🟣 Ripple doesn't need ETFs

Donald Trump reaffirms his support for crypto

Author

Marc-Thomas Arjoon
June 13, 2024

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Welcome back to 0xResearch. Here's what we’ve got for you today:

  • Ripple’s Backdoor

  • ProShares joins the ETF race

  • Donald Trump reaffirms his support for crypto

  • Terraform Labs to Pay $4.5 Billion to SEC

Ripple’s Backdoor

A crypto-focused SPAC (Blockchain Coinvestors Acquisition Corp. I) is merging with Linqto, a platform that allows accredited investors to buy into private companies, including Ripple. It should be noted that Ripple, the company behind the XRP cryptocurrency, is currently in a legal battle with the SEC.

This deal has largely gone unnoticed by the crypto community, possibly because Linqto itself isn't a crypto company. However, potentially offering access to Ripple would indirectly offer a way for certain investors to get involved in the crypto market.

This deal is part of a trend of crypto-focused SPACs merging with non-crypto companies, such as Webull, a stock trading app that recently moved its crypto trading to a separate app.

Meanwhile, crypto companies that have already gone public via SPACs are exploring new deals, with Core Scientific rejecting a buyout and Bakkt considering a sale or breakup.

ProShares joins the ETF race

ProShares, a major player in the ETF market, has unexpectedly entered the race to launch an Ether ETF. This move is surprising as the company did not participate in the recent competition to launch a spot Bitcoin ETF, despite already managing a successful Bitcoin futures fund called BITO.

This decision suggests that ProShares sees substantial growth potential in the Ethereum market due to increased adoption in DeFi, NFTs, and other apps. There may also be speculation over the long term, where the possibility of staked ETH ETFs looms large.

Regardless of the specific reasoning, ProShares is clearly looking to expand its cryptocurrency investment offerings. By joining the existing eight issuers in the Ether ETF market, ProShares introduces another competitor, intensifying the competition.

Donald Trump reaffirms his support for crypto

Donald Trump has expressed a strong desire for the remaining BTC to be mined within the country. He claims to see BTC as a crucial defense against the potential implementation of a central bank digital currency (CBDC).

While this may seem antithetical to what decentralization advocates stand for, the sentiment is likely appreciated above all else. In a recent post on social media, Trump voiced his concerns about the current administration's stance on BTC, believing it to be beneficial to rival nations like China and Russia. He firmly believes that increasing domestic bitcoin mining will not only bolster the U.S. economy but also establish the country as a leader in energy production.

A meeting with executives from Nasdaq-listed bitcoin-mining firms, CleanSpark Inc. and Riot Platforms, further solidified Trump's support for mining. During this meeting, Trump reportedly emphasized the role of miners in stabilizing the energy grid, highlighting their contribution to the national infrastructure.

Terraform Labs to Pay $4.5 Billion to SEC

The U.S. Securities and Exchange Commission (SEC) has reached a settlement with Terraform Labs and its former CEO, Do Kwon, following accusations of fraud and misleading investors in the TerraUSD stablecoin and Luna cryptocurrency collapse. Terraform Labs has agreed to pay nearly $4.5 billion, including $3.5 billion in disgorgement of illegal gains, over $460 million in prejudgment interest, and $420 million as a civil penalty.

Do Kwon, the former CEO, will personally pay $200 million to the Terraform bankruptcy estate and will be permanently banned from serving as an officer or director of any publicly traded company. This settlement concludes the SEC's case and aims to highlight the regulator's commitment to holding bad actors accountable in the cryptocurrency industry.

— Marc Arjoon (X: @marcarjoon | Farcaster: @marcarjoon)

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Symbiotic TVL:

Symbiotic is an emerging protocol that directly competes with EigenLayer in the Ethereum restaking sector. Backed by Paradigm and Cyber Fund, Symbiotic aims to disrupt the current restaking landscape.

The platform launched recently with significant seed funding and has quickly gained traction, amassing hundreds of millions in TVL.

This launch comes amidst concerns from Lido about losing market share to EigenLayer. As a competitor, Symbiotic could provide Lido with a strategic advantage in maintaining its dominance in the staking space. The growth and adoption of Symbiotic will be an important development to watch in the evolving DeFi landscape.

In 2024, Sanctum’s LST (INF) is the fastest growing LST on Solana because of the key value proposition of its underlying product - Infinity. Compared to other DeFi and LST protocols on Solana, participating in Sanctum's upcoming $CLOUD launch starting at $1M FDV presents a promising short-term opportunity.

Avalanche has introduced proposal ACP-77, which would drastically lower the barriers to entry to launch a dedicated blockchain, while imposing a continuous fee mechanism that subnets would pay to the P-Chain. By performing a scenario analysis of different dedicated blockchain solutions, we conclude that ACP77 would hypothetically make Avalanche subnets as cost-effective as Celestia-based rollups while providing additional liveness guarantees and native interoperability.

We’ve previously chatted about the intersection of AI and crypto, focusing specifically on bitcoin miners and AI. But the two industries have a few more intersections that I want to get into today.

If you were holding crypto in November 2022, you likely remember the chaos of Nov. 2 and the days that followed. Even casual observers were captivated by the unfolding drama of a massive bankruptcy and one of the largest financial frauds in history.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.