Bitcoin is still choice numero uno

Dear member,

Ethereum has been in the spotlight recently due to the much anticipated Shapella upgrade. But Bitcoin hasn’t disappointed either. Institutional investors concerned about challenges in TradFi have increased exposure to Bitcoin versus other altcoins. Bitcoin mining stocks have also been on a tear, far surpassing the NASDAQ 100 Index.

Though the first quarter of 2023 saw increased regulatory uncertainty, the bear market, and increasing signs of a coming global recession, billions of VC funds have poured into Web3 startups. Several notable fundraises in the past week include:

• 6m in seed funding for Fractal, an institutional on-chain finance start-up

• $21.9m in a community-centric fundraising campaign by SwissBorg

• $4.5 million in seed funding for Swaap Labs

• $200m fund by Bitget, a large Singapore-based crypto exchange

• $7m in Series A funding for Accredify, a Singapore-based blockchain start-up

Singapore has proved to be a crypto hotbed for startups, but other parts of Asia are also making positive strides, especially concerning policymaking. A court in Hong Kong has set a crucial precedent by declaring cryptocurrencies as properties. Three Japanese banks partnered with Ripple to enable P2P remittance services for their clients.

In Europe, the EU parliament has approved new policies that include licensing requirements and new cross-border fund transfer rules for crypto service providers. Societe Generale, a 150-year-old bank based in the U.K., launched a stablecoin pegged to the Euro and will be available to institutional clients.

While it may take time for the TradFi industry to build more bridges with Web3, many established players in the industry have been making headway. One such partnership was struck recently between Apple and Goldman Sachs; a savings program that offers yields of up to 4.15% annually.

It’s an attractive offer, all the more in this environment of near zero-interest rates. With increasing uncertainty in the global macroeconomic outlook and the cascading effects of de-dollarisation, Bitcoin may soon join the ranks of risk-off assets of choice for both retail and institutional investors. With BTC’s growth of 72.4% by the first quarter of this year alone, who’s to argue?

Best regards from the Future,
RFTF.ai 

Market Intel

Over 1 million ETH worth $2.1b has been withdrawn from Ethereum's Beacon Chain in the first four days of the Shapella hard fork, causing ETH to surpass $2,100 for the first time in 11 months. Data from Nansen shows that as of April 17, the amount of staked ETH has surpassed ETH withdrawals.

Bitcoin remains a focus for institutional investors over altcoins, with inflows of $414m in the last five weeks, likely due to a "flight to safety" by investors concerned about TradFi challenges.

Billions invested by VCs in Q1 2023 despite regulatory uncertainty, the bear market, and the US's attack on crypto. Several large investments have been made in the sector, including LayerZero, Scroll ZKP, Eigenlayer, and Fetch.ai. Companies are also seen to zero in towards Asia.

Bitcoin mining stocks have outperformed both Bitcoin and tech stocks this year. The outperformance of these stocks is likely caused by company-specific factors, as they have all delivered solid monthly operational updates exceeding expectations this quarter. The tech-heavy NASDAQ 100 Index has only managed a 20% gain so far this year, compared to leading mining firm Core Scientific’s 455% gain.

Bitcoin's QoQ growth of 72.4% makes it the best-performing asset in Q1 2023, beating the Nasdaq index and gold, which gained 15.7% and 8.4%, respectively. The report attributes Bitcoin's resurgence to "increased volatility from the banking crisis" and to Binance's decision to end part of its zero-fee incentive scheme for Bitcoin trades.

Funding Trends

Fractal, an institutional on-chain finance start-up, has raised $6m in seed funding led by Hack VC. Fractal is aiming to launch institutional-grade products that facilitate capital efficiency, transparency and a simplified user journey.

Crypto exchange Bitget launches a $200m fund to support the growth and development of decentralized applications (DApps) as part of a strategic partnership with Core DAO, an organization focused on developing the Satoshi Plus ecosystem.

SwissBorg has raised $21.9m in a community-centric Series A fundraising campaign at a valuation of $223m, which saw them outperform institutional and private investors. The Series A fundraising resulted in SwissBorg selling 13,651,189 shares to 16,841 investors.

Swaap Labs has raised over $4.5 million in seed funding for its Swaap platform, which aims to offer liquidity providers passive and profitable market-making strategies with reduced trading costs.

Accredify, a Singapore-based start-up, has raised $7m in a Series A funding round led by iGlobe Partners and SIG Venture Capital. Accredify uses blockchain technology to guarantee the authenticity of documents and its SaaS solution is used by educational institutions, government agencies and enterprises.

Web2 → Web3 Immersion

Apple partners with Goldman Sachs to launch a savings program that offers up to 4.15% annual percentage yields without minimum deposits or balance requirements. The program, available to Apple Card users, allows users to deposit funds directly into the savings account through their Apple Wallet or by linking it with their bank account, with no additional transaction fees on withdrawals.

Three Japanese banks have integrated to MoneyTap, Ripple blockchain-based peer-to-peer (P2P) remittance service. The move allows them to provide P2P payment services to clients through the MoneyTap application, with users able to make online payments through mobile phone numbers and bank account numbers.

Australia has installed more Bitcoin ATMs than Asia, with 364 crypto ATMs compared to Asia's 355 crypto machines, which represent 1% of the total crypto ATMs installed worldwide.

Space and Time is now available on the Microsoft Azure Marketplace. The move will enable the decentralized blockchain data warehouse developers to access enterprise data for smart contract applications and provide new use cases for indexed blockchain data.

Sotheby’s will facilitate the sale of the "Grails" NFT collection, originally owned by the now-bankrupt hedge fund Three Arrows Capital (3AC), as well as its NFT-collecting fund Starry Night Capital. The total value of NFTs held by 3AC is $2.4 million, including NFTs from popular Web3 projects and notable artists.

150-year-old leading bank Societe Generale has launched a stablecoin pegged to the euro on the Ethereum blockchain. Launched by its crypto division SG Forge, EUR CoinVertible (EURCV) will be available to institutional clients, bridging the gap between traditional capital markets and digital assets.

Regulatory Round-up

APAC

A Hong Kong court has ruled that cryptocurrency should be classified as property, according to reports. The decision was made during a case involving cryptocurrency exchange Gatecoin, which went into liquidation following a hack in 2016.

EU

The EU Parliament has approved new regulations for crypto service providers that include licensing requirements and new rules for cross-border fund transfers. The new rules, which are part of a wider effort by the EU to regulate the cryptocurrency industry, are aimed at increasing investor protection and combating money laundering and terrorist financing.

International

The Central Bank of Russia (CBR) has issued guidelines for its digital ruble pilot program, signaling its readiness to begin testing the new currency. The bank said that the pilot would take place in several regions, including Moscow and St. Petersburg, and involve a limited number of participants. The digital ruble is expected to improve payment efficiency and reduce transaction costs for businesses and consumers alike.

MENA

UAE’s FFSA has opened license applications for Virtual Asset Service Providers (VASPs) operating in the country. The new regulatory framework requires VASPs to meet anti-money laundering and counter-terrorism financing standards and to have a physical presence in the UAE.

The use of stablecoins in Israel is growing, with more than 60% of the country's institutional investors purchasing these digital assets. This growth is partly driven by the low-interest rates on traditional savings accounts and the rise of DeFi platforms. The Israeli government has been supportive of blockchain technology, which has further encouraged the adoption of stablecoins.

US

Basketball Hall of Famer Shaquille O'Neal has been sued for promoting FTX, the now-defunct cryptocurrency exchange, ending a 3-month goose case. O'Neal is among several celebrities that are facing lawsuits for failing to disclose they were paid FTX promoters.

US SEC charges cryptocurrency exchange Bittrex for operating illegally and violating federal financial laws, alleging it traded unregistered securities worth more than $1 billion.

The Raven Also Spotted

Cathie Wood, the CEO of Ark Investment, compared Bitcoin and Ethereum to gold, calling them "crypto commodities," while Ray Dalio, the founder of Bridgewater Associates, expressed skepticism about their value as an investment and predicting a possibility of further government clampdown.

Donald Trump earned more than $1 million from selling NFTs, according to his campaign spokesperson. The former U.S. president launched his own line of NFTs in March 2022, and they quickly sold out.

The Central Bank of Bhutan reportedly bought and stored Bitcoin and other cryptocurrencies worth millions of dollars without the government's knowledge, according to local sources.

Japanese Prime Minister Fumio Kishida is set to deliver a video message at CoinPost's WEB x Conference 2023, a blockchain and crypto-focused event. Kishida's participation at the conference highlights the growing interest in blockchain and cryptocurrencies among policymakers in Japan.

SEC Chairman Gary Gensler discussed a tweet by Kim Kardashian in which she promoted the Algorand cryptocurrency, at a recent hearing. Gensler said SEC is looking closer into the matter of celebrities and influencers promoting cryptocurrencies.