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

Grayscale’s Record-Breaking Hat-trick, Q3 Inflows Rakes in Over $1 Billion in Investment

Q3 was the best quarter ever for Grayscale Investments, which serves institutional investors, family officers, and private investors.

The largest digital asset manager took in more than $1 billion in new investment in its largest-ever quarterly inflows, marking it the third-straight quarter when the asset manager broke its own record for inflows.

As per the firm’s report on Wednesday, Grayscale now has $5.9 billion in assets under management (AUM).

This growth came despite the global economy taking a nosedive in 2020, and the price of Bitcoin recording gains of only 18%.

Like every time, the leading digital asset remained the most popular cryptocurrency. Grayscale Bitcoin Trust (GBTC), the company’s largest product, saw $719.3 million in new inflows in Q3.

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The persistent demand for GBTC has the company becoming one of the fastest-growing investment products in the world. It is further increasing the appetite for Grayscale’s other products.

Ethereum saw a record growth with 17% of the investment in Grayscale Ethereum Trust (ETH) from new institutional investors.

This week, Grayscale announced that ETHE is now an SEC reporting company that helped in its price surge.

“We believe in a future where multiple digital assets coexist,” said Michael Sonnenshein, managing director at Grayscale Investments. “We believe that there is a future state where bitcoin, Ethereum, and other digital currencies coexist as part of the digital currency cohort” and are “used for different things,” he said.

Grayscale’s Bitcoin Cash, Litecoin, and Digital Large Cap products also saw over 10x growth in inflows quarter-over-quarter.

Interestingly, for the first time, Grayscale found that a majority of its investors, more than half at 57%, were investing at least two of its crypto investment products, up from 44% a year ago and 37% when the company was first launched in 2012.

More institutions are surely coming, which are not only the primary source of investment capital at 81% in Grayscale, but they also increased their average allocation to $2.9 million from the previous quarter’s $2.2 million.

What is more interesting than this “consistent and significant growth” is what has been behind it.

Besides the digital assets outperforming major indices YTD, investors are interested in them because of the ongoing stimulus concern. With more significant fiscal stimulus expected in Q4, “more investors may look to digital assets for yield in this paradigm of monetary inflation,” it says.

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Author: AnTy

Currencycloud Partners with Ripple to Leverage RippleNet for Efficient Cross-Border Payments

Currencycloud – one of the global payment processing giants – has become the latest member of the RippleNet family and would help ripple in expanding its cross-border remittance services further. The B2B payment processing giant is known to work with several small and medium business entities before joining the RippleNet.

RippleNet, a venture of Ripple blockchain, is known for its cross-border remittance solutions and has partnered with hundreds of banks, financial institutions, and payment processing giants to avail fast and cheap cross-border transactions using XRP as liquidity.

RippleNet aims to be the payment processor for a rapidly-changing world and is banking on the wave of globalization moving from west to east.

Asia is one of the footholds for the decentralized tech provider firm, and they have made aggressive expansion in the region with new members and services regularly.

Currencycloud, which has been working with Small and Medium Enterprises (SME), aims at expanding its service to help its new partners, especially in a world where traditional banks often overlook SMEs for big MNCs. The payment processing giants hope to reach new firms and SMEs who are deprived of the banking facilities up until now.

Ripple’s Client List Grows to 350

Ripple, which calls itself a decentralized tech company, ventured into remittance services through RippleNet a few years back, and even though the XRP token hasn’t managed to see a price break though, in a very long time, the cross-border solutions have garnered a lot of popularity over the years.

Ripple now boasts over 350 clients and recently updated its official website to include its new partners.

Mike Laven, CEO of Currencycloud, commented on their recent association with RippleNet and hoped the partnership would be mutually beneficial, helping them in expanding their network to new parts of the world. He said:

“Currencycloud is all about bringing clarity, speed, and value to the traditionally opaque, costly, and time-consuming issues associated with cross-border payments, particularly for SMEs that have historically been under-served by traditional banking. Ripple’s solution will help us to extend our network to new parts of the world, removing more barriers to payments for our clients.”

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Author: Hank Klinger

Maker Governance Vote Approves Kyber Network (KNC) and 0x (ZRX) As New Collateral Assets

KNC (Kyber Network) and ZRX (0x) have become the latest members of the Maker family. MKR holders, through a community vote, approved both KNC and ZRX tokens to be the two new collateral assets that now allow the opening of Maker Vaults in a goal to create Dai tokens. The addition and advantages of these two new tokens as collateral assets went through extensive discussions among community members, before the executive vote on the official Maker forum.

The popularity of defi is soaring with each passing day, and many other tokens that cannot be collateralized are converting its value in ERC-20 tokens to gain access to defi—for example, the Wrapped Bitcoin, an ERC-20 token based on Bitcoin. Thus, the addition of new tokens would only expand the Maker ecosystem.

Both KNC and ZRX tokens went through rigorous risk assessment and risk parameters with the results listed below:

KNC Risk Parameters

  • Liquidation Ratio: 175%
  • Liquidation Penalty: 13%
  • Dust: 20 Dai
  • Bid Duration: 6 hours
  • Auction Lot Size: 50,000
  • Risk Premium: 4%
  • Minimum Bid Increment: 3%
  • Debt Ceiling: 5 million
  • Max Auction Duration: 6 hours

ZRX Risk Parameters:

  • Risk Premium: 4%
  • Max Auction Duration: 6 hours
  • Bid Duration: 6 hours
  • Dust: 20 Dai
  • Liquidation Ratio: 175%
  • Liquidation Penalty: 13%
  • Debt Ceiling: 5 million
  • Auction Lot Size: 100,000
  • Minimum Bid Increment: 3%

The addition of these two tokens would only help in progressing the already growing adoption of defi. It also proves that the defi ecosystem can put any asset as collateral as long they can become tokenized. The Maker governance comprising of members in possession of MKR governance token also plays a significant role in approving any particular token that can be collateralized.

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Author: Rebecca Asseh