October 06, 2024
Weekly: Latest Updates and Insights
Powell Advocates for Continued Rate Cuts to Support Economic Stability: Federal Reserve Chair Jerome Powell announced plans for further interest rate cuts to foster a “soft landing” for the U.S. economy, following a significant reduction in September. He emphasized that while the economy is generally strong, future cuts will depend on evolving economic conditions. Powell’s strategy aims to balance inflation control with sustained growth, despite concerns over potential recession risks.
IMF Pressures El Salvador to Revise Bitcoin Policies: The International Monetary Fund (IMF) has urged El Salvador to narrow its Bitcoin Law and strengthen regulatory oversight of the cryptocurrency ecosystem. Despite acknowledging that many risks associated with Bitcoin adoption have not yet materialized, the IMF continues to advocate for limiting public sector exposure to the digital asset. Simultaneously, the IMF is promoting central bank digital currencies (CBDCs) as a more stable alternative to cryptocurrencies.
Shigeru Ishiba’s Vision for Japan: Embracing Blockchain and NFTs: Shigeru Ishiba, Japan’s newly elected Prime Minister, aims to revitalize regional economies through pro-blockchain and NFT policies, leveraging digital technologies to enhance the value of local products. Appointing Masaaki Taira as the Minister for Digital Affairs, Ishiba emphasizes the need for tax reforms to support crypto startups. As he prepares for a general election on October 27, his administration’s focus on digital transformation signals a significant shift in Japan’s economic strategy.
CZ’s Heartfelt Return: Embracing New Opportunities: Changpeng Zhao (CZ), co-founder of Binance, expressed gratitude for the support he received during his challenging time in custody, highlighting the simple joys of life. He plans to focus on initiatives like Giggle Academy, invest in impactful technologies, and dedicate more resources to charity and education while continuing to work on his book. Notably, he remarked on Binance’s success in his absence, celebrating the team’s ability to thrive independently.
BlackRock’s Ethereum ETF Faces Narrative Challenges: BlackRock’s Ethereum ETF, ETHA, has seen slower growth compared to its Bitcoin counterpart, accumulating about $1 billion in assets under management within a month of its launch. Robert Mitchnick, head of digital assets at BlackRock, attributes this disparity to the more complex investment narrative surrounding Ethereum, which makes it harder for investors to grasp. Despite not expecting ETHA to match Bitcoin ETF inflows, he views its initial performance as a promising start.
Bitcoin Mining Revenue Hits Yearly Low Amid Rising Costs: In September 2024, Bitcoin miners reported a revenue decline to $816 million, the lowest monthly income in over a year, primarily due to reduced transaction fees and increased operational costs. The recent Bitcoin halving has exacerbated profitability challenges, cutting block rewards from 6.25 BTC to 3.125 BTC while mining difficulty reached an all-time high of 88.4 trillion. In response, companies like Hut 8 are diversifying their strategies, including launching GPU-as-a-service platforms to mitigate reliance on traditional mining revenue.
Bitwise Files for First XRP ETF Amid Regulatory Uncertainty: Bitwise has submitted a registration statement to the SEC for the first exchange-traded fund (ETF) focused on XRP, aiming to track its daily price. This move comes in the wake of a recent court ruling favoring Ripple Labs, which could impact XRP’s regulatory status. However, the SEC’s history of rejecting similar applications raises questions about whether this ETF will gain approval.
FTX Allocates $230 Million for Shareholders, Igniting Backlash from Creditors: FTX has announced a provision to allocate up to $230 million from government forfeiture proceeds exclusively for preferred shareholders, a move that has surprised and angered creditors who typically receive priority in bankruptcy cases. The decision, revealed after the creditor voting deadline, has led to claims of unfair treatment, with many creditors feeling “scammed” as they face potential losses despite assurances of receiving at least 118% of their claims. As the confirmation hearing for the reorganization plan approaches on October 7, tensions continue to rise over the prioritization of shareholder interests over those of creditors.
Indiana Man Pleads Guilty to $37 Million Cryptocurrency Theft: Evan Frederick Light, a 21-year-old from Lebanon, Indiana, has pleaded guilty to stealing over $37 million in cryptocurrency from nearly 600 victims through a cyber intrusion involving a South Dakota investment company. He conspired to commit wire fraud and launder monetary instruments, funneling the stolen assets through mixing services and gambling websites to conceal his identity. Light faces a maximum penalty of up to 20 years in prison for each count, with ongoing investigations into his accomplices.
Coinbase Forecasts Strong Q4 for Bitcoin Amid Economic Shifts: Coinbase Institutional’s report predicts a positive outlook for Bitcoin in Q4 2024, driven by anticipated U.S. interest rate cuts and substantial monetary stimulus from China. While Bitcoin is expected to thrive, Ethereum faces challenges such as rising transaction fees and limited benefits from recent U.S. spot ETFs. The broader crypto market remains optimistic, with emerging networks like Solana gaining attention for their scalability and efficiency.
Fundraising:
Binance Labs Invests in Sophon Ahead of Mainnet Launch: Binance Labs has invested an undisclosed amount in Sophon, a zkSync “elastic chain,” bringing its total funding to over $70 million. This Layer 2 network, built on Matter Labs’ ZK Stack, aims to enhance user experience by focusing on consumer-driven applications. With its mainnet and SOPH token launch scheduled for next month, Sophon has already formed partnerships in sectors like AI and gaming.
OpenAI Secures $6.6 Billion in Historic Funding Round: OpenAI has raised $6.6 billion in a funding round led by Thrive Capital, achieving a post-money valuation of $157 billion, making it the largest venture capital round ever. The funds will be used to bolster AI research, expand compute capacity, and develop innovative tools, while also paving the way for a potential transition from nonprofit to for-profit governance. With substantial operational costs and fierce competition from other AI startups and tech giants, this investment positions OpenAI to maintain its leadership in the rapidly evolving AI landscape.
SecondLive Secures $12 Million Funding Round: SecondLive has successfully raised $12 million in a private funding round led by Crypto.com, bringing its total funding to $15 million. The platform, which operates on eight major blockchains and boasts over 5 million registered users, utilizes generative AI technology to enhance virtual experiences and social interactions. This new capital will support infrastructure upgrades and expand opportunities for creators within the spatial web.
Mind Network Secures $10 Million in Pre-A Funding to Advance FHE Technology: Mind Network has successfully raised $10 million in a Pre-A funding round to enhance its Fully Homomorphic Encryption (FHE) infrastructure, targeting advancements in AI and Proof-of-Stake networks. The funding, backed by prominent investors including Animoca Brands and Ether.fi’s Mike Silagadze, will support the development of MindV, an innovative FHE-based voting solution aimed at improving consensus and data security. With plans to integrate more staking protocols, Mind Network is poised to revolutionize Web3 security and privacy.
Mawari Network Secures $10.8 Million in Funding for Spatial Computing: Mawari Network, a decentralized physical infrastructure network focused on spatial computing, has raised $10.8 million in a strategic funding round led by Anfield Ltd, Borderless Capital, and 1kx. This funding will support the development of real-time 3D content streaming for AR and VR devices, enhancing user interaction with digital environments. With this latest round, Mawari has raised a total of $17.3 million and plans to launch its mainnet in early 2025.
Exciting Developments from MeshMap: The MeshMap team recently raised $4 million in funding from prominent investors, including a16zcrypto and ColosseumOrg, after attending the Solana Breakpoint event. They are on a mission to create an open 3D map of the world and a network of augmented reality (AR) content, collaborating with partners like matt_kudo and pedrocruztech. Currently in New York City for the fall 2024 a16z CSX cohort, they will soon share updates on the launch of CityChampXYZ and AR activations in NYC, Tokyo, and San Juan.
Layer Secures $6 Million to Enhance Ethereum’s Capabilities: Startup Layer has raised $6 million in a seed funding round led by 1kx to develop the Layer SDK, which will enable the creation of full-stack decentralized applications using Web Assembly. By addressing the limitations of traditional smart contracts, Layer aims to empower developers to build robust applications that can run on various devices without compromising user experience. Co-founder Sam Cassatt highlighted the need for a comprehensive decentralized architecture to support a fully functional internet, while investors see Layer as a pivotal player in expanding blockchain’s potential.