Crypto Is Building A Faster Internet, MSTR’s Multilayered Bitcoin Strategy & More

Welcome back!

This is J264G and this week I’ve got these titbits for you:

• Internet Transformation: DoubleZero aims to rebuild the internet.

• Multilayered Gameplay: The implications of MicroStrategy’s Bitcoin strategy. 

• Paradigm Shift: How Sphere unlocks emerging markets with stablecoins.

Absolutely — stablecoins remain a hot topic, as evidenced by Y Combinator's latest request for startups.

Now, let’s jump right into this week’s newsletter!

Click on any underlined heading/hyperlink to learn more.

Spotlight

Multilayered Gameplay

The introduction of Bitcoin Spot Exchange-Traded Funds (ETFs) and the accompanying options trading has been a game-changer for crypto — bringing unprecedented legitimacy to Bitcoin and, by extension, the entire onchain economy. 

For years, critics labelled cryptocurrencies as purely speculative and unregulated, but the approval of Bitcoin Spot ETFs has shifted the narrative, positioning cryptocurrencies as credible and institutional-grade assets. 

This newfound legitimacy has fuelled a significant interest in Bitcoin, creating ripple effects across the entire crypto asset market — institutional investors, retail participants, and even sceptics are looking for ways to gain exposure to this emerging asset class. 

Interestingly, many are exploring financial vehicles beyond directly holding cryptocurrencies. As such, one of the most talked-about approaches is purchasing MicroStrategy’s debt instruments, giving holders a regulated and leveraged exposure to Bitcoin. 

Granted, MicroStrategy’s Bitcoin strategy provides an innovative solution for institutional investors constrained by regulatory or operational limitations. However, this strategy, naturally, also comes with significant risks. 

By investing in MicroStrategy’s debt instruments, investors are not only tied to Bitcoin’s performance but also exposed to the company’s operational and financial health. Also, the leveraged setup amplifies both potential gains and losses, increasing downside risks if Bitcoin’s price falls. Moreover, MicroStrategy’s debt instruments can have limited market liquidity compared to holding Bitcoin outright, which might complicate exit strategies.

Generally, it’s ironic: Institutional and retail investors often emphasise the risks associated with cryptocurrencies, such as volatility and regulatory uncertainty. Yet, they seem willing to engage with MicroStrategy’s multilayered volatility bet. If that’s the market’s risk appetite, there's a simpler approach: Buy Bitcoin and other cryptocurrencies directly and self-custody them — thus sidestepping layered risks and enjoying a purer and more decentralised way of engagement.

However, to make self-custody a more viable option for institutional and retail investors, two key steps are necessary.

• Regulatory frameworks: Clear regulations are needed to enable frictionless trading and self-custody of Bitcoin and other crypto assets — without compromising the principles of decentralisation.

• Education & onboarding: Institutional and retail investors need to be educated about and onboarded to robust self-custody solutions that offer unconditional freedom and access to their crypto assets. Building confidence in these solutions is critical to fostering broader adoption.

While MicroStrategy’s Bitcoin strategy has attracted significant attention, self-custody solutions remain the gold standard for secure and direct crypto ownership — free from third-party complexities and risks.

We’ve got more work ahead to equip investors with the tools and knowledge they need to manage their onchain assets independently — so let’s get to it!

Chart Of The Week

News Bites

Internet Transformation: DoubleZero is on a mission to build a permissionless high-performance network of dedicated fibre and subsea cables comprised of independent contributors to tackle challenges across OSI Layers 1, 2, and 3 — essentially rebuilding the internet from the ground up to better support blockchains such as Solana.

Paradigm Shift: Access to USD-pegged stablecoins enables merchants, particularly in emerging markets, to protect their assets from local economic instability, participate more effectively in global trade, and reduce operational expenses. Learn more on how Sphere helps companies navigate the stablecoin paradigm shift here.

Solana Spot ETFs: Grayscale has joined four other asset managers in filing for a SOL Spot ETF. Its 19b-4 filing with NYSE Arca serves as a comprehensive primer on Solana and SOL, making it an excellent resource for institutional investors and capital allocators new to crypto.

Tokenised Bonds: Tokenised real-world assets are gaining momentum. And now, traders can seamlessly trade tokenised government bonds from the US, EU, UK, Mexico, and Brazil via Etherfuse on Orca, offering the opportunity to capture competitive APYs.

Compute Accessibility: Compute Labs has acquired several Nvidia B200 clusters to advance its goal of democratising access to compute via its Compute Tokenization Protocol. To explore all the potential use cases the proprietary protocol enables, browse through this overview.

Caught In 4K

Weekly Take

Keks & Giggles

And that's a wrap!

If you'd like to reach me, respond to this newsletter or reach out to me on 𝕏.

Talk soon!

J264G

_{DISCLAIMER
None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. Lastly, please be advised that we discuss products and services from our partners from which our team members may hold tokens/equity.}