Gonna Make It PAC

Good morning. Today we've got our Weekend Update, a crypto-PAC in Washington, new ETFs, and more!

We've also added a Follow Ups section to the Weekend Update to provide links to updates on stories we've covered in past issues.

Bonus Content Coming: I'm targeting early next week the end of the month to have my notes out from Messari's Crypto Theses for 2022. I'll include a link to my notes in this newsletter, however, the full report is definitely worth a read. The report is now in podcast form and can be found here.

Market Update (as of 8:13am ET):

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Top 5:

1. Weekend Update
Bitcoin price action over the weekend was fairly stable, hovering around $38,000. Ether traded in similar fashion, sticking close to the $2,600 mark. Bitcoin trading volumes were light over the weekend, with the expectation that that trend may continue into the week with the Lunar New Year being celebrated in many Asian countries.

Bitcoin trading update from Dylan LeClair:

Follow ups from last week:
- Diem finds buyer in Silvergate Bank for $200 million...Read More
- Wonderland ousts QuadrigaCX co-founder and considers shut down...Read More
- President Biden to issue executive order on crypto regulation...Read More

2. Crypto leaders launch political action committee to back congressional candidates
On Friday, the GMI Political Action Committee (PAC) was announced by a corps of crypto industry leaders. The crypto PAC will support 2022 congressional midterm candidates "who work to give consumers and innovators the opportunity to build and use next-generation technologies services here in America." Founders and supporters of GMI include: CMS Holdings co-founder Dan Matuszewski, Framework Ventures co-founder Vance Spencer, FTX Digital Markets CEO Ryan Salame, Multicoin Capital, Messari, and others. The crypto industry continues to build strength in Washington with Coinbase spending $1 million in lobbying expenses during the fourth quarter of 2021 alone.

SSS: Crypto continues the push into politics with the launch of a political action committee. The group plans to support candidates during the 2022 midterms and draws funding from a range of crypto leaders and companies.

3. Crypto exchange Apifiny to go public via $530 million deal with Abri SPAC
More SPAC action in the crypto industry! Apifiny, a digital asset trading network, is going public via a merger with special purpose acquisition company, Abri SPAC I. The San Francisco based company serves institutional crypto traders by providing multi-venue execution across 25+ exchanges, access to liquidity globally, and compliance and security features all on a single user interface. The company will be traded on the Nasdaq at the end of the third quarter, when the $530 million deal is expected to close.

SSS: Crypto trading platform, Apifiny, is going public via a SPAC-merger later this year. The company focuses on institutional traders and provides a single platform to execute trades across multiple exchanges. It's been said many times in this newsletter, but the continued build up of infrastructure to support institutional trading is a clear sign that major players are taking crypto seriously.  

4. Binance Smart Chain, Ethereum Crypto Bridge Hacked for $80 Million
Another cross-chain hack, this time of the DeFi protocol Qubit Finance, sees a hacker get away with $80 million. A flaw in the X-bridge smart contract, which allows token swaps to occur between the Ethereum and Binance Smart Chain, was exploited by the hacker to take $185 million of Qubit xETH tokens. The hacker then used the stolen tokens as collateral for loans at other crypto lending platforms. The Qubit team tweeted out an offer of the "maximum bounty" to the hacker (below) in exchange for a return of the stolen funds. A full report of the hack's timeline can be found here.

SSS: Cross-chain protocol Qubit Finance was hacked to the tune of $80 million dollars. Cross-chain protocols appear to be a weak spot in crypto with a white-hat hack of Multichain occurring earlier this year that would have resulted in almost $2 million stolen.

5. Fidelity Plots Crypto Industry, Metaverse ETFs
When the SEC rejected Fidelity's spot-Bitcoin ETF application last week, the firm came back only hours later with two new proposals for the Fidelity Crypto Industry and Digital Payments ETF and the Fidelity Metaverse ETF. The crypto industry ETF would invest in businesses that are “engaged in activities related to cryptocurrency, related blockchain technology, and digital payments processing," while the metaverse ETF would be comprised of companies "that develop, manufacture, distribute or sell products or services related to establishing and enabling the metaverse." The most recent rejection of a spot-Bitcoin ETF has not deterred Fidelity and the firm believes the maturation of the industry warrants this type of product in the US. The company currently has a spot-Bitcoin ETF trading in Canada with $24 million in assets under management.

SSS: The SEC rejected Fidelity's spot-Bitcoin ETF application and the firm responded with two new applications for crypto and metaverse ETF products. Customer demand for crypto exposure is driving one of the world's largest asset managers, Fidelity, to launch additional investment products while also continuing to push for approval of a spot-Bitcoin ETF in the US.

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.