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MicroStrategy said Friday that it completed a $1.05 billion debt offering, the proceeds of which will be used to add to its ever-growing bitcoin hoard.

The announcement comes days after MicroStrategy revealed its latest debt offering plans, as previously reported. The publicly-traded firm has been steadily acquiring bitcoin since last August as part of its treasury management strategy. 

The notes offered to investors carry a 0% coupon and 50% conversion premium, as noted in the firm’s release, which explains:

“The aggregate principal amount of the notes sold in the offering was $1.05 billion, which includes $150 million aggregate principal amount of notes issued pursuant to an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, which the initial purchasers exercised in full on February 18, 2021 and which additional purchase was also completed today. The notes were sold in a private offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).”

“MicroStrategy estimates that the net proceeds from the sale of the notes will be approximately $1.03 billion, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by MicroStrategy,” the firm went on to say. “MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin.”

According to data collected by The Block Research, MicroStrategy’s current bitcoin holdings stand at just over 71,000 BTC — an amount worth about $3.8 billion.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Canadian investment firm CI Financial, which manages more than $230 billion worth of assets, has filed for a new bitcoin exchange-traded fund (ETF).

CI is seeking approval to list the bitcoin ETF on the Toronto Stock Exchange (TSX). If approved, the firm would manage the ETF with Mike Novogratz’s Galaxy as subadvisor and charge an annual management fee of 1%.

CI already operates a bitcoin fund named CI Galaxy Bitcoin Fund, which manages about $172 million worth of assets.

In recent weeks, the market has seen several crypto asset managers in Canada apply and get approvals for bitcoin ETFs, including Purpose and Evolve.

Purpose’s bitcoin ETF debuted Thursday and saw $165 million worth of trading volume and reportedly became the most-traded ETF for the day in Canada. Evolve’s bitcoin ETF began trading on Friday.

Another Canadian crypto asset manager, 3iQ, also filed a preliminary prospectus for a bitcoin ETF last week and is awaiting approval. 3iQ also already manages bitcoin funds.

Meanwhile, in the U.S. as well, several crypto firms have begun filing and refiling their bitcoin ETF applications with the Securities and Exchange Commission in recent weeks.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A crypto-focused venture firm has acquired the Sushi.com domain name for SushiSwap, an Ethereum-based decentralized exchange (DEX).

Future Fund shared the news Friday morning in a tweet:

Happy to announce we’ve acquired https://t.co/Hjsm7MOIYY for @sushiswap

A strong domain will greatly increase internet traffic and exposure to the sushi brand for their forthcoming new projects.

2021 will be a big year for $SUSHI pic.twitter.com/NWWkgTldWq

— Future Fund (@FUTURE_FUND_) February 19, 2021

It’s not clear how much Future Fund paid for the domain. A report from DomainGang.com, which tracks domain sale news, reported on February 13 that Sushi.com was previously listed at $1.9 million. 

SushiSwap, a fork of Uniswap, is the second-most voluminous DEX built on the Ethereum network. Data from CoinGecko shows SushiSwap with roughly $382 million in 24-hour volume. SushiSwap reported more than $13 billion in monthly volume for January, according to data collected by The Block Research.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto trading firm BCB Group announced Friday that it has launched a treasury service to help companies buy bitcoin and other cryptocurrencies on their balance sheets.

The solution, dubbed BCB Treasury, helps corporates trade, store and manage cryptocurrencies as part of their treasury strategy.

Falcon Corporate Services FZC, a Dubai-based public relations and advertising firm, is BCB Treasury’s first client, CEO Oliver von Landsberg-Sadie told The Block.

Falcon has allocated 75% of its corporate treasury into bitcoin via BCB Treasury, which equates to “several million dollars,” said Landsberg-Sadie.

Investing in bitcoin as part of corporate treasury appears to be in the limelight after Elon Musk’s Tesla disclosed earlier this month that it bought $1.5 billion worth of bitcoin in January.

Tesla became the third U.S.-based publicly-traded company to invest in bitcoin after Michael Saylor’s MicroStrategy and Jack Dorsey’s Square.

Square’s sister company Twitter is also considering adding bitcoin to its balance sheet, CFO Ned Segal said earlier this month.

Bitcoin’s price has jumped sharply in recent months. At press time, it is trading at around $52,700.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A serious risk to bitcoin could be a “sudden loss of confidence” in Tether (USDT) stablecoin, according to JPMorgan analysts.

In a comprehensive, 86-page report published Thursday, JPMorgan analysts, led by the chair of global research Joyce Chang, said that if USDT were to see any adverse developments, it could impact bitcoin’s price.

“A sudden loss of confidence in USDT would likely generate a severe liquidity shock to Bitcoin markets, which could lose access to by far the largest pools of demand and liquidity,” said the analysts.

Most bitcoin trading occurs via USDT, as The Block reported earlier this month when the stablecoin’s market capitalization crossed $30 billion. Citing data from asset manager NYDIG, JPMorgan analysts said around 50-60% of bitcoin trading has been happening via USDT since 2019.

USDT is issued by Tether and is pegged 1:1 to the U.S dollar. But since Tether is not subject to the same strict supervisory and disclosure regime as traditional commercial banks and it “certainly does not have anything like deposit insurance,” USDT presents a tail risk to bitcoin, according to the analysts.

Tail risk is the possibility that an unlikely event will occur and cause a considerable loss to an asset. It is a form of portfolio risk that arises when an investment moves more than three standard deviations from the mean above the risk of normal distribution.

JPMorgan analysts said Tether claims reserve assets of cash and equivalents equal to their outstanding liabilities “but has famously not produced an independent audit and has claimed in court filings that they need not maintain full backing.”

“Thus, were any issues to arise that could affect the willingness or ability of both domestic and foreign investors to use USDT, the most likely result would be a severe liquidity shock to the broader cryptocurrency market which could be amplified by its disproportionate impact on HFT [high-frequency trading]-style market makers which dominate the flow,” said the analysts.

Overall, JPMorgan’s global research team believes that bitcoin is an “economic side show,” but is here to stay as an “alternative” currency.

Still, the analysts aren’t sure whether crypto assets provide diversification benefits against assets such as equities.

“Crypto assets continue to rank as the poorest hedge for major drawdowns in Equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” said the analysts.

You can read the full report here.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• A common misconception about central bank digital currencies (CBDCs) is that privacy can’t exist while transacting, which makes many citizens anxious about general-purpose or retail CBDC. 
• Through the EUROchain research network, the European System of Central Banks (ESCB) developed a proof of concept using anonymity vouchers to enable privacy for certain retail CBDC transactions in 2019. 
• More recently, two McGill University researchers submitted a novel design proposal for a ‘Privacy-Hybrid CBDC’ to the Bank of Canada’s Model X Challenge.

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BNB, the exchange token of Binance, has become the third largest crypto by market capitalization for the first time as its price rally continues.

Data from CoinGecko and Binance-owned CoinMarketCap both show that BNB’s market capitalization has surpassed that of Tether around 4:00 UTC on Friday. As of writing, BNB’s market cap stands at $34.4 billion.

BNB has mostly remained as one of the top 10 coins by market cap in the past. CoinMarketCap’s most recent snapshot on January 31 showed that BNB was ranked at the 10th spot back then when its price was changing hands at around $40.

But BNB’s price has rallied towards above $230 as of writing, which has almost six-folded within weeks. 

As The Block Research mapped out in a piece on Thursday, one feature that Binance created for BNB since September is using it as the native token for its Binance Smart Chain that seeks to take advantage of the boom of decentralized finance.

“While Binance Smart Chain has made tradeoffs in that it is far more centralized than networks like Ethereum, it has used the demand for DeFi activity and the high fees environment to its advantage,” wrote The Block analyst John Dantoni, who identified 103 projects and companies across 13 different verticals expanding on the BSC ecosystem.

Screenshot of market cap ranking on CoinGecko

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Auditing giant KPMG and crypto data firm Coin Metrics are enabling BitGo clients to monitor public blockchain network risks.

The three firms are together delivering a combined suite of their products — and the idea is to further crypto adoption by institutions and banks.

Coin Metrics and KPMG began working together on institutional crypto adoption last year when the two entered a “strategic alliance.” This suite of products for BitGo clients also has components designed to increase institutional adoption, according to BitGo.

“Through this collaboration, we will be delivering the products and services that our institutional clients have needed to allow broad adoption of digital assets,” said Pete Najarian, Chief Revenue Officer BitGo in a statement.

The product suite will include KPMG’s Chain Fusion services, a suite of blockchain analytics tools for business, risk and compliance. BitGo, a digital asset custody platform, provides its custody technology and solutions.

Coin Metrics’ institutional data rounds out the offering. It’s also launching a new product as part of the suite, dubbed FARUM. FARUM is a risk management product that enables the identification of network attacks, fee volatility risks and unusual network event risks.  

Together, the combined products aim to deliver core capabilities for institutions and banks without some of the onerous step-by-step compliance and risk integrations, according to KPMG. 

“We are thrilled to launch a combined offering to market, which marks a significant step forward in uniting core capabilities for custody, data and risk/compliance and security through an integrated solution,” said Arun Ghosh, Principal and KPMG Head of Blockchain for One Americas in a statement.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

BitMEX co-cofounder Arthur Hayes went off the grid last year after the U.S. government filed criminals charges against him, the crypto derivatives exchange and his co-founders.

BitMEX ultimately moved to replace its leadership team in the days following the twin U.S. lawsuits, meaning that Hayes was no longer CEO of the platform. Earlier this month, Vanity Fair published a long feature on Hayes and BitMEX, suggesting that he may be in Singapore, where he owns a home.

After months of public silence, Hayes is back — in written form, at least. In a blog post entitled “Walkaway,” Hayes expounded on the recent drama around Robinhood, GameStop and the ensuing chaos that swept Wall Street, struck down short-sellers of the gaming retailer’s stock and drew the attention of journalists, regulators and members of Congress. His blog post contained no information about his whereabouts, nor did it make reference to the charges levied against him or BitMEX.

“Stonks for the long run. My hiatus from the equity markets ended when I too became sucked into the meme stock vortex,” Hayes wrote. “Seeing a meme stock like GME log a ten bagger in a few trading sessions will get any hardened market operator on their feet. I could not resist the YOLO urge.”

After what amounts to a denouncement of the current environment for trading — “[r]etail traders in aggregate supply the cannon fodder for Hamptons pads, Monaco F1 jaunts, and 100,000 GBP bar tabs at The Box,” he wrote — Hayes wrote optimistically about what he called the Crypto Capital Market: “Erected upon the bedrock of open source, this new Crypto Capital Markets game promises an open, permission-less way to move data / value around society. The playing field is cyberspace, and anyone with an internet-enabled device can play.”

He also promised future blog posts on the subject. “As the traditional financial game is adjudicated and participants feel raw with the surfeit of perceived inequalities, I will in plain language demonstrate why that behaviour can’t or wouldn’t persist in the Crypto Capital Markets.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Fidelity Charitable, the charity unit of the financial services giant Fidelity, collected $28 million in donations in the form of cryptocurrency, according to a report detailing its annual efforts.

The $28 million figure represents a notable jump from the $13 million Fidelity Charitable collected in 2019.

“After a long period of volatility, the value of cryptocurrency soared at the end of 2020—leaving many cryptocurrency holders with significant appreciation of their assets. Fidelity Charitable’s ability to accept bitcoin and other cryptocurrency donations allows donors to take advantage of the surge in appreciation to benefit charity. By donating these assets, the donors could eliminate the significant capital gains on the appreciation while giving the full fair market value to charity,” the report explained.

Two-thirds of Fidelity Charitable’s total contributions were from non-cash assets, according to the report, and $1.6 billion worth of those were from non-publicly traded assets, such as private stock or cryptocurrency. 

Fidelity’s charity arm first began accepting bitcoin in 2015.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.