan raises $4.6m for his anti-fraud startup
Soups Ranjan, former director of data science and risk at Coinbase, has come out of stealth with a new anti-fraud startup called Sardine. The firm has raised $4.6m in seed funding round led by XYZ Ventures and has now launched a fraud prevention-as-a-service platform for digital businesses.
Covalent closes $2m in a strategic funding round
Covalent, which is building a unified API for blockchain data, has closed a $2m strategic funding round led by Hashed with participation from Binance Labs, Coinbase Ventures, Delphi Ventures, and Hypersphere Ventures, among others.
Maple Finance raises $1.4m for its DeFi lending platform
Reputation-based DeFi lending platform Maple Finance has raised $1.4m in a new funding round led by Framework Ventures and Polychain Capital.
Syndicate raises $1m in a seed funding round led by IDEO CoLab Ventures
Decentralized investing protocol Syndicate, which is still in private beta, has raised $1m in a seed round led by IDEO CoLab Ventures to decentralize crypto investing from the ground up.
Ethereum-based interoperability project Connext raises $2.2m in seed funding
Connext, an ethereum-based interoperability project, has raised $2.2m in seed funding. Polychain Capital led the round, with participation from 1kx and Huobi Capital.
Zora raises funds from Paradigm
Zora, the company behind an Ethereum-based marketplace for tokenized product drops, has raised an investment round from Paradigm. The details of the investment were not disclosed.
NAOS Finance raises seed funding with $250m in assets originated
NAOS Finance, which has originated over $250m in crypto-assets backed by real-world debt, has raised a seed funding round as it accelerates its efforts to bridge the worlds of traditional finance and crypto. The round saw participation from Mechanism Capital, The Spartan Group, and SNZ, among others.
Dapper Labs closes $305m round at reported $2.6bn valuation, backers include Michael Jordan
Dapper Labs, the startup behind virtual trading-card platform NBA Top Shot, has raised $305m in a funding round led by the investment firm Coatue. NBA legend Michael Jordan, current NBA players such as Kevin Durant, Alex Caruso, Klay Thompson, and Andre Iguodala, Ashton Kutcher's Sound Ventures and Will Smith's Dreamers VC also participated in the round, among others.
Blockchain.com reportedly raises $300m at $5.2bn valuation
Less than a month after raising $120m a $3bn valuation, Blockchain.com has reportedly raised $300m in a funding round that valued the company at $5.2bn. The round was led by DST Global, Lightspeed Venture Partners, and VY Capital.
Fireblocks raises $133m in Series C funding
Crypto security startup Fireblocks has raised $133m in Series C funding. The round was co-led by investment manager Coatue, the fintech-focused venture capital firm Ribbit and growth equity firm Stripes.
Chainalysis raises $100m in Series D funding, valuing the company at $2bn+
Blockchain analysis company Chainalysis has raised $100m in Series D funding. The round, led by Paradigm, valued the company at $2bn+. TIME Ventures, the investment fund for Marc Benioff, and previous investors Addition and Ribbit also participated in the round.
StarkWare raises $75m in Series B funding
StarkWare Industries, which provides scaling and security solutions to overcome the limitations of Ethereum’s existing technology, has raised $75m in Series B funding round led by crypto VC firm Paradigm.
Crypto data provider Lukka raises $53 in Series D funding
Crypto data provider Lukka has raised $53m in Series D funding at an ~$200m valuation. Soros Fund Management participated in the round, alongside S&P Global and CPA.com.
Crypto bank Avanti raises $37m in Series A funding
Crypto bank Avanti has raised $37m in Series A funding from investors including Coinbase Ventures, Binance.US, and Morgan Creek Digital, among others, as it prepares to take its digital banking operations online.
Republic raises $36m in Series A funding round led by Galaxy Digital
Investment platform Republic has raised $36m in a Series A funding round led by Galaxy Interactive, a division of Mike Novogratz’s Galaxy Digital. The company is a crowd-equity platform which aims to provide greater access to sought-after investment opportunities in startups, real estate, gaming, and crypto.
NFT marketplace OpenSea raises $23m in Series A round led by a16z
NFT marketplace OpenSea has raised $23m in a Series A round led by venture capital firm a16z. Naval Ravikant, Mark Cuban, and 3LAU were among some of the other participants in the round.
Bitcoin mining firm Greenidge plans to go public by merging with Nasdaq-listed Support.com
Greenidge Generation Holdings, the parent company of upstate New York-based bitcoin mining firm Greenidge, is planning to go public in the U.S. through a merger deal with Support.com, a Nasdaq-listed customer service solution provider.
Publicly listed Chinese firm buys Filecoin miners worth $90m
New Universal (Newu) - a $400m market-cap, Shenzhen-listed equipment manufacturer - is buying $90m worth of computing and storage equipment on the InterPlanetary File System (IPFS) network as it enters the Filecoin mining space.
Linen App raises $2m+ via crowdfunding
Linen App, a banking services app with decentralized finance integrations, has raised over $2m from almost 2,000 users of the app, community members, and friends through the Republic platform.
Coinbase registers 114.9m shares for public listing
Cryptocurrency exchange Coinbase plans the resale of 114.9m shares of Class A common stock for a proposed maximum offering price of $943.2m as per an amended prospectus.
Kraken to go public next year
Crypto exchange Kraken is planning to go public next year, choosing the direct listing round as per a company spokesperson. CEO Jesse Powell had said earlier this year that the exchange could go public at a valuation of above $10bn.
Our overall takeaway
The accelerating pace of mega-rounds in the ecosystem is being matched by quality early-stage projects that are raising money via both equity and token rounds. Exits continue to accelerate on the M&A front, with large public exits on the horizon 👀
🚀 Project Launches & Updates
Mark Cuban building a digital art gallery for NFTs
In a recent interview, billionaire entrepreneur Mark Cuban shared that he is building a new online gallery - Lazy.com - to display non-fungible tokens (NFTs) in any form.
Uniswap unveils version 3, to be launched on May 5
Uniswap, the leading decentralized exchange (DEX) on Ethereum, is releasing its third iteration on Ethereum mainnet on May 5. The firm said that the new version promises “up to [4,000 times] capital efficiency relative to Uniswap v2.
Circle rolling out a payments solution for NFT marketplaces
Peer-to-peer payments firm Circle is launching a payments solution for non-fungible token (NFT) marketplaces and vendors. The marketplaces can offer buyers the choice of transacting via traditional or crypto payments using Circle's NFT solution APIs.
Cboe to build out crypto offerings as demand rises
Cboe Global Markets, the Chicago-based exchange holding company, is looking to get back into the cryptocurrency space after a couple of ill-fated attempts in prior years, the firm’s CEO said in a recent statement.
Dragonfly Capital launches new $225m fund
Crypto venture firm Dragonfly Capital has launched a new $225m fund, the Dragonfly Fund II. The fund will primarily invest in four areas: Decentralized finance (DeFi) protocols; non-fungible token (NFT) projects; Ethereum Layer 2 solutions and businesses built on top of them; and centralized financial (CeFi) infrastructure.
Gemini launches new venture fund
Crypto exchange Gemini has announced the launch of Gemini Frontier Fund, a strategic venture fund focused on investing in early-stage crypto projects and startups. The firm also operates Gemini Opportunity Fund, which supports Bitcoin Core Development.
Tendermint launches $20m venture fund for Cosmos ecosystem
Tendermint, which builds critical infrastructure for the Cosmos ecosystem, has rolled out a $20m fund to support promising projects.
Microsoft launches ION Digital ID network on bitcoin
Microsoft’s Decentralized Identity team has launched the ION Decentralized Identifier (DID) network on the bitcoin mainnet. This technology uses Bitcoin’s blockchain to create digital IDs for authenticating identity online.
Bakkt launches digital wallet for merchant partners
Bakkt has launched a digital wallet that will allow customers to use bitcoin for loyalty programs with participating merchants. In the first public rollout on March 30, customers can use Bakkt to reload their Starbucks Card through the Starbucks app for iOS. Best Buy, Choice Hotels, Fiserv and GolfNow are among the other merchant participants in the program.
Our overall takeaway
New use cases, from identity authentication to merchant loyalty programs, are becoming mainstream as incumbents try to roll out services leveraging blockchain. In parallel, new venture funds are being formed to focus on the space, across traditional GP/LP structures (Dragonfly), ecosystem funds (Tendermint) and exchanges (Gemini, which follows Kraken in recent weeks).
🔥 Other Bits We're Excited About
Crypto M&A doubled to $1.1bn in 2020, says PwC
According to a new report by PricewaterhouseCoopers (PwC), the value of mergers and acquisitions (M&A) in the crypto sector more than doubled to $1.1bn in 2020. The average deal size also increased from $19.2m in 2019 to $52.7m in 2020.
Guggenheim Museum looking at NFTs
The Guggenheim Museum in NYC is looking for an MBA intern to provide an evaluation of non-fungible token (NFT)-based art. The museum administrators have called NFTs a “nascent, fast-growing, highly scalable area of the art world.”
Crypto exchange FTX secures naming rights for Miami Heat Arena
Cryptocurrency exchange FTX has secured the naming rights to the home arena of NBA team Miami Heat for a reported $135m. The deal gives FTX arena-naming rights until 2040.
New York Times turns one of its columns into an NFT, sells for ~$560k
The New York Times has turned one of its columns into a non-fungible token (NFT). The piece sold for 350 ETH (~$560k) on the NFT marketplace Foundation.
SNL covers NFT in a new video song
With the ever-growing volume of conversations on NFTs, Saturday Night Live (SNL) has tried to answer your questions in an Eminem-inspired rap video.
Our overall takeaway
While last year saw M&A volume double to $1.1bn+, PwC believes that 2021 will see record-breaking activity across all M&A metrics. More recently, last year’s NBA Eastern Conference Champions have a new home - FTX Arena! New York Times and Guggenheim Museum are among the latest mainstream names that have turned to NFTs as the growth in the ecosystem continues.