Eterna's Insights - April 2022

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Tech Meets Crypto

April saw the Tech industry continue its embrace of blockchain. Shopify announced that it is bringing Bitcoin payments to its merchants through a partnership with Strike, a leading digital payments network built on Bitcoin’s lightning network. PayPal extended its blockchain footprint through acquiring a crypto security firm called Curv. Twitter and Stripe announced the rollout of crypto payouts for Stripe Connect. This will enable a select group of creators on Twitter to receive their earnings on the platform in the form of USD Coin (USDC), a stablecoin.

Robinhood recently acquired Ziglu (an Eterna Capital portfolio company), a London based FinTech app that allows users to trade cryptocurrencies. It is also one of the few crypto companies that has secured FCA approval to offer crypto services in the UK. This acquisition will help in Robinhood’s expansion into the UK and Europe crypto markets. Furthermore, Robinhood also released a crypto wallet to 2m customers and has announced plans to add support for Bitcoin transactions.

Finally, the CEO of Amazon, Andy Jassy, expressed optimism about the future of cryptocurrencies and NFTs during an interview with CNBC. Regarding the use of NFTs by Amazon, he claimed that “it’s possible down the road on the platform”. This comes after it was reported last year that Amazon was hiring a Financial Services Specialist who “understands the overall cryptocurrency and digital asset ecosystem”.

Wall Street Embracing Crypto

Both BlackRock and Fidelity invested in Circle’s latest $400m raise. Circle is a crypto payment company responsible for the stablecoin USDC. In addition, BlackRock announced a partnership with Circle to be an asset manager of USDC cash reserves. BlackRock also launched a blockchain ETF. The $4.7 million ETF does not directly own cryptocurrencies or digital assets, but instead tracks an array of international companies that are involved in the industry. Fidelity announced that by the middle of this year it would offer Bitcoin as an option in 401(k)s. This makes it the first major 401(k) provider to offer cryptocurrency as an investment for retirement savers.

Goldman Sachs continued its crypto push this month by offering its first Bitcoin-backed loan. It has also been reported that Goldman Sachs is gearing up to offer OTC Ether options. This comes after its first successful OTC crypto transaction last month. HSBC announced that it will be launching an exclusive Metaverse fund for its high-net-worth clients. The Metaverse Discretionary Strategy Portfolio will focus on metaverse infrastructure, computing, virtualization, experience, and discovery.

Germany’s second largest bank, Commerzbank, has reportedly applied for crypto custody licenses. This is Germany’s first major institution to seek a crypto license. If approved, the bank would be able to offer crypto safekeeping services to its clients and would be able to develop a crypto custody offering.

BigCrypto Pushing the Frontier

Blockchain.com, a major cryptocurrency exchange and financial services firm announced the launch of an asset management platform for institutional investors called BCAM. The platform has been founded in collaboration with Altis partners, a futures portfolio manager, and will serve institutions, family offices, and high-net worth individuals. Coinbase released its long-awaited beta version of its NFT marketplace. In addition to the marketplace, Coinbase has also launched a social engagement side to the platform with the aim of creating communities in the NFT space. It has been dubbed as Instagram meets OpenSea. Users can create a profile and curate it with their NFTs, comment on others NFTs, and build a following. Finally, NEAR protocol, a leading Layer 1 solution, announced the launch of its stablecoin USN. USN is a decentralized stablecoin similar to TerraUSD (UST), which is soft-pegged (algorithmic) to the USD, but does not hold USD cash reserves. The launch of the stablecoin was led by a DAO called Decentral Bank.

New Global Crypto Hubs

The UK government announced its intention to become a global centre for crypto technology and investments. In doing so, the government released a series of initiatives towards making the goal a possibility, which include proposing new regulations for stablecoins. According to the Chancellor of the Exchequer, Rishi Sunak, “The measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.” Furthermore, the UK’s FCA announced Victoria McLoughlin as its interim head of digital assets department.

The Bahamas government announced that it will allow Bahamians to pay taxes using digital assets. The government will also start allowing Bahamians access to digital assets using the Bahamian Sand Dollar. The Sand Dollar is the Bahamas Central Banking Digital Currency (CBDC) that was launched in 2020. The Prime minister, Philip Davis, stated, “We have a vision to transform the Bahamas into the leading digital asset hub in the Caribbean.” The Bahamas is already headquarters to FTX, one of the largest cryptocurrency exchanges.

The Central African Republic became the second country following El Salvador to approve Bitcoin as legal tender. This has baffled the worldwide community as the country’s current infrastructure needs significant improvement to make digital currencies accessible to the entire population. Currently, only 11% of the population have internet.

 

Disclaimer: this newsletter was put together for informational purposes only based on our review and analysis. This should not be construed as a solicitation, offer, or recommendation to acquire or dispose of any investment or engage in any transaction.




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