It's 2021 all over again as shares of video retailer GameStop (GME) soared Thursday after influential retail trader Keith Gill, better known under his RoaringKitty or DeepFuckingValue aliases, provided an update on his massive bet on the embattled stock.

According to a screenshot posted on Reddit, Gill's stock and options position is now worth some $586 million combined and announced a YouTube livestream for Friday. GameStop shares closed Thursday's session 47% higher.

Roaring Kitty, DeepFuckingValue has updated his GameStop, $GME position.He is worth now over $586 MILLION, with a 219% gain so far. pic.twitter.com/OM7nMayCvZ

— unusual_whales (@unusual_whales) June 6, 2024

The action rippled through the digital asset market, too. Solana-based meme token GME, which was inspired by GameStop but has no affiliation with the company, surged more than 80% over the past 24 hours, CoinGecko data shows, despite the broader crypto market pulling back. The micro-cap AMC token, which shares the name of the troubled movie theater chain but similarly has no affiliation, also jumped 83%.

Gill, who rose to fame during the GameStop short squeeze in the pandemic years, sparked a frenzy for memecoins last month when he returned to social media after three years of silence. Since then, the GME token is up over 3,000% since mid-May and surpassed the $120 million market capitalization.

Read more: GameStop Stock, Meme Tokens Surge as User ‘DeepFu*kingValue’ Returns to Reddit

Saudi Arabia’s central bank has joined Project mBridge – a cross-border experiment with central bank digital currencies (CBDCs) for international trade – as a full participant, the Switzerland-based Bank for International Settlements (BIS) announced Wednesday.

Project mBridge was launched in 2021 as a collaboration between the BIS’ innovation arm and the central banks of China, Hong Kong, Thailand and the United Arab Emirates (UAE) to test the viability of CBDCs for instantaneous cross-border trade and other payments using the project’s blockchain, the mBridge Ledger.

Read more: A CBDC Alternative to SWIFT?

BIS also announced Wednesday that Project mBridge has, after three years, reached the minimum viable product (MVP) stage and has requested private sector financial firms to “propose new solutions and use cases that help develop the platform and showcase all its potential.”

In addition to mBridge’s six full participants, 27 other official entities – including the International Monetary Fund (IMF), the World Bank and the central banks of countries including Norway, South Korea and Turkey – have signed on as observers to the project, giving them access to a “sandbox” for experimentation with the technology.

Major global financial institutions, including Goldman Sachs, HSBC and China’s six biggest state-owned banks, are also working on the project.

Bitcoin spot selling on exchanges weighed on prices with a built up of short derivatives positions around the $72,000 level, one observer noted.

Soft U.S. economic data, rate cuts could foreshadow dovish a Fed meeting next week.

Bitcoin {{BTC}} is increasingly compressed in a narrow range as the latest effort to rally past $72,000 stalled Thursday.

BTC rallied to $71,700 earlier during the day following the European Central Bank (ECB)'s rate cut, but quickly tumbled nearly dipping below $70,000 before bouncing to $70,600 at press time, down about 1% over the past 24 hours, CoinDesk's Bitcoin index data shows.

Well-followed market analyst Skew noted concerted spot selling activity on crypto exchanges Binance and Coinbase, and a simultaneous built-up of short perpetual futures positions on derivatives marketplaces, weighing on prices.

CoinGlass data shows a significant leverage built-up around the $70,000 and $72,000 price area that could be liquidated in case of a breakout from the narrow trading range in either direction.

The broader crypto market also experienced a pullback, with the CoinDesk 20 Index down 1% over the past 24 hours. Decentralized exchange Uniswap's token {{UNI}}, oracle network Chainlink's LINK and layer-1 blockchain Near's NEAR declined 3%-5% in the same period.

Read more: Bitcoin Mining Stocks Soar Amid Takeover Frenzy

Cosmos-based blockchain Injective's native token (INJ) defied the broader trend, gaining 5% following the project's tokenomics update that aims to make the asset more deflationary, reducing supply via token burns.

Despite bitcoin's struggle to get past the $72,000 level, analysts call for an imminent break upwards to new record highs as macro conditions are turning in favor of risk assets.

Central banks in the developed economies have started easing monetary policy, with the ECB and the Danish central bank both cutting benchmark rates by 25 basis today being the latest examples. Bank of Canada lowered rates earlier this week and its Swiss counterpart cut in March.

The big question going forward is if the U.S. Federal Reserve might join the rate cutting trend, and while some members of that central bank have suggested any monetary easing could be a 2025 story, recent data has shown softening in both inflation and economic growth. Tomorrow will bring the government's May employment report and a weak read could boost the odds of an imminent Fed rate cut.

And coming later this month will be the latest inflation data. "The CPI [Consumer Price Index] release next week might potentially be the trigger for a new all-time high for BTC," QCP said in a market update. "There may also be added momentum to the rally as the market prices in rate cuts."

Standard Charter's forex and digital assets research head Geoffrey Kendrick reiterated his $150,000 price target for BTC by year-end in a Thursday report, and noted the possibility of a breakout to new all-time highs in the next few days. "If tomorrow’s payrolls data are friendly I would expect a fresh all-time-high to be reached over the weekend,” he wrote.

The U.S. has charged three individuals in connection with the Evolved Apes NFT scam from 2021.

The NFT project promised a video game, but its website vanished shortly after it finished its fundraise.

The United States Attorney's Office for the Southern District of New York announced today that it has charged three in connection with a non-fungible (NFT) token rugpull from 2021 known as Evolved Apes.

Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are charged with wire fraud and money laundering, according to a release from the SDNY's office.

Evolved Apes was a collection of 10,000 unique NFTs, which promised a videogame that never materialized, as the anonymous developer Evil Ape vanished a week after launch, siphoning 798 ether ($3 million at today's price, $2.7 million at the current time) from the project's funds.

"The defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame," U.S. Attorney Damian Williams said in a statement. "They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal."

In crypto parlance this type of maneuver is known as a rug pull, a type of exit scam in which developers raise funds from investors through the sale of tokens or NFTs, then abruptly shut down the project and disappear with the money.

According to De.Fi's Rekt database, over $14.5 billion has been lost to rug pulls since 2011.

The largest rug pull so far has been South African digital assets investment fund Africrypt which absconded with 69,000 bitcoins in 2021, worth nearly $4.8 billion.

New York Attorney General Letitia James has filed suit against two purported crypto companies and their top promoters, a married couple, for allegedly operating two consecutive pyramid schemes that predominantly targeted Haitian immigrants to the U.S.

According to the complaint filed Thursday, the two schemes – AWS Mining and NovaTechFX – preyed on Creole-speaking church-goers via WhatsApp group chats, bilking investors out of more than $1 billion.

The first alleged scheme, an Australian company called AWS Mining, operated from 2017 until its collapse in 2019 and guaranteed investors a 200% return on their investment from crypto mining within 13-15 months. AWS Mining rewarded its promoters – including a Panama-based married couple originally from Florida, Cynthia and Eddy Petion – by giving them a 10% cut of the money invested by the new investors they recruited to the alleged scheme, along with bonuses and ceremonial titles.

The Petions were two of AWS Mining’s top promoters – each recruiting at least 200,000 investors to their “downline” – earning them both the ceremonial title of “President,” the suit alleged. After AWS Mining went bust in April 2019, the couple decided to start a new company together, NovaTechFX, with Cynthia serving as CEO and Eddy as COO. NovaTech claimed to be a crypto and foreign exchange trading platform that advertised up to 4% returns per week.

For their new company, the Petions allegedly recruited former promoters from AWS Mining – including Martin Zizi, James Corbett and Frantz Ciceron, who are also named as defendants in James’ suit – and, like AWS Mining, paid them a percentage of what the investors they recruited deposited in the platform.

Between August 2019 and April 2023, NovaTech’s investors deposited over $1 billion in the scheme, according to the complaint. In June 2022, shortly before the alleged scheme began to draw the attention of state securities regulators (who subsequently sent cease-and-desist letters to the company for fraud and securities violations) the Petions secretly sold their house in Florida and moved to Panama, James’ suit said.

Cynthia also advised her promoters to flee the U.S: “Leave the country,” Petion allegedly told Zizi. “They can’t serve you if they can’t find you lol.”

By December of 2022, the month after the spectacular collapse of crypto exchange FTX, many of NovaTech’s investors were requesting to withdraw their funds from the platform. In February 2023, the company halted withdrawals, and in May it shut down, failing to return “tens of thousands” of investors’ deposits and leaving them with “hundreds of millions of dollars in losses.”

Affinity fraud

According to the suit, the Petions and their employees largely preyed on Haitian immigrants in religious communities.

Cynthia Petion began calling herself “the Reverend CEO” after founding NovaTech, and claimed that God sent her a “vision” of the company while she was brushing her teeth, and called Jesus the “best affiliate market in the world”. The Petions and their promoters regularly hosted prayer groups where they advertised the alleged scheme, according to the complaint.

Zizi and the other promoters upheld Cynthia’s status as a visionary by likening her to American hero and abolitionist Harriet Tubman, telling investors that she had “helped thousands to see the light… and through her vision has created ways within the wilderness.”

NovaTech’s founders and promoters breathlessly marketed the scheme to investors – many of whom were experiencing financial hardship – as a path to becoming “the 1st millionaire in your family,” a way to “leave a legacy” and to gain “freedom from the plantation,” according to the complaint.

In private, however, NovaTech’s founders derided their investors as “a cult.” Cynthia Petion allegedly called herself a “Zookeeper” in a chat with one promoter, adding that her investors “join and follow mindlessly…they don’t think. They just agree with everything you say.”

Court records show the Petions previously filed for bankruptcy due to consumer debt in 2011.

The alleged affinity fraud committed by the Petions and the other NovaTech promoters closely mirrors that of EminiFX founder Eddy Alexandre, who also preyed on Haitian religious communities in a crypto pyramid scheme. In 2022, Alexandre was arrested and charged with fraud for stealing $240 million from investors. He pleaded guilty to commodities fraud in 2023 and was sentenced to 9 years in prison.

Lawsuits

James has accused AWS Mining, NovaTech, the Petions and the other named promoters of violating the Martin Act, New York’s strict anti-fraud law, as well as repeated and persistent fraud and repeated and persistent illegality. The suit is seeking damages and restitution for the victims, as well as permanent enjoinments preventing the Defendants from ever participating in another investment scheme.

The NYAG’s suit follows a class action lawsuit filed against NovaTech and Cynthia Petion earlier this year.

There are not currently any criminal charges against the Petions or the other promoters.

Bitcoin mining stocks outperformed other cryptocurrency-linked stocks Thursday after multiple industry takeover offers drew market attention to the question of who could be the next target.

Shares of miners such as Stronghold (SDIG), Core Scientific and TeraWulf (WULF) surged more than 15%. Gains in Iris Energy (IREN), Mawson (MIGI), Cathedra (CBIT) and Argo Blockchain exceeded 10%.

Most recently, one of the largest miners, Riot Platforms (RIOT), started a hostile takeover attempt of peer Bitfarms (BITF), while artificial intelligence firm CoreWeave proposed buying another mega-cap miner, CoreScientific (CORZ).

Although Bitfarms and CoreScientific both rejected the offers, the takeover attempts have reminded investors that the industry may be primed for mergers.

Read more: Bitcoin Halving Is Poised to Unleash Darwinism on Miners

B. Riley analyst Lucas Pipes said that power contracts and lower valuations could be the catalyst that starts the consolidation phase for miners.

"We believe that the bullish outlook on the power market could catalyze increased M&A activity this year, especially as wide discrepancies in valuation remain," he wrote in a report.

JPMorgan analysts agreed with Pipes' sentiment, noting that AI and cloud computing firms seeking to diversify their power sources could come after bitcoin miners. The bank also said that as some miners are looking to exit this market following the Bitcoin halving – an event that cut mining rewards, pressuring weaker firms – M&A activity is likely to accelerate.

Both Wall Street firms said larger miners such as Riot and Marathon Digital (MARA) are likely in the best position to lead this consolidation wave.

Cryptocurrency exchange Kraken is said to be in talks for pre-IPO funding, Bloomberg reported, citing people familiar with the firm’s plans.

Kraken is looking to raise more than $100 million, which may be completed by the end of this year, Bloomberg said.

There have been rumblings about Kraken’s aspirations to go public for the last few years. The firm has been busy dealing with accusations brought last year by the U.S. Securities and Exchange Commission (SEC) that it operated an unregistered platform and improperly mixed customer funds.

A spokeswoman declined to comment on the raise but said, "We are always exploring strategic paths towards Kraken's Mission: accelerating the global adoption of crypto. We remain fully focused on investing in this goal."

Users of Coinbase's mobile crypto wallet can now get automated alerts of what's happening on-chain via messaging service Notifi.

Perpetuals exchange GMX is the service's first client, according to a press release. Customers of the Arbitrum- and Avalanche-based platform will receive notifications about pending liquidations and governance updates, and can also design their own automated flags.

"If you're not constantly monitoring what's happening on-chain it's impossible to keep up," Notifi CEO Paul Kim said in an interview.

The service marks an expansion of Coinbase's messaging rails built on XMTP. Since last July the XMTP protocol has allowed Coinbase wallet users to send messages between themselves. Notifi is also utilizing the XMTP protocol, the press release said.

Today, Marcin Kaźmierczak from Redstong Oracles explains how Bitcoin layer-2s aim to enhance the protocol's performance while preserving its integrity by deploying enhancements on a separate blockchain.

Many advisors attended Consensus 2024 in Austin, Texas, last week. I highlight the key themes that emerged from the event in Ask an Expert. I’m looking forward to next year's conference, which will be held in Toronto, Canada.

–S.M.

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

Bitcoin Layer 2s

Bitcoin (BTC) has revolutionized the financial world with its decentralized, secure and transparent nature. Although it was the first cryptocurrency, Ethereum (ETH) pioneered the development of the entire decentralized finance, or DeFi, ecosystem. Now, Bitcoin is following suit, ushering in an era of development within its own ecosystem. As Bitcoin's popularity surged, so did the challenges related to its scalability and transaction speed. To address these issues, the Bitcoin community has developed various layer-2 blockchains, or L2s, which enhance the network's efficiency and functionality without altering Bitcoin's software itself. This article delves into the concept of Bitcoin layer 2s, exploring their classifications, benefits and expected advancements in this sector. By understanding these innovative protocols, users can comprehend how Bitcoin continues to evolve and maintain its relevance in an increasingly competitive digital landscape. In the end, the bitcoin cryptocurrency is the digital gold and the whole economy is being created around it, analogous to gold in the physical world.

Q: What are Bitcoin layer 2s, and how are they classified?

A: They are built on top of the Bitcoin blockchain. Transactions can be offloaded to them, addressing the Bitcoin blockchain's performance issues and limitations and adding programmability functionalities. There are three types of Bitcoin layer 2s:

1. State Channels

Function: Create external channels for transactions, which are recorded off-chain and updated as a single transaction on the main network at the end. You can compare it to a dedicated mailing route between houses that optimizes the cost of sending letters between them.

Example: Bitcoin Lightning Network.

2. Sidechains

Function: Semi-autonomous networks that maintain communication with the main network and can define their architecture. Imagine an optimized mailing system for a city that regularly syncs with the central office.

Examples: Stacks network, Rootstock Infrastructure Framework (RIF).

3. Rollups

Function: Serve as an execution layer that batches transactions and submits them to the main network’s consensus layer for final settlement. Imagine a whole state mailing system that updates its delivery status with the central body every 10 minutes. In the Ethereum ecosystem, examples include Arbitrum, Optimism, zkSync and Starknet.

Types: Optimistic Rollups and ZK Rollups.

Example: Merlin Network, Build On Bitcoiin, B^2, Bitlayer.

Q: What problems do Bitcoin L2s fix, and why do they matter?

A: Bitcoin layer 2s address key issues to enhance the network's efficiency and functionality. First, they improve scalability by reducing congestion. As a result, the transaction fees are lower and their execution is faster, making Bitcoin more suitable for everyday use. L2s also increase the utility of bitcoin holdings and introduce complex smart contract functionality, enabling DeFi, NFTs and other Web3 applications. This enhanced programmability helps Bitcoin maintain market relevance. They expand Bitcoin's use cases and ensure smoother, more affordable transactions. Ultimately, Bitcoin L2s matter for users, as they allow new functionalities for BTC holders, such as usage of lending platforms, yield solutions or decentralized exchanges (DEXs). They serve as an alternative to Ethereum-based solutions for actors who hold an important part of their bitcoin portfolio.

Q: A comparison of existing Bitcoin L2s and what to expect in that sector this year.

A: Comparing Bitcoin layer 2s involves evaluating their technical classification. One should identify whether it is a state channel, rollup or sidechain. Additionally, metrics such as transaction fees, security guarantees and available decentralized applications, or dApps, on top of a network are crucial. The table below represents major Bitcoin layer 2s as of June 2024.

* BounceBit is not a layer 2 but a layer 1 proof-of-stake chain with BTC as the main currency.

** Babylon is a BTC staking platform, implementing a novel approach allowing BTC staking.

Looking ahead, with no doubt, we can expect further expansion and the emergence of new Bitcoin layer 2s. Because of its scarcity and the fact that only about 21 million bitcoin will ever exist, it fundamentally makes sense to expand the programmability and functionalities of digital gold. The upcoming evolvement will include lowering transaction costs on the above L2s, adding further compatibility layers and implementing well-known primitives on top of Ethereum such as automation dApps or support of popular wallets.

Bitcoin has neither a floor nor ceiling in its value and cumulative market capitalization that sits today near $1.4 trillion. In its current form, the Bitcoin blockchain plays a foundational layer on top of which innovation can flourish. and today, that is materialized with layer 2s. Looking at the success of Arbitrum, Optimism, Base and zkSync, one can argue that we will have at least a few thriving ecosystems in that category. Therefore, it is vital to follow its evolvement and embrace the use of BTC as one of the fastest-growing narratives in 2024.

- Marcin Kaźmierczak, co-founder & COO, RedStone Oracles

Ask an Expert

Consensus Recap: The energy was positive at Consensus 2024 last week in Austin, Texas. Approximately 15,000 people attended, coming from a wide range of industries: service providers, custodians, crypto exchanges, ETF issuers, RIAs and advisors – all looking to connect. There was a lot of curiosity and engagement.

Q. What were the top themes that emerged?

EDUCATION was a top theme for the advisors we spoke with; the top theme was that it’s time to start learning about cryptocurrencies as an asset class.

Advisors also indicate the need to understand the RISK PROFILES of the different assets and how the price volatility could impact portfolios.

Advisors are curious about TOKENIZATION. They want to learn more about the problems it solves and understand its benefits to their clients over traditional investment vehicles.

Finally, understanding how COMPLIANCE will navigate digital assets and ETFs is crucial, especially as the regulatory environments continue to change and evolve.

Through this newsletter, we will continue to focus on these themes and provide deeper coverage of these topics as your source of information for advisors in the space.

Keep Reading

Morningstar explains the process of ETH ETF approvals in the U.S.

President Joe Biden has vetoed the congressional resolution to overturn the SEC's current approach to banks and crypto.

Bitcoin and ether Exchange Traded Notes became available for trading on the London Stock Exchange on May 28th.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Cathie Wood's Ark was the first company to seek permission to create a spot ether exchange-traded fund (ETF) in September, a pioneer who blazed the trail before a wave of other high-profile applicants.

And then, within the past week, it bowed out without explaining why.

Chalk it up to the intense battle to lure customers with low fees for crypto ETFs, according to experts.

During a fireside chat at CoinDesk's Consensus conference in Austin, Texas, last week, Wood said ARK's spot bitcoin ETF, launched earlier this year, wasn’t making the firm any money because it charges investors such a low fee: 0.21%. While that's comparable to what other bitcoin ETF issuers charge, it's significantly lower than what non-crypto ETFs typically charge.

“Perhaps this is a simple business decision,” said Nate Geraci, president of the ETF Store. “If Ark 21Shares Bitcoin ETF (ARKB) can eclipse $3.5 billion in less than five months and Ark can’t make any money, that’s obviously an issue.”

ETF issuers charge investors a fee to compensate for managing the fund. Many investors seek to minimize that fee since it cuts into returns.

In the race to launch a spot bitcoin ETF, Grayscale set its fee significantly higher than its competitors, at 1.5%, which appears to be one of the main reasons why investors have pulled billions of dollars out of the fund and the fund lost its early lead, in terms of assets, to BlackRock.

“I don’t think anyone truly expected the fee war to get that aggressive before we even saw launches,” said James Seyffart, ETF analyst at Bloomberg Intelligence.

Seyffart also believes that Ark made the decision based on the low fees. “It’s possible that the partnership made a ton of sense, particularly with the demand for bitcoin ETFs,” he said. “But after the fees got so low right off the bat, there might simply not have been enough money from fees to go around for both firms, particularly on an Ethereum ETF if they are expecting less demand versus bitcoin ETFs.”

Only one wannabe issuer, Franklin Templeton, has revealed the fee for its fund so far, which it set at 0.19% according to a filing, the same amount it charges for the Franklin Bitcoin ETF.

Despite the low fee structure of the ETFs, Ark’s departure from the race came as a shock, given the asset manager’s strong footing in the industry and its offering of multiple other ether-related funds.

“This is a surprising move from my perspective,” said Geraci. “From a longer-term branding perspective, I’m surprised Ark wouldn’t find value in being involved in the spot ether ETF category. Ark has been much more forward-thinking around crypto than many of their competitors, so it’s odd to see them sit this one out.”

A representative for Ark Invest could not be reached for comment.

The fund would target institutional investors, according to the report.

The asset manager already has a spot bitcoin ETF and has applied for a similar ether offering.

Franklin Templeton, the $1.6 trillion U.S. Silicon Valley asset manager, is considering a new crypto-focused investment fund, The Information reported Thursday citing people with direct knowledge of the effort.

The investment vehicle would be structured as a private fund targeting institutional investors and invest in cryptocurrencies beyond bitcoin {{BTC}} and ether {{ETH}}. The asset manager is also thinking about passing staking rewards on to the fund's investors, according to the report.

Franklin Templeton is one of several traditional finance heavyweights venturing into the digital asset industry to offer crypto and tokenized asset investments to clients.

It started a spot bitcoin exchange-traded fund (ETF) in the U.S. earlier this year and applied to list a similar offering for the second-largest crypto asset, ether. It also opened a tokenized U.S. government bond fund using the Stellar {{XLM}} network in 2021, years before BlackRock did.

Read more: Franklin Templeton's Jenny Johnson on Bitcoin ETFs, RWA Tokenization and Blockchain's Potential for TradFi

Rootstock is one of the most established projects aiming to introduce DeFi features to the Bitcoin network.

The ecosystem uses the RBTC token, which is pegged 1:1 with BTC.

The integration comes around six months after Uniswap was deployed on the Bitcoin sidechain.

Decentralized exchange SushiSwap is now live on Bitcoin {{BTC}} sidechain Rootstock, according to an announcement shared with CoinDesk on Thursday.

Launching in 2018, Rootstock is one of the most established projects aiming to introduce decentralized finance (DeFi) features to the Bitcoin network that are more commonly associated with the likes of Ethereum and BNB Chain.

It bills itself as the first Bitcoin sidechain compatible Ethereum Virtual Machine (EVM). An EVM is a smart contract-executing software that powers the Ethereum protocol, comparable to an operating system on a computer.

Rootstock's goal is to combine the security of the Bitcoin network with the smart contract capabilities of Ethereum to provide a platform for building and deploying decentralized applications (dApps).

The ecosystem uses the RBTC token, which is pegged 1:1 with BTC.

The integration comes around six months after Uniswap was deployed on the Bitcoin sidechain. SushiSwap began life as a fork to Uniswap.

Rootstock's bridged total value locked (TVL) sits at just over $450 million, according to data by DeFi Llama.

Since the start of 2023, there has been an acceleration in the expansion of features to the Bitcoin network that have historically been the domain of Ethereum and others.

The starting point was the Ordinals protocol, which allowed a version of NFTs to be minted and store on Bitcoin, from which there have been numerous initiatives to make progress introducing smart contracts to the world's largest blockchain.

Read More: A More Than $1T Bitcoin DeFi Opportunity

The Sandbox will use the capital to enhance features and develop a decentralized metaverse for mobile devices.

The valuation has sunk from $4 billion to $1 billion since 2022.

SAND rose by 4.5% after the funding round was announced.

Metaverse platform The Sandbox has raised $20 million at a $1 billion valuation as it looks to enhance its user-generated multiplayer gaming platform.

Kingsway Capital and Animoca Brands led the funding round, which featured investment from LG Tech Ventures and True Global Ventures, according to a press release.

In 2022, The Sandbox looked to raise $400 million at a $4 billion valuation.

The Sandbox’s native token SAND rose 4.5% after the funding round was announced, its market cap is now $1.1 billion, per CoinDesk data.

A portion of the capital will be used to develop a decentralized metaverse for mobile devices, which is expected to launch in 2025. The Sandbox will also update its Game Maker and 3D editor tools.

“McKinsey estimated that by 2030 the metaverse could add $5 trillion to the global economy," Yat Siu, co-founder of Animoca Brands, said. "Today, games like Minecraft and Roblox are some of the most popular titles in the world, but they do not provide their users with digital property rights. The Sandbox represents the evolution of UGC games for the age of digital ownership.”

The Sandbox has 5.7 million user accounts connected to crypto wallets, and more than 1,000 user-generated experiences have been created since the Alpha version went live in November 2023.

Crypto regulatory initiatives have stepped up in the U.S. in recent months, JPMorgan said.

The stablecoin bill is most likely to be approved before the presidential election, and is a threat to tether’s dominance if passed, according to the bank.

Issuance of a central bank digital currency is less likely after the House passed a bill last month banning the Federal Reserve from doing so, the bank said.

U.S. crypto regulations seem to be moving in a direction that opposes the launch of a central bank digital currency, is against local banks embracing crypto and is averse to non-compliant stablecoins, JPMorgan (JPM) said in a research report.

The bank notes that regulatory initiatives have stepped up in the U.S. in recent months, raising questions about the direction of crypto regulation ahead of the presidential election later this year.

Emerging regulatory initiatives appear to be “against a Fed coin, against U.S. banks engaging with crypto, against non-compliant stablecoins such as tether {{USDT}} and against a blanket classification of all tokens outside bitcoin {{BTC}} and ether {{ETH}} as securities,” analysts led by Nikolaos Panigirtzoglou wrote in a Wednesday report.

The Clarity for Payment Stablecoins Act has a higher chance of being approved before the election in November than three other initiatives, the report said. If passed, the bill will bolster U.S. compliant stablecoins, but would threaten the dominance of non-compliant stablecoins such as tether.

A stablecoin is a type of cryptocurrency that’s usually pegged to the U.S. dollar, though some other currencies and assets, such as gold, are also used.

The Financial Innovation and Technology for the 21st Century Act (FIT21), which was passed by the House of Representatives last month, still needs to be approved by the Senate and, ultimately, the president. That is unlikely to happen before the election, the bank said.

JPMorgan notes that Congress passed a resolution overturning the SAB 121 accounting rule, which made it harder for banks to custody crypto assets, but the resolution was vetoed by the president Joe Biden.

The Central Bank Digital Currency (CBDC) Anti-Surveillance State Act is an attempt to block a U.S. CBDC and prevents Federal Reserve banks from offering certain products to consumers and from using a central bank digital currency for monetary policy, the report added. The House passed the bill banning the Federal Reserve from issuing a CBDC last month, however, its prospects in the Senate are unclear.

Read more: Robinhood Wells Notice Shouldn’t Deter Eventual Approval of an Ether Spot ETF: JPMorgan

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Latest Prices

Top Stories

Bitcoin fluctuated around $71,000 throughout the Asian and European mornings, following its rally earlier this week. BTC's price is little changed over 24 hours, trading in a range of $70,900-$71,100 for much of the morning in Europe, an increase of around 0.1%. Elsewhere, the broader digital asset market, as measured by the CoinDesk 20 Index (CD20) is similarly unmoved, up about 0.25% at the time of writing. Among the crypto majors, only ether is showing a change in excess of 1%. ETH is priced at just under $3,850, a rise of around 1.25% in the last 24 hours.

Robinhood agreed to buy crypto exchange Bitstamp in a $200 million all-cash deal. Bitstamp, founded in 2011, is one of the largest crypto exchanges in Europe, and will therefore provide a boon to Robinhood's global expansion plans. “The acquisition of Bitstamp is a major step in growing our crypto business," said Johann Kerbrat, general manager of Robinhood Crypto " Through this strategic combination, we are better positioned to expand our footprint outside of the U.S. and welcome institutional customers to Robinhood.” HOOD shares rose 2.5% to $22.15 in pre-market trading following the announcement of the acquisition.

Van Eck set a 2030 target of $22,000 for ether, the native token of the Ethereum network. The firm, one of the prospective providers of a spot ether ETF in the U.S., wrote in a recent report that ether will soar to that level thanks to Ethereum's disruptive power and cash flow generated for token holders as well as the anticipated approval of the ETFs. VanEck wrote that the fuel driving the rally is that Ethereum-based technology can offer lower costs, increased efficiency and greater transparency. This shift could threaten to transfer significant market share from traditional financial and tech institutions, which cumulatively have a $15 trillion total available market, to blockchain-based services.

Chart of the Day

The chart shows the correlation between BTC's price and the chances of a Donald Trump victory in the U.S. presidential election in November, according to Standard Chartered.

Trump is regarded as the more bitcoin-friendly candidate, given Biden's vetoing of Congress' efforts to repeal SAB 121.

Standard Chartered's head of crypto research, Geoff Kendrick, is predicting BTC to reach $100,000 by the election and $150,000 by year-end in the event of a Trump victory.

Source - Standard Chartered

- Jamie Crawley

Trending Posts

Crypto Remains Sidelined as EU Election Kicks Off

Meme Coin Institutional Holdings Surged Since January, Led by DOGE, SHIB, PEPE

Florida Man Pleads Guilty to Wire Fraud Conspiracy Tied to Forcount Crypto Ponzi

The Desiweminer team will join Bitdeer's ASIC design team in Singapore, and products featuring the integrated technologies of the two entities are slated for immediate release.

Bitdeer received an investment worth $150 million from stablecoin company Tether at the end of last month.

Bitcoin {{BTC}} miner Bitdeer has agreed to acquire Desiweminer, a designer of chips for ASIC mining machines, in an all-stock transaction worth $140 million.

Bitdeer agreed to acquire all outstanding shares in Desiweminer for a consideration of 20 million Class A ordinary BTDR shares on June 3, according to an announcement on Thursday.

The acquisition is subject to customary closing conditions.

The Desiweminer team will join Bitdeer’s ASIC design team in Singapore, and products featuring the integrated technologies of the two entities are slated for immediate release.

Bitdeer received an investment worth $150 million from stablecoin company Tether at the end of last month.

BTDR shares showed little initial reaction to the announcement, rising 0.54% to $7.05 in pre-market trading.

Read More: Bitcoin Miner Bitdeer Is 'Differentiated' From Peers, Shares Are Cheap: Benchmark

MasterCard is understood to be resuming services for payments and deposits in crypto on Binance.

Mastercard withdrawal services have not been resumed as yet but this is expected to happen at a later date.

The Binance-branded Visa card has also resumed functionality on the exchange.

Binance can once again allow Mastercard users to purchase cryptocurrencies on the world’s largest exchange, after the card giant switched off that capability in August of 2023.

As well as allowing payments using Mastercard, Binance-branded Visa card has also resumed functionality on the exchange. Withdrawal services using Mastercard will be resumed at a later date, Binance said.

Last year’s decision by the card networks to part ways with Binance happened around the time the exchange was grappling with legal challenges in the U.S., including multiple charges by the U.S. Securities and Exchange Commission (SEC) and U.S. Commodity Futures Trading Commission (CFTC).

“Following an extensive review of the rigorous controls and processes that Binance put into place, Mastercard made the decision to allow Binance-related purchases on its network,” a Binance spokesperson said via email. “We look forward to adding support for further products, such as withdrawals, at a later date.”

Both Visa and Mastercard are enthusiastic about crypto these days, delivering into the Web3 and self-custody wallet space.

Core Scientific (CORZ) has rejected the $1 billion buyout offer from cloud computing firm CoreWeave, the firm said in a press release on Thursday.

Core Scientific’s board believes that CoreWeave’s offer to buy the bitcoin {{BTC}} miner for $5.75 per share significantly undervalues the firm.

The cloud computing firm’s made the offer to buy the miner on Tuesday, the same day the two firms signed a 200 MW deal to host CoreWeave's high-performance compute (HPC) services.

Shares of Core Scientific had jumped nearly 40% on Tuesday after the news of the two deals. At the time of writing, Core Scientific was trading flat in pre-market trading at $7.12.

Bitcoin’s value could potentially reach $150,000 by the end of 2024.

This is based on the assumption that Donald Trump’s U.S. election victory would be a positive boost for the crypto industry.

Bitcoin {{BTC}} remains on track to touch the aspirational $150,000 level by the end of this year as spot BTC exchange-traded funds (ETFs) continue to see significant inflows.

“I am sticking with my end-2024 $150K and end-2025 $200K forecasts for BTC,” Standard Chartered’s forex and digital assets research head Geoffrey Kendrick said in a Thursday note shared with CoinDesk. “Before then, if tomorrow’s payrolls data are friendly I would expect a fresh all-time-high to be reached over the weekend.”

“As we approach the U.S. election, I expect $100K to be reached and then $150k by year-end in the case of a Trump victory,” Kendrick added. As of Thursday, crypto traders on Polymarket are betting 56% odds of Trump being in office, compared to 36% for incumbent Joe Biden.

Sentiment for bitcoin and the broader crypto market has risen since May on the listing approval for ether (ETH) ETFs and support for the industry among U.S. political parties.

ETFs crossed $15 billion in net inflows on Tuesday for the first time since going live in January, boosting sentiment among bitcoin traders. Inflow activity has picked up recently after a dismal few weeks from mid-April to early May, a period that saw zero net inflows on some days and even outflows from major ETFs such as BlackRock’s IBIT.

Spot bitcoin ETFs saw over $880 million in inflows on Tuesday, led by Fidelity’s FBTC. This was the best day of inflows since March and the second-highest overall.

Institutional allocations to meme coins have surged over 300% this year, touching a high of almost $300 million in April.

The influx highlights professional investors' growing interest in the sector, according to Bybit.

Dogecoin and shiba inu were favored for their liquidity, with BONK the most popular new meme coin.

Institutional allocations to meme coins have climbed more than 300% this year, hitting an April peak of almost $300 million, according to crypto exchange Bybit.

The influx indicates how the sector is enjoying newfound favor among professional investors, Bybit said in a Wednesday report. Popular picks among institutional investors were dogecoin {{DOGE}} and shiba inu {{SHIB}}, mainly owing to their ample spot-market liquidity. Holdings were tracked exclusively on Bybit and do not include those on other exchanges.

Solana meme token BONK emerged as the most favored of the new meme coins that have come to prominence this year, attracting over $75 million in institutional bets.

Holdings dropped to by almost half to $125 million in May as the institutions took profits.

Stablecoin holdings fell during the period to $1.4 billion from $1.7 billion, while exposure to bitcoin {{BTC}}, ether {{ETH}} and meme coins increased.

As of May 1, DOGE had the largest share of meme coin holdings for both retail and institutional investors. Institutions allocated a larger proportion of funds to DOGE: 36% compared with retail investors' 24.5%.

“This suggests that while both groups view DOGE as a staple asset within the memecoin space, institutions favor it more, perhaps due to its higher liquidity and relative stability,” Bybit said. “Both cohorts also enjoy Ethereum-based memecoins (PEPE) and (SHIB), with retail users holding 20.95% and 14.61% respectively, compared to institutions' 22.23% and 10.39%.”

In recent months, meme tokens of the Ethereum and Solana ecosystem have gained prominence as a way to bet on the growth of a blockchain.