Alex Thorn

Crypto VC rebounded in Q1 with more than 600 deals completed, but capital invested remained historically low and the macro environment continued to pressure fund managers.

The Bitcoin Halving is an important quadrennial event that enacts Bitcoin’s most famous nickname, “digital gold.”

2023 was a monumental year for cryptocurrency, with BTC rising more than 160% and ETH rising 90%, but crypto venture capital investment nonetheless declined significantly from 2022’s banner year. Tightening monetary policy increased the cost of capital and reduced venture allocations across the board and several prominent blowups of venture-backed cryptocurrency industry startups further reduced allocator appetite for exposure. Ultimately, 2023 finished the year with only 1/3 of the crypto VC… Show more

2023 was a monumental year for cryptocurrency, with BTC rising more than 160% and ETH rising 90%, but crypto venture capital investment nonetheless declined significantly from 2022’s banner year. Tightening monetary policy increased the cost of capital and reduced venture allocations across the board and several prominent blowups of venture-backed cryptocurrency industry startups further reduced allocator appetite for exposure. Ultimately, 2023 finished the year with only 1/3 of the crypto VC investment than each of the prior two years across just a little more than half of the deals. However, the crypto industry appears set to surge in 2024 and central banks are poised to ease, the combination of which could lead to renewed interest in crypto venture capital this year. Show less

Crypto VC still hasn’t bottomed. In terms of both deals done and total capital invested, Q3 was the lowest quarter since Q4 2020.

On Friday Aug. 25, the Treasury issued its proposed regulations emanating from the authority granted in the Infrastructure Investment & Jobs Act. The proposed language is quite expansive and would require IRS tax reporting from a wide swath of entities, even including many non-custodial services.

On Thursday, August 17, Bitcoin experienced a major deleveraging event that saw BTCUSD drop more than 10% in a 2-hour period. The downward move awakened BTC out of a low volatility period of historic levels.

Crypto VC continues to slide.

Q1 2023 saw the lowest crypto VC activity in 2 years with $2.4bn invested across 439 deals.

Bitcoin has risen dramatically since the onset of the banking crisis, up more than 45% since the closure of Silicon Valley Bank on March 10. While further gains will be boosted or impaired by macro conditions – with the Federal Reserve set to announce its latest rate decision this week –an examination of performance, on-chain, and supply-side data shows reason for continued optimism for Bitcoin bulls.

Signature Bank director Barney Frank told CNBC Monday that he thinks “part of what happened was that regulators wanted to send a very strong anti-crypto message” and that Signature Bank officials believed they had stabilized on Sunday and that there was "no real objective reason" that Signature had to close and the bank was ready to open “as a going concern.” The flip-flopping here, and the suggestion that Signature was solvent and taken over for political reasons, is extremely troubling. The… Show more

Signature Bank director Barney Frank told CNBC Monday that he thinks “part of what happened was that regulators wanted to send a very strong anti-crypto message” and that Signature Bank officials believed they had stabilized on Sunday and that there was "no real objective reason" that Signature had to close and the bank was ready to open “as a going concern.” The flip-flopping here, and the suggestion that Signature was solvent and taken over for political reasons, is extremely troubling. The U.S. regulatory attack on the cryptocurrency industry continues and stands in stark contrast to the progressive frameworks being introduced around the world.

But beyond the political attack, there’s been a lot of commentary suggesting that cryptocurrency is to blame for the bank crisis of the last 72 hours. For a variety of reasons, we don’t believe this is a fair criticism. While it’s easy to make this association–Silvergate and Signature were mainstay players in the cryptocurrency industry and SVB was the key bank for the venture and private equity complexes–the reality is that the factors leading to the current crisis are more nuanced and diverse. Show less

A new frontier in Bitcoin emerged unexpectedly over the last 2 months. Since December 14, 2022, more than 200,000 inscriptions have been minted on Bitcoin. These digital carvings, etched into the world’s oldest and most secure distributed ledger, are files ranging from images to text, audio, and even applications. Each of these inscriptions can then be tied to an ordinal, a single, unique Satoshi (sat), the smallest unit of BTC. While there are notable differences between inscriptions and NFTs,… Show more

A new frontier in Bitcoin emerged unexpectedly over the last 2 months. Since December 14, 2022, more than 200,000 inscriptions have been minted on Bitcoin. These digital carvings, etched into the world’s oldest and most secure distributed ledger, are files ranging from images to text, audio, and even applications. Each of these inscriptions can then be tied to an ordinal, a single, unique Satoshi (sat), the smallest unit of BTC. While there are notable differences between inscriptions and NFTs, it’s fair to say that a native on-chain ecosystem for NFTs has emerged on Bitcoin in a way that was never before possible, and its usage has been exploding. On Monday, February 27, 2023, the world’s largest issuer of NFTs, Yuga Labs, announced TwelveFold, a new NFT collection issued on Bitcoin. Show less

Venture capitalists invested more than $30bn into crypto and blockchain startups in 2022, nearly matching the $31bn invested in 2021. Most of the investment was made in the first half of the year, with macro and crypto market conditions leading to significant investment drawdowns in Q3 and Q4, with the last quarter seeing the lowest deal count and capital invested in 2 years.

While macroeconomic factors and monetary tightening can cause Bitcoin to trade lower in the near term, for several reasons both technical and fundamental these levels should be considered opportunistic buying opportunities for both medium and long-term Bitcoin investors.

Most people talk about purchasing NFTs as “buying jpegs,” the image files you see online in avatars and marketplaces like OpenSea. But the reality is that the issuers of the NFT collections retain full ownership of those images. We reviewed the licenses for all of the top NFT collections, and in all cases, except one, the issuers offer only a usage license to the NFT purchaser, with varying levels of commercial rights ranging from permissive to highly restrictive. In many cases, issuers are… Show more

Most people talk about purchasing NFTs as “buying jpegs,” the image files you see online in avatars and marketplaces like OpenSea. But the reality is that the issuers of the NFT collections retain full ownership of those images. We reviewed the licenses for all of the top NFT collections, and in all cases, except one, the issuers offer only a usage license to the NFT purchaser, with varying levels of commercial rights ranging from permissive to highly restrictive. In many cases, issuers are less than forthcoming about this point, either encouraging directly or by omission through their marketing content a widely held misconception that “you own the art.” Because of the lack of user ownership, and exacerbated by pervasive misconceptions, the promise that NFTs can usher in a new era in digital ownership and property rights remains far off. Without rectifying this, the vision of Web3 will remain elusive. Show less

On Monday, the U.S. Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) added Ethereum addresses related to mixing protocol Tornado Cash to its list of sanctioned entities, marking the first time that the U.S. government has levied sanctions upon a smart contract application. While the action raises philosophical implications for the battle over privacy online, more immediate effects raise serious questions about the resilience of Ethereum’s decentralized finance… Show more

On Monday, the U.S. Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) added Ethereum addresses related to mixing protocol Tornado Cash to its list of sanctioned entities, marking the first time that the U.S. government has levied sanctions upon a smart contract application. While the action raises philosophical implications for the battle over privacy online, more immediate effects raise serious questions about the resilience of Ethereum’s decentralized finance ecosystem. Show less

Bitcoin fees are at all time lows. How is this possible? What does it mean? This report explains how Bitcoin scaling tech is making transactions more efficient.

Last year, venture capital firms invested more money into startups building in the crypto & blockchain technology sector than all prior years combined. Companies facilitating digital assets trading or building in the Web3 segment raised the most.

The money flowing into venture-backed startups in the space hit all-time highs for the third quarter in a row, even as the total number of deals remained below its Q1 2018 peak.

"Taproot" is a major upgrade for Bitcoin that brings scalability, privacy, and composability enhancements and activated on the Bitcoin network at block height 709,632, which was mined early Sunday morning, November 14, 2021.

From markets to on-chain data, private investment metrics to regulatory developments, the evidence that Bitcoin and the broader cryptocurrency industry is in the midst of a historic growth phase cannot be ignored.

The President's Working Group on Financial Markets, which includes members from the Fed, SEC, CFTC, FDIC, and OCC, issued a long-awaited report on stablecoins that explores risks and makes recommendations.

El Salvador adopted Bitcoin as legal tender alongside the US Dollar. We examine the implications for the country, the region, the markets, and Bitcoin itself.

The bipartisan infrastructure bill appears set to pass the Senate this week with no amendment to the provisions that designate participants in the cryptocurrency ecosystem as “brokers” under IRS reporting rules. A consortium of cryptocurrency advocates had lobbied to ensure that network participants and software developers were explicitly excluded from any reporting requirement. While the failure of the industry-backed amendments is a setback, cryptocurrency advocacy made great strides over the… Show more

The bipartisan infrastructure bill appears set to pass the Senate this week with no amendment to the provisions that designate participants in the cryptocurrency ecosystem as “brokers” under IRS reporting rules. A consortium of cryptocurrency advocates had lobbied to ensure that network participants and software developers were explicitly excluded from any reporting requirement. While the failure of the industry-backed amendments is a setback, cryptocurrency advocacy made great strides over the last 10 days. In this report, we review the timeline of events, breakdown our view on the language in the bill, and discuss the implications, both good and bad. Show less

A bipartisan infrastructure bill making its way through Congress contains broad language that would subject swaths of the cryptocurrency industry to IRS reporting regulations, including entities that would be pragmatically unable to comply. In this flash insight, we cover the story behind the language, explain how it affects the crypto industry, and call for changes.

Q2 2021 saw all-time highs for digital assets like Bitcoin and Ethereum, but also significant corrections. The money flowing into venture-backed startups in the space also hit all-time highs, surpassing the previous all-time highs set in the prior quarter, even as the total number of deals remained below its Q1 2018 peak. The gap between crypto VC valuations and valuations in the broader venture market continued to widen.

Since China's Financial Stability and Development Committee announced a new effort to "crack down on bitcoin mining and trading" on May 21, regulatory action against Chinese bitcoin miners and trading firms has accelerated. We examine the latest moves.

A top Chinese government financial oversight committee signaled that "a crack down on bitcoin mining and trading" was forthcoming. What does this mean for Bitcoin and crypto, both inside and outside China?

In this report, we tell the story of the whimsical cryptocurrency and explain why, despite its shortcomings, Dogecoin is one of crypto's most interesting phenomena.

Q1 saw a record advance for bitcoin and other digital assets. The money flowing into venture-backed startups in the space also hit all-time highs, even as the total number of deals remained below its Q1 2018 peak.

A new improvement proposal (upgrade) will alter fundamental properties of Ethereum to simplify user experience and harden ETH's monetary policy, but the proposal has drawn criticism from miners who stand to lose as much as 50% of their revenue.