Coinbase Launches Bitcoin Futures
Plus: BitGo Raises $100 million
Today we’re covering:
BitGo goes even harder with $100M in new funding
Coinbase’s future in Bitcoin futures poroducts
Block Green launches first mining hash futures product
And everything else you need to know.
First time reading? I’m Jordan, and this is the Bitcoin Minimalist. Every day, our team scours dozens of sources to bring you need-to-know Bitcoin news and insights—all in 5 minutes. Were you forwarded this email? Sign up here.
BitGo Secures $100M in Funding for Expansion, Acquisitions
💸 The scoop: BitGo, a crypto custodian, has raised $100 million in a Series C funding round, catapulting its valuation to $1.75 billion. The Palo Alto-based firm plans to use the new funds to expand its services and for strategic acquisitions.
💬 In their words: BitGo CEO Mike Belshe commented on the company's growth: "Not only are we seeing growing demand for regulated custody solutions in the US, but we're also seeing the demand on a global scale...to provide institutions, brands, coin foundations, and others with secure and seamless participation in the digital asset ecosystem."
📈 Company’s journey: Founded in 2013, BitGo pioneered the institutional custody business model. They now serve over 1500 institutional clients in more than 50 countries and handle around 20% of all on-chain Bitcoin transactions by value. Their product evolution includes BitGo Trust Company in 2018, BitGo Prime in 2020 and expanded offerings into altcoin custody in recent years.
🤝 Key partnerships: Noteworthy clients of BitGo include several of the largest Bitcoin exchanges, including Paxful, eToro, and Bitstamp as well as the largest Bitcoin base IRA company, Bitcoin IRA. It also serves as the custodian for FTX's bankrupt exchange creditors and was chosen as the distributor for Mt. Gox creditors.
WHAT WE'RE WATCHING
🔗 The Digital Energy Council (DEC) has officially launched. The council aims to act as a sort of interest group for Bitcoin miners. The council will be comprised of a member association focused on mining as a means to achieve energy security and advocate for ‘responsible energy use, grid stability, and to enhance the U.S.'s competitive stance’.
The council will also focus on debunking myths regarding digital asset mining's impact on U.S. energy. U.S. Senators Lisa Murkowski and Cynthia Lummis have already shown support for the council, emphasizing the sector's growth and its potential benefits for rural regions.
Block Green’s Informational graphic from their about page
🟩 Block Green has launched a ‘Hash Futures’ platform. In short, it allows miners to sell future revenue exposure at a discounted rate to anyone who wants to buy. This strategy provides immediate liquidity to miners, addressing the vulnerabilities of past financial structures in the mining industry where miners needing to expand quickly were forced into very risky, high interest debt instruments.
When the price of Bitcoin crashed, many of these miners did not survive because they could not service their debt. The Block Green platform enables mining rewards streaming agreements directly with bitcoin scripts, providing an alternative to traditional fiat solutions. This platform bridges miners with liquidity providers, such as hedge funds and financial institutions, fostering a balanced partnership and distributed risk.
🔓 A dormant Bitcoin wallet from 2010 containing 1,005 BTC (~$28,594 per BTC) has just transferred its coins to new addresses. Some wondered if Satoshi Nakamoto, Bitcoin's pseudonymous creator, was behind this. However, blockchain researcher Kirill Kretov suspects it's likely a long-term holder, perhaps the same one behind 13 similar awakenings between 2020 and 2021.
Kretov noted the rarity of such large wallet awakenings from Bitcoin's early years and indicated that these old "clean" Bitcoins could command a premium in over-the-counter sales due to their unique appeal.
📉 The recent UBS Global Wealth Report disclosed a significant loss of $5.9 trillion in wealth for the US in 2022, the largest drop for any country. North America and Europe combined lost $10.9 trillion. In contrast, the US had one million fewer millionaires by the end of the year but still retained over half of the world's ultra-rich population.
Interestingly, Russia, amidst its conflict with Ukraine, defied global trends by adding a remarkable $600 billion to its wealth, showcasing its economic resilience despite historic sanctions and a global downturn. How long Russia can keep this strength going remains to be seen, but for now, it seems to be weathering economic elements fine.
Coinbase Secures Approval for Bitcoin Futures Product
Coinbase CEO and Founder Brian Armstrong
📜 In short: Coinbase has received approval from the National Futures Association to operate as a futures commission merchant, paving the way for the company to offer federally regulated crypto futures trading to eligible U.S. customers. This comes after the U.S. Securities and Exchange Commission had earlier taken legal action against both Coinbase and Binance for operating as securities exchanges without proper registration.
📊 New Offerings Ahead: With this approval in hand, Coinbase has announced that eligible U.S. clients can soon access regulated derivatives products via Coinbase Financial Markets. These products will be under the oversight of both the Commodity Futures Trading Commission and the National Futures Association. Coinbase further emphasized its ability to now offer futures contracts for cryptocurrencies like bitcoin and ether.
🔍 The Facts:
Coinbase shares saw an over 5% increase before the market's opening.
Coinbase received regulatory approval from the National Futures Association to operate as a futures commission merchant.
The company faced legal issues in June when the U.S. Securities and Exchange Commission filed lawsuits against it and Binance.
Eligible U.S. customers can access regulated derivatives products through Coinbase Financial Markets.
💬 Coinbase’s Words: “We believe this is a watershed moment to be able to bring regulated crypto products to U.S. customers. This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business and be the most trusted and secure crypto-native platform for our customers.”
Is Coinbase's Futures Approval an Indication a Spot ETF will be Approved in 2024?
Tuesday’s Poll Results
Do you support the creation of a Bitcoin ETF in the USA?
Yes - 89.3%
No - 10.7%
👍 Yes: “Gensler is way overdue and out of sync.” - Steve
👍 Yes: “I think it’s good for the economy” - Dan
👍 Yes: ““It's massive good news and very important. It's basically free marketing for bitcoin. It's the best way to introduce regular people to bitcoin.”” - Ron
IN THE LOOP
🚫 PayPal UK will temporarily stop Bitcoin and other cryptocurrency purchases from October 1st, 2023, through early 2024 to comply with regional financial regulations. Affected customers received notifications detailing the suspension and its expected duration.
🏛️ Binance has sought a court order against the U.S. Securities and Exchange Commission (SEC) to limit its information requests, deeming them "over broad" and "unduly burdensome." This follows the SEC's lawsuit against Binance and CEO Changpeng Zhao in June, alleging deceptive practices and several other charges.
⚖️ A $140 million asset dispute between DeFiance Capital and Teneo, the liquidators for Three Arrows Capital, is set to be heard in Singapore, despite Teneo's preference for the British Virgin Islands. The conflict revolves aroud assets managed by DeFiance Capital within the 3AC corporate structure, with disagreements over their proper allocation between 3AC creditors and DeFiance Capital investors. The case might face parallel proceedings if the BVI also decides to hear the dispute, potentially resulting in two contrasting judgments.
Today’s newsletter was written by Colin and edited by Jordan.