Bitcoin’s Consolidation | Crypto SPAC Mania

CIRCLE GETS THE SQUARE

Meet the new belle of crypto’s debutante ball: payments infrastructure provider and principal developer of the second largest stablecoin USD Coin (USDC), Circle, is going public via a merger with Concord Acquisition, a publicly traded special purpose acquisition company (SPAC) led by former Barclays CEO Bob Diamond. The transaction values Circle at $4.5 billion and comes on the heels of Circle’s $440 million fundraise, completed in May,– the largest venture round ever raised by a crypto startup. The deal, expected to deliver up to $691 million of gross proceeds to the combined entity, should close in the fourth quarter this year, subject to approval by shareholders of Concord and Circle and regulators.

Over the past months, the company has engaged in a few high-profile partnerships enabling it to integrate its USDC payment infrastructure with Visa and crypto trading platforms FTX and Crypto.com. No wonder USDC (governed by Circle in partnership with U.S. largest crypto exchange Coinbase) has grown by more than 3,400% this year. The asset now stands at $25 billion in circulation and the company claims it has supported more than $785 billion in on-chain transactions. This announcement serves as validation for Circle, which had to sell off key pieces of its business and pivot its business away from being a one-stop crypto shop into stablecoins two years ago.

Not to be outdone, crypto startup Bullish (which doesn’t actually have a product yet) on Friday announced plans to also go public via a SPAC merger with blank check company Far Peak Acquisition, which is backed by Tom Farley, former president of the New York Stock Exchange. Bullish boasts a range of high-profile investors, including PayPal co-founder Peter Thiel, British billionaire hedge fund manager Alan Howard and Mike Novogratz’s crypto holding Galaxy Digital.

BLUE OCEANS FOR BITCOIN MINERS

Amidst the exodus of Chinese cryptocurrency miners under the fresh wave of Beijing’s regulatory pressure, bitcoin saw a historic difficulty readjustment of nearly 28% last Saturday. The bitcoin network automatically adjusts the level of difficulty it takes to find a new block approximately every two weeks, or 2016 blocks, based on the amount of computing power on the network, so that new blocks are added on average every 10 minutes. The difficulty drop will make it easier for the remaining miners to find blocks and thus collect larger profits, at least until Chinese mining operators relocate to more crypto-friendly jurisdictions.

BITCOIN STUCK IN THE $30,000 DOLDRUMS

In the meantime, bitcoin is struggling to break out of the $30,000-range. The cryptocurrency “is in a consolidation phase between the $30,000-$42,000 zone and we expect it to spend the next few weeks testing this range on either side,” says Pankaj Balani, CEO of crypto derivatives platform Delta Exchange. “There are limited catalysts here for any break on the upside in the short term.” Bitcoin’s short-term volatility is now at two-months low,  and analysts keep looking for clearer signs in the broader market.

Ether, however, could be positioned better for strong price action. A highly anticipated Ethereum upgrade introducing a new fee structure, Ethereum Improvement Proposal (EIP) 1559, is scheduled to launch on the mainnet on August 4. The update is expected to make Ethereum’s transaction fees less volatile and more predictable, while adding an element of deflation to the second-largest crypto asset by market. Moreover, U.S. banking powerhouse Goldman Sachs  issued a note on Tuesday, saying ether “currently looks like the cryptocurrency with the highest real use potential,” citing Ethereum’s role in the development of smart contract applications.

BLOCKCHAIN 50 SPOTLIGHT: THE NATIONAL BASKETBALL ASSOCIATION 

As the NBA Finals move into full swing, it is important to note how the league has embraced crypto and NFTs (non-fungible tokens). The NBA’s Top Shot marketplace is helping the league cash in on the sports-memorabilia boom. Using its partner Dapper Labs’ blockchain, the NBA is selling packs of “moments,” similar to trading cards but in digital form. The platform has more than 400,000 traders and has processed more than $627 million worth of transactions.

ELSEWHERE

USDC Is Only Circle’s Second-Biggest Business, SPAC Filing Shows [CoinDesk]

China’s Digital Yuan Trial Expands To 10 Million Eligible Users [Bloomberg]

Visa Says Crypto-Linked Card Usage Tops $1 Billion In First Half Of 2021 [CNBC]

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