Ecosystem Update February 24

Dear investors, 

We're thrilled to share our Ecosystem Update for February 2024. This detailed report explores the latest market trends, celebrates milestones in the Advanced Blockchain ecosystem, and highlights our organization's recent advancements, providing a thorough overview of our progress and the wider industry landscape.

Macro Industry View

Since the beginning of 2024, the crypto market has been evolving quite positively with the approval of the long-waited bitcoins spot ETFs and involvement of prominent asset managers, including Blackrock, Fidelity and WisdomTree, among others. Consequently, Bitcoin's price has soared, surpassing today the $65,000 threshold for the first time in three years, getting closer to it's All-Time high of $69.000.

Key updates in February 2024 have been crucial for the market, including:

• BlackRock's iShares Bitcoin Trust (IBIT) recording a daily milestone with $2.2 billion in trading volumes, highlighting growing investor confidence in Bitcoin
• Ethereum's Anticipated ETF Approval and 'Dencun' Upgrade: Catalysts for a Potential Price Surge to $4,000
• MicroStrategy Expands Bitcoin Strategy: Applications and Lightning Network Integration on the Horizon

Spot BTC ETF Development

In February 2024, the crypto markets witnessed robust gains, buoyed by consistent inflows into new spot Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT), fueled by steady investments in new spot Bitcoin ETFs. A notable highlight was BlackRock’s iShares Bitcoin Trust (IBIT), which set a new daily volume record of $2.2 billion, according to Yahoo Finance. Not only did IBIT volumes surge but also Fidelity Wise Origin Bitcoin Fund (FBTC) and  Grayscale Bitcoin Trust (GBTC) increased remarkably. 

The price spike reflects broader positive momentum spurred by institutional adoption, among other key market developments. Within this upbeat context, Bitcoin and Ethereum stood out, outperforming not just within the crypto space but also against traditional financial assets.

Investors anticipate that the momentum from spot Bitcoin ETFs, along with the eagerly awaited halving event for Bitcoin, may propel Bitcoin to approach its record intraday peak of $68,990.90 in the forthcoming weeks.

Ethereum Spot ETF 

On a similar note, Ethereum investors are eagerly waiting for the approval of the first class of spot Ethereum ETFs by the SEC. Several well-known asset managers, including BlackRock, Fidelity have submitted applications to launch Ethereum spot ETFs. The SEC has until May to make a decision on the initial wave of spot Ethereum ETF applications.

Considering the upcoming Ethereum upgrade (Dencun) set for early 2024, focusing on improvements in scalability, speed, and security, and the last update which took place in April 2023 that slightly boosted its price, the future of ETH's price is relatively positive. Nevertheless, the mix of ETF approval potential and the anticipation of upgrades makes predictions challenging. 

If past trends with Bitcoin ETFs serve as any guide, the Ethereum market may well experience a sharp price ascent in anticipation, potentially followed by a correction in May. Market analysts, looking at the confluence of these factors, project an optimistic scenario where Ethereum could reach a price point of $4,000 by May 2024.

This intricate tapestry of regulatory milestones, technological enhancements, and market speculations paints a picture of a dynamic and evolving Ethereum ecosystem. Investors and observers alike remain keenly watchful, recognizing that the outcomes of these developments could signal a new era for Ethereum and the broader landscape of cryptocurrency investment.

Ethereum’s Dencun Upgrade

The Ethereum network is set to undergo the Dencun upgrade (also referred to as Duncan or EIP-4844), marking a significant evolution for the Ethereum network, renowned as the leading platform for smart contracts.

Despite Ethereum’s prominence, Ethereum faces stiff competition from other networks like Solana and Avalanche, primarily due to criticisms over its slower transaction speeds, limited throughput, and high user costs. Ethereum’s transaction fees averages at $2.30 which are considerably higher when compared to other networks, such as Solana. 

In the quest to enhance affordability and scalability, Ethereum made a pivotal shift in 2023, moving from the energy-consuming proof-of-work model to a more efficient proof-of-stake model. The upcoming Dencun upgrade, slated for March 13, aims to further boost scalability by optimizing the efficiency of the network data storage.

Several market researchers emphasize the significant impact of the Dencun upgrade in reducing the settlement costs. Unlike previous updates that addressed different issues, EIP-4844 promises to elevate Ethereum's performance by fundamentally enhancing its scalability and efficiency, thereby dramatically lowering settlement fees.

MicroStrategy Bitcoin Focus 

MicroStrategy's Chairman, Michael Saylor, has revealed that the company is not only continuing its aggressive acquisition of Bitcoin but is also planning to expand its offerings by launching Bitcoin-related applications in the foreseeable future.

Since 2022, MicroStrategy has been exploring the potential of the Lightning Network, even declaring that each MicroStrategy email would function as a Lightning wallet address.

In a recent interview, Saylor shared that MicroStrategy is delving deeper into the development of Bitcoin applications, aiming to introduce various products designed to engage both public companies and small to medium-sized enterprises. The primary goal of these applications is to foster a new digital economy, leveraging the foundational strength of the Bitcoin protocol.

Ecosystem Key Updates

Summary

• Peaq Foundation appoints ex-Cisco CEO Michael Ganser in an Executive role, enhancing leadership amidst the upcoming mainnet launch, and strategic partnerships with Brainstem, Staex, Hashlock and ELOOP.
• Arweave's advancement in decentralized storage hits 600 million transactions with a 600 TPS speed, driven by hyper parallel computing tech, marking significant growth with a $1.6 billion valuation.
• Binance research features Composable’s technological innovation and its role in enhancing DeFi interoperability through Solana Restaking, powered by Picasso 
• Neon EVM launches cross-chain native asset transfers via deBridge integration
• Panoptic deploys its beta platform on the Solana network and hosted the DeFi Derivative Summit 

peaq

Peaq team made a major announcement with the appointment of Michael Ganser, former Cisco Germany CEO, in an Executive role to Peaq Foundation. 

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Michael Ganser's involvement is perfectly timed with Peaq's mainnet going live soon, the positive market developments, peaq’s team attendance to ETHDenver which together will expand the ecosystem and facilitate broader adoption of Web2 businesses, showcasing the technology outstanding potential. Previously, Michael Ganser served on the board of Advanced Blockchain AG too. 

Michael Ganser spent over twenty years at Cisco in various prominent positions, including Senior Vice President of Cisco Central Europe, Senior Vice President of Cisco DACH, CEO & Senior Vice President of Cisco Germany and CEO & General Manager of Cisco Switzerland. He also is the founder of Windage AG.

Aside from the development on the human resources side, various developments took place on the partnerships and product side, including: 

• Brainstem has integrated peaq IDs into its app, moving closer to the launch of its health data platform on peaq. This integration utilizes peaq IDs for data verification across its network.
• Staex has launched the inaugural version of its indexing tool for peaq IDs, achieving the initial milestone in its Ecosystem Grant Program.
• Hashlock, an Australian company specializing in smart contract audits, entered peaq’s ecosystem, offering a 50% discount on its auditing services to DePINs that are developed on peaq.
• ELOOP is developing a platform on peaq to tokenize real-world machine assets (Machine RWAs), allowing businesses and communities to convert the value produced by their physical machines into tokens.

Permanent Ventures

Permanent Ventures Fund continue to develop with Arweave’s recent technological innovation,  the hyper parallel computer (ao: https://ao.arweave.dev/), enabling higher transaction scalability for their decentralized storage solutions. 

Arweave has reached an impressive milestone in February 2024 exceeding 600 million transactions. Its processing speed has also increased to an outstanding 600 transactions per second, making it one of the fastest transaction processing protocols. 

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Advanced Blockchain’s subsidiary has indirectly invested in Arweave and the wider decentralized storage ecosystem, including key protocols, such as Kyve and Meson, through its participation in Permanent Ventures, owning a total of 0.7% of total Arweave token in circulation. Currently, Arweave boasts a fully diluted valuation of more than 2 billion USD.

Permanent storage as developed and offered by Arweave has many applications: from the preservation of most important data, to the hosting of truly decentralized and provably neutral web apps. The Arweave protocol is stable, mature and widely adopted. As such, its ecosystem is fully decentralized.

Composable

Composable’s technological innovation continues to gain traction from the wider crypto community with a recent feature by Binance Research, outlining Picasso’s role in improving DeFi interoperability. Furthermore, the light was shed on the advancement on the Restaking Layer built on Solana by Picasso, which serves as the validation layer. 

Composable team has designed the first actively validated services (AVS) through the Solana IBC bridge, powered by Picasso, which will enable liquidity of the Solana ecosystem to be able to interoperate with other IBC-enabled chains. This connection will also serve to further the development of new cross-chain use cases between Solana and other ecosystems, including Cosmos, Polkadot, Kusama, and more.

In 2024, the restaking market is swiftly transitioning from an initial idea to an innovative phenomenon. Ethereum restaking has led this development, significantly influenced by EigenLayer, the trailblazer in this area. Concentrating predominantly on Ethereum, EigenLayer is the most advanced in terms of its restaking journey and commands the greatest proportion of the total value locked (TVL) within the restaking domain. Below is an overview of the current Restaking Total Value Locked (TVL), which saw a remarkable increase to $7.5 billion in just a few months.

Read the full Binance research report here. 

Neon EVM

Neon EVM has launched cross-chain native asset transfers following its integration with the interoperability protocol deBridge. 

deBridge is a pioneering solution that redefines the possibilities of blockchain interoperability with deBridge IaaS (Interoperability-as-a-Service). deBridge enables an interoperable infrastructure layer for Web3 to enhance value transfer between various blockchains.

The launch is designed primarily to enable Neon EVM developers to add new cross-chain functionalities to their dapps, boosting the ecosystem liquidity, ease the user experience and secure cross-chain exchanges. 

Panoptic

Panoptic team announced the live deployment of Panoptic’s beta platform on the Solana network. Going live on Solana paves the way for more adoption to Panoptic tech, enabling more users to leverage the benefits of the permissionless options trading by Crypto enthusiasts. 

Furthermore, Panoptic team hosted the DeFi Derivatives Summit, showcasing their core product advancement and organized discussions around decentralized derivatives. 

ABAG Update

In line with market developments and the growth trajectory of our portfolio companies, we were thrilled to announce a remarkable 45% increase in the valuation of our top-10 holdings during HY2 2023, culminating in a valuation of 57.5 million euros. This milestone, bolstered by  our partnership with AVS-Valuation GmbH, highlights the success of our ongoing strategic achievements and the diligent efforts of our portfolio companies, signaling continued innovation and expansion in the years ahead.

Reasons the HY2 2023 Update Sparks Excitement:

• Robust Valuation Growth: The notable increase in valuation underscores the positive market dynamics and the outstanding strides made by our portfolio companies.

• Strategic Achievements: The growth reflects the success of our investment strategy, our market foresight, and the innovative breakthroughs achieved by our portfolio companies.

• Looking Ahead: With a strong commitment to our strategic vision, we are more driven than ever to sharpen our investment strategy further, seize new opportunities, and advance our vision for innovation and sustainable growth.

Our management team is working diligently on providing an update on the preliminary financial figures for the fiscal year 2023 by March 2023, in alignment with our predefined deadline.

Lastly, our management team of Advanced Blockchain AG plans to attend TOKEN 2024 in Dubai, together with peaq team, taking place on the 18th and 19th of April. The presence at the event is crucial for enhancing existing business relationships with potential partners from the region as well as sourcing new investment opportunities.

We extend our deepest appreciation for your continuous support.

Thank you for being a part of our journey.

Best regards,

Advanced Blockchain Team

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