US Government Sells $139M in Seized Bitcoin

The Breakdown First Five - Wednesday, April 3, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Paradigm Raising $750M Fund

Paradigm have signaled the beginning of VC season with sources claiming the firm is raising a $750M crypto venture fund. March was the hottest month for crypto VC since 2022, with $1.1B deployed across 180 deals. That’s a 50% increase month over month. Paradigm’s rumored fund would be the largest fund raised since crypto winter began. We’re not close to those high points, when major VCs managed to raise funds in the multiple billion dollar range. 

4. Milei Regulates Exchanges

New crypto regulations have come into force in Argentina, with exchanges required to register with local authorities for anti money laundering purposes. Some Bitcoiners are upset that Milei has gone against his presumed but unspoken pro-Bitcoin stance. Others noted that registration of exchanges is table stakes for participation in global capital markets. The major casualty appears to be Strike who have severed links to domestic bank accounts. 

3. Restaking Risk

Coinbase has called out restaking as a hidden risk to Ethereum. Eigenlayer, the major restaking platform, has now grown to become the second largest DeFi protocol with $12.4B in TVL. Coinbase researchers claim the adoption of liquid tokens representing restaked ETH could make the risks impossible to assess and present issues with market dislocations. Despite the risks, Coinbase believes restaking will “become a core part of the ecosystem’s infrastructure.”

2. Goldman CIO: “We’re not believers in crypto”

The CIO of Goldman Sachs Wealth Management has confirmed she doesn’t believe that Bitcoin is an “investment asset class.” In a Wall Street Journal article, Sharmin Mossavar-Rahmani unleashed all of the FUD, from tulips to illicit transactions. Her point was that Goldman isn’t changing their mind despite Bitcoin’s hot start to the year. She claimed that clients aren’t even asking for Bitcoin allocations, but noted that they are well aware of her team’s crypto criticisms.

1. Government Coins Moving

The US Government rattled markets with the movement of $2B worth of Bitcoin. Below the scary headline, it turns out only $139M worth of Bitcoin was sold in what appeared to be an OTC deal. The remaining funds were shuffled into a new wallet with no indication that they’re being sold at this stage. The Bitcoin was seized from Silk Road hacker James Zhong in 2021. The US Government still has 200,000 seized Bitcoin worth around $13B.