Do investors believe BTC is already mainstream? ??; Crypto funding in 2021 was bigger than all previous years. Combined ??; Kraken snags Staked ??

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Last week (20-24 December), despite being a holiday week, was still an exciting one in the world of Blockchain and Cryptocurrency.?We will look at?whether investors believe Bitcoin is already mainstream; how crypto funding has exploded in 2021; Kraken acquiring Staked, and other interesting news and developments.

Without further ado, let us dive into what has happened in the Blockchain & Crypto sector last week. Let’s connect the dots.

Do investors believe Bitcoin is already mainstream? ??

The money???US-based crypto technology firm?NYDIG has netted $1B in funding at a whopping $7B valuation?to drive its global mission - making Bitcoin accessible to all consumers through institutional clients and partners.

The round was led by WestCap, with participation from prior leads Bessemer Venture Partners and FinTech Collective, as well as strategic partners and existing investors Affirm, FIS, Fiserv, MassMutual, Morgan Stanley, and New York Life.

The USP ???The crypto technology firm provides the infrastructure for financial institutions (FIs) to offer a variety of Bitcoin products. Here’s how it works:

• NYDIG’s platform lets FIs build Bitcoin lending, trading, and rewards programs. Banks can use NYDIG’s white-label solutions to offer Bitcoin custody, and investment managers can offer crypto funds, for example.
• NYDIG also struck several partnerships with banking vendors, including?FIS?and?NCR, so their banking clients could offer trading products.

?? THE TAKEAWAY

So Bitcoin is mainstream now? ???Well, let’s look at the bigger picture. 60% of US adults are now aware of Bitcoin, per a 2021 survey by Curiosity at Work, and 66% are in the UK, per a Coinbase 2021 survey. Furthermore, banks are starting to offer crypto services to keep customers on their platforms as they are increasingly using exchanges, and challengers like Venmo and Revolut, which already offer trading. Moreover, several large wealth managers, including Morgan Stanley and Goldman Sachs, partnered with FinTechs like NYDIG to offer their clients exposure to Bitcoin. That said, 2022 should continue to be a massive year for crypto firms. Driven by a cross-demographic spike in consumer crypto interest, venture capital funding is flooding the space too, and infrastructure providers like NYDIG stand to profit.

Crypto funding in 2021 was bigger than all of the previous years. Combined ??

Flooding the space with ???????According to available data from PitchBook, as of December 15, VCs have invested around $30 billion into the crypto industry in this year alone.

Massive surge ???For the perspective, ATH of crypto investments was in 2018 when investors poured $8 billion into the space. This means that investors have invested almost 4-times of what they did in 2018 into the space. Let that sink in… ??

Top investors ???Data from PicthBook reveals that the top?venture capital investors?in the crypto industry include?Coinbase?Ventures which has closed around 68 deals this year,?Digital Currency Group?with 58 deals, and Polychain Capital with 44 deals. Other VCs that make up the top 5 include?Pantera Capital?and?Andreessen Horowitz?with 43 and 40 deals respectively.

These investors participated in some notable funding rounds like that of?FTX, a crypto derivatives exchange that raised $1 billion in its Series B funding round in July, and New York Digital Investment Group who also raised $1 billion recently.

?? THE TAKEAWAY

FOMO & New trends.?The surge in crypto investments is obviously tied to several new innovations that can now be found in the crypto space. Most notably, it’s the growth of NFTs, DeFi, Web 3.0, metaverse, among others. Zooming out, it must also be noted that investors are funding almost anything and everything these days, primarily because they think that they don’t have enough exposure to the industry and simply fear missing out. On a general level, we’re still early, and the next couple of years should be even more exciting as the crypto space grows to 1 billion users globally.

Kraken snags Staked ??

The deal ???Crypto exchange?Kraken?announced that it had acquired?Staked, a non-custodial staking startup.

Though details of the acquisition deal were not disclosed in the announcement, Kraken said that the acquisition was "one of the largest crypto industry acquisitions to date".

But what is it? ???Staking refers to the process of earning passive income on cryptocurrencies based on the proof of stake consensus mechanism. It involves users pledging their crypto assets to the network to help validate transactions and make them more secure.

In return, users get rewards, most often in the cryptocurrency, they stake, with average yield rates varying depending on the network.

Staked offers non-custodial access to cryptocurrencies, meaning that users are in full control of their private keys.

?? THE TAKEAWAY

The IPO prep.?10-year-old?Kraken has a long history of acquisitions, including the purchases of Swiss-based charting and trading terminal CryptoWatch in 2017, London-based financial services firm Crypto Facilities in 2018, and crypto markets data and intelligence firm CryptoFinance.ai in 2019. Staked is its 5th acquisition in 2021 alone. This comes as no surprise given Kraken is more actively thinking about public offering, potentially?IPOing?over the next two years. Kraken’s, which is currently valued from $10B to $20B, public debut would be very welcomed given its closest competitor Coinbase debuted in April this year. $COIN is currently down by -25% since their ATH.

Extra Reads & Quick Bites for Curious Minds??

• Crypto use ???A third of financial institutions are making payments via cryptocurrency, according to a survey of financial leaders. The research by payment network?Mercuryo also shows that three in five businesses report increased demand from customers to accept crypto as a payment form. The research is part of a report called The State and Future of B2B Payments in the UK.
• DeFi hack. Again ???Yield compounding tool?Grim Finance?suffered a?$30M “reentrancy” exploit?on Sunday. Built on the Fantom Opera network, Grim Finance allows users to stake their?liquidity pool tokens?in what it calls Grim Vaults, automatically harvesting yields and re-staking rewards using strategies for even higher yields. Stolen fantom tokens were routed to other Fantom-based?decentralized exchanges?(DEX) including AnySwap and SpookySwap, where the attackers exchanged them for other cryptos including the dollar-proxy asset USDC. Grim developers paused all vaults on Sunday to prevent further damage, though the platform's total value locked plummeted.
• Kraken NFT marketplace ???Kraken?co-founder and CEO Jesse Powell announced in a?Bloomberg?interview that the exchange will soon enable support for NFTs, "We're working on an NFT platform right now to give investors exposure to the burgeoning NFT market." The platform could feature projects from Metaverse-centric companies, such as Meta, The Sandbox, Pepsi, and Adidas. Powell added, "We think this is going to get to be a bigger and bigger thing, and…we want to be in front of that for people."?
• The positive take on CBDCs ???Central bank digital currencies (CBDCs) could ultimately mean good things for the crypto industry, the CEO of the crypto exchange Binance said. “Overall, I believe CBDCs are very positive for the crypto industry, but with a few caveats,” Changpeng Zhao wrote on the?company blog. Among those caveats? Zhang suspects most initial versions of CBDCs will be different in their fundamental properties to currencies such as bitcoin and ethereum. He also expects most CBDCs to have an unlimited supply, with central banks potentially minting more at will, leading to possible inflation.

Money Moves??

• Galoy, a developer of Bitcoin banking software and creator of the Bitcoin Beach Wallet in El Salvador,?closed?a $3M seed round. The suite of Galoy solutions enables any community, company, or government to offer banking services using Bitcoin and Lightning.
• Polygon and Reddit Co-founder Alexis Ohanian’s VC?firm, Seven Seven Six,?announced?a $200M?initiative backing projects operating at the intersection of social media and Web 3.0. The initiative will focus on gaming applications and social media platforms built on Polygon’s infrastructure.?
• Arcade, a platform that facilitates loans against NFTs as collateral, has?raised $15M.
• Render Network, a crypto startup that provides rendering tools to NFT and metaverse projects, has?raised $30M?in a token round.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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