Bitcoin nears all-time high
In Q3 of 2024, around $213 million was poured into crypto x AI startups, according to Messari.
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Bitcoin approached its all-time high. Plus, ETFs’ holdings near 1 million BTC, and what else is driving markets.
VCs are doubling down on crypto x AI. What to know about the growing intersection between the two technologies.
Numbers to know. The reward earned by an individual Bitcoin miner, the share of crypto startups building atop the Ethereum ecosystem, and more key stats.
MARKET BYTES
BTC closes in on all-time high ahead of U.S. elections
For the first time since March, bitcoin surged past the $73,000 mark on Tuesday, approaching its all-time high just below $74,000, before retreating to around $72,000 on Wednesday. A wide range of other tokens, from ETH to SOL, also saw gains this week; in a 24-hour period ending Tuesday, the broader crypto market cap rose 4.7% to $2.4 trillion.
Analysts attribute the spike in part to crypto traders’ outlook on next week’s U.S. elections, as well as to BTC ETF inflows. Bloomberg notes that options traders have “increased bets” that BTC will hit $80,000 by the end of November “regardless of who wins the election.” Both candidates have talked about crypto during this election cycle.
Here is more market info you should know about…
Bitcoin ETFs approach holdings of 1 million BTC
Last week, $906 million flowed into bitcoin funds. Sometime this week, the funds are on track to collectively break the 1 million BTC mark, with a value approaching a staggering $70 billion. BlackRock’s leading IBIT ETF alone now holds more than 400,000 BTC.
College try… In the latest sign that institutional investors are embracing BTC, the endowment fund for Emory University in Atlanta reported that it holds around $16 million in Grayscale’s Bitcoin Mini Trust. “Similar to pension funds, endowment funds prefer a risk-averse approach to their investments, making Emory’s allocation into a bitcoin ETF notable,” CoinDesk reports.
Beyond the election, what’s powering the rally?
Crypto markets are complicated and global and no one factor is ever fully responsible for gains or losses. Beyond the election, there are lots of reasons for markets to feel bullish. For one, interest rates and inflation in the U.S., Europe, and beyond have been dropping, boosting markets of all kinds. Some traders also view BTC as a valuable hedge in uncertain times. While inflation has cooled in the U.S., hedge fund legend Paul Tudor Jones noted last week that he is “long bitcoin” because he believes that prices will continue to rise, no matter who wins the White House.
What’s next? A slew of new data is set to emerge that could help boost (or cool) markets further, depending on what is revealed. This week, new U.S. consumer-spending data showed continued growth, and the latest monthly jobs report is due on Friday. Then early next month, on Nov. 6 and 7, the Federal Open Market Committee (FOMC) is set to meet. CME Group’s FedWatch is predicting a greater than 95% chance that the Federal Reserve will cut rates another quarter percent at the meeting.
CHAIN BRAIN
Venture funds go all in on the intersection between crypto and AI
As artificial intelligence and crypto become ever more intertwined with our day-to-day lives, venture capitalists are increasingly recognizing potential in the ways the two technologies can work together.
Hundreds of millions of dollars have been invested in crypto-meets-AI startups this year. And last week, Coinbase Ventures released an investment thesis around how crypto’s efficiency, borderless nature, and programmability can combine with AI to transform how humans and machines interact with the digital economy.
Here’s what you need to know about the growing link between the two technologies.
Venture capitalists are pouring money into crypto x AI startups
Many of the biggest crypto-focused VC firms — including Coinbase Ventures, Andreessen Horowitz (a16z), Paradigm, and Founders Fund — have invested in companies that sit at the intersection of crypto and AI.
Why? As Coinbase Ventures head Hoolie Tejwani put it, “Our core belief is that crypto and blockchain-based systems are a natural complement to generative AI. ”
Sentient, a startup looking to build an open-source artificial intelligence development platform atop Polygon, raised $85 million this summer. Ceti, which is looking to help make AI systems interoperable across different blockchains, raised $60 million this summer. And EPAL, a blockchain gaming startup, raised $30 million in September to help build out infrastructure that includes in-game AI companions.
Earlier this month, investment manager VanEck launched a $30 million fund aimed at the sector. And overall in Q3, around $213 million was poured into crypto x AI startups, according to Messari.
Onchain AI agents are on the rise
AI agents, which can autonomously perform tasks, manage assets, transact, or interact with other pieces of software, are one of the biggest new crypto-meets-AI use cases.
This week, Coinbase announced a tool called Based Agents, which allows users to build an AI agent that’s compatible with the Base blockchain within minutes. Once created, Based Agents can carry out trades, stake assets, or even post on the social media platform X. The launch followed tests earlier this year, in which Coinbase experimented with using an AI bot to buy crypto tokens from another bot.
More broadly, AI-powered bots have been used effectively this year to start or promote memecoins. One of the tokens promoted by an AI bot has managed to reach a market cap above $800 million, be owned by more than 35,000 different wallets, and become the most talked about memecoin on social media last week.
Bitcoin miners are also pivoting to AI
In the six months since Bitcoin’s last halving reduced, by half, the amount of new BTC generated by mining, many mining firms have turned some of their computing capacity toward AI in an effort to boost revenue.
Core Scientific signed a deal that could be worth as much as $8.7 billion with AI firm CoreWeave to host GPUs that are being used to train AI models. HUT 8, another bitcoin miner, received a $150 million investment from Coatue Management (an investor in CoreWeave) to help it build out AI infrastructure. And Hive Digital has also started pivoting to hosting AI servers, helping boost its revenue by 36% year-over-year last quarter.
The bottom line…
From AI-powered trading bots to blockchain technology that helps prove that people are human, and beyond, the intersection between crypto and AI is poised for further growth.
“These two secular technologies are going to interweave like a DNA double-helix to make the scaffolding for our digital lives,” said Coinbase’s Tejwani.
NUMBERS TO KNOW
400,000
The estimated number of transactions per second that a new gaming focused blockchain is expected to be able to handle. The blockchain, called Somnia, is being built by Improbable, which also built Bored Ape Yacht Club’s Otherside platform.
3.329
Amount of BTC, equivalent to around $222,000 at the time, earned by an individual Bitcoin miner last week. Because mining difficulty increases after every Bitcoin halving, it is typically done by large firms. But occasionally solo miners can get lucky — they've mined blocks on their own at least four other times this year.
62%
The share of new crypto startups that are opting to build atop the Ethereum ecosystem, which includes Ethereum, as well as layer 2 networks including Base, Arbitrum, and Optimism. Base is the fastest growing L2, with 28% of new startups choosing the Coinbase-incubated L2 since its launch, according to the study from Alliance, a crypto accelerator program.
$4
The starting price for a new collection of NFTs released by Major League Soccer. The NFTs are part of a new platform called MLS Quest, that allows users to collect medallions — either online or in real life — for the chance to unlock rewards such as team merchandise, autographed jerseys, tickets, and exclusive experiences.
SECURITY PSA
How to detect, and avoid, romance scams
Romance scams are all around us. There were more than 70,000 of them in the U.S. in 2022 totaling more than $1 billion in losses. Since many victims are too ashamed to report their cases, total financial losses are likely tens of billions a year.
Read our latest consumer protection blog post to learn about the four common romance scammer types to watch out for and how their cons typically play out.
TOKEN TRIVIA
When did Ethereum launch?
A
2009
B
2013
C
2015
D
2019
Find the answer below.
Trivia Answer
C
2015
