Kambria

Ben Strack

Venture capital firm Heartcore Capital is investing in the crypto segment’s application layer protocols as part of a bet on technologies that foster user interaction with the space.



The Denmark-based company has raised 15 million euros ($16.3 million) for its first Web3 fund set to allocate to founders building upon crypto infrastructure Heartcore says is primed for wider adoption.&nbsp;



“We believe that the shift towards on-chain protocols is the next stage of the software revolution of the past three decades,” Heartcore partner Yacone Ghalim told Blockworks. “We foresee that protocols will progressively disrupt parts of our economy, like previous internet startups.”



While bitcoin has rallied for chunks of the year — <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">jumping to $42,000 Monday morning</a> — much of 2023 resembled a bear market following the collapse of crypto exchange FTX.



Ghalim said such market cycles have historically offered ideal entry points, noting that Coinbase, Ethereum, Maker and Uniswap were built in bear markets.&nbsp;&nbsp;



“Tourist investors and founders have left to seek greener pastures, the signal-noise ratio has dramatically improved, valuations are back to being reasonable, and expectations are in check,” he said of the market conditions.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-venture-capital-fundraise-q3">Crypto VC challenges persist, but Q3 brings hope with $1B raised</a>



Ghalim argued that it is increasingly possible to create Web3 user experiences on par with Web2 products. For example, he noted the ability for <a href="https://blockworks.co/tag/layer-1">layer-1s</a> and <a href="https://blockworks.co/tag/layer-2-2">layer-2s</a> to process thousands of transactions per second.



The infrastructure layer currently holds 98% of the industry’s $1.6 trillion market cap, according to Heartcore. <a href="https://blockworks.co/tag/uniswap">Uniswap</a> has historically been the only application layer protocol in the top 20. The market cap of Uniswap (<a href="https://blockworks.co/price/uni">UNI</a>) had fallen to 21st-highest on Monday — behind bitcoin cash (<a href="https://blockworks.co/price/bch">BCH</a>) at $4.5 billion.



Tech infrastructure players — including telecommunications, semiconductor and networking companies — were among the highest valued in the early 1990s. But Web2 applications layer firms such as Apple, Amazon, Microsoft, Alphabet, Meta and Netflix would ultimately build powerful businesses as value moved “up the stack,” Ghalim said.&nbsp;



The firm believes application layer protocols, from DeFi to gaming, are positioned to be winners in their respective categories.&nbsp;



“While history doesn&#8217;t always repeat, it often rhymes and we think the same is about to happen in crypto as the ‘fat protocol’ <a href="https://medium.com/ledgercapital/the-fat-protocol-thesis-debated-65ad56285fd5">theory</a> is outdated,” he added. “Web3 applications have demonstrated they have real moats, often stronger monetization models and will increasingly own part of their infrastructure.”



Founded in 2007, Heartcore has <a href="https://www.heartcore.com/companies">invested</a> in more than 100 Web2 companies.



The firm has ventured into the <a href="https://blockworks.co/tag/web3">Web3</a> space in recent years, backing teams at companies such as Panoptic, Elusiv, Li.Fi, Superform, Rhinestone, and MakerDAO.



Heartcore has also shown foresight in the cryptocurrency domain with private investments in Ethereum as early as 2014, and in projects like Polkadot and Cosmos in 2017.



Despite its shift towards Web3, the firm maintains its commitment to <a href="https://blockworks.co/tag/web2">Web2</a> technologies, and intends to continue investing in this area through its other vehicles.



“We don&#8217;t think that this is a case of overnight disruption and we believe that traditional companies and protocols will co-exist for decades to come,” Ghalim said.



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VC firm Heartcore expands focus to Web3 via app-focused fund

Casey Wagner

A Supreme Court case could change the way the US Securities and Exchange Commission and other federal agencies bring enforcement actions — but legal experts warn the crypto industry not to hold its breath.&nbsp;



Following a 2011 investigation, the SEC sued hedge fund founder George Jarkesy for securities fraud, allegeding he inflated asset prices to boost his own management fee. By the SEC’s choice, the case was an “administrative proceeding,” a non-judicial process overseen by an administrative law judge instead of a federal court.&nbsp;



In an appeal to the Fifth Circuit, Jarkesy argued the administrative proceeding violated the US Constitution’s seventh amendment by denying him a right to a trial by jury.&nbsp;



The appellate judge sided with Jarkesy. But the SEC maintains that seventh amendment rights only apply when private rights are at stake, not public.&nbsp;



Now, the case is in the hands of the <a href="https://www.supremecourt.gov/docket/docketfiles/html/public/22-859.html">Supreme Court</a>. Justices heard oral arguments at the end of November and their opinion is pending.&nbsp;



“If the Supreme Court determines that jury trials are required in all administrative matters, there would be a very widespread impact on all administrative agencies – and a corresponding big impact on the Federal courts which would have to absorb all of those cases,” said Sam Dibble, partner at Baker Botts.



Justices could opt to create a new process for determining which cases brought by federal agencies go to federal court versus administrative tribunal. As of now, the <a href="https://blockworks.co/tag/sec">SEC</a> has the power to decide the venue, which is supported by the 2010 Dodd Frank Act.&nbsp;



Other legal experts are less certain the Supreme Court case could materially change much — especially for the crypto industry, where most cases are already advanced in federal court.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/coinbase-supreme-court-victory">Coinbase walks away with Supreme Court victory in arbitration case</a>



“Some have suggested that Jarkesy might mark the end of the administrative state,” Andrew Kim, partner at Goodwin, said. “Such sentiments are hyperbolic, to say the least.&nbsp; And it’s quite clear now that Jarkesy isn’t going to deal a death blow to either the SEC or the administrative state writ large. Regardless of how Jarkesy comes out, an Article III court will usually remain available to the SEC for enforcement proceedings, so you will continue to see actions like Coinbase, Binance, Kraken, etc.”&nbsp;



The SEC’s cases against <a href="https://blockworks.co/news/sec-sues-coinbase">Coinbase</a>, <a href="https://blockworks.co/news/sec-allegations-against-binance">Binance</a> and <a href="https://blockworks.co/news/kraken-commingle-customer-funds">Kraken</a> are all currently playing out in federal district courts as opposed to administrative proceedings. But for settlements, which are also common in the crypto space, the Supreme Court cases could change things, Kim said.



Read more: <a href="https://blockworks.co/news/coinbase-binance-suits-different">‘Fundamental Difference’ between SEC’s Binance and Coinbase suits</a>



“Historically, the SEC has used administrative proceedings to finalize settlements with private parties,” Kim said. “In a post-Jarkesy world, the SEC may well have to go to an Article III court, which can exercise independent discretion, every single time it wants to settle a potential enforcement action and extract civil money penalties as part of the agreed-upon resolution.”&nbsp;



Article III court judges — i.e. federal judges — could easily approve consent orders for settlements, or “some may decide to put the SEC through the ringer,” Kim said. 



“While Jarkesy won’t mark the end of the SEC or the modern federal administrative state, whatever the Court decides will be in line with a consistent theme of limiting the reach of the federal government and providing a check against the Executive Branch,” he added. “You’ll see a lot more of that this term.”



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The US Supreme Court could reshape the SEC’s powers — and how the agency approaches crypto

Katherine Ross

The Internal Revenue Service’s Criminal Investigations Unit is seeing an increase in its caseload of crypto tax cases, according to Bloomberg.



Bloomberg cited a reporter&#8217;s call with division head Jim Lee, during which he <a href="https://www.bloomberg.com/news/articles/2023-12-04/irs-criminal-investigation-unit-taking-on-more-crypto-tax-cases">disclosed</a> that the investigations range from failures to report capital gains to purposeful withholdings of crypto ownership disclosures.&nbsp;



Three years ago, Lee reportedly said the majority of cases were focused on money laundering. Now, roughly half are tax related.



The tax agency’s investigations unit was just one of the agencies aiding in the Binance probe, which led to a $4 billion settlement. 



Read more: <a href="https://blockworks.co/news/binance-changpeng-zhao-deal-unpacked">Here are the details of Binance and Changpeng Zhao’s plea deal</a>



As part of the settlement, Binance not only agreed to pay the billion-dollar sum but the exchange also pleaded guilty to the failure to comply with registration requirements and operating as an unlicensed money transmitting business. 



Former <a href="https://blockworks.co/news/changpeng-zhao-announces-resignation-binance">CEO Changpeng Zhao pleaded guilty</a> to violating anti-money laundering violations. He has, as part of the settlement, resigned from his role as CEO and faces a February sentencing.



The company <a href="https://blockworks.co/news/binance-changpeng-zhao-face-sec-charges">still faces a lawsuit from the US Securities and Exchange Commission</a> alleging that it commingled funds and offered unregistered securities.&nbsp;



“Our team of investigators uncovered that <a href="https://blockworks.co/tag/binance">Binance</a> disregarded anti-money laundering [know-your-customer] laws, failed to register as a money transmitter, and willfully violated US sanctions tied to the International Emergency Economic Powers Act,” Lee <a href="https://www.irs.gov/compliance/criminal-investigation/binance-and-ceo-plead-guilty-to-federal-charges-in-4-billion-resolution">said</a> in November following the settlement announcement.



Aside from the investigations, the <a href="https://blockworks.co/tag/irs">IRS</a> is currently working out its crypto framework. In October, it <a href="https://blockworks.co/news/irs-treasury-crypto-reporting-requirements">extended its tax rule comment period</a> following lots of public feedback. Coinbase weighed in on the proposed rules, with its head of tax criticizing the proposed rules.&nbsp;



“The proposed regulations, as written, would impose an incomprehensible and unduly burdensome set of new reporting requirements,” Coinbase’s Lawrence Zlatkin <a href="https://blockworks.co/news/coinbase-irs-crypto-tax-rules">wrote at the time</a>. 



Lawmakers on Capitol Hill <a href="https://blockworks.co/news/us-irs-to-crypto-tax-rules">pushed the agency to speed up its crypto tax rules</a>, which were first introduced back in August.



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Crypto tax evasion cases are on the rise: Bloomberg

Macauley Peterson

After nine months in development, Ethereum layer-2 network Mantle has launched its second core product, Mantle Liquid Staking Protocol (LSP).



This new protocol, deployed on Mantle and Ethereum mainnet, introduces a non-custodial and permissionless ether liquid staking solution, Mantle Staked Ether (mETH).



METH acts as a value-accumulating receipt token within the Mantle LSP, very similar to Lido’s staked ether (<a href="https://blockworks.co/price/steth">stETH</a>). Mantle aims to achieve the highest sustainable core yield by exploring maximal extractable value. It also shares yield from the Mantle treasury, according to a statement released Monday.



The idea for mETH came from Mantle “alchemist” Jordi Alexander, chief information officer at Selini Capital.



“We&#8217;ve just created a lighter weight, more modern Lido,” Alexander told Blockworks. He champions the idea of offering a native staking yield on an <a href="https://blockworks.co/tag/ethereum">Ethereum</a> layer-2. The premise is “we should do all of DeFi, but first start by having the 5% yield,” he explained.



This is the same promise of <a href="https://blockworks.co/news/3-years-launch-eth-staking">the planned Blast layer-2</a>, which has attracted deposits of ether (<a href="https://blockworks.co/price/eth">ETH</a>) and stablecoins now <a href="https://dune.com/0xramen/blast-stats">topping</a> $750 million over the past two weeks.



Blast, despite its rapid growth and ambitious plans, faces scrutiny over its security model and the centralization concerns related to its reliance on <a href="https://blockworks.co/tag/lido">Lido</a>.



Read more: <a href="https://blockworks.co/news/lido-centralization-debate-ethereum">Did Lido fly too close to the sun? Inside the centralization debate</a>



“Kudos to the Blast team because it&#8217;s the same idea that I had but just a very different implementation,” said Alexander, who has been advising Mantle since March and serves on investment and treasury committees.



“I was pretty excited [when Blast launched] because they&#8217;re educating the market on this idea” of having native staking yield available for DeFi on a layer-2, he said.



The Mantle LSP development process represents a more traditional, structured approach with a focus on security and integration within its ecosystem.



The team decided to build a solution from scratch, but also talked to Lido about the idea of white labeling their infrastructure.



“We talked to everybody — we literally went through every single [<a href="https://blockworks.co/tag/liquid-staking">liquid staking</a> team] out there —&nbsp;including Lido of course — we had multiple chats with them to decide [if] there [is] a way that we can take the easy way out,” Alexander said, adding “we decided to go the hard route, and it&#8217;s taken many months to do it properly and get all the audits and everything.”



The various components of the Mantle LSP have been <a href="https://docs.mantle.xyz/meth/security/audits">audited</a> by Hexens, MixBytes, Secure3 and Verilog, and the contract upgradeability is the responsibility of the Mantle <a href="https://docs.mantle.xyz/meth/security/roles#mantle-security-council">Security Council</a>, a 6 of 12 multisig, which is also used for maintenance of the Mantle Network itself.



“If you trust Mantle, it’s the same security,” Alexander said.



Unlike Blast, Mantle LSP doesn’t force anyone to stake or bridge. METH will work just fine on Ethereum mainnet and Alexander stressed that it is an independent product from the Mantle Network.



“There&#8217;s some people that just want to stay on [Ethereum] mainnet and we do want to cater to them as well,” but, he adds, “I expect that most of it eventually will get incentivized to move because we&#8217;ll make it really juicy to ship it over.”



These incentives can be seen as a vampire attack on Lido, which Alexander says should appeal to members of the Ethereum community concerned over excessive Lido centralization.



<h2 class="wp-block-heading">What’s cooking in “the mETH lab”?</h2>



The Mantle team has a number of ideas in the works to expand upon the LSP’s use within its network, which will be proposed to holders of the MNT governance token in the coming weeks.



MNT is also used to pay transaction fees on the Mantle Network.



Alexander originally considered mETH as a good candidate for the Mantle gas token — “like a self-replenishing gas,” he said — but ultimately <a href="https://blockworks.co/news/mantle-network-readies-mainnet">Mantle’s mainnet launch schedule</a> led to the introduction of MNT.



The team might consider a dual gas token model, make use of <a href="https://blockworks.co/news/account-abstraction-blocknative">account abstraction to reduce user friction</a>, or outline other new utilities for MNT.



“I think we&#8217;re going to have it be sort of like ATOM where you get airdrops and it&#8217;s kind of like a launch pool token,” Alexander said, referring to the native asset of the <a href="https://blockworks.co/tag/cosmos">Cosmos Hub</a>.



He agrees with the critique that Ethereum has too many layer-2 networks proliferating, suggesting that most lack a creative new idea.



“Is there something unique or some imagination that&#8217;s gone into it instead of just deploying a tenth version of Aave and just doing the same USDT pair or whatever?” he asked rhetorically. And as for the name and its natural association with illicit drugs?



“We&#8217;re going to try to just lean into it. I&#8217;m going to launch an unofficial meme contest on my Twitter.”



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Mantle offers ‘mETH’ to the masses, as a ‘lighter weight Lido’

Societe Generale announced Monday that it issued its first green bond on the Ethereum blockchain.&nbsp;



The transaction — which took place in late November — amounts to 10 million euros, or roughly $10.8 million, and has a maturity of three years.&nbsp;



The tokenized bonds, France’s third largest bank wrote, will ensure “increased transparency and traceability as well as improved fluidity and speed in transactions and settlements.”



According to a <a href="https://www.societegenerale.com/en/news/press-release/first-inaugural-digital-green-bond-public-blockchain">press release</a>, SocGen aims to enable more transparency on ESG by using the blockchain as a “data repository and certification tool for issuers and investors.”



The smart contract of the bond includes carbon footprint information, and is available for anyone to access.&nbsp;



Societe Generale-FORGE, the bank’s crypto team, released a report focused on the lifecycle of security tokens back in November.&nbsp;



Read more: <a href="https://blockworks.co/news/european-union-crypto-climate-impact">EU expensing $843K to pull back the curtain on crypto’s climate impact</a>



In partnership with the Lamarck Group, Institut Louis Bachelier and the Crypto Carbon Ratings Institute, the <a href="https://www.sgforge.com/report-carbon-footprint-dlt/">report</a> sought to develop a methodology to calculate “the carbon footprint of a financial product issued in the form of a token on the Ethereum public blockchain infrastructure.”



It specifically used <a href="https://blockworks.co/tag/ethereum">Ethereum’s</a> network due to the “relatively low greenhouse gas emissions” due to the Merge, which took place in September of last year.



Back in June, the European Investment Bank also issued a tokenized bond, though it used Credit Agricole CIB and SEB’s bond platform built on blockchain technology. The EIB’s bond was structured as a Swedish Krona 1 billion bond, which amounts to roughly $95 million, and has a 2 year maturity.&nbsp;



While the bond is a first for SocGen, it <a href="https://blockworks.co/news/european-institutions-public-blockchains">previously collaborated with the EIB</a> on the bank’s first digital bond issuance, which took place back in 2021.



Aside from collaborations, the French bank has proven to be interested in crypto.



Back in April, SocGen’s FORGE team <a href="https://blockworks.co/news/euro-stablecoin-societe-generale-ethereum">announced its plans for a euro-pegged stablecoin</a> dubbed EUR CoinVertible on the Ethereum blockchain.



The same team also secured a<a href="https://blockworks.co/news/societe-generale-secures-first-french-crypto-license"> license to operate as a digital asset service provider</a> in France back in July. It registered with the French stock market regulator as a digital asset custodian back in 2022.



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SocGen issues green euro-denominated bond on Ethereum 

Jack Kubinec

As voting winds down on Optimism’s public goods funding, backlash is emerging against projects that are set to receive the public goods funding.



Critics argue that projects with solid financial backing should not receive these tokens. Instead, they are advocating for their distribution to contributors without financial backing.



The Optimism Collective is retroactively disbursing roughly $53 million in OP tokens to reward people and projects who have contributed “public goods” to the popular layer-2. Voting on applicants ends Dec. 7.



The ongoing squabble is the latest complaint about DAO treasury spending, and comes as the crypto market stares down another potential bull run.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-most-hated-rallies-bull-market">Crypto’s most hated rallies may have confirmed the bull market&nbsp;</a>



In crypto, public goods are services projects or individuals provide for free to chains or ecosystems — think <a href="https://blockworks.co/news/blocknative-drops-mev-boost">Ethereum’s MEV relayers</a> or protocols that <a href="https://blockworks.co/news/aave-forks-vulnerability">allow forks of their code</a>.&nbsp;



The Optimism Collective is the governance and community arm of Optimism. It is giving out 30 million <a href="https://blockworks.co/price/op">OP</a>, worth around $53 million at current prices, to those behind public goods in the third <a href="https://community.optimism.io/docs/governance/retropgf-3/">round</a> of its retroactive public goods funding (RPGF).&nbsp;



Some <a href="https://blockworks.co/tag/optimism">Optimism</a> community members want the layer-2’s RPGF to prop up those who work for free while excluding public goods providers who have other funding sources — particularly venture capital money.&nbsp;



For example, Subli is the pseudonymous creator of the Optimist <a href="https://twitter.com/Th3Optimist">newsletter</a>, which publishes Optimism-related news for 10,000 subscribers. Subli also said he has done “hundreds of hours” of unpaid business development on behalf of the Optimism Foundation, the company <a href="https://community.optimism.io/docs/governance/what-is-the-optimism-foundation/#how-is-the-foundation-held-accountable">supporting</a> the Optimism Collective. With a different full-time job and two young sons, Subli said to Blockworks in a Telegram message that Optimism takes up all of his free time.&nbsp;



Subli’s newsletter <a href="https://dune.com/raho/rpgf">received</a> around 19,000 OP from the last round of RPGF, but this time, he doesn’t have enough <a href="https://www.growthepie.xyz/optimism-retropgf-3">votes</a>.



“I think that projects that are VC funded should not qualify for RPGF funding. Once you accept VC dollars, with their implicit expectation of a financial return, you&#8217;re not a public good,” ENS lead developer Nick Johnson <a href="https://twitter.com/nicksdjohnson/status/1731596331976732983">wrote</a> on X.&nbsp;



Among the most criticized RPGF applicants has been the Web3 development platform Alchemy. Alchemy has raised over $500 million over multiple funding <a href="https://cryptorank.io/ico/alchemy-dev">rounds</a> with participation from the likes of Andreessen Horowitz, Pantera Capital and Lightspeed Venture Partners.&nbsp;



&#8220;Our application focuses on the public work we&#8217;ve done to bring the benefits of Account Abstraction to the OP Stack and the EVM ecosystem…the scope of the grant application does not extend to all of Alchemy, as some have suggested, and complies with all of Optimism&#8217;s application requirements on their stated principle of ‘impact = profit’,” Noam Hurwitz, the engineering lead at Alchemy, told Blockworks.



The Optimism Collective’s documentation <a href="https://community.optimism.io/docs/governance/retropgf-3/#badgeholders">affirms</a> that VC-backed groups are eligible for funding, saying that voting should be solely based on potential impact to the collective.



A protocol designer at Eigenlayer pseudonymously named kydo <a href="https://twitter.com/0xkydo/status/1731379678123008266">said</a> on X that asking Alchemy and other well-heeled projects to withdraw from RPGF is “​​anti-competitive and against the spirit of crypto.” They added that funds “should be allocated to the most promising ideas.”



<a href="https://blockworks.co/news/bitcoin-ether-altcoins-etf">As altcoin prices rise ahead of a possible bull run</a>, requests for native token-denominated DAO funds have been scrutinized in general.&nbsp;



Community <a href="https://twitter.com/DeFi_Made_Here/status/1721499800711860452">backlash</a> brought about the defeat of a proposal for Blockworks Research, Gauntlet, and Trail of Bits to receive over $2 million-worth of Arbitrum (<a href="https://blockworks.co/price/arb">ARB</a>) tokens to manage governance on the Arbitrum DAO.



Two weeks later, the co-founders of Bankless <a href="https://x.com/RyanSAdams/status/1728850795318112353?s=20">burned</a> their BANK tokens amid controversy over a 1.82 million ARB education and onboarding <a href="https://forum.arbitrum.foundation/t/proposal-banklessdaos-global-education-and-onboarding-campaign-for-arbitrum/19653">proposal</a> made on Arbitrum by BanklessDAO.



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Optimism squabbles over public goods funding to VC-backed projects

Crypto investment products continue to notch inflows, marking a 10-week stretch with asset injection not seen in more than two years.&nbsp;



Such offerings brought in $176 million last week, according to a Monday CoinShares report — down from $346 million the week prior.



<figure class="wp-block-image size-large is-resized"><img decoding="async" loading="lazy" width="1312" height="1348" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=1024&amp;h=1024" alt="" class="wp-image-74915" style="aspect-ratio:0.9736328125;width:654px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=1312 1312w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=997 997w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=250 250w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=254 254w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=213 213w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/CoinShares-Flow-Report-12_4_23.jpg?w=78 78w" sizes="(max-width: 1312px) 100vw, 1312px" /><figcaption class="wp-element-caption">Source: CoinShares</figcaption></figure>



Still, these products have brought in $1.76 billion total over the active 10-week inflow streak. This is the best stretch since October 2021. That month marked the launch of bitcoin futures ETFs, including the ProShares Bitcoin Strategy ETF (BITO) that <a href="https://blockworks.co/news/bito-on-track-to-be-first-fund-in-history-to-hit-1b-in-aum-in-two-days">quickly grew to having more than $1 billion</a> in assets under management.



Interest in BITO has picked up in recent months as <a href="https://blockworks.co/news/21shares-bitcoin-etf-approval-incoming">optimism around the potential approval of spot bitcoin ETFs</a> persists. 



Read more: <a href="https://blockworks.co/news/pinning-down-bitcoin-etf-approval-dates">Industry watchers pin down possible bitcoin ETF approval dates</a>



The futures-based fund has seen net inflows of $270 million since Nov.1, according to ETF.com — <a href="https://blockworks.co/news/proshares-bito-reaches-asset-peak">hitting an asset peak of $1.47 billion last week</a>.&nbsp;



ProShares products accounted for roughly $39 million of the crypto product inflows last week, the CoinShares <a href="https://blog.coinshares.com/volume-160-digital-asset-fund-flows-weekly-report-3523bcc12d66">data</a> shows. Canada-based Purpose Investments was the only provider that tallied more inflows, seeing about $50 million.&nbsp;



Bitcoin-related investment offerings accounted for $133 million of the $176 million of crypto product inflows last week as the asset’s price has continued to rally.&nbsp;



The BTC price stood at roughly $41,600 at noon on Monday in New York — up 13% from seven days ago. Bitcoin’s price <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">briefly eclipsed $42,000 Monday morning</a>.&nbsp;



The recent surge in bitcoin&#8217;s price can be attributed to several factors, according to Deribit Chief Commercial Officer Luuk Strijers. In a statement, Strijers highlighted “easing concerns following the settlement of Binance&#8217;s legal matters, escalating geopolitical tensions, easing of inflation, and the steady increase in institutional engagement.” This comes alongside the anticipation of a positive SEC decision on proposed spot bitcoin ETFs, he added.



Ether-related products made up $31 million of last week’s net inflows, while blockchain equities saw a seventh straight week of positive flows. The latter product segment brought in $17 million last week, the largest since July 2022.



<a href="https://blockworks.co/news/bitcoin-ether-trading-stock-markets">Crypto-related stock prices jumped Monday morning</a>. Coinbase and MicroStrategy were up about 6% and 7%, respectively, on the day, as of 12 pm ET. Crypto miners Marathon Digital Riot Platforms each had notched daily stock price gains of roughly 8.5% at that time.&nbsp;



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Crypto product inflow streak hits 10 weeks before BTC climbed to $42k

As researchers forge ahead with looking into how a digital pound could work in the UK, lawmakers remain undecided on whether or not a central bank digital currency (CBDC) has a place in its future economic landscape.&nbsp;



In a recent report, the House of Commons Treasury Committee advised the Bank of England and HM Treasury to thoughtfully consider the introduction of a CBDC in the UK. It emphasized the importance of proceeding with caution and adopting a deliberate approach.



A digital pound specifically raises concerns about financial stability, committee members noted.&nbsp;



“One of the most commonly cited risks was that of ‘bank disintermediation’ — that is, the switching of deposits held with banks into digital pounds,” the <a href="https://committees.parliament.uk/publications/42395/documents/210641/default/">report</a> read. “In periods of financial market stress, the ability to rapidly and easily switch into digital pounds could accelerate the withdrawal of deposits from banks — <a href="https://blockworks.co/news/digital-dollar-bank-run-cbdc">a so-called ‘bank run</a>’— and thereby increase the risk of bank failures.”&nbsp;



Further, an increase in transferring deposits into digital pounds could result in higher interest rates on bank lending, the economists noted.&nbsp;



Read more: <a href="https://blockworks.co/news/bis-cbdc-project-mariana-concludes">Wholesale CBDCs and automatic market makers could be the perfect pair, BIS finds</a>



Committee members were further influenced by how other countries appear to be thinking about a <a href="https://blockworks.co/tag/cbdc">CBDC</a>. The United States, the report noted, “is not pursuing the development of a CBDC with any urgency,” further pushing UK lawmakers to recommend a slower and more thoughtful approach.&nbsp;



“I am not convinced about some of the problems that we might be trying to solve,” Governor of the Bank of England Andrew Bailey <a href="https://committees.parliament.uk/oralevidence/12520/pdf/">said</a> at the start of the year. “I am not necessarily convinced that the retail payment systems need this sort of upgrade at the moment.”



The Federal Reserve, while also taking steps to research the potential impacts and risks of a CBDC, seems <a href="https://blockworks.co/news/fed-needs-to-regulate-stablecoins">similarly skeptical of how one would fit into the existing financial system</a>.&nbsp;



“We would not support…accounts at the Federal Reserve by individuals,” Fed Chair Jermone Powell told Congress during a June 2023 <a href="https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=408872">hearing</a>. “If we were to, and we’re a long way from this, support at some point in the future a CBDC, it would be one that we’re intermediating through the banking system and not directly at the Fed.”



The report and international comments coincide with ongoing opposition to a retail CBDC by US lawmakers. Earlier this Congressional session, Rep. Tom Emmer, R-Minn., reintroduced <a href="https://blockworks.co/news/emmer-reintroduces-anti-cbdc-bill">legislation to prohibit the Federal Reserve from issuing a CBDC</a> directly to individuals.



“This bill puts a check on unelected bureaucrats and ensures the US digital currency policy upholds our American values of privacy, individual sovereignty, and free-market competitiveness,” Emmer <a href="https://twitter.com/GOPMajorityWhip/status/1701615359344759029?s=20">wrote</a> on X, formerly Twitter, in September, citing common criticisms of the digital dollar.&nbsp;



The UK report highlighted privacy, particularly with regard to government visibility into spending habits with a digital pound, as a primary concern. Nonetheless, committee members identified potential solutions to address these issues.



“The Bank of England and Treasury consultation paper states that the digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime,” the report said. “Payment Interface Providers — the private-sector firms that users would interact with directly to manage their digital pounds — would identify and verify users, but anonymise personal data before sharing with the <a href="https://blockworks.co/tag/bank-of-england">Bank of England</a> for recording on the digital pound’s ‘core ledger.’”&nbsp;



In a joint statement over the weekend, the Bank of England and the HM Treasury said that they would be responding to the committee’s report “shortly,” along with their joint consultation paper outlining next steps for the UK and a digital pound.



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UK still undecided on future of digital pound 

Crypto miner Riot Platforms has bought another 66,000+ machines as part of a deal with MicroBT that could ultimately help the company eclipse 100 exahash per second (EH/s) in mining capacity.&nbsp;



The buy of MicroBT M66S model machines for $290.5 million is the largest hash rate purchase in Riot’s history, Riot CEO Jason Les said in a statement Monday. It amounts to approximately 18 EH/s of mining capacity.



The Colorado-based miner, which <a href="https://blockworks.co/news/riot-platforms-texas-mining">operates mainly in Texas</a>, had 11.7 EH/s of deployed hash rate as of Oct. 31.



Its latest buy comes after Riot made a deal in June with the China-based bitcoin miner manufacturer in June to buy 33,280 machines — the initial order in what the company called a “long-term purchase agreement.”



Read more: <a href="https://blockworks.co/news/riot-microbt-bitcoin-us">Riot inks MicroBT deal to build bitcoin miners in US — not China</a>



The company had secured the option to buy an additional 66,560 machines before the end of 2024. It chose to do so Monday, and it also updated the agreement to include the option to purchase up to 265,000 more MicroBT miners on the same terms as the new order.



Such future purchases would add 75 EH/s to the company’s self-mining capacity, pushing it above 100 EH/s.



<a href="https://blockworks.co/tag/riot-blockchain">Riot</a> bought the 66,560 machines at a cost of $16 per terahash, the company said.



“The price of these future purchase options will not exceed our current order as announced today, giving Riot the ability to more effectively plan future capital requirements and providing protection from potentially higher market prices for miners in the future,” Les said in a statement.&nbsp;



The crypto mining sector is expected to come under financial stress next year, with <a href="https://blockworks.co/news/anniversary-of-2016-btc-halving">the next bitcoin halving</a> — when per-block mining rewards will fall from 6.25 bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) to 3.125 BTC — slated for April.&nbsp;



Industry players have made moves of late.



<a href="https://blockworks.co/news/hut8-merger-usbtc-closing-soon">Hut 8 and US Bitcoin Corp finalized their merger</a> last week in a deal executives say <a href="https://blockworks.co/news/hut8-mining-q2-earnings-revenue">helps diversify the business</a>. Another Riot competitor, Marathon Digital, <a href="https://blockworks.co/news/marathon-mining-bitcoin-halving">continues to expand geographically</a> and diversify its mining methods.



Like Riot, Bitfarms last week made a big purchase, buying nearly 36,000 Bitmain T21 miners as part of “a transformative fleet upgrade plan.”



“To be a large scale miner you need to be bold and think two steps ahead of your peers who are also your competitors,” Dan Weiskopf, a co-portfolio manager of the Amplify Transformational Data Sharing ETF (<a href="https://blockworks.co/tag/blok">BLOK</a>), previously told Blockworks.&nbsp;



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Riot plots aggressive hash rate growth via latest MicroBT deal

While the US stock market opened mostly in the red Monday, crypto-tied equities appeared to prove the exception Monday morning.



Some publicly listed firms posted double-digit rallies to round out the last month of the year. Galaxy Digital, Marathon Digital Holdings and Riot Platforms each gained more than 10% in the first twenty minutes of Monday’s trading session.&nbsp;



Coinbase and MicroStrategy weren’t far behind, posting around 8% and 9% rallies, respectively. Indeed, Coinbase, Marathon and Riot are poised to clock gains of more than 300% over the year.&nbsp;



Cryptocurrencies were also in the green. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) rallied more than 4% Monday morning over the past 24 hours, putting the largest cryptocurrency on track to post more than 150% gains over 2023. Ether (<a href="https://blockworks.co/price/eth">ETH</a>), which was up around 1.4% Monday, has rallied more than 85% year to date. 



Read more: <a href="https://blockworks.co/news/microstrategy-buys-bitcoin">MicroStrategy bought nearly $600M bitcoin in less than 1 month</a>



&#8220;Crypto trades while stocks are closed, so then they have to slingshot to maintain relative value,” said Roshun Patel, partner at Hack VC.



The ongoing optimism around a <a href="https://blockworks.co/bitcoin-etf">spot bitcoin exchange-traded fund</a> remains a key market-driving narrative, Patel added, which is serving as a tailwind for both cryptocurrencies themselves and related stocks.&nbsp;



“Coinbase in particular benefits a lot from anyone getting an <a href="https://blockworks.co/tag/etfs">ETF</a> approved as they will serve as the go-to custodian. I think stock market traders have a hard time underwriting BTC much higher so their forward expectations of earnings for stocks, especially miners, are dampened to expected reality,&#8221; Patel said.&nbsp;



Read more: <a href="https://blockworks.co/news/pando-joins-spot-bitcoin-etf-hopefuls">Spot bitcoin ETF market sees new applicant ahead of SEC ruling</a>



Bitcoin, <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">which briefly hit $42,000 Monday</a> before hovering around $41,600 later in the morning, is obviously riding the ETF wave, analysts agree, and the rally is positioning other cryptos in a favorable spot.&nbsp;



Bitcoin “is still the ‘gateway’ into the crypto market for many mainstream and large investors, as can be seen in its climbing market dominance,” Noelle Acheson, author of the Crypto is Macro Now newsletter said.&nbsp;



Broader markets, by contrast, slipped early in the trading day. The <a href="https://blockworks.co/tag/s&amp;p-500">S&amp;P 500</a>, Nasdaq Composite and Dow Jones Industrial Average indexes each opened in the red. The Russell 2000, representing small-caps, outperformed, gaining close to 3% at the open.&nbsp;



For traders considering other strategies to close out 2023, small caps may be a good place to look, analysts said.&nbsp;



A run for US small-caps, which continued Monday after the Russell 2000 posted a 3% rally on Friday, may not be the most shocking narrative, but it could foreshadow what is to come for the rest of the year.&nbsp;



“Friday’s Russell rally, while not especially unusual, does signal the possibility of a classic “dash for trash” rally in small caps this month,” Nicolas Colas, founder of DataTrek Research, wrote in a note Monday.&nbsp;



“This slice of the US equity market has lagged large caps in 2023, largely due to its spotty profitability and worries that high interest rates would crimp the ability of smaller companies to raise affordable incremental capital,” Colas added. “Now that rates seem to be heading lower, it makes sense that small caps could continue to play catch up.”



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Crypto stocks are riding the spot bitcoin ETF wave

El Salvador’s bitcoin investment is in the black, according to president Nayib Bukele.&nbsp;



Bukele alleged on X that El Salvador could not only recoup its initial bitcoin investment but also potentially earn millions if the country decides to sell.



According to <a href="https://nayibtracker.com/">Nayibtracker.com</a>, which tracks the country’s bitcoin purchases based on Bukele’s tweets, El Salvador would walk away with roughly $4 million in profit as of publication.



The price of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) sits around $41,000 at time of publication after hitting $42,000 Monday morning. After a rough 2022 following the collapse of FTX and multiple bankruptcies, bitcoin’s price is now <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">sitting at levels not seen since before Terra collapsed</a>.



Bukele, in his X post, used a screenshot from the site to showcase his country’s investment.&nbsp;



Read more: <a href="https://blockworks.co/news/ftx-meltdown-timeline">FTX began to unravel one year ago today: A timeline</a>



“We have no intention of selling; that has never been our objective. We are fully aware that the price will continue to fluctuate in the future, this doesn’t affect our long-term strategy,” Bukele said.



The last recorded buy on the website was back in November 2022 when Bukele claimed that the country would buy one bitcoin a day. Bukele said that the purchases would be part of a dollar cost averaging strategy.



<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">We are buying one <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> every day starting tomorrow.&mdash; Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1593113857261965312?ref_src=twsrc%5Etfw">November 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



However, it’s unclear if Bukele proceeded with that strategy.



El Salvador’s bitcoin holdings are worth around $131 million, according to the tracker.&nbsp;



Bukele and El Salvador first started adding to its <a href="https://blockworks.co/tag/bitcoin">bitcoin</a> position back in September 2021 with a purchase of 200 bitcoin. At the same time, he made <a href="https://blockworks.co/news/el-salvador-to-become-first-nation-with-bitcoin-as-legal-tender">bitcoin legal tender in the country</a>.



<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">El Salvador has just bought it’s first 200 coins. Our brokers will be buying a lot more as the deadline approaches.<a href="https://twitter.com/hashtag/BitcoinDay?src=hash&amp;ref_src=twsrc%5Etfw">#BitcoinDay</a> <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw">#BTC</a>🇸🇻&mdash; Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1434968475928248331?ref_src=twsrc%5Etfw">September 6, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Since then, Bukele has faced widespread criticism for his country’s holdings. Even US politicians on Capitol Hill are pushing<a href="https://blockworks.co/news/us-house-bill-seeks-to-study-el-salvadors-careless-gamble-on-bitcoin"> for an analysis into the risks posed</a> by the country’s bitcoin adoption.



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El Salvador’s bitcoin bet is in the green: Bukele

Bessie Liu

Osmosis, the largest decentralized exchange by trading volume in the Cosmos ecosystem, will merge with Umee’s cross-chain lending UX Chain.



As part of this merger, the UX Chain will transition its code so that it will be compatible with the Osmosis Blockchain and cater to existing liquidity, TVL, and functionality.&nbsp;



This move will enable Osmosis to inherit Umee’s lending features, including spot margin trading, shorting, liquidations, stablecoin pools, interchain flash loans and MEV markets.&nbsp;



Osmosis currently has a TVL of <a href="https://defillama.com/chain/Osmosis">$140 million </a>and a seven-day trading volume of <a href="https://defillama.com/chain/Osmosis">$103 million</a>. Following this merger, its TVL will be combined with TVL on the UX chain, which currently is estimated to be around <a href="https://defillama.com/chain/UX">$17.4 million</a>, according to DeFiLama.&nbsp;



Brent Xu, CEO of Umee, told Blockworks that this initial merger would focus on the weaving of the two different product code bases. Later, a ‘call to action’ proposal will be posted, asking community members to determine the next steps in tokenomics management.&nbsp;



The UX Chain’s UX token could be used to apply <a href="https://blockworks.co/news/mesh-security-cosmos">mesh security</a>, shared security mechanics involving <a href="https://blockworks.co/news/vitalik-buterin-plasma-hype">plasma</a>, or new tokenomic designs developed in the interim, Xu noted.&nbsp;



“In crypto communities, builders should take a product-first mindset and eventually use that as a platform to improve the tokenomics,” Xu told Blockworks. “This is similar to mergers in tradfi where first the deal is announced to the public, and subsequently, the process begins where company governance must decide on all details and specifics of the deal toward final execution and closing.”



<h2 class="wp-block-heading">Mergers in Cosmos</h2>



The Osmosis and Umee merger is not the only unification talk revealed in the Cosmos ecosystem over the past few months.&nbsp;



Earlier at Cosmoverse in Istanbul, liquid staking zone Stride Labs <a href="https://www.google.com/search?q=blockworks+stride&amp;oq=blockworks+stride&amp;gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQABiABDIICAIQABgWGB4yEAgDEC4YChgWGB4YrwEYxwEyCAgEEAAYFhgeMggIBRAAGBYYHjIGCAYQRRg8MgYIBxBFGDzSAQgzNjYxajBqNKgCALACAA&amp;sourceid=chrome&amp;ie=UTF-8">floated the idea</a> of becoming part of the Cosmos Hub, a blockchain responsible for connecting thousands of networks within the Cosmos ecosystem.&nbsp;&nbsp;



This proposal ultimately <a href="https://blockworks.co/news/stride-atom-token-conversion">fell through</a> as ecosystem participants were unsure of the role the Cosmos Hub would play in the merger. Participants also noted that ATOM, the native token of the Cosmos Hub, should remain <a href="https://forum.cosmos.network/t/convert-entire-strd-supply-to-atom/11650/143">neutral</a> and not play favorites.&nbsp;&nbsp;



It is important to note, however, that the merger between Osmosis and UX is different from the Stride and Cosmos Hub merger proposal.&nbsp;



This particular merger can be seen as more strategic — as both blockchains share similar objectives to improve trading experiences for their users. Xu notes that there are likely going to be more such alignments within the Cosmos ecosystem in the future.&nbsp;



“It&#8217;s a difficult environment for one team to ship everything, so protocols are better to find synergies than to build in silos,” he said. “This is the ethos of open-source technology. Two chains can merge their technologies to unlock the most powerful applications for the benefit of users, leveraging the benefits of composability.”



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Cosmos chain Osmosis to hook up with Umee’s borrow/lend protocol

Taylor Barr

Advanced semiconductors are at the heart of virtually all modern technology, from consumer electronics to advanced military systems.&nbsp;



Dependence on foreign — in many cases adversarial — semiconductor supply chains poses a significant risk. Onshoring the semiconductor industry is not just a matter of economic policy, but a strategic imperative for national security.&nbsp;&nbsp;



In the midst of the many rapid AI and cloud computing advancements, bitcoin mining plays a complementary (albeit less visible role) as an important driver for domestic chip demand. The burgeoning mining sector&#8217;s need for high-powered, efficient computing chips underscores and amplifies the call for onshoring chip manufacturing.&nbsp;



Look no further than the <a href="https://www.nist.gov/news-events/news/2023/09/biden-harris-administration-announces-final-national-security-guardrails#:~:text=%E2%80%9CCHIPS%20for%20America%20is%20fundamentally,and%20enhance%20our%20collective%20security.%E2%80%9D">CHIPS Act</a> for an example of how critical domestic chip manufacturing is to US national security. The legislation provides north of $52 billion to incentivize American chip manufacturing and targets America&#8217;s declining global share in semiconductor production, which has <a href="https://www.cfr.org/blog/us-investment-semiconductor-manufacturing-building-talent-pipeline#:~:text=Currently%2C%20the%20United%20States%20manufactures,and%20hardware%20education%20to%20stagnate.">plummeted</a> to just 12% from 37% three decades ago.&nbsp;&nbsp;



The unique demands of bitcoin mining for specialized chips not only align with but also enhance the technological strides made in AI and cloud computing. As bitcoin mining becomes further intertwined with our financial system, the demand for specialized chips does too.&nbsp;



By pushing the boundaries of chip efficiency and performance, bitcoin mining inadvertently fuels innovations that benefit the entire spectrum of data technologies.&nbsp;



<h2 class="wp-block-heading">A domestic pioneer</h2>



Enter Auradine: the Silicon Valley-based start-up shows how bitcoin mining can be a catalyst for advanced semiconductor manufacturing. By producing highly efficient ASICs domestically, they exemplify the potential for this sector to drive technological innovation and engineering prowess on American soil.&nbsp;



As Intel left the ASIC chip manufacturing market earlier this year, Auradine is one of the only major player left. And while one of the first to pioneer these innovative practices, Auradine&#8217;s success in producing high-efficiency ASICs domestically shows that onshoring semiconductor manufacturing is not just a concept, but a feasible reality.&nbsp;



Their achievements pave the way for other US companies to consider similar strategies, reinforcing the potential for a robust domestic chip production industry.



<h2 class="wp-block-heading">A call to policymakers&nbsp;</h2>



The strategic national security significance of bitcoin mining calls for a concerted policy effort. If they don’t already, US policymakers must recognize the sector&#8217;s vital role in national security and foster an environment where these pioneering efforts are viable.



Read more from our opinion section: <a href="https://blockworks.co/news/crypto-wall-street-adoption">Yes, crypto is ready for Wall Street</a>



With the strategic value of bitcoin mining becoming increasingly clear, the onus is on US lawmakers to support legislation that fortifies the industry’s status as a key player in the nation&#8217;s strategic assets.&nbsp;



One example is Congressman Pete Sessions&#8217;<a href="https://digitalchamber.org/congressional-resolution-paves-the-way-for-proof-of-work-mining-in-the-u-s/"> Congressional Resolution</a>, which endorses proof-of-work, the consensus mechanism that is the backbone of Bitcoin. Doing so would be a first step in recognizing and tapping into the integral role of domestic bitcoin mining for national security.



Bitcoin mining has emerged as a pivotal player in bolstering US national security. Auradine&#8217;s pioneering role in reshoring chip manufacturing, driven by the demands of Bitcoin, is a clear indicator of its potential.&nbsp;



The time is now for policymakers to take notice and act. Supporting this sector is crucial, transcending economic benefits and directly impacting our national defense and technological leadership on the global stage.



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


<div class="wp-block-post-author-biography">Taylor Barr is a Policy Associate for the Chamber of Digital Commerce, the world’s largest blockchain trade organization. Before joining the Chamber, Taylor helped craft policy for U.S. Senator Steve Daines.</div>


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Want to bolster American national security? Support bitcoin mining.

David Canellis

Bitcoin has pressed on with its price rally, and if you believe traditional market math, another bull run has long been confirmed.



The price of <a href="https://blockworks.co/price/btc">BTC</a> briefly cleared $42,000 Monday morning — up nearly one-fifth over the past month and by 150% over the year to date, about on par with Meta but trailing Nvidia.



Bitcoin is now at levels not seen since about a month <a href="https://blockworks.co/news/one-year-since-terra">before Terra collapsed</a> in May 2022, pulling crypto into its <a href="https://blockworks.co/news/longest-bitcoin-bear-market-survival">longest bear market in history</a> by at least one metric.



Potential approval for spot bitcoin ETFs from banks like BlackRock and Fidelity may have pushed bitcoin higher. The DOJ <a href="https://blockworks.co/news/us-binance-changpeng-zhao-personality">finalizing its case</a> against Binance and co-founder Changpeng Zhao also appear to have helped, with markets no longer wondering about the worst case scenario.



While not an exact science, standard definitions say that bull markets are confirmed when an asset climbs 20% from recent lows, and bear markets demand a 20% drop from prior highs.&nbsp;



The S&amp;P 500, for example, <a href="https://apnews.com/article/bull-stock-market-wall-street-cde5d042da6aa887e7d5ba64b62815ff">confirmed</a> in June that it had been in a bull market since lows of October 2022.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16000023/embed#?secret=Ka9v9A6wGy" data-secret="Ka9v9A6wGy" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The log view better compares bull market returns</figcaption></figure>



Because crypto is typically more volatile than stocks or real estate — sometimes swinging 20% either way in a matter of days — it’s probably more realistic to confirm bull and bear markets over a longer period of time.



So, let’s say a crypto bear market starts when a token stays 20% below its most recent high for two months or more. And a bull market begins when it climbs that much above its latest lows and stays there for one month or more.



<ul>
<li>That would mean bitcoin has been in a bull market, its fifth ever, for the past 296 days.</li>



<li>On January 12, 2023, Bitcoin first traded 20% above lows set just before FTX declared bankruptcy last November.</li>



<li>Bitcoin held onto those gains for one month to start the bull market on February 12, 2023.</li>
</ul>



Napkin math like this is fun, but it should be stressed that bitcoin, like all other cryptocurrencies, is an incredibly young asset.&nbsp;



With only around 13 years of price history, it’s somewhat silly to expect any real insight from studying its past performance, whether it’s about bull markets or the <a href="https://blockworks.co/news/bitcoin-price-mirrors-2012-halving">impact of halvings</a>.



Still, plotting out bitcoin’s bull run so far against its previous major rallies shows some correlation: its returns match the previous two runs almost exactly: 170% compared to 165% in 2020 and 140% in late 2015.



Those rallies topped out years later up thousands of percent, although this time might pale in comparison as bull run returns have diminished every cycle.&nbsp;



Bull markets also don’t go in a straight line, with price corrections between 30% and 50% common across cycles even in multi-month uptrends.



In any case, the last two bull markets lasted more than two and a half years each — so it could be early days if the bull is truly back.



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How this Bitcoin bull market tracks to other major price rallies

Soccer star Cristiano Ronaldo faces a class action lawsuit in Florida for his allegedly “deceptive and unlawful” promotion of Binance, which recently settled with the US Department of Justice.



But Ronaldo appears unbothered, <a href="https://x.com/Cristiano/status/1729477584977600615?s=20">posting</a> on X this week that he’s “cooking something up” with the exchange.



Ronaldo’s continued involvement highlights a larger trend: Binance’s long list of sports partnerships seem to remain intact despite the <a href="https://blockworks.co/news/doj-indictment-binance-changpeng-zhao">Department of Justice’s</a> actions against the centralized exchange and its former CEO, Changpeng Zhao.&nbsp;



Binance has had several sports partners, particularly in soccer, including as Argentina’s fan token provider during its World Cup run. Binance <a href="https://x.com/BinanceArg/status/1680971083904700416?s=20">ended</a> its partnership with Argentinian soccer this summer.



Pet Berisha, author of the “Sporting Crypto” newsletter, told Blockworks that Binance’s deals are likely safe because, unlike with FTX, the exchange remains solvent and can still meet its payment obligations.&nbsp;



Because of the demographic overlap between sports fans and crypto users, Berisha said he expects crypto projects to continue their sports advertising spending, though he expects Binance “will refrain from spending until the noise dies down here and they&#8217;ve built up a cash reserve.”



<h2 class="wp-block-heading">‘Okay Bears’ go live at ZARA</h2>



The Solana NFT collection Okay Bears has a set of shirts with its branding <a href="https://twitter.com/okaybears/status/1730244524440498399">available</a> in 1,149 ZARA stores worldwide.&nbsp;



The shirts are only <a href="https://www.zara.com/us/en/okay-bears--shirt-p03366661.html?v1=322619604">listed</a> in kids’ sizes on ZARA’s website. Okay Bears and ZARA did not return requests for comment about the specifics of the partnership.&nbsp;



The partnership follows on Pudgy Penguins’ move to <a href="https://blockworks.co/news/pudgy-penguins-walmart-debut">bring toy versions of its NFTs to 2,000 Walmart stores</a> in September.&nbsp;



Solana NFT volumes <a href="https://twitter.com/punk9059/status/1730424383217573898">hit</a> their highest point in over a year on Wednesday, according to @punk9059 on X.



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul>
<li>OpenSea, the embattled NFT marketplace, <a href="https://twitter.com/datarade/status/1729416261149340002?s=20">earned</a> less than $2 million in fees in October, down from a high of $387 million in January 2022, <a href="https://twitter.com/punk9059/status/1730424383217573898">according</a> to a Dune dashboard.&nbsp;</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul>
<li>Magic Eden is rolling out a <a href="https://www.prnewswire.com/news-releases/magic-eden-tests-nft-focused-cross-chain-wallet-in-beta-301998035.html?tc=eml_cleartime">wallet</a> to pair with its cross-chain NFT platform. The wallet works with Bitcoin, Solana, Ethereum, and Polygon.</li>



<li>On-chain collectible platform Zora introduced <a href="https://x.com/ourZORA/status/1729571950953918661?s=20">Notes</a>, where users can mint bits of text, and is now <a href="https://x.com/ourZORA/status/1729908093902033062?s=20">allowing</a> users to get started on the platform with just an email address rather than a crypto wallet.</li>
</ul>



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Web3 Watch: Binance seems likely to retain its sports partnerships despite DOJ actions

Bitcoin mining firms are deepening their financial war chests as speculation arises around potential spot bitcoin ETF decisions early next year.



Twitter co-founder and longtime bitcoin bull Jack Dorsey led a $6.2 million seed <a href="https://www.prnewswire.com/news-releases/jack-dorsey-leads-seed-round-in-support-of-oceans-mission-to-decentralize-bitcoin-mining-globally---announces-launch-at-future-of-bitcoin-mining-conference-301999073.html">round</a> in Mummolin, the company supporting the launch of a decentralized bitcoin mining pool called OCEAN.&nbsp;



Meanwhile, the Canadian mining company Bitfarms <a href="https://investor.bitfarms.com/news-events/press-releases/detail/220/bitfarms-announces-closing-of-c60-million-private">closed</a> a private $60 million share sale with US institutional investors.&nbsp;



OCEAN is a non-custodial mining pool, meaning miners can lend computing power with ASIC interfaces and receive rewards directly from the bitcoin network without the company taking custody of the mined bitcoins.&nbsp;



“It went back to the principle of protecting bitcoin,” Dorsey <a href="https://www.youtube.com/watch?v=_PH5sKrkzZY">said</a> at a live event this week promoting OCEAN. “We need the people to have more independent, sovereign options [to mine bitcoin].”



It is Dorsey’s second round of 2023, joining his seed investment in bitcoin “voucher” provider Azteco in May.&nbsp;



Read more: <a href="https://blockworks.co/news/dorsey-funding-bitcoin-voucher-service">Twitter co-founder Dorsey leads $6M investment in bitcoin voucher service</a>



Bitfarms operates mining facilities in Quebec, the US state of Washington, Argentina, and Paraguay. The day before the private placement closed, the company <a href="https://investor.bitfarms.com/news-events/press-releases/detail/219/bitfarms-initiates-transformative-fleet-upgrade-that">announced</a> the purchase of 35,888 T21 bitcoin miners and said the high-energy miners come at the most attractive price point the company has seen since 2020.&nbsp;



November was a busy month for bitcoin miners on the funding side. Abu Dhabi-based Phoenix Group <a href="https://www.globenewswire.com/en/news-release/2023/11/21/2783783/0/en/Phoenix-Group-s-IPO-Sees-Unprecedented-180x-Oversubscription-from-Retail-Investors-Signifying-Strong-Market-Confidence.html">raised</a> $370 million via an initial public offering ahead of its listing on the emirate’s ADX stock exchange. Northern Data Group <a href="https://ir.northerndata.de/news/corporate-news/northern-data-group-secures-eur-575-million-debt-financing-facility/">secured</a> a $623 million debt financing facility from Tether Group, the company behind USDT, partly to scale its bitcoin mining operations.&nbsp;



<h2 class="wp-block-heading">Warner Music Group invests in Web3 fan engagement platform</h2>



Warner Music Group joined a group of investors including CMT Digital, Winklevoss Capital, and the NEAR Foundation to raise $3.5 million for a startup blockchain fan engagement platform named MITH, as Axios <a href="https://www.axios.com/pro/media-deals/2023/11/30/mith-fan-platform-jack-harlow">reported</a>.



MITH allows creators to make tiered membership platforms for fans. MITH members can store collections and rewards on their profiles. The rapper Jack Harlow’s “Private Garden” membership <a href="https://www.privategarden.us/memberships">platform</a> launched earlier this month on the Polygon blockchain, according to Axios.&nbsp;



MITH’s raise is the latest funding round for a platform using Web3 monetization tools to connect celebrities with their fans. Modhaus, a platform for K-pop fan engagement, <a href="https://blockworks.co/news/3-startups-90m-raises">raised</a> $8 million in November.&nbsp;



<h2 class="wp-block-heading">Other notable fundraises</h2>



<ul>
<li><a href="https://blockworks.co/news/cross-chain-protocol-investor-funding">The cross-chain protocol Wormhole raised $225 million</a> at a $2.5 billion valuation. Tier-1 investors in the round <a href="https://cryptorank.io/funding-rounds">were</a> Coinbase Ventures, Multicoin Capital and Arrington XRP Capital, per CryptoRank.&nbsp;</li>



<li>Coinchange <a href="https://x.com/coinchangeio/status/1729828234366222707?s=20">raised</a> $10 million for its platform that simplifies DeFi yield and compliance for financial businesses. </li>



<li>Decentralized physical infrastructure (DePIN) provider Grove <a href="https://medium.com/decentralized-infrastructure/grove-announces-7-9m-fundraise-to-fuel-decentralized-infrastructure-growth-0671362fae45">raised</a> $7.9 million with participation from Placeholder VC, Avon Ventures, and Druid Capital. DePIN refers to computing infrastructure, like wireless networks or file storage, that isn’t controlled by a centralized entity.</li>
</ul>



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