EthCap Presentation + Companies Bracing for a Crypto Winter

Bear market or not, there’s no slowing us down these days! Let’s recap what we’ve been up to this week.

We’re pleased to invite you to a live investor presentation featuring Ether Capital’s CEO Brian Mosoff and President & CFO Ian McPherson.

We’ll share details about our Q1 financial results (the first time we generated operating profit #NBD) and what’s next as we continue building out our business. Brian and Ian will also explain the value proposition for company shareholders and what sets $ETHC apart from crypto ETFs/other products.

We’d love for you to join us and we’ll be ready to answer your questions! Click here to register.

Bear markets can be tough to manage, especially if you’re new to the space. Earlier today, we spoke with Bloomberg Quicktake about how investors can seek out opportunities and refine their investment strategies during this period.

But it’s important to know that it’s not just investors who are feeling the pressure. Many businesses are also facing financial hardship and have started implementing cost-cutting measures in the event of a crypto winter.

On Thursday, Gemini confirmed it’s laying off 10% of its staff and rival crypto exchange, Coinbase, also announced a hiring freeze.

As we explained to Bloomberg, our company is in a very different position and we remain committed to hiring developers and growing our business. Now is a good time to focus on building institutional-grade infrastructure without the distractions that permeate the industry during a bull run.

Cryptocurrencies have lost nearly US$1 trillion in market value YTD, but that is not stopping investors from pouring funds into Canadian crypto ETFs.

New research by National Bank Financial shows Canada’s crypto funds made a strong comeback following April’s $338 million selloff. In May alone, crypto ETFs raked in $565 million — the biggest monthly inflow so far this year for the category.

Overall nearly $7 billion flowed into crypto ETFs since February 2021 with the introduction of Purpose’s BTCC that Ether Capital helped launch. But due to YTD price declines for both Bitcoin (-35%) and Ethereum (-50%), the combined total of AUM for Canada’s 42 crypto ETFs is closer to $4.3 billion.

As we said during a MoneyShow virtual panel last week, bear markets give investors the space to recalibrate and understand the true value of assets like Bitcoin and Ethereum. They end up walking away with more knowledge and conviction that the asset class is here to stay, rather than being dissuaded by the short-term prices.

Ethereum developers are one step closer to the Merge after the protocol’s longest running proof-of-work (PoW or mining) testnet, Ropsten, reached an important milestone earlier this week.

The testnet began the process of switching to a proof-of-stake (PoS) consensus, which will allow developers to obtain key insight into how the Merge will play out on Ethereum’s main network where all transactions take place.

The tl;dr is Ethereum has a few test networks (i.e., Ropsten, Goerli and Sepolia) called “testnets.” They provide a sandbox-type environment where developers can deploy smart contracts while testing out decentralized applications and code that doesn’t interfere with main network activity.

Once the transition to PoS successfully occurs on all testnets, developers will shift their attention to the main network and the big upgrade (aka the Merge) is expected to take place later this year — August being a possibility.

Ethereum’s switch from PoW to PoS will allow ether holders to generate yield (currently ~5%) by staking their assets to help validate (or approve) transactions that occur on the network.

What’s great about the Merge is not only will the blockchain become 99% more energy efficient, but there is expected to be a 90% reduction in ether issuance. This combined with a portion of Ethereum’s transaction fees being burned — more on that here — analysts predict the upgrade will result in more ether being destroyed than created through validator rewards. This means the world’s second largest cryptocurrency could become a deflationary asset.

Our two wei

We believe most user activity and tokenization will continue to take place on Ethereum, and the switch to PoS will play an important role in future adoption.

Many funds and institutions that have sat on the sidelines due to ESG concerns will have a good reason to pay attention to Ethereum as an eco-friendly alternative to Bitcoin. The idea that ether will also allow investors to generate a strong ROI through staking is another winning feature. If you don’t plan on trading your ETH, you might as well turn it into a productive asset, right?

Last but definitely not least, we are excited to introduce our brand new website!

We worked hard behind the scenes to make sure the design, layout and content was just right. It’s the same URL http://ethcap.co, just a different look. Check it out and let us know what you think.

No bug bounty rewards being offered at this time, but we appreciate feedback!

Growing Demand for Crypto

A new survey by the Economist shows growing demand for cryptocurrencies, including investors viewing digital assets as a good way to diversify their portfolios.

Bitcoin Mining Won’t Pay the Bills

Bitcoin mining revenue and profitability slumped to an 11-month low as BTC’s price continues to slide and the crypto winter drags on. Bitcoin’s daily mining revenue tanked as much as 27% in May, according to recent data by Blockchain.com. Yikes.

Global Insurers Warming Up to Crypto

A new survey by Goldman Sachs shows that global insurance industry leaders are starting to lean into the space. Approximately 11% of U.S. insurance firms indicated either an interest in investing or a current investment in crypto.

Tacobout A Good Time

Chipotle is now accepting cryptocurrency payments in American establishments through Flexa, a digital payments platform. The Mexican fast food restaurant is part of the growing number of retailers accepting cryptocurrency as a form of payment.

The industry is quickly evolving and there’s a lot of information to keep up with. That’s why we want to help!

Email us your questions and we’ll respond to as many as we can. While we can’t provide investment advice, we do want to steer you in the right direction so you can stay informed.

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