Building, Raising, and Public Offerings resume amidst Crypto Midsummer Cool-down

Hartmann Capital Newsletter, Friday 16th July, 2021

In this issue

  • Financial payments company Square to bring crypto into the mainstream.

  • Bitcoin mining hashrate begins recovery.

  • NFT powerhouse Sorare raises at $4 billion valuation. Another crypto unicorn.

  • Bullish to be the second crypto exchange to go public.

  • This week’s blog: Are Crypto Assets “Too Volatile”?

Market by numbers

The majors were lower this week, DeFi fell even further, and Metaverse property and gaming tokens broke out, in some cases to all-time highs.

Financial payments company Square to bring crypto into the mainstream

Twitter-founder and multiple unicorn-creator Jack Dorsey’s Square (SQ - NASDAQ) announced that it will build a new company around mainstreaming Bitcoin for financial services. 

This is huge news for Bitcoin adoption, as Square is the fastest growing payment service company in the world, with 36 million Cash App users. Square already allows customers to buy and sell Bitcoin, and has spent $170 million of its own cash on Bitcoin. It has also funded Square Crypto, dedicated to growing the Bitcoin financial ecosystem, and last month suggested it will build its own Bitcoin hardware wallet.

Details are scarce, but it strikes many as odd that Bitcoin would be chosen as the network to build financial services on. Some would argue that non-custodial, permissionless and decentralized financial services do not need Square, as crypto already has DeFi on Ethereum.

The few services using Bitcoin, including the Lightning Network, have encountered significant technical hurdles. Will Square’s attempt be any different?  

Bitcoin Mining in Recovery

With Chinese miners relocating elsewhere and settling in, Bitcoin hashpower has stabilized and appears on the rise.

Not only are miners returning to work, according to glassnode’s data, they have returned to accumulating Bitcoin.

Some suspect that miners sold BTC to cover relocation costs. Recent net sales began roughly at the same time as the China rule changes. 

Hashrate and price have been positively correlated in the past. Will this hashrate rebound stick and will this in turn stabilize BTC?

Speaking of China, ARK Invest’s Cathie Wood has observed that moving mining away from coal-powered China to the US and other countries with greener energy will erase the environmental FUD (fear, uncertainty and doubt) surrounding BTC.

Many market watchers see Bitcoin’s Q2 2021 correction as at least partially caused by Elon Musk and Tesla’s rejection of BTC as a means of payment due to global warming concerns. 

NFT powerhouse Sorare raises at $4 billion valuation

The crypto metaverse has spawned another unicorn. Sorare, the fantasy soccer (football) game on Ethereum announced this week that it has raised $532 million, led by Softbank, valuing the Paris-based company $4 billion. The addictive game has pushed valuations of its player NFTs higher in spite of the general crypto correction.

Sorare players can trade in the six figures. 

They are the fifth most-traded NFT on OpenSea at 50,000 ETH ($100 million).

Games on blockchains have been growing rapidly. In the same way that Axie Infinity (see last week’s newsletter) has “scholars” who are sponsored to earn real income for both themselves and their funders, Sorare has managers funded by Blackpool. Play-to-earn and on-chain BFTs appear to be the next big things in crypto, and both Axie Infinity and Sorare are well-placed to benefit.

The Bullish exchange to go public

A new - and Peter Thiel - backed exchange has filed to go public through a SPAC acquisition valued at $9 billion. Bullish, the new exchange, will be part centralized and part decentralized. KYC and admin will be centralized but will use liquidity pools, similar to Sushiswap and Curve’s automated market makers (AMM). 

While the business model raises some questions one of the most interesting plans is to write all transactions to the EOS layer 1 blockchain. EOS has struggled to find any traction with users over the years, and the token has suffered. It’s down 72% from May highs, and has yet to make a post-2018 all-time high.

The new exchange is well set up with its own liquidity. Before the acquisition, Bullish was capitalized with $400 million in cash from and a strategic investment round as well 164,000 BTC (worth over $5 billion), and 20 million EOS. 

This week’s blog: Are Crypto Assets “Too Volatile”?

In this week’s blog, we introduce our series on crypto asset risks and risk management. In Part 1 we focus on addressing investors’ concerns that crypto assets are “too volatile” to be considered as part of a prudent diversified portfolio. We conclude that, historically at least, volatility is a feature and not a bug of crypto as an asset class.

Hartmann Capital Weekly written by Head of Communications, Rasheed Saleuddin, PhD, CFA


This is not an offering. This is not financial advice. Always do your own research.

Our discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.