Stripe's stablecoin move & Web3’s funding rollercoaster

gm 👋

Tesla moved $765 million in Bitcoin to unknown wallets, sparking speculation about Musk's crypto plans. With new accounting rules on the horizon, the company hasn't confirmed if a sale is coming.

TL;DR

TL;DR Stripe eyes stablecoin expansion: Stripe is in talks to acquire Bridge, a stablecoin infrastructure startup, marking a potential return to crypto with stablecoins.

Web3 funding sees mixed results: Web3 funding grew 43% year-over-year but Q3 saw a 13% dip compared to Q2, signaling caution despite some big deals.

Stripe eyes stablecoin expansion with Bridge acquisition

Stripe is in talks to acquire Bridge, a stablecoin infrastructure startup founded by alumni from Coinbase and Square. Bridge specializes in converting traditional currencies into blockchain-based stablecoins and already works with big names like SpaceX. With backing from Sequoia Capital, Ribbit Capital, and others, Bridge has raised around $58 million since launching in 2022.

Why it matters: Stripe, which ditched Bitcoin support in 2018, seems to be making a crypto comeback—this time with stablecoins. If the acquisition goes through, Stripe would be doubling down on integrating crypto into mainstream payments. It’s a sign that stablecoins, with their ability to avoid the volatility of other cryptocurrencies, are catching serious attention.

The bigger picture: Crypto isn’t just hype anymore—it's becoming part of the financial system. With companies like Stripe stepping up, stablecoins could hit mainstream use for payments, bridging the gap between traditional finance and crypto.

Yes, but: Crypto regulations are tightening, and stablecoin adoption still faces hurdles. Stripe will have to navigate the regulatory landscape carefully if it wants to make this move without getting caught up in legal battles.

Web3 funding sees mixed results: 43% yearly growth, but Q3 dips

Web3 startups pulled in $2 billion across 300 deals in Q3, a 43% rise from last year’s $1.4 billion but down 13% from Q2 2024, according to Crunchbase data. Despite the growth, this marks the lowest deal count since Q2 2020, a far cry from the 1,200 deals seen at Web3's peak in early 2022.

Why it matters: While the funding growth looks promising year-over-year, the decline in deal volume signals caution. The sector’s volatility has investors being more selective, which could limit future opportunities for emerging Web3 startups.

Big deals keep rolling…

Despite fewer deals overall, investors went big. Notable rounds include:

• Infinite Reality raising $350 million at a $5.1 billion valuation.

• Story Protocol securing $80 million led by Andreessen Horowitz.

• ID Planet locking in an $80 million Series B.

The bigger picture: The renewed interest in Bitcoin and Ethereum ETFs, coupled with massive stablecoin growth, has been a major driver. ETFs from giants like BlackRock and Fidelity have made it easier to trade crypto without direct exposure, giving the market a boost.

Yes, but: Q3 also marks the second consecutive quarter of declining deal numbers, suggesting fewer new Web3 startups are getting funded. Fewer deals now could mean even fewer investment opportunities in the future.

Bottom line: While Web3 funding is showing signs of stabilization, the sector's long-term outlook depends on whether new startups can emerge and attract sustained investor interest. Stability is key, but in Web3, that’s still a rare commodity.

News ☕️

🇺🇸 Donald Trump declared "crypto is the future" while launching his new cryptocurrency, World Liberty Financial, but it sold just 3% of its $300 million target in the first 24 hours.

🇪🇺 The EU markets watchdog, Esma, is pushing for mandatory external cyber audits for crypto companies as part of new regulations, amid rising cyber attacks and $1.5 billion in thefts this year.

📁 Google has removed live crypto price charts from search, with no explanation yet. Prices are still available on Google Finance, but updates may be delayed.

💸 Azra Games raised $42.7 million to develop its Web3 mobile RPG, Project Legends, aiming to bring console-quality experiences to mobile. The funding, led by Pantera Capital, will help revolutionize mobile RPGs with optional Web3 features.

💰 Predicate raised $7 million to help blockchain apps navigate regulations with a plug-and-play solution for transaction approvals.

WEB3 NOTES

Read: A first look at Qatar’s 2024 digital assets regulations (Forbes)

Watch: What price Ethereum will trade at on January 1st 2025 (Bitget)

Listen: FTX’s Ryan Salame is going to prison. Here’s what he has to say (Unchained)