In the Arena | April 1, 2025
- Michael Schwartz
- Apr 1
- 3 min read
“3 observations and a chart” on the latest in the digital assets sector
Binance secures $2 billion investment from Abu Dhabi-based MGX — single largest investment ever into a crypto company
Binance, the largest digital asset exchange in the world with more than $20 billion of daily volume, secured a $2 billion investment into the company from MGX, an Abu Dhabi-based investment fund. The Binance minority stake is the first investment into a crypto company by MGX, a fund founded by UAE sovereign wealth fund Mubadala to focus on AI and advanced technologies. The deal is also the first institutional investment into Binance. MGX and Binance aim to work together on AI, blockchain and financial innovation, with a focus on “advancing blockchain’s transformative potential for digital finance” and “secure, compliant and scalable blockchain infrastructure and solutions.” We highlight the significant capital commitment to the growth of the digital assets and blockchain sector by a sophisticated and deep-pocketed international investor.
Decentralized Finance leader Aave begins tokenomic overhaul in light of improved regulatory environment – “fee switches being turned on”
With increased decentralized finance (DeFi) activity, DeFi protocols continue to realize significant cash flow from trading and staking (blockchain security) activities. Aave, the leading DeFi lending protocol with $41 billion in total value locked, has begun to implement tokenomics changes that share cash flow with token holders. The Aave decentralized autonomous organization (DAO) that governs the DeFi protocol approved a buyback and distribution program that will buy back $1 million of tokens each week for the next six months. Buybacks are expected to increase as revenues increase over the course of the year. The Aave token rallied more than 26% in the 24 hours following the announcement. We have long expected DeFi and other cash flow producing projects to get more creative with tokenomics and channel more financial value to token holders once the regulatory environment improves like that in the US.
Cantor Fitzgerald creates Bitcoin financing business with Anchorage and Copper – financial leverage being added to digital asset ecosystem
Cantor Fitzgerald, the company run by Howard Lutnick prior to his confirmation as Secretary of Commerce, launched a new global Bitcoin financing business in partnership with Anchorage Digital and Copper.co. Cantor Fitzgerald, already an institutional leader in the digital assets sector through its management of the US Treasury portfolio of and equity interest in stablecoin issuer Tether, will now provide leverage and other financing solutions to institutional investors who hold Bitcoin. The partnership will launch with $2 billion in initial financing and is expected to grow substantially. We highlight financial leverage being added to the digital asset ecosystem; engagement with Bitcoin and digital assets by institutional investors is facilitated with under-rather than over-collateralized leverage and enhanced capital efficiency.
Chart of the Month
Source: Research Report, “What’s Driving Bitcoin Adoption in 2025” by River Learn, https://river.com/learn/files/river-bitcoin-adoption-report-2025.pdf
Arena Digital Capital Partners is a liquid evergreen fund open to monthly subscriptions. We are always happy to discuss further with you or investors you think may have an interest in the sector. Please reach out to Bill Cline at williamc@arenadigital.capital.
Sincerely,
The Arena Digital Capital Management Team
Michael Schwartz, Michael Prober & William Cline
Arena Digital Capital Management was founded in January 2022 by three experienced traditional finance hedge fund professionals who have been deploying personal capital in the digital asset ecosystem since 2018. The team has managed billions of dollars of capital for high net worth individuals, family offices, and institutions ranging from pension plans and endowments to sovereign wealth funds. We have worked closely with institutional consultants, RIAs, and other advisors in serving their clients.
In May 2022 we launched Arena Digital Capital Partners, with the goal of providing a multi-strategy investment vehicle to access the digital asset ecosystem. Our mandate is to offer broad exposure across the growing digital asset and blockchain sector with an appropriate level of diversification, professional oversight, and manager selection. Our collection of skill sets and our history in the business allows us to understand, assess, and engage with the practitioners of this nascent asset class with a level of diligence required to be responsible stewards of capital. We are happy to periodically share our observations with you.
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