May 5, 2021 | Issue #167

MUST READS

Galaxy Digital To Buy BitGo: Will Become Second Largest Custodian Behind Coinbase

Galaxy Digital (GLXY) has agreed to buy BitGo for $1.2 billion in cash and stock, the first $1 billion deal in the cryptocurrency industry.

To finance the deal, Galaxy is paying $265 million in cash and issuing 33.8 million new shares. The acquisition will make Galaxy Digital a crypto-focused financial-services firm with more than $40 billion in assets under custody.

To better understand what this means for GLXY investors, we contacted NZ, our trusted source for GLXY news and someone that has been pounding the table on the company for over a year.

Coinsnacks: GLXY acquires Bitgo. Thoughts?

NZ: This further legitimizes GLXY as a key player in the institutionalization of crypto by adding a complimentary, fee generating service line which will support overhead. GLXY now has the ability to provide a full-suite of brokerage services to large clients at scale and with institutional pedigree.

They also now surpass Gemini in assets under custody. Gemini reached $25B in April 2021.

It substantially increases workforce with the addition of 50 capable engineers, and an additional board member, furthering path to improving corporate governance.

The use of cash as well as stock demonstrates Management’s conviction in company outlook and strong solvency position.

This is likely to be only the first of several major acquisitions for the company.

CoinSnacks: You previously tweeted that you thought Galaxy may be acquired. How does BitGo news fit that thesis?

NZ: GLXY is a target for a minority investment that leads to a controlling interest. Possibly someone like Goldman Sachs.

Bitcoin in Your Bank Account?

It appears that some banks are getting jealous of Coinbase's ability to rake in fees produced by Bitcoin trading...

According to a Press Release, FIS – a leading provider of technology solutions for merchants, banks and capital markets firms globally – will soon offer their clients the ability to buy, sell and hold Bitcoin.

Once launched, this will open up the spigots for 300+ banks in the US to offer Bitcoin to their hundreds of millions of clients. It's hard to deny that 300+ banks giving Bitcoin the "okay" is good for awareness/ adoption.

Coinbase Offers New Bitcoin Buying Option With PayPal

The newly public crypto exchange is giving US customers a way to buy crypto using cards linked to PayPal. According to the reports, users will be able to make a purchase of up to $25,000 every day using their PayPal account.

Extra: Following the path of PayPal (who recently started allowing users to pay in BTC and other leading assets upon checkout), Ecommerce giant, eBay, has signaled it is open to the idea of accepting payments using cryptocurrencies such as Bitcoin on its site, the company said on Monday.

As of the first quarter of 2021, eBay has roughly 187 million active buyers.

The Signs Are Clear: THIS Type of Market Crash Is Coming

It’s actually much bigger and more important than what happens to the Nasdaq or S&P. Some of the world’s best investors are practically drooling in anticipation.

Because this crash will create a slew of 100%-plus opportunities... backed by legal protections that stocks can only dream of.

Our top analyst, Tim Melvin, believes this could happen within months – and you must prepare now. Get the full story here right away.

DEEP DIVE

Here’s What’s Driving the Price of ETH

ETH broke through the $3k milestone on Sunday and reached a new all-time high above $3,500 today with its market cap just above $400B. Now, some DeFi community members are saying that ETH at $10k is on the horizon.

But ETH’s massive price surge hasn’t been fueled on hype alone. The Ethereum ecosystem is going through massive innovations that are making everyone from institutional investors to celebrities turn their heads.

Here’s a rundown of everything currently driving the price of ETH, courtesy of The Defiant:

The NFT Explosion
Institutional Investors (more here) and Big Corps
Improving Economics: The upcoming release of Ethereum Improvement Proposal (EIP) 1559, Scarcity, and Scaling Solutions
DeFi

Billions of Dollars are Being Invested Into the Crypto Ecosystem

As previously reported by The Block, Q1′ 21 was a historical quarter in venture funding for the crypto/blockchain sector with roughly $3.18 billion allocated to crypto/blockchain projects. And that funding doesn't seem to be slowing down in Q2.

This week, alone, we have:

Goldman Sachs leading a $15 million Series B round for Coin Metrics
Tiger Global and Coatue backing Bitso in a $250 million Series C
Ethereum 2.0 staking project Lido raising $73 million led by Paradigm
Notional raising $10M to grow DeFi lending protocol with ‘real world’ potential
Paxos raising $300 million as it looks to onboard more PayPal-sized clients

We also have multiple venture funds raising money to invest in crypto projects which we will most likely start to see in the coming months.

Multicoin Capital raises $100 million for it's second fund
Andreessen Horowitz is planning it's $1 billion cryptocurrency VC fund

The World’s Most Honest Sh*tcoin

On the back of a major resurgence in cryptocurrency price (along with retail trading manias fueled by mobile trading apps and Reddit-borne trade ideas), Dogecoin (DOGE) has emerged as the best performing crypto YTD.

In this report, Galaxy Digital tells the story of the whimsical cryptocurrency and explains why, despite its shortcomings, Dogecoin is one of crypto's most interesting phenomena.

Uncovering the Hidden Costs of the Petrodollar

Crypto analysts continue to flex their skills when it comes to understanding markets outside of crypto. This week we have Alex Gladstein diving into the petrodollar and the negative externalities of the dollar system.

Read this. More than once.

If You Didn’t Buy Bitcoin at 5 Cents, Read This

There’s one crypto investment that a top expert recommends you get into first – and it’s not bitcoin.

He projects 5 times gains and calls it an “unstoppable computer” that’s already made a $100 million fortune for its founder.

Early investors could make a small fortune... but the window is closing soon. He explains everything, right here.

REGULATORY FRONT

SEC Punts on Decision for VanEck's Bitcoin ETF Filing Until at Least June

The SEC has now given itself an additional 45 days to consider the proposal. The order designates June 17, 2021 as the decision deadline, though this window could be extended further to encompass a 240-day decision period.

The Pillaging Never Ends

The US housing market is insane at the moment. If the rumors of institutional investors scooping up single-family homes are true, they highlight just how perverse the incentives of our fiat monetary system are and the dark places they have led us to.