“Stablecoins Must Be 100% Backed By Cash” And “Only Be Issued By Depository Institutions”

“Stablecoins Must Be 100% Backed By Cash” And “Only Be Issued By Depository Institutions,” Says Sen. Cynthia Lummis

A crypto supporter, Wyoming Senator, has concerns about stablecoins not being fully backed “in a transparent manner.” Meanwhile, the Fed chair acknowledges they shouldn’t wait too long on CBDC as “there is a sense of urgency” in terms of digital currencies.

Philadelphia Federal Reserve Bank President Patrick Harker said on Wednesday that he supports the beginning of tapering of the central banks’ asset purchases before the year is over.

“I would be supportive of moving that as soon as November, that we would start that process, but that is up to the full committee,” Harker said at a virtual event, adding that he would like to finish the tapering by the middle of 2022 and then the potential rate increases would be subject to where the economy is.

During his speech, Harker also said that some stablecoins and central bank digital currencies (CBDC) could be used for payments in the future but added that cryptocurrencies are speculative investments.

On the topic of stablecoins, an ardent crypto supporter Senator Cynthia Lummis said they should be backed by cash and may need to be issued by banks. Her concern is that stablecoins might not be not fully backed “in a transparent manner.”

Lummis, in a speech Wednesday on the Senate floor, said,

“Stablecoins must be 100% backed by cash and cash equivalents, and this should be audited regularly.”

“It may be the case that stablecoins should only be issued by depository institutions or through money-market funds or similar vehicles.”

“There Is A Sense Of Urgency”

This week, US Fed Chair Jerome Powell, meanwhile, yet again talked about the digital dollar but didn’t say anything new.

Powell said the central bank is still evaluating whether it should issue its own CBDC and, if so, in what form. He reiterated that it is more important to make “well-informed” decisions than to be fast with a digital dollar. He did acknowledge that the Fed should not wait too long as “there is a sense of urgency” in terms of digital currencies.

Speaking virtually at the ECB Forum on Central Banking, Powell said it is important to determine that such an asset would “serve the public well.”

The Fed is currently working on a paper on which it seeks comments from elected representatives, Powell added.

A Boston Fed official also said on Wednesday that the first phase of a multi-year research project they have been doing with the MIT on the technology that could be used for a digital dollar is nearly done and could be released in the coming months.

This research, dubbed “Project Hamilton,” is separate from the paper Powell has been talking about though both will be released over the summer.

During a virtual panel focused on payments, Boston Fed senior vice president Jim Cunha said the initial findings from the research would include open-sourced code that could serve as a potential model for a digital dollar and will also focus on the system’s ability to handle a high volume of transactions.

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Author: AnTy

Swiss Companies to Offer Institutions Tokenized Assets Built on Tezos (XTZ)

Swiss Companies to Offer Institutions Tokenized Assets Built on Tezos (XTZ)

A trio of Swiss-based crypto-friendly banks has announced plans to offer regulated tokenized assets using the Tezos blockchain. The banks are Crypto Finance, InCore Bank, and Inacta.

Regulated Trio Team Up with Tezos to Create Tokenized Assets

Tezos was chosen because of its unique blockchain. The network is self-upgrading, which enables the activation of essential consensus updates without splitting the network.

The banks plan to integrate financial products for their institutional clients using a new token standard on the Tezos blockchain.

The new standard dubbed “DAR-1” was created based on Tezos’ FA2 design. The DAR-1 token standard enables smart contracts necessary to support the modern financial markets in compliance with regulations.

Crypto Finance would serve as the infrastructure provider on the project, while InCore Bank would handle the tokenization using the new DAR-1 token standard, which Inacta developed.

In addition to the joint partnership, InCore Bank has also introduced institutional-grade storage, staking, and trading services for XTZ, the native cryptocurrency of the Tezos blockchain.

This would make InCore Bank the first Swiss business-to-business bank to launch staking services for the Tezos network, unlocking new yield earning products for institutional customers.

The XTZ staking with InCore Bank can be initiated directly via embarking, unlike the traditional staking method. Clients will receive periodic statements regarding staking payouts.

Tezos is quite popular in Switzerland, which is not surprising as the network’s founders, the Tezos Foundation, is based there. Last year, Swiss-based digital asset firm Sygnum Bank launched trading and custody services for Tezos.

More recently, Crypto exchange Gemini announced the listing of the Tezos token on its Gemini Earn platform. Gemini Earn is a passive income program where tokens are locked with world-class security and interest accrued daily.

Tezos Rolling Out Upgrades On Network

In recent times Tezos has welcomed integrations from different protocols as it continues to upgrade its network.

Tezos is an open-source proof of stake blockchain network that powers applications and tools behind leading financial institutions, central banks, NFTs, DeFi platforms, and so on.

The network’s seventh successful upgrade called Granada went live this year. Granada contains numerous bug fixes and minor improvements for the Tezos protocol. The update cuts block times in half and decreases smart contract gas consumption by 3-6x. It also introduces liquidity banking.

The upgrade, which is the third to occur this year, was named after a Spanish city. Granada goes live less than three months after the previous one, dubbed Florence.

The Florence upgrade was the update that doubled the size of maximum operations (from 16kB to 32kB), reduced gas in smart contract execution. It streamlined the amendment process by deactivating unused test chains on the Tezos protocol.

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Author: Jimmy Aki

40% of Institutions Personally Invested in Bitcoin; Only 10% Trading Crypto in their Investment Firms

40% of Institutions Personally Invested in Bitcoin; Only 10% Trading Crypto in their Investment Firms

Only 10% of institutional investment firms are trading cryptocurrencies, reported JPMorgan. Out of those firms who did not invest, 80% do not expect to start investing or trading in crypto.

Interestingly, when it comes to personal investments, 40% of investors said they were active in crypto assets.

These numbers are found in a survey conducted at JPMorgan’s Macro, Quantitative and Derivatives conference attended by about 3,000 investors from around 1,500 institutions.

95% of investors surveyed believe fraud in the crypto market is “somewhat or very much prevalent,” and four-fifths of them expect regulators to get tougher on the asset class.

Nearly half of investors labeled the emerging asset class as “rat poison squared,” agreeing with billionaire investor Warren Buffett while another 16% thought it was a temporary fad.

The survey further found that they expected the US benchmark stock Index to trade between 4,200 to 4,600 points by the end of 2021. Currently, at 4,241.84, S&P 500 made a new all-time high on Tuesday at $4,254.68. They also expect a dial back in central bank stimulus and inflation as key market risks.

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Author: AnTy

Financial Institutions ‘Should be Concerned’ of Competition from Crypto/DeFi Businesses: Mark Cuban

Financial Institutions ‘Should be Concerned’ of Competition from Crypto/DeFi Businesses: Mark Cuban

Billionaire Mark Cuban is talking about yield farming now, which is a core feature of most decentralized finance (DeFi) projects.

He explains how instead of starting a business and then hoping to make enough revenue like in the traditional world, in the crypto/DeFi space, they sell tokens to raise capital, reward Liquidity Providers and validators, and build communities that replace layers of bureaucracy.

This makes it “a model for future technology businesses and possibly all businesses,” he said.

When it comes to the valuation of these projects, Cuban shares he looks for current revenues, growth rates, defensibility, the strength of the community, and if they can continue to grow as fast or faster than the crypto industry as a whole.

Crypto is also decentralized in its governance where no one owns majority control, not only because of the ethos of DAOs but also because it doesn’t involve the

“ABSOLUTE STUPIDITY of our regulators forcing some of the most impactful and innovative entrepreneurs of this generation to foreign countries to run their businesses.”

The Brilliance of Crypto/DeFi

In a blog post on Sunday on the Dallas Mavericks site, Cuban talked about the DeFi project Polygon (MATIC) in which he recently invested.

An Ethereum layer 2 solution, Polygon basically provides tools that enable transactions using their Ethereum/Solidity smart contracts to take place as quickly and inexpensively as possible while still being able to bring in more money than they spend noted the Shark Tank investor. MATIC 4.62% Polygon / USD MATICUSD $ 1.55
$0.074.62%
Volume 1.62 b Change $0.07 Open $1.55 Circulating 6.29 b Market Cap 9.75 b
10 h Financial Institutions ‘Should be Concerned’ of Competition from Crypto/DeFi Businesses: Mark Cuban 3 d Polygon And 0x Team Up to Devote $10.5 Million Into Attracting New Users & Developers 6 d Layer-2 Scaling Solution Polygon Records Continued Growth, But May Not Bring Fees Down on Ethereum
ETH 2.65% Ethereum / USD ETHUSD $ 2,581.97
$68.422.65%
Volume 27.78 b Change $68.42 Open $2,581.97 Circulating 116.29 m Market Cap 300.26 b
5 h Ethereum (ETH) Price Trading Analysis June 14; Market Outlook Is Slightly Bearish, Here’s Why 9 h ETH/BTC Continues its Descent as Fees Drops Under $3, ConsenSys Launching MetaMask Institutional 10 h Long-Term Chart Clearly Shows Bitcoin Still in an ‘Uptrend’ But Biggest Macro Headwinds Looms Over Price

However, blockchain-based businesses diverge quickly from traditional software, and instead of building their businesses exclusively on a cloud computing platform, their businesses are decentralized.

Cuban finds it “brilliant” that here third parties like validators or miners put up their own capital to provide resources to support the network platform in exchange for rewards in the token of that network, which are created at “a near zero cost,” unlike centralized businesses in the traditional world where they would have had to raise millions and more.

“Where a crypto based business competes with a traditional business, the crypto business may have a significant cost of capital and cost of operations advantage. There are a lot of financial institutions that should be concerned.”

DeFi businesses like Polygon build their transaction volumes and fees by having enough widely and heavily used applications. And one-way projects like Polygon try to create a network effect is via DeFi based businesses.

Regulators Need to be Supportive

Here, Cuban talks about decentralized exchanges (DEX) whose “brilliant” part is liquidity providers (LPs) that put up the capital.

He has been actually testing out Polygon’s DEX QuickSwap, where he is a small LP where he is earning a percentage of the transaction volume for a particular pool. Cuban also provides liquidity on Bancor Network, where he gets rewards in the native BNT token. QUICK -4.01% QuickSwap / USD QUICKUSD $ 486.06
-$19.49-4.01%
Volume 5.29 m Change -$19.49 Open $486.06 Circulating 159.75 K Market Cap 77.65 m
BNT 2.70% Bancor / USD BNTUSD $ 4.06
$0.112.70%
Volume 61.97 m Change $0.11 Open $4.06 Circulating 210.11 m Market Cap 853.86 m
10 h Financial Institutions ‘Should be Concerned’ of Competition from Crypto/DeFi Businesses: Mark Cuban 3 w Cryptocurrency Exchange ShapeShift Reveals Gas Fee Mitigation Functionality With FOX Token Rewards 3 w DEX’s Record A New ATH in Volume; Decentralized Exchanges Hit First $100 Billion in May

“Have enough LPs and the exchange is far more capital efficient than a similar traditional exchange business and I get to make some money.”

Cuban also covered AAVE, which “looks like a bank” but is nowhere even close to it; rather, he described it as

“a completely automated, permissionless platform where there are no bankers, no buildings, no toasters, no vaults, no cash, no holding your money, no forms to fill out, no credit ratings involved.”

While all of these features make crypto the future, not every crypto blockchain or DeFi project will work. Not to mention, “crypto is brutally competitive,” still Cuban says he will choose crypto over traditional businesses.

But Cuban has issues with the regulators with “politicians shitting on the innovations crypto is fostering,” unlike the early days of the internet when innovation and entrepreneurs were supported.

“Hopefully this changes quickly or we will lose the next great growth engine that this country needs.”

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Author: AnTy

Investment Bank Cowen to Custody Crypto for Institutions, Signs Partnership With PolySign

Investment Bank Cowen to Custody Crypto for Institutions, Signs Partnership With PolySign

Renowned investment bank Cowen Inc is set to make its foray into the cryptocurrency market.

The firm would offer hedge funds and other asset managers crypto custody service through a partnership with fintech company PolySign Inc, per an official announcement.

Cowen Leads PolySign’s Funding Round

Cowen said that its digital asset investment division would provide crypto custody services to institutional clients, helping them seamlessly secure, access, and leverage Bitcoin and other cryptocurrencies in their portfolios.

As part of the partnership, the bank invested $25 million into PolySign, which is a part of the $53 million funding raised for the firm recently. Other investors include Blockchain.com, Race Capital, Sandia Holdings, and PilotRock Investments.

The custody solutions for the digital assets will be provided by Standard Custody & Trust Company, a subsidiary of PolySign. Standard recently received a trust company charter from the New York State Department of Financial Services.

The CEO of Cowen, Jeffrey Solomon, noted that the heightened demand for crypto assets had intensified the importance of custody service, especially since there is a lack of clear regulations for asset managers. Solomon added,

“The demand is clearly here. We’re going to be able to help a lot of our institutional clients get over the hump and start trading digital assets in the not-too-distant future.”

Founded in 1918 and headquartered in New York, Cowen holds almost $12 billion in assets under management. It is a diversified financial services firm that offers investment banking services, equity, and credit research services.

Cowen also offers sales and trading, prime brokerage, global clearing, commission management services, and actively managed alternative investment products.

Surging Crypto Prices Luring Investment Firms To Take A Closer Look At Crypto

The recent surging crypto prices seem to be luring hedge funds and investment managers into entering the market. Due to the high demand for crypto, wall street banks want to help their clients gain access to digital assets.

Prime examples of investment banks with unveiled plans to help their clients get exposure to the crypto markets are Goldman Sachs and Morgan Stanley.

However, Goldman and Morgan’s offerings differ from Cowen’s because they only offer indirect access to crypto through futures trading and mutual funds respectively. On the other hand, Cowen plans to actually provide custody for the underlying assets, which no major Wall Street firm has tried before.

Cryptocurrency exchange Gemini has also been winning in the crypto custody business. As of May 11, the exchange had reported about $30 billion worth of assets under management. Gemini works with the likes of BlockFi, CoinList, and WealthSimple.

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Author: Jimmy Aki

Digital Yuan Is Closing In On A Full Release As Major Institutions Start Using The CBDC

Digital Yuan Is Closing In On A Full Release As Major Institutions Start Using The CBDC

  • Alibaba’s Ant Group partnered with PBoC to develop China’s CBDC report.
  • The digital yuan could overpower the influence of WeChat Pay and AliPay in the future.
  • More institutions are adopting the CBDC as a form of payment.

Ant Group, a wholly-owned subsidiary by Alibaba, has been partnering with the People’s Bank of China (PBoC) on the central bank digital currency, popular as CBDC, a report from South China for the past four years China Morning Post reads.

This information was revealed over the weekend at a Digital China Summit in Fuzhou. MYbank, a mobile fintech app by Ant Group, was the intermediary to distribute the digital yuan since 2017. Additionally, the central bank’s main research institute, China Digital Currency Institute, picked up the app in mid-2019 to choose consumers to spend, pay and receive the CBDC.

“Ant Group, together with MYbank, will continue to support the research, development, and trial of PBOC’s e-CNY,” a representative familiar with the matter commented.

The influence of the CBDC is unquestionable across China with the trials conducted over major cities are well received by the population. At the core of the growing adoption rates is the support of China’s large banks such as the Industrial and Commercial Bank of China, the Agricultural Bank of China, Bank of China, HSBC, and the China Construction Bank, all of who have taken part in the trial phase of the digital yuan.

To further boost adoption, several large banks are promoting the use of the digital yuan in an upcoming festival on May 5th over the use of platforms such as WeChat Pay and AliPay. The banks are urging the population to download a digital wallet and purchase the digital CBDC, also known as e-CNY in a bid to make their payments “more convenient,” a representative said.

The continuous push towards a digital yuan controlled by the central banks will reduce the control and dominance private companies such as AliPay and Wechat have in mobile payments. To curtail big-company dominance in holding financial data, the Chinese government will launch a full public version of the e-CNY later in the year to battle with the private corporations.

All in all, big institutions have started embracing the CBDC as a form of currency boosting transactions within the country. JD.com, a China-based e-commerce company, announced Monday that some of their employees have started accepting to be paid using the digital currency electronic payment (DCEP) system.

Having participated in the DCEP trials, JD.com integrated the payment solution earlier this year in its business while paying some of its expenses using the digital yuan, a CNBC report stated

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Author: Lujan Odera

Bitcoin Price to Rise as it Captures Bigger Share of ‘Anti-fiat Market’ Driven by ‘Stimulated Environment’

“Strong” crypto performance leads to rising interest among institutions, including university endowments and foundations, a trend that will continue “at an accelerated pace,” says experts. As for the govt. banning Bitcoin, “Crypto Mom,” says that would be “foolish.”

Bitcoin is trading above $60,000, giving off strong bullish signals with traders getting in on this action.

According to Dhaval Joshi, chief strategist for BCA Research’s Counterpoint product, the price of Bitcoin will rise as it becomes a bigger share of what he calls the $15 trillion anti-fiat market, currently dominated by gold.

“So long as we have a fiat money system, there will be demand for an ‘anti-fiat’ asset that is a hedge against a debasement of the fiat money system,” said Joshi, who called cryptocurrencies “the new vigilantes to prevent rampant inflation.”

Currently, Bitcoin accounts for 10% of this anti-fiat market but, “as this share doubles or trebles, it arithmetically requires a doubling or trebling of cryptocurrency prices.”

He recommends investors to hold $1 of crypto for every $3 of gold, which implies 25% of the precious metal market, putting BTC at $120k.

Tipping Point

The prices are rising as the institutionalization of the crypto space gains speed.

During a MarketWatch virtual panel discussion, “How to Invest in Crypto,” Tom Jessop, head of Fidelity Digital Assets at Fidelity Investments, said the maturation and adoption of digital assets as a class of investments would continue “at an accelerated pace.”

According to him, ultralow interest rate and easy-money policies helped drive momentum into bitcoin, which are increasingly being seen as alternatives to assets like bonds that offer meager yields.

“Pandemic, quite frankly, was a catalyst for institutional adoption, and specifically bitcoin and the narrative, or use-case, around digital gold,” Jessop said. And “we’re not going to get out of this stimulated environment anytime soon,” he added. “I think we’ve reached a tipping point.”

As Mark Yusko, founder and CEO of Morgan Creek Capital Management, told MarketWatch, “We really believe that we’ll look back five years from now, and it will be deemed fiduciarily imprudent to have zero exposure to digital assets.”

With Bitcoin becoming a trillion-dollar asset and total crypto market cap surging past $2.1 trillion, “you can’t ignore it anymore,” Yusko said. “I really think we are at an inflection point.”

According to him, crypto performance has been “so strong” that even a small allocation can make a big difference. And Yusko has seen a rising interest among institutional investors, including university endowments and foundations.

A Good Regulatory Framework

When it comes to the regulatory front, it might not be of big significance as SEC commissioner Hester Peirce says it would be “foolish” to ban Bitcoin.

“I think we were past that point (of banning Bitcoin in the US) very early on because you’d have to shut down the internet.”

“I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from doing it.”

“So I think it would be a foolish thing for the government to try to do that.”

According to her, technology is likely to outpace the government’s attempt to limit the use of BTC.

During the panel discussion, while reiterating that the US remains “behind the curve” in regulating crypto, Peirce, aka “Crypto Mom,” said Gary Gensler as SEC Chairman might push it in the right direction.

“I’m optimistic with a new chairman coming in with a deep knowledge of these markets that is something we could do together—build a good regulatory framework.”

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Author: AnTy

Bitcoin Ramping Up Ahead of the Weekend, Another BTC ATH Incoming?

Depleting speculating supply is “insanely Bullish, of course” as institutions remove the coins from weak hands for “strong” HODLing.

Bitcoin continues to experience volatility around $58k, moving in tandem with the traditional markets as Federal Reserve Chairman Jerome Powell vowed to keep the interest rates down and supply the economy with all the help that it needs and “as long as it takes.”

And while the Fed forecasts that inflation (the consumer price index) is likely to ramp up to an alarmingly high rate of 2.4% by the end of the year but says it will be temporary, “common sense and the bond market says they are bluffing, and everybody knows it,” wrote analyst Mati Greenspan.

While Powell, along with his counterparts at the European Central Bank, Bank of England, and The People’s Bank of China, continues to double down and “support the economy” by debasing the currency, the Bank of Japan is stepping away from the aggressive monetary stimulus in favor of a more “sustainable” policy, allowing more fluctuation in 10-year bond yields.

“It is important to strike an appropriate balance between maintaining market functioning and controlling interest rates by allowing interest rates to fluctuate to a certain degree,” said the BoJ in its policy statement.

The central bank kept overnight interest rates on hold at -0.1% and will continue to peg 10-year bond yields at “around zero” but allows them to fluctuate by plus or minus 0.25% instead of the previous 0.2%.

Insanely bullish, of course!

Fed’s dovish statement helped the market climb higher but only to end up lower on Thursday. Before the weekend, S&P 500 and tech-heavy Nasdaq are attempting to rebound as yields calm down. Bitcoin went past $59k before coming back to $58k only to go back up.

Crashing bonds have been acting as a major driver bringing the tech stocks down, which in turn pushes S&P 500, other indices along with Bitcoin down.

“Markets went crazy since FOMC. Bonds and tech seem to have put in a local bottom (nothing extraordinary)—Powell to speak three times next week. And stimulus checks coming,” noted trader and economist Alex Kruger, who expects a repeat of last weekend that saw BTC making a new ATH.

While Bitcoin is following the traditional markets, inflows and continued adoption can help the cryptocurrency change direction.

As we have seen on-chain, speculative inventory, Bitcoin reserves on exchanges have been depleting ever since early last year.

“From March 2020, Bitcoin undergoes steep and continued supply shock in sync to USD money printing,” noted analyst Willy Woo.

We have been seeing US money printing climbing up while BTC supply held by speculative “weak hands” reducing and being transferred to institutions and high net worth individuals who are locking up their coins as strong HODLers in response to monetary inflation.

“This is insanely bullish of course. Strong hands have been buying every dip, which has been driving price steeply upwards since Q4 2020,” Woo added.

image1

Institutions, the asset allocator type like pension funds, come in a strong HODLer category because they only sell when their investment thesis changes.

“The arrival of institutional asset allocators to crypto dramatically increases the number of hodlers & strong hands, and should thus reduce the size of price corrections,” trader Kruger.

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Author: AnTy

Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry

Coinbase going public will be making some people very rich as institutions start to dominate exchange’s volumes, while CT was disappointed in the money-making crypto company having surprisingly small amounts of digital currencies in their treasury balance sheet.

Coinbase Global Inc. has filed with the US SEC for a direct listing on Nasdaq, and it has the crypto market excited, and the traditional markets are taking notice, as the financial statements of the company revealed that the exchange has been making a lot of money.

Interestingly, a good majority, 85% of the 130 companies that went public in the US last year, was unprofitable. But with Coinbase, the matter is altogether different.

San Francisco-based reported revenue of $1.28 billion in 2020 versus $533.7 million in 2019.

Given the record trading volume, the number of new users, as well as the crypto trading platforms it has been acquiring in just the two months of 2021 amidst the wild bull run, the revenue in the first quarter will be off the charts and is expected to surpass $2 billion, for the exchange.

This puts Coinbase with over a $100 billion valuation, more valuable than CME, ICE which owns the NYSE, CBOE, and Nasdaq.

ErikVoorheesCoinbase

Source: Twitter

This will certainly be making Coinbase CEO Brian Armstrong, and its top executives, rich by billions of dollars as a result of this valuation, which would make it one of the biggest companies to go public since the social media giant Facebook.

The CEO owns 21.8% of the company’s voting power, followed by a16z’s Marc Andreessen at 14.2%, who owns twice as many shares as Armstrong, and co-founder Fred Ehsram 9%. In total, the 11-member board has the majority voting control.

coinbase-shares

Source: SEC Filing

To be listed under the ticker COIN, Goldman Sachs, JPMorgan, and Citigroup are the market makers who are also the advisors on the transaction with another addition Allen & Co.

One of the largest exchanges, Coinbase, reported 43 million verified users, steady growth from 23 million in Q1 of 2018. As for the transacting users, in Q4 of 2020, it was 2.8 million, nearly the same as 1Q18 at 2.7 million.

Unlike the transacting users, in 1Q18, when the market topped, Coinbase recorded $56 billion in trading volume, but during the last quarter, it was $89 billion.

The big difference has been in Coinbase’s volume by customer segment, as back in Q1 of 2018, retail dominated the exchange with more than an 80% share; it has completely changed to institutional accounting for 64% of volume in 4Q20.

Exciting & Embarrassing

Crypto Twitter (CT) has been excited about this development as Matt Huang, Co-founder at Paradigm, previously a partner at Sequoia, congratulated the company, “The Coinbase S-1 is just one step along the way toward building a legendary company… but still, one hell of a milestone.”

“This represents another major milestone in the development of the cryptocurrency industry,” tweeted Jay Hao, CEO of crypto exchange OKEx. “Coinbase’s S-1 filing will undoubtedly have a profound impact on the crypto market and usher in a new era of mainstream crypto adoption,” he added.

RobertLeshnerCoinbase

Source: Twitter

What really set off the CT was the fact that Coinbase, which started in 2012 when the price of BItcoin was about $5, holds only $130 million worth of BTC.

Square’s recently announced the purchase of $170 million worth BTC is more than this, and Coinbase’s BTC stash is nowhere even near Michael Saylor’s $2.171 billion bet on Bitcoin.

Besides having 55% of their modest crypto treasury, separate from cash and cash equivalents at $1.1 billion, the company has $24 million (10%) in Ethereum ETH -5.02% Ethereum / USD ETHUSD $ 1,446.93
-$72.64-5.02%
Volume 31.49 b Change -$72.64 Open $1,446.93 Circulating 114.84 m Market Cap 166.16 b
6 h Crypto Hedge Fund Arca is the Latest to Join the Crowd of Bitcoin Trust Issuers 6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry 7 h 1Inch Decentralized Exchange to Transition to Binance Smart Chain as Ethereum Exodus Begins
, $49 million (20%) in USDC stablecoin USDC -0.02% USD Coin / USD USDCUSD $ 1.00
$0.00-0.02%
Volume 2.46 b Change $0.00 Open $1.00 Circulating 8.59 b Market Cap 8.59 b
6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry 1 w Private Aviation Company Sees 20% Revenue Coming from Bitcoin Paying Users 1 w You Can Now Buy Bitcoin with Apple Pay as BitPay Adds Support
, and $34 million (15%) in other altcoins.

Given that Coinbase is a cryptocurrency-centered company, some even called this crypto stash “embarrassing.”

But many expect Amrstong, Ehsram, and other early backers to own heavy Bitcoin BTC -4.15% Bitcoin / USD BTCUSD $ 46,344.77
-$1,923.31-4.15%
Volume 351 b Change -$1,923.31 Open $46,344.77 Circulating 18.64 m Market Cap 863.85 b
5 h A “BIG Deal:” Stone Ridge Files to Add Bitcoin to its Diversified Alternatives Fund 6 h Crypto Hedge Fund Arca is the Latest to Join the Crowd of Bitcoin Trust Issuers 6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry
and crypto bags personally.

Coinbase going public, meanwhile, is also expected to be bullish for other exchanges and their tokens. “I think the bigger the Coinbase IPO gets, the better for exchange tokens. Doesn’t matter that owning an exchange token ≠ actually owning stock. Just matters that a lot of people will feel priced out of coinbase” noted trader DonAlt.

As we reported, US-based Kraken is also planning to raise funds that could more than double its valuation and surpass $20 billion.

Interestingly, in its filing with the SEC, Coinbase also mentions that they do not maintain a headquarter as of May 2020 and that they have become a remote-first company.

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Author: AnTy

NYDIG Sees Institutional Order Books Pushing BTC Holdings to $25B by Year-End

  • NYDIG believes it could grow its AUM to $25 billion as institutions are still hungry for Bitcoin.
  • Increasing institutional demand is growing at impressive levels, giving more hope for Bitcoin’s long-term trajectory.
  • Institutional demand remains a significant point of focus for the crypto market, with more firms expected to enter into the industry soon enough.
  • In line with the phenomenon, the New York Digital Investment Group (NYDIG) expects to quadruple its assets under management this year.

This week, Ross Stevens, the founder and chairman of NYDIG, made an appearance at the MicroStrategy World Conference 2021. In his session, the executive explained that the crypto investment company could be sitting on $25 billion in assets under management (AUM) by year’s end.

Stevens explained that NYDIG’s AUM figures currently stand at about $6 billion. However, the firm has seen enough institutional investors’ commitment to push the figure past the $25 billion mark. Considering that none of the investors have walked back their intention to commit to Bitcoin, the firm expects a windfall going into the year.

NYDIG is a fund management firm that operates as the crypto-facing subsidiary of Stone Ridge Holdings Group LLC. The company provides an avenue for large investors to improve their crypto exposure. Last year, it helped facilitate the purchase of $100 million by MassMutual, the Massachusetts-based insurance giant.

As the Wall Street Journal reported at the time, MassMutual, a company with about $235 billion in AUM, had made the purchase through a backchannel with NYDIG. The insurance giant also purchased a minority stake in NYDIG for $50 million. The deal will also see NYDIG custody MassMutual’s Bitcoin stash. Now that more institutions appear to be lining up to make purchases, NYDIG could be in for its most fruitful year.

Institutional Demand: A MicroStrategy Case Study

Stevens had made the revelation to Michael Saylor, a businessman who has become overly familiar with cryptocurrencies over the past year. Since August 2020, under Saylor, MicroStrategy has purchased over $1.3 billion worth of Bitcoin, becoming one of the industry’s largest institutional players.

The company has benefited immensely from the decision. MicroStrategy built a $425 million Bitcoin holding when the asset was only trading at about $11,000. When the asset eventually grew to $21,000 apiece, the firm announced that it had issued $650 million in convertible senior notes and would use most of the raised capital to purchase more of it.

Now that Bitcoin is in the high $30,000s, it is anyone’s guess just how much MicroStrategy’s decision to move to the Bitcoin standard has grown its reserves.

Along with its bottom line, MicroStrategy’s Bitcoin obsession seems to be helping its stock price. In December, Tyler Radke, an analyst at investment banking giant Citigroup, downgraded MicroStrategy’s stock based on fears that the company was overpricing its Bitcoin play. As the analyst explained, while the company had made a sizable return on its Bitcoin investment, the market appeared to have been overpricing its core business.

However, Bitcoin’s rally in December helped the company’s reserve to balloon even more. While Radke’s criticism of MicsoStartey’s core business has some merit, the market appeared to have overlooked that as its stock surged over 100 percent. The stock, which traded at $286.21 when Radke downgraded it, has now jumped past the $740 mark and is surging on.

The Virginia-based firm is precisely the type of client that NYDIG appears to be looking for. Deep-pocketed and not afraid to take risks, MicroStrategy has become a whale among whales in the Bitcoin market.

Although some could criticize the effects of increasing institutional action on Bitcoin’s liquidity, everyone seems to agree that it would benefit the market in the long run.

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Author: Jimmy Aki