December 9, 2020 | Issue #147

MUST READS

Cryptocurrency Indices To Go Mainstream

S&P Dow Jones Indices, a major financial data firm, said last Thursday it will launch a customizable cryptocurrency indexing service in partnership with crypto data provider Lukka in 2021.

The coming product is poised to become a hub for cryptocurrency pricing data at a time when more Wall Street investors than ever are searching.

The First Publicly-Traded Crypto Index Fund In The U.S. Goes Live

Increased investor interest has spurred yet another big announcement this week...

Today, Bitwise Investments launched a publicly-traded crypto index fund under the ticker symbol BITW. The company listed shares on OTC markets and are now available to trade via traditional brokerage accounts, such as Fidelity, Charles Schwab, E*Trade, and TD Ameritrade.

Key Points:

BITW tracks the Bitwise 10 Large Cap Crypto Index and therefore it will give investors exposure to the ten largest crypto-assets.
As of November 30, the fund held approximately 75% BTC and 13% ETH, with the remaining 12% allocated across XRP, LTC, LINK, XTZ, and other crypto assets.
The index's constituents are screened for liquidity, custody, and other risks, and are rebalanced monthly.

This new Bitwise vehicle provides another publicly-traded Bitcoin proxy for investors given the 75%+ BTC weighting... and joins the likes of other "Bitcoin trades" such as Grayscale Bitcoin Trust (GBTC), MicroStrategy (MSTR), and Galaxy Digital Holdings (BRPHF).

MSTR Plans To Purchase More BTC, Get’s Downgraded by Citi

MicroStrategy has detailed in a press release it is offering $550 million worth of convertible senior notes in a private placement to qualified institutions.

They plan to use the proceeds to, you guessed it... buy more Bitcoin.

According to the press release, the private placement is expected to close on December 11. The notes mature in 2025, and may be converted to equity (at a 37.5% premium to the current MSTR price) at the company's election.

MicroStrategy made headlines in recent months for converting nearly all of its treasury to BTC, in two major tranches of roughly $250mm and $175mm. Additionally, MicroStrategy purchased another $50mm in BTC just last week.

Following the news, Citi has lowered its recommendation for MicroStrategy’s stock from ‘neutral’ to ‘sell." The downgrade seeks to warn investors that the intelligence company’s Bitcoin euphoria may be overextended.

Fidelity Will Let Customers Use Bitcoin As Collateral For Loans

Last November, Fidelity Digital was granted a trust company charter from the New York Department of Financial Services. Now they are putting that charter to use.

The company will now allow its institutional customers to use Bitcoin as collateral against cash loans. BlockFi is partnering with Fidelity to help manage the risk by offering cash worth 60% of a loan backed by Bitcoin.

DEEP DIVE

Where Are We in the Bitcoin Market Cycle?

Glassnode CTO Rafael Schultze-Kraft published a Twitter thread looking at various on-chain metrics for Bitcoin, and where they sit currently in comparison to the peak of Bitcoin's 2017 run.

TLDR: Insanely bullish. Most metrics are far from the top... and we could see more than 10x for BTC from here.

Crypto Theses For 2021

Key trends, people, companies, projects to look out for, and predictions for 2021...

Warning: This report from Messari is a beast, but it's jam-packed with industry insights and high-level investment frameworks.

Ether Cap Becomes First Public Company to Stake ETH

Ether Capital Corporation, whom we have covered in these issues consistently over the last year, has announced that it has begun participating in staking on the newly launched Ethereum 2.0 network and has committed to running a validator node on the network.

For those who want exposure to ETH in the public markets, the ticker symbol's are (NEO:ETHC) and (OTC:DTSRF).

REGULATORY FRONT

US Lawmakers Introduce Bill That Would Require Stablecoin Issuers to Obtain Bank Charters

This week Representative Rashida Tlaib and others proposed the STABLE Act to force stablecoin issuers to receive banking charters.

According to Tlaib, the bill is designed to “prevent cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color."

A number of stablecoin issuers currently operate without banking charters, including the CENTRE consortium (Circle and Coinbase), Gemini and Paxos. Algorithmic stablecoins like basis.cash or crypto collateral tokens like DAI would also appear to fall under this bill.

As expected, there has been quite some pushback against Tlaib and her bill.

FireEye, a Top Cybersecurity Firm, Says It Was Hacked by a Nation-State

For years, cybersecurity firm FireEye has been the first call for government agencies and companies around the world who have been hacked by the most sophisticated attackers, or fear they might be.

Now it looks like the hackers — in this case, evidence points to Russia’s intelligence agencies — may be exacting their revenge.

The $3.5 billion company declined to say explicitly who was responsible, but its description, and the fact that the F.B.I. has turned the case over to its Russia specialists, left little doubt who the lead suspects were and that they were after what the company calls “Red Team tools.”

The hack is the biggest known theft of cybersecurity tools since those of the NSA were stolen in 2016 by a still-unidentified group that calls itself the ShadowBrokers.

📌 A New Publicly-Traded Crypto Fund, MSTR Gets Downgraded, and Spotify Crypto Payments

MUST READS

Cryptocurrency Indices To Go Mainstream

The First Publicly-Traded Crypto Index Fund In The U.S. Goes Live

MSTR Plans To Purchase More BTC, Get’s Downgraded by Citi

Fidelity Will Let Customers Use Bitcoin As Collateral For Loans

SPONSORED

The Crypto 2021 Summit

DEEP DIVE

Where Are We in the Bitcoin Market Cycle?

Crypto Theses For 2021

Ether Cap Becomes First Public Company to Stake ETH

REGULATORY FRONT

US Lawmakers Introduce Bill That Would Require Stablecoin Issuers to Obtain Bank Charters

FireEye, a Top Cybersecurity Firm, Says It Was Hacked by a Nation-State

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