White Star Capital Digital Assets Fund - Newsletter #133
BlackRock's ETF Application Sparks Bitcoin Rally and Crypto Optimism
BlackRock’s ETF Application Sparks Bitcoin Rally and Crypto Optimism
Speculation is growing that BlackRock, the world’s largest money manager, may finally break the decade-long resistance of US regulators to exchange-traded funds (ETFs) based on Bitcoin. They recently filed an application to launch the first publicly traded spot Bitcoin ETF in the United States, and the optimism surrounding this development has fuelled a rally in the token, which has surged by a fifth to over $30k in response.
Numerous asset managers have attempted to launch a Bitcoin ETF, with the Winklevoss twins filing the first application in 2013 when BTC was trading around $1,000. However, the SEC has never approved an ETF based on the underlying Bitcoin asset due to concerns about the unregulated nature of the Bitcoin market, including the potential for fraud and market manipulation. Supporters of the ETF argue that having a low-cost and regulated asset in the largest investment market in the world would attract a broader range of investors, and believe that the financial prowess of BlackRock may succeed where others have failed in gaining approval. The SEC has a three-month window to evaluate the application.
Currently, the only approved crypto ETFs in the US are based on Bitcoin futures contracts traded on the regulated Chicago Mercantile Exchange. Both the ETF and crypto markets are now closely watching BlackRock's progress, with other major players like Invesco, WisdomTree, Bitwise, Ark Investment Management, and Valkyrie, who had previously seen their spot bitcoin ETF filings rejected, now refiling their applications.
Part of the optimism surrounding BlackRock's application stems from the company's impressive track record. With 575 filings approved by the SEC and only one rejection, BlackRock has a favourable history with the regulator. While the odds of approval for the Bitcoin ETF application are uncertain, some experts, such as Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, place the chances at 50-50.
Regardless of the final SEC decision, the filing itself still signifies adoption and interest from global financial heavyweights which is a significant development within crypto, particularly during the current bear market. If successful, this could pave the way for more widespread adoption of BTC and further validate the legitimacy of digital assets in the eyes of regulators and institutional investors alike.
🔦 White Star & Portfolio Spotlight
Dfns and Cryptosat launch crypto keys into low-earth orbit with space wallet
Dfns Labs and Cryptosat have partnered to create the revolutionary "Space Wallet." This innovative wallet combines a threshold signature scheme with a satellite co-signer to enhance transaction security and prevent physical access-based attacks. The collaboration's goals include expanding blockchain support, achieving Distributed Key Generation in space, open-sourcing the mini-frost library, and demonstrating the potential of satellite-based Trusted Execution Environments for secure transactions in resource-constrained environments.
ALEX plans to revolutionise Bitcoin's DeFi using Ordinals, BRC20 tokens, and Layer 2 solutions
The goal of ALEX is to enhance Bitcoin's DeFi by focusing on Ordinals, BRC20 tokens, and Bitcoin's Layer 2 solutions such as Stacks. They aim to highlight the distinctive relationship between Bitcoin-Stacks and Ethereum-Arbitrum. ALEX has started B20, a BRC20 Orderbook DEX, and is developing an 'indexer of indexers' for decentralized BRC20 indexing. Their ultimate objective is to create a user-friendly and scalable BRC20 trading platform to revolutionise Bitcoin DeFi.
Introducing Ledn Dual Cryptocurrency Notes (DCNs)
Ledn's new Dual Cryptocurrency Notes (DCNs) offer clients increased control over Bitcoin transactions by setting a Strike Price and maturity date, potentially yielding 1.5 to 3 times higher returns than a regular savings account. However, while offering higher earning potential, DCNs entail risks, including missing out on favourable price shifts and asset lock-in until maturity.
Safello invited to bid in Swedish Authorities' procurement for cryptocurrency services
Safello has been invited by the Swedish Police Authority to bid in a procurement process aimed at selecting a preferred supplier of cryptocurrency services for the Police, Customs, and Ecocrime authorities. This recognition underlines Safello's quality and contribution potential, as they aim to meet these organizations' national cryptocurrency exchange needs.
Multis integrates Arbitrum and Optimism solutions into its platform
Multis has integrated two Layer 2 solutions, Arbitrum and Optimism, into its platform to provide faster and more scalable transactions for its users. These integrations aim to significantly reduce transaction fees and delays, enhancing the overall user experience in DeFi.
🏦 Enterprises & Institutions
Circle sets sights on Hong Kong, sees “enormous demand for digital dollars”
Circle is targeting Asia's growing market, with a particular focus on Hong Kong's regulatory developments. The company recently obtained a digital token license in Singapore, highlighting its commitment to expanding its presence in the region alongside other crypto firms like Gemini and FalconX.
HSBC Hong Kong launches support for Bitcoin and Ethereum ETFs
HSBC Hong Kong now offers Bitcoin and Ethereum futures Exchange Traded Funds (ETFs) on its mobile app, granting access to digital asset derivatives in the Asian crypto hub. These ETFs, listed as securities, provide customers with convenient exposure to Bitcoin and Ethereum futures, catering to the simplicity and convenience desired by new crypto investors, as stated by Sei Labs co-founder Jeff Feng.
Cross-border stablecoin payments testing underway at SAP
SAP is testing cross-border USDC payments on Ethereum's Goerli testnet, inviting global businesses to participate and provide feedback. The goal is to address the challenges of slow and expensive cross-border payments by integrating blockchain-based payment processes into SAP's mid-market enterprise resource planning (ERP) solutions, with potential for further exploration of digital and cryptocurrency payments in commerce and employee scenarios.
JP Morgan activates Euro payment settlement with its JPM Coin
JP Morgan has conducted its inaugural blockchain transaction in Europe using its JPM Coin. Siemens AG made a Euro-denominated payment on JP Morgan's permissioned blockchain, highlighting the bank's focus on leveraging blockchain for secure and efficient settlements.
⚖️ Government & Regulation
EU reaches deal on capital requirements for banks holding crypto
EU lawmakers have agreed on transitional capital requirements for banks holding cryptocurrencies until the implementation of Basel III reforms. The agreement aims to ensure banks disclose their crypto asset exposure and includes a call for a specific legislative proposal from the European Commission.
As EU’s landmark crypto rules come into force, do we already need MiCA 2.0?
The European Union's groundbreaking crypto regulations, known as MiCA, will come into effect soon, but financial policymakers are already calling for the development of a second version, MiCA 2.0, to address current blind spots such as decentralized finance, lending, staking, and potentially non-fungible tokens (NFTs). While the focus is currently on implementing MiCA 1, reports on the gaps in the legislation could pave the way for the development of MiCA 2.0, with discussions centered on what should be included to regulate blockchain-based finance more comprehensively.
'Not just an experiment': Swiss central bank to carry out CBDC pilot
Switzerland's central bank will pilot a wholesale central bank digital currency (CBDC) on the SIX digital exchange to test real transactions with market participants. The pilot will focus on interbank, wholesale use and won't include a public, retail version initially.
Coinbase celebrates win at US Supreme Court over arbitration
The U.S. Supreme Court ruled 5-4 in favor of Coinbase, allowing the exchange to pursue arbitration in customer disputes. Coinbase celebrated the victory as it faces a separate regulatory battle with the U.S. Securities and Exchange Commission.
IMF shifts stance on cryptocurrencies and CBDCs in Latin America
The IMF has changed its stance on cryptocurrencies, shifting from advocating for bans to emphasizing the importance of regulation. In a recent report, IMF economists highlighted the benefits of cryptocurrency adoption and examined the progress of CBDCs in Latin America.
💰 Funding & Exits
Dtcpay, Singapore Payments Startup, closes $16.5 million round led by Pontiac Land chair
Singapore-based payments startup Dtcpay raised $16.5 million in a pre-Series A funding round led by Kwee Liong Tek, chairman of Pontiac Land Group. The funds will fuel product development and global expansion of Dtcpay's payment services for fiat and cryptocurrency transactions.
Cosmos-based blockchain Neutron raises $10 Million in Seed Funding led by Binance Labs and CoinFund
Neutron, a Cosmos-based blockchain, raised $10 million in a seed funding round led by Binance Labs and CoinFund. The funding will fuel the expansion of the Neutron ecosystem and the development of new dApps within the interconnected Cosmos network.
DeFi Infrastructure project Maverick Protocol raises $9 Million led by Founders Fund
Maverick Protocol, a DeFi infrastructure project, raised $9 million in a funding round led by Founders Fund, with participation from top crypto investors including Pantera Capital, Binance Labs, Coinbase Ventures, and Apollo Crypto. The funds will be used to expand the protocol, enhance cross-chain liquidity, and attract developers and projects to its ecosystem, following the successful launch of its decentralized exchange with $37 million locked in value.
Kaito gets $87.5M valuation in new funding to build AI search engine for crypto
Kaito raises $5.5 million in Series A funding to develop an AI search engine customized for the crypto industry. Kaito's search engine utilizes large language models and real-time data from various sources to provide comprehensive information on social media, news, and on-chain data.
Concordia secures $4 Million in Seed Funding to transform Digital Asset Collateral management and unify DeFi and TradFi
Concordia, a digital asset risk and collateral management platform, raised $4 million in seed funding after launching its public testnet. With plans to expand to mainnet and other chains, Concordia aims to streamline collateral management for cross-chain margin trading and integrate DeFi and TradFi into a unified global financial system.
Northstake raises $3M to boost institutional crypto staking
Cryptocurrency staking platform Northstake has secured 2.8 million euros ($3 million) in funding from investors such as PreSeed Ventures, Morph Capital, The Aventures Fund, Funfair Ventures, and Delta Blockchain Fund. Northstake simplifies institutional staking while maintaining compliance, attracting interest from entities like sovereign wealth funds.
Earn Network raises $2.7M in Seed Funding to further develop the Marketplace for liquid investments
Earn Network, a community-driven marketplace for liquid investments, has raised $2.7 million in seed funding led by Shima Capital. The funding will fuel the expansion of product categories, team growth, and establishment of new partnerships, aiming to create a user-friendly investment platform that unlocks the untapped potential of the DeFi ecosystem.
Radius raises $1.7 Million to bring shared sequencing to life
Radius has secured $1.7 million in pre-seed funding, led by Hashed, to develop Practical Verifiable Delay Encryption (PVDE), a trustless shared sequencing layer. PVDE aims to address issues of centralized sequencing in blockchain transactions, while Radius is also working on 360, an MEV-resistant decentralized exchange to protect users from front-running and sandwich attacks.
Anichess secures $1.5 Million to develop decentralized chess game with magical spells
Anichess, a subsidiary of Animoca Brands, has raised $1.5 million in a seed round to develop a decentralized chess game in partnership with Play Magnus Group. The game, featuring strategic layers powered by magical spells, aims to offer a new and engaging chess experience, with an alpha launch planned for the first quarter of 2024.
🚀 Project Launches & Updates
Web3 fashion platform SYKY launches incubator for emerging digital designers
Digital fashion platform SYKY has launched The SYKY Collective, a year-long incubator program for emerging digital designers to grow their brands. The program includes a cohort of 10 designers mentored by industry leaders, with a focus on disrupting the traditional fashion industry and empowering artists in the digital fashion space.
Leveraged bitcoin futures ETF launch set for Tuesday
Volatility Shares is set to launch the first US-based ETF that provides leveraged exposure to bitcoin futures contracts. The ETF aims to deliver double the excess return of the S&P CME Bitcoin Futures Daily Roll Index for a single day, offering convenient and liquid access to leveraged bitcoin exposure for US crypto traders via traditional brokerage accounts.
FC Barcelona, World of Women reveal 'Empowerment' soccer NFT auction
FC Barcelona and World of Women have collaborated to release a digital artwork titled "Empowerment," showcasing women's club captain Alexia Putellas and offering collectors exclusive physical and virtual benefits through an exclusive auction on OpenSea.
🔥 Other Bits We're Excited About
Crypto Funds see largest inflow in a year
Digital asset investment products experienced the largest weekly inflows in a year, totaling $188 million, with Bitcoin-related products driving the majority of the inflows, according to a report by CoinShares. The surge in inflows coincided with a significant Bitcoin price rally and the filing of spot Bitcoin ETF applications by prominent traditional financial institutions.
Celebrities curate NFT collection to support AIDS Research
Celebrities like Kendall Jenner, Kate Moss, J Balvin, Jeff Koons, and Baz Luhrmann will curate an NFT collection to support amfAR, The Foundation for AIDS Research. Artists can submit digital backgrounds, which will be combined with pre-designed foreground characters, and the proceeds from the collection's sale will fund AIDS-related research.
Will Elon Musk fight Mark Zuckerberg in a cage? You can bet on it
Speculation about a potential cage fight between Elon Musk and Mark Zuckerberg has led to online betting on Polymarket, with the majority of bets indicating that no fight will be announced. Despite confirmation from UFC President Dana White that both Musk and Zuckerberg are serious about the fight, the outcome remains uncertain.