Increased Demand in Crypto has Citigroup Considering Offering its Biggest Clients Bitcoin Futures Trading

Increased Demand in Crypto has Citigroup Considering Offering its Biggest Clients Bitcoin Futures Trading

Citigroup is now considering whether to offer its biggest clients the option to trade in Bitcoin futures, citing increased demand in the cryptocurrency space.

According to the reports, the banking giant is currently awaiting approval to begin trading CME Bitcoin futures.

According to a Financial Times report, the bank first started weighing the option of providing crypto-related services in May.

“Our clients are increasingly interested in this space, and we are monitoring these developments,” Citigroup said in a statement this time.

Other banking giants JPMorgan, Morgan Stanley, Wells Fargo, and Goldman Sachs, are also working on allowing all of their wealthy clients access to cryptocurrency funds.

Citibank further said they are currently only considering futures for some of its institutional clients due to the fact that they operate under strong regulatory frameworks. The bank is basically being “very thoughtful” of how they approach the crypto industry due to many unanswered questions around regulatory frameworks, supervisory expectations, and other factors.

Sights on the Regulated Product

Bitcoin futures are also presently the popular product for exchange-traded funds (ETFs) to be based on after SEC Chair Gary Gensler signaled that he is more open to a futures-backed Bitcoin ETF under the 1940 Act, which offers more investor protection instead of physically-backed ETF that are filed under the 1930 laws that allow stock exchanges to list products.

Tennessee-based Valkyrie Investments is one of the firms to file for the Valkyrie XBTO Bitcoin Futures Fund that would be listed on the Nasdaq exchange. Their request was only revealed on Tuesday as smaller issuers are allowed to file confidentially for new offerings.

“We still thought a physical bitcoin ETF was a little further away and, with futures, the way they are regulated and the way they trade with the CME, they are already. It is a regulated product. So it’s kind of a one-step, two-step way to get a physical ETF, but we thought there were a lot of opportunities with futures,” said Steven McClarge, CIO at Valkyrie Investments, in an interview.

While Valkyrie is the first to file for a futures-backed Bitcoin ETFs, several others have filed since Gensler’s statement, with two dozen filing sitting at SEC’s desk for approval.

“The SEC is trying to be cautious here – which they should be doing,” McClarge said.

“While I believe the market is ready for physically backed ETFs, I know they are trying to be extra cautious before putting anything in the market that could hurt retail investors, and that is their reason to do so.”

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Author: AnTy

Citigroup’s Richest Clients Can Now Trade Crypto; Also Helps Invest in Stablecoins, NFTs, & CBDC

Citigroup’s Richest Clients Can Now Trade Crypto; Also Helps Invest in Stablecoins, NFTs, & CBDC

Citigroup is finally coming around on cryptocurrencies.

The Wall Street giant now allows its richest clients to bet on crypto as part of a new digital assets group inside its wealth management unit.

This wealth management unit has been in the works ever since Citigroup formed the division earlier this year, and more recently, it has been focused on building out a series of wealth management hubs across Europe and Asia.

Under Citigroup’s crypto plan, the new group will help clients invest in cryptocurrencies, stablecoin, non-fungible tokens (NFTs), and central bank digital currencies (CBDCs), according to the memo.

The new effort will be led by Alex Kriete and Greg Girasole, who will serve as liaisons to “all other business groups at Citi who are expanding into this rapidly emerging space also.”

“They will be responsible for developing our future product capabilities, client delivery mechanisms, and thought leadership around all digital assets,” said Iain Armitage, Citigroup’s global head of capital markets for its private bank, and Rob Jasminski, who oversees the bank’s investment management arm globally, in the memo.

The bank is forming the unit as investor demand for crypto assets continues to soar and its rivals like Goldman Sachs and Morgan Stanley also start offering crypto-related services to their clients.

The newly formed unit comes just weeks after the CEOs of the six biggest US banks were grilled by Congress over their ties to cryptocurrencies. At the time, Citigroup chief executive Jane Fraser said her bank was taking tentative steps in the crypto space.

“We proceed with great caution here,” Fraser said.

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Author: AnTy

Interactive Brokers, with 1.3 Million Clients, to Offer Direct Crypto Trading on Customer Demand

Interactive Brokers, with 1.3 Million Clients, to Offer Direct Crypto Trading on Customer Demand

Back in January, during the meme stock mania, Interactive Brokers was involved in placing temporary restrictions on speculative stocks like GME and AMC to safeguard the market and because they were “worried about the integrity of the marketplace.”

Interactive Brokers is expecting to offer cryptocurrency trading by the end of the summer, revealed Thomas Peterffy, the firm’s chairman and CEO, during the Piper Sandler Global Exchange and FinTech Conference.

The company first started offering access to cryptocurrency when bitcoin futures began trading on the CME in December 2017.

Peterffy said at the conference that customers have been asking for direct crypto trading.

He further shared that the biggest obstacle in offering cryptos is keeping customers safe and ensuring that no one steals their coins.

Back in late January, during the meme stock mania, Robinhood said the brokerage service providers, including Interactive Brokers, placed temporary restrictions on speculative stocks like GameStop, AMC Entertainment, and Koss to what they called to safeguard the market.

“We are worried about the integrity of the marketplace and the clearing system,” Peterffy said at the time.

A month later, Peterfly said the US financial system faced greater stress during this GameStop frenzy. “We have come dangerously close to the collapse of the entire system, and the public seems to be completely unaware of that, including Congress and the regulators,” he said in an interview.

Not a choice anymore!

The Connecticut-based brokerage firm executes about 3.3 million trades per day in 135 markets worldwide. In April, the company reported an increase of 74% from a year-ago quarter in its customer accounts to over 1.3 million.

“A year ago, Interactive Brokers wouldn’t go anywhere near crypto. Now they are coming in. They don’t have a choice. Eventually, they will all come in because crypto is going mainstream and clients want it,” commented SpartanBlack, Partner at crypto fund The Spartan Group, which has begun deploying capital for a newly raised $110 million fund.

Interactive Brokers competitors Fidelity and Charles Schwab currently do not offer direct access to cryptocurrency.

“Although bitcoin futures are now available for trading on the CBOE and CME, Fidelity does not currently have any plans to offer bitcoin futures trading for its retail brokerage customers,” states Fidelity’s website; however, the brokerage giant has been involved in the crypto space and has launched a subsidiary Fidelity Digital Assets (FDA) to support its institutional customers’ holdings in digital assets.

Schwab said in May that its customers could access cryptocurrency markets through Grayscale Trusts but noted that aspects of a cryptocurrency remain “immature” and can pose risks to clients, adding SEC’s approval of a crypto ETF will be a key step in the market’s development.

“When there is more regulatory guidance, you can expect Schwab to have more investment options for clients, including spot crypto trading and custody,” according to the company’s website.

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Author: AnTy

Standard Chartered Targeting Institutional Clients in Britain & Europe for its Crypto Exchange

Standard Chartered Targeting Institutional Clients in Britain & Europe for its Crypto Exchange

Head of the bank’s technology arm has a “strong conviction that digital assets are here to stay and will be adopted by the institutional market as a highly relevant asset class.”

Standard Chartered is the latest bank to set up a joint venture to allow buying and selling cryptocurrencies just days after its biggest rival, HSBC Holdings, said it wouldn’t offer crypto trading services due to its volatility.

The idea is to establish a cryptocurrency brokerage and exchange platform in Britain and Europe, targeting institutional clients.

For this, the London-headquartered bank said on Wednesday that its technology arm, SC Ventures, would partner with BC Technology Group Ltd., which operates Hong Kong-based cryptocurrency investment platform OSL, which was the first crypto exchange to be licensed by the Securities and Futures Commission.

Alex Manson, head of SC Ventures, said he had a “strong conviction that digital assets are here to stay and will be adopted by the institutional market as a highly relevant asset class.”

“We are constructing the building blocks for a safe and reliable investment infrastructure.”

This new partnership will be based in the UK and target the European market. To be opened in the fourth quarter, the bank will offer trading in cryptos, including Bitcoin and Ethereum.

This year, more and more banking giants have been taking a special interest in cryptocurrencies, including Goldman Sachs, Morgan Stanley, BNY Mellon, and many others.

Everyone has been slowly coming around; even JPMorgan is planning to offer Bitcoin funds to its wealthy clients. This has been despite its CEO Jamie Dimon calling Bitcoin “fraud” in 2017.

“A lot of our clients are asking, ‘can we help them buy or sell cryptocurrency?’ we’re investing in that as we speak,” said Dimon at the bank’s annual shareholder meeting on May 18.

Recently, in congressional testimony to the U.S. House Financial Services Committee, Dimon personally advised to “stay away” from Bitcoin, adding, “That does not mean the clients don’t want it.”

“I don’t tell people how to spend their money, regardless of how I might personally feel about something,” Dimon told Congress. He also suggested a more rigid regulatory framework for the asset class. While criticizing regulators for being “a day late and a dollar short,” he speculated that the government would “pay a lot more attention” in the future.

“Buyers beware,” he added in reference to cryptos and not blockchains or stablecoins.

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Author: AnTy

Saxo Markets Launches BTC, ETH, & LTC Trading on ‘Strong Demand’

Saxo Markets has launched a cryptocurrency offering enabling its clients to trade Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) against the dollar, euro, and yen, from a single margin account.

Due to being in the form of derivatives, clients can go both long and short on these cryptocurrencies.

The company is targeting mass affluent and emerging-affluent clients for its latest offering. Over the next few weeks, this will be launched in different countries.

This new service was introduced on the back of “strong demand,” said Saxo Markets APAC Chief Executive Officer Adam Reynolds.

“The active trading clients are going to be the ones most interested in this,” Reynolds said, “and that will include people who are active traders in FX, but also people like active traders in tech stocks.”

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Author: AnTy

Wealthfront Allows Clients to Invest in Crypto; Germany Passes Legislation on Spezialfonds

Wealthfront Allows Clients to Invest in Crypto; Germany Passes Legislation on Spezialfonds to Allocate 20%

Wealthfront is the latest one to start allowing its clients to invest in cryptocurrencies later this year.

The US digital wealth manager with $16 billion in assets under management said starting this week; users will be able to build their own portfolio from a range of ETFs vetted by their team.

This a notable shift for Palo Alto, a California-based startup that has been traditionally more conservative and long term. It is not yet known which cryptos would be available.

Dan Carroll, co-founder, and chief strategy officer of Wealthfront, said the changes reflected a growing desire from Millennial and Gen Z investors to make investment choices.

“Wealthfront will be the place to invest responsibly, not some Wild West arcade,” Carroll said. “We can do it in a fiduciary way. We care what is in your best interests. We won’t let you put 100% of your portfolio in crypto.”

The company, which has around 357,425 accounts, will also continue to rebalance portfolios automatically and tell users about the impact their investment choices have on their risk level.

Amidst this growing adoption of cryptos, big news came from Germany, where new legislation allows the managers of popular institutional investment funds, Spezialfonds, to allocate 20% to crypto assets.

The law that cleared federal parliament last Thursday will come into force on July 1, which further legitimizes the asset class and boosts the cryptocurrency industry in the country.

According to market experts, this could release huge sums of money as it allows thousands of existing investment funds to invest in Bitcoin and other crypto-assets.

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Author: AnTy

62% of Clients Willing to Switch Financial Advisors to Know More About Bitcoin: NYDIG Survey

62% of Clients Willing to Switch Financial Advisors to Know More About Bitcoin: NYDIG Survey

“Unprecedented client demand for advisors to offer access to Bitcoin,” says bitcoin trading and custody service provider subsidiary of Stone Ridge Holdings Group.

NYDIG, the subsidiary of Stone Ridge Holdings Group, revealed in its latest financial advisory survey that there is a high demand for advisors to offer Bitcoin access.

22% of the financial advisors’ clients own Bitcoin, while 2.5% hold BTC with their advisors.

The bitcoin trading and custody services provider survey revealed that 82% of clients expect their advisors to be knowledgeable sources about Bitcoin as an asset class. Still, only 21% of clients have actually brought it up.

“Understanding this gap and closing it is critical,” states the report.

Interestingly, 62% of clients said they would switch financial advisors to advice about the leading cryptocurrency. Client attitudes are shifting as an estimated more than 1 in 5 financial advisory clients already own Bitcoin.

“The increasingly widespread adoption of Bitcoin has perhaps caught many advisors by surprise, and few manage Bitcoin for their clients today.”

The poll was conducted on Jan. 26-27, 2021, among a national sample of 2,082 US consumers. And the respondents want their advisors involved, with 65% saying they wish they knew more about the trillion-dollar asset.

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Author: AnTy

Goldman Sachs to Start Offering its Wealthy Clients Access to Bitcoin Starting Next Quarter

Goldman Sachs to Start Offering its Wealthy Clients Access to Bitcoin Starting Next Quarter

The bank’s VP says there is “a large contingent of clients” looking for ways to participate in the crypto space and sees Bitcoin as a hedge against inflation.

Goldman Sachs plans to start offering its first investment vehicles for Bitcoin and other crypto-assets to its wealthy clients in the next quarter.

CNBC reported the news on Wednesday, citing an internal company memo seen by it.

In an interview this week, Mary Rich, the new global head of digital assets for Goldman’s private wealth management division, which targets individuals, families, and endowments with at least $25 million to invest, said,

″We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near-term.”

Throughout the first quarter, Goldman Sachs has been working towards offering crypto products as it rebooted its bitcoin trading desk from 2018, filed for an ETF to provide indirect exposure to BTC, and reported “rising” client demand.

Another big name Morgan Stanley is reportedly on track to place clients into its bitcoin funds starting in April.

The investment banking giant is, according to Rich, is looking to offer a “full-spectrum” of investments in digital assets that ultimately range from physical bitcoin to derivatives and traditional investment vehicles.

It is basically all about demand for Bitcoin from the customers, and “there’s a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that,” Rich said.

She further said that “a large contingent of clients” also feels like we’re at the dawn of a new Internet and are looking for ways to participate in the crypto space.

While the ecosystem is still at its “very nascent stages,” she said, “it will be part of our future.”

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Author: AnTy

Growing Number of Clients Bought ETH, But Only A Select Group Is Investing in DeFi: Coinbase

Growing Number of Clients Bought ETH, But Only A Select Group of VC Funds & Family Offices Investing in DeFi: Coinbase

DeFi remains retail-driven just like the early days of Bitcoin adoption, says Coinbase whose clients are interested in Ethereum’s evolving potential as a store of value and its status as a digital commodity.

2020 brought “traditional hedge funds to the forefront of participation,” states Coinbase in its 2020 in the Review report.

Covering the year “crypto cemented its status as an institutional asset class,” said the largest cryptocurrency exchange in the US, which is planning to launch its IPO, noting that macro funds are the earlier adopters with several large funds now begun trading Bitcoin and Ethereum directly with investor capital as well.

The company’s clients invested in Bitcoin for a range of reasons, including as a store of value, as an inflation hedge and/or insurance against new potential monetary policy risks, as a portfolio diversification tool, and as a treasury reserve asset.

Coinbase is particularly expanding its business in Europe and Asia, with Singapore as the staging post for Asia expansion because of its regulatory clarity. After opening its third office in Europe, Coinbase now has 120 full-time employees in the region.

A Trend Occurring out of View for Most of Wall Street

“While our institutional clients predominantly bought Bitcoin in 2020, a growing number also took positions in Ethereum,” reads the report.

The second-largest cryptocurrency, which has been more volatile than Bitcoin, is seen by Coinbase’s institutional clients as a “decentralized computing network that shares Bitcoin’s properties of trustless store and transmission of value, along with more flexible programmability via smart contracts.”

Ethereum’s evolving potential as a store of value and its status as a digital commodity required to power transactions on its network are the clients’ reasons for owning the digital asset. However, the community needs to settle on a clearer and simpler narrative, which Coinbase says is both a challenge and an opportunity for Ethereum.

Decentralized Finance (DeFi) is also seen as one of the most important growth developments for the Ethereum network as Coinbase clients believe this sector has “potential to reinvent financial products and services.”

Coinbase hasn’t yet seen significant investment in DeFi assets from institutional clients, except for “a select group of venture capital funds and family offices.”

DeFi remains retail-driven; just like the early days of Bitcoin adoption, Coinbase added maturity would take time.

“We can imagine a future in which institutional investors can access both traditional and decentralized financial services through trusted, regulated onramps,” which may be difficult to imagine today given the relatively small size of the DeFi market, a bottom-up trend that is occurring out of view for most of Wall Street.

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Author: AnTy

Leading Japanese Messaging App, LINE, Launches Crypto Lending Services on BITMAX Exchange

LINE, the Japanese messaging app giant, is launching crypto lending services for its clients through its subsidiary crypto exchange, BITMAX. The news, which was first reported by CoinDesk Japan, highlighted that BITMAX users will be now be permitted the option of lending their crypto holdings to the exchange service, with BTC, XRP, ETH, BCH, or LTC as the underlying collaterals.

This service is set to function similarly to bank loans; only instead of interest, the lenders will receive a ‘rental fee.’ LINE filed a statement with the Tokyo Stock Exchange on Oct 9, noting the firm will be running a campaign up to Oct 30, where users could earn as much as a 10% rental fee for lending their digital assets. This should start accruing from the day the rental is deposited.

With LINE’s 80 million local outreach, the new lending services become bullish to the Japanese crypto market. The country which has had historically low-interest rates will probably benefit from the exposure in crypto volatility, although at the cost of accommodating the high risk.

LINE made it’s crypto debut onto the Japanese market last year after being granted an operational license by the country’s Financial Services Agency (FSA). They recently launched a blockchain development platform and digital wallet as part of scaling LINE’s crypto services footprint.

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Author: Edwin Munyui