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This week’s Crypto Biz dives into ARK Invest’s withdrawal from the spot Ether ETF in partnership with 21Shares, Galaxy Digital’s unique tokenized loan for Animoca Brands, Avail’s successful fundraising round, Polygon Labs’ acquisition of Toposware, and Bitcoin miners’ first reports following the halving.
In a surprising move, 21Shares filed to the SEC on May 31 to rename its proposed spot Ether (ETH) exchange-traded fund (ETF) and remove ARK Invest from the application. A spokesperson for ARK Invest confirmed the withdrawal, citing the need to reassess their investment strategy. This decision has raised concerns within the crypto community about the short-term viability of newly approved ETFs.
During a June 5 interview, SEC Chair Gary Gensler hinted at potential delays in final approvals for asset managers, indicating that ETFs might “take some time” to be fully approved. Despite this setback, ARK Invest and 21Shares will continue their partnership on the spot Bitcoin (BTC) ETF launched in January.
Galaxy Digital, led by Michael Novogratz, and Animoca Brands co-founder Yat Siu have tokenized a 1708 Stradivarius violin to secure a multimillion-dollar loan. On June 4, Galaxy lent an undisclosed sum to Siu, using the 316-year-old violin as collateral. The violin, once owned by Russian Empress Catherine the Great, was turned into a nonfungible token (NFT) by Galaxy, which will hold both the NFT and the physical violin until the loan is repaid.
Polygon Labs has acquired blockchain research and engineering company Toposware, marking its third zero-knowledge (ZK) startup investment in three years. Toposware has collaborated with Polygon on the Type 1 Prover, which allows Ethereum-compatible blockchains to use zero-knowledge proofs with minimal changes. This acquisition brings 11 Toposware engineers into Polygon’s ZK teams and pushes Polygon’s total ZK technology investment over $1 billion, following previous acquisitions of Mir and Hermez in 2021.
Bitcoin miner Riot Platforms reported a 43% drop in BTC production in May, totaling 215 BTC despite an expanded fleet. This decline is attributed to the recent Bitcoin halving, which reduced mining rewards to 3.125 BTC. Riot had preemptively upgraded its infrastructure with a new facility in Corsicana, Texas, adding 3.1 exahashes per second to its total self-mining capacity, marking a 17% increase from the previous month. Marathon Digital also adapted to the halving, selling 63% of its BTC production in May.
Avail, a modular blockchain base layer, successfully raised $43 million in an oversubscribed Series A round. The funding attracted multiple venture capital firms and angel investors, including Altos Ventures, Alliance DAO, Hashkey, Elixir Capital, Spark Digital Capital, and RW3 Ventures. With a total of $75 million raised across various funding rounds, Avail aims to address blockchain fragmentation, data availability issues, and scalability within the Web3 ecosystem under the leadership of co-founder Arjun from Polygon.
Franklin Templeton CEO Jenny Johnson believes that we are still in the early stages of the Bitcoin investment cycle and that substantial institutional money has yet to be fully invested in the asset class.