36% Hedge Funds and 32% Managers with $10B in AUM Expect to Increase Crypto Exposure

36% Hedge Funds and 32% Managers with $10 Billion in AUM Expect to Increase Crypto Exposure: EY Survey

As the industry better understands the asset class, “the alpha-generating opportunities will certainly create more incentive for alternative fund managers to participate in this strategy.”

Only 1 in 10 managers currently have exposure to cryptocurrencies, according to a survey published on Monday by one of the big four accounting firms Ernst & Young. But the good thing is firms are planning to increase their exposure in the coming year.

While 10% of the hedge fund managers have exposure to crypto, a mere 4% of the private equity managers are currently reporting crypto allocations through diverse means such as crypto derivatives, listing funds, and crypto companies. AUM dedicated to crypto also remains small, at 1%-2% for hedge fund managers.

But in the next one to two years, more than 20% of institutional investors and 25% of hedge fund managers said they expect to increase their exposure to cryptocurrencies.

Among these investors, the largest managers are most likely to increase their exposure, with 36% of hedge fund managers that have over $10 billion in AUM and 32% of managers with $2 billion – $10 billion in AUM reporting that they expect to increase their crypto AUM, as per the report.

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When it comes to barriers to investing in crypto, the number one was that crypto does not align with their investment strategy, followed by volatility, regulatory uncertainty, lack of understanding of crypto, and immature market infrastructure.

Tax implications, lack of suitable investment opportunities, crypto not being ESG-friendly, and crypto being a bubble were the lowest factors preventing them from investing in crypto assets.

Greenwich Associates conducted the survey from July to September 2021 that polled 264 alternative institutional investors collectively holding about $5 trillion.

“2021 appears to be an inflection point where this asset class is gaining the attention of all institutional alternative fund managers,” notes the study. It further adds that alternative fund managers have become more active participants in crypto assets, drawn by uncorrelated returns and continued investment in institutional-grade infrastructure to support the space.

“As the industry and regulators continue to better understand this asset class, the alpha-generating opportunities will certainly create more incentive for alternative fund managers to participate in this strategy.”

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Author: AnTy

Morgan Stanley Head of Emerging Markets: Millennials Prefer Bitcoin (BTC) To Gold

  • Expect heightened inflation as early as 2021, Morgan Stanley’s executive states.
  • Millennials prefer Bitcoin to gold in investments.

Morgan Stanley’s executive states Bitcoin (BTC) and gold are favorable options for investors to hedge against the central banks’ expansionary monetary policies. Speaking on a First Move with Julia Chatterley’s interview on CNN, Morgan Stanley’s head of emerging markets and chief global strategist, Ruchir Sharma, further explained that when it comes to asset investing, more millennials are showing an affinity to the digital gold than its physical counterpart.

As global health teams work to kill off the COVID-19 pandemic, central banks rushed to their printers to print money to stimulate their economies. According to Sharma, the increased monetary expansion policies by the central banks will cause inflation in the economy – predicting the United States could experience it as early as 2021.

The money printing, expansionary monetary, and fiscal policies are setting investors towards looking for more stable assets to invest in, he continued.

“There is this lingering feeling out there that given what central banks are doing in terms of printing so much money, there is a search for alternative assets.”

The seasoned investor advised investors to look at gold as a possible investment asset to cover themselves from the impending inflation. He claims having “about 5% of gold in your portfolio is not a bad idea.” However, for the younger generation and more risky investors, cryptocurrencies are their choice of an investment asset.

“If you’re a bit more adventurous — and I guess it’s more to do with demographics — then obviously search for Bitcoin and other cryptocurrencies. […] I think some of the older [investors] are still buying gold, and millennials are buying more of the Bitcoins and the cryptocurrencies.”

According to a report on BEG in March, over $970 billion in wealth could move into the crypto market as the generational shift happens in the U.S.

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Author: Lujan Odera

Last Week’s Top Bitcoin and Cryptocurrency News – Top Stories From December 15-22

  • Is it realistic to expect crypto to up surp the fiat system by 2030?
  • China’s mining dominance does not make Bitcoin network centralized
  • Mark Cuban’s latest put-down of Bitcoin is perfectly valid, for now
  • QuadrigaCX punters call for exhumation of the body of the deceased owner

Banks’ Unlikely Optimism For Cryptocurrencies Is Born Out Of Resignation

The latter half of this year, ever since Facebook made official their Libra project in June, has seen financial regulators around the world scrambling to come up with ways to stave off a rapidly accelerating monetary phenomenon that defied all existing policies.

If we’ve learned anything from their efforts, it’s that we’re not going to have a uniform legal framework for cryptocurrencies. It quickly became apparent to even the most stiff-necked fogey that this new class of money was untameable. There was no handbook for lawmakers to draw from, which has led to them taking several interesting regulatory tacks.

Busied with a farcical impeachment inquiry, we may not soon find out the US approach, but we know that China, Russia, and India have undertaken plans to fob off a digital version of fiat as cryptocurrency. A less devious scheme was ratified by Germany at the end of last month, enabling banks to offer cryptocurrency custodial services. FINMA-licensed SEBA Bank AG, a crypto bank in Switzerland, was launched in November and is in the process of expanding to nine overseas jurisdictions.

It’s hardly surprising then that, resigned to its inevitability, banks are now happy to view cryptocurrency favorably, but this is an uneasy alliance of convenience sought in a quest to survive an impending paradigm shift and retain monetary sovereignty, through either issuing digital fiat currencies or offering crypto banking services.

Deutsche Bank published a predictive report for the decade ahead titled “Imagine 2030” which tips cryptocurrencies to replace fiat money by 2030. The paper inspired a heated social media debate last week. Research Strategist Jim Reid, who earlier in the year described the European financial system as “vulnerable”, wrote that the forces holding together a fragile fiat system could unravel over the next decade and in such a scenario, demand for alternate currencies could take off.

The report argues that decades of low labor costs, ever since the US withdrew from the Bretton Woods system in 1971 and instituted fiat money, has enabled central banks to resort to QE to stimulate the economy each time, relying on stagnant labor costs to offset such policies from being inflationary. With the supply of labor from key global regions expected to decline in the next decade, labor costs will begin to rise, leaving central banks in a dilemma between admitting of higher inflation or ramping up interest rates. Given the debt levels globally, the latter would be tantamount to fiscal suicide.

Further in the report, Marion Laboure, Harvard lecturer in Economics and Finance, predicts an obsolescence of plastic cards from broader adoption of mobile payments and expects cryptocurrency to be at the forefront of this change if it can achieve price stability and legitimacy in the eyes of regulators and forge alliances with key stakeholders and retailers to bridge the gap for consumers.

Earlier this month, a study by California-based stockbroker Charles Schwab found that Bitcoin, specifically the FINRA-approved Grayscale Bitcoin Trust (GBTC), was the fifth most popular investment among millennials, who apportioned more of their wealth towards the GBTC investment trust than shares of Berkshire, Disney, Netflix, and Microsoft. Various other such studies have also indicated that millennials, who will be the dominant generation in ten years, are more disposed to investing in Bitcoin than Gen X and baby boomers.

While on the face of it, these are positive indicators and while it’s easy to get excited by this new-found optimism for cryptocurrency from central banks and legacy services, if banks have their way, crypto will be subsumed into a dysfunctional debt-financed economic model rather than replace it. Anything but direct user adoption of Bitcoin as peer-to-peer money waters down the concept reduces it to merely another fiat-correlated tradable asset and exposes it to the many Machiavellian machinations which plague the current outmoded system.

China’s Organic Hash Rate Hegemony Should Be Cause For Action, Not Worry

A research paper published by UK based digital asset management firm CoinShares last Friday revealed some interesting data regarding Bitcoin mining. Titled “The Bitcoin Mining Network“, the biannual report sheds light on the distribution of hash rate, cost of mining, consumption, and source of electricity powering the network.

Among the findings was the revelation that a lion’s share of the Bitcoin network hashrate emanates from China. This wasn’t one of those instances where statistical insight dispelled widely held suspicions, yet that didn’t stop people from using it as a stick to beat Bitcoin with. Although the report is largely extrapolated and deduced from accessible data and details plenty of other positive findings, news outlets focused exclusively on China’s hash rate share of 65%, up 5% since June, with 54% of global hash rate estimated to be domiciled in the tech hub of Sichuan.

With China’s Bitmain and MicroBT being the biggest ASIC manufacturers, cheaper cost of electricity and readily adaptable renewables infrastructure, China’s burgeoning influence on the industry is very much organic. This is further attested by 31% of the other 35% of network hashrate coming from higher temperate and frigid climes of Canada, Scandinavia, Russia and regions with high renewables redundancy such as Kazakhstan, Georgia, and Iran. Ultimately, the mining industry will flock to regions that make the most economic sense.

The total electricity draw of the network was estimated to be approximately 6.7 GW, a 43% rise from June this year despite an almost 50% price drop. The annualized consumption is estimated to be approximately 61 TWh. By comparison, the annualized electricity consumption for gold mining is estimated to be 135 TWh, more than twice that of Bitcoin. It should also be noted that, unlike gold, which pollutes the physical environment during extraction, Bitcoin mining has no direct impact on the physical environment.

The study also dispels the oft-mooted argument that Bitcoin’s energy consumption makes a significant dent on the environment, estimating the share of renewables used for mining to be 73% globally, with Chinese miners, impressively, utilizing just 11%, one-sixth of their 65% network share, of fossil/nuclear sources for their mining operations. Non-Chinese regions have a lot of catching up to do in this regard as nearly half of their power, 16% out of 35%, is sourced from fossil/nuclear sources.

Before complaining about China’s mining dominance making the network centralized, the rest of the world needs to address issues such as manufacturing mining equipment internally rather than importing it from China and fostering a power infrastructure that focuses on affordable renewables. Until such time, China’s hash rate share will organically continue to scale new highs.

Crypto Community Cannot Take Selective Umbrage With Legitimate Misgivings

Investor Mark Cuban of Shark Tank has had a lot to say about Bitcoin over the years and not a great deal positive. It is therefore understandable that the crypto community doesn’t care much to examine the validity of his criticisms. But his latest diatribe particularly seems to have struck a nerve, perhaps because it rings uneasily true for flag-waving Bitcoin firebrands.

Following up on earlier comments made in September, Cuban doubled down last week that he saw no future scenario where Bitcoin became a reliable currency,

“No chance. Not because it can’t work technically, although there are challenges, it could, but rather because it’s too difficult to use, too easy to hack, way too easy to lose, too hard to understand, too hard to assess a value,”

and with so many rival crypto assets, “too much work for people to know why BTC over everything else.”

It’s easy to dismiss these comments as those of someone whose interests are not best served by Bitcoin’s success but that’s not the case here. Dallas Mavericks, an NBA team owned by Cuban, started accepting Bitcoin for payments in 2015 briefly and resumed allowing the option of Bitcoin payments for tickets and merchandise in August this year. Cuban says he’s happy to accept Bitcoin payments as “my job is to make it easy for our customers to do business with us,” but added that few want to use it, with only 5 customers taking up the option in the last four months.

When the Bitcoin brigade on Twitter challenged Cuban over his remarks, arguing that his views were outdated and the ecosystem has evolved and asked him what it would take to change his mind, he said he’d change his mind when there’s actual usage by consumers who opt for Bitcoin over other options,

“You don’t have to convince me. You need to convince your neighbors. If they don’t see the value, that is the problem you need to solve. I’m not opposed to BTC. I understand every argument being made. The world is littered with great products/services that failed for lack of consumers.”

Let’s be clear that Cuban is not a hater and Jack Dorsey, who’s often feted a rabid proponent of Bitcoin, its open-source ethos and decentralization, made very similar comments regarding Bitcoin not being efficient as a currency a couple of months ago without inviting nearly as much backlash. Cuban being branded ignorant or dated in his views for saying the same thing reeks of distasteful ad hominem that should be firmly discouraged. Instead, when criticisms are valid, regardless of their source, they should be engaged with a view to dialectical discussion on possible solutions.

Without Recourse To Restitution, QuadrigaCX Users Seek Solace In Closure

Lawyers representing customers of defunct Canadian exchange QuadrigaCX filed a request to the Royal Canadian Mounted Police asking for the exchange’s deceased owner, Gerald Cotten’s body to be exhumed and a post-mortem autopsy to be performed “to confirm both his identity and the cause of death.”

Since rising to prominence as the largest Canadian cryptocurrency exchange following Bitcoin’s frenzied price surge in 2017, QuadrigaCX has been mired in numerous controversies and even continued operating without a bank account using third-party payment processors. Earlier this year, it was revealed that Cotten had been running the business without even an office out of his laptop at home.

In December last year, while on a tour of India with his wife Jennifer Robertson, Cotten died in Jaipur from complications related to Crohn’s disease. Everything we’ve learned from investigations since has been suspicious, to say the least. Cotten, at age 30, had signed his will just twelve days before he reportedly died, leaving Robertson his entire $7.5 million estate.

At the time of Cotten’s death, the exchange owed 115,000 of its users a total sum of $190 million. Robertson claimed that these funds were held in the exchange’s cold wallet in Cotten’s laptop and only Cotten had the private keys to access these funds. Various blockchain analytics firms have been unable to find evidence of such a cold wallet to corroborate this story.

Making this even more likely as a long con were revelations by auditor Ernst & Young that Cotten used users’ funds on his exchange to trade under aliases and transferred funds to other exchanges to trade on his accounts. Chainalysis even went so far as to suggest that the funds claimed to be locked up in Cotten’s cold wallet never existed.

The circumstances of Cotten’s death and various revelations since fully justify the exhumation request. It won’t make things right for those who trusted a jury-rigged exchange with their money but it might afford them some much-needed closure. Now while we’re on the topic of digging people out of the grave, could we also exhume Jeffrey Epstein?

Trading Insights

Defying a bearish engulfing from the week prior, BTC/USD closed last week’s session at 7509 in a promising hammer pattern, rallying towards the weekend to post a 5.5% gain. Despite the promising turn, there is as yet no sign of a strong rally beyond the range-bound levels from the last four weeks.

The longer a chart pattern develops, the greater the momentum upon breakout. Daily chart patterns spanning several months are rare in crypto markets, so while it’s frustrating to see sluggish price action, rest assured there will be nothing sluggish about a breakout from a bullish six-month falling wedge pattern, were it to eventuate.

Despite Ichimoku conversion line shaping to cross above the baseline, while the price remains under the cloud, this is not a valid bullish signal. While RSI shows a slight bullish divergence from price, volume oscillator diverging bearishly as price trends upward indicates a lack of momentum.

The 4-hour chart backs this up, with ADX facing resistance after briefly trending and directional indices sharply reconverging immediately following a bullish divergence, further corroborated by a similar bearish MACD turn. A decisive break below 7200 could lead to another retest of 6600 levels.

It was a disastrous week for altcoins as Ether (ETH/BTC) broke support at 0.02 BTC to slide 12.5% all the way to the next support level at 0.0175 BTC. Ripple (XRP/BTC) fared worse, falling 16% from 3060 sats to 2577 sats. With leading altcoins tumbling, Bitcoin’s market dominance rose significantly from 66.4% to 68.7%.

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Author: Lamps T

Tron’s BitTorrent Shares Details of Fifth Airdrop as Weekly TRX Report Touches on Key Developments

Tron’s BitTorrent Shares Details of Fifth Airdrop as Weekly TRX Report Touches on Key Developments

The BitTorrent token by Tron has climbed the ranking ladder of the CoinMarketCap. We should expect to see the fifth airdrop by the foundation; this should be by June 11th.

The holders of the token will be able to receive a part of the 990,000. On February 11th the platform organized its very first airdrop, at this time the Tron block height was at about 6.6 million.

During this period, about 1.1% of their total supply was airdropped, this is about 10.890 billion BTT, and from this, the company announced there should be another 12 more airdrops to expect.

‘’Are you ready for our 5th #airdrop? On June 11th at 00:00 UTC we will reward TRON $TRX holders with 990,000,000 $BTT. Learn more about our airdrop program, and the exchanges & wallets supporting it!”

The ecosystem is welcoming the new developments to help increase adoption of the token

The BTT ecosystem is excited about the latest developments that are taking place as it will increase the adoption of the token. The company has ensured they have made the token available on BitTorrent and uTorrent for their users.

BitTorrent Speed is another application that will be able to see the launch being done very soon. As a user, you will be able to gain the BTT in exchange for bandwidth and seeding, this will go a long way in enjoying faster downloads.

However, the application was lacking adequate clarification on how users will be able to earn more BTT; thus, it did not impress the users with the promised speeds.

As a result, the BTT fell by about 7.68%, which got valued at $0.011, having a market cap of about $250 million. It was noted the 24-hour trading was about $55.111 million, as this had fallen by 25.59% in just the past week and this continued dropping by 0.49% at press time.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Bitcoin Exchange Guide News Team