July 28, 2021 | Issue #179

MUST READS

Money Never Sleeps

Billions of dollars of investment capital is flowing into the system... with over $500 million entering the space just in the last 24 hours alone.

Yep, read that again. This all just happened over the past 24 hours:

Crypto infrastructure firm Fireblocks scores a $2 billion valuation following their $310 million Series D
Activant Capital and L Catterton lead $60M Round in Eco to Accelerate its "Smart Money" Strategy
Genesis Digital Assets Announces $125 Million Raise to Expand Industrial-Scale Bitcoin Mining Operations
Mercato Partners Traverse Fund Invests $64M in Financial Technology Leader Prime Trust

And some, dare we say, smaller raises...

Saber ($7.7M), Splinterlands ($3.6M), Hedgehog Markets ($3.5M), StormX ($9M), Biconomy ($9M), Lolli ($10M), Valora ($20M), Lemon Cash ($16M)

The Amazon Pump?

While we're all glued to the tube watching the Olympics (joke), bitcoin has been quietly picking up some steam. Since Tuesday, July 20th, the price of bitcoin has gained over 30%.

So what happened?

The trendy, often-false first viral narrative:
BTC prices popped over the weekend after Amazon listed a job posting for a Digital Currency and Blockchain Product Lead, suggesting that the mega-corporation is enabling crypto payments.

The not-so-trendy, real story:
Prices quickly climbed over the weekend after bitcoin experienced an epic “short squeeze." When those shorting an asset like bitcoin start to lose out (in other words, the price of the cryptocurrency rises) they are forced to capitulate and start buying at higher prices to pay back the initial loan they took out. This causes the price to go up even further—and quickly.

Here's a replay of its price action.

Under The Robinhood

Robinhood is going public tomorrow. And more so now than ever before, buying shares of the company provides yet another way for investors to gain exposure to crypto.

Here are some interesting tidbits before the big bell rings tomorrow AM:

Robinhood has big crypto ambitions. They plan to build out a crypto platform to resemble something more like Coinbase, where customers can use their own wallets, lend and stake, dabble in decentralized finance, and so on
The listing price will be between $38-$42 (official price will be released tonight)
Unlike companies like Uber and Doordash, Robinhood is actually profitable (read s-1 here). The company, of course, will face pressure to show that it can keep doing so in the future
Payment for order flow (PFOF) made up 81% of Q12021 revenues, total PFOF revenue grew 340% YoY, led by cryptocurrencies at almost 2000%
The company will reserve 35% of shares for its app users

JPMorgan Greenlights Crypto Fund

JP Morgan, one of the biggest investment banks in the world, has finally given its wealth management clients access to bitcoin and other crypto funds.

As of July 19, JPM clients can gain exposure to Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Ethereum Classic (ETC) via five different funds: (1) Grayscale's Bitcoin Trust; (2) Grayscale's Bitcoin Cash Trust; (3) Grayscale's Ethereum Trust; (4) Grayscale's Ethereum Classic Trust; and (5) Osprey Fund’s Bitcoin Trust.

The man in charge at JPM, Jamie Dimon, previously called Bitcoin a “fraud” but now the firm regularly speaks about digital assets and even provides banking services to Coinbase and Gemini.

Don't Count on Cash to Save You This Time

When the U.S. dollar sinks in value, millions of people all around the world holding their wealth in cash equivalents will be in big trouble. Find out where you can put your money now with the potential to keep it safe and aim for exponential growth.

Click here to learn more.

DEEP DIVE

The Future Is Bright

For quite some time, the ESG movement has been ruthlessly attacking Bitcoin miners for not being environmentally friendly.

While this issue calls for a bigger debate that's probably far above our pay grade, we still can't help but highlight some pretty neat (and positive) developments in the space:

(1) Stronghold Digital Mining files for $100m IPO

The company's business model is focused on converting waste coal acid directly into value through bitcoin mining.

When rain or snow meets sulfur-rich waste coal dumps, the largest water polluter in Pennsylvania is formed and contaminates nearby streams and rivers. By converting the waste coal into power to mine bitcoin, Stronghold has sought to restore the usability of geographical areas that acid mine drainage had previously damaged.

(2) Wesco Operating Co., an oil producer near Moab, found in Bitcoin a solution to a years-old problem

The company has essentially stopped flaring excess natural gas and is now using it to mine bitcoin, reducing carbon emissions and increasing profits.

TLDR: Bitcoin, as these examples show, is uniquely positioned to go beyond just incentivizing clean energy. Bitcoin mining can also help energy producers increase their profit margins, leverage stranded power, and capture pollutant waste.

A New Era of Financial Market Behavior

Traditionally, large institutions have decided where markets go, as early-stage investment phases were closed off to retail investors.

But thanks to crypto, now early-stage investments are opening up to the masses. Is this a good thing? Of course... but now there's even more risk.

Here's why.

So You Think You're Hedged?

Inflation... lockdowns (again)... a dollar collapse... more speculative non-sense... interest rate hikes... should we keep going?

You see, in today's market, where any one thing can cause a significant market downturn... the single best piece of advice we can give you is to make 100% sure your portfolio is hedged.

With all the hysteria going on in today’s “bull market,” a plan for protection against a sudden, catastrophic drop is more important now than ever before. It's time to prepare.

Click here to learn more about this simple buy & hold hedging strategy.

REGULATORY FRONT

Senator Warren Sounds The "Alarms"

At a hearing of the Senate Banking Committee, Senator Elizabeth Warren continued to sound the alarm about the potential dangers of blockchain technology stating that “all the warning signs are flashing." She also sent an open letter to U.S. Treasury Secretary Janet Yellon urging her to elicit a "coordinated and cohesive" strategy to combat the risks of crypto.

“Instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy, faceless group of super-coders and miners, which doesn’t sound better to me."

Well... it does to us.

Regulators Closing In On BlockFi

BlockFi’s potential IPO has grown complicated as state regulators in Texas, Alabama, New Jersey, and now Vermont have begun questioning the legality of the firm’s BlockFi Interest Account (BIA) offering. Here's a TLDR around the BIA.

What will happen? Hard to say.

The product, which promises to reward crypto depositors with high-interest payouts, had amassed over $15 billion in assets by March 31. And despite the rising regulatory scrutiny, the company is currently closing a $500 Series E at a $4.75 billion valuation and aims to go public in 12 to 18 months.