Bitwise: What does Harris' statement mean for BTC's 5% rise?
The cryptocurrency market is rising sharply on Monday afternoon. Bitcoin is up more than 5% in the past 24 hours, and Ethereum is up more than 7%. Altcoins are not far behind.
This is the biggest single-day gain in the cryptocurrency space in nearly two months. More interestingly, investors poured $555 million into Bitcoin ETFs on Monday, the biggest single-day gain in four months.
The rise is partly due to a plan unveiled on Monday by Democratic presidential candidate Kamala Harris, which, among other things, advocates for a smart regulatory framework for cryptocurrencies.
Reading U.S. media coverage of the proposal, you would think Harris has embraced cryptocurrencies with both arms.
Bloomberg writes: "Kamala Harris emphasizes capital access and cryptocurrencies to attract black men."
But in reality, the statement doesn't say much. Here is her agenda in full:
Let black men who hold digital assets benefit from financial innovation. More than 20% of black Americans own or have owned cryptocurrency assets. Vice President Harris appreciates that new technologies can expand access to banking and financial services. She will ensure that owners and investors in digital assets benefit from a regulatory framework that protects Black men and others who participate in the market.
That’s it. That creates a $5 billion market cap for Bitcoin.
I hate to spoil the fun, but that was… nothing! No mention of ensuring equitable access to banking services for crypto companies; no mention of changes in regulatory leadership; not even mild comments about “embracing innovation in the digital asset space” or “the United States leading the way in blockchain.”
In fact, Harris’ words read more like a Rorschach test than policy. If you’re against crypto, you’ll see Harris pushing for tight regulation of crypto in the name of “protecting” investors; if you’re for crypto, you’ll see Harris pushing for regulatory clarity and a path forward for the industry.
I’m not close enough to the campaign to know exactly what she means. I’ve seen people who claim to know the inside story argue both sides. From my perspective, you can only know one thing: the statement shows that Harris recognizes that crypto is important to an important demographic group, and she’s taking the time to point that out.
That’s good news. She knows that crypto exists, it’s important, and it’s not going away. But it wasn’t the wholehearted embrace that crypto advocates were hoping for.
Here’s the thing, though: That little bit of good news was enough to send Bitcoin up 5%. Enough to push over $500 million into Bitcoin ETFs. Enough to start people wondering if crypto will finally hit new all-time highs.
And that, to me, is the most interesting thing about today.
Regardless of what Harris actually said, the price action over the 15 days of October tells me there’s a lot of capital sitting on the sidelines waiting to get in once things are clear.
In last week’s memo, I talked about what it would take to push crypto to new all-time highs and for Bitcoin to break $80,000. In terms of the election, I mentioned that either a Republican win or a divided government would be fine. My comments implied we’d have to wait until after the election before we could hit $80,000 again.
After today, I’m not so sure. Monday’s rally tells me that if crypto starts to take off, people don’t want to get left behind. There’s a lot of dry powder on the sidelines. As soon as we get a whiff of clarity, I think we’ll move up quickly.
Binance to hire 1,000 people this year, compliance spending exceeds $200 million
Binance Holdings Ltd. will hire 1,000 people this year, many of whom will be designated for compliance positions, as the cryptocurrency exchange spends more than $200 million a year to meet regulatory requirements, including U.S. regulation under a plea agreement.
CEO Richard Teng is visiting the U.S. to talk with regulators and officials, and he outlined the goal in an interview in New York on Wednesday.
Sentient: Top VCs rush to invest, with $85 million in seed round
What is Sentient?
According to the Sentient Foundation, Sentient is an AI research organization dedicated to building a new Open AGI economy for AI builders and creators. Sentient is building platforms and protocols that enable open source AI developers to (1) monetize their models, data, and other innovations, (2) collaborate with each other to build powerful AI, and (3) become important stakeholders in the new Open AGI economy.
Sentient believes that closed source AI currently dominates the AI field, concentrating enormous power in a few organizations. Although open source AI exists, it lacks sufficient incentives for developers and its performance cannot match or even exceed that of closed source AI. Sentient envisions a future where AI development is open and transparent, and its access and monetization are decentralized.
From the information currently disclosed, Sentient has very few technical details and only some general ideas. Sentient will build an AI platform where AI developers are the main force and major participants. They build powerful AI products through innovation and collaboration, relying on the economic coordination provided by the underlying blockchain and incentive mechanism to achieve Open AGI. The AI models hosted on Sentient are "Open, Monetizable, and Loyal" (OML). OML models will drive the shared Open AGI economy and support downstream applications for millions of AI agents and billions of AI users.
According to Sandeep Nailwal, co-founder of Polygon and founder of AggLayer, Sentient will be built on Polygon Agglayer.
Behind the Sentient team and founding
Looking through Sentient's official information, it can be found that the core figures of Sentient mainly include Sandeep Nailwal, co-founder of Polygon and founder of AggLayer, Sreeram Kannan, founder of EigenLayer, Pramod Viswanath, professor of Web3 at Princeton, and Himanshu Tyagi, professor of Indian Institute of Science (IISC).
They are the founders of the hugely successful star encryption projects (Polygon and EigenLayer) and well-known professors in academia, so it is very easy to understand why they have attracted huge bets from top VCs.
As Joey Krug, partner of Founders Fund, bluntly said, investing in Sentient is mainly an investment in the team.
Sandeep Nailwal talks about the origins of Sentient:
Not long ago, I was in Dubai with Sreeram Kannan, founder of EigenLayer, to discuss my ideas about how encryption can solve the centralization and security problems of AI, and how Polygon can play a role in shaping this major shift in humanity. I told him, but what if AI models are loyal to their creator communities? He didn't laugh. Instead, he asked a lot of questions, and I explained my thought process to him. Finally, he said, this could be huge. He shared my thinking with Princeton professor Pramod Viswanath (who is the co-inventor of Flash OFDM, the technology behind the 4G wireless standard) and Himanshu Tyagi of the Indian Institute of Science (IISC), who were already working on something similar. Pramod said that this thinking could give birth to a whole new branch of AI+cryptography research and call it AI native cryptography. This research became Sentient.
It will be built on Polygon Agglayer, and I will help them as a core contributor. This project is very ambitious and model-fidelity, and it tries to solve a problem that has never been solved from this direction. With this financing, Sentient has attracted some of the best AI talents in the world, and the AI team is also working with senior talents from Google, Deepmind and other world-class AI companies. If successful, Sentient may change the relationship between humans and AI. Let's try to build it and see how it goes.
Why investors invest in Sentient
After Sentient officially announced that it had obtained seed round financing, the heads of various VCs involved in the investment also came out to publish articles to talk about the thinking behind investing in Sentient.
Tommy, co-founder of Delphi Digital and founding partner of Delphi Ventures:
The black-box authoritarian AI future is the enemy, and global, permissionless AI innovation is the goal. The Sentient team focuses on hosting open source models that can be audited and built by the whole world, but combined with cryptographic incentives to ensure that capital expenditure costs and value are protected, which is ambitious, but it will be very important if it is solved.
Framework Ventures:
We just co-led a round of $85 million in Sentient, an AI research organization that is building a new open AGI economy for AI builders and creators. Here are the reasons why we are happy to support this team.
The current state of AI is reminiscent of the closed-source software era in 1995. A few organizations dominate and concentrate huge power. Open source AI development exists, but there is a lack of sufficient incentives to allow developers to become equal stakeholders.
Sentient enables open source AI developers to (1) monetize their models, data, and innovations, (2) collaborate to build powerful AI together, and (3) become key stakeholders in the new open AGI economy. We think this will be a game changer for the AI community.
Sentient is building an AI platform that relies on underlying blockchain protocols and incentives. AI models hosted on Sentient are “Open, Monetizable, and Loyal” (OML), meaning they are aligned with the community that built them and enforced by the blockchain.
Joey Krug, Partner at Founders Fund:
We invested in Sentient primarily as an investment in the team, but there are also some interesting topics related to open and closed source AI. I have known Pramod and Sandeep for many years and they are both super sharp technologists. Pramod did a lot of early work in wireless networks and has published many novel papers in the crypto space (on scaling, networking, etc.). I first met Sandeep during the Augur days when we were working on Matic (now Polygon). I am very excited to see him leading Sentient. One of the great things about Founders Fund is that our partners and founders can have different perspectives, and we actually welcome that!
While I believe the pros of open source (even NATSEC-adjusted) outweigh the cons, I agree with the following that the economics of open source AI make no sense today. Software with high capex is very different than traditional software with low capex. If you spend $10 billion training a model, you can’t give it away for free. Our investment in Sentient aims to change that. They are trying to embed cryptography into their LMS (learning management system) so that if you don’t pay for the model, you can’t use it. They call it “model fidelity”. This way, the model can still be open source, but not actually be used without paying for it. An MVP of this model could be released using Nvidia’s recent TEE trusted hardware. A rough mental model is that Ethereum is open source, but not free to use, or something like DRM (digital rights management).
This is certainly a huge research challenge, but if they solve it, it could actually enable monetization of open source AI models. If you can monetize them, capitalist incentives may drive open source models that are stronger/smarter than the current paradigm.
Paul Veradittakit, Partner at Panteral Capital:
Sentient’s technology will pave the way for a new era of AI. By promoting an open source, community-governed approach to AGI, Sentient will enhance innovation, collaboration, and transparency. The goal is for Sentient to not only compete with existing AI solutions, but also redefine the standards for ethical AI development and deployment.
Dovey Wan, Founder at Primitive Ventures:
Monopolistic control of AI power will drive everyone to fight for data, model, and computational autonomy. Sentient will challenge incumbents and lead the d/acc movement. We are witnessing the convergence of several trends: binary code becomes currency code, machine programs become social contract programs, and human languages become programming languages. This convergence heralds the advent of a new era. Humanity needs to: embrace the principles of decentralization, transparency, and collective ownership.
Franklin Bi, Partner at Panteral Capital:
Let’s make sure Open AI beats OpenAI. In the long run, open systems outperform closed systems.
Safety is always the most important
The founder of Slow Fog, Yu Xian, posted on the X platform that Munchables was attacked, saying that Munchables on the Blast was stolen at 62.5 million US dollars, which was really lost. The investigation by Detective Zachxbt on the chain is because one of their developers is a North Korean hacker. This is the situation that we encountered at least the second DEFI project we encountered. The core developer camouflated for a long time, and won the trust of the entire Team. The timing got started as soon as the time arrived, without mercy. There are many victims, we will follow up closely. Blast ecological project Munchables was attacked and lost about $ 62.3 million.
