investment Archives -
Rumor has it vaunted, long awaited institutional money, big investment in crypto is coming. One of the many holdups involves custody regulation, as both large funds and those ecosystem companies best poised look for a smooth way to guard cryptocurrency holdings securely, alleviating whales’ greatest fears: theft and loss.
Investment Whales Want Custody Assurance
“There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital,” hedge fund Multicoin Capital’s Kyle Samani told Olga Kharif and Sonali Basak by phone.
Custodial arrangements in traditional, legacy finance are well understood and regarded. Precious metals, diamonds, and even cash are carefully guarded by trusted institutions such as JP Morgan. The brave new world of cryptocurrency scares the hair off of big finance, so a regulated, risk averse arrangement, complete with liability insurance, is, some professionals feel, key to big money entering the space in a substantial way.
Popular ecosystem bank, Coinbase, is among those who’ve announced movement in this area. As these pages reported last month, it “announced a new suite of services meant to attract more big money players such as the many new crypto hedge funds that pop up all the time. It will launch a cryptocurrency custodian in partnership with an SEC-regulated broker-dealer to a group of initial clients that include 1confirmation, Autonomous Partners, Boost VC, Meta Stable, Multicoin Capital, Polychain Capital, Scalar Capital and Walden Bridge Capital.”
About the same time, Tokyo-based investment bank Nomura announced its new venture, Komainu. It was “established to help overcome barriers for institutional investment in crypto-assets with a custody solution and offering new services, standards and best practices.” Jez Mohideen of Nomura explained, “Global investment managers have long been held back from full participation in digital asset markets, limited by operational and regulatory risk. Our new partnership will set the required standards that will bring peace of mind to digital asset investors, and provide tools and products to enable better integration with more traditional investment vehicles such as mutual funds.”
Coinbase estimates $ 20 billion worth of crypto is sidelined until custody solutions make sense. Crypto assets will flow into custody services once they’re available, estimates Sam McIngvale, who’s leading Coinbase’s project — and that number is probably considerably higher with the ubiquity of initial coin offers, for example.
“Such projects would pave the way for vast tracts of investors to expand into crypto,” Bloomberg claims, “potentially reviving prices in markets that have tumbled in recent weeks. Regulated crypto custody would allow more institutional buyers — such as hedge funds and pensions — to invest in Bitcoin, Ether and a multitude of other coins. Retail brokerages would have a safer way to let clients add crypto to portfolios stuffed with stocks and bonds.”
Regulatory clarity in this area seems to also be paramount for future growth in professional circles. Literally hundreds of funds have popped up in recent years, touting crypto toe-dips of one kind or another, and managers worry the, at times trigger happy, US Securities and Exchange Commission could very well fire first with prosecutions, asking questions later. Coinbases of the world, pending formal approval, would go a long way toward easing those concerns.
Do you expect major institutional money to enter the crypto market soon? Let us know in the comments.
Images via the Pixabay.
Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from Bitcoin.com.
The post At Least $ 20 Billion in Crypto Investment Awaits Custody Streamlining, Approval appeared first on Bitcoin News.
As an emerging asset class, cryptocurrency and blockchain technology related investments are gaining begrudging respect among finance professionals. Market slides aside for the moment, a study released by Grayscale Investments attempts to make the case investors should seriously consider adding crypto to their respective portfolios, as they bring better returns and, counterintuitively, reduce risk and volatility.
Grayscale Urges Modern Investors to Incorporate Crypto into Portfolios
Granted, it’s a strange time to be making such an argument: crypto markets as of this writing are bloody, and one only need cruise over to Satoshi Pulse in order to see the carnage. Nevertheless, Grayscale Investments (GI), a major player in the ecosystem as it relates to mainstreaming crypto in the broader world of finance, released, A New Frontier:
How Digital Assets Are Reshaping Asset Allocation by Matthew Beck.
It’s a bold attempt to persuade modern investors of the need for cryptocurrency, and their related offspring, in any balanced portfolio. They “view digital assets as a brand new asset class that can enhance strategic asset allocation and help investors build portfolios with higher risk-adjusted returns. We will provide a few different lenses through which the reader can gain a deeper understanding of the role that digital assets may play in building more efficient portfolios.”
Throughout the paper, Mr. Beck refers to the crypto phenomenon as “digital assets,” which he believes “provide exposure to unique market opportunities and risks, thus creating a diversifying return stream for investors. As such, they should be considered a component of the optimal beta portfolio alongside traditional assets such as equities, bonds, and real estate.”
GI is a subsidiary of Digital Currency Group (DGC), a venture capital firm based in New York City. Grayscale actually precedes DGC by a couple of years, begun and maintained by Barry Silbert, a noted finance figure in the crypto space. DGC’s umbrella includes GI, of course, but also Coin Desk as its independent media arm. Grayscale itself is considered a leader in the purgatory between spot markets and over-the-counter so-called fringe investing and traditional equities. GI manages Bitcoin Investment Trust (GBTC), the first of its kind to offer accredited investors publicly traded shares measured in the price of bitcoin core (BTC). Accredited investors have earned more than $ 200K the last two years, with assurance s/he will do the same this year, or has over $ 1 million in net worth.
A Well Argued Reminder
Fundstrat’s Tom Lee lauded A New Frontier, tweeting, “This report is a well argued reminder that adding crypto to a portfolio enhances return while reducing overall portfolio risk/volatility. Not sure there are any other emerging asset classes that benefit a balanced portfolio this way.” And at the outset, Mr. Beck’s attempt is to first square digital assets with Modern Portfolio Theory (MPT). In short, he believes “many of today’s asset allocators are missing out on a ‘free lunch.’ That’s because (i) digital assets represent a brand new investment opportunity that is uncorrelated to other asset classes and (ii) investors are generally under-allocated to this sector. It is our view that the optimal beta portfolio lies somewhere higher than what was previously believed to be the efficient frontier, and digital assets are the proverbial ‘missing piece of the puzzle.’”
Breathlessly, Mr. Beck insists “digital assets are squarely at the intersection of some of the most significant trends reshaping the global economy, including: A new market paradigm, characterized by slow economic growth, low interest rates, and divergent central bank policies. Rapid advancements in financial technologies and payment infrastructure, which now make it possible to move, settle, and clear value/assets at the same speed as information in a digital format. Regulatory shifts, altering financial industry economics and significantly increasing the cost of compliance and financial operations. Demographic shifts, driven by (i) the next generation of investors entering their prime earning years (i.e., millennials) and (ii) baby boomers entering retirement and tapping underfunded pension plans,” and this last part Tom Lee hit on a few months back in his own presentation.
Regarding diversification and adding digital assets, A New Frontier stresses “the average rolling one-month correlations range from slightly negative to slightly positive, with an average correlation of zero. This provides evidence that digital assets can be considered a diversifying component in multi-asset portfolios. Moreover, many digital assets are imperfectly correlated to one another, which means there may even be diversification benefits within the asset class itself.” A healthy chunk of the paper runs through hypothetical investment scenarios, and while they’re ‘mathy’ and graph-laden, they’re somewhat less convincing.
A general good rule of thumb when thinking about cryptocurrencies is how no one, not one person, understands them. Sure, they’ve got parts of the equation, and that can be very powerful, but ultimately digital assets still face giant hurdles with regard to mainstream adoption, the kind Grayscale hopes. Regulation, which they’re on record as inviting, could strangle the golden goose, as was empirically the case with New York’s Bit License. Add to the above whether institutional money will finally find its way into the space with the liquidity long dreamed by the likes of GI, and conservative mom and pop investors probably won’t be so keen on incorporating crypto long term. Mr. Beck concludes, acknowledging it is “still early in the lifecycle of digital assets, but we believe our multifaceted approach to assess their investability makes a compelling case for investors to have some portion of their portfolio allocated to this new asset class. A lot can happen over the next few years, but remember: diversification is a ‘free lunch’ and asset allocation is all about the long-game.”
Do you think crypto enhances return and reduces risk? Let us know in the comments.
Images via the Pixabay, Grayscale.
Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.
Disclaimer: Bitcoin.com does not endorse nor support this product/service.
Readers should do their own due diligence before taking any actions related to the mentioned company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
The post Add Crypto to Investment Portfolio: Enhance Return, Reduce Risk/Volatility appeared first on Bitcoin News.
The deal is one of Toyota’s largest investments outside of its core business of making cars. Chief Executive Akio Toyoda, who has said the automotive business will be in jeopardy in a future of self-driving and shared vehicles, has pushed his company to break into new businesses to ensure its survival.
WSJ.com: What’s News Asia
Coinbase has opened up its index fund for accredited US investors, giving them exposure to all cryptocurrencies listed on its exchange GDAX. The company is now working on “launching more funds which are accessible to all investors and cover a broader range of digital assets.”
Coinbase Index Fund Launched
Coinbase, one of the largest cryptocurrency companies, announced on Tuesday, June 12, that Coinbase Index Fund is now open for investment. The San Francisco-based company first unveiled this fund on March 6.
“We’ve seen overwhelming interest from investors since we announced the fund earlier this year,” Reuben Bramanathan, Product Lead of Coinbase Asset Management, wrote. He elaborated:
Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization…At this stage, Coinbase Index Fund is only open to US-resident accredited investors. We’re working on launching more funds which are accessible to all investors and cover a broader range of digital assets.
The company’s website states that “Our vision is to make index investing in digital assets available to everyone.” Further, the company emphasized that they are “beginning the work required to offer index funds to all US investors,” not just accredited ones, adding that “In the future, we hope to be able to offer index investing to customers in the US and internationally.”
About the Fund
Coinbase Index Fund “is a private fund that seeks to track Coinbase Index (Fixed Supply),” which is a measure of the overall performance of the cryptocurrencies listed on Coinbase’s exchange, GDAX, the company describes.
The minimum investment amount for the fund is $ 250,000 and the maximum is $ 20 million. The fund’s annual management fee is 2%.
“The assets are weighted by market capitalization. The index level takes into account the ongoing increases in supply of each asset, not just changes in price,” the company noted, adding that the index is “reconstituted each time that a new asset is listed on GDAX,” such as the recent addition of ETC.
The current composition is 61.47% BTC, 27.17% ETH, 8.22% BCH, and 3.14% LTC. The fund will soon be rebalanced to include ETC.
Moreover, Coinbase explained that “Unlike actively managed investment funds,” the fund manager of its index fund “does not actively trade assets, or target a specific allocation for any asset.”
What do you think of Coinbase Index Fund? Let us know in the comments section below.
Images courtesy of Shutterstock and Coinbase.
Need to calculate your bitcoin holdings? Check our tools section.
The post Coinbase Cryptocurrency Index Fund Now Open For Investment appeared first on Bitcoin News.
Spending on renewable energy is outpacing investment in electricity from coal, natural gas and nuclear power plants, driven by falling costs of producing wind and solar power.
WSJ.com: US Business
Coinbase is seeking to become a fully licensed broker-dealer through its acquisition of three federally regulated firms. The company is confident that it will get the approvals necessary to start offering fully-regulated crypto securities.
Coinbase as Regulated Broker-Dealer
One of the world’s largest cryptocurrency companies, Coinbase, has implemented a plan to list crypto securities, the company announced on Wednesday. President and COO, Asiff Hirji, wrote:
Today, we’re announcing that Coinbase is on track to operate a regulated broker-dealer, pending approval by federal authorities. If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (Finra).
With a presence in 32 countries, the San Francisco-based cryptocurrency company has traded $ 150 billion in assets and claims to have over 20 million customers.
In the US, crypto tokens exhibiting the characteristics of securities are subject to the SEC oversight.
Hirji explained that becoming a regulated broker-dealer for the company is “made possible by our acquisition of a broker-dealer license (B-D), an alternative trading system license (ATS), and a registered investment advisor (RIA) license,” adding:
If approved, these licenses will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products.
The company hopes to secure these licenses through the acquisition of three federally-regulated companies: Keystone Capital Corp, Venovate Marketplace Inc, and Digital Wealth LLC. All of them are registered with Finra.
Operating Under Keystone’s Licenses
Keystone Capital is a Finra-registered broker-dealer with licenses to operate an alternative trading system (ATS) and as a registered investment adviser.
A regulatory approval is needed for Coinbase to operate under the Keystone licenses, the Wall Street Journal explained, adding that “Coinbase is essentially buying Keystone for its licenses.”
According to Hirji, the company “is confident it will get those approvals,” after which it would take several months to integrate Keystone’s operations into its own, the publication noted, adding:
Buying Keystone also raises the prospect that Coinbase could, down the line, expand into products tied to stocks or other securities.
On the company’s blog, the COO wrote, “Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement and chain-of-title.”
What do you think of Coinbase offering regulated crypto securities? Let us know in the comments section below.
Images courtesy of Shutterstock, Coinbase, and Finra.
Need to calculate your bitcoin holdings? Check our tools section.
The post Coinbase Acquires Investment Firms to Offer Regulated Crypto Securities appeared first on Bitcoin News.
In Japan, seniors and middle-aged adults are increasingly interested in investing in cryptocurrencies. The Japanese Cryptocurrency Support Center has launched an intensive course for seniors to help them learn and invest in cryptocurrencies.
Intensive Crypto Course for Seniors
Japan’s Cryptocurrency Support Center has launched an intensive crypto investment course for middle-aged and elderly adults. This is “Japan’s first virtual currency investment course for seniors,” local media reported last week.
The Tokyo-based center “supports dissemination of the correct information and knowledge of virtual currencies” and of “building assets with virtual currency with confidence,” its website describes. The organization says “we have connections with overseas exchanges and currency issuers” and aims to promote “the sound development of the virtual currency industry.” The center describes:
In the past, investment of stocks and FX was the mainstream. However, since 2017 virtual currencies became a topic in the news, and seniors who start investing [in] virtual currencies are increasing…we hold virtual currency seminars…and some participants in their 80s have participated.
One of the reasons why the elderly are increasingly turning to cryptocurrencies in order to increase their asset holdings is “for the future relief of family and grandchildren to eliminate anxiety about old age,” the center explained.
What Seniors Will Learn
The course is divided into two parts: “Basic operation and maintenance of virtual currency” and “Investment know-how of virtual currency and measures against taxation.”
The former teaches how to open an account at a crypto exchange, how to purchase cryptocurrencies using Japanese yen, and how to store crypto in wallets and cold storage. In addition, students will learn how to send and receive crypto remittances. This part will also touch on security such as two-step authentication and safekeeping and restoration of private keys.
“For beginners who do not know how to buy virtual currency, we will instruct [them] carefully from the beginning, including how to use a personal computer,” the center elaborated, emphasizing that:
Even if you are inexperienced, even if you are not good at personal computers, you can start investing in virtual currency during the course period!
The second part teaches fundamental analysis using Twitter, technical (chart) analysis using Tradingview and Cryptopia. Students will also learn some “promising altcoin watching methods,” how to create diversified investment portfolios, and tax measures or tax saving methods for those with capital gains.
What do you think of crypto courses for seniors? Let us know in the comments section below.
Images courtesy of Shutterstock and the Virtual Currency Support Center.
Need to calculate your bitcoin holdings? Check our tools section.
The post Japanese Crypto Center Launches Investment Course for Seniors appeared first on Bitcoin News.
Social trading platform Etoro is expanding into the US. Pre-registration has already begun. Initially, 10 cryptocurrencies will be offered, but the company plans to add more throughout the year. The company’s crypto business has boomed in recent years, with 70% of its users reportedly trading cryptocurrencies.
Etoro Launching in the US
Social investment platform Etoro has announced that it is expanding into the US market. CEO Yoni Assia unveiled the company’s plans at the Consensus conference on Tuesday. According to the announcement:
The launch will initially enable U.S.-based users to invest in 10 cryptocurrencies, with more to be added throughout 2018. Users will have access to a community feed and tools, letting them engage in conversations about cryptocurrencies and follow the investment strategies of other U.S. users.
Launched in 2007, Etoro is regulated in Europe by Cyprus Securities and Exchange Commission and in the UK by the Financial Conduct Authority. The company says it has more than 10 million registered users across 140 countries in Europe, Asia, and Australia, with an accumulated capital funding of more than $ 162 million. Currently, its website shows 247,387,974 open trades on the platform.
Assia commented, “Etoro will continue to focus on simplicity and user-friendliness so that more diverse groups will feel welcomed into the global crypto community.”
Pre-Registration Begins for US Users
The company explained that US users can join the waiting list for the platform starting on May 15. “Users will be able to experience the interface and perform mock cryptocurrency investments via a virtual portfolio,” its announcement details, adding:
The 10 cryptocurrencies that will be initially available are: bitcoin, ethereum, litecoin, XRP, dash, bitcoin cash, stellar, ethereum classic, NEO, and EOS. Etoro intends to integrate several more cryptocurrencies throughout 2018.
“The platform will offer U.S. investors three ways to access the crypto markets,” Etoro described. The first way is “by manually investing in a coin.” The second is “by automatically copying the trades of other traders on the platform to benefit from their knowledge and investment expertise.” The third is “by investing in a Crypto Copyfund which provides a diversified portfolio of major crypto assets.”
A Copyfund is Etoro’s investment product aimed at helping investors minimize long-term risk, its website states. “Once you invest in a Copyfund, your capital is professionally managed by Etoro’s investment committee. Each Copyfund’s performance is analysed in depth and rebalanced automatically to maximise its gain potential.”
Etoro’s Booming Crypto Business
In January last year, the platform added cryptocurrencies. According to Fortune, “In recent years, the company’s crypto business has boomed with 70% of its users trading digital currency.”
In an interview with the news outlet, Assia predicted that Etoro’s “unusual social media features would help it gain a foothold” in the US. “Those features let users create a public profile of their investments, which in turn allows others on Etoro to track and copy their trading decisions.”
Commenting on the crackdown by the US Securities and Exchange Commission (SEC) targeting tokens that resemble securities, Assia told the publication that he is confident “the digital assets Etoro plans to list are currencies not securities.” He expects Etoro will list as many as 15 tokens by the end of the year, the news outlet conveyed, adding that the company also “plans to open a global wallet and exchange service later this year that is aimed at institutional traders.”
Currently, the aforementioned ten cryptocurrencies are already being offered on the platform for non-US users.
What do you think of Etoro launching in the US? Let us know in the comments section below.
Images courtesy of Shutterstock, Medium, and Etoro.
Need to calculate your bitcoin holdings? Check our tools section.
The post Investment Platform Etoro Launches in the US with 10 Cryptocurrencies appeared first on Bitcoin News.
The chief investment officer of California’s $ 350-billion pension fund is stepping aside.
Ted Eliopoulos announced Monday that he’s leaving the California Public Employees’ Retirement System after a replacement is hired. He is one of California’s highest paid state workers and responsible for the…