White Star Capital Digital Asset Fund - newsletter #33
All 👀 on Coinbase's public debut and a whole lot of news!
Coinbase going public, crypto’s watershed moment?
Another busy two weeks in crypto space, with bitcoin reaching new highs above $63k on April 13th, ahead of Coinbase’s highly anticipated direct listing today (April 14th), for which the reference price has been set at $250 / share, implying a $66.5bn reference valuation, 27% lower than what Coinbase last traded at in the private secondary market, ~$344 / share.
Beyond bitcoin’s new highs and Coinbase’s highly anticipated public debut, it is hard to overstate the level of momentum in the space at present with major Wall Street institutions like Goldman Sachs, BlackRock, and Morgan Stanley getting increasingly active on the capital markets front, while leading auction houses like Christie’s and Sotheby’s continue to dive deeper down the NFT rabbit-hole with Crypto Punks (widely considered to be the first-ever NFTs).
Simultaneously, regulators globally continue to embrace digital assets, while record levels of funding continue to pour into the space, across both early-stage and growth rounds.
Last but not least, we’ve added a “🔦 Portfolio Spotlight” section to our newsletter, highlighting recent exciting announcements and developments from our portfolio companies!
🔦 Portfolio Spotlight
Rally raises $22m via CoinList’s first “liquid sale”
Rally, an Ethereum-based platform that mints “social tokens” for online creators to flex their crypto clout, last week raised over $22m through a token sale on distribution platform CoinList. Initiated by community vote, the RLY token sale garnered more than 40,000 participants, a record for CoinList.
Rally unveils new products updates to empower creators
While the $RLY token continues to gain adoption from investors, users and top tier centralized exchanges, the team has been hard at work launching new products to empower creators in and transitioning to web3. Most recently, the team launched custom audio live alerts, coin integrations into a livestream, and a dashboard for Discord CoinBot.
Kevin Chou (Founder and CEO of Rally) covers “The Creator Economy — NFTs and Beyond” on a16z podcast
A recent a16z Podcast, covers the Creator Economy, and how NFTs (but not just NFTs!) are making it possible for artists, musicians, videogamers, game developers, and writers to create entirely new markets to make money from their work and engage with their fans. Part of this emerging picture is social tokens, which share a crypto foundation with NFTs, but unlike NFTs, social tokens are typically fungible, meaning each token has the same value. This episode features a16z General Partner and crypto investor Chris Dixon, talking with Kevin Chou, who founded Kabam, and is the founder of Rally, an open network on Ethereum where creators can launch social tokens; and Jesse Walden, the founder of Mediachain, a music attribution protocol that was acquired by Spotify; he’s now the founder of crypto venture fund Variant.
Paraswap launches V4, with best-in-market prices, multi-language support, and $REDUX gas token
Our portfolio company Paraswap, which is building a leading decentralized exchange aggregator, announced its V4, boasting many new market-leading features.
dfuse’s StreamingFast launches support for Binance Smart Chain
After launching on EOS, Ethereum and Solana, dfuse has launched on Binance Smart Chain, via its StreamingFast brand which focuses on the Ethereum ecosystem to date. StreamingFast is now freely available to stream both historical and live data faster than any other service on Binance Smart Chain.
Multis integrates Coinbase, Coinbase Commerce and major exchanges
Companies can now track their crypto and fiat on the upcomping Multis accounts, currently in private beta. How? Multis has integrated Coinbase (and Coinbase Commerce), Binance, Kraken and other major exchanges. Brick by brick, the team is bridging crypto and fiat, ahead of their full launch beyond beta in the summer.
Ledn onboards Mario Gibney as Director of Community from leading bitcoin player Blockstream
Ledn has added Mario Gibney, a popular figure in the bitcoin community given his role at Blockstream, as its new Director of Community.
🏦 Enterprises & Institutions
Goldman Sachs looks to offer bitcoin investment vehicles in the second quarter
Goldman Sachs aims to offer bitcoin and other crypto investment vehicles to private wealth management clients in the second quarter. The crypto offerings could be through the "physical bitcoin, derivatives or traditional investment vehicles," according to Goldman's Mary Rich, who was recently named global head of digital assets for the bank's private wealth management division.
BlackRock has begun trading bitcoin futures
Wall Street investment manager BlackRock, which had recently announced it had “started to dabble” in the bitcoin market, held $360,457 in CME bitcoin futures contracts earlier this year, according to regulatory filings published Wednesday, May 31st.
Morgan Stanley files to add bitcoin exposure across a dozen institutional funds
As reported in our last newsletter, Morgan Stanly is set to offer bitcoin exposure to its clients via multiple products. In a recent regulatory filing, the bank said that a number of its institutional funds may gain exposure to bitcoin in the form of cash-settled futures or a Grayscale's Bitcoin Trust.
Shopify CEO muses integrating e-commerce giant into DeFi ecosystem
On Friday, April 9th, Shopify CEO Tobi Lutke posted a Twitter message asking the DeFi community what “role” Shopify could play in the growing financial vertical, showing genuine and advanced interest in the crypto space.
Gucci and other luxury fashion brands are poised to launch NFTs
Gucci and a number of other luxury fashion brands are reportedly close to launching NFTs. Vogue Business reported the news recently, saying Gucci recently confirmed to the news outlet that it's "only a matter of time" before it will release an NFT. Several other luxury fashion brands are close to releasing NFTs, Vogue Business reported, citing "multiple industry sources."
MicroStrategy buys another $15m of bitcoin
MicroStrategy, the business intelligence firm that has made bitcoin its main treasury reserve, said it purchased about 253 more of the leading cryptocurrency for $15m in cash. MicroStrategy now holds about 91.579 bitcoin at a total purchase price of $2.23 billion, at an average price of $24,311 per coin.
Sotheby's planning first NFT auction with artist Pak and Nifty Gateway
Following Christie’s Beeple NFT auction, Sotheby’s (established in 1744 in London!), has announced its first auction of non-fungible token (NFT) based digital artworks created by anonymous artist Pak, that “scrutinizes our understanding of value.”
Credit Suisse, Instinet settle equities on same day via Paxos Settlement Service
Credit Suisse and Nomura-owned broker-dealer Instinet have settled US-listed equity trades on a same-day settlement cycle (T+0) via Paxos' blockchain-based settlement service. The equity trades occurred at 11 AM ET and 3 PM ET on a day and were settled at 4:30 PM ET on the same day.
Bloomberg foresees bitcoin rallying to $400k in 2021
According to Bloomberg bitcoin analysts, the price could climb as high as $400,000 this year. The bullish prediction is based on bitcoin’s performance during the 2017 and 2013 bull runs.
Citi completes cross-border payments pilot using EOSIO-based LACChain
The innovation arm of multinational finance giant Citi has wrapped a proof-of-concept project with the Inter-American Development Bank (IDB) to send cross-border payments on a blockchain. The project used the LACChain Blockchain Network to power payments from the IDB’s headquarters in Washington, DC, to a recipient in the Dominican Republic.
Forbes sells first-ever NFT of issue cover for $333,333
Major business magazine Forbes has sold a non-fungible token of its latest issue cover for $333,333 to a bidder who goes by "mondoir." The magazine's first-ever NFT, titled "Merchants of the Metaverse," features Cameron and Tyler Winklevoss.
Robinhood says 9.5m customers traded crypto in Q1, up from 1.7m in Q4
Online brokerage app Robinhood recently stated that 9.5m customers traded cryptocurrencies in Q1, up from 1.7m in the previous quarter. In a blog post titled "How Crypto Fits Into Robinhood's Mission," the company also said its crypto team has more than tripled in size this year and is still growing.
Christie's is auctioning off a collection of nine CryptoPunks next month
Major auction house Christie's will sell a collection of nine CryptoPunks – widely considered to be the first non-fungible token (NFT) projects released on the Ethereum blockchain – in a sale next month. This marks a big milestone for “OG NFTs” as valuable digital art / collectibles.
Revolut adds 11 new tokens including Uniswap and Cardano
London-based neo-bank Revolut announced recently that it has added the option for users to buy and sell 11 more crypto-tokens, bringing the total number of digital coins it lists to 21. "2021 is the year of crypto at Revolut," the firm said in an email sent to customers in April, adding that the 11 additions are "some of the hottest coins in crypto right now." The new list includes Cardano, Uniswap, Synthetix, Yearn Finance, Uma, Bancor, Filecoin, Numeraire, Loopring, Orchid, and The Graph.
JP Morgan testing blockchain solution with Taiwanese Banks
JP Morgan is testing a solution “Confirm” with 12 banks in Taiwan including CTBC Bank, Taiwan Cooperative Bank and First Commercial Bank for money transfers to Indonesia using JPMorgan’s clearing solution “PayDirect.” The banks will be able to request and receive confirmation of beneficiaries’ account information in near-real time.
NY Stock Exchange launches “NYSE First Trade NFTs”
NYSE has decided to mint its first NFTs, and chose to memorialize that particular one-of-a-kind moment. The first class of NYSE NFTs celebrates the First Trades of these notable listings: Spotify, which executed the first ever Direct Listing, Snowflake, Unity, DoorDash, Roblox and Coupang, the largest US IPOs so far this year. There will be many more NYSE NFTs to come.
TIME partners with Grayscale, and will hold bitcoin on its balance sheet
Popular magazine TIME has partnered on a new video series with Grayscale, aiming at explaining the crypto space to new comers. TIME has agreed to be paid in bitcoin and will hold the cryptoasset on its balance sheet, in a first of its kind media partnership.
Grayscale Trust is '100% committed to converting GBTC into an ETF'
Grayscale Investments said it’s “100% committed” to converting its flagship Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). In a blog post, the world’s largest digital asset manager confirmed its intent to re-apply with the U.S. Securities and Exchange Commission (SEC) to offer an ETF.
Our overall takeaway
At this pace, we’re going to need a standalone newsletter for this section soon. Crypto is here to stay, and corporates and institutions are embracing multiple new use cases, with legacy financial institutions, FinTechs, and media corporates paving the way.
⚖️ Government & Regulation
ECB’s Christine Lagarde says digital euro should launch within 4 years
In an interview with Bloomberg on Wednesday, Lagarde said if ECB policymakers give the digital currency project the green light this summer then the digital currency will be rolled out within four years.
BIS leader says central bank digital currencies could resolve 'long-standing' payments issues
Agustín Carstens, the general manager of the Bank for International Settlements, recently took the stage to promote central bank digital currency over other payment solutions, pointing to their potential to overhaul traditional payment systems.
Canadian securities regulators clarify framework for crypto platforms
In a new notice published March 29, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) explored how existing regulation can be "tailored" to crypto innovation, including interim approaches for crypto marketplaces and dealers.
BOJ starts central bank digital currency experiments
The Bank of Japan kicked off the first phase of experimenting with a central bank digital currency (CBDC), having made the necessary preparations in the first quarter.
“In PoC Phase 1, the Bank plans to develop a test environment for the CBDC system and conduct experiments on the basic functions that are core to CBDC as a payment instrument such as issuance, distribution, and redemption,” the BOJ said in an announcement.
Fidelity, Coinbase, Square form crypto council to lobby policymakers
A group of major companies, including Fidelity, Coinbase, and Square, have formed a crypto council to lobby policymakers. The Crypto Council for Innovation has a stated mission of demonstrating the "transformational promise of crypto and communicate its benefits to policymakers, regulators, and people around the globe."
Bank of Russia plans prototype for digital Ruble in December, and full launch in 2023
The Bank of Russia presented a new concept for the digital ruble, a central bank digital currency the regulator has been contemplating since late last year. A prototype of the digital ruble will be created by this December, said the Bank of Russia which also published a fresh report on the current state and future plans for the project. Further, Russian central bank officials indicated that a digital ruble will launch in 2023.
European Investment Bank plans to settle bonds in euros using blockchain
The European Union’s lending wing is reportedly planning to trade, settle and sell digital bonds using blockchain technology. Indeed, the European Investment Bank (EIB) tasked Goldman Sachs, Banco Santander SA, and Societe Generale AG with assessing the feasibility of settling and registering the bonds using the nascent tech, while investor meetings will commence April 15 and continue for "weeks." No date was given for the initial sale.
Our overall takeaway
While government interest is at an all-time high, it appears a digital euro coming 🔜
💰 Funding & Exits
Q1 2021 saw $3.2bn of private funding pour into the blockchain space
Q1 2021 was a historical quarter in venture funding for the crypto and blockchain sector. In aggregate, roughly $3.2bn was allocated to projects in the space, with crypto financial services and NFTs attracting a majority of the funding. For perspective, in all of 2020 in aggregate, there was less total funding with $3.1bn in private financing than just this recent quarter. Worth noting that later-stage deals skewed the numbers this quarter, as five deals this quarter qualified as one of the fifteenth largest crypto and blockchain funding deals of all time, all occurring in March (BlockFi, Dapper Labs, Blockchain.com, NYDIG, and Bitpanda).
Non-custodial crypto investing app Ember Fund raises $5.3m seed
Ember Fund, a non-custodial crypto investing app, announced its $5.3m Seed round led by Richard Jun of Bam Ventures, with participation from Anthos Capital, Uncorrelated Ventures, Calm Ventures, and others.
Crypto prime broker OVEX raises $4m from Alameda Research
South African crypto prime broker OVEX has raised $4m from Alameda Research in a strategic funding round. Further, the firm has announced that it is looking to raise a further $14m in the near future.
Andreessen Horowitz leads $4.4m round in Element Finance
DeFi startup Element Finance, which is building a yield-maximizing marketplace for crypto interest rates, announced it raised $4.4m from Andreessen Horowitz and Placeholder.
Crypto wallet startup imToken raises $30m series B
Crypto wallet startup imToken has raised $30m in a Series B round led by Chinese venture capital firm Qiming with participation from IDG Capital, Breyer Capital, Longling Capital, Hashkey Capital, SNZ, Signum Capital as well as Liang Xinjun, co-founder of Chinese conglomerate Fosun International.
Enjin raises nearly $19m for Polkadot-based Efinity project
Enjin has raised $18.9m to build a Polkadot-based blockchain network, dubbed Efinity, with a focus on non-fungible tokens or NFTs.
Ex-Revolut and Spotify exec’s DeFi startup Gro raises $7m from Northzone, Galaxy & Framework
London-based Gro, founded by Hannes Graah, former VP Growth at Revolut, and Spotify veteran build products called protocols or autonomous programs for a simpler and more friendly DeFi experience. The company raised $7.1 million in seed funding in a round led by Galaxy Digital and Framework Ventures, and Northzone with participation from business angels including founders of DeFi protocols Aave, Compound, and Synthetix.
DeFi lending protocol Greenwood raises $2m seed led by Polychain
DeFi lending protocol Greenwood has raised $2m in a seed round led by Polychain Capital, with participation from Blockchain Capital, Robot Ventures, Divergence Ventures as well as Ricky Li, co-founder of crypto trading firm Altonomy and DeFi lending protocol Aave's founder and CEO Stani Kulechov.
Privacy coin Iron Fish raises $5.3m and launches testnet
Iron Fish, a new privacy coin, which protects transactions using zk-SNARKs, is launching its public testnet after nearly two years of building. Alongside the launch, the project announced $5.3m in funding from the likes of Electric Capital, Slow Capital, Juan Benet, and Balaji S. Srinivasan.
Crypto trading app Atani raises $6.25m
Cryptocurrency startup Atani, which is building a non-custodial platform offering trading and portfolio monitoring on 22 different exchanges, has completed a $6.25m seed funding round.
Crypto accounting platform Cryptio raises $1.2m in seed funding
Crypto accounting platform Cryptio has raised $1.2m in a seed funding round led by Draper Associates, with participation from ConsenSys Ventures, Outlier Ventures, and Aave founder Stani Kulechov, among others.
NYDIG raises another $100m
NYDIG, the New York-based crypto investment firm, has secured another $100m just one month after announcing a $200m fundraise. The additional cash comes from strategic partners, including insurance firms Starr Insurance, Liberty Mutual Insurance, and other property and casualty-focused insurers, who are joining life insurance and annuity-focused firms New York Life and MassMutual as backers of the firm.
Polkadot-based DeFi project Equilibrium raises $2.5m via a series A token sale
Equilibrium, a Polkadot-based interoperable decentralized finance (DeFi) project, has raised $2.5m in Series A funding. The funds were raised via a token sale with investors, including CMS Holdings, KR1, Signum Capital, AU21 Capital, and Genesis Block Ventures.
dClimate Raises $3.5m seed token round
dClimate, the first decentralized network for climate data, today announced it has closed an oversubscribed $3.5m seed financing round led by CoinFund, with participation from Multicoin Capital and Republic Labs. The funds were raised in exchange for the network's native governance token, WTHR.
Virtue Poker raises $5m strategic round ahead of mainnet launch
Decentralized gambling platform Virtue Poker, which was incubated by blockchain developer ConsenSys and counts Pantera Capital and DFG Group among its backers, has raised $5m in a strategic investment round. The project plans to conduct an initial DEX offering (IDO) ahead of its mainnet launch in May.
Defiant Media raises $1.4m pre-seed round
Defiant Media Inc., the creator of The Defiant, closed a $1.4m pre-seed round to build the leading information company at the intersection of tech and finance, from investors including IDEO CoLab Ventures, ParaFi Capital, Blockchange Ventures, MetaCartel Ventures, Defiance Capital, Mechanism Capital, GBV Capital, and angels including Anthony Pompliano, Mariano Conti, Andrew Keys and many more.
ConsenSys raises $65m strategic round
Leading Ethereum-venture studio ConsenSys announced a $65m via a convertible note, from investors such as JPMorgan, UBS, Mastercard, Alameda Research, Protocol Labs, Fenbushi, the Maker Foundation, The LAO, Liberty City Ventures, the Greater Bay Area Homeland Development Fund and Quotidian Ventures.
Enso Finance announces $5m seed round
DeFi trading platform Enso Finance, announced it has closed a $5m private funding round co-led by Polychain Capital and Dfinity Beacon Fund, with additional investors including Multicoin Capital, P2P Capital, Singapore's Spartan Group, Zola Global, and The LAO and angel investors from AngelList, Dfinity, Synthetix, Status, Fantom, Nexus Mutual, Aave and Messari.
Step Finance raises $2m led by Alameda
Step Finance, a trading dashboard born out of the Solana hackathon, announced Tuesday a $2m funding round from Alameda Research, 3 Commas Capital and more.
Gryphon raises $14m for all-renewable energy mining
Gryphon Digital Mining has raised $14m to establish renewable energy-driven bitcoin mining operations in the United States. Participants in the round were undisclosed.
NFT Investments raises $48m via London Stock Exchange Growth Market listing
NFT Investments, an investment company focused on non-fungible tokens (NFTs), has raised £35m ($48m), three times more than planned, through a listing on the Aquis Stock Exchange Growth Market (AQSE) in London.
Bitcoin mining firm Hut 8 files to raise nearly $400m in Canada
Bitcoin mining firm Hut 8 is seeking to raise ~$400m in Canada, according to public documents. The offering will take place on the Toronto Stock Exchange, where the firm's shares already trade. A decision document penned by the Ontario Securities Commission was issued on April 7.]
Fei Labs raises over $1.2bn for its algorithmic stablecoin project
Fei Labs, the firm behind the Fei Protocol stablecoin, raised 639,000 ETH, roughly $1.27bn at the sale period’s end, in commitments for its Fei Protocol stablecoin. The ETH raised will be used as collateral to mint Fei stablecoins. According to Fei Labs, over 17,000 unique addresses participated in the "Genesis" event of the Fei stablecoin.
Mining firm Riot Blockchain to acquire rival Whinstone for $651m
Nasdaq-listed bitcoin mining firm Riot Blockchain is set to acquire rival Whinstone for $651m. Riot signed a definitive agreement with bitcoin mining hosting facility Whinstone for the deal, a mix of cash and stock.
NFT Investments Plans Listing on LSE Growth Market AQSE
NFT Investments, an investment company focusing specifically on non-fungible tokens (NFTs) said it plans to list on the Aquis Stock Exchange Growth Market (AQSE) in London later in April.
Coinbase set for April 14 direct listing
Coinbase announced it will begin the public trading of its stock on April 14.
The crypto exchange also held its first-quarter earnings call on April 6, highlighting $1.8bn in revenue and MAU growth of 117% during the quarter, providing a financial outlook for 2021.
Our overall takeaway
Funding continues to pour into the space at unprecedented rates, while Coinbase’s direct listing marks a watershed moment for the crypto industry.
🚀 Project Launches & Updates
ConsenSys announces layer-2 NFT platform, Palm
Ethereum venture studio ConsenSys announced Palm, an environmentally friendly NFT scaling solution, which will be a sidechain designed to be “fully connected” to Ethereum. Palm’s benefits include faster settlement times, lower fees and an especially light carbon footprint and is looking to compete with Dapper Labs’ Flow blockchain.
Kakao’s Klaytn expands NFT offerings to OpenSea
Klaytn, the blockchain project of South Korean tech giant Kakao, has partnered up with NFT marketplace OpenSea to bring a nonfungible token market to its platform, following 800% quarterly growth in its native token KLAY.
Coinbase signs sponsorship deal with CS: GO esports tournament organizer
Cryptocurrency exchange Coinbase has signed a sponsorship deal with Counter-Strike: Global Offensive (CS: GO) esports tournament organizer BLAST Premier. The worlds of gaming and crypto continue to intertwine at an accelerating pace.
NEAR Protocol launches Ethereum bridge for cross-chain interoperability
Blockchain project NEAR Protocol has launched its Ethereum bridge, called Rainbow, for cross-chain interoperability. The bridge allows transferring ERC-20 tokens between the Ethereum and NEAR blockchain.
Our overall takeaway
The future is multi-chain and cross-chain.
🔥 Other Bits We're Excited About
Akon launches AkoinNFT platform
American-Senegalese rapper and R&B singer Akon has launched AkoinNFT, a non-fungible tokens (NFTs) platform to “supercharge and empower artists” and brands. The move follows an ever-growing lineup of artists moving into the NFT space and creator economy.
Crypto exchange volumes surpassed $1tr for the second month in a row
Crypto exchange volumes surpassed $1tr in March — the second consecutive month that volumes have reached thirteen figures.
Football champion Tom Brady is launching an NFT platform
American football champion Tom Brady is launching an NFT platform called Autograph, which is scheduled to launch this spring. Autograph will bring together some of the biggest brands and names in sports, entertainment, fashion, and pop culture to create NFTs.
Our overall takeaway
Across disciplines, celebrities ❤️ NFTs as they seek new ways to engage and monetize their relationship with fans, across platforms, with superior economics. Meanwhile, crypto volumes and adoption keep on growing, and the momentum continues to impress!