White Star Capital Digital Asset Fund - newsletter #30
NFTs go mainstream with Christie's Beeple auction, licensed IP, and top creators, while Wall Street's eyes are set on the impending Coinbase IPO!
NFTs are crossing the chasm
Where do we start? While the stock markets took a beating over the past week, the crypto universe continues to fire on all cylinders. However, the NFT (non-fungible tokens, which can represent digitally scarce art, gaming items, collectibles, or any type of IP) ecosystem stands out in terms of the explosive growth seen in 2021.
Just compare the two charts below, the first is the lifetime sales volume, and the second is the sales volume over the last 30 days. Yes, you are reading it right: NBA Top Shot has seen almost 85% of its lifetime sales volume in the last 30 days, with all the other products also demonstrating similar trends, especially across applications with licensed content such as NBA TopShot and SoRare.
Over the recent weeks, we have seen the likes of Mark Cuban, Lindsay Lohan, Logan Paul, Toro y Moi, Disclosure, and many more auctioning their NFT artworks and now Christie’s is auctioning popular digital artist Beeple’s new artwork “The First 5000 Days”, signaling the mainstream acceptance of NFT artworks. The current bid is $3.25m, so don’t forget to place your bids before the auction ends on March 11!
The First 5000 Days by Beeple
In other news, Wall Street giants are entering the crypto custody business while a Canadian bank launched a fiat-backed digital currency. Ventures are getting funded across the board, with DeFi and NFT verticals leading the pack.
New artists are constantly dropping their NFT artworks, with Grimes and Soulja Boy among the latest to do so. Your favorite artist might be the next to follow suit, so be on the lookout for the opportunity to own a piece of their creation, as creators seek to engage with fans in new ways.
For more on NFTs, we recommend the below reads:
I. Enterprises & Institutions
Twitter considering adding bitcoin to its balance sheet
Twitter CFO Ned Segal has said that the company is open to adding bitcoin to its balance sheet. He elaborated that if Twitter employees and vendors ask to be paid in bitcoin, then the company may consider investing in bitcoin as part of its treasury.
BNY Mellon to custody bitcoin and other cryptocurrencies
BNY Mellon, which is America's oldest bank, will custody bitcoin and other cryptocurrencies starting later this year. The bank’s Digital Assets aims to help clients address growing and evolving needs related to the growth of digital assets.
Alliance Bernstein is explaining to its clients the importance of DeFi
In a recent research note to its clients, Alliance Bernstein, the $600bn asset manager, has shared a detailed explanation about Decentralized Finance (DeFi) applications. It further delved into the advantages of DeFi Dapps over traditional financial services.
Mastercard to expand the scope of digital currency support on its network
Mastercard has said in a recent blog post that it is working to enable its systems to facilitate payments in the form of stablecoins directly to merchants who choose to accept them. The service will complement Mastercard's existing crypto-card offerings.
Deutsche Bank quietly planning to offer crypto custody and prime brokerage services
Deutsche Bank is planning to offer crypto custody service to hedge funds that invest in the asset class. The Deutsche Bank Digital Asset Custody prototype aims to develop “a fully integrated custody platform for institutional clients and their digital assets”.
JPMorgan carries out test of blockchain payments in space
JPMorgan Chase has been testing blockchain payments between satellites in earth orbit. “The idea was to explore [internet of things] payments in a fully decentralized way,” Umar Farooq, CEO of the bank’s blockchain arm, Onyx, added.
Morgan Stanley teaching its research clients about DeFi
Wall Street giant Morgan Stanley has shared information about decentralized finance (DeFi) in a recent research note to its research clients. It is the second known major firm along with Alliance Bernstein to have done so recently.
Canadian bank launching fiat-backed digital currency in a claimed first
Canadian bank VersaBank is launching a stablecoin called VCAD that it plans for use in commerce. The bank claims that the Canadian-dollar linked VCAD is the first digital currency issued by and backed by deposits with a North American bank.
BlackRock “dabbling” in bitcoin, says CIO
Asset management giant BlackRock’s chief investment officer Rick Rieder has said that the firm "is starting to dabble" in the cryptocurrency, but did not elaborate further on what that means for its operations.
Motley Fool announces $5m investment in bitcoin
Motley Fool, a financial advice company, is investing $5m in bitcoin. The company also said that it believes bitcoin will store value more effectively than gold.
Nvidia unveils new processor chip built for Ethereum mining
Graphics card maker Nvidia has unveiled a new processor chip, dubbed Cryptocurrency Mining Processor or CMP, dedicated specifically to Ethereum mining.
KPMG, Coin Metrics, and BitGo offer combined product suite to further institutional crypto adoption
KPMG and Coin Metrics are enabling BitGo clients to monitor public blockchain network risks, in a bid to further crypto adoption by institutions and banks.
MicroStrategy raised $1.05bn debt for more bitcoin purchases
MicroStrategy has raised further debt to add more bitcoins to its balance sheet. The company's current bitcoin holdings stand at just over 71,000 BTC.
Square reports $4.57bn in bitcoin sales for 2020 via Cash app
Square has reported $4.57bn in bitcoin sales for 2020 via its Cash app, which accounted for $97m in gross profits. It sold $1.76bn worth of BTC in Q4’20. Further, Square has added 3,318 BTC to its treasury for $170m in Q4’20, adding to its previous purchase of 4,709 BTC in October 2020.
E-commerce giant Rakuten now lets users shop using cryptocurrency
Japanese e-commerce giant Rakuten is now allowing users to spend bitcoin and other cryptocurrencies. The move opens up crypto payments at thousands of merchants across Japan that accept Rakuten Pay and Rakuten Point Card.
Our overall takeaway
Square and MicroStrategy are continuing to add to their bitcoin stockpile as Twitter considers a similar move, while major equity research teams are trying to educate their clients about DeFi. Crypto is eating capital markets.
II. Government & Regulation
SEC commissioner calls for legal clarity, freedom to experiment for DeFi
SEC commissioner Hester Peirce has said in a recent speech that federal regulators need to "provide both legal clarity and the freedom to experiment so that DeFi can compete with CeFi to offer investors financial services".
St. Louis Fed tweets about how DeFi may lead to a paradigm shift
The St. Louis Fed tweeted a link to a research report on what decentralized finance is and how it may lead to a paradigm shift in the financial industry on February 8.
Bitcoin ETF receives approval from Ontario securities regulator
The Ontario Securities Commission has approved the first bitcoin exchange-traded fund, Purpose bitcoin ETF, which is managed by Purpose Investments. Since, a second bitcoin ETF by Evolve has also been approved.
Central Banks of China, UAE join CBDC payments project
The central banks of China and UAE are joining the Hong Kong Monetary Authority and Bank of Thailand on a project looking to use blockchain for regional payments.
Andrew Yang plans to transform NYC into a Bitcoin hub if elected mayor
Andrew Yang, the Democratic Party front-runner in a race to be NYC’s next mayor, tweeted that he would transform the city into a cryptocurrency hub if elected mayor.
Swiss canton Zug now accepting bitcoin and ether for tax payments
The canton of Zug, one of the Swiss Confederation member states, has begun accepting BTC and ETH for tax payments. It has partnered with Bitcoin Suisse for the initiative.
Beijing's new digital yuan test features ATMs that convert digital currency to cash
Beijing’s latest test featured automatic teller machines that could convert China's central bank digital currency to physical cash and vice-versa. This was part of a $1.5m trial that took place during the Lunar New Year holiday in early February.
FATF to release updated guidance for digital assets in June
The Financial Action Task Force (FATF) will be seeking public comment on updated guidance related to virtual assets. The public consultation draft will come out in March, with the updated guidance slated for release in June.
Our overall takeaway
Government agencies including the SEC and FATF are signaling a willingness to work with the crypto industry to help create a regulatory framework that also fosters innovation. Globally, regulators are moving from experimentation to implementation as shown by Swiss canton Zug’s decision to accept BTC and ETH for tax payments.
III. Funding & Exits
Convergence Protocol raises $2m in new funding round
Convergence Protocol, a project focused on bringing liquidity to real-world assets in decentralized finance (DeFi), has raised $2m in its latest funding round led by Hashed.
Nexus Mutual raises $2.7m via NXM token sale
Decentralized insurance alternative Nexus Mutual has raised $2.7m through sale of NXM tokens from Collider Ventures, with participation from Blockchain Capital and 1kx, among others.
InsurAce raises $3m in new strategic funding round
DeFi insurance protocol InsurAce has raised $3m in new funding round led by Alameda Research and HashKey Capital, with Hashed and ParaFi Capital also joining the round along with others.
MIT’s Digital Currency Initiative raises $4m to ‘harden’ bitcoin
MIT Media Lab’s Digital Currency Initiative (DCI) has raised $4m from prominent backers, including CoinShares’ Meltem Demirors, Twitter’s Jack Dorsey and MicroStrategy’s Michael Saylor.
Centrifuge raises $4.3m in new funding round
Centrifuge, which aims to bring real-world assets to DeFi, has raised $4.3m via a “safe agreement for future tokens” (SAFT) round led by Galaxy Digital and IOSG Ventures.
Reflexer Labs raises $4.4m in new funding round
Reflexer Labs, the creator of a new gentlecoin that follows ETH’s price minus the volatility, has raised $4.4m in a new funding round led by Pantera and Lemniscap.
Ethereum storage network Swarm raises $6m via a private token sale
Swarm Association, the team behind the development of an Ethereum-based decentralized storage network, has raised $6m through a private token sale. Investors in the round included HashKey Capital, NGC Ventures, and KR1.
Decentralized platform Radicle raises $12m in new funding
Radicle, a peer-to-peer platform for coding collaboration, has raised $12m in a funding round led by Galaxy and NFX. Other investors include Placeholder, Naval Ravikant, Balaji Srinivasan and Meltem Demirors.
Bitcoin brokerage River Financial raises $17.3m
High-end bitcoin brokerage River Financial raised $17.3m in a recent equity sale. The firm reported 34 backers for the round in its filing with the US SEC.
NFT social network Showtime raises pre-seed capital
Showtime, the social network to discover and showcase digital art, has raised pre-seed capital in a round led by Dragon Fly Capital. Robot Ventures, Bollinger Investment Group, and Balaji Srinivasan also participated in the round, among others.
Bitcoin mining infrastructure provider Compute North raises $25m
Compute North, the US-based bitcoin mining infrastructure provider, has raised $25m in new funding to expand its operations. The new funding constitutes $10m and $15m in equity and debt financing, respectively.
BlockFi reportedly raising Series D funding at $2.85bn pre-money valuation
Crypto lending startup BlockFi is rumored to be in the market to raise $150m ahead of the launch of a new credit card product and public market debut by the end of the year. The Series D round is priced at $2.85bn pre-money valuation.
Mobile banking firm MoneyLion set for SPAC merger; to offer new suite of crypto products
New York-based mobile banking firm MoneyLion has announced plans to launch a new crypto platform in 2021. The firm also plans to go public through a merger with a special purpose acquisition company (SPAC), which will value the firm at $2.9bn.
Dapper Labs, creator of CryptoKitties, raising $250m at $2bn valuation
NFT-focused startup Dapper Labs, the creator behind CryptoKitties and NBA Top Shot, is raising $250m in a new funding round led by Coatue Management. The round will value the company at $2bn and comes amid a period of rapid growth for its NBA Top Shot NFT product.
Bitcoin payments platform Bottlepay raises over $15m in seed funding
Bootlepay, a payments platform that lets you send bitcoin on social media, has raised £11m (nearly $15.5m) in a seed funding round at a post-money valuation of £51m ($71m). Participants in the round included FinTech Collective and NYDIG, among others.
DeFi exchange protocol DFX raises $5m in seed funding
DFX Finance, a decentralized finance exchange protocol optimized for non-U.S. dollar stablecoins, has raised $5m in seed funding led by Polychain Capital.
Polkadot parachain Clover Finance raises $3m seed round
Polkadot parachain Clover Finance has closed a $3m seed round to build a bridge between Ethereum and Polkadot. Investors in the round include Polychain, Hypersphere, Bithumb Global and Divergence Ventures.
Async Art raises over $2m in seed funding
Ethereum-based digital art platform Async Art has raised over $2m in seed funding round led by Lemniscap, with Galaxy Interactive, Signum Growth Capital, Divergence Ventures and the LAO joining the round, among others.
Synthetix raises $12m from investors including Paradigm and Coinbase
Synthetic asset protocol Synthetix has raised $12m in new funding from venture capital firms Paradigm, Coinbase Ventures and IOSG. The funds acquired SNX tokens directly from the DAO treasury.
Optimism raises $25m in Series A funding round led by a16z
Ethereum scaling startup Optimism has raised a $25m Series A funding round led by Andreessen Horowitz. The company “is currently in the midst of a phased rollout, and will be ready for large-scale production later this year”, a16z said in its announcement.
DeFi prime brokerage Oxygen raises $40m in new funding round
Oxygen, which aims to be the Robinhood for DeFi, has raised $40m in new funding. The round was led by Alameda and joined by Multicoin, Genesis Capital and CMS.
Digital soccer collectibles platform Sorare raises $50m in Series A round
Sorare, a platform that provides digital soccer collectibles in collaboration with globally-renowned teams, has raised $50m in Series A funding to grow its community and launch a mobile application. Benchmark led the round, with Accel Partners and soccer stars Rio Ferdinand, Oliver Bierhoff and Antoine Griezmann joining the round.
Anchorage raises $80m in a Series C funding round
Cryptocurrency custodian and banking company Anchorage has raised $80m in a Series C funding round led by Singaporean sovereign wealth fund GIC, with participation from a16z, Blockchain Capital, Lux and Indico.
Blockchain.com raises $120m in growth funding
Cryptocurrency services provider Blockchain.com has raised $120m in growth funding from a host of investors including Moore Strategic Ventures (Louis Bacon), Access Industries, Lightspeed Venture Partners and GV (Google Ventures), among others.
Crypto asset manager CoinShares to IPO in Sweden
CoinShares, Europe’s largest crypto-focused asset manager, is planning to list its shares on Nasdaq First North Growth Market in Stockholm on March 11.
Coinbase S-1 published by US SEC with impending public listing
Coinbase’s S-1 was published by the US SEC on February 25, clearing the way for its much-anticipated direct listing on Nasdaq. The highlights: $3.4bn in total revenue until 2020, largely from transaction fees (96% of net revenue), net income of $322.3m in 2020, 43m verified users, of which 3m transact monthly. At the latest valuation, the firm was trading at $100bn on Nasdaq Private Market.
Our overall takeaway
Quality projects at the early stage, especially in the NFT and DeFi space, continue to raise capital from leading investors. On the exit front, all eyes are on the Coinbase IPO since its S-1 publication!
IV. Project Launches & Updates
Christie’s auction house to cryptocurrency for Beeple artwork auction
Christie’s is auctioning “Everydays: The First 5000 Days”, an artwork by digital artist Mike Winkelmann, who goes by Beeple. The standalone sale will run from February 25 to March 11. The auction house will accept Ether as payment for the artwork’s principal price, while the premium will have to be paid in dollars. This piece will go down in art history as the first digital art sale of the kind.
Microsoft and Enjin collaborate to bring custom NFTs to Minecraft
Microsoft has released a browser game, Azure Space Mystery, that rewards players with non-fungible tokens (NFTs) for use inside Minecraft, one of the world’s most popular games.
Germany’s Solarisbank launches licensed crypto brokerage
German fintech firm Solarisbank is adding a brokerage and trading application programming interface (API) to its regulated crypto custody service. The company will offer fiat-to-crypto trading and instant settlement from within its custody solution.
Our overall takeaway
NFT artworks are no longer limited to niche marketplaces, with global auction powerhouse Christie’s auction of Beeple’s “Everydays: The First 5000 Days”.
V. Other Bits We're Excited About
Rapper Soulja Boy selling NFT artwork on Rarible
American rapper Soulja Boy has made his first steps into the blockchain space by selling crypto artworks on the digital collectibles platform Rarible. The artwork, titled “Crank That”, was priced at 5 ETH.
Musician Grimes lists War Nymph NFT collection on Nifty Gateway
Canadian musician Claire Elise Boucher, known professionally as Grimes, has listed her War Nymph NFT collection on Nifty Gateway. She plans to donate a percentage of the proceeds to Carbon180, a NGO dedicated to reducing carbon emissions.
Top bidder at Ultraviolet NFT auction will get the chance to collaborate with DJ 3LAU on new music
Famous musician and crypto influencer 3LAU has announced an upcoming NFT auction of 33 one-of-a-kind “Vinyl NFTs” celebrating the three-year anniversary of his 2018 album Ultraviolet. The top bidder getting an opportunity to collaborate with the artist to produce a new track.
On-chain stablecoin volume surpasses $360bn for February
The monthly on-chain stablecoin volume hit a new high in February, crossing $360bn for the first time. USDT saw 63.5% of the volume, with 18.7% going to USDC.
Nyan Cat, an animated flying cat, sells for $580,000
A 10th-anniversary remastered version of Nyan Cat, the animated flying cat that has become a popular meme, was sold for $580k on the Foundation app.
Our overall takeaway
Top creators are flocking to NFTs, while stablecoins continue to gain adoption.