MicroStrategy Pushes its Bitcoin Ownership well over $1 Billion with Latest Round

MicroStrategy completed the sale of its $650 million convertible senior notes with an interest rate of 0.750%. The proceeds from the sale will be used to buy Bitcoin.

“MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending identification of working capital needs and other general corporate purposes,” noted the company on Friday.

As we reported, the offering was initially set at $400 million only to be increased to $550 million with an additional $100 million up for grabs despite the company getting a bearish call from Citi analyst for its big BTC bet.

Interestingly, the popular hedge fund known for its exceptional returns, Renaissance Technologies has also been buying the majority of the MicroStrategy stock this year.

As we reported, RenTech’s flagship Medallion fund also disclosed its intention to invest in CME Bitcoin futures in March, this year.

Just a month before MicroStrategy first indicated its interest in buying Bitcoin publicly in July, RenTech bought the stocks of MSTR in June and then in Sept., and it is now indirectly invested in Bitcoin.

“BTC is our best Hope”

MicroStrategy’s latest $650 billion round of Bitcoin bet would take their Bitcoin ownership to over $1.1 billion. It was in August when the publicly-traded software company announced that it had bought 21,454 BTC for $250 million then the next month another 16,796 BTC were bought for $175 million. Then earlier this month, MicroStrategy bought 2,574 BTC more for $50 million.

MicroStrategy CEO Michael Saylor’s view on the largest cryptocurrency is pretty simple — “BTC is our best Hope.”

“Every investor is in danger of losing their wealth due to the great monetary inflation. We all need a Store of Value that is not based on fiat.

Bitcoin is The Solution – an investment grade, safe haven, treasury reserve asset.”

Given that MicroStrategy is a software company, some raised questions on its Bitcoin investment, calling it a fund.

“MicroStrategy is not an investment company (IC) per the 1940 Investment Co. Act. An IC is a co. that invests ≥ 40% of assets (less cash & govt securities) in “securities”. Per the SEC, BTC isn’t a security. Ergo, holding BTC doesn’t cause MicroStrategy to become an IC,” clarified Saylor on Twitter late Friday or early Saturday.

He further went on to say that MicroStrategy is also not an ETF/ETP because they exist to invest in stocks, bonds, or commodities and are investment companies per the’40 Act.

MicroStrategy much like Apple & Microsoft is an operating company traded on a stock exchange which “just happen to hold BTC in our treasury reserves,” Saylor said.

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Author: AnTy

Bitbond And Germany’s Oldest Bank to Issue A Euro Stablecoin On Stellar’s Blockchain

Bitbond, a Germany-based tokenization firm, has finally completed the launch of its first stablecoin after securing a partnership with Bankhaus von der Heydt (BVDH), the country’s oldest running bank, an official statement confirmed on December 9. Earlier in February this year, BEG had reported the partnership between the two to develop the first Euro-backed stablecoin on the Stellar blockchain, which has now come to life.

In a press statement, Radoslav Albrecht, founder and CEO of Bitbond said,

“Bitbond has been working with Stellar since 2019 when we issued the first-ever tokenized security recognized by the Federal Financial Supervisory Authority (BaFin), [the financial regulatory authority for Germany].”

Bitbond utilizes blockchain technology to enhance the issuance, settlement, and custody of bonds through tokenization. Following the completion and launch of the Euro stablecoin issuance, Bitbond “has completed our digital assets tech suite which, up to now, included digital asset custody and tokenization technology,” Albrecht further said.

The statement claims the Euro stablecoin is the first-of-its-kind issued in Europe or across any banking institution. It is fully regulated by BaFin and fully backed at a 1:1 ratio, which gives institutional investors and third party banks confidence in using the token. However, given the strict regulations, KYC/AML compliance, and other regulatory requirements, Bitbond’s EUR stablecoin will not be traded on open exchanges.

BVDH customers and other third-party developers of financial applications dealing with digital assets’ online settlements can use the stablecoin – reducing their costs and transaction times – albeit in a more regulated way. Bitbond also integrated the tokenization of bond securities allowing the system to directly mint and destroy tokens according to the demand/supply mechanisms.

This opens up a gateway for Stellar blockchain to dominate the Euro stablecoin market in a similar manner that Ethereum does for Tether – the dollar-backed stablecoin. Partnering with one of the largest banks across Europe shows the digital space’s potential to work with traditional banks to create better innovative solutions in the finance space. Denelle Dixon, the CEO and Executive Director of the Stellar Development Foundation stated,

“This is a testament to the ways that traditional banking and blockchain can work together, bringing together one of the oldest banks in Europe with a FinTech start-up to deliver exciting innovation in the digital currency space.”

The 266-year old bank is finally taking its role in digitizing securitization, fund administration, and mergers & acquisitions to complement the traditional methods already employed in the bank. The bank has looked at stablecoins and digital assets in the past few years, according to Lukas Weniger, BVDH business development.

However, institutions and big corporations are still wary of using current stablecoins such as Tether and Circle’s USDC due to the third party risk and a lack of a fully licensed bank to back them, Weniger said.

Bitbond will also offer regulated tokenized bonds on the Stellar blockchain as the company works with real estate developers who wish to issue tokenized securities, he further confirmed.

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Author: Lujan Odera

BIS Wholesale CBDC Proof-of-Concept in Collaboration with SNB and SIX was A Success

The Bank of International Settlements (BIS), Swiss National Bank (SNB), and SIX Digital Exchange has completed a wholesale CBDC proof-of-concept (PoC), which tested the integration of a CBDC with tokenized assets and the feasibility of linking existing payment networks with Digital Ledgers (DLTs).

As earlier reported by BEG, the SNB and BIS were planning to launch a PoC CBDC by the end of 2020; it seems the duo is on track given the latest updates. Dubbed project ‘Helvetia,’ this initiative tested the technical and legal feasibility of integrating digital assets via a CBDC or linking current networks with DLT ecosystems. The press release reads,

“Project Helvetia shows the feasibility of two proofs of concept (PoCs), using “near-live’ systems to settle digital assets on a distributed ledger with central bank money … The collaboration sets the stage for further joint experimentation to assess the impact of digital innovation on the future of the financial system.”

Switzerland, which has long been an international financial hub, is looking to capitalize on the benefits of DLTs to further increase its attractiveness as a haven. SNB’s governing board member, Andréa M Maechler, noted that the SNB is prepared to embrace DLT if this means a better financial ecosystem,

“Irrespective of which technologies the financial markets adopt next, the safety and reliability of Swiss financial infrastructure must be preserved. If DLT can deliver significant improvements in securities trading and settlement, then the SNB will be prepared.”

Pros and Cons for both PoCs

Following the PoC tests, this initiative revealed that both a wholesale CBDC or linking existing payments with DLTs come with pros and cons. The former provides a seamless avenue for settling digital assets but is likely to raise significant governance and policy challenges. As for the integration approach, policy implications are minimal, although stakeholders would have to forego the perks of fully integrating with DLT networks.

Nonetheless, this milestone set the stage for further practical CBDC research according to the head of BIS Innovation Hub (BISIH), Benoît Cœuré,

“If wholesale CBDCs are to fulfill their potential as a new means of settlement, their design and implications deserve close study and consideration. This is only possible via continued deliberations and experimentations among central banks and with other stakeholders, such as market supervisors and the private sector.”

The press release was keen to point out that this innovation is only a PoC test and should be interpreted that the SNB will issue a wholesale CBDC or facilitate exchange clearing through DLT. Meanwhile, other jurisdictions, including Canada, have recently signaled a keener interest in the CBDC developments to hedge for a virtual monetary future.

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Author: Edwin Munyui

DEX Aggregator 1inch Raises $12M; Plans to Scale Market Outreach, Products, and Team

1inch, the Decentralized Exchange (DEX) aggregator, has secured $12 million in its recently completed series A funding. This round was led by Pantera Capital and attracted other crypto investment heavyweights, including Blockchain Capital, Spartan Capital Securities, Struck Capital Fabric Ventures, and ParaFi Capital. Alexander Pack, Kain Warwick, and Josh Hannah also contributed to the 1inch series A funding round.

Sergej Kunz, the CEO of 1inch, informed The Block that this funding followed the process of a simple agreement for future tokens (SAFT); basically, this is an investment contract that promises to deliver tokens at a later date.

The 1inch DEX aggregator made its debut in the hallmark DeFi niche as recent as August, launching its Automated Market Maker (AMM) protocol dubbed ‘Mooniswap’ as well. This DEX aggregator serves as a bridge in the nascent DEX markets by connecting several DEXes into one ecosystem.

In doing so, 1inch helps users optimize their DEX liquidity by finding the best trades across AMM protocols, including Balancer and its platform, Mooniswap. The project recently released a v2 for its protocol, which features a new API, ‘Pathfinder,’ to improve routing between DEXes.

1inch’s series A funding comes when DEX aggregators are speeding up their products to solve the underlying challenges in DeFi. Its competitor, Slingshot, also recently secured a $3.1 million funding in a round led by Framework Ventures.

1inch Set to Expand Team, Market, and Products

According to Kunz, the recently raised funds will come in handy for the DEX aggregator, especially with expansion plans. He highlighted that the team is currently working on various initiatives, including a liquidity protocol update for the Mooniswap AMM and its upcoming utility token, 1INCH. This token is still in audit, although everything is already in place for launch and distribution, per Kunz’s conversation with The Block.

“Code is already written, and the 1inch Foundation is also in place, which would issue the token. But we have to stay clean from the regulatory side.”

Kunz also mentioned that 1inch plans to scale its team past the current 28 personnel as part of its expansion plan in the coming future. The DEX aggregator has signaled that it will expand its footprint into the Asian market, focusing on the Asia-Pacific region. Finally, the team will announce a detailed roadmap for the next two years, including new products.

“We are soon going to announce our product roadmap for the next two years. This includes a lightweight, very gas-efficient limit order protocol and an improved liquidity protocol.”

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Author: Edwin Munyui

Fireblocks Raises $30M to Expand Its Crypto Service Operations; Building a ‘Next-Gen Backend’

To extend its services for larger firms in the crypto sector, Fireblocks recently completed a Series B funding round of $30 million and has a $46 million total raised in cumulative fundraising.

The funding round led by Paradigm, along with several investors, Cedar Hill Capital, Cyberstarts, Swisscom, and Galaxy Digital, to name a few, will enable the firm to expand its global operations to meet the demands of the retail market and institutional traders in the crypto market, according to a press release from Fireblocks.

The firm says it will be offering tools for the transfer and secure storage of digital assets, either for traditional hedge funds or crypto exchanges.

Fireblocks plans to lure more institutional players.

Although Fireblocks will be very active in the crypto-native markets, the company says it still wants to take advantage of the crypto market’s positive regulatory momentum and go after institutional players. The firm also says that the simplistic nature of the Fireblocks platform makes it attractive to many users in the industry, leading to the rush of its integration. The company pointed out,

“Everyone from crypto-native funds to large tech companies and banks is integrating Fireblocks because it’s simple.”

The company is committed to maintaining its market position as the industry leader, supporting customers’ high demands as the mainstream sector enters into massive adoption of cryptocurrency.

In the third quarter of the year, Fireblock’s customer growth increased by 533%, and the company is growing at a similar pace this fourth quarter.

To improve the speed of crypto transactions, Fireblocks launched a program, with crypto derivatives exchange FTX being the first to join the program. Fireblocks wants to increase participation in the program by inviting more exchanges into the program next month.

Paradigm co-founder joins Fireblocks director board

As part of the deal, Fred Ehrsam, the managing partner and co-founder of Paradigm, joined the board of directors at Fireblocks.

Ehrsam is also the co-founder of Coinbase, and chief executive officer of Fireblocks Michael Shaulov has acknowledged his crypto space contribution. “One can say he almost built this space,” Shaulov said in the press release.

Fireblocks intends to double its workforce

Buoyed by the influx of funds, Fireblocks intends to scale its infrastructure and personnel, according to Shaulov. The company wants to hire personnel across the support, marketing, and staff sales department. It also has plans to double its engineering team within the next three months.

The anticipated recruitment will increase its workforce from its present number of 70 personnel to about 130 in the next three months.

Fireblocks wants to meet the increasing demands of customers and clients in the industry. Its main service is directed towards hedge funds, over-the-counter trading desks, exchanges, and institutional clients to transfer funds securely. According to reports, the company serves over 120 commercial clients presently.

With the added funds, it is believed that the number will increase within the next few months.

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Author: Ali Raza

Tezos ‘Delphi’ Upgrade Makes it More Attractive For Defi Projects; Reducing Gas Price By 75%

Tezos has completed the Delphi upgrade, which many believe would make the blockchain a hub for defi projects. As per the official announcement, the Delphi upgrade has brought down the gas fees significantly, allowing users and developers to deploy more complex smart contracts on the platform.

The Delphi upgrade is believed to bring down the gas fee by a whopping 75% along with a four-times lower storage cost.

Tezos network makes use of gas just like Ethereum, but with a different implementation. While the Ethereum blockchain uses gas as a transaction fee, the Tezos network uses it as a limit setter for the consumption of computing power for a transaction. However, the transaction cost is determined by the amount of gas used for that transaction.

Gabriel Alfour, the lead developer at Marigold—and one of the core development teams that worked on Delphi, explained the importance of the lower gas fees and how it can propel the Tezos network to be a leading blockchain when it comes to the deployment of complex smart contracts. He said,

The motivation for such an interim proposal is straightforward. The size and complexity of smart contracts is limited by gas constraints, and so people attempting to build contracts with rich functionality have needed improvements to those constraints for some time.

Thus, such improvements are crucial to enable novel applications on Tezos that target areas like DeFi (“Decentralized Finance”), collectibles, and gaming.

Luckily, in August, we finalized some long-standing work on improving the performance of the Michelson type checker and interpreter, and on refining the cost model, thus mitigating the gas problem.

Growing gas fees due to the network congestion has been a substantial problem for Ethereums mainnet since defi gained traction, and its volume increased significantly. While the launch of ETH 2.0 is believed to solve many of the scaling problems for Ethereum, in the meantime, other blockchains such as Tezos can attract higher numbers of customers to its platform.

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Author: Hank Klinger

Uniswap Tanks After SushiSwap Successfully Migrated with Over $1 Billion in Liquidity

SushiSwap is now live after the migration was completed in the wee hours of Thursday. And with the official launch of the Uniswap clone, SushiSwap has sucked out all the liquidity and volume from the project that has been up until today, leading the market.

The legal billion dollar-heist resulted in Uniswap’s TVL tanking from $1.8 billion — previously among the top four DeFi projects to fall to the 9th spot with a 75% reduction — to almost $350 million of total value locked in now, as per DeFi Pulse.

A fork of Uniswap, SushiSwap, migrated the liquidity into its own protocol, currently recording $1.32 billion with the volume on the DEX climbing to $120 million.

Wrapped Ether is contributing the most to the volume followed by SUSHI, USDT, USDC, and YFI, much like Uniswap.

Unlike Uniswap, SushiSwap had its own token, and it allowed traders to pour tokens representing deposits in Uniswap liquidity pools into SushiSwap to earn SUSHI rewards. Keeping them through migration also got them extra tokens.

The migration involved swapping Uniswap LP tokens for the underlying asset and putting those tokens on SushiSwap.

Uniswap is currently recording $530 million worth of liquidity, down from nearly $2 billion liquidity on Sept. 4th. Daily volume on the platform has also gone down under $400 million from over $950 million on Sept. 1st.

Uniswap’s figures had come back to where it was before SushiSwap entered DeFi but are still up 50% from $285 million before the copycat was launched.

“Liquidity has no loyalty,” said yEarn creator Andre Cronje, who is against the narrative that SushiSwap took TVL from Uniswap because “Uniswap TVL pre/post Sushiswap remains unchanged. Sushiswap simply took their liquidity locusts with them. Only the liquidity locusts win.”

SushiSwap DEX, which is just shy of a fortnight old, has already experienced years’ worth of drama. Just over this past weekend, the original creator of the project, an anonymous Chef Nomi, sold their dev shares and handed over the control of the protocol to FTX CEO Sam Bankman-Fried, who has been involved in farming SUSHI right from the start.

As expected, the liquidity fragmented, but still, it all turned out good for DeFi in the end. As analyst Ceteris Paribus said,

“Honestly thought Sushi would just make things worse for traders, but uniswap liquidity is 2x since this and sushi has >$1B. Quite impressive…”

SUSHI token is also enjoying market enthusiasm and bullishness as it rebounds from its $1.2 low to over $3. At the time of writing, SUSHI was trading at $2.69 as per CoinGecko.

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Author: AnTy

Crypto Lending Startup, BlockFi, Secures $50 Million In Series C Funding

The popular crypto lending startup, BlockFi, announced that it has completed another successful funding round where major industry investors were involved. The firm announced that it raised $50 million in its latest Series C funding round.

In a statement to the public, Anthony Pompliano stated that the funding round was led by his crypto asset management company Morgan Creek Digital among other reputable investors. Morgan Creek Digital co-founder, known as Pomp, also revealed that he would become part of BlockFi’s board of directors. Pomp’s appointment to the board follows Morgan Creek’s participation in all of the three of BlockFi’s funding series in the last one year.

Pomp praised BlockFi for its phenomenal growth and its contribution to the crypto industry. He said:

“BlockFi’s platform offers investors unparalleled capabilities in the digital asset ecosystem. We’re excited to back this world-class team as they continue to add new products and expand into incremental areas that are disrupting traditional finance.”

The funding round also attracted other big shots in the crypto industry, including Valar Ventures, Winklevoss Capital, CMT Digital, Castle Island Ventures, Purple Arch Ventures, SCB 10X, Avon Ventures, Kenetic Capital, Michael Antonov, and HashKey. NBA’s Matthew Dellavedova also participated in the funding round.

The new funding round comes at a time when the firm has witnessed a 10-fold revenue growth in the last 12 months. The crypto lender now boasts of $100 million in terms of revenues in the previous year. The firm also boasts of $1.5 billion in terms of managed assets since it was started.

According to BlockFi’s CEO Zac Prince, the newly raised capital is set to be utilized in helping the firm to grow geographically and increase the number of staff to deal with the increasing number of clients. Prince also explained that some of the money would be used in the development of a Bitcoin rewards credit card that is set to be released in the near future. The firm aims at releasing the credit card in the first quarter of next year, Prince revealed.

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Author: Joseph Kibe

Pantera Bitcoin Fund Clients, Including Institutional & HNWI Investors, Are HODLers

The blockchain investment fund, Pantera Capital, has completed its seven months, and its Bitcoin fund has generated a lifetime return of 15,140% net fees and expenses, “outperforming bitcoin over the same period.”

Pantera Bitcoin Fund provides institutions, and high-net-worth individuals access to large quantities of bitcoin without the burden of safekeeping them. It also offers daily liquidity, but most of its investors are long-term hodlers, with an average holding period of 841 days.

Bitcoin’s high volatility, 75% annualized volatility, is the most common concern of institutions in its adoption but also the reason behind such prominent gains, which made it the best performing asset class of the last decade.

Also, it used to be a lot higher and will be a lot lower in the next few decades, that’s just the way new asset classes work. “Volatility exists because it’s still a young asset class — bitcoin is just a teenager,” reads Pantera’s report released on Wednesday.

Despite this high volatility, bitcoin’s annual price low has been higher than the previous year’s low every time except for one year in its ten-year life.

Bitcoin Just a Tiny Fraction of All the Markets it can Disrupt

In 2020, bitcoin acted like a risky asset as it crashed along with the majority of the asset classes due to coronavirus pandemic. Starting last week, the digital asset started its journey as a digital gold — a safe haven asset and a hedge against inflation, as it went in the opposite direction of the S&P 500.

Bitcoin is currently trading around $11,000 after breaking two important key levels $10,000 and $10,500 earlier this week. BTC/USD is up over 50% YTD. Amidst these gains also came the green light from OCC that is now letting all nationally chartered banks in the U.S. provide custody services for digital assets.

It’s clear that bitcoin has many use cases, sometimes a store of value and others a centralized settlement system.

In terms of an alternative SoV to gold, bitcoin is just 2% of yellow metal’s $9 trillion market and as money, even a smaller fraction.

“With all these potential markets to disrupt, it really comes down to how many people choose to use it,” wrote Dan Morehead, CEO of Pantera.

“A few years ago, there were half a million people using it for speculation, commerce, remittances, and more. Now there are probably 50 million people using bitcoin and cryptocurrencies. And in a few years, if a billion people are using it, it’s going to be worth a lot more. It’s just supply and demand,” he said.

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Author: AnTy

After Bitcoin Hash Rate, Difficulty Makes a New All-Time High Just 2 Months Post Halving

Today, Bitcoin’s difficulty has hit an all-time high. The difficulty re-adjustment has completed with a 9.89% increase this time, reaching a “sky-high” 17.35 trillion.

Since early November 2019, bitcoin difficulty has been on a constant increase until in late March after the bitcoin halving, the difficulty saw a downward adjustment of 15.7% from the previous ATH.

CoinWarz-BTC-Difficulty
Source: CoinWarz

In mid-June, bitcoin difficulty had a 14.5% jump, the biggest since January 2018. The last positive adjustment was just a speck on the chart, but today’s positive adjustment marks the full recovery of difficulty in just two months post-halving that reduced the rewards per block from 12.5 BTC to 6.25 BTC.

Bitcoin mining difficulty adjusts every 2016 blocks or roughly 14 days based on the hashing power competing for the rewards on the network.

The Bitcoin network made it most difficult to mine BTC after miners allocated more resources than ever to generate the digital asset.

Bitcoin hash rate made a new high last week, as per Blockchain.com. This jump in both the fundamentals came amidst China’s rainy season, which has made it cheaper to mine bitcoin by reducing the cost of electricity.

Given that China accounts for 65% of bitcoin’s mining power, it makes sense. Moreover, reportedly, the disruption in the supply chain due to coronavirus pandemic is also resolved.

Besides the rainy season in Sichuan, investment is flowing with the new generations of miners are also helping with the situation. While ASIC companies are rolling out new mining machines such as Bitmain’s Antminer S19 Pro and Whatsminer M30S++ by MicroBT, several miners have buying bulk of them.

Moreover, a regulatory filing unveiled that asset management giant Fidelity holds about 10.6% stake in Canada-based mining firm Hut 8.

As the hash rate and difficulty have surged, the hash ribbons have also given a buy signal as Bitcoin remains stuck in a range. However, today, BTC has jumped by 1% to above $9,300.

Besides these two important fundamentals of the network, the world’s leading cryptocurrency market cap of $171 billion saw other aspects making new highs as well.

The realized market cap of bitcoin that discount lost coins and values the supply when it was last moved has reached nearly $107 billion after being on a constant uptrend since April 2020, as per Coin Metrics.

During all this, accumulation is growing strong with a record number of addresses, over 3 million now holding more than 0.1 BTC and hodlers keeping steady with a record 62% of BTC not moved in the past year, not even during the March crash.

Overall, the bitcoin network is strong and seeing growth; now, all eyes are on the price.

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Author: AnTy