Will The Raising Institutional Investment Bring Back Glory Days For Cryptos?

Everyone that has ever traded cryptos knows for sure that it’s the institutional money this is expected to change the game for the industry. There was a long wait for Bitcoin ETF but there is no result yet. Finally, the patience seems to be running off as the leading institutions including hedge funds have suddenly raked by their exposure to cryptos nearly doubling it over past months.
Crypto Asset Under Management has gone up from USD 5 bn to USD 14 billion over a year
Institutions are coming to cryptos. This is a statement which most crypto investors were waiting to hear all this while and it looks like this is coming through at least according to a new report by Crypto Fund Research. According to the report, there are currently more than 700 cryptocurrency/blockchain investment funds. The majority are set up as hedge venture capital funds, while a large numbers are hedge funds or hybrid funds.
The statistics presented in the report shows that 2017 was a record year for the launch of new cryptocurrency funds with over 200 new funds including hedge funds and venture capital. This was more than triple the number of funds launched in 2016. However, 2018 has now surpassed 2017 in terms of crypto fund launches with more than 230. However, the new launches may see a slow down in 2019
Source: Crypto Fund Research
While the number of funds looks great, The vast majority of crypto investment funds are small. Half have less than $10 million in assets under management (AUM). However, there are a number of crypto funds with over $100 million in assets including Pantera Capital, Galaxy Digital Assets, Alhpabit Fund, and Polychain Capital, among others. Despite lower cryptocurrency prices in 2018, assets under management for crypto funds actually increased. Current crypto fund assets are still quite small. All crypto funds combined make up less than 1% of total hedge fund assets.
Source: Crypto Fund Research
 
Source: Crypto Fund Research
On the private investment fund, venture funds have now surpassed hedge funds as the most common type of crypto investment funds. Existing tech/FinTech VC firms are expanding investments into blockchain startups and launching their own blockchain funds. As some blockchain companies mature, private equity funds are beginning to get involved. Hybrid funds – those funds investing in cryptocurrencies as well as initial coin offerings are listed above as hedge funds although they take on some characteristics of venture funds.
It looks like the institutional money is flowing into cryptos not just for trading and investing in coins but also in real business by way of the venture and private equity investment. This will definitely help in the creation of the ecosystem and one may soon see the prices of coins and tokens also rising.
What are your target for Bitcoin in 2019 with this institutional money coming in? Do let us know your views on the same
The post Will The Raising Institutional Investment Bring Back Glory Days For Cryptos? appeared first on Coingape.
Source: CoinGape

How Bitcoin May Surge off of Billions of Dollars From IPOs Like Lyft, Uber

After multiple private funding rounds over half a decade, the San Francisco-headquartered Lyft, the world’s second largest ridesharing startup, took to the Nasdaq on Friday after months of media hype. While this happening has little to do with crypto on the surface, some industry commentators claim that Lyft’s initial success on American markets could bode well for Bitcoin (BTC) and other digital assets.
Silicon Valley’s Biggest Startups May Go Public, Could Crypto Rally?
The time has come for some of Silicon Valley’s biggest names to go public, as firms look to migrate away from the venture capital-only funding model. Lyft, of course, is now live on the Nasdaq. But, the transportation startup, which has consumed one-third of the world’s ridesharing market, is reported to soon be joined by companies like Uber ($72 billion), Pinterest ($12.3 billion), Postmates ($2 billion), Slack ($7 billion) and Airbnb ($31 billion) — whose products you likely actively use.
Related Reading: Why This Early Uber Investor Bought Bitcoin at Under $1 in 2009
This “IPO Frenzy,” as The Wall Street Journal dubs it, will allow venture capital firms to slowly unload billions of dollars worth of shares in the aforementioned companies, as long as their lockup contract allows it. Much of the cash (rumored to be in the dozens, if not hundreds of billions) garnered as a result of the sale of shares is likely to be reinvested in some of the Bay Area’s hottest names, Bitcoin-friendly firms included.
Barry Silbert, the head of Digital Currency Group, a New York-headquartered cryptocurrency conglomerate, claims that this newfound supply of cash, held by investors like Andreessen Horowitz (a16z), Accel, the Founders Fund, and Sequoia (all of which have serious stakes in the crypto industry already), will find its way into the hands of cryptocurrency and blockchain names.

Billions of dollars in private company stock is becoming liquid via IPOs this year. The crypto asset class is going to be a huge beneficiary
— Barry Silbert (@barrysilbert) March 29, 2019

This isn’t just baseless speculation.
a16z secured Lyft shares for $4.25 apiece in a private round years ago. These same shares now sell for $77 on the public market, netting the prominent venture firm a purported $1.8 billion. With Andreessen Horowitz also owning 5% of Pinterest, it should be able to cash $500 million out when the social media platform goes public. A hefty percentage of this liquid capital will likely be siphoned into the American fund’s crypto arm, which established a $300 million war chest for blockchain firms last year.

The @A16Z Fund III , $900M , 2012 vintage looks pretty good
own 6% of $LYFT, should generate $1.8B in liquidity based on $30B valuation, a 2x on the fund
also own over 5% of Pinterest, which should generate $500M+
Based on those two deals, will likely hit 3x DPI
— Shai (@shaig) March 28, 2019

Not So Fast, Claims Bitcoin Bull Arthur Hayes
While Silbert’s conjecture makes sense, especially considering the notable overlap of IPO whales and pro-crypto venture capitalists, Arthur Hayes isn’t convinced that the arrival of Silicon Valley startups on Wall Street will be a boon. In Hayes’ recent profanity-ridden BitMEX Crypto Trader Digest, the industry insider adamantly claimed that VC money is unlikely to find its way into the blockchain space.
Hayes remarks that 2017’s Bitcoin rally (and other cryptocurrencies too) was effectively predicated on “easy” or “free” money, which was created by the Federal Reserve’s third quantitative easing (QE) session. On the other hand, the collapse in this budding market over 2018 went hand-in-hand with a period of quantitative tightening, which also created turmoil in the stock markets. But interestingly, Hayes explains that the U.S. central bank “couldn’t stomach a 20% correction in the S&P 500,” and thus could begin another round of QE.

While this turn of events makes it sound like the prophesized fourth QE will boost cryptocurrencies yet again, the BitMEX chief executive claims that the next influx of “easy money will manifest itself in other higher profile and more liquid dogs**t before crypto.” Hayes adds that this newfangled asset class will be the last to “feel the love (VCs cashing in on IPO deals),” specifically as a result of 2018’s downturn, which likely left a sour taste in the mouths of bigwig investors — sour enough to disenchant them from “FOMO[ing] back into the markets.”
However, this all isn’t to say that cryptocurrencies cannot do well over 2019. In fact, Hayes explains that he still fully expects for Bitcoin to reach quintuple-digits by this year’s end, somehow. The former institutional player, who was slammed hard by 2008’s Great Recession, explains that by early-Q4 “green shoots will begin to appear,” giving Bitcoin a chance to rally back to $10,000 and potentially beyond.
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Newfangled Crypto Service Signals Continued Institutional Interest In Bitcoin

Since Bitcoin (BTC) began to falter in early-2018, optimistic investors, many of which are “HODLing,” have resorted to grasping for straws. Case in point,  the words, “Wall Street” and “institutional investors,” are incessantly mentioned, as crypto diehards have sought to find a light at the end of the proverbial tunnel.
But are institutional stakeholders really here?
Wall Street Doesn’t Like Crypto?
In recent weeks, the narrative that institutions and similar entities are flooding into the cryptocurrency space has been overtly questioned.
The Chicago Board Options Exchange (CBOE), the first issuer of U.S.-regulated Bitcoin futures, shuttered its offering. As reported by NewsBTC, this means that by June 2019, the exchange’s clients will have no open interest in any of the cryptocurrency contracts the CBOE offers. While some groups, like media outlet The Block, chalked this closure to the fact that there simply wasn’t enough demand to warrant the continued operation of the vehicle, some were more cynical.
Joe Weisenthal, a crypto-friendly reporter & anchor at Bloomberg TV, remarked that the “institutional money” cheer, sparked by the arrival of futures and custody solutions, is “one of the most busted narratives of 2018.”

The idea that crypto futures (and crypto custody solutions) would unleash a tidal wave of "institutional money" is one of the most busted narratives of the last year. https://t.co/13RGkcDcBx
— Joe Weisenthal (@TheStalwart) March 15, 2019

Mark Dow, a notorious Bitcoin short seller, echoed Weisenthal’s statement. Dow took to Twitter citing his anecdotal experience as a “whale” in this market, explaining that every time he had to “roll his BTC exposure each month, liquidity got worse.” He added that it’s hard for him to buy “the story about broadening institutional adoption,” especially considering the aforementioned CBOE development.
Related Reading: Access to Thousands of Institutions: Gemini Crypto Exchange Partners With British Telecom
Not So Fast
Yet, the launch of a dark pool offering from Omega One might indicate that believe it or not, there still is institutional interest in this space. Alex Gordon-Brander, a ConsenSys C-suite member turned chief executive of Omega, recently took to Bloomberg to explain the subject matter in depth.

Omega One launches the first regulated, fully independent and institutionally focused dark pool for crypto assets https://t.co/wmWe9CNcxG pic.twitter.com/yt0WBMnCUa
— Bloomberg TV (@BloombergTV) March 21, 2019

Gordon-Brander explained that dark pools, a more private, shadowed version of an over-the-counter (OTC) desk, should reduce slippage, volatility, and liquidity concerns for institutions looking to delve into crypto assets, like Bitcoin. The former Standard & Poor’s employee then hints that there is demand for such a desk, explaining that there is “massive interest on the institutional side.”
Even if Omega’s launch doesn’t indicate ongoing involvement from incumbents of traditional industries, it could be argued that this newfangled dark pool could entice institutional players to make a foray into cryptocurrencies. That’s what some hope anyway.
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Despite Bear Market, Crypto Startups Got Boosted By Billions In 2018

Taking a brief gander at crypto’s daily trading volumes, it is more than apparent that the number of investors, along with capital allocated, has all but dissipated over the course of 2018. Some have even argued that Bitcoin has left the mainstream consciousness, and could potentially be on its last legs.
Related Reading: Bitcoin Rally To Be Preceded By More “Crypto Is Dead,” Layoffs, Regulation, Says Investor
Chris Burniske, a partner at Placeholder Ventures, once explained that the days “cryptocurrency” and “blockchain” were plastered all over mainstream media, as CoinMarketCap sat open on the smartphones and laptops of millions the world over are long gone.
VC Deals in 2018 (Source: Diar)
In fact, more likely than not, retail investors en-masse have removed CoinMarketCap from their bookmark list, purged their Coinbase and Binance accounts, and unfollowed crypto’s most eccentric commentators on Twitter.
But, venture capitalists have kept their ears to the cryptocurrency ground, taking the lack of public interest in this asset class to their advantage. Face it, this subset of the investing realm is entirely opportunistic. And from their perspective, if Bitcoin and related technologies are to succeed over the long haul, now is arguably the perfect time to build solid portfolios, which accentuate asymmetric risk/return profiles.
Equity Was Hot, Even As Bitcoin Plunged
Research completed by Diar, a crypto analytics publication, recently confirmed that while the lackluster (understatement) performance of the Bitcoin price has deterred all but the zaniest traders, venture groups and investor groups of similar caliber have kept their proverbial pedals to the metal.
In the publication’s most recent edition, it was explained that while 2018 was a “bloodbath for cryptocurrencies,” what Diar deemed “blockchain-led” operations secured $1.6 billion in fiat investment over yesteryear.

We've published our latest issue for your read:#Bitcoin Retail Investor Holdings Continue Incremental GrowthMajor #Cryptocurrency Miners Banking on Empty Blocks#Blockchain Focused VCs Setup Intertwined Financial Infrastructure@coinbase Lists XRPhttps://t.co/iOrtZzL9VP
— Diar (@DiarNewsletter) February 25, 2019

Diar claims that since stakes in cryptocurrency startups became a viable investment vehicle, $5 billion has been siphoned into such opportunities — no small sum to say the least. Interestingly, the $1.6 billion the crypto war chest saw comes it way in 2018 primarily pertained to trading infrastructure, rather than blockchain projects in and of themselves.
Coinbase, Circle, Kraken, three notable American cryptocurrency service providers, raised $500 million collectively even “long after the bubble burst.” Bakkt and its competitors, in ErisX and SeedCX, have also secured hundreds of millions, as many, including Fundstrat Global Advisors, argue that proper regulated, institution-friendly, and multi-faceted fiat on-ramps and off-ramps is currently something curbing this space.
Interestingly, the trend of equity investing has continued into 2019.
According to previous reports from this outlet, Chainalysis, a blockchain research and software provider startup, secured $30 million in its recent Series B, led by the San Francisco-based Accel Ventures, which also has a stake in Circle. Chainalysis, which actively aids American governmental agencies (Department of Justice, Securities and Exchange Commission, etc.) in crypto-related cases, is looking to bolster its staffer lineup and European operations with this funding influx.
Coin Metrics, a Bitcoin-centric blockchain research unit based out of Massachusetts, recently raised $1.9 million, as it seeks to make much-needed information available to a wider population, thus increasing the health of this nascent space.
Kraken itself even made a nine-figure deal, completing the biggest industry deal of 2019 so far. The company acquired CryptoFacilities, a European Bitcoin derivatives provider, to start its foray into the array of alternative investment products. The details of the deal were scant, but it was explained that Facilitates gained at least $100 million from its business partner.
Institutions Continue Bolstering Crypto Holdings
Although much of crypto startups have garnered capital from Silicon Valley venture groups, like the world-renowned Andreessen Horowitz, this jaw-dropping funding figure has hints of institutional involvement sprinkled throughout.
Case in point, citing a number of sources familiar with the matter, Singapore’s primary sovereign wealth fund, GIC, purportedly participated in Coinbase’s historic $300 million funding round that concluded in October 2018. For those who missed the memo, this round, which valued the now-XRP-friendly Coinbase at $8 billion, was led by Tiger Global and Andreessen Horowitz. So interestingly, Singapore’s involvement in the San Francisco-based company wasn’t initially disclosed.

GIC isn’t the only incumbent of legacy finance to have allocated millions to the Bitcoin cause. Bakkt’s parent company, the Intercontinental Exchange (ICE), gave its cryptocurrency foray hundreds of millions in capital, as it nears its launch.
The University of Michigan’s endowment, valued at a hefty $12 billion, was recently revealed to have its eyes set on giving a hefty cheque to a16z, specifically for its CNK fund that invests in blockchain ventures.
And arguably most notably, two pension funds headquartered in Fairfax County, Virginia, were the principals behind Morgan Creek Digital’s $40 million venture fund, which has up to a 10% allocation in physical cryptocurrencies, like Bitcoin and Ethereum, as the remaining capital gets siphoned into equity deals with promising projects with visions of grandeur.
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Chainalysis Secures $30M: Despite Bitcoin Crash, Crypto Venture Money Still Flowing

The so-called “crypto winter” has undoubtedly been tough on a majority of this ecosystem’s upstarts, even those with supposedly colossal war chests and copious amounts of talent. Heck, earlier this week, Ripple cut Bloomberg alumni Cory Johnson, the fintech firm’s chief market strategist, due to shifts in the Bitcoin winds.
Bitmain, Huobi, and ShapeShift are also among industry powerhouses that have mandated staff cuts to bolster their bear market bottom lines. Other firms, such as Giga Watt and Liqui, have collapsed entirely.
But interestingly, it seems that the crash in the Bitcoin price hasn’t deterred opportunities. Even in trying times, money from ambitious venture capitalists and visionaries alike have continued to rush into this space, no holds barred.
Blockchain Analytics Group Finishes Series B
Ever since it secured $16 million in its Series A funding round during 2018, Chainalysis has become an integral but little-known mainstay in this space. For those who missed the memo, the company, which has headquarters in New York, is a blockchain research and software provider that has played a role in the back offices of the cryptosphere. While the company’s premise may seem boring for most, investors have become enamored with what the team has accomplished, and what it intends to do.
In fact, in a press release issued Tuesday, Chainalysis divulged that it had scored over $30 million in funding for its Series B round, led by Accel, a Palo Alto-based venture group that also has investments in Circle.

Excited to announce our latest funding round of $30m led by @Accel to support strategic product development of new cryptocurrency use cases and a new office in London! Read more: https://t.co/0Rn2li4wkO
— Chainalysis (@chainalysis) February 12, 2019

Accel’s deal with Chainalysis will also see the Bay Area investment group’s Philippe Botteri and Amit Kumar join the blockchain upstart’s board. Per Business Insider, the duo will aid Chainalysis in bolstering its presence, in the European region, along with its overall research efforts.
With this influx of funding, the analytics unit has decided to bolster its team. The company currently has 30 open roles, including stints ranging from the vice president of finance to the team lead for cybercrimes. Although the company has its primary offices in New York, many of the new positions are located in London and Copenhagen, the former of which is where Chainalysis is looking to double its headcount.
This $30 million dollar deal, which also saw participation from other unnamed financiers, isn’t just about acquiring talent though. Chainalysis divulged that it intends to double-down on its raison d’etre to make blockchain data easy to digest, useful, and accessible for governments, institutions, and native cryptocurrency firms. The company wrote:
“We are building a team that is focused on attributing more services associated with criminal activity, including darknet markets, scams, ransomware, terrorist financing, and sanctions evasion.”
The New York-based firm also explained that it intends to begin analyzing an array of other cryptocurrencies, not just assets like Bitcoin and Ethereum, while also bolstering its “compliance and investigation software” to create a fair environment for cryptocurrencies.
Exact specifics regarding Chainalysis’ plans were scant, but considering that the firm has garnered the support of Binance, Barclays, among a series of other fintech firms, its future remains bright, whether Bitcoin continues lower or otherwise.
Related Reading: Chainalysis: Up to 3.79 Million Bitcoins May Be Lost Forever
Crypto Venture Tap Still Has Water
While props to Chainalysis would be in order, this move only accentuates how the crypto venture capital tap still has water, even in spite of the harrowing market conditions. On Tuesday, Morgan Creek Digital, a crypto-centric venture group headed by fervent decentralist Anthony “Pomp” Pompliano, revealed that it had launched a $40 million fund.

The fund, launched weeks, if not months ago, saw investment from two public pension funds that pertain to Virginia, a private institution, a university endowment, and other investors. The fund purportedly already allocated capital towards Bakkt, Coinbase, Harbor, and Blockfi, just to name a few notable crypto upstarts.
Speaking of Bakkt, the Intercontinental Exchange-backed initiative secured over $182.5 million in one of the largest crypto-related deals to date. This round saw Boston Consulting Group, CMT Digital, Horizons Ventures, ICE itself, Microsoft’s venture wing, Pantera Capital, and Galaxy Digital make allocations.
All this and more only goes to show that although BTC has continued to trade in a tight range, with analysts claiming that lower lows are inbound, the smart money is under the impression that eventually, this market will undergo a resurgence.
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Even During Nuclear Winter, the Largest Crypto Asset Manager Controls Nearly $1 Billion

Cryptocurrencies have continued to stumble, but one organization has been making promising strides in the back offices of the Bitcoin space. Grayscale Investments, a wholly-owned subsidiary of the crypto conglomerate that is the New York-based Digital Currency Group, revealed that its products secured millions in investment amid the so-called “crypto winter.”
Crypto Winter Has Been No Match For Grayscale’s Bitcoin Fund
Grayscale, headed by Michael Sonnenshein, recently released its “2018 Digital Asset Investment Report” to outline company performance over the course of yesteryear. And surprisingly, the statistics were arguably not foreboding, but optimistic.

BREAKING: We are excited to share our 2018 Digital Asset Investment Report!
2018 Highlights include:• Total Capital Raised into Grayscale Products: $359.5M • Majority of investment (66%) came from institutional investors
Read the FULL report https://t.co/Kjv3tBdqrl pic.twitter.com/GGvTJ2eqLJ
— Grayscale (@GrayscaleInvest) February 14, 2019

The company first accentuated that as it stands, it has $825 million worth of assets under management, 43.5% ($359.5 million) of which entered Grayscale’s care in 2018. While this figure was impressive in and of itself, it was later explained that 66% of inflows came from institutional investors, who Grayscale claims are “building core strategic positions in digital assets.” Doing some napkin math, that means that $237 million of investments in Grayscale’s products, which include in-house Bitcoin, Ethereum, and Stellar Lumens funds, came from institutional players.
While $237 million may not seem like a monumental sum, critics of Grayscale’s 2018 figures would be remiss to neglect fiat amplifiers. Alex Kruger, a leading cryptocurrency economist and researcher, recently did some analysis on how nominal fiat inflows affect the aggregate value of all cryptocurrencies.

According to JPM, only 2 billion dollars entered Bitcoin in 2017 => $2 billion propelled bitcoin's market cap from $15 billion in Jan/1/2017 to $250 billion by year end. pic.twitter.com/6vW0lJ5WvB
— Alex Krüger (@Crypto_Macro) January 3, 2019

Citing a 2018 report from JP Morgan regarding cryptocurrencies, the New York-based trader explained that that Wall Street institution is calculating a fiat amplifier of 117.5 ($1 million in fiat investment turns into $117.5 million in cryptocurrency value). But, this isn’t the whole story. Citi purportedly estimated an amplifier of 50, while Chris Burniske of Placeholder Ventures calculated the figure out to somewhere between two and 25.
Thus, considering a low-end estimate of a ten times fiat multiplier, Grayscale’s institutional clients could have infused $23.7 billion worth of registered market capitalization into this space over 2018.
Regardless, what was made clear is that institutions still are interested in allocating capital to the cryptosphere, as the heads of such groups look to accumulate when the price of Bitcoin remains in a lull.
2019: The Year Of Institutional Investors
These statistics haven’t gone unnoticed. Barry Silbert, the founder of Digital Currency Group, Grayscale’s parent organization, recently took to CNBC to express that the advent of institutional investors will continue to be an industry trend in the coming months. As reported by NewsBTC previously, Silbert commented that products like Bakkt’s futures only accentuate that bigwig firms are poised to make investments in Bitcoin.
Galaxy Digital Holdings founder Mike Novogratz also recently made a similar comment. In an interview with Bloomberg TV, the former Goldman Sachs partner noted that it is only a matter of time before institutional-sourced greenbacks appear on crypto’s marketplaces.
Echoing comments he has made over recent months, the Galaxy Digital chief executive noted that the “architecture” that would entice institutions to make noticeable capital and effort allocations are starting to be put in place.
Case in point, Fidelity Investments, a world-renowned financial institution with over ten thousand clients in its institutional Rolodex, recently revealed that it could launch its crypto custody offering by March. Novogratz explained that this service, along with products of a similar caliber, will pave the way for “smart money” to make a foray.
Related Reading: Novogratz: Institutions Will Drive The Next Crypto and Bitcoin Boom
While industry insiders are talking up a big game, some fear that there actually aren’t that many bigwigs waiting on the crypto sidelines. Case in point, over recent months, both Coinbase and Blockchain, which both have institutional investor-centric divisions that are some of this sector’s most prominent, dropped notable hires from Wall Street.
Representatives from the firms claimed that there has been a noticeable shift in the underlying status of cryptocurrency investment. More specifically, it was explained that “crypto-native firms,” like hedge funds, projects, and venture groups, were the institutions requesting services, rather than Wall Street hotshots.
Yet, some believe that this is just “noise,” which is trying to mask the fact that true financial incumbents are revving their crypto engines. Binance, BitGo, and Coinbase are all notable industry upstarts that launched over-the-counter (OTC) desks over the past months, indicating that some high-ticket clients are requesting for a more efficient trading medium.

On Thursday, The Block exclusively reported that LJ Brock, who hails from Chicago hedge fund giant Citadel’s C-suite, would be joining Coinbase. In a company email obtained by the outlet, Coinbase chief Brian Armstrong remarked that he’s “really excited” to have Brock join the team, especially due to the new hire’s people experience and stints on Wall Street.
While this move is unlikely to affect institutional investors with a growing penchant for crypto directly, this move could underscore that Coinbase and its competitors are still looking to entice non-consumer populations to take the plunge. But will they?
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Bexplus Investment Advice – Profit from Bitcoin “Bear Market”

CoinSpeaker

Bexplus Investment Advice – Profit from Bitcoin “Bear Market”

Still upset with Bear Market? See How to make money in crypto winter.

Bexplus Investment Advice – Profit from Bitcoin “Bear Market”

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Source: CoinSpeaker

$3 Trillion Hedge Fund Industry Should Have 1% In Bitcoin (BTC), Claims Novogratz

Although undoubtedly Bitcoin rose to worldwide fame and glory in late-2017, institutions have been slow to make a bonafide foray into this asset class. In fact, effectively zero preeminent Wall Street funds have divulged that they have taken active stakes in cryptocurrencies. Many traditionalists would argue that this is for good reason, but crypto’s enthusiasts have been left asking — what’s the deal?
Novogratz: Where Are Bitcoin Allocations From Wall Street?
In a tweet issued on Saturday, Mike Novogratz, the chief executive of the TSX-listed Galaxy Digital, made a surprising remark that came straight out of left field. The former Fortress Investment and Goldman Sachs executive, who has become a full-on crypto diehard, explained that he doesn’t understand why large macro funds, such as Ray Dalio’s Bridgewater Associates, don’t have a 1% position in Bitcoin (BTC).

Don’t understand why all the big macro funds out there don’t have a 1 percent position in $btc. Just seems logical even if your prone to be a skeptic. @RayDalio #goldproxy #animalspirits #greatriskreward
— Michael Novogratz (@novogratz) February 9, 2019

Backing his comment, Novogratz added that such a move is logical “even if you are prone to be a skeptic,” likely touching on the asymmetric risk-return profile that cryptocurrencies are best known for.
For some perspective, Winton, a British investment management firm, estimates that hedge funds worldwide hold a minimum of $3 trillion in assets. Thus, a ubiquitous 1% allocation would see $30 billion rush into BTC at the bare minimum, which would push the cryptocurrency likely beyond its late-2017 high due to fiat multipliers.
While this would be crazy in and of itself, some argue that this is just the tip of the iceberg. In an installment of Off The Chain, Anthony Pompliano of Morgan Creek Digital Assets claimed that “every pension fund (valued at ~$4.5 trillion) should buy Bitcoin.” Pompliano explained that a potential solution to solve the pension crisis, whereas such funds will likely default on some, if not most of their payments, is to simply buy cryptocurrencies. Bitcoin, for one, is a non-correlated asset, with Pomp even calling it “the holy grail of any portfolio.”

This isn’t even an unproven fact. PlanB, a leading crypto researcher, recently remarked that a 1% BTC and 99% cash portfolio beat the performance of the entire S&P 500 over the last ten years. Although the difference between the two portfolios was marginal, with mere percentage points separating their performance, PlanB claimed that Bitcoin simply has a better risk-to-return profile than U.S. equities.
In response to this, Pompliano remarked that this trend is likely going to continue over the next decade.
Bitcoin Isn’t Only A Diversifier, But A Hedge Against Fiscal Irresponsibility
Not only is Bitcoin likely going to be a great diversifier in the long haul, but many argue that it is a perfect hedge against poor fiscal practices from central banks, like the U.S. Federal Reserve. In a comment given at an alternative investment conference in the Grand Cayman, Travis Kling, the chief investment officer of Ikigai, remarked that the flagship cryptocurrency is the perfect hedge against “fiscal and monetary policy irresponsibility.”
Kling, a former Point72 portfolio manager even likened Bitcoin to a credit default swaps (CDS) against central banks’ enamorment with printing money. The Ikigai head, who made a sudden U-turn at the peak of 2017’s crypto boom, as he downed a red pill to foray into cryptocurrencies, remarked that he’s wary of the build-up of debt on government balance sheets. Kling even stated that the monumental rise of enlisted quantitative easing (QE) strategies is “how you would write the script” for the adoption of cryptocurrencies, especially ones that are fully decentralized, the world over.
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Tips Every New Cryptocurrency Investor Should Know

CoinSpeaker

Tips Every New Cryptocurrency Investor Should Know

If you are a cryptocurrency beginner who just decided to invest a good amount of their hard-earned money into this market, you need to gather as much information as possible before you get started.

Tips Every New Cryptocurrency Investor Should Know

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Institutions Still Bullish On Crypto: Grayscale Owns 1% of All Bitcoin

As Bitcoin continues its chaotic price action, ceaselessly falling and ascending through key levels, some paranoid traders have feared that institutional investors have been alienated from the crypto market. Yet, reports indicate that Grayscale’s growing war chest has continued to swell, while institutional players continue to express interest in crypto assets. This, of course, makes it more than palpable that institutions see immense value in cryptocurrencies, and potentially, that a market bottom is inbound.
Grayscale Owns $826 Million in Bitcoin
According to a research report released on December 3rd, from the offices of crypto analytics unit Diar, Grayscale Investments, a self-proclaimed “trusted authority on digital currency investing,” has accumulated thousands of BTC for its in-house Bitcoin Investment Trust (GBTC).
Since the start of 2018, Grayscale, owned by Barry Silbert brainchild Digital Currency Group (DCG), has seen its Bitcoin coffers swell by 30,600 BTC to 203,000 total, now accounting for more than 1% of the asset’s total circulating supply. 
As seen in the chart above (sourced from LongHash), the wallets pertaining to Grayscale’s GBTC, a vehicle that allows retail and investors to purchase custodied BTC on the U.S. OTC market, has seen month-over-month increases. Diar wrote on the matter:
“Record inflows however have resulted in record Bitcoin equivalent holdings with December notching up a little versus the start of the previous month.”
Although GBTC’s user base also consists of retail investors, the steady rise in BTC holdings indicates that capital continues to flow into this market through trusted third parties (ironically enough), a plausible positive sign.
Institutional Players Continue Crypto Foray
Grayscale isn’t the only DCG subsidiary to see a spike in investment interest. Genesis Trading, also owned by the New York-headquartered conglomerate, recently saw its CEO, Michael Moro, take to CNBC to note that his firm’s lending service has seen an “incredibly strong reception.”  This “incredibly strong reception” has seemingly taken the form of interest originating from “60+ institutional counterparties,” who have requested for cryptocurrency loans across “nearly a dozen digital assets” in the past six months. According to statistics from the firm itself, these loans amounted to a monetary value of $553 million, a jaw-dropping sum to put it lightly.
Moro added that while many of its institutional debtors have already paid their loans in full, there is still $130 million worth of active loans,  a figure that has only grown of the course of the lending service’s seven-month lifetime. This indicates that the crypto market downturn hasn’t deterred these industry participants one bit, contrary to popular belief.
This continual institutional interest hasn’t gone fully unnoticed, with a number of institutions and forward-thinking crypto innovators establishing products, services, and platforms, aimed at high net-worth individuals and Wall Street. Nasdaq, for instance, recently announced that it joined hands with VanEck to work on a Bitcoin and “crypto 2.0” futures contract, aimed at institutional and retail investors alike.
Related Reading: Why Are Novogratz, Fidelity, And Bakkt Banking On Institutional Crypto Investors?
Fidelity Investments, which sports the business of 13,000 institutional clients, even announced its own digital asset-centric subsidiary, slated to offer top-notch cryptocurrency custody and with trade execution.
Even Without Institutional Investment, Crypto Still Valuable
But even if institutional money doesn’t continue to flood in and the aforementioned platforms falter, as skeptics expect, Bitcoin and its altcoin brethren will still have big shoes to fill. As reported by NewsBTC last week, at BlockShow Asia 2018, Tom Lee, head of research at the crypto-friendly Fundstrat Global Advisors, claimed that Bitcoin is “bent, not broken.” The long-time cryptocurrency advocate, somewhat infamous for his irrational price predictions, added that Bitcoin’s $1.3 trillion in on-chain transaction value, reportedly 2.5 times that of PayPal, indicates that this innovation has “staying power.”
He added that there’s still “enviable profitability” in the cryptosphere, with BitMEX alone, who will likely generate $1.2 billion in fiscal 2018, making more than the Hong Kong Stock Exchange’s parent and Nasdaq. This profitability factor alone should entice investors to continue to invest in cryptocurrencies and related projects.
Jackson Palmer, CEO of Dogecoin, echoed the sentiment that cryptocurrencies have and will continue to maintain inherent value, even without support from Wall Street hotshots. In an op-ed posted to Diar, Palmer, a developer at Adobe, noted that the grassroots projects, namely the Lightning Network and Plasma framework, can help “cryptocurrencies fight back” and keep the heart of the decentralized revolution burning.
Related Reading: Dogecoin Creator: Bakkt, Fidelity, and Bitcoin ETF Are Bad for Cryptocurrency
Palmer wasn’t alone in his anti-centralization, pro-crypto statements, with Ethereum co-founder Vitalik Buterin, Marc Andreessen, one of the world’s foremost venture capitalists, and even Edward Snowden lauding cryptocurrencies for their ability to transcend traditional entities.
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Institutional Interest in Crypto During Bearish Times is Bullish

An oversold market makes the best time to enter. And experts believe it is happening with crypto industry as it retains a yearly bearish bias.
The significant dip seen in 2018, followed by consecutive strong rebounds from a specific bottom area has upped medium-term bullish sentiments in the crypto market. Bitcoin, the cryptocurrency with the highest dominance, for instance, has reversed its downtrend on multiple occasions upon testing a $250-wide area below $6,000 as strong support. The price action has led bulls to conclude that it would be impractical for bears to crash Bitcoin below the $6,000-range, citing miners’ breakeven ROI, and the influx of institutional funds around the oversold bottom.
Big Names Entering Crypto Space
The growing number of crypto hedge fund launches this year has testified that there is a demand for crypto gateways among institutional investors. Significant monies have entered the $211 billion space by spreading some portion of their investment portfolio to digital currencies like Bitcoin, Ripple, EOS, and Ethereum.
The endowments of several high-profile institutions, including Harvard University, MIT, Stanford University, Yale University, Dartmouth College, and the University of North Carolina have spread their risks into at least one cryptocurrency fund.

Commentators often seem surprised when companies make moves, invest, or launch products during crypto bear markets. They then act confused when bull markets return. "Where did this come from?" they ask. Perhaps this is why they are commentators, rather than business people.
— Erik Voorhees (@ErikVoorhees) October 16, 2018

Other investors are entering the space with over-the-counter markets or so. Michael Novogratz, a one-time hedge fund billionaire, converted 30-percent of his wealth to crypto assets and announced a $500 million crypto-fund. Dan Morehead of Pantera Capital-fame invested in 43 cryptocurrency-related startups and is currently one of the largest institutional owners of digital assets. The list is too long.
Garry Tan, a prominent seed investor, stated that investors believe that Bitcoin is bottoming out and noted a “buying-the-dip” sentiment among prominent investors, majorly citing David Swensen, Yale’s Warren Buffet, who recently invested an undisclosed sum into two crypto-funds.

Super confused at the fud about institutional investors coming into crypto funds.
Is it a big deal? Yes.
Is it a negligible amount? No. It’s as much as a given endowment might put into a core venture capital investment. That’s the kind of return they expect.
— Garry BUIDL Tan (@garrytan) October 7, 2018

 
Strong Fundamentals
There is also a significant amount of money waiting at the door on speculation that the US Securities and Exchange Commission will give the green light to some Bitcoin ETFs by mid-2019. More so, if the SEC appoints a new legal definition to crypto-assets, then institutional investors in the US could be assured of receiving watchdog protections, no different than forex and gold futures.
Prominent industry leaders are already meeting lawmakers and regulators to come up with a concrete crypto law that could decide the fate of the industry in the US. Once Bitcoin is regulated as a security or any other asset, then institutional money will tail the high-net individuals and hedge funds already in the space. It could result in a strong rally, coupled with factors that investors will be buying Bitcoin low against the projected values ranging between $14,000 to even a million dollars.
 
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Coinbase Want To Attract More Than Just Institutional Investment

Coinbase have been accused of only wanting to attract institutional investors, however their latest move is one that has been designed entirely for low level and inexperienced investors. Coinbase Bundle is a new platform that is being launched by the popular US exchange in order to make it easier for new investors to invest in cryptocurrency.
Coinbase Bundle will be launched in the United States and across Europe over the next few weeks and will allow new traders to purchase a bundle of five cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ethereum Classic (all of the tokens that are currently offered on the Coinbase exchange).
Continue reading Coinbase Want To Attract More Than Just Institutional Investment at Crypto Daily™.
Source: Crypto Daily

Huge Inflow into Crypto Investment Fund Despite Bear Market

Crypto investment fund Grayscale has revealed it received record-breaking inflows of money during the first six months of 2018 even though the price of Bitcoin crashed from $20,000 to $7,000.

Crypto Fund Receives Strong Backing

Grayscale Investments released their first Digital Asset Investment report, which showed a large influx of money into their crypto investment funds. From January to June, they amassed $248.4 million in new assets, which will add to their $2 billion portfolio. This is the highest amount of money they have received in any six-month period.

“As the investment community knows, over the last six months, the digital asset market experienced one of the largest price drawdowns since the inception of Bitcoin in 2009,” said Grayscale in the report. “However, what is more interesting, and somewhat counterintuitive, is that the pace of investment into Grayscale products has accelerated to a level that we have not seen before.”

During this time, they added new funds including support for Bitcoin Cash, Ether, Litecoin, and Ripple in March. They now have eight investment funds available including a Digital Large Cap Fund.

Grayscale Investments is a subsidiary of Barry Silbert’s Digital Currency Group, founded in 2013. The Group manages Genesis Trading which is a full-service, institutional trading firm aimed at digital currencies. It also manages a crypto news site, which provides market updates.

“Bitcoin has the potential to radically transform our concepts of money, store of value, and the means by which assets are exchanged the world over,” said B

In June, Grayscale launched their Zencash Investment Trust focused on the Zencash (ZEN). Similar to Zcash, which Grayscale already offers, it is available to accredited investors for the first year and then will be available to the general public.

Strong Demand from Institutional Investors

More than half of the investment came from institutional investors, according to the report. This shows a clear sign of the interest in the market and sharply contrasts Blackrock CEO Larry Fink who said that he hadn’t heard of one client who was interested in cryptocurrencies.

Fink said: “No. I don’t think that any client has sought out crypto exposure… I’ve not heard from one client who says, ‘I need to be in this.’”

Other signs of a move towards institutional investors include the largest ETF trader in Europe moving into crypto alongside a new proposal for a Bitcoin ETF in the U.S., which has attracted a large number of comments by those in the crypto community. The U.S. Securities and Exchange Commission (SEC) has also clarified its position on securities and said that Ethereum and Bitcoin are not securities, even though Ethereum was funded by an ICO.

On the back of this, Coinbase has continued to move into the smart money market with its custody offering although it had to backtrack after previously claiming that the SEC had approved it to list security tokens.

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