The Federal Reserve Board’s annual stress test results reveal that large banks are expected to face nearly 5 billion in projected losses during a severe recession scenario. These losses are significantly higher than last year due to increased risks in bank balance sheets and higher expenses. The aggregate common equity tier 1 (CET1) capital ratio […]
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Study: Crypto Market Participants Favor Meme Coins, Shun High-FDV Projects
Crypto market participants’ growing preference for character or celebrity meme tokens signals a growing disdain for projects with a high fully diluted value, the latest Kucoin report has said. Tap-to-earn projects have “remarkably higher overall participation data” due to their lower barriers to understanding and participation. Tokens with High FDV Face Limited Price Discovery Opportunities […]
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56% of Fortune 500 Firms Pursue Crypto and Blockchain Projects, Says Coinbase
A Coinbase report reveals that cryptocurrency and blockchain initiatives among Fortune 100 companies rose by 39% year-over-year, reaching a record high in Q1 2024. In addition, 56% of Fortune 500 companies are working on onchain projects. The report emphasizes the need for clear crypto regulations to retain talent and enhance U.S. leadership in crypto technology. […]
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VC Firm Paradigm Secures $850 Million For Crypto Projects In Latest Fundraise
Venture capital firm Paradigm has reportedly raised 0 million for its third fund, supporting early-stage cryptocurrency initiatives led by Coinbase co-founder Fred Ehrsam and ex-Sequoia Capital partner Matt Huang.
Increased Venture Capital Interest In The Industry
Paradigm’s previous investments include prominent projects like decentralized exchange (DEX) Uniswap and Optimism, a scaling solution for the Ethereum blockchain.
According to Bloomberg, with the capital raised in the latest funding round, Paradigm aims to contribute to early-stage crypto work and plans to prioritize such projects in the future.
The latest fundraising comes after Paradigm’s notable achievement in 2021 when it secured a .5 billion fund, the largest-ever crypto investment vehicle at that time.
The current surge in interest and confidence within the venture capital community towards the crypto industry has led to increased funds focused on cryptocurrency strategies.
Paradigm’s fundraising success reflects the growing market appetite for crypto investments. Recent developments, such as the introduction of Bitcoin ETF and the impending approval of ETFs centered around Ethereum, have fueled the industry’s expansion.
Hivemind Capital Joins Paradigm In Venture Funding Race
Paradigm is not the only venture firm seeking to raise funds within the crypto space. Hivemind Capital, for instance, is actively raising a specialized million non-fungible token (NFT) fund.
Hack VC, which previously announced a 0 million fund, is also exploring opportunities to raise over 0 million for another investment vehicle. These initiatives highlight the increasing interest and confidence in the potential of the crypto industry from venture capitalists.
While Paradigm faced criticism, including temporarily removing cryptocurrency references from its website, the firm rectified the situation and reaffirmed its commitment to the industry.
Fred Ehrsam transitioned from managing partner to general partner at the firm in October, further solidifying Paradigm’s dedication to fostering crypto innovation.
Despite setbacks, Paradigm continues to support crypto projects actively. Recently, the firm led an investment round in Merkle Manufactory, a company responsible for developing software infrastructure for the Farcaster social media network.
The funding round valued Merkle Manufactory at approximately billion, underscoring Paradigm’s ongoing belief in the potential and value of the crypto industry.
Overall, Paradigm’s successful fundraising efforts for its third fund demonstrate investors’ continued interest and confidence in supporting early-stage cryptocurrency projects.
In recent months, the crypto industry has experienced a consistent outflow of funds, resulting in a decline in the total market capitalization from its yearly peak of .7 trillion to the current level of .3 trillion.
The dominant cryptocurrency in the market has been the primary driver of the recent price drops. It is currently valued at ,700 and has experienced a 3% decrease within the past 24 hours. Similarly, Ethereum has also declined, with its price dropping by 4% to approximately ,475.
Featured image from DALL-E, chart from TradingView.com
Paradigm Secures $850 Million for Third Crypto Fund, Targets Early-Stage Projects
On June 13, the leading San Francisco-based crypto-focused venture capital firm Paradigm revealed it has secured its third fund, totaling 0 million, aimed at early-stage crypto projects. Paradigm Announces 0 Million Fund Established in 2018 by Coinbase co-founder Fred Ehrsam and ex-Sequoia partner Matt Huang, Paradigm ranks among the leading crypto investment firms, overseeing billions […]
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Vitalik Buterin Criticizes Celebrity Crypto Projects — Offers Blueprint for Respectable Ventures
Ethereum co-founder Vitalik Buterin has expressed his dissatisfaction with the current wave of celebrity crypto projects, emphasizing their lack of meaningful societal contributions. He highlighted projects like Stoner Cats, which actually fund real initiatives, as more commendable. Buterin also detailed the criteria that celebrity crypto projects must meet to gain his respect. Vitalik Buterin Critiques […]
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Research Firm Projects Ethereum Explosion To $15,000 With ETF Inflows
Michael Nadeau, founder of The DeFi Report, has published a deep dive into the implications of the approval of spot Ethereum (ETH) Exchange-Traded Funds (ETFs) on the cryptocurrency’s price trajectory. This analysis follows on the heels of a significant regulatory nod from the US Securities and Exchange Commission (SEC), which approved the 19b-4 applications for eight leading financial entities — Grayscale, Bitwise, BlackRock, VanEck, Ark 21Shares, Invesco, Fidelity, and Franklin.
These approvals, granted under a collective omnibus order on May 23, set the stage for the final steps, which involve awaiting S-1 registrations’ sign-offs before these spot ETFs can start trading.
Why Ethereum Could Skyrocket To ,000
The report draws upon projections by ETF experts at Bloomberg, such as James Seyffart and Eric Balchunas, suggesting that the inflows into Ethereum ETFs could range between 10-20% of those experienced by Bitcoin ETFs. “The logic behind these projections rests on a few key observations—currently, there is less institutional interest in ETH, and it is inherently more complex than BTC. Also, the ETH futures ETF volume is considerably less than BTC’s, ranging from 10-20%, and ETH spot trading volumes are roughly half of BTC’s,” Nadeau explains.
He added that “ETH is more difficult to understand than BTC. ETH futures ETF volume is less than BTC (10-20%). ETH spot trading volumes are less than BTC (about 50%). ETH is about 1/3 of BTC’s market cap.”
However, according to the researcher, the dynamics of Ethereum offer a unique perspective when compared to Bitcoin. “Ethereum validators do not incur the substantial operating expenses that Bitcoin miners do, which mitigates the structural sell pressure on the asset,” Nadeau states. This difference is critical in understanding the supply-side dynamics of Ethereum compared to Bitcoin.
Nadeau also delves into the current status of Ethereum on-chain activities. A substantial portion of Ethereum, approximately 38%, is effectively ‘soft locked’ across various mechanisms like staking contracts and DeFi applications. This scenario, as Nadeau points out, “helps reduce the available circulating supply, contributing to a decrease in ETH balances on exchanges to levels not seen since 2016—currently, this stands at less than 11% of the circulating supply.”
The concept of reflexivity in Ethereum’s market behavior also receives significant attention in Nadeau’s report. “ETH is more reflexive than BTC. This reflexivity could be expressed with price action leading onchain activity, which leads to more ETH burned, which can further drive narratives, more price action, more onchain activity, and more ETH burned,” Nadeau elaborates, suggesting a cyclic effect that could significantly amplify Ethereum’s market presence and valuation.
Exploring potential market scenarios, Nadeau questions the extent of rebalancing that might occur from spot Bitcoin ETF holders towards Ethereum, the attractiveness of a 50/50 BTC and ETH allocation, and the potential shift of institutional focus towards Ethereum. He hypothesizes, “If momentum hits ETH, will we see the ‘reflexivity flywheel’ kick into gear? How many institutions are on the sideline right now, having missed BTC? Will they go all in on ETH?”
In concluding his analysis, Nadeau presents a valuation framework that anticipates the cryptocurrency market reaching a trillion market cap. He states, “Given our fundamental views on ETH, we think it’s more likely that ETH will outperform Bloomberg’s projections of 10-20% of BTC’s net inflows. Under this scenario” and projects that “ETH could command a market cap at cycle peak of .8 trillion, which would price ETH at approximately ,984 (3.9x), assuming no change in supply.” He continues, “For reference, if Bitcoin reaches a trillion market cap, that would price BTC at 2,000 (2.8x)” at cycle peak.
At press time, ETH was trading at ,823, still around 29 % away from its 2021 all-time high.
Ripple Unveils Brazil Fund for Supporting Local XRP Ledger Projects
Ripple, the cryptocurrency services and payments company, has recently unveiled a local fund to support Brazil-based projects using XRP Ledger, the XRP asset blockchain. Julia Heitner, Program Manager of the XRPL Grants program, stated that Brazil was the first country where this strategy would be implemented, given the nation’s openness to blockchain initiatives. Ripple Launches […]
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62 Crypto Projects Raise $474M in 20 Days, Led by Sophon and Securitize
According to the latest data, 62 blockchain or cryptocurrency projects have collectively raised 4 million over the past 20 days of May. Leading the charge, the entertainment-focused blockchain project Sophon garnered million in a node sale, with Securitize following closely, raising million. May Sees 4M Invested in Blockchain Startups Since the start of […]
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2 Bitcoin L2 Projects Secure Investments to Enhance Bitcoin’s Defi Capabilities
On Tuesday, two Bitcoin-centric layer two (L2) initiatives successfully secured funding from strategic investors. Botanix Labs, a startup focused on developing a decentralized Turing-complete L2 EVM (Ethereum Virtual Machine), garnered .5 million. Meanwhile, the Bitcoin L2 ZKM attracted million during a pre-seed investment phase. Bitcoin L2 Projects Gain Momentum With New Financing Rounds Throughout […]
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