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BlackRock Revises Spot Bitcoin ETF Proposal

BlackRock's ETF proposal now includes cash redemptions, a concession to the SEC that may improve the fund's approval odds. Plus the top news, stats, and reports from this week in crypto.

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Issue Summary: Welcome back to Coinstack, the weekly newsletter for institutional crypto investors and industry insiders. We review the top news, stats, and reports in the digital asset ecosystem for our 200k weekly subscribers. This week, we cover BlackRock revising their spot Bitcoin ETF proposal, Gensler 'Taking a New Look' at Bitcoin ETF applications, UK introduces new regulations, and big new venture rounds for Line Next ($140M) and Dynamic Labs ($13.5M).

The countdown to one of the key historical catalysts for the start of each four-year bull market cycle

Price performance since we began writing Coinstack in January 2021. Solana and Avalanche have been pumping nicely recently.

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💵 Weekly Crypto Fundraises & Deals

Here are all the crypto fundraises we heard about this week, ranked by size…

🗞️ Crypto News Recap: The Top 5 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 5 stories of the week… 

  1. 💎 BlackRock Revises Spot Bitcoin ETF Proposal Ahead of Hoped-for SEC Approval: BlackRock's ETF proposal now includes cash redemptions, a concession to the SEC that may improve the fund's approval odds.

  1. 🔎 Gary Gensler: SEC 'Taking a New Look' at Bitcoin ETF Applications: The U.S. Securities and Exchange Commission is “taking a new look” at applications for a spot Bitcoin ETF, following October’s landmark court ruling on Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF.

  1. ⚖️ UK introduces new regulations for its Digital Securities Sandbox: The UK has introduced new regulations that will give the nation's financial watchdogs rules for supervising a sandbox for tokenized securities, according to an official publication on Monday.

  1. 🚀 Lisk Blockchain Will Become an Ethereum Layer 2 Via Optimism and Gelato: The new Lisk network will be powered by OP Stack, Optimism’s open-source framework for developing Layer 2 chains, and built using Gelato’s rollup-as-a-service platform. Lisk's Layer 2 will focus on real-world assets and decentralized physical infrastructure networks (DePINs), according to a statement.

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💬 Tweet of the Week

Source: @RyanWatkins_

📊 Key Stats of the Week

Here are the most important and interesting stats in crypto this week...

1. The Bitcoin mining industry is booming. Network hashrate, a key indicator of computational power, has risen 65% year-over-year to hit around 500 EH/s. This growth indicates improved robustness and security, with the U.S. emerging as a major player in mining.

Source: @TheBlockPro__

2. In November, stablecoins drove more onchain value transfer than ETH and BTC. That month, there was ~$𝟵𝟭𝟰𝗕 of Stablecoin transfer volume, ~$𝟴𝟲𝟵𝗕 of BTC transfer volume, and ~$𝟭𝟱𝟱𝗕 of ETH transfer volume.

Source: @0xKofi

3. Solana TVL surpassed $1B for the first time since the collapse of FTX in November 2022. TVL is up 143% on the month in terms of USD and is up 30% in terms of $SOL, with more than 13.3M $SOL deposited throughout the space. 

Source: @DavidShuttleworth

4. Here is what the top five rollups spent on posting data to Ethereum in November:

1. Arbitrum - $4.4M
2. Linea - $3.7M
3. Optimism - $2.508M
4. zkSync Era - $2.506M
5. Scroll - $1.43M

Source: @0xKofi

5. Solana flips Ethereum in 24hr DEX volume for the first time

Source: @DegenerateNews

6. Top Moving Coins From the Top 100

📝 Highlights from the Top Crypto Reports

Here are the top highlights from the best crypto research reports this week…

About the Author: Paul Veradittakit, is a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing into blockchain companies and cryptocurrencies. This is an excerpt from the full article, which you can find here.

Sat down with Inside.com to chat about the future of blockchain and crypto investing

Karan Chafekar: Hey insiders, thank you for tuning in for this new interview series of Inside VC, where we chat with VCs, angel investors, and founders. Joining us today is Paul Veradittakit, the managing partner of Pantera Capital, a blockchain hedge fund and a VC firm that has invested in over 100 blockchain companies, 110 early-stage tokens, and manages nearly $3.3B in blockchain-related assets. Hey, Paul, thanks for joining us today.

Paul Veradittakit: Thank you for having me, Karan. 

Karan: So let's start with the first question, which is- the crypto industry has faced I mean, really big slump over the last year, you know, the VC funding has declined, and that has got into crypto as well, that has impacted that as well. And plus, there was the fallout of FTX, and then Three Arrows Capital, and so many things going on in the crypto industry. So how has that impacted Pantera Capital and your portfolio companies?

Paul: That's a great question. This is the first time that the crypto market has been bear [market], in the same time, as there has been a global recession. So that makes it pretty tough on the macro side for a lot of companies to think about going public and also companies from a fundraising perspective. The other thing that has happened on top of a global recession has been a few blow-ups- FTX, Terra Luna, DCG, Genesis and a few others. And that makes it tough for the industry, because not only are you sort of facing headwinds around a recession, but the reputation around crypto has gotten a bit tougher.

But nevertheless, I mean, even though we are seeing a lot of growth stage investors and traditional VCs, probably backing away a little bit from crypto, and not quite sort of seeing the opportunity or focusing on other areas like artificial intelligence. For us, I mean, we're more excited than ever, in investing in this space. Us and our peers have quite a bit of capital, there were quite a few seed funds that were able to raise during the last bull market and now are deploying capital in this bear market, it is the best time to be investing. When you look for entrepreneurs to back, you always try to figure out whether they are mission-driven, whether they can sort of survive and push through a bear market.

So, it is very self-selecting right now, where all the entrepreneurs that are coming in are very mission-driven about pushing decentralization to the forefront, and they're willing to go through whatever sort of things that they have to go through in terms of regulations, they're accumulating a bunch of talent –right now, we're actually seeing quite a bit of talent coming in, still from some of the best crypto companies or large tech companies wanting to build during this time. And so there is alignment in terms of vision. And I think there's also a bit more alignment in terms of valuation.

Karan: Well, thanks for your answer. I think you dived into so many of these topics, which definitely we'll dive into more. But to begin with, you said, definitely, I mean, crypto startups are being invested in. So which are the startups that are getting funded? And which are the ones that are not getting funded in recent times?

Paul: Yeah, I would say that there has been a shift towards companies that are probably going after, larger chunks or larger average customer values for a business model. So while there's still interest and opportunities in bringing consumers to crypto, whether it's in a centralized financial onramp way, or maybe even if it's in a more decentralized financial onramp way, those companies are going to be a little bit tougher and thus need a certain type of entrepreneur. But companies that are taking more of a B2B business model, whether they're servicing developers, enterprises, or institutions are probably more likely to, number one get fundraising but also more likely where entrepreneurs are going to sort of tackle because, at the end of the day, when you're in a bear market, you can sort of see the line of sight to the next round when you're able to get closer to profitability.

And thus, I'd say a lot of the companies that are being funded right now are in that camp, either developer tooling, companies that are helping, let's just say enterprises figure out NFTs for sort of brand loyalty or maybe even on the institutional side, like companies like for instance, like Ondo that are trying to tokenize real-world assets, and then of course, be able to get institutions to get access to these products, whether it's domestically or internationally. Things around data security, insurance, and businesses providing services to the cryptocurrency industry. So we've seen zero-knowledge proofs be used for scalability, now we're starting to see some of them being used for, you know, providing privacy, transactions, and maybe privacy to identity, etc. And so that category has been sort of interesting. And then of course, the intersection of AI, and anything AI related is probably going to grab some attention.

🎧 Top Crypto Podcasts of The Week

Here are the crypto podcasts that are worth listening to this week...

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📰 The Coinstack Newsletter:

Tracking the most important blockchain stories of the 2020s, including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Please do your own research. Just our opinions. Not intended as financial advice as we are not financial advisors. We may own some of the digital assets we write about as we believe strongly in the sector. Please do your own research. Published and written weekly by Ryan Allis and Mike Gavela. 

Coinstack is a news and analysis newsletter for the digital asset industry. None of the information here is a recommendation to invest in any securities or other types of investments. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in loss.

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