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- Microsoft Rejects Bitcoin Reserve Crypto Alpha - Week 50 2024
Microsoft Rejects Bitcoin Reserve Crypto Alpha - Week 50 2024
All things Crypto, Web3 and Blockchain to keep you updated
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TL;DR
BlackRock Advocates 2% Bitcoin Allocation
Microsoft shareholders vote ‘no’ to Bitcoin reserve
Eigen Foundation Supports Ethereum’s Protocol Guild
Grayscale Expands with Lido and Optimism Funds
VanEck’s 2025 forecast: SOL, ETH, BTC set for big gains
Ethereum Researcher Max Resnick Switches to Solana
Cosmos Acquires Skip for Growth
SilentSwap Launches Privacy-Focused Cross-Chain Aggregator
Avalanche Raises $250 Million for Upgrade
SI Tickets Partners with Avalanche for NFT Platform
Early Bitcoin Investor Sentenced for Tax Evasion of $3.7M
Japan Considers Strategic Bitcoin Reserve
And much more!
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Bitcoin Highlights of the Week
BlackRock, managing $11.5 trillion in assets, recommends a 1-2% Bitcoin allocation for traditional portfolios, highlighting its diversification benefits while emphasizing risk management. In a typical 60/40 portfolio split, Bitcoin’s risk profile aligns with mega-cap tech stocks like Apple and Microsoft, which also influence risk-weighted portfolios significantly.
However, allocations exceeding 2% could amplify overall volatility due to Bitcoin’s unique market dynamics. This cautious endorsement marks a pivotal step in Bitcoin’s mainstream acceptance, signaling its role as a credible asset. As Bitcoin’s volatility declines, its utility and adoption in institutional strategies could grow, further integrating cryptocurrency into global financial systems.
Russian State Duma Deputy Anton Tkachev has proposed creating a strategic Bitcoin reserve akin to the country’s traditional currency reserves. Submitted to Finance Minister Anton Siluanov, the proposal argues that Bitcoin offers a viable alternative to inflation-prone and sanction-vulnerable currencies like the dollar and euro.
The initiative also aligns with Russia's ongoing experiment in cross-border crypto settlements. This proposal comes amidst a global trend, with nations like the U.S., El Salvador, and Brazil exploring similar reserves. Recently, President Putin reinforced Bitcoin’s inevitability, legalizing its mining and emphasizing its growing role in international trade and financial stability.
The City of Vancouver has approved a motion to explore integrating Bitcoin into its financial system. Led by Mayor Ken Sim, the initiative includes examining Bitcoin's potential for tax payments, municipal reserves, and as a hedge against inflation. A feasibility report is expected by Q1 2025.
While proponents highlight Bitcoin's decentralized nature and performance as a hedge, critics cite environmental concerns and its links to crime. Regulatory hurdles, including restrictions on local governments holding digital assets, could impede progress. The study will assess risks, benefits, and environmental impacts, marking a pivotal moment in Vancouver's financial strategy.
Microsoft shareholders voted against a proposal to allocate 1% of the company’s $78 billion treasury to Bitcoin at the December 10 shareholder meeting. Citing Bitcoin’s price volatility and its unsuitability for stable reserves, Microsoft’s board emphasized the need for predictable investments.
The proposal, backed by MicroStrategy co-founder Michael Saylor, garnered only 0.55% approval. While Bitcoin advocates criticize this cautious stance, Microsoft prioritizes investments in strategic areas like AI. The board remains open to reassessing Bitcoin as regulations evolve and markets stabilize, reflecting the ongoing debate between traditional finance priorities and digital asset opportunities.
Marathon Digital Holdings (MARA) has expanded its Bitcoin treasury with the purchase of 11,774 BTC for $1.1 billion, funded through zero-coupon convertible notes. This brings MARA’s total holdings to 40,435 BTC, valued at approximately $3.9 billion—nearly 0.2% of Bitcoin’s finite supply.
The company has achieved a year-to-date Bitcoin yield of 47.6%, underscoring its aggressive accumulation strategy. Despite a Q3 net loss of $124.8 million, MARA’s approach mirrors MicroStrategy’s bold Bitcoin bet, reflecting confidence in its long-term potential. However, the strategy carries risks tied to debt and shareholder dilution, making it a high-stakes play on Bitcoin’s future.
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Ethereum Highlights of the Week
The Eigen Foundation has pledged 1% of its EIGEN token supply to the Ethereum Protocol Guild, benefiting 180 members from 29 teams focused on Ethereum layer-1 maintenance. EigenLayer, a restaking protocol integral to Ethereum, allows staked assets like Ether to be reused, offering additional yields while enhancing network security.
Dominating the restaking sector with $18.2 billion of the $26.9 billion total value locked, EigenLayer plays a pivotal role in reducing entry barriers for developers and DApps. This move aligns with the broader adoption of restaking, emphasizing its potential to attract fresh capital and boost decentralized finance ecosystems.
Grayscale Investments has launched funds for Lido DAO (LDO) and Optimism (OP) tokens, enhancing its suite of single-asset crypto products. Lido, the largest decentralized finance protocol with $40 billion in total value locked, simplifies Ethereum staking, while Optimism, a leading layer-2 solution with $800 million in TVL, powers Ethereum scaling and supports networks like Base and Unichain.
These funds aim to provide qualified investors exposure to Ethereum-focused efficiency and scalability innovations. Grayscale, managing $35 billion in assets, continues expanding its offerings, including recent trusts for Aave, MakerDAO, and Sui, alongside its flagship Bitcoin and Ethereum ETFs.
The U.S. Securities and Exchange Commission (SEC) has progressed NYSE Arca's application to list Bitwise’s Bitcoin and Ethereum spot exchange-traded fund (ETF), soliciting public comments on the filing. Proposed on Nov. 26, the ETF seeks to offer balanced exposure to BTC and ETH in an accessible format.
Industry analysts predict a rise in index ETFs, akin to the S&P 500 in traditional finance. Competing filings, including Bitwise’s 10 Crypto Index Fund and Grayscale’s Digital Large Cap Fund, highlight growing interest. The regulatory landscape may shift in 2025 as crypto-friendly leaders are set to assume key roles under President-elect Donald Trump.
BlackRock’s iShares Ethereum Trust has experienced a remarkable surge, drawing in $1.5 billion in inflows over a 16-day period, with a $200 million increase on December 14. This follows a successful streak since its July launch, making Ethereum ETFs a key focus for institutional investors.
Global investment in Ethereum products reached $3.5 billion in the same period. Despite challenges from layer-2 networks, Ethereum’s appeal is rising. BlackRock’s dominance, alongside rising competition from other asset managers, signals growing institutional interest in Ethereum, contributing to its price momentum and making Ethereum ETFs a dominant force in the market.
Ethereum's price rebounded 11.6% from December 10 to 12, climbing from a $3,500 low. Key drivers include robust inflows into Ether spot ETFs and a surge in decentralized application (DApp) activity. Ethereum’s total value locked (TVL) rose to $78 billion, a 31% increase in 30 days, fueled by increased deposits in protocols like AAVE and EigenLayer.
Ethereum’s dominance in DApp volumes remains at 47%, surpassing Solana in various sectors. Analysts, including Bitwise, project further growth, with a $7,000 target driven by ETF adoption and layer-2 expansion, suggesting Ethereum could reach new highs in the short term.
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Solana Highlights of the Week
Solana-native decentralized exchange (DEX) Raydium surpassed Uniswap in monthly trading volumes for October and November, according to Messari. In November, Raydium beat Uniswap by about 30%, generating around $30 billion in volume. This success is attributed to Raydium’s dominance in the Solana ecosystem, capturing over 60% of its daily DEX volume.
Memecoin trading, particularly through Pump.fun, played a significant role, accounting for 65% of Raydium’s November volume. Solana’s rapid growth, bolstered by high throughput and low transaction costs, further fueled this performance, while Uniswap's expansion across 18 networks contrasts with Raydium’s Solana-only presence.
Max Resnick, a leading Ethereum researcher, has left Consensys to join Solana’s research and development firm, Anza. Resnick, who was critical of Ethereum’s layer-2 scaling approach, believes Ethereum should focus on scaling the base layer, similar to Solana.
At Anza, he will work on Solana’s fee markets and consensus systems to enhance the network’s performance. Resnick’s shift has sparked discussion in the crypto community, with some viewing it as a sign of Solana’s technical advantage. Despite the move, Resnick will still advise Consensys, continuing to influence both Ethereum and Solana’s development.
In 2024, Solana surpassed Ethereum for the first time in eight years as the top ecosystem for onboarding new developers, with 7,625 new developers joining Solana compared to Ethereum's 6,456. This growth, fueled by strong demand in Asia, led to an 83% increase in Solana's developer activity.
Despite this shift, Ethereum remains the leader in total developer activity, with the most active developers globally. Ethereum's layer-2 networks also saw notable growth, while Solana briefly outperformed Ethereum in network activity and fee generation during specific periods in 2024.
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