Core Fund Update
March has undeniably shone as a standout month for the web3 industry, signaling another period of significant advancement and bullish momentum. Bitcoin, the flagship digital asset, reached an all-time high of more than $73K on March 14, boosted by increasing interest surrounding the Bitcoin Halving. Additionally, March showcased significant developments in both institutional interest, the Web3 AI sector, and surging on-chain activity.
The Core Fund has fully capitalized on the current market conditions, witnessing a+18,80% increase. This return is attributed to leveraging Bitcoin’s surge to all-time highs, along with taking advantage of emerging narratives like tokenization and AI. We invite you to join us on a deep dive into the major industry updates of March, and take a look at some of the advancements that have fueled the success of the Core Fund.
Ever Increasing Institutional Interest in Web3
Blackrock
In March, several major institutions had announced significant developments and advancements in the industry. A strong push has been seen from the institutional side into the narrative of tokenization. In a standout announcement, BlackRock has revealed its tokenized asset fund named ‘BUIDL,’ operating on the Ethereum network and marking the company’s debut in issuing a fund on a public blockchain.
With BlackRock’s reputation and its $10 trillion under management, this is a positive move toward tokenizing assets. Blackrock is not the least party to take the first steps toward tokenization; more will follow. By investing in tokenized products and partnering with platforms like Securitize, BlackRock reduces the reputational risks associated with blockchain technology, encouraging other institutions to participate in tokenization.
HSBC
Following the developments in tokenization, HSBC launched the HSBC Gold Token, becoming the first bank to offer blockchain-based real-world assets to retail investors in Hong Kong. The tokenized gold product is accessible through HSBC Online Banking and the HSBC HK Mobile App, minted on the bank’s Orion digital assets platform. This move highlights the increasing trend of major financial institutions tokenizing real-world assets on blockchain platforms.
Visa
Payment infrastructure provider giant, VISA, has also showcased its commitment to industry adoption by partnering with Transak. Through Visa Direct, users in 145 countries can now convert at least 40 cryptocurrencies directly to fiat on their Visa debit cards, bypassing centralized exchanges. Europes largest stock market, The London Stock Exchange, has also announced plans to introduce a market for Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETNs) on May 28, with applications for trading opening on April 8, 2024. These moves showcase the confidence major institutes have in the usability of digital assets on a global scale.
Bitcoin Halving Comes Closer And Closer
The Bitcoin Halving stirred up excitement across the industry in March as Bitcoin reached its highest-ever levels. The Bitcoin Halving, also known as the Halvening, is an event that takes place approximately every four years within the Bitcoin network. During this event, the rewards that miners receive for validating and adding new transactions to the blockchain are cut in half. This reduction in rewards is a programmed feature of Bitcoin’s protocol and is designed to control the rate at which new bitcoins are created, ultimately limiting the total supply of bitcoins to 21 million.
This has significant implications on the supply and demand dynamics of Bitcoin, leading to a phenomenon known as “supply shock.” As the rate of new supply entering the market decreases due to the halving, the available supply of bitcoins becomes scarcer. Meanwhile, demand for Bitcoin may continue to grow or remain stable, driven by factors such as increasing institutional adoption, growing recognition as a store of value, and broader market trends. The combination of diminishing supply and sustained or rising demand can create upward pressure on the price of Bitcoin. Consequently, the industry is in a state of heightened excitement as the potential for increased scarcity drives prices higher in the long term.
This image shows the cycle of the last three halvings and the upcoming halving, marked with orange vertical lines. The next halving on April 20 heralds a new market phase.
Web3 AI Sector Heats Up
At the tail end of March, significant advancements unfolded in the AI Web3 sector. Excitement builds as Fetch.ai, SingularityNET, and Ocean Protocol announced their collaboration to establish the Superintelligence Alliance. This alliance, with a combined value of $7.5 billion, aims to revolutionize AI research and development, striving for Artificial Superintelligence (ASI) – a level of AI surpassing human capabilities.
As part of this groundbreaking partnership, the three organizations will merge their tokens to create a single universal AI token, named the Artificial Superintelligence token ($ASI). With a focus on democratizing access to AI and data, the Alliance is set to promote decentralization and inclusivity in the AI space, empowering the community and driving innovation through governance structures and token swap mechanisms. To date, we are already seeing great developments in the AI sector, but the power over these powerful systems often remains with one party. Initiatives like that of the ASI are building innovative solutions to tackle these dangers.
On Chain Web3 Activity Continues To Surge
March was not only filled with strong macro developments but also witnessed a consistent surge in on-chain activity. This follows the successful Ethereum upgrade “Dencun,” which has not only slashed gas fees on Ethereum but also has notable effects on layer-2 protocols, significantly reducing their respective fees. In total, the Total Value Locked on Ethereum has seen significant growth in March, inching closer and closer to a total of $40 billion locked.
One L2 that has largely benefitted from the fee slash is Coinbase’s Base chain. Base TVL has surpassed $3 billion, experiencing a 73.65% increase in the last week of March, as per data from L2BEAT.
Similarly, Tether’s USDT stablecoin has reached a circulating supply of over $100 billion, making it the first stablecoin to achieve this milestone. While significant developments are being made from the macro level – on-chain activity only continued to grow in March and show that more and more people are using Web3 based platforms.
Conclusion
In conclusion, March witnessed remarkable growth in the web3 industry, marked by Bitcoin’s surge to all-time highs, increasing institutional interest in tokenization, and a surge in on-chain activity. Major institutions like BlackRock and HSBC made significant strides in tokenizing assets, while VISA and the London Stock Exchange embraced Web3 on a global scale. On-chain activity continued to surge, driven by Ethereum’s successful upgrade and the growth of layer-2 protocols. Additionally, the AI sector in web3 saw significant advancements with the establishment of the Superintelligence Alliance. As excitement builds around the approaching Bitcoin Halving, the industry anticipates continued bullish momentum fueled by diminishing supply and growing demand.
As the pieces come together, and the Web3 landscape only continues to grow in confidence, the Core Fund stands at the forefront of these exciting developments, capitalizing on these market developments. While it may seem like a lot to keep up with, the Six Capital team works tirelessly to manage and optimize the Core Fund, ensuring investors stay ahead of the curve.
Contact us today to learn more about how the Core Fund can maximize your investment opportunities in the web3 industry.
