✨ All that glitters

Bitcoin’s value can be boiled down to one specific quality: accountability.

We know precisely how many bitcoins have been mined at any point in time. We also understand which addresses have access to those coins, as well as how long they’ve been held without moving.

What we don’t know is how many coins are lost forever — BTC tied to private keys that have been destroyed, misplaced or otherwise not passed on after death and so on. 

Some estimates suggest around 20% of all BTC won’t ever move again, the equivalent of 3.7 million BTC ($318 billion). 

We’ll never uncover the private keys for all those coins, but we will always know exactly where they’re sitting onchain.

The same can’t be said for gold and silver. World Gold Council reckons 212,582 tonnes of gold had been mined across all of history as of the end of last year.

Of that, 45% of it has been made into jewelry, 22% in bars and coins, 17% held by central banks and the rest is scattered across the world in various other forms. 

Based on those figures, the total value of mined gold (analogous to circulating supply) is about $18 trillion. But who knows how much of it is readily available to be brought to market.

Data for total above-ground supplies for silver is similarly vague. InfinteMarketCap, which tracks all assets against each other, goes by the 2019 CPM Group Silver Yearbook, which says that 1.751 million metric tonnes of silver have been mined to date. 

At current prices, that would put silver’s market cap at nearly $1.9 trillion — almost $200 billion higher than what InfiniteMarketCap shows right now, putting it ahead of bitcoin.

But again, just how much silver is really out there is an unsolvable mystery. For what it’s worth, a gold blog (probably biased) in 2021 sized silver, within the context of the financial market, at only $108 billion, having removed all silver used for industrial purposes and jewelry from its estimates.

That would make silver much, much smaller than bitcoin, which is today at $1.8 trillion. But going by the same loose definitions that award gold an $18 trillion value, silver is still bigger than bitcoin — but only just.

So, what would it take for bitcoin to flip both silver and gold? The moon math says bitcoin would need to hit $96,000 to eclipse silver — if it trades flat from here — and $910,000 to surpass gold.

There you have it: A single 10x is the goal.

— David Canellis

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• SOL is up 3.3% on the day and is looking to break $240. That’s only 6.4% below its November 2021 all-time high of $259.96.

• SOL open interest is already at a new record: $5.71 billion, up 31% week on week.

• BONK has gained 90% in the past week amid plans to burn a trillion tokens before Christmas. WIF and BONK are now battling for the title of Solana’s most valuable memecoin.

• Stablecoins USDe and FDUSD have both grown by nearly 12% in the last seven days, to $3.28 billion and $2.29 billion apiece.

• $270 million in liquidations on CEXs in the past 24 hours — two-thirds coming from longs.

🧜‍♀️ A whole new world

I chatted with Arca CEO Rayne Steinberg about the company’s announcement last week that it would be merging with Blocktower in an all-equity deal. 

The two had been in talks to merge for a little over two months, Steinberg said. They’d always been close, but the merger just “made so much sense” after talks ramped up.

Steinberg lightheartedly pointed out that the two had to move quickly due to “crypto years,” which pass much faster than in other sectors. The deal is expected to close by the end of this year, and Steinberg said he couldn’t even imagine what crypto would look like if they waited another whole year to close. 

And while the overall political environment wasn’t a huge factor, it’s definitely going to benefit the new company going forward. 

“We see this as a huge white space for the token market,” he told me.

But it’s not just tokens that are going to benefit from the new environment. Steinberg said he also remains bullish on activist investing in DAOs. 

The “inefficiencies in the space” have not allowed it to “mature in having people that drive good governance thinking about outcomes for token holders,” he said.

“I'm not knocking any regulatory regime or thinking about that. But just when you have an environment where you've kind of disallowed any productive use of tokens, from fee switches to utility or things like that … contrary to what you would probably want, you create an environment where only things like memecoins have any real traction, because they literally, by definition, cannot offer anything of a tangible value.”

With more clarity, he believes, we’ll see both traditional and activist investors get more involved which, in turn, makes him more bullish. This could also lead to further consolidation down the line as crypto readjusts in the next cycle.

Aside from Blocktower’s venture team, which will be spun out, Arca and Blocktower plan to retain all their talent under one umbrella. Steinberg will lead the new company, with Jeff Dorman staying on as CIO. Ari Paul, CIO and founder of Blocktower will be moving to a role as an advisor, though Steinberg believes he’ll be “very involved.”

— Katherine Ross

• Polymarket’s favoring Cantor Fitzgerald CEO and Tether fan Howard Lutnick as the next Treasury secretary. 

• Microstrategy has acquired 51,780 BTC for around $4.6 billion so far this month.

• Ripple’s XRP ripped over the weekend as folks weigh a more favorable regulatory environment.

• Bitcoin miner Marathon announced a $700 million convertible senior note offering. 

• El Salvador and Bhutan have both bet on bitcoin and are now reaping the benefits, Fortune reported.

Q: Should we see more M&A activity as the bull market plays out?

100%.

I’m actually a bit excited to see some consolidation in the space. In recent discussions with VCs, they say one of the biggest issues they face is the sheer number of similar projects out there getting funding. 

Consolidating and cleaning up the landscape only benefits crypto. We get teams that can be paired up to maximize their innovation and abilities, and we cut down on the volume of projects. 

— Katherine Ross

You’ve probably heard about zombie chains. Long-running protocols with huge treasuries backing their development but with few real users to show for it.

Rather than bleed out slowly, perhaps it’s more pragmatic (and interesting) to strap themselves to a more relevant rocket ship. 

It’s early days, but the triple merger of Fetch.ai, Ocean Protocol and SingularityNET into a single mega-AI project, Artificial Superintelligence Alliance, could end up serving as a roadmap for zombie chains moving forward.

— David Canellis