- The SEC has approved BlackRock’s spot Bitcoin ETF options listing, potentially leading to increased institutional investment and proliferation of new Bitcoin-related products, ultimately driving more structural demand.
- Stablecoins are emerging as a crucial element in the broader adoption of cryptocurrency, particularly within traditional financial systems: Revolut considers issuing stablecoin, Japanese banks MUFG, SMBC, and Mizuho working on a cross-border stablecoin transfer platform, insights from Visa and PayPal on their use of stablecoins. Circle, Celo, Agora, Ethena, Tether, and a long tail of others hard at work.
- Google Cloud is making significant advancements in Web3 infrastructure with the launch of its Ethereum-compatible RPC service, challenging industry incumbents.
- 10SQ takeaways from the major crypto events Token2049 and Solana Breakpoint in Singapore. The conferences highlighted Asia's deep, broad, and mature ecosystem of companies and digital asset projects.
Key Themes
SEC Approves BlackRock's Spot Bitcoin ETF Options Listing
The SEC approved the Nasdaq ISE’s rule change request to list and trade options on BlackRock’s iShares Bitcoin Trust (IBIT). There is consensus that the IBIT options, which still need to be greenlighted by the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC), will further help draw institutions to the crypto market. Market participants expect to see options trading on IBIT, and potentially the other bitcoin ETFs as well, by the end of the year.
10SQ View: This is a big win for the bitcoin ETFs, which will attract more liquidity and lead to higher institutional adoption. Bitcoin has long been seen as a highly volatile asset. However, there has been a clear downward trend in Bitcoin's volatility over its lifetime, and the trading of Spot Bitcoin ETF options might accelerate this trend. Institutional investors predominantly use yield-generating and hedging strategies that could lower Bitcoin's volatility. Bitcoin's realized or historical volatility has been trending lower since the Chicago Mercantile Exchange listed bitcoin futures in December 2017, opening doors for traditional institutions to take exposure to the cryptocurrency.
DBS To Launch Crypto Options Trading And Structured Notes
DBS announced it is launching over-the-counter cryptocurrency options trading and structured notes for eligible institutional investors and accredited wealth clients. It is the first Asian-headquartered bank to offer financial products whose value is linked to the price of Bitcoin and Ethereum.
DBS Digital Exchange (DDEx) reported that the value of digital assets traded on the exchange nearly tripled in Singapore dollar terms compared to the same time in 2023. In addition, the number of active trading clients on DDEx grew 36%, while digital assets in custody with DBS surged over 80% in Singapore-dollar terms.
10SQ View: Professional investors in Asia are increasingly allocating to digital assets in their portfolios. Crypto-structured products are early among banks. The preparation took approx. nine months after the launch of US ETFs.
Japan’s Three Major Banks To Test Cross-border Stablecoin Transfer Platform
Japan’s three megabanks — MUFG, SMBC, and Mizuho — are set to trial a cross-border stablecoin transfer platform to offer faster international settlement for enterprises.
“By integrating these regulated stablecoins and truly open and secure cross-chain messaging standards with the current cross-border messaging framework, we’re enabling cross-border settlements for enterprises at the speed of the internet.” - said the representatives of the banks.
10SQ View: While speed is the immediate benefit, there is also a massive potential for more significant innovation in cost reduction, enhanced privacy, and new forms of asset management, such as tokenized real-world assets.
Fintech Giant Revolut Said To Be Planning Stablecoins
Revolut, intends to issue its stablecoin, taking a compliance-first approach. Revolut has allowed the buying and selling of crypto within its app for several years and launched a standalone cryptocurrency exchange for experienced traders in May.
Robinhood Markets (HOOD) is rumored to be exploring stablecoin.
10SQ View: Adopting a comprehensive regulatory framework for stablecoins with MiCA in the European Union this year opened the way for fintechs to the new payment technology. Now, major fintech companies are starting to integrate stablecoin rails or launch their own stablecoins compliantly. In the coming years, we expect to see a wave of mainstream adoption of stablecoin technology in the tradfi sector.
PayPal Will Allow Businesses to Buy and Sell Crypto
PayPal now enables U.S. merchants to buy, hold and sell cryptocurrency directly from their PayPal business accounts. PayPal also now enables business account holders to send and receive supported cryptocurrency tokens to and from external blockchain accounts.
Earlier this month, PayPal announced that Venmo and PayPal users will be able to transfer cryptocurrency using Ethereum Name Service (ENS) names, which act as a nickname for a blockchain address. The new integration simplifies transfers between wallet addresses while reducing the risk of mistakes and lost funds.
10SQ View: It is remarkable how PayPal is consistent in their crypto strategy. Now the company will bring bitcoin and other virtual coins to "millions" of merchants across the US. ENS is an essential step in the evolution of blockchain technology as it is building an “identity layer” for crypto transactions by creating unified Web3 identities. It is possible that soon, we will see ENS domains replace bank accounts and email addresses.
Google Cloud Releases Ethereum-compatible RPC Service
The cloud division at Google has introduced a new blockchain remote procedure call (RPC) service for Ethereum to support Web3 development. Google Cloud will integrate support for additional blockchain networks next year. The RPC lets developers access blockchain data and functionality through API calls.
The company also acts as a validator for multiple networks, provides node hosting and BigQuery data analytics for 19 blockchains, launched Web3 Portal with developer tools.
10SQ View: Google Cloud continues to expand its presence in Web3 infrastructure for the Web3 ecosystem, positioning it in competition with incumbent infrastructure providers, including Infura, Alchemy, and QuickNode. This is undeniably a significant development in the ongoing interaction between traditional tech giants and the decentralized world of blockchain.
Hivemapper Network Has Added Coverage Five Times Faster Than Google Street View
Hivemapper is a decentralized mapping network that allows contributors to use specifically designed dashcams to collect high-quality street-level imagery during their drives. Hivemapper announced the launch of its new mapping innovation brand, Bee Maps, a global mapping network.
Notably, it took less than two years for the Hivemapper community to map its first 10 million unique miles of roads, while it took ten years for Google Street View to map an area of the same size. The network offers unique coverage for more than 26% of the world's roads, with the strongest coverage across North America, Europe, South Korea and Japan.
10SQ View: Hivemapper is an excellent example of decentralized physical infrastructure projects (DePINs) at work in real life. DePINs are projects that use token incentives to encourage people to invest in building infrastructure that is in high demand. The DePIN sector's appeal stems from its being rooted in "real world" applications with well-understood markets.
10SQ Takeaways from Token2049
The two-day Token2049 conference in Singapore has historically been one of the main events for the crypto ecosystem. With an impressive 7k+ companies, 20k+ attendees, and 300+ speakers this year, the event showcased the immense scale of the crypto industry, hosting, besides the main conference, an overwhelming amount of side events. Token2049 was clearly the epicenter of crypto in Asia in September.
Key narratives discussed:
Role of crypto in Asia |
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Real building and focus on monetization |
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Crypto VC market |
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10SQ Takeaways From Solana Breakpoint 2024
Solana Breakpoint was the second largest event of the Singapore crypto week and the biggest conference event in Solana history, attended by over 5.7k Solana developers and users. With all developers using existing Solana infrastructure, the conference was able to showcase new applications across payments, gaming, social and many other use cases. There was massive optimism from investors, builders, and corporates.
Key narratives discussed:
PayPal |
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Visa |
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Institutional adoption |
Institutions are increasingly adopting Solana for new financial products:
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DePINs on Solana |
Top infrastructure projects on Solana attracted a lot of attention:
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Product and company announcements |
New exciting company announcements:
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Upcoming Events
October 9-11 - Polina Bermisheva will be at Permissionless in Salt Lake City, UT
October 24 - Chris Cheung will be speaking at EMex Americas: The Emerging Manager Exchange in New York, NYC
November 11-13 - SALT iConnections Asia in Singapore
Opportunities to connect with the 10SQ team - book a meeting in Calendly
Important Disclosures
This newsletter is provided for informational purposes only, and should NOT be relied upon as legal, business, investment, or tax advice. Furthermore, the content is not directed at nor intended for use by any investors or prospective investors in any TenSquared Capital LLC (“10SQ”) managed funds. Please see tensquared.com/disclosures.html for additional important details, including link to list of investments.