Funding Rounds Spike Valuations While ETF Momentum Builds

Interest in digital assets is showing no signs of waning.  Just look towards companies like Tesla, MicroStrategy, and now Meitu – each of which have allocated significant sums of their treasury reserves to holding Bitcoin.  This past week brought forth multiple examples, highlighting this continued interest even further, through successful funding rounds and ETF applications.

Funding Round

Roughly one month ago, Blockchain.com made waves when it successfully raised $120 million at a valuation of $3 billion.  This was an impressive turn of events, as the raise – headlined by Google Ventures- made the company one of the highest valued in the sector.  Looking back, this was only the tip of the iceberg, as Blockchain.com has now seen a massive jump in valuation only a month later to $5.2 billion on the back of a fresh $300 million raise.

This most recent funding round was spearheaded by the following companies,

• Lightspeed Venture Partners
• DST Global
• VY Capital

It should be noted that these recent funding rounds are not based purely on hype.  Blockchain.com has managed to become widely accepted as a top competitor to industry leading Coinbase.  It has done so by offering a diverse product package to its client base of over 30 million clients.

Spiking Valuations

While the aforementioned $5.2 billion valuation of Blockchain.com is indeed impressive, the company still has a long way to go before it can match the lofty levels of its main competitor – Coinbase.  Coinbase, despite delaying its highly anticipated direct listing on the NASDAQ, has reached a valuation of $68 billion.

With the recent moves of companies like Blockchain.com and Coinbase leading to massive jumps in valuation, it should be interesting to see if popular trading app Robinhood is able to emulate their success.  It looks to do so with a recently filed application for an IPO of its own.

Robinhood long ago attained the status of a FinTech ‘Unicorn’, and despite a tumultuous 2021 to date which saw the company pay the SEC a $65M settlement, it would not be surprising to see another spike in valuation.  For the time being, financial details were not disclosed in its recent application for an IPO, as it was submitted as a confidential filing for the time being.

ETF Momentum Growing

              Fidelity Investments

Only days ago, we reported on the addition of applications for a United States based ETF.  These included filings from both WisdomTree, and SkyBridge Capital.  The application pool has now become even more crowded, as Fidelity Investments joined the fray.  The application, which can be found HERE, would see the creation of an ETF dubbed the ‘Wise Origin Bitcoin Trust’.

If approved, this ETF would see Fidelity Digital Asset Services act as a custodian, with performance goals tracking Fidelity’s own ‘Bitcoin Index PR’.  In the filing, it is stated that,

“The Trust provides direct exposure to bitcoin, and the Shares of the Trust are valued on a daily basis using the same methodology used to calculate the Index. The Trust provides investors with the opportunity to access the market for bitcoin through a traditional brokerage account without the potential barriers to entry or risks involved with holding or transferring bitcoin directly, acquiring it from a bitcoin spot market, or mining it”

              Goldman Sachs

Goldman Sachs has done a complete turnabout over the past year in its stance towards digital assets like Bitcoin.  The company, which one determined that digital assets were ‘not a suitable investment’ for its clients, has now filed with the SEC to offer notes directly linked an ETF which can provide investors with exposure to Bitcoin.

The ETF in question is one offered by ARK Innovation.  It is built upon a basket of companies involved in transformative technologies.  The following represent the top five holdings found in the fund,

• TESLA
• Square
• Teladoc Health
• Roku
• Zillow Group

With regards to Bitcoin, Goldman states in its filing that “The ETF may have exposure to cryptocurrency, such as bitcoin, indirectly through an investment in a grantor trust. The ETF’s exposure to cryptocurrency may change over time and, accordingly, such exposure may not always be represented in the ETF’s portfolio.”