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Later this morning, the President of the United States will address our very own Digital Asset Summit.
It’s the first time a sitting president has ever addressed a crypto conference (he wasn’t president yet when he took the bitcoin stage in Nashville last July).
Now we just have to hope that crypto can maintain this positive price momentum, which hasn’t always been the case after Trump talks crypto.
He’s — rightfully — received some criticism for his approach to digital assets, but two things can be true and it’s monumental for someone of his caliber to address an industry-centric event.
If you want to tune in, we’ll have livestreams on various platforms, and the address is expected to happen later this morning.
Meanwhile:
Bitcoin’s back to $85,000 this morning, a 2% increase over the past day. ETH, however, wasn’t able to keep up the positive momentum and has fallen just under $2k, a 1.6% decrease in the same timespan.
Hold your horses! The global crypto market cap is on a tear, up 4.5% over the last day to $2.84 trillion per Blockworks Research data.
Total RWA onchain is up to $18.9B, a 17% increase over the past 30 days.
🔓Unlocking real estate
I have an exclusive for you this morning.
Manifest, a firm focused on bringing US private equity real estate onchain, raised a $2.5 million round to bring together real estate and DeFi.
The round was led by VanEck Ventures with participation from Compound, Lattice Fund and SALT.
This is the latest company on CEO Nathaniel Sokoll-Ward’s resume. He’s been a career founder, having founded other firms like Roostify, which focused on mortgages.
After a stint in Argentina to spend time in a space that embraces crypto — Sokoll-Ward and his co-founder came up with Manifest, a way for folks to get a piece of the American pie…so to speak.
Their first offering is USH, an ERC-20 token that promises 13% annual returns by providing exposure to US residential real estate through Home Equity Investments, which is exactly what it sounds like: a financial tool designed to unlock the equity in a home.
My biggest question for Sokoll-Ward was simple. How is this any different from the real estate stuff we heard about, and that ultimately didn’t seem to catch momentum in the market, last cycle?
“The graveyard there is really deep,” he acknowledged.
“Most importantly, it is on the asset permissionless side, right? So, typically, people have done real estate and these like walled garden sort of things, sort of atmospheres where you had to be KYC’d and every subscript transaction was KYC, AML checked as well. In my mind, that was just sort of like tokenization as theater, right? Because even though the assets might actually be tokenized, if you can't actually use DeFi infrastructure, then who the hell cares? It's just like normal investing, but with more steps in between.”
Remember how I said they were backing the token with HEIs? The simplest way to explain that is tokenizing a mortgage. So, Manifest is “essentially a capital markets layer on these originators in the United States … so we’re tapping into a $35 trillion market.”
Because of the way this operates, the overhang that marked the death knell for a lot of the other tokenized real estate projects isn’t going to impact Manifest.
Further, because Sokoll-Ward says he was able to utilize some of his past mortgage industry connections — as well as paying a lot of legal bills for consults — to create Manifest.
“These guys have created the unlock for the first wave of assets that's starting with real estate,” VanEck’s Wyatt Lonergan told me. “But you can imagine that there are so many different parallels, so many different portfolios and baskets of assets that you could start to create with the same logic, same legal structure.”
The token is “inherently yield-bearing and that’s the next step, in our opinion, in tokenization,” he added.
For Lonergan, Manifest was an opportunity to get exposure in an area that both Circle and VanEck have previously tried to get access to.
Manifest, in the future, would look to expand its token offerings to other assets that can only be acquired on a private equity basis at this moment.
This round, Sokoll-Ward said, helps to “stand up” the fund structure and offer it to the public. The team plans to expand and pay some bills after extensive visits with lawyers to figure out the legality of their product.
“This is really a follow-the-money type of thesis,” Lonergan told me. He believes that the graveyard of failed firms marks an opportunity as more folks focus on tokenization.
Let’s just not bring back real estate in the metaverse as a narrative though, okay?
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📈 Fundamentally important
There are a handful of big themes coming out of the Digital Asset Summit (think regulation, macro, etc) and then there are some smaller themes (venture capital, narratives and fundamentals).
I’ve been — somewhat obsessively — listening to practically every panel on stage. Without focusing on that, let me explain: Fundamentals have been something I’m especially keen on.
We’ve spoken to Blockworks Research’s Ryan Connor about the role they’re playing and I think I’ve vocalized my excitement for fundamentals a few times now. However, we’re still not really seeing that play out.
In a panel with the one-and-only Connor yesterday, Matthew Sigel, VanEck’s head of digital assets research, told the crowd that he used to say token prices were half fundamentals and half flows — but he doesn’t believe that anymore.
“I think it's 90% flows and 10% fundamentals. And you can see that in the market cap of XRP versus Ethereum, and just look at how much economic activity goes across Ethereum versus XRP,” he explained.
As a former stock market girl (aka reporter), it’s rough. But he has a point and “you have to, I guess, respect the tape.”
For Sigel, it means that his firm’s been very selective on projects they’re backing.
“You may have noticed many of our competitors have been throwing a lot of single token ETFs at the wall this year in terms of filings. We've been much more judicious on that, and instead doubling down on our active strategies. And it just means that we're passing on more investments because the active strategies are looking for great, doxxed teams that are building product equivalent where tokens should be able to actually capture value over the medium-run,” he explained.
Unfortunately, it seems that we’re still not fundamentally focused — but I’ll hold out hope for that day.
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On my mind: M&A activity
Kraken announced this morning that it’s acquiring NinjaTrader for a whopping $1.5 billion. That’s no small sum. Actually, it’s quite the opposite: It’s the largest crypto/TradFi acquisition in history (so far).
It’s also a push to gain a larger retail base, given that NinjaTrader specializes in offering futures trading for that crowd. It’ll help open the door for Kraken to move into other assets.
It’s a huge deal.
And, because this is the riff, I can tell you my exact thoughts on this: We’re heading into an IPO open season. Okay, not just yet, hold your horses. What I mean, though, is that this reads to me like the first sign that Kraken’s serious about IPOing. They’re getting ahead of the comparisons — because they will be made — to Coinbase by differentiating offerings.
IPOs probably will be put on the back burner overall until macro conditions improve, but I see that as a boon for Kraken specifically. They can quietly close this deal, get their affairs in order and start floating their strategy to the necessary parties.
Putting aside IPOs, this also opens the door for more M&A, though I think that door was cracked open before Kraken made this announcement given that Blockdaemon made their own acquisition yesterday.
Either way, it’s going to be an exciting year, and not just for regulatory clarity.