Dispatch #83: BlackRock Digs Deeper into Crypto

Apr 15, 2022 4 min read

Dispatch

In this patch of your weekly Dispatch:

BlackRock leads a huge round for Circle
Meta’s 50% fees have tongues wagging
Behold the Nexo Card 🔥

The Big Idea

BlackRock’s Stable Bet

BlackRock is the world's largest asset manager with more than $10T in assets under management. Because of that, other market participants pay close attention to their perspective on…well everything.

Over the last few weeks, we've seen their heightened engagement around digital assets.

First, in CEO Larry Fink's annual shareholder letter in March, he explicitly called out "a less discussed aspect" of the Russia-Ukraine war "its potential impact on accelerating digital currencies."

Indeed, he believes that "the war will prompt countries to re-evaluate [their] currency dependencies” and concludes that "BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients.”

Perhaps then we shouldn't have been surprised when BlackRock led a $400M round for USDC creator Circle this week. Importantly, the announcement made it clear that this is more than just a traditional investment:

"In addition to its corporate strategic investment and role as a primary asset manager of USDC cash reserves, BlackRock has entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC."

Sounds like there is a lot more to come with BlackRock's involvement in the space.

The Latest In…

Elon

The drama continues! A week after announcing that he had purchased 9.2% of Twitter and days after reversing his decision to join the Board, Elon has made an offer to buy the company for $41B in cash. Proponents of the move think that a private Twitter under Musk would be much more conducive to making Twitter a true free-speech commons. Antagonists are angry at the idea of a billionaire buying the entirety of an important media platform. Meanwhile in crypto land, Tron’s Justin Sun says he’ll offer $60 a share, while many others are using it as a moment to explore what a truly decentralized alternative would require. Never a dull moment.

The Latest In…

The Nexo Card

There’s one thing we’re all talking about this week and it’s the Nexo Card. The only card tied to a dynamic crypto-backed credit line that lets you spend without selling your digital assets is finally out in Europe and has made thousands of European HODLers happy since the official launch on Wednesday.

For the release of this first-of-its-kind product, we teamed up with none other than Mastercard as the payment network, and DiPocket – Nexo’s card issuer. We thank our partners for making history with us.

The Latest In…

The Metaverse

Facebook’s name switch to Meta and everything it implies about their prioritization has been lurking in the background as one of the most significant events – for good or ill – in the development of the metaverse. This week the crypto community was gobsmacked to discover that while Meta was planning to let people sell virtual items in their metaverse, they would be taking a 47.5% cut!

We genuinely don’t know if we’ve ever seen Web3 folks so unanimous in their revulsion for anything.

The Latest In…

Nexo Ventures

Speaking of metaverses, Nexo Ventures team was deep in deal mode this week and:

Made a strategic investment in Improbable, the UK-based Metaverse technology company, as part of their $150M funding round, alongside titans including SoftBank and a16z.
#AnotherOne – participated in RociFi $2.7M seed round. RociFi is a DeFi network that utilizes on-chain and decentralized identity data to facilitate zero- and under-collateralized loans to institutional and retail borrowers.

The Week’s Most Interesting Data Story

Ultra Sound Money?

Ethereum has been in the spotlight again this week. All eyes are turned to the merge, aka the shift to PoS. Core developer Tim Beiko both flared and threw a little cold water on the excitement, saying that the merge is definitely on track – but likely to happen later than the anticipated June timeline. That hasn’t got people extremely focused on the upside. Bankless’ Ryan Sean Adams pointed to a Bloomberg research piece estimating nearly 9% yield on staked ETH post-merge, not to mention a 2% annual supply reduction once burns from EIP-1559 were factored in. So what do you think – is ultra sound money on the table?