📝 #73: A New Supercycle

Crypto goes mobile. Vodafone integrates crypto into SIM cards. RTFKTs new collection. Mercedes-Benz goes Farcaster. Solana x Google Cloud. Big week for ETFs. Microsoft's new AI model & more.

Hey, it’s Marc. ✌️

This week is all about consumer crypto going mobile and challenging traditional infrastructure players, aka DePIN. Plus: Big week for ETFs, Stack Overflow signs a deal with OpenAI and Microsoft is training its own AI model MAI-1 to compete with Google and OpenAI.

Let’s dive in. 🦈

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“We finally have a way to coordinate large numbers of disparate parties trustlessly across the globe in real time through the use of economic incentives.” Kyle Samani

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📚 Top 5 Reads

  • The SEC’s power grab on digital assets threatens US innovation. By Joseph Lubin. Link

  • The Dawn of Bitcoin Programmability. By Vishal Kankani, Multicoin. Link

  • Why retail hasn’t returned to crypto. By Regan Bozman. Link

  • Challenges & solutions for new token issuances. By Jeff Dorman. Link

  • all media onchain: crypto as port of entry. By Jesse Walden. Link

✨ Web3 & Consumer

Crypto goes mobile 📱

A variety of companies are looking to disrupt the mobile industry with blockchain:

  • Vodafone wants to integrate crypto wallets into smartphone SIM Cards, aiming to link it to the identity of users – onchain. Link

  • T-Mobile partnered with Fliggs Mobile to offer mobile plans that reward users with monthly bitcoin cashback​. Link

  • DePIN cell service provider Helium Mobile introduces new $20 plans with unlimited data in bid to compete with bigger providers. Link

Zooming in: Helium incentivizes users to build and maintain mobile networks leveraging its infrastructure with rewards in the form of the HNT token.

Be smart: Traditional infrastructure providers will have to compete against decentralized infrastructure networks, that coordinate and incentivize participants with tokens. This is called DePin (= Decentralized Physical Infrastructure Network).

By the numbers:

  • 6.5B people have smartphone subscriptions

  • Vodafone expects 8B smartphones and 5.6B crypto wallets in use by 2030

  • Helium Mobile has onboarded 62,463 subscribers to its unlimited plans since the start of 2024.

The big picture: This is the beginning of a new “supercycle”, that will be “user-powered and community-centric”, as Joseph Lubin said in 2023.

Zooming out: In 2017, Kyle Samani from Multicoin Capital described blockchains “as a foundation for a new social order”.

Maja Vujinovic, early blockchain pioneer and investor, talked about “a new type of organized groups collaborating in investment and profit sharing that is going to transform capital allocation, business and society at large”.

This is what they meant.

Punchline: Blockchain, onchain data, smart contracts and cryptocurrencies will enable a new type of decentralized, programmatic economy. Brace yourself.

More on Web3:

  • Mirror pivots to building a Farcaster-based social app called Kiosk, while Paragraph will take over Mirror. Link

  • RTFKT introduces 20k collab collection with legendary artist Takashi Murakami. Link

  • Mercedes-Benz NXT launches a project on layer2 Base, available for minting In Frame directly on Farcaster. Link (Read Farcaster deep dive)

  • Solana Labs partners with Google Cloud to accelerate user-created content as tradable in-game assets, opening new opportunities for studios of all sizes. Link

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🌎 Crypto & Macro

Big Week for Crypto ETFs📊

Here’s what happened:

  • Hong Kong’s spot BTC ETFs are struggling to gain traction, and recently saw its first outflows. Link

  • Meanwhile, spot bitcoin ETFs in the U.S. experienced a net inflow of $217M on Monday, with HK investors buying US spot ETFs. Link

  • Wells Fargo, America's 3rd biggest bank, Edmond de Rothschild, Rubric Capital Management, and 183 other wealth managers reported owning spot Bitcoin ETF in SEC filings. Link

  • Meanwhile, Grayscale abandoned its plans for an ETH futures ETF and withdrew its SEC application.

Why it’s important: ETF inflows are an proxy for institutional appetite for crypto.

How it works: A Bitcoin spot ETF is a type of investment fund traded on the stock market that allows investors to buy shares representing direct investment in actual Bitcoin, without needing to purchase Bitcoin itself — making it accessible to a much broader investor base.

Total US Bitcoin Spot ETF Net Inflow (source)

Zooming in: Access to staking rewards is expected to be key for wider adoption of ether ETFs in the future.

By the numbers:

  • US-listed ETFs experienced a massive surge in inflows, gathering nearly $200B in Q1 2024. Link

  • Digital asset investment products saw $2.25B of inflows in 2023, the 3rd largest year since 2017 and 2.7x the inflows seen in 2022.

  • And 64% of current investors expect to increase allocations in the next three years.

Punchline: Earlier this year, ETFs moved Bitcoin away from the interest rate narrative. They continue to shape the institutional narrative for crypto – and more capital to come. Watch out.

More on Crypto:

  • Bitcoin surpasses historical 1B transactions. Link

  • Hong Kong central bank forms community with HSBC, HashKey and others. Link

  • Mastercard joins forces with US banking titans, such as Citigroup, Visa and JPMorgan, for tokenized settlement trials. Link

  • PayPal integrates with MoonPay, enabling 426M US customers access to 100+ cryptocurrencies. Link

🧠AI + Metaverse

  • Microsoft is training MAI-1, a new, in-house AI model with ~500B parameters, large enough to compete with top models from Google, Anthropic, and OpenAI. Link

  • Stack Overflow signs a deal with OpenAI to supply data to its models. Link

💰 Money Moves

  • Sophon: Entertainment-based blockchain raises $60M in a ‘node sale,’ where the longer investors wait, the more they pay.

  • Lava Foundation: Nonprofit development arm of modular blockchain Lava raises $11M in funding round ahead of mainnet launch and token drop

  • Lagrange: Zero-knowledge cryptography startup based on EigenLayer’s restaking platform raises $13.2M led by Peter Thiel’s Founders Fund.

That’s all for now, folks. Thank you for being part of the journey.
Talk soon,

Marc

PS: Follow me on LinkedIn and X for shorter insights.

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1  The Runes protocol itself sets a higher minimum transaction fee compared to standard Bitcoin transactions. This means users creating or trading Rune tokens have to pay more to get their transactions included in a block.

2  DePIN, in one sentence, is a concept where individuals contribute physical infrastructure resources (like wireless hotspots, storage, or sensors) to create decentralized networks and earn cryptocurrency rewards in return.

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