Everyone’s mom after Fidelity opens 401(k)s to Bitcoin
WHAT'S MOVING CRYPTO
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Happy Friday Everyone! 👋
Crypto was up and down this week.
In the real world, Facebook Meta Platforms announced plans to open a brick-and-mortar store to sell hardware for the metaverse. Or, a hype store.
Meanwhile, Coinme extended its reach as the world’s largest bitcoin kiosk network after entering its 49th state.
And—the biggest news of all—SX Network announced the closing of a $9.5M funding round led by crypto venture fund Hack VC!
I’ve been invested in SX Network since January 2018 and it was the subject of the FIRST edition of this newsletter in which I told investors I believed we were at an inflection point.
Having said that…let’s get to it!
Everyone’s mom after Fidelity opens 401(k)s to Bitcoin
Stripe dips its toes back into crypto
IPO-tied crypto tokens
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1. Everyone’s mom after Fidelity opens 401(k)s to Bitcoin:
A decade ago, (now) Fidelity chairman and CEO Abigail Johnson began holding internal meetings every week to discuss digital assets and something called the blockchain.
In 2015 the company began mining Bitcoin.
In 2020 it opened its own crypto fund for wealthy customers.
This week it announced plans to become the first major retirement-plan provider to put Bitcoin on its 401(k) menu.
Starting later this year, plans will allow investors to place up to 20% of their accounts in Bitcoin (as well as up to 20% of each payroll contribution).
Could Fidelity’s move kickstart a domino effect across the industry?
The US Labor Department, which regulates company-sponsored retirement plans, could pose a problem: just last month they were cautioning employers to exercise “extreme caution” before opening 401(k)s to cryptocurrencies.
2. Stripe dips its toes back into crypto
Starting today, select Twitter users will be able to receive earnings from the platform’s Ticketed Spaces and Super Follows features in crypto.
Twitter is just the first merchant that fintech giant Stripe is rolling out this new offering to as it dips its toes back into crypto. The company bailed on Bitcoin payments in 2018.
The new feature comes a year after Stripe formed a team dedicated to investigating opportunities in crypto and Web3.
The payout feature runs on the Polygon network which sits on top of the Ethereum network and payouts will be limited to stablecoin USDC (pegged to the US dollar) to start.
Stripe expects to add support for additional rails and cryptocurrencies in the future.
Meanwhile—as Stripe begins feeling its way back into the crypto scene—TradFi giants like Visa, MasterCard, and PayPal have already made big moves in the space.
3. IPO-tied crypto tokens
The ICO (Initial Coin Offering) may be dead but its spirit lives on in a new crypto token issued by…a beauty company?
New York-based online retailed Oddity Tech has plans to offer security tokens to accredited investors which are tied directly to equity ownership—the first offering of its kind from a non-crypto company.
Like ICOs, the proceeds from the sale of tokens would be used for “general corporate purposes”.
However, unlike their dubious counterparts, a condition in the contracts governing Oddity’s tokens will be programmed to ensure they are not tradeable.
This means the only way for investors to realize a profit is to wait for the company to go public, at which point the tokens would automatically convert to a share of stock…at a 20% discount to the IPO price.
Do these security tokens represent the future of capital raising?
A small beauty company probably won’t provide the best case study to answer that question, but these tokens are unique in that they can be programmed to contain specific characteristics (like equity ownership or profit-sharing) and be offered as regulated assets.
At the very least, it’s the latest example of innovation happening at the intersection of traditional equities and blockchain infrastructure.
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