White Star Capital Digital Assets Fund - Newsletter #144
Franklin Templeton files for spot Bitcoin ETF
Franklin Templeton files for spot Bitcoin ETF
White Star Capital Digital Asset Fund - newsletter #144
Franklin Templeton, an asset manager with $1.5 trillion in assets under management, has announced its intention to launch a spot bitcoin ETF. The proposed product, called "The Franklin Bitcoin ETF" would be listed on the Cboe BZX Exchange as a series within the Franklin Templeton Digital Holdings Trust. The objective is to reflect the performance of Bitcoin's price, before paying the expenses of the fund.
The ETF's shares will be backed by Bitcoin held by Coinbase Custody Trust Company, the fund's custodian. Other Bitcoin ETF applicants have also chosen Coinbase as their potential fund's custodian and surveillance-sharing partner. This means Coinbase would share information about trading, clearing activity, and customer identification to reduce the risks of market manipulation, as well as take care of storing the Bitcoin backing the fund's shares.
In addition to Bitcoin, there are currently 15 live Ethereum futures ETF applications and three spot Ethereum ETF applications. Spot ETFs track the live price of the underlying asset (in this case, either Bitcoin or Ethereum), while futures ETFs allow investors to speculate on the future price of the asset. Investors seeking direct exposure to Bitcoin may choose to invest in spot ETFs. This type of product provides a simple way to gain exposure to the price of Bitcoin in their brokerage accounts, along with stocks and bonds.
Franklin Templeton's proposal is one of 12 applications currently under consideration by the Securities and Exchange Commission. In April, Ark and 21Shares re-filed for a Bitcoin ETF spot, about two months before asset management giant BlackRock announced plans to launch a similar offering. BlackRock's entry into the Bitcoin ETF race prompted Fidelity, Invesco, Bitwise, and several other issuers to also retry their own attempts. While Canada, Brazil, and Europe trade such products, the US securities regulator has yet to permit a spot Bitcoin ETF to enter the market.
Despite issuers' long-standing efforts to bring an ETF that directly holds Bitcoin to the US market, the SEC has never allowed one to start trading. Franklin Templeton has filed for an actively managed Bitcoin ETF, following a recent legal battle won by Grayscale Investments against the SEC. The DC Circuit Court of Appeals ruled that the SEC's denial of Grayscale's conversion of its Bitcoin Trust (GBTC) to an ETF was "arbitrary and capricious" because the agency had already permitted Bitcoin futures ETFs to enter the market. Although the decision doesn't mandate the SEC to approve the GBTC conversion, the judges have instructed the agency to use reasons other than those it had previously cited for denying the conversion.
Some industry watchers believe that the recent ruling has positively impacted the chances of the SEC approving a spot bitcoin ETF at some point. However, this does not necessarily mean that GBTC's conversion to an ETF will occur in the next few weeks. It is more likely that a conversion will occur in late 2023 or 2024, along with other spot bitcoin ETF approvals. This decision has prompted Bloomberg Intelligence analysts to increase the likelihood of bitcoin ETF approval from 65% to 75% by the end of 2023. According to the analysts, there is a 95% chance of such a product launching in the US by the end of 2024.
🔦 White Star & Portfolio Spotlight
Trident is set to develop an advanced crypto lending business with the recent funding round
Trident Digital Group will use the $8 million from its seed round to develop its advanced crypto lending business, with a focus on addressing liquidity challenges and mitigating counterparty risk. They plan to offer a yield product tied to the risk-free rate, secured by physical treasuries, and seek deposits from fintech firms, crypto-native treasuries, and venture capitalists, all while ensuring a balance between security and capital efficiency in their lending solutions.
Oamo goes live, allowing data monetization through initial data tools
The Oamo platform has officially launched, allowing users on their allowlist and mintlist to start monetizing their data through initial data pools. The platform aims to unlock the value of users' data while emphasizing anonymity and plans to expand with more pools from partners and customers in the future.
Ledn launches USD stablecoin growth accounts offering secure yield generation
Ledn introduces its new USDC Growth Account, offering a secure way to generate yield on USD stablecoins. The account is backed by Bitcoin collateral posted by borrowers, ensuring security, risk mitigation, transparency, client control, and trust for users, with an 8.5% APY on offer.
Safello introduces lightning-fast crypto purchases with Apple Pay and Google Pay support
Safello, a cryptocurrency platform, has unveiled support for Apple Pay and Google Pay, enabling users to purchase cryptocurrencies in just 15 seconds, streamlining the buying process. This move aims to make crypto transactions quicker and more accessible to a wider audience.
ALEX DeFi to launch on-chain BRC20 "Indexer of Indexers"
ALEX DeFi, in collaboration with key off-chain indexers, is set to launch the first on-chain indexer for BRC20 tokens, aiming to enhance the immutability and censorship resistance of the BRC20 ledger. This on-chain indexer, utilizing a federated model of consensus and a consortium of off-chain indexers, will help reduce the centralization risk and potential errors associated with centralized off-chain indexers, offering a more secure environment for users to transact BRC20 tokens.
ParaSwap begins $PSP Token distribution worth $13 Million
ParaSwap has initiated the distribution of its $PSP tokens, with $13 million allocated for the airdrop. The distribution is determined by on-chain and swap activity, with over 20,000 whitelisted wallets eligible to claim their tokens through the provided website.
Exclusible nominated in European Metaverse awards
Exclusible and Polycount have been nominated in three categories for the European Metaverse Awards. This recognition reflects their valuable contributions and impressive achievements in the metaverse industry.
🏦 Enterprises & Institutions
Google launches $20 million fund to support responsible AI development
Fresh from its Google Cloud Next conference, Google has introduced the Digital Futures Project, aimed at fostering diversity in AI development and addressing concerns like bias, workforce impact, and fairness. The initiative includes a $20 million fund to support responsible AI development and has allocated initial grants to institutions such as the Aspen Institute and MIT Work of the Future to facilitate research and discussions around the challenges posed by AI.
Meta is building new AI model to compete against OpenAI’s ChatGPT
Meta is developing a new AI model to compete with OpenAI's ChatGPT. The company plans to launch a more powerful system than its existing Llama 2, with capabilities similar to OpenAI's GPT-4. The training for this new model is set for 2024. To strengthen its infrastructure, Meta is acquiring the highly sought-after NVIDIA H100 Tensor Core GPUs for AI workloads. In addition to this development, Meta has also introduced Llama 2 and is continuing various AI projects, including developer tools, AI-driven advertising services, and forthcoming chatbots.
JPMorgan looks to save millions with blockchain-based financial instruments
While JPMorgan's $20 million blockchain-driven savings may seem small compared to their traditional payment flows, it represents a significant proof of concept. Blockchain technology enables precise and cost-effective transactions, with savings estimated to reach $20 million by next year. This is especially valuable in liquidity-strained environments. This trend is expected to double in the near future, emphasizing the real-world utility of these innovations for clients.
Panerai to enhance luxury watches with NFT 'digital passports' for authenticity and warranty extension
Italian luxury watchmaker Panerai will introduce NFT-based "digital passports" with all watch purchases starting from October 3. Developed in partnership with Web3 solutions provider Arianee, these digital passports will offer comprehensive information about each timepiece, serve as proof of authenticity, extend warranties, and combat counterfeiting in the secondary market.
Binance pledges $3M in BNB to Morocco earthquake victims
Binance has pledged $3 million in BNB cryptocurrency as aid relief for victims of the recent earthquake in Morocco, specifically targeting the Marrakech region, where the earthquake caused significant damage. Users in the most affected areas will receive up to $100 in BNB, while those outside the region will receive $10 each, with nearly 70,000 Binance users in Morocco expected to receive aid. Binance is also accepting additional contributions in various cryptocurrencies to support earthquake relief efforts.
Coinbase paves way for big institutions to do more with Web3, DeFi, NFTs
Coinbase has expanded its services into the professional space by introducing a Web3 wallet through its Coinbase Prime division. This new wallet is tailored for institutional clients looking to engage with NFTs, DeFi, and other aspects of blockchain, offering a secure avenue for corporations to participate on-chain, whether it's for NFT drops or voting in DAOs, according to Kevin Johnson, Coinbase's VP of institutional sales and trading.
Circle’s liquidity coverage is about double US banks
Circle's chief economist, Gordon Liao, disclosed that the liquidity coverage ratio for USDC (USD Coin) stands between 200% and over 800%, significantly exceeding conventional banking requirements and typical US bank reserves. Despite recent market fluctuations, Circle has consistently fulfilled redemption requests, processing more than $300 billion in redemptions over the past five years, highlighting the robustness of the system.
⚖️ Government & Regulation
Adobe, IBM, Nvidia join US President Biden’s efforts to prevent AI misuse
Adobe, IBM, Nvidia, and five other companies have joined President Biden's efforts to prevent AI misuse by endorsing voluntary AI commitments, including watermarking AI-generated content. The White House Chief of Staff, Jeff Zients, emphasized the urgency of leveraging AI's advantages and mitigating its risks through collaboration with the private sector. Discussions in Congress regarding potential AI legislation have been ongoing, but concrete progress has been limited, while the White House is actively developing an executive order related to AI.
Nasdaq receives SEC approval for AI-based trade orders
Nasdaq has received SEC approval to launch the first AI-driven order type, called dynamic midpoint extended life order (M-ELO). This innovative system employs real-time reinforcement learning AI to execute orders, resulting in a 20.3% increase in fill rates and an 11.4% reduction in mark-outs, enhancing the efficiency and responsiveness of stock trading to market conditions.
Hong Kong-Israel CBDC project examines security, privacy, accessibility
The Bank for International Settlements (BIS) has revealed that CBDCs can be secure and private while settling transactions on the central bank's ledger, as demonstrated in its Project Sela. This project explored the protection of CBDC systems from hacks and distributed them to users while preserving privacy by obfuscating personal identifiers, potentially influencing the development of CBDCs worldwide.
US & Vietnam forms ‘billion dollar’ AI-chip business partnership
The US and Vietnam have entered into significant business agreements and partnerships, focusing on AI technologies, cloud computing, and semiconductors, to maintain their competitive edge in the global AI race. These collaborations, involving prominent tech giants like Google, Intel, Boeing, Amkor, Microsoft, and Nvidia, aim to drive technological progress and strengthen economic ties, with Vietnam's economic growth and emphasis on AI playing a pivotal role.
France introduces certification to promote transparency in crypto and finance influencer ads
France has launched the Responsible Influence Certificate in Finance program, designed to educate crypto and finance influencers on transparency and paid ad disclosures. The Autorité des Marchés Financiers (AMF) champions the need for clear, precise, and honest investment communications, encouraging the certification to safeguard investors, despite its non-mandatory status.
Major crypto firms join forces to advocate for regulatory clarity in Texas
Leading crypto and blockchain firms, such as a16z crypto, Coinbase, Ledger, Bain Capital Crypto, Blockchain Capital, and Paradigm, have united to create the Crypto Freedom Alliance of Texas. Their mission is to promote clear and uniform regulations for digital assets in Texas by educating stakeholders, raising awareness about Web3's potential, and advocating for crypto-friendly tax, bank charter, and bank regulations, taking inspiration from Wyoming's favorable laws.
Russian Central Bank may ‘Mark’ CBDC tokens to track digital Ruble transactions
The Russian Central Bank is exploring "marking" digital ruble tokens for better traceability in CBDC transactions, particularly for tracking funds in state budgets. However, the Deputy Governor clarified that color-coding CBDCs is not in active development and will be discussed in a later pilot program stage, raising concerns about potential restrictions on money use and reduced liquidity.
💰 Funding & Exits
Story Protocol secures $54M investment for Blockchain-based IP management
US-based startup, Story Protocol, has successfully raised $54 million in funding, led by a16z crypto from VC firm Andreessen Horowitz, along with support from Endeavor, Samsung Next, Hashed, Paris Hilton’s 11:11 Media, and Wattpad co-founder Allen Lau. This innovative platform is set to launch in the first half of the coming year, allowing creators to tokenize their intellectual property (IP) with a transparent ownership and governance framework. Story Protocol's model encourages global creators to share IP rights or revenues, fostering collaboration and incentivizing content remixing within the network.
Zeebu surpasses hard cap target with $25 Million in presale funding for Telecom carrier's on-chain invoice settlement platform
Zeebu, a blockchain-based settlement platform for telecom carriers, has successfully raised $25 million in a presale funding round, surpassing its initial $15 million target. This strategic investment aims to transform the industry by introducing an efficient on-chain invoice settlement platform and a dedicated loyalty token.
Animoca brands raises $20M for Mocaverse
Animoca Brands secures $20 million in funding led by CMCC Global to accelerate the development of Mocaverse, a Web3 gaming and entertainment project. Mocaverse aims to empower users to build digital identities and loyalty points within a vast ecosystem, soon launching the exclusive Moca ID NFT collection.
Pantera Capital leads $16.5M series A round for StarkWare-Powered DEX Brine Fi
Decentralized exchange Brine Fi has secured $16.5 million in a Series A funding round, led by Pantera Capital, valuing the platform at $100 million. Brine Fi, which aims to enhance privacy through zero-knowledge technology, offers users the ability to directly execute orders while retaining full custody of their crypto assets, distinguishing it from the automated market maker DEX model. The platform has already launched with significant traction, boasting a daily trading volume of $1 to $3 million and leveraging zero-knowledge proofs to combat frontrunning. Brine Fi also offers gasless (zero transaction fee) trades with a 0.05% trading fee.
Pahdo Labs secures $15M funding to develop anime-inspired RPG and UGC platform
Pahdo Labs secures $15 million in funding led by Andreessen Horowitz (A16z) to develop an anime-style RPG and user-generated content platform, promising players the ability to create virtual worlds using AI tools. Their project "Halcyon Zero" aims to redefine the genre by integrating creative and social features into the anime RPG experience.
Seedify secures $10 million investment from LDA Capital
Seedify has announced a significant boost to its growth capital, with a $10 million commitment from Madrid-based LDA Capital. Seedify, known for its successful foray into the blockchain industry without external capital, achieved remarkable ROI as a launchpad and aims to support teams in developing valuable Web3 products. With this partnership, Seedify's network will gain access to LDA Capital's platform, offering capital solutions and additional value-add services to further enhance the blockchain ecosystem.
Flashwire Group raises $10M in series A funding and unveils Web3 financial products
Flashwire Group secures $10 million in Series A funding and introduces innovative Web3 financial products. These offerings include a crypto-friendly digital bank, a cryptocurrency VISA debit card, and a collateralized lending platform, aiming to solve industry challenges and provide valuable solutions for users.
"GamePhilos raises $8M in seed funding for Web3 strategy game 'Age of Dino'"
GamePhilos has secured $8 million in seed funding for its upcoming mobile and PC strategy game, "Age of Dino." Xterio Ltd contributed to the funding, and the game will incorporate web3 elements like NFT ownership and in-game economics. The game, developed by former members of Netease, Zynga, FunPlus, and ByteDance, features battles among factions of dinosaurs, real-time battles, multiplayer gameplay, trading systems, and alliance-building mechanics.
Trident Digital Group secure $8 million funding for innovative crypto lending venture
Trident Digital Group, founded by former Coinbase executives, raises $8 million in seed funding to rejuvenate the crypto lending sector amidst recent market turmoil. Their innovative approach aims to address counterparty risk and restore liquidity.
Mythic Protocol raises $6.5M in seed round to pioneer collaborative entertainment
Mythic Protocol has successfully closed an oversubscribed $6.5 million seed round co-led by Shima Capital and Alpha JWC, with participation from various investors, including Saison Capital, GDV Venture, Planetarium Labs, Arcane Group, Presto Labs, MARBLEX, EMURGO Ventures, HYPERITHM, and prominent angels. The funding will be used to create an ecosystem of entertainment products leveraging blockchain technology, gaming, and creative media with a focus on collaboration.
🚀 Project Launches & Updates
Sony reveals blockchain plans to 'connect souls across generations'
Sony Network Communications is teaming up with Startale Labs to establish a blockchain platform, creating a joint venture named Sony Network Communications Labs Pte. Ltd. This collaboration seeks to combine Sony's strengths in areas like IoT, AI, and solution services with Startale's blockchain expertise to construct a global infrastructure for the Web3 era. However, the precise applications of blockchain in Sony's products remain undisclosed.
Apple unveils iPhone 15 Pro with enhanced gaming capabilities
Apple's unveiling of the iPhone 15 Pro marks a significant milestone in mobile gaming, thanks to its A17 Pro chip boasting ray tracing and enhanced gaming capabilities. This powerful chip promises smoother gameplay and improved graphics for popular titles like Resident Evil Village and Assassin's Creed: Mirage. Developers have praised its higher resolution, dynamic lighting, and environmental effects, solidifying the iPhone 15 Pro as a game-changer in the mobile gaming arena.
PayPal enhances crypto offering with USD conversion service
PayPal is expanding its cryptocurrency services by introducing a USD conversion service, allowing users in the US to easily convert their digital currencies into US dollars. This service is not limited to wallets and is also accessible to decentralized applications (dApps) and NFT marketplaces, providing a seamless payment experience for Web3 merchants and offering security controls to help streamline payment processes.
Particle Network launches V2 of its intent-centric modular access layer of web3
Particle Network has introduced V2 of its Wallet-as-a-Service (WaaS) solution, offering significant improvements in privacy, user experience, and transaction efficiency for Web3. V2 is designed to be adaptable to changes in user behavior and blockchain architecture while upholding Web3 principles of user sovereignty and composability, featuring technologies like zero knowledge (ZK) components and the Intent Fusion Protocol to enhance privacy and streamline user interaction in the Web3 environment.
Opera browser introduces MiniPay Stablecoin Wallet for African users
The Opera web browser is set to launch MiniPay, a non-custodial stablecoin wallet integrated into its mobile web browser, initially targeting its African user base. MiniPay, built on the Celo blockchain, will enable users in countries such as Nigeria, Kenya, Ghana, and South Africa to conduct stablecoin transactions with minimal fees, offering integration with local payment methods and traditional bank transfers. This move aims to address concerns about high fees, unreliable service uptimes, and a lack of transparency in transaction progress expressed by users in these regions.
🔥 Other Bits We're Excited About
India leads world in ‘grassroots crypto adoption’
India is a leader in grassroots crypto adoption, particularly in the Central and Southern Asia and Oceania (CSAO) region, as well as in lower-middle-income nations. Despite high capital gains taxes on crypto profits, India ranks at the top due to the active use of centralized and decentralized exchanges, lending protocols, and token smart contracts. As a result, it is the second-largest global crypto market by transaction volume. This is driven by factors such as gaming, gambling, and rising DeFi activity, particularly among institutions.
Switzerland emerges as a global hub for cryptocurrency
According to blockchain expert Özcan Köme, Switzerland has emerged as a global hub for cryptocurrency due to its regulatory clarity, business-friendly environment, and strong technological infrastructure. The Crypto Valley in Zug, which is home to over 800 crypto and blockchain companies, promotes collaboration and innovation. Furthermore, Swiss banks provide support, local government initiatives encourage growth, top-tier educational institutions like ETH Zurich offer expertise, and favorable tax policies make Switzerland an attractive destination for crypto ventures.
Bloomberg predicts $150B inflow to Bitcoin market with BlackRock's ETF approval
A Bloomberg ETF analyst foresees a potential influx of $150 billion into the Bitcoin market if BlackRock's Bitcoin spot ETF gains approval. This estimate is derived from comparisons to the value of gold ETFs and the substantial assets managed by financial advisors, suggesting that BlackRock's ETF could substantially boost Bitcoin's appeal among traditional financial advisors.