While crypto markets are still in a state of “fear,” as evidenced by Bitcoin’s Fear & Greed Index, the industry as a whole is giving us reasons to be bullish. Large venture funding rounds, growing adoption of decentralized governance models and new institutional-grade product offerings suggest that crypto is more than just daily chart patterns.
This week’s Crypto Biz newsletter looks at a new Grayscale product that’s giving accredited investors more ways to bet on the so-called “Ethereum killers.” We also document two funding stories and draw your attention to the latest developments surrounding El Salvador’s Bitcoin (BTC) bond.
Grayscale launches smart contract fund for Ethereum competitors
Grayscale Investments, the world’s largest digital asset manager, has officially launched its 18th investment product focused on Ethereum competitors. The Grayscale Smart Contract Platform Ex-Ethereum Fund, also known as GSCPxE, will provide exposure to seven smart contract platforms: Cardano, Solana, Avalanche, Polkadot, Polygon, Algorand and Stellar. These high-profile Ethereum competitors can now be accessed by accredited investors via GSCPxE. While Ethereum remains king of the decentralized application (DApp) market, decentralized finance (DeFi) has become a much more level playing field. Only time will tell whether the aforementioned “Ethereum killers” will become popular among institutional investors.
Former Polychain GP unveils $125M crypto fund with DAO governance ambitions
Former Polychain Capital general partner Tekin Salimi has taken a novel approach to fund crypto startups. His new fund, dubbed “dao5,” will provide governance tokens to crypto project founders that represent an ownership stake in a future decentralized autonomous organization, better known as DAO. Salimi plans to convert the fund, which is currently valued at $125 million, into a founder-owned DAO around the year 2025. In other words, every grant recipient will have exposure to all other projects in the portfolio — a feature Salimi says will strengthen the collaboration among project founders. Crypto investors are going to hear a lot more about DAOs in the coming years as more industry leaders look to advance new models of corporate governance.
Chip giant Qualcomm launches $100M Metaverse fund
Semiconductor giant Qualcomm has made a foray into the Metaverse sector by launching a $100 million fund that will back projects at the intersection of extended reality (XR), artificial intelligence (AI) and augmented reality (AR). The new fund, dubbed “SnapDragon Metaverse Fund,” aims to support developers who are pushing the boundaries of spatial computing. Qualcomm is positioning itself as the “ticket to the metaverse” through its wireless and AI technologies. After Facebook rebranded to Meta and shifted its focus to the metaverse economy, it was only a matter of time before other major technology plays started following suit.
El Salvador postpones Bitcoin bonds to September: Report
The government of El Salvador is reportedly delaying the issuance of its Bitcoin-backed bonds due to unfavorable market conditions brought about by the geopolitical crisis in Eastern Europe. Finance Minister Alejandro Zelaya told local news that the so-called “Volcano Bond,” which will be used to fund El Salvador’s Bitcoin City, will be pushed back to September at the latest. If you’re thinking: What does the war in Ukraine have to do with Bitcoin demand? Consider that legacy finance still views crypto as a risk-on asset and traditional investors are more likely to reduce their holdings of such assets during periods of uncertainty. That being said, Bitcoin and the broader crypto markets have held up fairly well amid the geopolitical crisis. Bitcoin’s price breached $43,000 this week, having recovered more than 30% from its bottom in January.
Before you go!
Is crypto in a bear market? It depends on how you define it. If digital assets were any other market, we would classify the past four months as a major downtrend. On The Market Report this week, I sat down with fellow analysts Jordan Finneseth, Marcel Pechman and Benton Yuan to discuss the top crypto projects to buy and hold during a bear market. You can check out the full replay below.
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