NUMEUS GROUP

The Bridge Panel Spotlight: The LP Landscape for Digital Assets will explore the evolving role of LPs in digital asset investment strategies. We’ll discuss how LPs are navigating the crypto space, how their approach has shifted over time, and the changing dynamics of capital flows in the broader digital asset ecosystem. Speakers include: • Rabia I., Managing Partner, Nural Capital (Moderator) • Michael Ashby, CEO, ALGOQUANT • Matthew Shapiro, Partner, Multicoin Capital • Paul Brodsky, Partner, Pantera Capital • Mitchell Ulman, Partner & Chief Operating Officer, NUMEUS GROUP Explore our agenda and speakers, and request your ticket to attend on our site: bridge.thetie.io #TheTieBridge

🟠 Bitcoin Mining in a Post-Halving World 🟠 With Bitcoin's recent halving reducing daily rewards to 450 BTC, miners are navigating new economic realities. Here's a snapshot of the current landscape and RIOT's position: Global Mining Competition: The global hashrate has surged to 769 EH/s, reflecting intense competition for the reduced block rewards. RIOT's Share: RIOT controls 22 EH/s, or 2.86% of the global hashrate, equating to ~12.86 BTC mined daily. 📍 Cost Efficiency Advantage: RIOT's all-in cost per BTC: $39,437 Electricity rate: $0.025 per kWh Compared to miners paying $0.04 per kWh, RIOT achieves 42.9% profit margins, significantly higher than less efficient operations. 📍 Profit Breakdown (BTC @ $69,000): Daily revenue: $887,340 (12.86 BTC × $69,000) Daily costs: $507,387 (12.86 BTC × $39,437) Daily profit: $379,953 Electricity Costs and Operational Expenses Post-halving, electricity prices are a crucial factor in determining mining profitability. Here’s a breakdown of roughly estimated daily operational costs per Bitcoin at different electricity rates: 📍 $0.08 per kWh: Estimated daily operational cost per Bitcoin: $93,600 📍 $0.06 per kWh: Estimated daily operational cost per Bitcoin: $70,200 📍 $0.04 per kWh: Estimated daily operational cost per Bitcoin: $46,800 Stay tuned for part two, where we dive deeper into the distribution of mining costs across the global network, revealing how much of the daily 450 BTC is mined at various cost levels. We've only covered the most efficient miners so far, who account for just 2.86% of the daily mined BTC.

Bitcoin's foundational principle of decentralization is increasingly challenged as a significant portion of its supply becomes concentrated among large custodians and institutions. Major exchanges like Coinbase (holding approximately 4.93% of the total supply), Binance (3.38%), and investment firms such as Grayscale Investments (holding around 3.16%) are accumulating substantial amounts of Bitcoin. This trend raises valid concerns about potential centralization within the Bitcoin network. 🟠 BTC Holder Concentration - Coinbase holds about 4.93% of the total supply directly. - Grayscale Investments holds approximately 3.16%, with its Bitcoin stored using Coinbase Custody. - BlackRock, through its Bitcoin ETF holds 1.84% Bitcoin with Coinbase Custody. - U.S. Government, specifically the U.S. Marshals Service, has selected Coinbase to manage and trade its seized cryptocurrency assets which amount to 1.01%. By aggregating these holdings and custodial relationships, Coinbase Custody oversees a substantial portion of the total Bitcoin supply, potentially exceeding 9%. This consolidation amplifies concerns about centralization within the Bitcoin ecosystem. 🟠 Impact of Bitcoin ETFs The introduction of Bitcoin ETFs by major financial institutions like BlackRock could further centralize Bitcoin ownership: - ETFs accumulate large amounts of Bitcoin under institutional control, potentially limiting individual access to directly owning the asset. - Institutions managing these ETFs may gain significant influence over market dynamics due to the volume of Bitcoin they control. 🟠 Risks of Centralization - Centralization conflicts with Bitcoin’s core principle of a decentralized network free from control by any single entity. Large holdings by institutions like Coinbase, coupled with entities like BlackRock and the U.S. Government utilizing Coinbase Custody, could lead to a power imbalance within the ecosystem. - Dominance by institutions and ETFs may enable them to exert undue influence over market movements and decisions, potentially affecting the network's integrity and market fairness. 🟠 Community Safeguards Against Centralization - While developers are pivotal in maintaining and updating the Bitcoin network, they cannot enforce changes without broad community consensus. If centralization poses a significant threat, the developer community, alongside miners and nodes, could advocate for a fork to create a version of Bitcoin that upholds decentralized principles. - Initiating a fork to counteract centralization would require widespread support from the Bitcoin community, including developers, miners, exchanges, and users. This collective action could help maintain Bitcoin's foundational values. Although institutions like Coinbase have demonstrated leadership in supporting the ecosystem and resisting regulatory challenges, there is an urgent need for large centralized entities to enhance transparency.

🟠 Why BabylonLabs' Solution Isn't Equivalent to Earning More Bitcoin 🟠 In the dynamic world of cryptocurrency, innovative platforms like BabylonLabs are offering new ways to generate yield from our Bitcoin (BTC) holdings. At first glance, the prospect of earning additional returns on BTC is enticing. However, it's crucial to critically assess whether these solutions genuinely help us accumulate more BTC or introduce unnecessary risks with limited upside. 🟠 Yield in Altcoin Tokens vs. Bitcoin BabylonLabs enables users to stake or lend their BTC to earn yields. The catch? The returns are often paid out in altcoin tokens rather than in BTC itself. Here's why this is a significant concern: 📍 Inflationary Nature of Altcoins: Many altcoins have high inflation rates, meaning their supply increases over time. This can dilute the value of the tokens you receive, negating the benefits of the yield earned. 📍 Market Volatility and Liquidity Risks: Altcoins are generally more volatile and less liquid than BTC. The tokens you earn may fluctuate wildly in value or be challenging to sell without impacting the market price. 📍 Sustainability Doubts: The demand for certain altcoins can wane if retail investors aren't actively engaging with them. Without sustained interest, the value and utility of these tokens could diminish rapidly. 📍 Risks to Your Bitcoin Holdings By participating in such yield-generating schemes, you're potentially exposing your BTC to several risks: 📍 Custodial and Security Risks: Handing over your BTC to a third-party platform introduces the risk of hacks, fraud, or mismanagement. Regulatory Uncertainty: The regulatory landscape for crypto platforms is still evolving. Changes in regulations could affect the platform's operations and your access to funds. 📍 Smart Contract Vulnerabilities: If the platform relies on smart contracts, bugs or exploits could lead to significant losses. 🟠 Is the Trade-Off Worth It? For many, BTC is viewed as a long-term store of value—a hedge against inflation and economic uncertainty. Sacrificing this for potentially depreciating altcoin tokens may not align with the investment goals of those looking to accumulate more BTC. Unless there's a significant shift with retail investors flocking back to altcoins, the demand and, consequently, the value of these tokens may remain subdued. Conclusion While platforms like BabylonLabs are pushing the boundaries of what's possible in crypto finance, it's essential to align their offerings with your investment objectives. If your goal is to accumulate more BTC, earning yields in inflating altcoin tokens may not be the optimal path. Let's focus on strategies that truly enhance our BTC holdings without compromising on security and long-term value. 🔗 Read more on our Bitcoin research here: https://lnkd.in/dHBGJ9iw

We haven't posted in a while but since everybody seems to agree that Ethereum is dead, we would like to point out some relevant aspects of the technology! 🌐 Ethereum: The Backbone of Crypto and Web3 There’s a lot of bearish sentiment around $ETH, but let’s take a closer look at what’s actually happening. While people talk about other chains and Layer 2 (L2) solutions, here are some key facts: 📍 Ethereum is the AWS of Crypto: Just as Amazon Web Services (AWS) underpins most of the modern internet, Ethereum is the fundamental infrastructure supporting the entire decentralized finance (DeFi) and blockchain ecosystem. Almost everything in crypto relies on Ethereum in some way.$ 📍 The Last Reliable Fallback: Other chains may boast speed or lower costs, but when push comes to shove, Ethereum remains the most reliable and secure platform. Over the past 8 years, Ethereum has never experienced any downtime—a feat not many other platforms can claim. 📍 Adoption by Big Players: In the past month alone, major companies such as PayPal, Visa, BlackRock, Venmo, and Sony have all made moves on Ethereum. These are global giants choosing to trust Ethereum as the foundation for their blockchain initiatives. 📍 Ethereum Powers Layer 2 Solutions: Many of the L2 solutions that promise scalability or faster transactions are still ultimately relying on Ethereum’s security and infrastructure. Without Ethereum, these would struggle to operate independently. 📍 Innovation Leader: Ethereum has twice as much innovation in contract development as any other chain combined. It’s not just about copying; it’s about building the future. 📍 Validator Exit Queue is Empty: Despite market fluctuations, the Ethereum staking exit queue is basically empty, indicating that long-term holders are committed to securing the network and maintaining its health. Ethereum might not always grab the spotlight, but like AWS in the tech world, without Ethereum, much of the crypto world simply wouldn’t work. While others may shout louder, Ethereum is the quiet giant driving the decentralized ecosystem forward.

User-friendly applications, like those championed by Coinbase, are driving mainstream adoption of blockchain technology, built on the robust security of Ethereum’s L1. These applications are now helping Ethereum-dependent blockchains like Base reclaim market share from competitors like Solana, which previously relied heavily on memecoin trading to generate activity and revenue. 🔵 Explosive Growth: Base's rapid rise in monthly active users, as shown in the first image, highlights its growing dominance in the L2 space, attracting both users and developers. 🔵 Market Share Reclaim: Ethereum-dependent blockchains like Base are taking back market share from Solana and other competitors, showing the strength of platforms built on Ethereum’s solid foundation. 🔵 Developer Magnet: The influx of builders on Base is accelerating its growth, further boosting its appeal as a leading L2 solution. 🔵 User-Friendly: Base's intuitive interface simplifies blockchain interactions, making it accessible to a broader audience and fostering wider adoption. 🔵 Scaling Power: With lower costs and faster transactions, Base is becoming the go-to platform, drawing users away from other L2s and Solana. 🔵 Ethereum’s Backbone: Base's reliance on Ethereum’s L1 ensures robust security and decentralization, crucial for maintaining user trust as the platform scales. 🔵 Synergy and Stability: The success of Base and similar platforms is deeply connected to the stability and security of Ethereum’s L1, proving that innovation and a strong foundation can lead to reclaiming market leadership. However, to truly realize the potential of blockchain, we need more applications across various blockchains with strong fundamentals, where users don't even realize they are interacting with blockchain technology. In light of recent government overreach and censorship, blockchains might find their product-market fit out of necessity, offering a decentralized alternative that preserves freedom and privacy.

🔻 Ethereum ETFs have been on a 4-day losing streak, shedding $98M on July 29 alone. 🔻 Grayscale's ETHE has been the main culprit, losing a staggering $1.7B since its conversion. That's a whopping 18% of its pre-conversion AUM! But don't lose hope just yet! Some ETH ETFs are shining bright: 🟢 BlackRock's ETHA is the star of the show, attracting a massive $500M in inflows 🟢 Bitwise's ETHW is close behind, with $276M flowing in 🟢 Fidelity's FETH is holding its own, raking in $244M Analysts are optimistic that ETHE outflows might calm down this week, potentially giving the ETH price a much-needed boost! In general there is still a massive supply of ETH locked in various ways, which will lead to a limited supply eventually since ETF's are exploring the option to stake Ethereum as well. 📍 For context, BTC ETFs went through similar growing pains. GBTC outflows hit rock bottom on day 7, at 13.2% of the original fund. 📍 A BlackRock bigwig has revealed that there's a strong institutional appetite for ETH exposure via ETFs. The big boys are ready to play!

FORTEUS is excited to attend BTC Nashville this week! We are looking forward to connect with industry partners and investors. Please reach out to Thomas Chladek and Jackson McGonagle if you’re attending and want to connect. #BTCNashville #Forteus #Numeus

We are pleased to share the Hedge Fund Alert article published last week re: FORTEUS. This includes several exciting recent business developments, as well as background regarding our founding partners. Please reach out if you'd like to learn more. Thank you Hedge Fund Alert

For the confirmed Ethereum ETFs launches today at 9:30am ET, it's crucial to understand the nuanced dynamics of potential inflows, outflows, and their impact on the market. Let's break down the data: Inflow Projections: 📍 Industry estimates range from $500M to $2B per month. 📍 That data suggests $800M-$1.2B of monthly inflows. 📍 These projections are based on market cap weighted averages of Bitcoin ETF inflows. Supply Dynamics: 📍 Current staked ETH: 33.4M (117 Billion) 📍 This represents approximately 28% of total ETH supply 📍 Staked ETH effectively reduces the liquid supply, potentially amplifying price movements Liquidity Factors: 📍 ETH has lower liquid supply compared to BTC due to: a) Native staking (33.4M ETH) b) Supply locked in smart contracts (9.1M ETH) However, the liquidity gap isn't as wide as perceived: 📍 ETH's orderbook depth (±2%) is about 80% of BTC's Potential Outflows: 📍 ETHE (Grayscale Ethereum Trust) conversions could lead to initial outflows 📍 Unlike GBTC, ETHE has been trading near par value for months, potentially mitigating sell pressure 📍 Grayscale's new "mini trust" with competitive fees may retain more assets Reflexivity and Ecosystem Impact: 📍 ETH price increase → Increased DeFi activity → Higher ETH burning rate → Reduced supply → Further price increase 📍 $68B of value locked in Ethereum DeFi protocols (20M ETH) 📍 ETF inflows could trigger a positive feedback loop in the broader Ethereum ecosystem Comparative Analysis: 📍 ETH ETF flows are expected to be proportional to market cap relative to BTC 📍 Global crypto ETP data suggests market cap weighted allocation is the dominant strategy Additional Considerations: 📍 Potential rotational flows from BTC ETFs to ETH ETFs 📍 TradFi understanding of Ethereum's value proposition 📍 Possibility of staked ETH ETFs in the future, offering yield opportunities This data paints a picture of a complex, interconnected ecosystem where ETF flows could have far-reaching implications. However, it's crucial to note that while these factors may significantly influence mid- to long-term trends, short-term market movements are often driven more by prevailing narratives and sentiment. (Source chart ASXN)