Bitcoin Boom Roils Markets, Andreessen Horowitz Raises $515M

Coinbase experienced a brief outage yesterday as investors raced to the crypto exchange, propelled, in part, by a fear of missing out. 

FOMO is seen elsewhere in the market, as derivatives products soar 300% on daily trading volumes and Grayscale reported a notable uptick in shares of its Bitcoin Trust. Meanwhile, a16z is making another long-term play, launching its second, larger crypto fund. Here’s the story:

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Delayed Telegram
Messaging app Telegram postponed the launch of its TON blockchain for a second time on Wednesday, pushing the new launch date to April 2021. This delay triggers a clawback clause in which the company will offer to return up to 72% of each investor’s stake from its initial $1.7 billion token sale in 2018. Investors can choose to loan their capital to Telegram in exchange for a higher equity stake next year. 

Back in Business
Obsolete mining equipment is becoming profitable again, at least for a short time. According to the miner profitability index, tracked by mining pools PoolIn and F2Pool, older mining rigs, such as Bitmain’s AntMiner S9 or Canaan’s Avalon A851, can now generate a 10%-20% gross margin at an average electricity cost of $0.05 per kilowatt-hour (kWh).

Second Crypto Fund
Andreessen Horowitz has raised $515 million for its second crypto fund. The firm launched an initial $300 million crypto-focused in 2018. (Fortune)

Jump Shares
Amid the sharp rise in bitcoin’s price Wednesday, shares in the Grayscale Bitcoin Trust (GBTC) also saw notable gains of 14.3% on the day. Grayscale’s Ethereum Trust also saw a 7.7% jump to $104.50 per share. (Disclosure: Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.)

Coinbase Outage
Coinbase experienced a brief outage Wednesday as the price of bitcoin rallied to just below $9,000. The largest U.S. exchange by trading volume reported $300 million in daily transactions by Wednesday afternoon, dwarfing its average from the previous seven days. Kraken, another major exchange, also experienced some web issues. 

Legal Dispute
Micree Ketuan Zhan, the ousted co-founder and former chairman of leading bitcoin mining equipment manufacturer Bitmain, has scored a partial legal victory over his former employer. The court has granted Zhan’s request to block the company from registering a new legal representative. The legal dispute is the latest chapter in Zhan’s ongoing struggle with Bitmain since he was ousted by his fellow co-founder Jihan Wu last October.

New Standard
A Swiss-based nonprofit focused on advancing the adoption of blockchain technology has published a common industry standard for the custody and management of digital assets. (CoinTelegraph) 

Blockstack’s Business
Blockstack’s financial operations have run almost exclusively on Stacks token sales. The company brought in $23.3 million last year, $23 million of which came from its Regulation A+ compliant token sale in September 2019, according to SEC filings Wednesday. Its 2017-2018 revenues came from exempted token sales, the filing showed. The Block reports this represents a 37% fall in its 2019 revenue due lower sales of its Stacks token. 

Tencent Accelerator
Tencent has launched a blockchain accelerator program. The Tencent Industrial Accelerator is looking to mentor 30 startups and established firms looking to enter the blockchain industry. (The Block)

Portugal’s Sandbox
Portugal has approved a nationwide plan to encourage digitalization and experimentation with emerging technologies. While it covers a wide field of technological advances, the “Digital Transitional Action Plan” will also provide tax breaks for cryptocurrency trading and issuance and encourage firms working with blockchain, CoinTelegraph reports.

Chain’ Links to Tezos
Pricing feed protocol Chainlink has integrated with another blockchain, this time Ethereum rival Tezos. The integration means Tezos projects can pull from active pricing feeds for various assets to build out products, such as the bitcoin-based decentralized finance (DeFi) application recently created by the Bitcoin Association Switzerland.

Pierce’s PPE
Brock Pierce’s Puerto Rican nonprofit has teamed up with Binance to buy $1 million in personal protective equipment to help fight coronavirus in Puerto Rico. 

Copycats Be Warned
Alibaba has patented a blockchain-based program to vet the originality of songs. Granted by the U.S. Patent and Trademark Office on April 21, the patent describes a blockchain comprised of several library nodes and one validation node, which evaluates how similar a song’s tune, tempo and other factors such as lyrics and beat are to other tracks in the library. 

Cohn on Crypto/COVID-19
The COVID-19 crisis will hasten the adoption of digital assets, according to a Financial Times op-ed penned by former Trump adviser Gary Cohn. The former director of the US National Economic Council now sits on the advisory board of blockchain startup Spring Labs.

CoinDesk Live: Lockdown Edition continues its popular twice-weekly virtual chats with Consensus speakers via Zoom and Twitter, giving you a preview of what’s to come at Consensus: Distributed, our first fully virtual – and fully free – big-tent conference May 11-15.

Register to join our fifth session Thursday, April 30, with speaker Hudson Jameson from the Ethereum Foundation to discuss private transactions, client improvements and dealing with FUD, hosted by Consensus organizer Nolan Bauerle. Zoom participants can ask questions directly to our guests. 

Eclipsing Gold & Stocks
Bitcoin jumped 13% on Wednesday, the most in six weeks, as Federal Reserve Chair Jerome Powell promised an “unlimited pot” of money to keep the U.S. economy from collapsing. Blowing past predicted resistance levels, the cryptocurrency is now up 24% on the year, eclipsing both gold’s year-to-date gains of 13% and the Standard & Poor’s 500 Index, which is down 9%. 

Derivative Spike
Bitcoin’s two-month highs have revived interest in options and derivative instruments used to hedge against sudden price swings. Major exchanges registered a total trading volume of nearly $180 million on Wednesday, up 350% from the day before.

Cambridge Survey
CoinDesk is working with the Cambridge Centre for Alternative Finance (CCAF), an independent academic research institute at the University of Cambridge, on their 3rd Global Crypto Asset Benchmarking Study. To gather up-to-date information, the CCAF invites crypto companies to participate by completing one of the following surveys by May 1:

The resulting report will help us all get a better idea of where growth is happening, what it looks like, what barriers are in the way and what the short-term outlook holds. If you have any questions or feedback, you can contact the CCAF directly at  a.blandin@jbs.cam.ac.uk.

Two of CoinDesk’s most popular series, NLW’s The Breakdown podcast and the Money Reimagined newsletter by Chief Content Officer Michael Casey, come together for a special podcast microseries in the run-up to Consensus: Distributed, our first virtual big-tent event May 11-15. 

The Breakdown: Money Reimagined builds on themes Casey explores in his newsletter to tell the story of key arenas in the battle for the future of money – from the incumbent dollar to China’s aspirational DCEP to the insurgent bitcoin – in the context of a post-COVID-19 world. 

The four-part podcast features over a dozen voices including Consensus: Distributed speakers Caitlin Long, Matthew Graham and Kevin Kelly. New episodes air Fridays starting May 1 on the CoinDesk Podcast Network. Subscribe here.