Our experts tell us what you need to know about the cryptocurrency division of venture capital firm Andreessen Horowitz. And what startups and technologies the company is allocating more than $7 billion to

The a16z crypto portfolio has dozens of crypto projects. And among them are both established players and startups that are still building infrastructure. The company’s early bet on Coinbase, the second largest crypto exchange, turned out to be one of the best in the history of venture capital funds. Though it came with very specific allegations of insider trading. The fund invested in leading decentralized exchange Uniswap, NFT marketplace OpenSea and large infrastructure blockchain project Alchemy.

This year, the company has led several multimillion-dollar investment rounds for various crypto projects. Among them, for example, is a $25 million round by Here Not There Labs. Which is developing the Towns protocol for group chat rooms. And which are blockchain-based and use end-to-end message encryption.

A recent nearly $30 million investment round closed the Story Protocol project from the developers of the Radish Fiction app, which was bought out by Korea’s Kakao. Andreessen Horowitz’s cryptocurrency division also led the round. Although it had previously invested $10 million in the project. A $40 million round led by the fund was also completed by blockchain game developer CCP Games.

Probably the main crypto-investment of the company this year was the project LayerZero.

Its developers, led by a16z, closed a $120 million round, after which the valuation of the company behind it, LayerZero Labs, jumped to $3 billion. The total amount of venture capital investment in the project. Which creates an infrastructure for exchanging data between ecosystems that are isolated from each other. And built on different blockchains, exceeds $250 million.

Other projects in the fund’s portfolio with more than $100 million in investments include Optimism, Aleo, Matter Labs (developer of the zkSync solution) and several others. From the last two, as well as from LayerZero, the cryptocurrency community expects to launch tokens. And to conduct airdrops following the example of Arbitrum. Or the same Optimism, but none of the companies have yet announced plans to issue their own assets.

Problems and failures

Despite its scale and strong market position, a16z faced problems in 2022, as did the entire cryptosphere. In October, The Wall Street Journal sources reported that the value of the company’s cryptocurrency fund fell 40%. And that’s noticeably more than other avenues. This was recorded even before the general collapse of the crypto market. Which was triggered by the bankruptcy of the FTX exchange.

Some of the fund’s biggest investments probably didn’t justify themselves. Among them is Helium, a mobile WiFi hotspot startup. In April, the company announced it was moving its infrastructure from its own blockchain to the Solana network. And the HT token trades only on second-tier crypto exchanges. And judging by the price movement, it’s not much in demand.

Another example from our experts is Dfinity. It’s a project that was rebranded as Internet Computer. Which raised $100 million from a16z in 2017. But it did not actually produce any product. And investor funds were invested mainly in a marketing campaign. However, given the success of other projects in the fund’s portfolio. And the financial return from investing in them will surely be able to outweigh the losses from unsuccessful investments.

Data from the TradingView analytics platform became available to users directly through a Binance account

Binance has announced the integration of spot trading with its TradingView analytics platform. This will expand the exchange’s users’ ability to analyze trading strategies with an additional range of charts and tools, according to a press release.

The initial integration of Binance Futures Trading with TradingView in December 2022 went very well. The platform’s customers appreciated the convenience of a single login to trade directly on Binance. And the use of TradingView’s wide range of graphical tools for performance analysis. For example such as cross-comparison of crypto-assets and securities. As well as benchmarking between different cryptocurrencies.

Our experts note that according to the exchange’s instructions, in order to use the new feature. Then the user has to log in to his TradingView account and select Binance as a broker. Then, after logging in to his account at the cryptocurrency exchange, he will need to connect his TradingView account to it.

After that the user will be redirected to the Trading View interface. The order history on the Binance spot market will automatically synchronize with the Trading View account.

Tether announced a change in investment strategy and the decision to increase the share of the first cryptocurrency in providing reserves

Tether has decided to regularly buy millions of dollars worth of Bitcoins. The company announced that it would spend up to 15% of its realized operating income on buying Bitcoins. The company may have already spent $222 million to buy its first cryptocurrency. This was calculated by CNBC, based on Tether’s first-quarter statements.

The issuer of Tether (USDT), the largest stablecoin by capitalization, announced a new investment strategy. Starting in May 2023, the company will begin regularly allocating a portion of its net realized operating income to buying Bitcoins.

According to Tether’s first-quarter report, Tether had about $1.5 billion in Bitcoin in its reserves at the end of March. And that was about 2% of their total holdings. About 85% of the collateral was held in cash and cash equivalents. And it was also placed in short-term deposits – mostly in U.S. Treasury bills.

Although many institutional investors deposit their Bitcoins with third parties. Then Tether takes a “not your keys, not your Bitcoin” stance. And it keeps the assets on its own, the company said in a press release.

“Bitcoin has consistently proven to be sustainable and has evolved into a long-term savings vehicle with significant growth potential. Its limited supply, decentralized nature and widespread adoption have made Bitcoin the preferred choice among both institutional and retail investors,” said Tether CTO Paolo Ardoino.

Investing in Bitcoin, he said, is one way to boost Tether’s portfolio performance. And the company expects the BTC exchange rate to rise.

Tether will also invest in building infrastructure for Bitcoin mining and exploring other “innovative opportunities in the ever-evolving landscape of digital assets.”

Our experts note that in the fourth quarter of 2022, Tether posted a profit of $700 million. The USDT issuer closed the first quarter of this year with a profit of $1.48 billion. The company noted that this is a “huge success.” And they said they already have an “extremely positive outlook” for the second quarter of this year as well.

Elon Musk will take over as CTO, focusing among other things on the integration of payments into this social network

Elon Musk will leave the post of CEO of Twitter. He announced this in his account on the social network. He has been Twitter’s CEO since the social network’s $44 billion acquisition in 2022.

Musk uses Twitter’s polling interface to get followers’ opinions on the social network’s various policies. Late last year, he launched a poll about whether he should resign as head of the service. By a relatively small margin, most of the votes were positive. Musk joked that he would leave when he “found some crazy person” to replace him. And then he himself will move to the development team.

That “madman” eventually became Linda Yaccarino, head of advertising at NBCUniversal, which owns a network of TV channels and several movie studios. Musk specified that she would start working “in about half a month.” He himself will take over as chairman and CTO of Twitter.

Integration of cryptocurrencies into Twitter social network interface, opinions of Crypto-Upvotes experts

Judging by the history of Musk’s statements, he really does not give up hope of integrating cryptocurrencies into the interface of the social network Twitter. If we take into account his previous global goals to develop a “super-application” X (similar to China’s WeChat). Then it is possible to assume the creation of some ecosystem with internal support of cryptocurrencies. And of which Twitter would be a part, our expert thinks.

But if we consider Twitter separately, at the initial stage Musk could introduce a function of sending money through personal messages. And paying for subscriptions to paid content or Twitter Blue status for cryptocurrency. Any kind of coin could be suitable for these purposes. And so Bitcoin and Dogecoin (DOGE) could potentially benefit from such integration.
Introduction of a payment function in Twitter is one of Musk’s key objectives, according to our experts.
In their opinion, it will turn the social network into a more predictable and stable source of income. It will also add features which are absent in other social networks. And by doing so, it will attract new users and make the social network a more profitable asset in Musk’s portfolio.

Technically, the integration of cryptopayments into Twitter could be done in partnership with a third-party cryptocurrency company. For example, Coinbase, which already has a developed infrastructure – wallets, exchange, business solutions and payment gateways.

Or another option – Musk will buy a payment gateway operator. In any case, the main task is not just to introduce cryptocurrencies. But to allow those who don’t have them to conveniently buy cryptocurrencies and just as conveniently spend them within the social network.

Despite Musk’s plans, the likelihood of introducing cryptocurrencies is still in question. Because of the “witch hunt” by the U.S. regulators, which has already provoked many large cryptocurrency companies to leave for other jurisdictions. Perhaps one of the tasks of the new CEO will be to find a way to find legal loopholes for the safe introduction of cryptocurrencies into Twitter, but this is just our guess.

Influence on cryptocurrency prices

As the head of Twitter, Musk organically joined the cryptocurrency community. Which settled on the platform at the stage of crypto-business birth. Musk participates in Twitter Spaces broadcasts with opinion leaders from the cryptosphere and comments on high-profile news in his personal account.

It’s not uncommon for Musk’s tweets to cause significant spikes in the price of crypto-assets. Which he mentions to them directly or indirectly. The most popular of these is Dogecoin (DOGE). In his May 2021 tweet, Musk said he was working with the developers of Dogecoin to make the system more efficient. This immediately led to a 22% increase in the Dogecoin exchange rate.

In December of that year, DOGE jumped 33%. When Musk announced that electric car maker Tesla would begin accepting the coin as payment for goods at its online store. Typically, such price spikes are fleeting as traders and automated bots start buying up tokens. Which were mentioned by Musk within seconds of his comments on Twitter. And to quickly sell them at a profit afterwards.

Musk gained a reputation as an influencer in the cryptocurrency community long before he bought Twitter. The change of position, will not have a negative impact on this reputation according to our experts. Rather, we can expect a positive impact, as the position of CTO is “more in line with Musk’s role as an eccentric innovator.

Trading volume were boosted by trend events, such as the rise of “Chinese” coins. And also etherium Arbitrum, led to an increase in cryptocurrency trading activity

In the first quarter of 2023, the total trading volume of the 15 largest exchanges reached $10.8 trillion, with an increase of more than 40% compared to the fourth quarter of 2022. This is stated in the report of the analytical platform TokenInsight.

Changes in trading volume and market share of exchanges. These are parameters that directly indicate the rise or fall of the crypto industry. Bitcoin’s price recovery in the first quarter of the year was the most important factor. Which caused an active increase in trading volume.

Binance still holds the largest market share with 55% of trading volume. This is despite a slight decline in its share – it was 60% in the fourth quarter of 2022. OKX and Bybit, as at the end of last year, occupy the second and third places, respectively.

Spot trading volume on the top ten exchanges totaled $2.4 trillion between January and March, up 16% from the previous period. Derivatives trading volume on the top 10 exchanges totaled $7.8 trillion, up 30%.

In addition to the rise in the price of Bitcoin, many trending events occurred in the first quarter. For example, the growth of “Chinese” coins and the Arbitrum Airdrop (ARB). This led to increased activity in derivatives trading, according to our experts.

Binance, OKX and Bybit exchanges collectively accounted for 85% of the cryptocurrency derivatives market in the first quarter of this year.

The report also noted that most native crypto exchanges’ tokens closed the first quarter with an increase in price. Only LEO Token (LEO) from Bitfinex and HT from Huobi fell in price.

The only exchange token that outperformed Bitcoin and Ethereum in growth was BGB (Bitget exchange). And it was up 120%. The token Gate (GT) of the exchange Gate.io and OKB (OKB) from OKX rose in price by more than 50%.

In addition, our experts note that in early April it became known. That the monthly trading volume on decentralized exchanges renewed the maximum since May 2022. Rapid growth of cryptocurrency trading on DEX platforms began in March amid the bankruptcies of U.S. banks.

The Hong Kong Monetary Authority (HKMA) will issue a circular to banks to clarify account opening rules for cryptocurrency companies.

The Hong Kong regulator will explain how banks should conduct customer due diligence (CDD). The announcement was made by HKMA Deputy Executive Director Arthur Yuen.

Although the Hong Kong authorities actively support the development of the crypto-business. Then this industry is experiencing difficulties with access to banking services. But it is necessary for companies to store fiat assets, pay staff and pay suppliers.

The authority reviewed reports from industry participants that there may be difficulties with the account opening process and banks may reject applications. The HKMA then decided to explain to banks the rules for vetting customers. The regulator expects that crypto-service providers will be able to successfully open accounts using simple procedures.

The HKMA actively discussed the issue with banks and reminded them that there are no legal requirements. That prohibit Hong Kong banks from providing services to virtual asset (VA) related entities. The department also advised banks to avoid unnecessary processes. And refrain from adopting a “one-size-fits-all” approach to rejecting account applications.

On April 28, the HKMA and the Hong Kong Securities and Futures Commission (SFC) will co-host a roundtable discussion for the banking industry and crypto-service providers. This is done to exchange views on account opening and other information.

Our experts note that as of June 1, a new regime will come into effect in the region. According to which all cryptocurrencies operating in Hong Kong or with local investors must obtain an SFC license. Many major crypto exchanges, such as Huobi, OKX and Bitget, have already applied for a license. Or have announced the establishment of a local licensed unit.

Blockchain researchers note the “incredible diligence” of the developers of scam dubious coins. And they note that every day several new cryptocurrencies are released from the address scammer.

One scammer launched 114 scam meme cryptocurrencies in the past 45 days, a blockchain researcher under a nickname ZachXBT reported on Twitter. According to him, each time the funds received as a result of the fraudulent scheme were sent to the same address.

“I suspect that there are even more of them [issued cryptocurrencies]. These are just the ones sent to the same address,” ZachXBT added.

He attached a diagram that shows the “scam tokens” with names. Which refer to famous brands, such as KingKong, BBC, TrumpMind, Arbitreum, Mozilla, SpeechAI, PEPAPIG, are redirected to one address on the Coinbase exchange.

Users on social media noted that the scammers are acting like “criminal geniuses,” sending funds to a large centralized exchange, thereby giving themselves away. ZachXBT suggested that Coinbase had not detected the fraud because the transfers were coming in small amounts.

On April 27, a social network user under the pseudonym Guru also reported another similar case. In doing so, pointing to the address of a cryptocurrency wallet, which allegedly launched 2-5 memcoins daily for almost two years in a row.

“These developers have an incredible work ethic. Make sure you take note of their address on Etherscan. So you don’t fill their pockets with your money. Absolute insanity,” he wrote.

Our experts point out that scammers take advantage of the fact that meme tokens are popular in the cryptocurrency community. And in doing so, despite the fact that they do not bear any practical benefit. For example, new meme coins were launched in mid-April. Which are associated with famous Internet memes – Pepe the frog and Wojak the character. Their value rose by hundreds of percent after the launch. And now dozens of projects are launched every day that use PEPE, etc. in the name. Be careful 99% of these projects will be shut down within days of launch.

Our experts tell us what sandwich attacks are. And how trading bots generate millions of dollars for their creators by tracking profitable transactions on the blockchain

An anonymous trader who owns an Ethereum wallet with the address jaredfromsubway.eth became a star in the cryptocurrency community in one day. This became known thanks to the tactics of the so-called sandwich attacks. It earned more than $4 million in just one day and became the leader in terms of network commissions, displacing the largest cryptoservices.

Such attacks are not a new concept in decentralized finance (DeFi). The sandwich metaphor is used because a trader’s tactics are based on two-way use of information about someone else’s bid to buy a particular cryptoasset. By using special bots, the trader tracks transfers in the pool of unconfirmed Ethereum or other blockchain transactions.

When the bot finds a large order that will inevitably lead to an increase in the price of an asset. It buys the asset in advance at a lower rate, “pushing” its transaction at the expense of an increased commission. And after the order is executed and the price rises, he sells it with a profit. The process is automated and takes place in seconds.

Memes and commissions

The most attractive targets for such attacks are usually low-liquid assets. For example PEPE, a new token named after the famous meme of Pepe the frog, has become just that. PEPE quickly gained popularity when a story broke in the community about How a certain early buyer of the token turned $250 into $1.8 million at a thousand-fold increase in its price.

In search of quick profits, thousands of other traders began buying up PEPE. In parallel, similar tokens named after famous memes – CHAD, WOJAK and others – started to be launched. Due to the low liquidity of the tokens, any large purchase order pushed their prices up. And such bids were hunted by bots of traders making money on sandwich attacks.

According to analytics service EigenPhi, PEPE and WOJAK have become the most popular assets on the Ethereum network over the past week. But after the stablecoins USDC and USDT with transaction volume of more than $250 million and $120 million, respectively. The wallet owner jaredfromsubway.eth had about $1.6 million in revenues from sandwich attacks in pairs with PEPE and more than $2.8 million in transactions with WOJAK.

However, the implementation of this strategy in such volumes requires high costs to pay higher commissions to ” push transactions “. The owner of jaredfromsubway.eth spent about $1.3 million on gas on the Ethereum network in just one day. That’s about 1.8% of the network’s total commissions over the same period. At the moment, only the Arbitrum network contract was ahead of the trader in terms of commissions. Which has an entire ecosystem of applications with millions of users.

Community observers estimate that jaredfromsubway.eth has spent about $7 million in commissions on more than 180,000 transactions over the past two months. When it sought to make a profit ahead of other users’ transactions.

Sandwich attacks are not an ethical tactic

Sandwich attacks are just one tactic within the larger phenomenon of Maximal Extractable Value (MEV). It is a technique that manipulates the sequence of transactions in the blockchain for profit. For example, by arbitrage or by outperforming other people’s transactions. The profits from MEV usually go to the creators of transaction blocks on the Ethereum network. They are the ones who determine the order of these transactions and then pass it on to validators. Ordinary users cannot influence their own transactions. And wallets and applications do not have the necessary tools to use MEVs to their advantage.

It takes the Ethereum blockchain about 12 seconds to validate a single block of transactions. Bots have enough time to scan each of the unvalidated transactions in a block and get ahead of the time to close someone else’s transaction. The process whereby the bot puts its own transaction in front of another’s (which will cause the price of the asset to rise) is called frontrunning. Repositioning a transaction with a bid to sell an asset already at a higher price is called backrunning. The combination of both processes creates a sandwich attack.

Traditionally, these tactics are considered unethical. But it is not prohibited either. The lack of a central supervisory body for DeFi plays into the hands of MEV traders. Most of their transactions take place on decentralized exchanges (e.g., Uniswap). This was the case with the owner of the wallet jaredfromsubway.eth. Similar to how high-frequency trading market players lead in profits on traditional markets. So do crypto traders in the MEV segment, using a variety of tactics to generate billions of dollars in crypto-assets revenue.

How to combat this

Our experts point out that Flashbots has been fighting for a fair market in the MEV field for years, creating software and infrastructure to reduce manipulation in this area. On April 20, the developers presented a beta version of their MEV-Share protocol. The purpose of which is to distribute a portion of the profits from maximum recoverable value to Ethereum users. According to the developers, it will give users the ability to control their transactions.

Crypto Upvotes experts evaluated the effectiveness of airdrop Arbitrum and told how ARB token exchange price may develop in future

After the sensational airdrop project Arbitrum (March 23), 1 billion ARB tokens were released to market. Which were distributed among 625 thousand addresses. The total market capitalization of token stabilized at $1.63 billion.

At the time of publication, the price of ARB is at $1.28. Having analyzed the experience of projects such as Optimism, Aptos and Blur, whose tokens have also entered the market as part of large-scale airdrops. Our experts told us how the rate of ARB token may behave in the future.

The general bullish trend continues

After listing on exchanges, tokens of projects with airdrops tend to exhibit high volatility. Therefore, there can be both sharp price jumps and drawdowns of tens of percent all at once. Overall, ARB is in line with the “most positive trend.” That’s because the token price didn’t collapse after the start of trading on Bybit, Kucoin, MXC, Huobi, Okex. And then on Binance, although it experienced serious fluctuations. On Huobi, the exchange rate was as high as $11 per token on listing day, though the price went down almost immediately.

First of all, such volatility is due to the fact that those who received ARB tokens during the Airdrop. And then decided to lock in profits immediately after listing, which put pressure on exchange rates. On another note, our Crypto Upvotes experts observed that a significant number of sell orders were placed well in excess of the market price, pushing the rate higher.

If you compare listing of ARB on exchanges with other large tokens with airdrop. The similarity can be seen in the high volatility at the start of trading. The major difference is the “general bullish sentiment” of investors regarding ARB. And this is favored by such data as the growth of total blocked value (TVL) of Arbitrum network by a quarter during the last week. According to DefiLlama, Arbitrum’s TVL stands at $2.18 billion, while its closest competitor, Optimism, has $907 million of locked-in capital in its ecosystem.

Predicting the price of Arbitrum after trading starts is difficult

Starting ARB trading was marked by the fact that on some exchanges trading started a little later than announced. And also the fact that the influx of users led to disruptions in the resources for receiving tokens and on exchanges. Listing of Arbitrum on exchanges was immediately accompanied by high trading volumes, which further attracted crypto-traders. This gives big players an opportunity to form positions without much damage to the average purchase price.

Our experts note that it is difficult to predict the further development of ARB price. Because the price levels have not been fully formed yet. In the short term it is necessary to focus on the level of $1, as it will be a psychological support. In case of a positive scenario, we should be attentive at the price level of $1.5. If this level of resistance is exceeded, the price is likely to quickly approach $2.

Why airdrop Arbitrum became successful

The effectiveness of an Airdrop depends directly on marketing work that the project has done before distributing these tokens. First, the project needs to develop their community, to attract new capital. And constantly pointing to the possibility of a profitable airdrop for active participants. Under such conditions, you can talk about success – even if some of the users in the community decide to sell ARB tokens.

The effectiveness of such a model is good for the popularity a project – it’s an excellent marketing move, our experts say. In the case of Arbitrum, the popular topic media “literally bursting with news”. Because people like to get something for free, especially if it will bring good profits in the future.

However, most traders will fix some part of the received tokens, e.g. 20-30%. The rest will go into stacking or long-term storage waiting for price growth if the project really deserves it. According to experience of our experts, even now we can see that large participants of crypto market actively accumulate ARB in their wallets.

Santiment analysts reported on growth of “Whales” investment in altcoins. Review by Crypto-Upvotes experts

Those socalled “Whales” of cryptoindustry, that is, large holders of crypto-assets. They have started to increase their investments in altcoins. And it is the interest of the big players, according to information and analytical platform Santiment, that is causing the rise in prices of digital assets.

Santiment experts pointed out that large holders of Litecoin (LTC) have increased their token holdings by 1.15 million coins (+4.92%) over the past six months. And in the last 7 weeks alone, the increase in their wallet balances was about 0.5% of the coin’s total supply. Analysts said on Twitter that this was the reason for LTC’s 89% rise since it fell to $50 in early November. By January 31, the value of the asset had risen to $95, a daily gain of 2.8%.

The cryptocurrency Litecoin, created in 2011, uses the same programming code as Bitcoin. But it works with some differences, offering cheaper and faster transactions. The asset has a market capitalization of $6.8 billion as of Jan. 31 and daily trading volume of $1.1 billion.

One of oldest investment companies in the crypto industry, Pantera, has renewed its interest in investing in digital assets. Which is different from Bitcoin and Ethereum, The Block reports. Last spring, Pantera switched from investing in altcoins to ETH to avoid losses. But now it has begun to return to coins, which Pantera co-founder Joey Krug says will “outperform Ethereum in the coming cycle.” No specific assets were named.

Prices of some altcoins rose by tens or even hundreds of percent earlier this year. Santiment analysts last week pointed out that sentiment in the cryptocurrency community may be signaling tops. But if traders don’t take emotion into account, the rise in cryptocurrency prices could continue.

Santiment also named the top 10 fastest-growing altcoins. To compile the ranking, the analytics company used data on developer activity.