Web3 Wednesday #1

Welcome to 🔑 Web3 Wednesday 🔑 ! A weekly note on the most exciting developments in the world of blockchain, from the latest innovations in decentralized finance to the cutting-edge applications of Web3 technology.

Let’s dive in!

• 🟡 Bitcoin Miners need to rethink their opearting and risk management strategies in 2023 if they wish to survive

• 📈 Valkyrie launches Opportunistic Fund to take advantage of GBTC’s record-high discount of over 50% to bitcoin price

• 🔥 Save money on your electricity bill and earn cryptocurrency with Heatbit

• ⚔️ Ukraine plans to leverage NFT technology to digitize and preserve its cultural artifacts on the blockchain following Russia’s military invasion

Bitcoin Miners Struggle in 2022, Experts Predict More Challenges Ahead

• The Bitcoin mining industry faced challenges in 2022 due to high energy prices, increased competition for bitcoin blocks, and a bear market, leading to bankruptcies and loan defaults

• Industry experts predict 2023 will bring more difficulties for miners as they try to improve their balance sheets and operations, but also opportunities for those able to buy assets and improve margins through innovation

• Many miners made investments in hashrate, a measure of computing power on the bitcoin network, but saw these investments fail as the economics of crypto mining did not pan out as expected, leading to debt financing and in some cases, a tripling of debt-to-equity ratios

• Some miners failed to hedge their risks against falling bitcoin prices and will need to implement more sophisticated risk management strategies

• In order to survive, miners will need to be more transparent, focused on cost efficiency, and consider using renewable energy sources

Valkyrie plans to manage Grayscale Bitcoin Trust

• Crypto asset manager Valkyrie Investments has announced plans to become the sponsor and manager of the Grayscale Bitcoin Trust (GBTC).

• This is no small feat. GBTC currently manages over $10 billion in assets while Valkyrie manages approximately $180 million in total assets.

• Valkyrie also launched the Valkyrie Opportunistic Fund, which aims to take advantage of GBTC’s discount to the value of its underlying bitcoin

• Earlier this month, GBTC shares hit a record-high discount rate of over 50% relative to the price of bitcoin, triggered by the SEC’s reiteration of its reasons for denying Grayscale Investment’s application to convert GBTC into a spot bitcoin ETF

Heatbit: The Space Heater That Mines Bitcoin and Warms Your Home!

• Heatbit is a startup that has created a space heater that also mines bitcoin

• The heat generated is enough to warm a 500 sq ft space and, if run 24 hours a day at a bitcoin price of $20,000, the device can offset a portion of the homeowner’s monthly electric bill

• The company has sold nearly 1,000 units globally and is planning a wider roll-out

• The device costs $1,200 and is WiFi compatible

• The company is planning to raise capital to build other product lines, including a fanless version of Heatbit and eventually venture into all-season products.

Blockchain Technology Is Used to Preserve Cultural Artifacts from Timbuktu and Ukraine

• Black History DAO and Ukrainian entrepreneur Michael Chobanian are using blockchain to preserve cultural artifacts

• Black History DAO aims to offer a permanent storage solution for ancient African texts and help disperse preservation efforts of its history

• Michael Chobanian has announced plans alongside Alex Bornyakov, Ukraine’s deputy minister in the Ministry of Digital Transformation to use blockchain to preserve 3D models of buildings and cultural heritage in Ukraine