$6.5B BTC Sell, U.S.'s Unexpected Growth, and Meta's Content Moderation!

We’re sending thoughts to anyone affected in LA - stay safe!

This Week in Crypto

We’ll get to the main piece of news that nuked our bags in a moment, but first, it’s tradition to peek at ETF flows…

Well we had one (very) good day (+978M) that saw us tag $104k followed by one (very) bad day (-568.6M) that saw us tag $91k. Talk about volatility.

A primary driver of this PA was one final middle finger from the DoJ who were cleared to sell $6.5B of Silk Road seized assets (c.35% of their total stash). 

Now there has been some speculation (on X) that:

1. Given the notice was on the 30th much of this is already done via credit lines. 

2. It will be sold OTC and so will not have a massive market impact. 

3. They won’t be able to sell it all before the inauguration. 

Now, in short, I don’t know. Helpful, I know. However, what we can say was that if the government did sell pre inauguration, it would be very evident in the tape. A portion may or may not get bought by OTC desks etc, but that would still translate into negative PA. 

This appears to be the wallet in question and we think it’s unlikely much, if any, has been sold via credit facilities. They would have a responsibility to get a good execution price too, and $6.5B to sell on the market in just 5 or so working days is a very tall order.

The positive line here would be the sale does not complete (either fully or at all) pre inauguration, and it prompts the Trump Admin to expedite a executive order for an Strategic Bitcoin Reserve (one of our 2025 predictions). We believe an SBR will most likely consist of holding seized BYC , and not market buying additional coins (which would just be unfathomably bullish). 

• And don’t worry HODLers - even if they do manage to twap this all out, it might sting, but we’ll get past it.

One metric that has not shown any signs of ineptitude is hashrate:

Elsewhere, MicroStrategy has announced plans to raise up to $2 billion through a public offering of perpetual preferred stock in the first quarter of 2025. A perpetual preferred stock is a hybrid financial instrument offering fixed dividends without a maturity date. It’s essentially another novel way for Saylor to tap into the fixed income market to finance his Bitcoin purchases. A handy thread for more information below.

• Speaking of fixed income markets - Strive Asset Management, co-founded by Trump ally Vivek Ramaswamy, plans to launch a 'Bitcoin Bond' ETF. The actively managed fund will invest in bonds issued by companies like MicroStrategy that use proceeds to purchase Bitcoin. 

This Week in TradFi

In the U.S., the big news is a surprising jobs report for December: 

• U.S. job growth unexpectedly accelerated last month and unemployment fell to 4.1% (down from November’s 4.2%). Nonfarm payrolls increased by 256,000 jobs last month vs 212,000 in November. This was much higher than the forecasted 160,000. 

• As a result, futures were down slightly, with investors worried that the jobs report would lead to a skittish Fed deciding not to cut interest rates any more this year. Meanwhile, the U.S. 10-year notes yield increased to 4.78% and the 2-year notes yield increased to 4.362%. 

• Prior to the jobs report, traders had predicted a rate cut around May. Now, the expectation is the U.S. will see one more rate cut in June and then nothing else for the rest of the year. Maybe then we can finally write about something other than rate cuts? Only time will tell. 

On the international front: 

• Germany’s trade surplus with the U.S. is set to reach a record-high, just days before President-elect Trump takes office. Between January and November, Germany’s surplus with the U.S. exceeded almost $67B. However, Trump has threatened a 10% tariff on global imports to boost U.S. manufacturing, which would seriously hinder the German economy, particularly the country’s car manufacturing industry. 

• Bad news continues out of the UK, with traders’ confidence in the British pound falling the most this week since the 2022 UK budget crisis. The pound saw a drop this week of almost 1%, a 14-month low of $1.2239. 

• Similar news out of India, with the Indian rupee falling to an all-time low of 85.97 rupees to one U.S. dollar. The rupee dropped 0.2% this week, its tenth consecutive weekly loss. 

This Week in Tech

On Tuesday, Meta, parent of Facebook, Instagram, and Whatsapp, announced that they will end their third-party fact checking system and loosen content moderation policies.

• Instead, Meta will move to a system similar to X with a Community Notes feature. 

• The company is also lifting restrictions on “topics that are part of mainstream discourse”, encouraging users to take a “personalized” approach to political content. 

• These content moderation policies had been initially instituted after claims that Facebook had helped spread election misinformation, bad advice on COVID-19, and other fake news. 

• Reactions to the news have been mixed, and TechCrunch reported that Google searches for how to cancel and delete Facebook reached an all-time high. Searches for Facebook alternatives also rose - good news for any of you founders looking for your next project. 

In other news Disney announced Monday that they were merging Hulu’s live TV business with Fubo, the live TV service especially known for their extensive sports coverage. 

• Disney will own around 70% of Fubo following the deal, which will continue to be available to users. 

• Currently, Hulu live TV and Fubo have a combined 6.2 million subscribers. The merger comes as Disney attempts to compete with Youtube TV, which has around 8 million subscribers. 

• Funnily enough, Fubo had actually sued ESPN, Fox, and Warner brothers last year over Venu Sports, a proposed joint streaming venture. As it goes, the legal challenges have been resolved as a part of this merger, and the three companies will pay Fubo a combined $220M, in addition to a $145M loan offering from Disney. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• Marine robotics startup Xocean has raised $119M to continue to capture ocean data. 

• Google just invested $1M into startup Rooms, which allows users to build and code interactive 3D rooms and mini-games. 

• Semiconductor company NXP is planning to acquire TTTech Auto, a startup that provides safety software to autonomous vehicles, in an all-cash deal valued at $625M. 

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Disclaimer: None of the above is financial advice, seriously.