$10B in Holdings and $4B in Profits

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Good Morning.

Funding rates have started to pick up. They’re nowhere near the last local top, which is great as it indicates that there are genuine spot buying thanks to the spot Bitcoin ETFs. All eyes are on the halving (April) and spot Ethereum ETFs (May).

In Today's Email:

• What Matters: MSTR $4B profit 📈

• Founders Highlight: Eli of StarkWare 👨🏻‍💻

• Deal Flows: Architect $12M round 💰️ 

You read and share. We listen and improve. Send us feedback at [email protected].

TOGETHER WITH

Flare Networks

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Meet fellow developers and learn about Flare, the blockchain for data, at ETH Denver. Get the latest insights from the fireside chat featuring:

• Nalin Mittal (Google Cloud, Web3 Product Lead)

• Stanley Wu (Ankr, CTO)

• Hugo Philion (Flare Labs, CEO)

Spaces are limited so make sure to secure your spot ASAP 👇

WHAT MATTERS

MicroStrategy’s $4 Billion Profit

State of play: MicroStrategy, the largest corporate Bitcoin holder, has seen its BTC holdings exceed $10B in value, amassing over $4B in profit as Bitcoin's price neared $53,000 yesterday.

• As of January's end, MicroStrategy held 190,000 bitcoins, acquired at $5.93B total, averaging $31,224 per coin, according to its latest investor presentation.

• MicroStrategy started buying Bitcoin in Q2 2020 and has continued to acquire more every quarter since then.

• By December last year, MicroStrategy's profit was nearly $2B, which has doubled following Bitcoin's over 20% rally since the start of 2024.

Why it Matters: With the launch of numerous US spot Bitcoin ETFs, it remains to be seen how MicroStrategy roles will play out as there’s no reason for investors to still buy MSTR instead of the ETFs directly.

For builders and investors: That said, MSTR roles in the crypto markets will still be relevant in the upcoming years. We’ll see if they’ll do anything interesting in other BTC-related verticals (e.g. Mining, Ordinals, etc.)

BUILDER-INVESTOR HIGHLIGHT

Eli Ben-Sasson of StarkWare

Intro: Eli Ben-Sasson is the co-founder and CEO of StarkWare, the developer of Starknet. Eli was also the Founding Scientist of the Electric Coin Company (the inventor of Zcash).

• Starknet recently published the controversial eligibility criteria for its $STRK airdrop, including the minimum of 0.005 ETH balance in the user’s account before November 15th, 2023.

Previous background: Eli was an academician, he was a Post-Doctoral Researcher at MIT, a Visiting Assistant Professor at TTI Chicago, and a Professor for 7 years at Israel Institute of Technology.

• Eli earned his PhD in Computer Science in 2001 from The Hebrew University of Jerusalem.

The big idea: Eli through StarkWare is using high-level math to develop scaling solutions that aim to provide blockchain users with a secure, fast, and seamless experience.

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

Understanding the Intersection of Crypto and AI

Credits to Lucas Tcheyan for the original report.

Lucas Tcheyan from Galaxy published a report on the intersection of crypto and AI two days ago. He highlights the three emerging verticals (Decentralize Compute, zkML, and AI Agents).

Here are the key takeaways from the report on the three emerging verticals:

• Decentralized Compute: Decentralized compute marketplaces, crucial for AI training and inference, are emerging in various forms but need to prove their advantages over centralized options.

• Zero-Knowledge Machine Learning (zkML): zkML aims to offer efficient and verifiable on-chain model outputs, mirroring off-chain compute security. It's still in the experimental phase, grappling with issues like computational costs, memory constraints, and limited resources.

• AI Agents: The availability of on-chain compute verification enables on-chain AI agents, to benefit from crypto's permissionless payment systems. With projects launching basic agents for advanced users, the growth in this area suggests these agents could soon be major users of decentralized compute and zkML, autonomously tackling various tasks.

AI is bringing innovations to crypto similar to those in web2, improving infrastructure, user experience, and accessibility.

• However, most near-term integrations will be off-chain due to the challenges of proving on-chain AI's technical feasibility and economic viability at scale.

• Advances in decentralized compute, zkML, and AI agents are setting the stage for a future where crypto and AI are closely integrated.

DEAL FLOWS

Architect $12M Round

Deal flows remain steady this week, we saw $100M+ in deals 💼

Architect, an institutional trading technology provider for global futures, options, and digital asset markets, announced that it has completed a $12M investment round, led by BlockTower Capital and Tioga Capital.

• This round brings Architect’s total capital raised to $17M since its founding in January 2023.

• The investment will fund the upcoming launch of its US derivatives brokerage via its CFTC-regulated subsidiary and support Architect expansion into US securities and derivatives services.

• Additionally, the funding will enable the continued growth of Architect's Chicago headquarters and further support its strategic expansion into EU and APAC jurisdictions.

Deal flows in the past week:

• Drosera, $1.5M Pre-Seed Round

• Watches.io, $1.9M Pre-Seed Round

• Witness, $3.5M Pre-Seed Round

• Overworld, $10M Seed Round

• Fordefi, $10M Seed+ Round

• Helika, $8M Series A

• Exverse, $3m Private Round

• IntentX, $1.8M Strategic Round

• Ultiverse, $4M Strategic Round

• Architect, $12M Private Round

• Concrete Protocol, $7.5M Unknown Round

• Analog, $16M Unknown Round

• MetaStreet, $25M Unknown Round

• Hydro Protocol, Undisclosed $ Private Round

• Lava Network, Undisclosed $ Seed Round

• Unisat, Undisclosed $ pre-Series A Round

QUICK BITES

• Coinbase beats Q4 estimates.

• Uniswap reveals tentative date for v4 launch.

• MicroStrategy tops $4B in BTC holding profit.

• Genesis cleared to sell GBTC shares worth $1.3B.

• Aptos partners with Jambo to launch a web3 phone.

• Tiger Global exited the Coinbase stake late last year.

• House Hearing on FinCEN turns into a crypto debate.

• Citibank tests the tokenization of PE funds on Avalanche.

• Starknet Foundation unveils STRK token distribution plan.

• JPM states US regulators have control over Tether via OFAC.

• FCA issued 450 alerts against illegal crypto promotions in 2023.

• Galaxy predicts 20% of BTC hash rate could go offline post halving.

NOTEWORTHY READS

• Y Combinator’s read on request for startups.

• Thiccythot’s read on reviving a cursed coin: a Polygon thesis.

• NEAR’s read on unlocking web3 usability with account aggregation.

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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.