January 13, 2020 | Issue #151

MUST READS

Crypto 🤝 SPACs

Bakkt, the cryptocurrency platform majority owned by Intercontinental Exchange Inc., is going public through a merger with blank-check firm VPC Impact Acquisition Holdings, at a $2.1 billion valuation.

As part of the deal, Bakkt will raise an additional $532 million from VPC’s funds and a concurrent capital raise to support development and marketing of the Bakkt App.

VPC (NASDAQ: VIH) shares are currently +51% since the announcement. Warrants are booming as well.

Here's a TLDR of Bakkt's filing with the SEC and how they came up with their valuation.
SPACs feel a bit toppy right now. Do your due diligence.

Off the Chain Capital Raises $160 Million Fund That Brings Value Investing to Bitcoin

Brian Estes founded Off the Chain Capital in 2016 with a simple mission: to outperform Bitcoin with less volatility.

Four years later, and with a recent raise of $160 million, Off the Chain has succeeded at doing just that.

Here's how, using Mt. Gox bankruptcy claims, buying discounted Bitcoin from miners, and packaging up Bitcoin to be sold for a premium in brokerage accounts made it all possible.

UBS to Charge Negative Rates on Holding Above 250,000 Sfr

This week Switzerland's largest bank, UBS, announced that they will begin charging clients with balances in excess of 250,000 Swiss francs (about $280,000) a 0.75% interest rate.

"It’s becoming increasingly clear that we’ll have to contend with negative interest rates for years to come." Swiss banking head Axel Lehmann told employees in the memo.

This new and probably long-lasting rate regime is a key driver of investors seeking new places to store wealth, such as Bitcoin.

Morgan Stanley Buys 10% Stake in MicroStrategy to Up Bitcoin Exposure

Morgan Stanley has its eyes on crypto. On New Year’s Eve, the bank bought 792,627 shares (10.9%) of MicroStrategy, a company whose CEO Michael Saylor came out as one of the most ardent advocators of Bitcoin this summer.

Saylor’s investments in Bitcoin, which now total well over a billion dollars, are widely thought to have kickstarted Bitcoin’s bull run. In his wake followed a slew of high-profile institutional investors, among them MassMutual and Anthony Scaramucci’s SkyBridge.

The Biggest Digital Revolution of Your Lifetime

This is likely your last chance to get in early on exciting crypto tech, because “ID Coin” is something you don't want to miss.

It’s part of a bigger trend you must understand before it goes mainstream.

DEEP DIVE

The Hindsight Depression

In this Deep Dive, Lyn Alden discusses the similarities and differences between the 1929-1940 period and the 2008-2020 period in terms of fiscal policy, monetary policy, and social dynamics.

Her take is that the 2020's will mirror the 70's/40's in terms of inflation and commodity cycles.

Bitcoin in 2021

Bitcoin Core contributor Anthony Towns published a blog post last week expressing his thoughts on the current state of the protocol and what he plans to prioritize working on in 2021.

Quit staring at price-feeds and spend some time reading Anthony's thoughts. It's a little refreshing to hear what the individuals who are actually writing Bitcoin’s code have to say.

An Incomplete Guide to Rollups

Rollups are all the rage in the Ethereum community, and are poised to be the key scalability solution for Ethereum for the foreseeable future.

But what exactly is this technology, what can you expect from it and how will you be able to use it? This post from Vitalik will attempt to answer some of those key questions.

Forbes: “The Next Boom Has Begun”

A massive Fed blunder just created all-time-high demand for crypto. And a second event just capped crypto supply.

The result: A crypto superboom like we’ve never seen.

REGULATORY FRONT

Introducing the First Federally Chartered Digital Asset Bank

Crypto custodian Anchorage has secured conditional approval for a national trust charter from the U.S. Office of the Comptroller of the Currency (OCC), making it the first national “digital asset bank” in the U.S.

Anchorage first applied for a national charter from the OCC last November, and it joins Kraken and Avanti in being crypto-native banks, although the latter two are special-purpose depository institutions organized under Wyoming state law. Fellow crypto startups BitPay and Paxos have also applied for federal charters through the OCC.

"Crypto deserves a bank, and we are immensely proud of being approved as the one to set the standard."