Why are Institutions Dumping Bitcoin ETFs?

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FTC To “Scrutinize” AI Deals - The FTC launched an inquiry into Microsoft and Amazon backing of AI startups OpenAI and Anthropic respectively.

OpenAI Gets Better - A breakthrough in natural language embedding models means more capable, efficient, and cheaper AI systems for model users.

Hugging Google? - Google Cloud partnered with AI model repository Hugging Face to offer its TPU ‘supercomputer’ power to open-source AI devs without the need to pay for a Google Cloud subscription.

AiPhone 16? - Apple has been stealthily acquiring AI startups (21 since 2017) hiring AI talent, publishing papers, and upgrading chips — all to work towards integrating on-device AI into upcoming products per the Financial Times.

Swiftly Removed - AI-generated explicit images of Taylor Swift shared on X got 45M+ views and 24k reposts before being removed.

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Are Institutions Interested in Crypto ETFs?

Despite the Bitcoin ETF hype and speculation, Bitcoin price is down 20% from its post-ETF highs and may see even more downside, with the US Government set to unload its Silk Road holdings. Spot ETFs have been net sellers of bitcoin, with flows into the new ETFs being eclipsed by BTC flows out of GBTC and other funds. The selling includes the FTX estate liquidating holdings as well as likely many early institutional buyers like Blackrock and the taking profits.

As Byron Gilliam of Blockworks points out, the ETFs haven’t amounted to much so far, although he still sees some long-term benefits in exposing more people to “the bitcoin meme”. What about Ethereum ETFs? TLDR, it’s more complicated. On Wednesday, the SEC delayed its decision timeline on a spot ETH ETF proposal from Grayscale, over concerns about whether Ethereum's proof of stake mechanism and "concentration of control” make the fund susceptible to fraud and manipulation. In other words, don’t hold your breath.

What do Institutional Investors Want From crypto?

The above question is the crux of Gilliam’s analysis. His take is that rather than ETFs, Institutional investors actually want “productive assets that look more like companies… Institutional investors would not let themselves be left out of a potentially revolutionary way of creating value.”

Seems Meta is not one to be left out. Rep Maxine Waters and the FTC are also putting pressure on Zuck to outline his crypto plans since it still has five crypto-related trademark applications live despite its Diem project being blocked in 2022. Meta invested ~$46.5B in its Metaverse plans, which may yet prove to be less folly than foresight despite many writing the investment off already.

VC funding in the crypto sector is flowing again too, suggesting many agree with Gilliam on the best way to get exposure. For example, 1RoundTable is raising an $800M growth stage crypto VC fund based on CEO Dan Tapiero's stellar track record including backing Gemini, Kraken and Yuga Labs. Also, Launchbay Capital just closed its debut ‘secondary fund’ at 25% of the $100M target, intending to invest in growth-stage startups including in the fintech, AI, and blockchain sectors. As for startups, HashKey became the first crypto unicorn of 2024 raising $100M at $1.2B PMV showing the level of VC interest still around.

Email us if you would like to access Tech Buzz subscriber-only opportunities and open deals in the Crypto space: [email protected].

Deals We’re Watching

Founders to Watch and Opportunities to Catch

Open Deals:

Raising for your startup? Send us your Open Round —> [email protected]

Generative AI Web - Making generative AI accessible to leading companies like Accenture, J.P. Morgan, and Intel via online engagement, employee training, virtual salespeople, and more. Seeking Series B partners now.

Ending Snoring - A contactless AI anti-snoring device. Voted #1 solution by various media platforms, with >100k customers & strong revenue over 5 years. Self-funded and seeking $5M from strategic partners for first equity raise ever.

EV Charging Infrastructure OS - Trusted by Cruise, GM, Hitachi, and more. Notable Angels include Tesla’s ex-Fast Charging head and Mercedes’ NA CEO, Auto Ventures, Connect Ventures, and more. Now Seeking $500K.

Drone SaaS platform - Lets enterprises automate missions, manage pilots and data. Techstars portfolio company, raised $200K so far. Founder built Midwest Aerial Productions. Seeking investment to push drone operations further.

Looking to invest? Let us know if you want a warm intro —> [email protected] 

Closed Deals:

Identity Protection - CyberSec company Silverfort raised $116M in a late-stage round led by Brighton Park Capital with Citi Ventures and GM Ventures.

SME Travel Unicorn - TravelPerk has reached break-even and now has room to scale after SoftBank backed a $104M Series D at a $1.4B valuation.

RNA Cancer Drugs - Accent Therapeutics raised a $75M Series C led by Mirae Capital Life Science with Bristol Myers Squibb and J&J’s VC arm JJDC.

AI To Spot Wildfire Risk - AiDash uses AI and satellites to spot fire and weather risks to power lines in the US and UK, and just raised $50M.

Commercial Orbital Imagery - Albedo closed a Series A-1 ‘up round’ at $35M led by Standard Investments and backed by Booz Allen, YC and Republic Capital.

Companies to Watch:

Security "Hyperautomation" - Torq’s threat intel platform revenue is up 300% on 500% client growth with ~100 enterprises, including Blackstone, Chipotle, & Rivian. They also just raised a $42M Series B to scale.

User Spend “Nearing $20B” - Renter rewards unicorn Bilt was in EBITDA profit for 2023 and just doubled its valuation to $3.1B with a $200M round.

IPO "Quite" Soon - Klarna CEO says the BNPL company is preparing to go public and has been retooling its business for profit and growth with a new subscription service and rewards scheme.

The Funding Buzz

New SPAC Rules - The SEC approved a new set of regulations upping disclosure requirements for SPAC sponsors aimed at protecting investors.

Innovation Endeavors - Ex-Google CEO Eric Schmidt’s firm closes its $630M Fund V to invest in startups at the intersection of science and technology.

1RoundTable is raising an $800M growth stage crypto VC fund based on CEO Dan Tapiero's stellar track record including backing Gemini, Kraken and Yuga Labs.

Launchbay Capital just closed its debut ‘secondary fund’ at 25% of the $100M target, intending to invest in growth-stage startups including in the fintech, AI, and blockchain sectors.

Tools and Buzzy Tech

UT Austin - Launching a Center for Generative AI with a massive computing cluster of 600 NVIDIA H100s GPUs one of the largest in the academic world.

Lumiere - Google’s space-time diffusion AI video gen model is sector-leading.

Chrome - Released 3 AI enhancements for users to: organize tabs; generate custom themes; & to write better with “Help Me Write”.

China's Quantum Leap - Claims to have discovered a "Supersolid" material that cuts helium reliance in quantum cooling, easing US tech dependence.

New Study - Immune T cells engineered to kill zombie cells can reverse aging in mice including metabolic & physical decline… for life.

UCLA - New Research combats threat of Deepfake audio using “embeddings.”

Kin.art - Launched Nightshade free tool to shield artists' images from AI models.

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The Tech Buzz Team