Backpack Acquires FTX EU

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Good Morning.

The market dump yesterday after the spike in OI failed to have further continuation, maybe it's time to tone down a bit on the leverage folks, we’re 12 days aways from Trump’s inauguration.

Our new podcast episode with Rushi from Movement is up!

In Today's Email:

• What Matters: FTX EU Acquired by Backpack 🎒

• Case Study: Bernstein's 10 Crypto Predictions 🔮 

• Governance & Features: Solayer’s InfiniSVM 🛠️ 

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TOGETHER WITH

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WHAT MATTERS

FTX EU Acquired by Backpack Exchange

State of play: FTX EU, the European branch of the now-defunct crypto exchange FTX, has been acquired by Backpack Exchange, following regulatory approvals from the FTX bankruptcy court and the Cyprus SEC.

• Backpack Exchange was founded by former FTX and Alameda employees.

• The acquisition will see Backpack EU handling the distribution of previously court-approved bankruptcy claims to FTX EU users.

• The new arm, Backpack EU, will also offer crypto derivatives, including perpetual futures, across the European Union.

• Backpack was valued at $120M in its Series A funding round in early 2024.

• It has obtained a MiFID II license plus a license from the Dubai VARA.

What’s next: Backpack EU plans to launch in Q1 2025, supporting SEPA payments and wire transfers in major European currencies.

Why it matters: The acquisition comes as the EU’s Markets in Crypto-Assets (MiCA) regulation sets new standards for virtual asset service providers.

Our take: Backpack has been making interesting moves, working backwards by starting with its communities via madlads and other CT-native marketing strategies, before working back up to creating a regulated “new-generation” of crypto exchanges.

For builders and investors: Exchanges remain the best business in crypto (other than Tether).

CASE STUDY

Bernstein's 10 Crypto Predictions for 2025

Bernstein analysts foresee crypto entering the "Infinity Age," marked by relentless evolution and widespread acceptance as part of the financial system.

Key predictions for 2025 include:

1. Bitcoin at $200K: Bitcoin could hit $200K by 2025, driven by sovereign and corporate adoption.

2. Spot Bitcoin ETFs: ETFs may see $70B+ inflows, doubling 2024's figures due to institutional demand.

3. AI-Crypto Innovation: AI blockchains, wallets, and tokenized agents will drive growth.

4. Stablecoin Growth: Pro-crypto laws may push stablecoin markets past $500B.

5. New Products: Banks and asset managers will roll out more crypto offerings.

6. Regulatory Shift: The SEC may settle major crypto cases, easing market restrictions.

7. Crypto IPOs: More crypto firms are expected to go public.

8. Tokenized Equities: Equity markets will see increased tokenization.

9. Miners and AI: Miners will pivot to AI for better value creation.

10. Ethereum’s Appeal: Ethereum will gain institutional favor for its intrinsic value.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Coinbase Premium Turns Positive

The Coinbase Premium Index (CPI) turned positive for the first time since December 2024, signaling growing US investor demand for Bitcoin. CryptoQuant analysts noted that this shift reflects increasing institutional buying pressure.

• Bitfinex analysts added that Bitcoin’s recovery above $100,000 is fueled by shrinking sell-side liquidity.

• The Liquidity Inventory Ratio (LIR), a key metric for measuring supply versus demand, dropped from 41 months in October to just 6.6 months now.

• This mirrors tightening trends seen during rallies in 2024, indicating supply constraints amid growing demand.

Bitfinex analysts added that Bitcoin’s recovery above $100,000 is fueled by shrinking sell-side liquidity.

• The Liquidity Inventory Ratio (LIR), a key metric for measuring supply versus demand, dropped from 41 months in October to just 6.6 months now.

• Although miner profitability improved for the second consecutive month in December 2024, it remains 43% below pre-halving levels.

• The Bitcoin network's hashrate grew by 6% last month, though at a slower rate than in 2023

FEATURES & GOVERNANCE UPDATE

Solayer Introduces InfiniSVM

Solayer announced the development of InfiniSVM, a hardware-accelerated blockchain built on the Solana Virtual Machine (SVM). The litepaper outlines its dynamic scalability and claims a tx confirmation time of just 1 millisecond.

Key Features of InfiniSVM:

• Architecture: Utilizes a multi-execution cluster design and software-defined networking, supporting up to 100Gbps throughput.

• Consensus Mechanism: Implements a hybrid proof of assigned stake for high-speed transaction verification.

• Native Assets: Integrates yield-bearing tokens like sSOL and sUSD, allowing staking on the network.

With InfiniSVM, Solayer aims to expand into developing its blockchain to scale Solana's infrastructure and meet decentralized application demands.

• InfiniSVM represents a new wave of projects extending SVM capabilities to create Layer 2 solutions or independent blockchains.

• Other projects, like Eclipse, are also leveraging SVM for faster transactions and lower gas costs on Ethereum.

• InfiniSVM is showcasing how SVM's parallel processing power can support new applications beyond the main Solana blockchain.

Other notable feature updates:

• f(x) Protocol launches v2.0.

• Aethir unveils the AethirEdge device.

• Akash Network launches DeepSeek-V3.

• Hyper Foundation launches staking on mainnet.

• Berachain opens stablecoin pre-deposits for Boyco.

• TON partners with Jupiter to develop a new liquidity aggregator.

QUICK BITES

• Ripple teases potential XRP ETF.

• FTX EU acquired by Backpack Exchange.

• Czech National Bank weighs Bitcoin purchases.

• Arbitrum deepens ties with South Korea’s Lotte group.

• Gemini agrees to pay a $5M settlement in the CFTC case.

• NY judge grants Coinbase's move for an interlocutory appeal.

• CFTC Chair plans to step down following calls to regulate crypto.

• Court docs reveal the potential impact of Terra's collapse on 1M+ victims.

NOTEWORTHY READS & MEME

• Cred’s read on lowering your IQ.

• Cumberland’s read on stop making me bridge.

• Kam’s read on a letter to the Hyperliquid core team.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.