FREGO

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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Backpack, a crypto <a href="https://blockworks.co/news/crypto-exchange-solana-spot-trading">wallet and exchange</a> popular among Solana users, has acquired FTX EU for $32.7 million.



In buying the defunct exchange’s European arm, Backpack — which was started by FTX and Alameda alumni — gets access to more than 110,000 former FTX EU users, Backpack CEO Armani Ferrante told me. On top of that, it inherits FTX EU’s European regulatory license that will let European users trade perpetual futures, which are very popular among crypto traders.



Ferrante said the deal was signed back in April of 2024, and Backpack spent the next eight months going through due diligence with regulators. In buying FTX EU, Backpack now becomes responsible for distributing bankruptcy claims to the <a href="https://blockworks.co/news/ftx-impacts-on-cryptos-future">exchange’s former customers</a>.&nbsp;



Ferrante formerly worked at Alameda Research, the research and trading firm that totally wasn’t commingling bank accounts with FTX. Backpack Wallet co-founder Tristan Yver, who just stepped back from an operational role at the company, was the head of strategy at FTX US.



FTX is tied to Solana because it built its Serum DEX on the network in 2020 and is <a href="https://blockworks.co/news/solana-first-vc">widely credited</a> with helping put the network on crypto investors’ radars in Solana’s early days.&nbsp;&nbsp;



Backpack has never been shy about the connection to FTX, and it’s pitching this acquisition partly as a way to get customers their funds back. “FTX EU users have been waiting for their distribution for too long. We believed that we could do it faster and more efficiently,” Ferrante said.



Outside of those connections, this deal feels a bit surprising at first glance, because FTX obviously doesn’t have any staff or proprietary technology that Backpack can access. Backpack also now has to distribute bankruptcy claims, which it didn’t have to do before.&nbsp;



Perhaps the most lucrative part of the deal is FTX’s MiFID II license that lets Backpack offer trading services including perps in Europe. Convincing regulators to reactivate the FTX license — which was suspended after the exchange’s collapse — was part of what took the deal so long to be finalized, Ferrante told me.&nbsp;



Europe is a big trading market, and a large chunk of crypto trading volume comes in the form of perps, Ferrante said in an email. “Yet there are no compliant crypto perpetual futures offerings on the market right now in Europe.”



A Coinbase spokesperson said the exchange bought an EU MiFID II entity last year, and it plans to “expand our derivatives offering from the EU in due course.”



Crypto derivatives were also relevant to the only other FTX post-collapse acquisition: It <a href="https://blockworks.co/news/ftx-ledgerx-sale">sold the LedgerX derivatives platform</a> to a Miami-based holding company for $50 million in 2023.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Backpack acquires FTX EU and its 110K former users

Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Core Scientific got a lot of attention in 2024 for its hosting deals with cloud provider CoreWeave.&nbsp;



But Hut 8’s plans to lease data center space to its own — for now unknown — AI hyperscaler may put it in an even stronger position than its rival, one analyst argues.



Various bitcoin miners embarked on revenue diversification efforts last year — particularly after last year’s Bitcoin halving. This included a focus on building out <a href="https://blockworks.co/news/btc-miners-evolving-revenue-post-halving">HPC verticals</a> to <a href="https://blockworks.co/news/hut-8-mining-ceo-interview">support AI applications</a>.&nbsp;&nbsp;



<a href="https://blockworks.co/news/2024-crypto-stock-winners">CORZ stock shot up</a> roughly 300% in 2024 after emerging from bankruptcy and <a href="https://blockworks.co/news/core-scientific-relisting-shares-tumble">relisting on the Nasdaq</a> last January.



A Tuesday research note from Benchmark’s Mark Palmer followed the West Feliciana Parish Planning &amp; Zoning Commission <a href="https://www.theadvocate.com/baton_rouge/news/business/25-billion-west-feliciana-data-center-approved/article_d6dce702-cc45-11ef-8ff0-1fd2550a45e5.html">reportedly</a> voting to approve Hut 8’s planned data center construction in Louisiana. It now seeks final approval.&nbsp;&nbsp;



Palmer described this project as a likely “game-changer” for the company, noting: “We believe that HUT’s agreement with the unnamed AI hyperscaler could feature better economics on a per [megawatt] basis than CORZ is slated to realize in its deal.”



The reason, he explains, was startup CoreWeave’s inability to offer support needed for CORZ to tap the project finance market. It instead agreed to provide most of the capital required to build the project.&nbsp;



On the other hand, Palmer explains, Hut 8 having the backing of a large, established AI hyperscaler enables it to access the finance market to raise the $2.5 billion it plans to invest in Phase One of the West Feliciana Parish project.&nbsp;



“The upshot is that HUT wouldn’t face the discount to its economics that CORZ had given CoreWeave’s fronting of the capex for its project,” he added.



Hut 8 shares were trading for ~$24.85 at 1:45 pm ET, while CORZ stock was at ~$14.20. Though both were down more than 6% on the day at that time, Hut 8 had the YTD stock price gain edge on Core Scientific, +17% to -1%. 



Palmer’s price target for Hut 8 stock is $41. It’s safe to say we’ll be monitoring those shares as the miner’s data center project progresses.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Bitcoin miner’s data center project to be ‘game-changer’

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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The so-called “Trump effect” on crypto has materialized — at least for one prominent crypto player — in the form of a stateside hiring spree.&nbsp;



Ripple is seeking new pros across all departments. Roughly three-quarters of its open positions are based in the US, including those in its recently expanded San Francisco and New York offices.



Open roles include a general compliance manager and financial systems lead of enterprise performance management in San Fran, as well as a ​​KYC/due diligence specialist in NYC. Also a bunch of engineers.



The pick-up in hiring <a href="https://blockworks.co/news/trump-appoints-crypto-council-head">reflects optimism</a> in the US market as a new administration steps into power (<a href="https://blockworks.co/news/trump-appointments-cantor-fitzgerald-sec">Trump</a>, his <a href="https://blockworks.co/news/trump-nominates-commerce-dept-leader">cabinet nominees</a> and a <a href="https://blockworks.co/news/crypto-friendly-congress-steps-into-power">pro-crypto Congress</a>).&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">2025 is here and the Trump bull market is real. For Ripple, this is even more personal after Gensler&#39;s SEC effectively froze our business opportunities here at home for years. The optimism is obvious and very deserved. Today: ✅75% of Ripple’s open roles are now US-based, while…&mdash; Brad Garlinghouse (@bgarlinghouse) <a href="https://twitter.com/bgarlinghouse/status/1875939452226564177?ref_src=twsrc%5Etfw">January 5, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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&#8220;While initial SEC policy shifts could begin within the first few months under new leadership, legislative progress may advance steadily as policymakers prioritize clear frameworks for digital assets,” a Ripple spokesperson told me. “The most immediate impact will likely come through changes in enforcement and by way of offering more regulatory guidance.”&nbsp;



And perhaps less regulatory guidance, in some scenarios. The SEC, under <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">a new leader</a> (after <a href="https://blockworks.co/news/gary-gensler-resigning">Gary Gensler’s departure</a>) could revoke SAB121, for example — guidance deterring some major players from custodying crypto.



Ultimately, Ripple said it’s looking for an end to SEC regulation by enforcement (the company knows all about legal battles <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">with the SEC</a>). It also seeks “fit-for-purpose frameworks” (rather than applying decades-old regulations) and “clear guidelines for institutional sales and distributions.”&nbsp;



Such aforementioned clarifications would allow the company to significantly expand its US operations, the spokesperson said.&nbsp;



The rep added: “We&#8217;ve already seen this starting to happen, closing as many enterprise deals in the two months post-election as in the previous six months.&#8221;



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Ripple’s pre-Trump hiring spree

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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We got another expected Biden-era cabinet member resignation today: CFTC Chair Rostin Behnam will step down from his position on Inauguration Day and leave the agency altogether in early February.



Behnam, a Democrat nominated to the commission by Donald Trump in 2017, became acting chair after President Joe Biden was inaugurated. He was later confirmed by the Senate in December 2021.&nbsp;



Trump is expected to name either Caroline Pham or Summer Mersinger, both sitting Republican commissioners, as acting chair later this month. He may or may not opt to bring in a new candidate for Senate approval.&nbsp;



Short-listed names to head the derivatives regulator include Jill Sommers of consultancy firm Potomak Global Partners and Milbank law partner Josh Sterling, according to Reuters.&nbsp;



Former CFTC Commissioner and head of policy at a16z crypto Brian Quintenz is also being considered, a person familiar with the matter told Blockworks. Quintenz served on the commission from 2017 to 2021.&nbsp;



The CFTC, long seen as a lesser player in the financial regulation landscape, took on a more important role in cryptocurrency regulation in recent years. Bipartisan efforts, including the FIT21 bill that passed through Congress last year, attempted to give the CFTC more oversight over crypto markets.&nbsp;



Behnam himself <a href="https://blockworks.co/news/regulation-by-enforcement-unsustainable">advocated</a> for more CFTC authority, particularly with regards to the fact that as it currently stands, the agency does not have explicit, comprehensive authority over crypto derivatives markets.&nbsp;



“The evidence is in our enforcement record, and we even point to the SEC’s enforcement record as well,” Behnam said in 2023 during a Congressional hearing. “We brought 82 cases over about eight years, and [these] 82 cases [came from] an agency that doesn’t have regulatory authority.”&nbsp;



That said, the CFTC was part of the 2023 settlement agreement <a href="https://blockworks.co/news/binance-dismiss-cftc">with Binance</a>, which resulted in a payment of more than $4 billion, one of the largest corporate penalties ever.&nbsp;



&#8220;Binance’s activities <a href="https://blockworks.co/news/binance-cftc-damning-quotes">undermined</a> the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental <a href="https://blockworks.co/news/binance-motion-to-dismiss-cftc-lawsuit">obligations</a> that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from US customers,&#8221; Behnam said in a statement at the time of the settlement announcement.&nbsp;



Pham and Mersinger — both known for their engagement with the crypto industry in recent years — have dissented from other commissioners regarding crypto enforcement actions. In September the two issued statements against the CFTC’s $175,000 settlement with Uniswap for an alleged illegal leveraged trading offering.&nbsp;



Mersinger <a href="https://blockworks.co/news/cftc-uniswap-settlement-dissenting-opinion">claimed</a> that the case against Uniswap “has all the hallmarks of what we have come to know as regulation through enforcement.”&nbsp;



Pham, in her opinion, noted that the agency seems to be treating crypto actors with a scrutiny they would never apply to other industries.&nbsp;



“Applying the logic of the CFTC’s legal argument, it seems that any commercial transaction to purchase a cow, a bushel of oats or a barrel of oil that involves the word ‘financed’ and is delivered in 30 days is a violation of [commodities laws] and needs to be executed on a futures exchange,” Pham wrote. “I am skeptical that the CFTC would try to enforce these statutory provisions outside of DeFi.”&nbsp;



The Trump transition team did not immediately respond to our request for comment on Behnam’s resignation.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Rostin Behnam’s parting ask for crypto rules

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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Before “AI” came to be synonymous with “agents,” there were far humbler AI projects with functional use cases. <a href="https://blockworks.co/news/solana-wallets-grass-airdrop">Grass</a> was one such DePIN project on Solana.



The Grass elevator pitch: Big Tech bad because it scrapes your data on the internet for their profit, Grass good because you can now use it to activate your idle internet bandwidth to sell that access.



Rather than buying it from Big Tech, AI companies (or businesses that find it useful to track media sentiment) that want your textual data can now purchase it from you via Grass as an intermediary.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfOaFluRNCHciWYIG5ognSLP1iMjgw-yNP3MiFDA2E6Y6wfWaAzw6K5EHG2bvhWOxesvclzRtsHmqzbf_6d6tr2KS9i1EEblPhnmJEjSZ3Kld7Zgh313htaZ9KfuEp0h_HJtn-OvA?key=t0gZV95PRBaJNtXjVlJVzpLc" alt=""/></figure>



Grass blew up mid-2024, growing to more than <a href="https://x.com/getgrass_io/status/1837497231274041557">2 million+</a> active nodes in less than a year. These nodes scrape about <a href="https://x.com/Daveeemor/status/1868698451044675897">90TB</a> of data daily (about 445x less than Google), which is then sold to AI companies.



The GRASS token airdropped in October, with multiple major CEX listings and a 380% appreciation since.



That’s impressive considering most tokens see a down-only trend on TGE. It’s even more particularly impressive since GRASS farmers don’t suffer an opportunity cost, i.e., staking capital. The more costless it is to farm something, the higher tendency for a token to dump aggressively, but that hasn’t been the case for Grass.



Based on <a href="https://x.com/alpha_pls/status/1846611190891360467">@Daveeemor</a>, Grass generates about $33 million in annualized revenues, which it plans to eventually share with its node operators and GRASS stakers.



At a $702 million market cap today, that gives GRASS a 21.3x MC/F multiple. If one believes Grass can continue to scale as it did in 2024, that suggests a very attractive token valuation relative to other fee-generating DePIN protocols, like Helium or Akash, which <a href="https://x.com/Daveeemor/status/1868698451044675897">trade</a> at a much higher 265-334x MC/F multiple.



In Q1 2025, Grass plans to introduce the ability to better capture real-time data with its “Live Context Retrieval” technology, enabling more performant and specific AI models that depend on time-sensitive information such as market trading. 



For more on Grass, see our previous Blockworks research <a href="https://app.blockworksresearch.com/flashnotes/touching-grass">report</a> by Boccaccio.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Reshaping the data layer of AI with Grass

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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There have been, quite frankly, a lot of predictions floating around, which is to be expected.&nbsp;



It’s hard to filter through the noise to pull out ones that are either fun to pay attention to, or have the highest odds of success.&nbsp;



On Empire this week, Jason Yanowitz and Santiago Santos recapped their predictions over the last couple of years and <a href="https://blockworks.co/podcast/empire/4cddc846-cc72-11ef-9ae7-cb1d9b6b1f2e">gave some forward-looking ones</a>, including a bitcoin price target.&nbsp;



Let’s start with the price target: $150k sometime this year. Not necessarily the biggest prediction, given that we’ve seen Bitwise and Bernstein, in their own calls, say it could go as high as $200,000 before year-end.&nbsp;



With bitcoin (barely) back above $100k, it seems like the bullish vibes are coming back after a fairly bumpy ride at the end of last year. Ledn’s John Glover thinks this first quarter could see a rally up to $125,000, which would get us just under the target given by Yanowitz and Santos.&nbsp;



Sounds like this prediction, if we maintain this course, is a matter of when, not if.&nbsp;



One other prediction that I found feasible, and honestly quite interesting, was about stablecoins. Yanowitz came ready on this one, admitting that he had four different predictions involving stablecoins. The big one, though, is that he thinks this could be the year that we see a big bank, a tech company and a fintech company all launch their own stablecoins.&nbsp;



Focusing specifically on banks, the big hurdle they’ve faced so far is just the lack of regulation in the space. It’s a topic <a href="https://blockworks.co/news/stablecoin-report-market-capitalization">we’ve discussed a few times</a> here on Empire, but if we’re set to see an overhaul at the SEC and a change in the way the regulator engages with crypto-curious companies, then Yanowitz’s prediction once again may be a matter of time rather than feasibility.&nbsp;



At the very least, the Empire hosts are not alone. Galaxy also <a href="https://www.galaxy.com/insights/research/crypto-predictions-2025/">predicted</a> that we could see a number of TradFi-backed stablecoin partnerships announced this year.&nbsp;



So, my question then is, who’s first?



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Bitcoin could hit $125k in Q1: Analyst

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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If Solana investors look up from their AI coins, they’ll see a few interesting products slated to launch this year.



Shipping dates can always be delayed of course, but as of now, 2025 is poised to deliver a slew of Solana product launches. Solana Mobile’s Seeker phone tops the list along with the full version of Jump Crypto’s Firedancer client. DePINs, crypto wearable tech, and Jito’s restaking platform are also noteworthy areas expecting new launches.&nbsp;



The most interesting product launch to watch in this newsletter writer’s opinion will be the Solana Seeker, which is the second mobile phone created by Solana Mobile. The new phone is <a href="https://blockworks.co/news/solana-mobile-app-season">expected in mid-2025</a>.



Solana Mobile is being built under Solana Labs, which is the original Solana development company where co-founders Anatoly Yakovenko and Raj Gokal are still employed. Perhaps by virtue of its bona fides, Seeker has drawn several dozen Solana teams to its so-called dApp store.&nbsp;



Seeker orders will partly be driven by interest in token airdrops associated with the phone, which proved to be <a href="https://blockworks.co/news/solana-phones-sold-out">quite lucrative for the last Solana phone</a>. When we last spoke in October, Solana Mobile general manager Emmett Hollyer said the Seeker, currently priced at $500, had garnered 145,000 pre-orders.



A close second to Seeker’s hype could be the full rollout of Firedancer, a Solana validator client being built from the ground up by Jump Crypto. Firedancer is software Solana network validators can run to process transactions and build the blockchain — and it has been spoken of in hallowed terms by Solana faithful since its development began in 2022.&nbsp;



Firedancer was <a href="https://blockworks.co/news/lightspeed-newsletter-solana-firedancer-testnet">revealed to have gone live</a> during the Solana Breakpoint conference in September of 2024, but it currently only runs in non-voting mode, meaning the client still essentially comes with training wheels attached. Nobody really knows if or when Firedancer could go fully live, and the team doesn’t do much press. The client&#8217;s GitHub repository <a href="https://github.com/search?q=repo%3Afiredancer-io%2Ffiredancer+vote++&amp;type=commits&amp;state=open&amp;s=committer-date&amp;o=desc">shows</a> two code commits related to vote transactions over the past month.



Despite a slight <a href="https://blockworks.co/newsletter/daily/issue/post_a2165e15-be7b-4bc1-a65f-fc882f2d7148">apparent dropoff</a> in DePIN interest from crypto’s chattering class, there’s one Solana DePIN launch I have my eyes on for this year. DAWN, a <a href="https://blockworks.co/news/two-vaneck-funds-back-depin-dawn">darling of crypto venture</a> that aims to be a decentralized internet service provider, is <a href="https://x.com/MessariCrypto/status/1868953743653585341">slated</a> to launch on mainnet in 2025.&nbsp;



Speaking of sectors seeing declining interest amid the AI explosion, <a href="https://blockworks.co/news/jito-releases-code-for-solana-restaking-network">Jito’s restaking platform</a> should launch in around a month, a member of the team told me today.



And there’s one wild card to keep an eye on: fitness tech. Pulse, a Solana-connected fitness tracking bracelet, aims to ship products in Q1. A second iteration of Cudis’ Solana smart ring just began shipping in December (I will note, I had issues with <a href="https://blockworks.co/news/lightspeed-newsletter-solana-smart-ring-health-tracker">my first Cudis ring</a> rusting, although my second ring has been okay so far. Still, buyer beware).



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Seeker and Firedancer expected to ship Solana products in 2025

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Bitcoin Inc., which operates the Bitcoin Conference where President-elect Donald Trump <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">spoke</a> last year, is hosting an industry inauguration celebration later this month.&nbsp;



Co-hosts for the event, dubbed the “Crypto Ball,” are non-profit Stand With Crypto, Exodus and Anchorage Digital. The sponsorship package to co-host the event costs $5 million, according to documents shared with Blockworks. Other sponsorship opportunities range from $150,000 to $1 million. Sponsors include Coinbase, MetaMask and Galaxy Digital.&nbsp;



Bitcoin Inc. has partnered with MAGA Inc. and David Sacks, the incoming Trump Administration’s “<a href="https://blockworks.co/news/trump-picks-crypto-czar">crypto czar</a>,” to host the Jan. 17 event. General admission tickets, of which 800 are available, are going for $2,500 apiece.&nbsp;



It’s unclear whether Trump and/or Vice President-elect JD Vance will be in attendance.&nbsp;



“It’s hard to get a direct confirmation at the presidential/vice presidential level but we’re optimistic they will attend and we will definitely be the event to attend for pro-crypto cabinet members and high-level staffers,” a note from Bitcoin Inc. that was shared with Blockworks read.&nbsp;



Given the industry’s level of interest in this election, and Trump’s <a href="https://blockworks.co/news/trump-appoints-crypto-council-head">apparent support</a>, we weren’t surprised to hear about the party, or who’s involved.&nbsp;



Any Forward Guidance readers have a seat at their table? I just might know a journalist itching for a media invite.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Celebrate good times, come on

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Just days into the new year, bitcoin’s price is back to six figures. The asset’s price rose above $102,400 on Monday morning. It hovered around $101,750 at 2 pm ET — up nearly 9% from a week ago.&nbsp;



Crypto is so far seeing its own “<a href="https://blockworks.co/news/market-movement-q1-2025">January effect</a>” — a term alluding to the potential rise of stock prices during the year’s first month. CoinGlass data shows bitcoin saw price gains — albeit slight ones — during each of the month’s first five days. That hasn’t happened since 2018.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1138" height="1292" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=1024&amp;h=1024" alt="" class="wp-image-95931" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=1138 1138w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=264 264w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=902 902w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=226 226w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=230 230w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=193 193w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/COINGLASS-JANUARY.png?w=70 70w" sizes="(max-width: 1138px) 100vw, 1138px" /></figure>



You know by now about BTC’s historic rise to an all-time peak of $108,000 a little over a month after Trump’s <a href="https://blockworks.co/news/donald-trump-declared-president-2024-election">election win</a>. Then there was what some called a <a href="https://blockworks.co/news/eoy-price-updates-and-outlook">“healthy” correction</a> fueled by hawkish Fed vibes and profit-taking, with BTC dropping below $92,000 on Dec. 30.&nbsp;



Grayscale product and research head Rayhaneh Sharif-Askary noted <a href="https://blockworks.co/news/bitcoin-bull-market-drawdowns">temporary drawdowns</a> during bull markets are common, pointing out the FTSE/Grayscale Crypto Sectors Market Index’s 6% decline in December.



“However, strong demand from US-listed Bitcoin ETPs and treasuries like <a href="https://blockworks.co/news/microstrategy-btc-purchase-recap">MicroStrategy&#8217;s</a> may support bitcoin’s price,” she said when asked about the <a href="https://blockworks.co/news/eoy-price-updates-and-outlook">outlook for January</a>.&nbsp;



The US bitcoin ETFs welcomed $908 million in net new assets on Friday — rebounding from a combined $940 million worth of outflows over the previous four trading days, Farside Investors <a href="https://farside.co.uk/btc/">data</a> shows.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I would have predicted a rough patch for the btc ETFs given the drop below $100k (overdue for a breather) but no, they roared back with nearly $1b Friday, which lifted the 1W to positive net. Good sign. The scoring was spread around too, Dream Team-style- also a good sign. <a href="https://t.co/krmKS0wKm2">pic.twitter.com/krmKS0wKm2</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1876266559846658323?ref_src=twsrc%5Etfw">January 6, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



96% of financial advisers <a href="https://x.com/bitwiseinvest/status/1875240461092474926?s=51&amp;t=jj3FXH_4rQaOer9kcKNJsg">surveyed</a> by Bitwise received a crypto-related question from clients in 2024. This finding jibes with the expected ongoing wealth manager-fueled <a href="https://blockworks.co/news/2025-btc-adoption-wave">capital influx</a> into the crypto segment.



As for Sharif-Askary’s mentioning of treasuries, MicroStrategy’s latest bitcoin buy (on Dec. 30-31) was 1,070 BTC for roughly $100 million. Though smaller than its BTC buys in previous weeks, the company also just revealed targeting a $2 billion capital raise via perpetual preferred stock offerings to acquire more BTC.



On that note, Metaplanet CEO Simon Gerovich just <a href="https://x.com/gerovich/status/1875777564184342786">noted</a> his company plans to boost its BTC holdings (currently at 1,762 BTC) to 10,000 BTC in 2025. Then there’s KULR Technology Group, which said Monday it bought an additional $21 million worth of bitcoin.



Also set for January, of course, is Trump’s inauguration. And with members of <a href="https://blockworks.co/news/crypto-friendly-congress-steps-into-power">the 119th Congress</a> sworn in last week, hearings on the president-elect’s cabinet nominees are <a href="https://www.bostonherald.com/2025/01/05/senate-majority-leader-warns-no-clarity-on-trump-cabinet-picks-as-hearings-due-to-begin/">expected to kick off</a> soon.&nbsp; Confirmation hearing happenings, and subsequent signals on the pace and extent of future crypto regulatory clarity, could impact BTC price throughout the month, Sharif-Askary told me.



“Delays or restrictive policy announcements may dampen sentiment,” she said, before adding: “Macro factors — including Federal Reserve signals on <a href="https://blockworks.co/news/fed-dovish-hawkish-2024-conduct">interest rates</a> and market responses to a stronger US dollar — could also play a role.”



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BTC hits milestone as possible big month begins

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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In 2017, investor John Pfeffer <a href="https://medium.com/john-pfeffer/an-institutional-investors-take-on-cryptoassets-690421158904">published</a> “An (Institutional) Investor’s Take on Cryptoassets,” a seminal paper on long-term investments of crypto tokens.



In retrospect, Pfeffer’s original thesis was way ahead of its time. It laid the formative groundwork for investor thinking around magic internet money, and made many prescient predictions that still hold up today.



Pfeffer argued that the equilibrium long-term outcome would be one dominant crypto asset as a monetary store of value, with bitcoin as the likely candidate. He projected BTC’s market cap within a range of $4.7 to $14.6 trillion ($260k-$800k per BTC).



There are many reasons Pfeffer believes bitcoin would be cemented as the dominant SOV, but key to the thesis is that BTC carries the least technological risk. For ETH to beat BTC at the SOV game requires massive intellectual coordination across a multiyear roadmap with lots of technical upgrades subject to delays and/or risk of failures.



As Hasu put it on an old <a href="https://youtu.be/SFTvhVGx_DU">Uncommon Core</a> podcast, “nothing happening in bitcoin is actually the best thing that can happen to bitcoin.”



Turning to Ethereum, ETH bulls today tend to argue the superiority of ETH to BTC on a multi-prong level: Its use as a means of payment within the EVM ecosystem buttresses its value as a SOV (on top of its deflationary effects following <a href="https://blockworks.co/news/eip-1559-is-live-thanks-to-ethereums-london-hard-fork">EIP-1559</a>).



But it’s not clear why that alone would make ETH a valuable SOV.



Pfeffer argued that crypto participants would simply convert their preferred “store of value via the payment rail at the time of payment in the exact amount needed and for as little time as possible.” He likened this to retailers converting bank deposits to physical cash for payments only at times of need.



Pfeffer also presciently argued that Ethereum’s <a href="https://blockworks.co/news/0xresearch-newsletter-ethereum-tps">scaling solutions</a> — such as L2s and the move to <a href="https://blockworks.co/news/ethereum-switches-to-proof-of-stake-after-7-years-of-work">proof-of-stake</a> — would be “bullish for adoption/users but bearish for token value/investors.” This has turned out to be exceptionally spot-on in light of Crypto Twitter’s constant caterwauling about the lack of ETH’s price appreciation in the last year.



So what is ETH worth?&nbsp;



Today, Pfeffer’s landmark thesis is being <a href="https://www.linkedin.com/feed/update/urn:li:activity:7278030654078943233/">revisited</a> via a newly-published paper by Triton liquid fund, which he co-authored.



The paper’s conclusion: Ethereum is a technological marvel, but ETH’s risk-adjusted upside is a difficult projection to make.



One could try to value ETH as a cash-flow asset. But Ethereum’s constant innovation around its protocol and tokenomics makes a DCF analysis “incredibly difficult to do accurately.”



Even so, the paper makes an attempt based on generous assumptions that issuance is net-neutral, plus with an average growth rate of 5%. No matter what discount rate one uses, though, “ETH appears highly overvalued today as a cash flowing asset at $400b.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdyBnSGFp1FmGGjrqjJ2wrsZoIA77PyYRFXSFtHQCrHOD4i7j7sd5gF9POrzyj2ythpS9ts6gquQVfggLdenvjv8MlARAb7NBXqB1Pfl0uV0hNOmqdueR6WH8eXleKuW61HWXm_Jw?key=oVgGb96GsTGcMS5NlXgT4fiJ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.linkedin.com/feed/update/urn:li:activity:7278030654078943233/">Triton</a></figcaption></figure>



One could then turn to the “monetary premium” argument for ETH. But contrary to ETH bulls, ETH is not money — it’s not even the de facto unit of account in the EVM ecosystem (the US dollar is). Case in point: Base, Ethereum’s largest L2, started <a href="https://x.com/jessepollak/status/1870508320030851123">offering</a> last month the use of USDC for gas costs rather than ETH.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">&quot;Monetary premium&quot; is insane because it appears to be one of the most legitimately powerful concepts with the potential to gigafry economics but is exclusively regurgitated by literal turbonormies who unironically want to like &quot;justify an absurd valuation&quot; instead of just saying…&mdash; Gwart (@GwartyGwart) <a href="https://twitter.com/GwartyGwart/status/1872777669059699066?ref_src=twsrc%5Etfw">December 27, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Even if ETH was treated as the primary medium of exchange onchain, trying to justify ETH’s ~$400+ billion valuation based on “monetary premium” is an exercise laced with wishful thinking. The paper estimates Ethereum’s onchain “GDP” at about $2.8 billion (annualized based on the past six months), making it about 1000x overvalued by its current valuations.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdJT3W4iJTbzsNndepkuLuJ0eoD6HJH1CEMnFqJ8EdGoFPqOIPzRFk8T-VPVmhm7HvaQ0kQvnVmenMRp11BMy2r1bjA_7xAmU1c5Q5nktjpKAVZmf8KOnGqzELhLKCRTePPeh1mVA?key=oVgGb96GsTGcMS5NlXgT4fiJ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.linkedin.com/feed/update/urn:li:activity:7278030654078943233/">Triton</a></figcaption></figure>



The strongest argument for ETH as an investable asset points to it as the dominant internet-native commodity and productive onchain asset. Holding ETH is not like holding gold bars or oil — one can stake it in DeFi to accrue a yield.



Yet, the paper questions that a 3% yield from Lido outweighs the inherent volatility of ETH for it to be used as an “internet bond.”&nbsp;



In conclusion: “At $400b today and given its current trajectory, it is difficult to justify ETH as a rational investment on a risk-adjusted long-term horizon, no matter which lens you use to value it…BTC still holds its position as a sound risk-adjusted bet that it can grow into its role as a non-sovereign store of value.”



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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What is ETH worth?

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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It’s SEC Chair Gary Gensler’s last month in office. A new SEC is on the horizon, one that’s potentially far more crypto-friendly.&nbsp;



Here’s the thing: That doesn’t mean that the old actions (aka lawsuits) taken by the SEC just disappear overnight. It’s unfortunately not that simple. But what happens next is a loaded question right now.&nbsp;



Haynes Boone’s Matthew Frankle does think there’s a possibility that we will see some of the cases dropped as the regulator recalculates how it plans to approach crypto.&nbsp;



Frankle said he’s “taking a guess here, but I suspect that many of them will be dropped to the extent they can drop, right? I mean sometimes they actually can&#8217;t be dropped, but to the extent they could be dropped, I think probably they will be unless there’s … underlying fraud, and that&#8217;s what they&#8217;re going after.”



Tie that into Frankle’s belief that crypto will still be a big priority for the SEC and there’s potential for a totally different dialogue around regulation by this time next year.



A crypto-friendly regulator doesn’t mean less regulation, Frankle was careful to explain.&nbsp;



“I don’t think it’ll be less, I think it’ll be smarter,” he told me. “We&#8217;re going to get some regulations, but it&#8217;s going to be to clarify things rather than to tell people, ‘hey, what you&#8217;re doing is wrong, and by the way, there&#8217;s no way you can do it right.’ That&#8217;s the big issue, right? You have these big players out there … [that] want to do it the right way, and the SEC is telling them, essentially, there is no way to do it.”



But if you had your heart set on Jan. 20 being the day everything changes, you might need to adjust your expectations. Frankle expects that it’s going to take some time, and we obviously need to see the new head of the SEC confirmed before we can really see the changes play out.&nbsp;



Perhaps this is the year crypto learns patience.&nbsp;



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Current SEC crypto lawsuits could be dropped, lawyer says

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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Lightspeed put together an anonymous survey and circulated it to Solana founders to get an honest peek into what they think of other ecosystems, VCs, startups and more.



The questions included a range of choices and a write-in slot that has been edited for grammar and clarity.&nbsp;



The results from our 42-founder poll:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXctoMvEG_kaH-bXrI5Tu4uvvXvEfU-_VdFBSCC97Aw4NKZHHWZ_zifaeiST2KLKibYGU2y3sRap1d78p4f8iG1fQnj5LXcLrxTWIH9cHn-IsVCOt5EUZEr4Js6WH--akMmNubTQUw?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“None. If not solana, I wouldn&#8217;t be in crypto.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdxEIUOoxBadzShlODZY16e8Zi1lVaUDbef5kdtdljYF0iRPwkuXJEBezFAwIUHwLdyFPK9nCLIrK05GbRjs7IfaQMDgkKWzb-cApDxAHk9dj3p8iTh8iKaBwzeKwyZuvBR5cTLzw?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeE3rhNXBxlK8H8audVjRQTbG0HhYiNW85beu5r1hb7ENSD-uZw4H5Nk1ta33vQqd3V_HPZcrOoZx5MC60kcaMpLTI5n4WPgwhYF4OzmipqywlYZotw0IA9XnjTcaSIB9mFvPX7CA?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“Unfair to choose a single one”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdVMsi33are-XX3MVqNU8s6Fb5joNbBnvl2GusL1AX_wxmLZ9kBPdrO33Lf4KL9vbPJYeJrogXcN-weszAZN6bM30qRFj_hEvOzVxDtvmOCJ-LZeTyZOwna2G_3FyKOP3KVnV1L?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“Asia-based VCs who only ape in based off who the lead is”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXenMRRxT5F4aX7cswCdLM25QFqZC6bNGR5AZLN52rmC-Mc2Wt6s5CnwiNJSqSFtPVsKcAv-nSsLylD-j23gcIVmZpnhY6Qshk2zzhPxDoCcPQpFBvwaGGDcRbJEX0LD7Ke_b0OH?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“I don’t know, either way, doesn&#8217;t really matter”



“Not a fan of this question, feels like it&#8217;s trying to provoke rather than inform”



“Exists, I am a part of it, but not &#8220;at the expense of non-cabal projects&#8221; because I invest a lot of time and money into &#8220;non-cabal projects&#8221; as well. It&#8217;s a two-way street &#8212; you give and you receive.”



“Does not exist and I am a part of it”



“There&#8217;s a network of personal relationships that have formed naturally during the early days and bear market. Folks who valued working together and helping solana over the years naturally have a tighter network now. Some of these people (individuals include folks from the OG solana labs team) have gone on to find a large voice and following. This is natural. Almost all of the surviving teams have also been funded by VCs and solana ventures money. Those are facts, but there&#8217;s no ill intent in my opinion. Solana Foundation is doing a great job at actively dispersing the resulting effects and supporting people throughout the wider ecosystem (see Superteam, etc). In my opinion, Toly specifically is doing a great job at shouting out builders without discrimination but rather based on 1) what they&#8217;re building being cool 2) earnestness”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOSX2_PSc_xW9ia9sYXEESKNp_5jqVM7b2_I-TLiTdp_9AdMwina7lZSssFDSAKWu0au7fw_egdd6foRJYyH271AsSbuYq_FfDhmebsiDrEO5P3R7gKmxp0T2YE1uNa2BBNZV36A?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“Need much more blockspace ASAP. 5x demand + 2x price appreciation = need 10x bigger blocks to maintain the same cost for app builders!”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXemCz_z5OQzfiCA2jGG-MWQ64BR3IomejWasDuGdemc3r0mmOlFtdJhsTPV-KpoTP0-rJOb2yA0oCijOj_22ofwCqfYOblVwWyN6kl-vgo4mP7Y60BG7ClZL13NX1MX-7tJwvF9bg?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXek7HxxQZjxBHXXAB3vAPEUvqDOnmaKwRt3cGBwHq6Z5yoZBzL5UKQ44t8bvFnqoSRloatXAD4P9abt1zxqXLVs1U1dr09KK1LcIvVAtLrxDy_VONk4RtsOHZkPAdl3lfzimjRE-A?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeKpV-nGdAYI79sx7lksGwsWcuHLGqL2QxV6s02i5fLn2x5qc5IXdcIilIxTL1QEZxc7-ahzixRKqPFsWlchlA6MB90bQDnm__ofYjRlEYksGrk6f2lI5vD4MrFHqc6Z7lYO9kJ?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“The one that does not accelerate”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeliVTDJ9tMHuxjccNyrJf_nY5K5DFrWxStGsaQi93-wftyRhxvGoGE0AhO5fTmU3cfJ5_rCzbPw80piXS1bgIW54MksTTX-pemHuDtTN07wbJtCbRPDdGQ-he7Vjg-FcC4776lgA?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said: </h2>



“SocialFi, DeSci, and gaming are all equally terrible”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXey3679njzrzqFIdPF2ZLbn3wIZ58jfbiKzne883PzpLcBNcKPhe57tHKpTbmP7f8eJxy8kJIExlhGegGWLEQ1zieI6IyURe6a6or9BaErDkrkXekut0MQZw5CH63tBN-TGl8OW7A?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf_IZ5kublvbG5khv5O-TbKSPBkewl1wRbpk5TZb1OZUGCeng0UmMmTM5Os53gWJ3c8gnyIicRLa8DXMJZJZ_fkDjE4RkNLW-Kph362kLlHDuepx-FUKxb38KhmB6bosYkzX_fH0A?key=nKIpr1J-gOoWEtn9ycTklgFC" alt=""/></figure>



<h2 class="wp-block-heading">Founders also said:</h2>



“FTX was both the best in the early days and the worst lol.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



There’s a lot to dig into here, but there are a couple findings I found immediately interesting: Other founders don’t think highly of pump.fun, yet they think memecoins are mostly good for the ecosystem. And, Base and Sui appear to be by far the most alluring Solana competitors. 



As a journalist, it can be difficult to get founders to be candid with me on the record. This was a helpful exercise in learning what Solana founders really believe — at least in the aggregate.



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We surveyed 42 Solana founders. Here’s what they said.

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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You already know a bunch of pro-crypto political candidates won their elections in November. Today marks the start of seeing what that will mean.



Well, sort of. The Republican-led House gathered just hours ago to begin voting on whether to re-elect Mike Johnson as its speaker. So there’re some other things to deal with before crypto-related matters take center stage.



But it appears they will eventually, with crypto market structure and stablecoin legislation <a href="https://subscriber.politicopro.com/article/2024/12/hill-scalise-wants-to-pass-crypto-overhaul-stablecoin-bill-in-first-100-days-00194218">expected</a> to gain attention in the coming months. As mentioned yesterday, <a href="https://blockworks.co/news/republican-nominees-for-house-committees">Rep. French Hill</a> tapped Allison Behuniak — staff director of the House Financial Services Committee’s digital assets subcommittee — to serve as the committee’s policy director.



Stand With Crypto put the <a href="https://x.com/standwithcrypto/status/1874854081438871925">final tally</a> at 298 crypto-friendly legislators in the 119th Congress. The organization also hosted a coffee gathering Friday in an effort to “build camaraderie among the pro-crypto legislators, policymakers and community members.”



Coinbase chief policy officer Faryar Shirzad was apparently in attendance, <a href="https://x.com/faryarshirzad/status/1875171965465764035">posting</a> a coffee pic to X. Two days earlier, he shared the following expectation for the new year:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">2025 will be a huge and positive year for crypto policy, but an even bigger year for updating the financial system and building the on-chain ecosystem. Happy new year, and let’s get to work! <a href="https://t.co/hHxMm4O3m1">https://t.co/hHxMm4O3m1</a>&mdash; Faryar Shirzad 🛡️ (@faryarshirzad) <a href="https://twitter.com/faryarshirzad/status/1874515792173334650?ref_src=twsrc%5Etfw">January 1, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



When I <a href="https://blockworks.co/news/harris-trump-crypto-stances-coinbase">interviewed Shirzad</a> in October (prior to elections), he measured the industry’s 2024 success by seeing virtually no candidates push an anti-crypto message.&nbsp;&nbsp;



“Because I don’t think it has any resonance,” he explained at the time. “I think you can fit every anti-crypto voter in the country all in a single bus — maybe even a single minivan.”&nbsp;



One X user <a href="https://x.com/BalistrariaFund/status/1875223309530603924">warned</a> this morning that it’s one thing to “talk the talk” in a pre-election survey. Keeping the pressure on the lawmakers — letting them know “they are constantly being watched and scrutinized” — is the next step.



That’s a good idea for industry players, sure. But the optimism around these politicians following through seems to be rooted in something real. 



As Blockchain Association CEO Kristin Smith said in a Nov. 6 X <a href="https://x.com/KMSmithDC/status/1854191005353873851">post</a> when describing the biggest post-election takeaway: “There is zero electoral upside to being anti-crypto.”



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Crypto-friendly Congress steps into power

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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The latest crypto M&amp;A deal makes more sense when considering the segment’s evolution in 2024.&nbsp;



Digital asset prime broker FalconX bought trading firm Arbelos Markets in a bid to become one of the market’s largest crypto derivatives dealers.



FalconX, in a Thursday news release, noted the institutional market’s significant growth over the past year, “driven by positive regulatory momentum along with the growth of ETF and derivatives markets.”



The company added: “Similar to traditional asset classes, crypto derivatives will continue to scale to be many multiples of spot markets.”&nbsp;



After bitcoin ETFs launched in January, the SEC <a href="https://blockworks.co/news/sec-approves-cboe-nyse-options-btc-etfs">approved options</a> — contracts representing the right to buy or sell them at a certain price for a specific period of time — on the biggest of those products, BlackRock’s iShares Bitcoin Trust (IBIT).&nbsp;



Industry watchers told me options would spur a more <a href="https://blockworks.co/news/on-the-margin-newsletter-btc-etf-options">robust ecosystem</a> around the spot ETFs, enhancing liquidity and price discovery. The tool essentially <a href="https://blockworks.co/news/bitcoin-etf-options-trading-begins">attracts institutional investors</a> looking to better manage their bitcoin exposures as market conditions fluctuate.



Michael Klena, a partner at advisory firm Architect Partners, called this FalconX purchase “a logical progression in the market” as more demand and supply fosters more deals.



The institutional trading spurred by regulatory changes (ETF approvals) and expected crypto-friendly frameworks “means the larger firms are now able to move more aggressively to acquire and be confident not to get in the crosshairs of the regulators,” he said. On the supply side, there are a number of newer crypto derivatives firms (i.e. Arbelos, D2X and One Trading), but no one dominant player.



Another point: “Derivatives are a higher-margin product than spot trading, so firms will look to expand their offering as trading fees are compressed,” Klena said, noting the same thing happened in equity trading.&nbsp;



We saw Cboe Global Markets <a href="https://blockworks.co/news/cboe-sees-need-to-move-quickly-in-crypto-following-exchange-acquisition">close its acquisition</a> of ErisX in 2022. Coinbase, that same year, <a href="https://blockworks.co/news/coinbase-acquires-regulated-futures-exchange-to-expand-derivatives-offerings">bought</a> derivatives exchange FairX. “But timing was a bit early on those deals due to the not-yet-seen regulatory clarity,” Klena told me. “We are now hearing firms saying that timing is looking better.”



Alongside the advent of crypto ETFs and pending regulatory clarity, Arbelos Markets CEO Joshua Lim in a statement labeled growing acceptance of crypto as a diversifier in portfolios as yet another reason this is a “critical moment” for this combination to occur.



You may recall BlackRock’s recent <a href="https://www.blackrock.com/institutions/en-zz/literature/whitepaper/bii-investment-perspectives-december-2024.pdf">guidance</a> that a <a href="https://blockworks.co/news/2025-btc-adoption-wave">1-2% allocation to BTC</a> is “reasonable.”



We saw <a href="https://blockworks.co/news/m-a-deals-shifting-tide">a flourish</a> of crypto M&amp;A deals right after the election. Klena anticipates more deals to come around derivatives trading and infrastructure.



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How 2024 set up the latest crypto M&A deal

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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As of Dec. 30, 2024, <a href="https://blockworks.co/tag/mica">MiCA</a> officially went into force, marking a turning point for the European Union&#8217;s approach to crypto assets.



Despite the euro’s prominence in TradFi — accounting for 20-30% of global FX reserves, SWIFT transactions and trade flows — it represents less than 0.5% of global stablecoin circulation.



Patrick Hansen, an industry expert and <a href="https://blockworks.co/tag/circle">Circle&#8217;s</a> EU policy lead, expects this to change. He emphasized MiCA’s significance as “the world’s most comprehensive regulatory framework for crypto assets.”



“The EU has a unique opportunity to position itself as a global hub for crypto innovation,” Hansen told Blockworks.



<h2 class="wp-block-heading">Why the euro lags in stablecoins</h2>



Hansen attributes the disparity in onchain euros compared to dollars to several factors:



1. Dollar-dominated liquidity: &#8221;Network effects created around US dollar stablecoins were just impossible to catch up for euro stablecoins. European users interacting with global crypto markets choose whatever is cheapest and most liquid.&#8221; 



2. Historical negative interest rates: &#8221;For a long time in the euro area, negative interest rates put the stablecoin business model into question.&#8221; 



3. Regulatory uncertainty: Until MiCA, euro stablecoins lacked a dedicated regulatory framework, deterring <a href="https://blockworks.co/news/micar-foreign-stablecoins-advantage-in-europe">institutional players</a>.



MiCA addresses this third point by creating a clear framework for stablecoins. Hansen notes that the entry into force has already attracted institutional interest, with major European banks and other players <a href="https://blockworks.co/news/robinhood-eyes-eu-expansion">exploring</a> or launching euro stablecoin products. He highlights Circle’s launch of EURC under <a href="https://blockworks.co/news/circle-first-stablecoin-issuer-eu-compliant">MiCA-compliant</a> conditions, with reserves fully managed by a French-regulated entity, noting that “we’ve seen 60-70% growth in EURC supply, driven by launches on multiple blockchains.”



MiCA mandates stablecoin issuers hold reserves proportional to tokens circulating in the EU. Circle uses a &#8220;dynamic rebalancing&#8221; model to comply, Hansen explained.



“If we see the number of USDC held in the EU increase, we increase the European reserves accordingly,” he said.



<h2 class="wp-block-heading">Emerging use cases for onchain euros</h2>



Hansen sees two main drivers for euro stablecoin adoption: regulated crypto capital markets and stablecoins’ real-world applications.



&#8220;Only stablecoins authorized under EU rules will ultimately be used as trading pairs in regulated crypto markets,” Hansen said. “I’d not be surprised to see significant growth in this area.”



This change has driven crypto exchanges to <a href="https://www.binance.com/en/square/post/18126423130122">delist USDT</a> as trading pairs for customers in the EU. 



Corporate use cases, such as cross-border payments and tokenized financial instruments, are gaining traction, according to Hansen. &#8221;Corporate suppliers in the euro area will inherently demand euro-denominated assets for risk management,” he said. 



However, while MiCA offers a solid foundation, Hansen cautions that it’s only &#8220;version 1.0&#8221; and must evolve to address emerging challenges. He also warns that the EU’s Travel Rule (TFR), which requires additional user verification for certain transactions, could create friction — particularly for self-custody wallets.



Ultimately, MiCA’s success will depend on whether it can balance fostering innovation with protecting consumers and creating a competitive local market.



As Hansen put it, &#8220;only time (and the market) will tell whether MiCA can achieve its goals.”



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Can MiCA spark a euro stablecoin renaissance?

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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Disrupting money and finance is big business. And business is good.



Look no further than SEC filings to find out just how much cash is made on the frontlines of the crypto revolution.



I spent the morning compiling 2024 insider stock sales for the top 60 or so companies in the S&amp;P 500 (as well as a few other notables) and compared them to Coinbase and MicroStrategy.



From those firms — ranging from Apple and Nvidia to Costco and Walmart, to Palantir and Morgan Stanley — about 500 insiders, executives, investors and other major shareholders reported selling a combined $36.9 billion in company stock.



Amazon executive chair Jeff Bezos was responsible for more than one-third of that total ($13.4 billion).&nbsp;



Meta chief Mark Zuckerberg followed with $2.5 billion, and Palantir co-founders Alexander Karp and Peter Thiel respectively cashed in $1.9 billion and $1.5 billion, either themselves directly or through trusts and funds in their names.



Still, four crypto execs found themselves in the top 25: Coinbase head honcho <a href="https://blockworks.co/news/coinbase-stake-sale-brian-armstrong">Brian Armstrong</a> placed eighth with $636 million and MicroStrategy alpha bull <a href="https://blockworks.co/news/michael-saylor-offloads-mstr">Michael Saylor</a> came 13th with $410.8 million.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcyTCYdPh3E6T4s0YIrZZVmqjnRZDPPwqHrYifaHrWAEwYtUZwwrzW9a6_h17MEjFg1DiW0uyE5iJWd7ecwfBDFIU7V4pZdh1VAYcfBUi_3ygLdME7rS2yplISZCTzOvCdJ8f0Usw?key=GWxgBr4s90_BqfzY10_jT82j" alt=""/><figcaption class="wp-element-caption">*Totals may include sales by entities of which they are a beneficial owner</figcaption></figure>



Coinbase co-founder <a href="https://blockworks.co/news/fred-ehrsam-sells-coinbase-shares">Fred Ehrsam</a> took 22nd place with $203.8 million, a figure that counts COIN shares sold by his trust, as well as by his fund Paradigm.



Next after Ehrsam was Emilie Choi, Coinbase’s chief operating officer who <a href="https://www.coinbase.com/en-nl/blog/welcome-emilie-choi-coinbase-vice-president-of-corporate-and-business-development">joined</a> the firm from LinkedIn in 2018, with $186.4 million.&nbsp;



That’s $3.4 million more than JPMorgan boss Jamie Dimon, and $22.6 million more than Apple and Alphabet CEOs Tim Cook and Sundar Pichai combined.



All those sales helped put Coinbase at seventh overall for insider selling last year (for the analyzed companies, at least).



<ol class="wp-block-list">
<li>Amazon: $13.5 billion.</li>



<li>Walmart: $4.84 billion.</li>



<li>Palantir: $4.14 billion.</li>



<li>Meta: $2.72 billion.</li>



<li>Nvidia: $2 billion.</li>



<li>Salesforce: $1.27 billion.</li>



<li>Coinbase: $1.25 billion.</li>



<li>Oracle: $842 million.</li>



<li>Apollo: $630.6 million.</li>



<li>Intuit: $593.9 million.</li>



<li>MicroStrategy: $567.8 million.</li>



<li>Netflix: $528.3 million.</li>
</ol>



As for this year, I’d watch for MicroStrategy to flip Coinbase — should Saylor’s bitcoin plan really start to pay off.



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