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New Bitcoin ETF stalls, DAO loses bid for US Constitution

2021.11.20 Adam James

A new bill proposed in the United States hopes to prevent any harm done by the infrastructure bill to the country’s blockchain and cryptocurrency industry.

It’s been an interesting week in the blockchain and cryptocurrency industry, to say the least. While a rapidly formed decentralized autonomous organization almost won a rare copy of the United States Constitution, legislators in the country are putting forth a new bill to counteract the potentially negative effects of the recently passed infrastructure bill on the industry.

Here’s everything you need to know about these stories, and more, in this week’s edition of OKEx Insights’ News of the Week.

ConstitutionDAO loses U.S. Constitution bid

Despite the decentralized autonomous organization’s best efforts, ConstitutionDAO lost out on a high-profile Sotheby’s auction to win a rare copy of the United States Constitution. The week-old DAO raised some eight figures to purchase the historical document but was outbid by another buyer for $43.2 million.

Key takeaways

  • The rapid formation of and fundraising by ConstitutionDAO drew a lot of attention this week. According to a Discord message by the DAO’s organizer, Julian Weisser, 17,437 donors accounted for nearly $47 million — often from new Ethereum wallets.
  • ConstitutionDAO will now undergo efforts to refund the decentralized autonomous organization’s participants — though Ethereum gas fees will not be refunded.

Keep Innovation in America Act aims to undo potential infrastructure-bill damage

After the high-profile infrastructure bill — which has caused a lot of consternation among cryptocurrency proponents — passed into United States law on Monday, Republican Rep. Patrick McHenry and Democrat Rep. Tim Ryan introduced a new bill to limit the Internal Revenue Service’s problematic definition of a digital asset broker.

The bill is called “The Keep Innovation in America Act” and hopes to prevent the all-but-certain stymying of the blockchain and cryptocurrency industry in the United States to be caused by the contentious infrastructure bill, which defines a digital asset broker as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

Key takeaways

  • In an effort to protect cryptocurrency miners, node operators and other industry participants that do not actually broker trades, the Keep Innovation in America Act seeks to change the definition of a digital asset broker to “any person who (for consideration) stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers.”
  • Less-known is the infrastructure bill’s defining of digital assets as cash for tax purposes — something the newly introduced bill hopes to change, as it would require nonfungible tokens or other transactions worth more than $10,000 be reported to the IRS.
  • The infrastructure bill’s crypto-related reporting requirements won’t come into effect for multiple years, but the industry would likely relocate to more crypto-friendly jurisdictions.

OpenSea reportedly valued at $10 billion

OpenSea is reportedly being valued by potential investors at $10 billion, per people apparently familiar with the matter speaking to The Information — which claims the industry-leading nonfungible token marketplace did not initiate the fundraising conversations.

Key takeaways

  • The report comes roughly four months after OpenSea raised $100 million in an a16z-led Series A fundraise that pushed its valuation to $1.5 billion — six times less than the new report’s claimed valuation from interested potential investors.
  • Investors appear unphased by OpenSea’s recent scandal involving its former head of product, Nate Chastain, insider trading.
  • The immediate-term picture for art and collectible NFTs is bearish, per data from The Block Research — which found that sales in said categories hit their lowest points since January.

VanEck Bitcoin Strategy ETF receives tepid reception

Another Bitcoin futures-based exchange-traded fund went live on Tuesday after VanEck announced its self-titled VanEck Bitcoin Strategy ETF’s launch plans. XBTF is currently trading on the Cboe exchange.

Key takeaways

  • VanEck’s offering didn’t exactly receive the same warm reception as its Bitcoin futures-backed ETF brethren. XBTF saw trading volume under $4.8 million — a far cry from the roughly $1 billion inaugural trading volume experienced by ProShares’ offering.
  • With Bitcoin futures-backed ETFs now somewhat plentiful, any new offerings are unlikely to promote increased interest from investors.

Crypto.com renames Los Angeles’ Staples Center

The Staples Center in Los Angeles will be renamed the Crypto.com Arena after cryptocurrency services platform Crypto.com — a competitor of OKEx — penned a 20-year deal with the iconic venue’s owner and operator, AEG.

Key takeaways

  • Despite the name, the deal is entirely a cash one and does not involve cryptocurrency, a spokesperson told The Block. Additionally, the renaming will reportedly cost Crypto.com $700 million.
  • Cryptocurrencies continue to penetrate deep into the mainstream — something that was oft-discussed but remained a pipe dream in 2017. With four professional sports franchises calling the arena home, mainstream exposure to cryptocurrencies in general will be substantial.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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