SEC Makes It Easier for Crypto Startups to Raise Funds; October was a Massive Month for BTC Options; Square Did $1.63B in BTC Sales via Cash App in Q3

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P.S. Before we dive into what happened in Blockchain & Crypto last week, check out my Connecting the Dots Newsletter, where you will get much more. Every Saturday/Sunday????

Last week (2-7 November) was yet another interesting week in Blockchain & Crypto this year. This week was all about Bitcoin - from 1 million Bitcoin wallets holding 10,000 in Bitcoin to massive month in Bitcoin Options, decentralised prediction markets and Square crushing the Bitcoin sales numbers.

Without further ado, let us dive into what has happened in the financial technology sector this week. Let’s connect the dots.

SEC Makes It Easier for Crypto Startups to Raise Funds

The SEC is raising crowdfunding limits from $1.07M to $5M, meaning crypto startups could start relying less on venture capital.

The US Securities and Exchange Commission this week raised its limit on Regulation Crowdfunding offerings from $1.07 million to $5 million as part of a package of amendments to its exemption offering framework. The move should provide cryptocurrency startups with more legal pathways to funding beyond venture capital.

With the amendments voted in, accredited investors no longer have any limits, while non-accredited investors can use either their annual income or net worth to calculate investment limits, thereby increasing the amount they can invest in a 12-month period.

THE TAKEAWAY

This new development effectively gives more freedom. Crypto firms from now on don’t necessarily have to raise money from venture capital funds. This will thus give more freedom enable some blockchain projects to get all of their money from the public instead of VCs.

1M Bitcoin Wallets Are Now Holding $10,000 in BTC

On the back of Bitcoin's price rally, more BTC addresses are now holding large balances of the cryptocurrency.

There are now more than one million wallets holding over $10,000 worth of Bitcoin, according to data provided by BitInfoCharts. This is on the back of Bitcoin's recent price rally.

At the time of writing, BitInfoCharts’ rich list puts the grand total of addresses that are richer than $10,000 at 1,095,150. 

It is important to stress though that these figures do not necessarily mean there are over 1 million people holding over $10,000 worth of Bitcoin, as one individual can own multiple Bitcoin addresses. Yet, on the flip side, a lot of the Bitcoin held in the largest addresses is owned by multiple people holding funds on exchanges.

THE TAKEAWAY

The figures not only show how many Bitcoin addresses exist in Bitcoin’s richest categories, but also how the famed cryptocurrency is distributed across more modest amounts of wealth. As Bitcoin rally continues, this should only continue to grow.

October was a Massive Month for Bitcoin Options

Bitcoin options interests reach new heights in October, according to data compiled by The Block Research.

The aggregated open interest of bitcoin options reached an all-time high of $2.4 billion by the end of October, a month-over-month increase of 54.7%. On October 29, the open interest of Bitcoin options hit a new daily all-time high of $2.6 billion.

The monthly volume of bitcoin options reached a new all-time high as well. It increased by 46.4% on a month-over-month basis from $3.9 billion to $5.8 billion.

Deribit continues to maintain its dominance in the bitcoin options market, making up 89.5% of last month's volume.

THE TAKEAWAY

With Bitcoin rallying, derivative markets are following too.

US 2020 Election Boosts use of Decentralized Prediction Markets

The 2020 U.S. election has been a boon for decentralized prediction markets.

On Augur, open interest recently passed $4 million, primarily driven by Catnip.exchange, a simple end-user interface for Augur's U.S. election market. According to The Block researcher Mika Honkasalo, open interest on Augur has been steadily increasing by over $1 million or 25% daily, leading up to election day.

Polymarket, a popular newcomer in the prediction markets space, also benefited from the U.S. election, with its election-related markets receiving over $3.5M in trading volume on Polymarket V2 — roughly 91% of total volume on the platform.

THE TAKEAWAY

Prediction markets is one of the most interesting space in DeFi right now. Watch it closely.

Square Did $1.63B in Bitcoin Sales via Cash App in Q3

Square sold $1.63 billion in bitcoin during the third quarter of 2020, according to a newly released earnings statement. The latest quarterly sales make up nearly 90% of all sales in prior quarters, highlighting the growth in the business.

Backing out the cost to acquire the bitcoin, Square made $32 million in gross profit on its bitcoin sales, up more than 15 times since last year and good for more than 4% of total company gross profit.

"Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and volume per customer," the firm said in its report.

Square made headlines last month when it announced the purchase of $50 million in bitcoin. At the time, the payment firm said that "cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose.” The investment represented roughly 1% of Square’s total assets as of 2020's second quarter, as reported at the time. 

THE TAKEAWAY

Bitcoin continues to drive both institutional and retail interest. Square has jumped into this way before the mainstream adoption, which effectively has made Cash App a one-stop-shop for buy, send and spend.

Extra Reads & Quick Bites for Curious Minds??:

• Ethereum 2.0 deposit contract goes live, in key milestone for blockchain network's "proof-of-stake" upgrade.
• Chinese central-bank governor more than 4M transactions totaling about 2B yuan ($299M) have been conducted using digital yuan.
• Australian central bank partnering with multiple prominent domestic banks to explore possible use of digital currency.
• Nigerians protesting police corruption and concerns about a possible internet shutdown are adopting decentralized VPNs, along with bitcoin.
• Following Coinbase’s announcement, peer-to-peer digital asset marketplace Paxful will launch a Visa debit card.
• Fidelity launches engineering hiring initiative to build out crypto trade and custody services

Quote of the Week/??Food for Thought??

In Bitcoin we trust? ??

Graph of the Week

Bitcoin has spent 21 days, or 0.49% of its time in existence above current levels. This came at the tail end of 2017’s face-melting bull-run.

Week in Brief

The SEC is raising crowdfunding limits from $1.07M to $5M, meaning crypto startups could start relying less on venture capital.

On the back of Bitcoin's price rally, more BTC addresses are now holding large balances of the cryptocurrency.

Bitcoin options interests reach new heights in October, according to data compiled by The Block Research.

The 2020 U.S. election has been a boon for decentralized prediction markets.

Square sold $1.63 billion in bitcoin during the third quarter of 2020, according to a newly released earnings statement. The latest quarterly sales make up nearly 90% of all sales in prior quarters, highlighting the growth in the business.

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

?? These are the Best Performing Stocks of the Last Decade

?? Welcome to the Google Bank - Your Everyday Banking from Google, NOT a Bank.

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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 company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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