90% of all Bitcoin has been mined. What’s next? 🤔; Klarna isn’t going public yet, but you can already get a piece of it 🍰; PayPal for Crypto raises $52M 👀
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Good day Everyone,
And happy Sunday! The week was just a blast, hence, I invite you to take a look at the three stories that were moving the headlines this week in the financial technology world. You can uncover other stories, keep the FinTech pulse daily and get at least X5 more by becoming a subscriber. Join the community here:
And here’s a mix of 3 really interesting FinTech stories from this week:
90% of all Bitcoin has been mined. What’s next? 🤔
The milestone 👀 The biggest and most popular cryptocurrency has hit a new milestone as 90% of all Bitcoins have been mined as of Monday morning. This means 18.89M bitcoins – of a maximum of 21M – are now on the open market.
One must note that reaching the milestone took nearly 12 years since the first Bitcoins were mined on January 9, 2009. However, the remaining supply is not expected to be mined until February 2140, based on network activity estimates and Bitcoin’s halving schedules.
Available is less, actually… 🤷♂️ Despite that BTC is capped at 21M, not all of 21 million Bitcoin is expected to be available on the open market. Crypto analytics firm Chainalysis estimates 3.7M bitcoin have been “lost” based on analyzing address activity, from reasons ranging from losing one’s private keys to even death.
A further 1M bitcoin is still held by Bitcoin creator Satoshi Nakamoto, untouched because the pseudonymous person/s mined the amount in the network’s early days.
✈️ THE TAKEAWAY
So what’s next? 🤔 When thinking about Bitcoin’s future, one must realize there are a lot of moving parts. First and foremost, Bitcoin didn’t respond to US inflation hitting a 6.8% annualized rate, which is the highest year-over-year inflation rate since 1982. This hence contradicts one of the most widely cited selling points of Bitcoin – that it’s an inflation hedge, a place to put your money when fiat is losing real-world value. On the other hand, on-chain data shows that crypto investors appear to have resumed Bitcoin accumulation, which is a sign they expect the price to rise. Blockchain data tracked by Glassnode shows the 7-day moving average of exchange flows turned negative a week ago, indicating net outflows. The level fell to -5,924 BTC on Sunday – the lowest reading since early August. According to IntoTheBlock, coins worth $3B left centralized exchanges last week, the biggest weekly outflow in 5 months. Yet, despite all of that, two prominent Bitcoin Core contributors have announced departures. Veteran open-source Bitcoin developer John Newbery and Bitcoin Core maintainer Samuel Dobson will step down from their roles, which obviously raises some questions. Add it all up, and the current sentiment seems to be more bearish than bullish. Yet, that could easily change… Bitcoin is currently trading at over $47,000, having declined about 30% from its peak of $69,000 earlier this year.
Klarna isn’t going public yet, but you can already get a piece of it 🍰
The news 👀 An anonymous investor is reducing its stake in BNPL giant Klarna and offering the shares to small investors, according to The Times.
The offer is happening in the UK at a 5% discount to the $46 billion valuation that the Swedish “buy now, pay later” credit company achieved 6 months ago.
The offer 👉 Crowdcube, the online investment platform, has been taking expressions of interest from its 1.2M members for shares in Klarna, which is the most valuable privately-owned financial technology company in Europe.
The investment platform has been messaging its members telling them that it has “secured an exclusive, limited allocation” of Klarna stock from an unidentified private seller.
Overwhelmed 🤷♂️ Although Crowdcube didn’t specify how many shares it was selling and for whom, they did emphasize that the interest in Klarna shares has been overwhelming. Well, that’s understandable - who wouldn’t want a piece of the most valuable FinTech in Europe? 🤔
✈️ THE TAKEAWAY
BNPL is fading away? 🤔 Although there’s very little information for one to make a robust conclusion here as to why somebody would sell Klarna at the discount, there is one indication we should be aware of. The unknown investor may actually be dumping, as buy now, pay later stocks have started to plummet. Affirm, Afterpay, and Zip Co, some of the most notable players in the BNPL space, all have seen their stocks declining 23-28% in the past month alone. That’s definitely not something to be proud of… Yet, the decline in the stock price was part of a broader drop across the FinTech industry, as inflation took hold and fear of the omicron variant sent stock prices down. Also, looking at the fundamentals, all aforesaid BNPL stocks show somewhat strong performances, with a focus on expansion and partnerships, which effectively should make them worth holding for the long term. Therefore, I would argue that this is a somewhat strange personal decision, or simply a need to cash out now, rather than a worrying signal for a contracting BNPL sector.
PayPal for Crypto raises $52M 👀
The funding 💸 UK-based crypto payments infrastructure startup Ramp has raised $52.7M in a Series A funding round.
Series A raise was led by Balderton Capital. Existing backers NFX, Galaxy Digital, Seedcamp, Firstminute Capital, and angel investors such as Wise co-founder Taavet Hinrikus and TrueLayer’s Francesco Simoneschi also participated.
This Series A raise arrives 6 months since the company closed a $10.1M seed round, and is now partnered with over 400 developers.
The USP 🥊 Founded in Warsaw in 2017, Ramp offers non-custodial, full-stack payment infrastructure that aims to open up cryptocurrencies and digital assets to more businesses and users. It styles itself as the PayPal for crypto.
With its Ramp SDK, the startup is giving clients the ability to offer crypto-enabled services within a few hours. When multiple brands employ Ramp’s technology, there’s no need for consumers to enter the verification process for each individual payment gateway.
Ramp received approval from the UK’s FCA in July 2021, recently received the seal of approval from US FinCen – the Financial Crimes Enforcement Network, allowing the company to legally operate in the US, also receiving an Open Banking license from The Polish Financial Supervision Authority (KNF) in 2020.
Numbers 📊 The company said it has seen monthly transaction volumes grow by a factor of 30 times in the past 12 months while tripling the size of its team.
✈️ THE TAKEAWAY
The PayPal for crypto play. At the core, Ramp is all about the infrastructure. Infrastructure for opening up the digital asset world to new (mainstream) audiences, by allowing users to buy digital assets directly in-app in a convenient and reliable way, without needing to sign up for an exchange or set up a crypto wallet. If we believe in Web3, then any crypto-enabled app will need to onboard mainstream users, and Ramp is here to bridge the gap between the use cases that rely on crypto and fiat money. If we have learned anything from a massive MoonPay fundraise, crypto payments infrastructure is crucial and it’s getting hotter every day.
🔎 What else I’m watching
Crypto-fit 👀 SEC Chairman Gary Gensler said crypto fits into the "broad remit" of the SEC. "The public's anticipating some profit based upon the efforts of some entrepreneur or computer-science group that's raised money from the public. That fits in our broad remit at the SEC." Gensler reiterated his desire for more robust measures to protect crypto investors and invited crypto trading platforms to come to the SEC and work together to establish standards.
Acquisitions, Crypto & SPAC 👉 Personal finance startup Dave will use $450M it’s expected to raise in its upcoming initial public offering (IPO) to make acquisitions, launch new products and possibly invest in cryptocurrency, The Wall Street Journal (WSJ) reported. Dave has an app for consumers who often overdraw their bank accounts or run out of cash. The company will merge with special purpose acquisition company (SPAC) VPC Impact Acquisition Holdings III Inc. in the next few weeks, and then its shares will trade on Nasdaq in early January.
Crypto ads… 😬 The U.K. Advertising Standard Authority (ASA) issued rulings against seven of the sector’s biggest firms, including Coinbase and eToro, for misleading and irresponsible ads promoting crypto investments. The action taken by ASA comes after the regulator announced in July that misleading crypto marketing was a “red alert” priority and the agency would pay close attention to it. “We see this as an absolutely crucial and priority area for us” said Miles Lockwood, director of complaints and investigations at ASA.
💸 Following the Money
Austria-based digital receipts FinTech Warrify has received an investment of EUR 150,000. With its platform, Warrify aims to save users from physically storing receipts.
NFT metaverse developer MoonRay raised $3.5M to build the first metaverse RPG on the Stacks blockchain, which operates smart contracts on the bitcoin network.
IBISA, which is focused on providing coverage for “small farmers whose livelihoods might be affected by adverse climate events,” IBISA just raised about $1.7M in a new capital round. Despite its European roots, focuses on developing markets.
👋 That’s it for today! Thank you for reading and have a productive rest of the weekend! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
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