Welcome back to BlockchainAsia. I am Coco. This newsletter includes:
Editorial
Market Data,
Deals
Regulatory developments, and
Recommended reading
Editorial
On January 10, upon the SEC’s long-awaited approval of the Bitcoin spot ETF, I received some messages from my contacts in China. Having been closely monitoring the developments in the past few months, they told me that when the approval news was finally unveiled their excitement was blended with a tinge of sadness.
They lamented China could have been the country to take Bitcoin to this new level. China once controlled more than 50% of Bitcoin’s hash rate, had the most BTC owners, and the top 3 largest exchanges were in China. Within 5 years they lost it all. Crypto and mining are banned outright there. Now, a whole lot of catch-up to do in Hong Kong, which after 2 years of hesitation, strives to reinvent itself to be a Web3 hub in Asia.
On January 13, another big news broke. In Taiwan, Lai Ching-te of the Democratic Progressive Party (DPP) won the presidential election. However, none of the three parties managed to secure a majority in the unicameral parliament, the Legislative Yuan. The rise of the minority party, the Taiwan People’s Party (TPP), could play a pivotal role in fostering a more robust system of checks and balances within the parliament. Bloomberg’s report
Source: Bloomberg
Taiwan is strategically important for its thriving semiconductor industry which contributes to 20% of its GDP, and its role as a key supportor for major Bitcoin and other crypto mining rig suppliers. In 2020, as I commenced writing my blog BlockchainAsia, Taiwan just concluded its presidential election. I did an introduction to Taiwan’s dynamic blockchain & crypto industry. BlockchainAsia#2
Again, I want to wish Taiwan and its people the best!
Market Data
USDT
USDT’s market share continues to climb, reaching $94.9B, vs. USTC's $24.6B on January 13, according to DeFiLama. Since 2Q of 2022, USDT and USDC have moved in opposite directions.
The weekly unique active wallet address of Tether is 5.5M+. The significant jump in market share and the number of active addresses could be driven by 1) an increase in use as derivatives collateral 2) an increase in use as a vehicle to move assets outside of some countries with capital control, e.g. China 3) an increase in use to store value in some high inflation countries.
Source: Yash Bora on X
Bitcoin Hash Rate
China’s monthly Bitcoin hash rate is creeping up. In January it ranks #2 at 21.11%. trailing the U.S. Xinjiang province is said to quietly allow miners to mine Bitcoin again since it has an oversupply of electricity.
Source: Bitcoin Mining Map, University of Cambridge
Investments
✺ LD Capital, a Hong Kong-based fund, announced the launch of a Solana ecosystem fund.
✺ The first BRC20 infrastructure project BRC20.com raised $1.5M from a group of investors including Sora Ventures, a Taiwan-based VC.
✺ The first gaming project on Bitcoin Ordz Games completed its seed round led by Hong Kong-based Waterdrip Capital and joined by Sora Ventures and others.
✺ Solana-based DeFi project Saros raised $3.75M from VCs including Solana Ventures, 2 Asian VC funds Hashed and Spartan and others.
Regulatory Developments
➤ On January 10, South Korea’s Financial Service Commission (FSC) on its website put out a statement:
“Domestic securities firms brokering overseas-listed Bitcoin spot ETFs may violate the existing government stance on virtual assets and the Capital Markets Act. However, regulations on virtual assets are being established, such as the Act on the Protection of Users of Virtual Assets, which will go into effect in July of this year, and there are overseas cases such as in the United States, so we plan to review them further.”
FSC also announced that it was considering prohibiting crypto traders from using credit cards in transactions.
➤ Hong Kong’s SFC has received about 10 applications for cryptocurrency spot ETFs, 8 of which are at an “advanced stage”. The question remains whether SFC will approve both BTC and ETH ETF applications simultaneously. SCMP
What I Recommend
✔ Meet stablecoin's dad: Mr. Eurodollar
✔ What will a Bitcoin ETF mean for Bitcoin? Lessons from ETF History
That’s all for now. Until next time.
Coco
I am Coco Kee, Co-founder of Kee Global Advisors and author of BlockchainAsia. More than 3 years ago, I started following innovations and developments in Asia’s blockchain, digital & crypto assets with the belief that this industry is inherently global and Asia is the other side of the coin. BlockchainAsia keeps readers informed of the latest developments and opportunities in Asia, a unique platform to showcase emerging Asian startups and VC funds.
Email me if you want me to include your company’s stories or interview you. Follow me on Linkedin and Twitter.
The curated content is selective and serves as information and contains personal views only, not investment advice.