Crypto Giggle
In the last week alone, more than 600 companies have revealed they invested in Bitcoin spot exchange-traded fund (ETFs) to the tune of billions. Millennium Management invested the most, $1.9 billion. Bitcoin ETFs also saw a spike in volume, with trading reaching $5.65 Billion on May 16th. The increase in trading volume indicates a move away from accumulation on the chain to ETFs. Venture capital is also booming in the crypto-space, with huge investments made in decentralized finance and web3 gaming, as well as blockchain infrastructure.
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Firms Invest $3.5 Billion in Bitcoin ETFs
In the last week, over 600 companies have reported to the Securities and Exchange Commission that they hold spot Bitcoin Exchange-Traded Funds (ETFs). These filings reveal that about $3.5 Billion worth of Bitcoin exchange-traded funds are owned by professional investment firms. Morgan Stanley, JPMorgan Chase, Wells Fargo Bank, UBS BNP Paribas Royal Bank of Canada and Schonfeld Strategic Advisors are some of the most well-known investors.
Millennium Management has invested $1.9 billion in BTC ETFs. The investment includes $844.22 million for BlackRock’s iShares Bitcoin Trust, $806.7 Million in Fidelity Wise Origin Bitcoin Funds (FBTC), 202 millions in Grayscale Bitcoin Trusts (GBTC), 45 million dollars in ARK 21Shares Bitcoin Funds (ARKB), as well as $44.7 in Bitwise Bitcoin Funds (BITB).
Schonfeld Strategic Advisors, the second largest spot BTC ETF Investor, holds $248.8 million of BlackRock ETF, and 231.8 million dollars in Fidelity fund. Totaling $479.8 million.
Boothbay Fund Management in New York has a total of $377 million invested in Bitcoin spot ETFs. This includes $149.8 in IBIT and $105.5 in FBTC. Pine Ridge Advisers is another New York-based company that announced a $2005.8 million investment into spot Bitcoin ETFs. This included $83.2 in IBIT and $93.4 in FBTC.
Morgan Stanley is one of the biggest holders of GBTC with a $269.9-million investment. Aristeia Capital is an alternative asset management firm that has invested $163.4 in IBIT.
Graham Capital Management has invested $96.6 in IBIT, and CRCM announced a $98.8 investment. Fortress Investment Group in New York has invested $53.6 in IBIT.
The volume of Bitcoin ETFs has risen
Bitcoin ETFs have also seen a rise in volume. Data from Santiment research shows that the seven biggest U.S. Bitcoin ETFs had a volume combined of $5.65 Billion on the 16th May, which was the largest volume since March. Around the same time that Bitcoin hit its all-time highest, Santiment’s data shows that on May 16, seven of the largest U.S. spot Bitcoin ETFs managed a combined volume of $5.65 billion. This is by far their biggest day since March.
Santiment thinks this increase in trading volume means that whales are no longer accumulating only on chain. Thomas Kralow, a hedge fund manager who is based in New York City, seems to be on the same page. He sees this surge of trading activity as an extremely positive indicator for the market. BTC is bullish because spot ETFs are seeing consistent inflows of positive money every single day.
Grayscale Bitcoin Trust, which is struggling to cope with massive outflows of funds, also showed modest interest. On May 16-17 it received $27 and $4.6 millions in inflows respectively.
Crypto-VC funding soars
Investors are not only attracted to Bitcoin ETFs, but also the entire industry. The number of venture capital funding rounds is surging, as it appears that the bull crypto market might be rekindling.
Aquarius, a crypto venture company, announced on May 16 a multi-strategy liquid fund of $600,000,000 that would enhance the liquidity within blockchains for foundations and projects in ecosystems. This fund, supported by Bitrise Capital and leading family offices and miners as well as influencers and other investors, will support blockchain infrastructure projects, artificial intelligence and the Bitcoin eco-system, modular architecture and early stage data layer.
Increased funding is a reflection of the bullish crypto trend. VC funding surpassed $1 billion for the second month in a row. April saw $1.02bn across 161 rounds of investment, while March had $1.09bn. Last time VC financing was at this level was 2022.
BlackRock led a round of funding that raised $47m for the digital securities platform Securitize earlier this month. Aptos labs, Paxos and Circle were also involved.
Puffer Finance is a liquid stake project for Ethereum layer-2 solution EigenLayer that has also secured an additional $18 million from Coinbase Ventures. The funding will support Puffer Finance’s technology, which reduces capital requirements for Ethereum validators from 32 to 1 Ether.
Bitcoin has gained more than 300% since its fall below $16,000 in November 2022 after the FTX’s collapse, mainly due to the acceptance of Bitcoin spot exchange-traded fund and repayment of creditors by the now defunct exchange. Some VCs believe that the bull market could lead to a new ICO boom, which may surpass those of 2018.
Param Labs
The Web3 gaming sector is also a good example of this trend. Param Labs raised $7 million from a gaming-infrastructure developer in an ‘oversubscribed investment round’. The crypto venture capital company Animoca Brands led the round, with firms such as Delphi Ventures and Cypher Capital also participating.
The funding provided will be used to address the shortage of infrastructure for Web3 gaming. This makes the modular gaming eco-systems, like Param, vital for the development of the next generation Web3 games. Anthony Anderson, CEO of Param Labs, and Kiraverse pointed out that, unlike Web3 studios, which focus on single titles, modular gaming ecosystems provide a variety of products and parts, allowing game developers to create their own games, and also providing tools and resources for other developers.
Param Gaming Platform was experiencing a rapid growth. It recently passed 300,000 users on its page X and 2,5 million subscribers.
Richard Banks, the founder of Face Clan and co-founder of Animoca Labs Yat Siu also invested in strategic investments. Yat Siu was very enthusiastic about Param Labs’ partnership, believing it could advance the digital property rights of gaming.
Lack of Web3 gaming is a major obstacle to mainstream adoption. Anderson says that infrastructure can enhance blockchain gaming beyond the games developed by his company.
Nick Greenawalt, the founder of Wanderers Game, recently posted a humorous post that shed light on current infrastructure problems by showing frequent MetaMask wallet requests interrupting gameplay.
Web3 games must integrate Web3 and crypto assets organically without disrupting user experience. Anderson said that players should be able interact easily with assets on the blockchain, and benefit from features such as trading assets with their friends or monetizing time in game without even realizing it.
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