Be greedy when others are fearful: a16z’s new $4.5B crypto fund 🤑; The first crypto company to enter the Fortune 500 🤯; NFTs in travel?! 🤔

👋 Hey, Linas here! Welcome to a 🔓 weekly free edition 🔓 of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed this week:

1. Klarna laying off 10% of its staff over a prerecorded message shows how broken the company culture is 😔
2. The Great FinTech Convergence 🤜🤛, or Stripe vs. Plaid: Round 2 🥊
3. Revolut's native token & Web3 wallet 👀 (huge risks involved)
4. Affirm's strong results & why it needs a super app 🚀
5. The Fast Saga continues? Bolt is laying off 30% of its staff 😳
6. Stripe App Marketplace is a massive move🔥

and more! Don't miss out and join the community here👇🏼

Last week (23-27 May) was one of the most exciting weeks in the Blockchain & Cryptocurrency space this year. We will look at why you should be greedy when others are fearful, or a16z’s new $4.5B crypto fund; the first crypto company to enter the Fortune 500; why NFTs could be the Next BIG thing in Travel as we move to Crypto-as-an-Experience, and other interesting news and developments.

Without further ado, let us dive into what happened in the Blockchain & Crypto sector last week. Let’s connect the dots.

The first crypto company to enter the Fortune 500 🤯

The achievement 🙌🏼 Crypto exchange giant Coinbase has become the first crypto company to make the Fortune 500 cut, an annual list of America's largest corporations by revenue, ranking at 437.

Despite Coinbase's current struggles induced by bearish market conditions, the digital assets operator still has managed to make it to the list. This is because Fortune has ranked companies for its 2022 list based on their 2021 revenues.

More on this 👉 The revenue threshold for the 2022 Fortune 500 list was $6.4B, up 19% from last year's limit, as per Fortune Media. Coinbase's 2021 revenue was $7.8B.

✈️ THE TAKEAWAY

What’s next? 🤔 Coinbase joining America's largest corporations by revenue is more of an indicator rather than some massive achievement. It shows that digital assets are slowly yet surely reaching mass adoption. But what’s next? Well, one thing is clear - it might be difficult for the crypto exchange to stay on the list next year. 2021 so far hasn't been a rosy year for Coinbase, with the company posting net revenue of $1.16B and a net loss of $430M for the first quarter. For the perspective, Coinbase's net revenue for the fourth quarter of last year was $2.49B. As crypto prices have plunged in the past six months, trading volumes have dropped across exchanges, which has led to the fact that Coinbase's shares are trading near all-time lows at $66. They fell as low as $40 earlier this month, down 88% from their debut at over $328. Fortune magazine has been putting out a list of top revenue-generating companies since 1955. US retailer Walmart has been in the number one spot for the last ten consecutive years.

NFTs could be the Next BIG thing in Travel as we move to Crypto-as-an-Experience 🤯

NFTs meet Travel 🤝 NFT tech is meeting travel tech in the meta lobby with the launch of NFTs that hotel & resort guests can buy (and sell, if needed). In short, this is similar to how StubHub allows sellers to offer concert and sporting events tickets.

Why? 🤔 Reservation “no-shows” and last-minute cancellations account for up to $100M in lost sales for the hotels every year. And this is for the United States alone. Blockchain could be the silver bullet for this.

The USP 🥊 There are two sides of the coin here:

• For hotels 🏨 Pinktada, a new booking platform, teams up with local resorts to take room reservations in hotspots like the Caribbean, Mexico, San Francisco, and Hawaii and turn them into NFTs.
• For guests 🙋🏽♂️ They can reserve rooms by buying those NFTs from Pinktada at a lower rate than if they booked a refundable room from the hotel. If they need to cancel, there’s an option to gift or resell the reservation on Pinktada's NFT marketplace. Also, travelers can use the tokens for other Pinktada hotels or sell them in the Pinktada network.

A win-win for everyone? 🤑 This is undoubtedly another interesting application of NFTs in real life (which could potentially be huge), but there’s a catch… Here’s the takeaway:

✈️ THE TAKEAWAY

Crypto-as-an-Experience & the Travel dream 💭 First, let’s zoom out a bit and look at the trends we’re seeing. Since NFT sales have plummeted (because most were speculation at best), we’ve started to see the emergence of CaaE (Crypto-as-an-Experience) as a growing variety of industries are turning to the blockchain for real-world applications. Just last month NYC’s NoMo SoHo became one of the first US hotels to offer NFT-based packages with IRL perks like late checkout and free breakfast. Earlier this spring, Stay Open, which converts unutilized retail and office space into hostel-like lodgings, began selling 10,000 NFTs for one-tenth of an Ethereum coin each, partly to open new locations. The hotel biz is the latest one to jump into the game. That said, it’s clear that there’s a clear value add. For the hotels. With the help of companies like Pinkdata, the hotel owners will be able to offload extra inventory and keep the sales from last-minute cancellations. Travelers, on the other hand, will have to take on the burden of reselling their room — or being stuck with it if they can’t. Also, bot-operated ticket resellers could potentially lock up blocks of rooms during popular travel periods, hoping to flip them at a profit (which makes sense & could be an easy way to earn an extra buck). Hence, this is yet to be seen how or if this trend will catch on. Especially if major hotel players like Hilton, Marriott, or ING sit on the sidelines.

Be greedy when others are fearful: a16z’s new $4.5B crypto fund 🤑

The (rich) news 💸🗞 Silicon Valley VC heavyweight Andreessen Horowitz (a16z) is doubling down on crypto despite the market downturn. The VC firm has formed a new $4.5 billion fund that will be used to invest in cryptocurrency and Web3 companies.

More on this 👉 The fund is the firm's fourth to target digital assets, with over $7.6 billion being raised in total. Of the $4.5B, $1.5B will go towards seed investments while the rest is being set aside for venture investments.

"We think we are now entering the golden era of Web 3," the company said in its announcement, adding that it's "excited" about developments in blockchain gaming, decentralized finance (DeFi), decentralized social media, and non-fungible tokens (NFT).

One can remember that previous funds were raised last June and in April of 2020, both of which came shortly after the crypto market downturns.

What does this mean? Warren Buffett once famously said that it is wise for investors to be fearful when others are greedy, and greedy when others are fearful. A16z is illustrating the latter perfectly. Here’s the takeaway:

✈️ THE TAKEAWAY

Greed is good 😎 Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind (Wall Street, 1987). With their latest crypto fund, Andreessen Horowitz is following the words of the famous Gordon Gekko. They are being greedy when others are fearful. Not only it’s a brief moment of warmth during all this darkness in the markets, but also it’s more than double the size of a16z’s last fund and it’s coming from the largest institutional crypto firm to date. Zooming out, we must stress that one of the key takeaways from this news is that the VC giant will now be able to invest at lower prices in lots of companies (hint: hundreds of them as $1.5B is for seed investments only), given its time horizons and capacity for risk. Further, it’s also a piece of good news for pushing crypto and Web3 more mainstream as crashes like this usually wipe out “short-term focus” people who aren’t helping build crypto’s long-term future. So be greedy when others are fearful.

Extra Reads & Quick Bites for Curious Minds🧠

• Terra’s impact 👉 Finance ministers from the world’s seven largest developed economies, including the U.K., U.S., and Germany, are calling for tougher rules on reporting reserves to combat money laundering, following the collapse of stablecoin TerraUSD last week. In the U.K., the country’s financial regulator and its finance ministry are taking Terra’s recent token downfall into account as well, as they create new rules for crypto assets. It’s finally coming.
• Crypto pivot 😎 GameStop (GME) unveiled its crypto and non-fungible token wallet, sending its shares up 3%. A beta version of this self-custodial Ethereum wallet is available to download now from GameStop's website and comes ahead of its NFT marketplace. 
• Outflows 🌊 Digital asset manager Coinshares reports that total assets under management for digital asset funds fell to $38B, the lowest level since July 2021. This comes off the heels of the second largest weekly outflows recorded among the funds over the last year, amounting to $143M last week.

Money Moves💸

• Multichain decentralized finance (DeFi) protocol iZUMI Finance has raised $30M through the sale of bond vouchers and claims on its iZUMi Bond USD (iUSD). Along with the funding, the firm announced its new iZiSwap decentralized exchange (DEX). 
• A group of former executives from Binance, one of the largest cryptocurrency exchanges globally, has created a $100M venture fund.

Continue reading by subscribing to Linas's Newsletter. You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S. You might enjoy my earlier pieces as well:

👉 1000+ FinTech, Tech & Crypto Talent Ready to Grow Your Business 🚀

👉 Bitcoin in 2021: a story in 5 graphs, and what might come in 2022

👉 A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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