GBTC Still Has $23B: Are We Reliant on ETF Flows?

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Good Morning.

Bitcoin ETF inflow will be a critical data point this week. After five days of outflows, we’ll know exactly just how much ETF-driven the current rally is. Hey, it might be reflexivity at play, but we need to understand the game. Meanwhile, meme coins mania continues. Be careful of the sideways chop.

In Today's Email:

• What Matters: State of Bitcoin ETF 📊 

• Product: Starknet USD Stablecoin 💵 

• Charts: Mad Lads & NodeMonkes growth 🖼️ 

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WHAT MATTERS

State of Bitcoin ETF

State of play: Last week, outflows from spot Bitcoin ETFs surpassed new capital, resulting in five straight days of net outflows. While IBIT and FBTC hit record-low inflows, GBTC faced its largest single-day outflow on March 18.

• The ten ETFs experienced total outflows of $888M, as reported by BitMEX Research.

• This marked the longest streak of net outflows to date, surpassing four days in January.

• Blackrock's IBIT, holding nearly half the market, had record-low inflows of $49.3M on Wednesday.

Despite net negative inflows, trading volumes remained high. The Block's data shows that spot bitcoin ETFs' total trading volume grew by about $22B last week, reaching $164B.

The Block also reported that an analyst noted that persuading the world's sovereign wealth funds to invest in Bitcoin remains challenging.

• Fadi Aboualfa of Copper doubts sovereign wealth funds will pick Bitcoin over the safety and 5-6% APY of five-year bonds.

• Despite skepticism about sovereign wealth funds investing in Bitcoin, one analyst observed signs of their growing interest in digital assets.

• Gordon Grant suggests that sovereign wealth funds invest in digital asset infrastructure first and then digital assets second.

What’s next: Bloomberg ETF analyst Eric Balchunas suggested that GBTC's significant outflows might be due to selling by Genesis.

Our take: Grayscale itself still has around ~$23B in BTC that might be heading towards the outflow as most of GBTC buyers were investors from back in the days that didn’t have any significant liquidity until the ETF launch.

For builders and investors: Regardless of short-term volatility, the bull market is already here. Understanding which phase in the market we currently are in and being strategic with your product releases/narrative announcements is critical.

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 👇

PRODUCT OF THE WEEK

The First Starknet USD Stablecoin

Last week, Nostra introduced UNO, the first Starknet-native stablecoin. UNO combines the reliability of traditional fiat-backed stablecoins with Starknet’s innovation, aiming to enhance the DeFi experience for users worldwide.

• Each $UNO is backed by 1 USDC or $1.

• The Peg Stability AMM guarantees users can buy and sell UNO for 1 USDC for a 0.10% fee.

• Users can lend and borrow UNO in the Nostra Money Market and provide liquidity to UNO pools on Nostra Pools.

• UNO is initiating a 10M cap to encourage growth, adoption, and user diversity, the cap will be removed once performance metrics are met.

• Institutional partners can buy UNO with USD cash but UNO is currently not available in the US, EU, and certain other areas.

Nostra is giving 10x boosted points to bootstrap UNO adoption. To earn the boost users have to Lend UNO to the Nostra Money Market or Provide liquidity to the UNO pools.

Other cool products:

• Storichain, the Wattpad of web3.

• APXD, a real-life impact-focused survival web3 game.

• BubbleAI, a web3 off-chain AI data analytics platform.

• Wireshape, an Open Enterprise Blockchain Network and AI solutions.

• DeBio, a decentralized appchain for medical and bioinformatics services.

CHARTS OF THE WEEK

Mad Lads Reached $265M in Market Cap

Credits to OurNetwork for the original report

State of play: In 11 months, Mad Lads generated $3.6M in royalties from $88M in sales and hit $266.5M in market cap, quickly becoming a top NFT collection by sales volume and floor price in the crypto industry.

• The floor price of Mad Lads quadrupled from 50 to 200 SOL, driven by the Backpack exchange launch, PYTH and W token distributions to holders, 1:1 NFT raffles, and a market uptrend since last December.

• Since early 2024, most Mad Lads trades ranged between 150-200 SOL, with the Tensor NFT marketplace emerging as the favored platform for traders.

• Just days after launching, Mad Lads #2968 sold for 3,420.69 SOL on Apr. 26, 2023, marking the collection's highest sale and showcasing the unique prestige of Mad Skulls in the crypto industry.

Our take: Mad Labs pioneered having a strong NFT community as a user base before building your core products — it was never meant to be just another PFP collection. We’re now seeing more and more of this trend emerge.

NodeMonkes, the Ordinal Blue Chip

State of play: NodeMonkes, the collection of 10,000 unique monkey-inspired digital artworks inscribed as Bitcoin Ordinals, has established itself as an Ordinal blue-chip NFT.

• Currently, the floor price of NodeMonkes is at around 0.668 BTC.

• The NodeMonkes floor price crossed the 0.8 BTC mark twice in March, on March 4 and March 18.

• NodeMonkes's total volume is at 3.4K, with 4.6K owners and 1.1K listed.

Our take: NFA, but NodeMonkes are poised to become the crypto punks of the BTC ecosystem. Especially given how most of the western crypto markets aren’t caught up with the BTC ecosystem growth.

QUICK BITES

• Google added ENS to search.

• Binance to discontinue USDC support on TRON.

• Phishing scam targets BlockFi and FTX creditors.

• BlackRock sees little demand for ETH from clients.

• Gensler says crypto firms are dodging registration.

• Do Kwon's extradition postponed by Montenegro.

• Bankers are lining up to buy FTX’s 8% stake in Antropic.

• Polygon zkEVM resumes operation following a 10-hour outage.

• Anchorage Co-Founder steps back and joins Haun Ventures as GP.

NOTEWORTHY READS & MEME

• Polynya’s read on crypto’s broken moral compass.

• Coinbase’s read on what is crypto good for, anyway?

• The Blockcrunch’s read on exploring the frontier of Bitcoin L2s.

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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.