(Micro)Strategy Offers $2B Convertible Note

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Good Morning.

We're witnessing a crypto cocktail that’s equal parts high-stakes financing aimed at fueling more Bitcoin buys and scandalous memecoin shenanigans mixed with a dash of political intrigue. Insider texts and record-breaking trades are adding just the right amount of drama to keep us all entertained. Never a boring day on crypto.

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In Today's Email:

• What Matters: (Micro)Strategy Offers $2B Convertible Note 💰️ 

• Case Study: $LIBRA Saga Continues 🔎 

• Governance & Features: Monad To Launch Public Testnet on Feb 19 🚀 

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WHAT MATTERS

(Micro)Strategy Offers $2B Convertible Note

State of play: Strategy (formerly MicroStrategy) announced a $2B convertible senior notes offering with 0% interest to fund future Bitcoin acquisitions and support general corporate purposes.

• The notes will be maturing on March 1, 2030.

• The notes may be settled in cash, class A common stock, or a combination thereof, with initial purchasers granted options to buy up to an additional $300M in notes within five business days.

• This announcement came just hours after the company issued a profitability warning following a $1.79B impairment loss on its Bitcoin holdings.

• The firm cautioned that further significant declines in Bitcoin's market value could jeopardize its ability to meet financial obligations.

• In 2024, Strategy expanded its BTC portfolio, now holding approximately 478,740 BTC valued at over $46B.

Why it matters: With a 0% interest rate and multiple settlement options, the offering is designed to attract investors seeking exposure to digital assets without immediate interest costs, potentially influencing similar financing strategies across the sector.

Our take: The combination of aggressive capital raising and cautionary financial disclosures sends a mixed message to investors.

For builders and investors: The convertible note offers potential upside if Bitcoin rebounds, but investors should be wary of the associated risks, particularly given the recent impairment losses and profitability warnings.

CASE STUDY

$LIBRA Saga Continues

Libra Token co-creator Hayden Davis, CEO of Kelsier Ventures, has ignited controversy by allegedly boasting in December text messages that he could "control" Argentine President Javier Milei by sending money to the president’s influential sister, Karina Milei.

• In these messages, Davis claimed that his payments ensured Milei would support his ventures, including the launch of the Libra memecoin.

• These revelations emerge amid an investigation into Milei's promotion of the token, which was touted as a novel way to boost Argentina’s economy.

• Davis’s spokesperson has denied the allegations, asserting that no payments were made to Milei’s sister or his inner circle.

The scandal has further deepened as prominent figures in the crypto space, including Meteora co-founder Ben Chow, have faced fallout. Chow resigned amidst allegations of insider trading and mismanagement linked to Libra’s controversial launch.

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INSIGHTS

Trader Turns $1M into $109M Trading $TRUMP

Blockchain analytics platform Bubblemaps claims that pseudonymous crypto trader Naseem made over $100M in profit trading the official TRUMP memecoin.

• According to research conducted alongside Coffeezilla, Naseem “sniped” the token immediately after its launch, making an initial purchase worth ~$1M.

• This buy was subsequently split across at least nine wallets, with one key address (beginning with 93Wb) linking several of these transactions

• The key address even held a unique "naseem.sol" vanity asset.

• Although the evidence is circumstantial and some activity hints at other traders, the data strongly suggests Naseem's significant role.

• When approached about allegations of insider trading, Naseem denied any direct knowledge of the launch, stating that he was not informed in advance.

FEATURES & GOVERNANCE UPDATE

Monad To Launch Public Testnet on Feb 19

Monad, a high-performance EVM blockchain, is set to launch its public testnet on February 19, marking a major milestone in its development ahead of a tentative mainnet rollout later in 2025.

• Developed over 2 years, this public environment allows devs and users to experiment with Monad’s enhanced features.

• The network now boasts a boosted throughput of 14K TPS and reduced block times below one second, utilizing parallel execution and a custom database.

• Fully compatible with EVM bytecode, Monad facilitates a smooth transition for Ethereum developers and will integrate with popular applications.

• Co-founder Keone Hon highlighted the project's ambition to accelerate next-generation EVM performance.

• Monad Labs, co-founded by former Jump Trading developers, has raised $225M in funding led by Paradigm.

Other notable feature updates:

• Lido has introduced Lido V3.

• Aave has launched GHO Base.

• Uniswap has launched Unichain.

• Virtuals Protocol is now live on Solana.

• LayerZero is now live on Story Protocol.

• LayerZero has gone live on TON Blockchain.

QUICK BITES

• Australian regulator takes aim at 13 crypto firms.

• FTX begins initial fund distributions to customers.

• Strategy announces $2B convertible note offering.

• Meteora co-founder Ben Chow resigns amid Libra scandal.

• Hayden Davis claims he paid Argentine Pres. Milei's sister for influence.

• Robinhood & Coinbase's Q4 shows retail's interest in alternative cryptos.

• Cobie hints that private funding platform Echo may release an ICO product.

• US Senate confirms pro-crypto Howard Lutnick as Secretary of Commerce.

• Former Tether CEO to debut yield-bearing stablecoin on Ethereum & Solana.

NOTEWORTHY READS & MEME

• Dfinzer’s read on OpenSea Situation 

• Chilla’s read on The Enduring Value of Airdrops.

• Deebs’s thread on What Currently Happening in Crypto.

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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.