Category: Institutions

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Bitcoin Crypto News Institutions

Ray Dalio Warns of 1930s-Style Currency Devaluation

Billionaire hedge fund manager and crypto advocate Ray Dalio, who claimed to own some Bitcoin, has warned about a 1930s-style currency devaluation phase in relation to goods and services, and that Bitcoin remains a valuable instrument against this scenario.

‘Cash is Trash’

During an interview with CNBC’s Squawk Box, Dalio talked about his current stance on Bitcoin, stating that he still holds a small amount of BTC on his portfolio.

Dalio went on to say that fiat currency is trash, explaining what he meant by this is that major currencies such as the euro or the yen will eventually “go down in relationship to goods and services”:

Dalio added that Bitcoin, given current economic conditions, remains a useful tool for investors looking to protect themselves against fiat hyperinflation.

Bitcoin has made a tremendous achievement over the last 11 years … I think the Bitcoin people get too preoccupied with it … the gold bugs get too preoccupied with it, and … you have to look at the broader set of assets that serve that purpose.

Ray Dalio, hedge fund manager and crypto advocate

However, Dalio wasn’t always a Bitcoin advocate. He changed his mind back in 2020 when the Covid-19 pandemic started bruising global economies, and he now considers BTC a store of value.

The New ‘Digital Gold’

Given the economic scenario that has been developing in the past few years in the US, more American hedge fund billionaires and institutional investors have turned their eyes to cryptocurrencies as the new “digital gold”.

While Dalio holds a “small amount” of BTC, another hedge fund manager, Bill Miller, isn’t quite as diversified. Crypto News Australia reported in January that Miller had gone big on his BTC investment, with half of his portfolio now tied up in the flagship cryptocurrency.

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Crypto News Institutions Metaverse NFTs

HSBC Bank Launches Metaverse Fund For Wealthy Asian Clients

HSBC, a British multinational investment bank with assets worth over US$2 billion, has launched a metaverse fund for its wealthy clients in Asia, starting with Hong Kong and Singapore.

The Discretionary Strategy portfolio, to be managed by HSBC Asset Management, will reportedly focus on investing in the digital sector, particularly in five segments: infrastructure, computing, virtualisation, experience, and interface.

We see many exciting opportunities in this space as companies of different backgrounds and sizes are flocking into the ecosystem.

Lina Lim, managing dIrector, HSBC

HSBC is joining the NFT train, which now has top-notch passengers on board from all kinds of industries, especially in the tech field. Crypto News Australia previously reported how a US$69 billion metaverse deal would make Microsoft the world’s #3 gaming company in revenue terms.

It’s worth noting that this isn’t the first time HSBC has pushed into the metaverse. A few weeks ago, Crypto News Australia reported that HSBC had bought a considerable amount of LAND in Sandbox – a blockchain-based metaverse – so esports and gaming fans can connect.

You’re Still Not Allowed to Buy Crypto

Crypto Twitter had a mixed reaction to the news. Some claimed it was a big move by the investment bank that could further expand adoption and awareness of blockchain technology and NFTs. However, some are still frustrated over HSBC’s deliberate decision of suspending the purchase and withdrawal of cryptocurrencies on crypto exchanges:

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Binance Crypto News Institutions NFTs Sport and Leisure

Binance Becomes Official Crypto Partner of 64th Annual Grammy Awards

Binance has entered a partnership with the Recording Academy to become the first-ever crypto exchange partner for the 64th annual Grammy Awards, to be held on April 3 at the MGM Grand Garden Arena in Las Vegas, US.

As per a statement from Yi He, co-founder of Binance, partnering with the Recording Academy will bring “fresh new experiences powered by blockchain and all the great things Web3 technology can bring to entertainment”:

There are no further details about the partnership as yet. However, it appears Binance is already rolling out plans to make it more than just a branding opportunity. As per the statement:

Binance will continue to work with the Recording Academy throughout the year to bring various Web3 technology solutions and experiences to the organisation’s members, events and initiatives.

Binance statement

Crypto Permeates Entertainment Industry

The increasing popularity of NFTs (non-fungible tokens) is making it harder for leading organisations in the entertainment industry to ignore the potential opportunities to work with this emerging sector, which is taking over the mainstream at a fast pace.

This is the second time the Recording Academy hass collaborated with crypto companies. As Crypto News Australia reported last November, the organisation announced that NFT collectibles would be awarded as prizes at the Grammys thanks to a collaboration with Tezos-based NFT platform OneOf:

Crypto Also Increases its Sports Presence

Binance is not the only exchange making waves in the entertainment world. Just a week ago, Crypto.com became the official crypto sponsor for the 2022 FIFA World Cup, with the objective to bring awareness of the brand to billions of users who tune in to watch the tournament.

In January, Crypto.com also announced a five-year A$25 million sponsorship deal with the Australian Football League for both its men’s and women’s competitions.

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Blockchain Cardano Crypto News Institutions Investing

Institutional Demand for Cardano (ADA) Soars 50x in 2022

Since the beginning of the year, Cardano (ADA) has seen a massive 50-fold spike in large transaction volume (LTV) and, according to crypto intelligence firm IntoTheBlock, this represents a significant increase in institutional demand for the decentralised blockchain network.

IntoTheBlock stated in a tweet that such high volumes – last seen in 2018 – indicate “increasing institutional demand”.

The volume of on-chain transactions over US$100k has increased remarkably in 2022 alone. This week, a total of 69.09 billion ADA, worth US$81.4 billion, was moved in these large transactions, representing 99 percent of total on-chain volume, according to the firm.

Large transactions on Cardano: IntoTheBlock

ADA Making Waves on Many Fronts

Cardano’s Total Value Locked (TVL) has also seen a significant increase since the beginning of the year when it started off. The chain’s slow academic approach has seen its token off to a low start but as new functionality is added, the chain becomes more secure and decentralised for users.

ADA TVL. Source: DefiLama

Since smart contracts were enabled on the chain in September 2021, many developers have started building in the ecosystem. Within the first five days of the upgrade, 2,334 smart contracts were deployed on the network.

Since 2021, the average amount of active addresses has also been steadily increasing. As of January 2022, the total addresses with a balance have increased from 3.4 million to 5.05 million, pointing to an exponential increase in usage.

Total ADA addresses. Source: IntoTheBlock

Cardano’s Layer 2 – Hydra also recently started looking into implementing a burning mechanism for the token, but this has caused confusion among some members of the community. With all the progress the chain has made, many are wondering how its price has managed to stagnate:

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Bitcoin Crypto News ETFs Institutions

Canadian Bitcoin ETF Up 23% YTD And Now Holds Over 36,000 BTC

Since becoming the first spot bitcoin exchange traded fund in Canada in February 2021, the Purpose Bitcoin ETF has surpassed CAD$1.7 billion assets under management and, according to Glassnode, holds over 36,000 BTC.

Purpose Bitcoin ETF holdings. Source: Glassnode

One Bitcoin analyst noted the dramatic increase in holdings over the past week in particular:

The Canadian Purpose #Bitcoin ETF has just hit another ATH yesterday of 36.27k $BTC. Last week the ETF ended with an AUM of 34.07k bitcoin. That’s more than 2k bitcoin added this week so far …

Jan Wüstenfeld, Bitcoin analyst for @QE4Everyone

ETFs Not Welcomed by All

A spot-based Bitcoin ETF – that is, one exposed to the price of bitcoin, as opposed to something like a futures contract – is a somewhat divisive topic within the Bitcoin community.

Some regard ETFs as an easily-understood and accessible vehicle for everyday investors to gain exposure to bitcoin. In doing so, it broadens the tent so to speak, and opens up the sector to a whole new range of retail and institutional participants.

An opposing view highlights the risks of manipulation within paper markets linked to physical assets such as gold and silver. Within the context of Bitcoin, this could undermine the protocol’s most fundamental principle, namely a fixed and verifiable supply.

Unfortunately, one needn’t go back too far in history to find evidence of manipulation in financial markets. In 2020, investment bank giant JPMorgan paid US$920 million in fines and restitution for its role in manipulating the paper silver market.

Canada Leads the ETF Way

Whatever one’s view of spot-based Bitcoin ETFs, Canada has undoubtedly been at the forefront of bringing crypto ETFs to market. Not only was it the first country in the world to approve a Bitcoin ETF, it has since successfully launched another four.

By comparison, across the border in the US regulatory authorities are yet to approve a spot-based Bitcoin ETF, citing “manipulation concerns”. As reported by Crypto News Australia, as of November last year there were 34 ETF applications pending approval. Many have since been refused and, at the time of writing, more than a dozen applications remain outstanding.

Tellingly, the Securities and Exchange Commission (SEC) did approve a futures-based Bitcoin ETF in October. This was met with mixed reactions, with the consensus view emerging that it provided little benefit to retail investors relative to the intermediaries involved:

This vehicle means that the arbitrager takes their slice, the ETF provider takes their slice, the lawyer who set up the fund takes their slice, the administrator, the auditor … I mean, everybody is taking a slice out of your pie.

Real Vision founder/CEO Raoul Pal, on the futures-based Bitcoin ETF

While it remains unclear what the holdup is at the SEC, as one on-chain analyst noted, if the Purpose Bitcoin can double in 10 months, imagine what would happen if a spot-based ETF launched in the US:

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Crypto News Institutions Russia Ukraine

Report Shows Institutions Are Selling Crypto Amid Ongoing Geopolitical Uncertainty

Crypto-related investment products have suffered outflows of over 100 million in the past seven weeks amid ongoing geopolitical uncertainty, as stated in a recent report from digital asset manager CoinShares.

Institutions Sell Crypto Amid Regulatory Uncertainty

It was only little more than a month ago that Crypto News Australia reported how institutional adoption had accelerated following BlackRock’s decision to offer crypto trading services to its clients, but now it seems it has taken a 180-degree turn amid investors’ fear regarding the current geopolitical scene in Europe and regulatory uncertainty.

Given there has been little price response and that outflows of US$30 million were also seen in Europe, it highlights [that] the reasons are unclear. Regulatory concerns and geopolitics remain at the forefront of investors’ concerns for digital assets.

CoinShares report

Bitcoin and Ethereum Among the Most Affected Assets

At least 80 percent of the outflows come from North America-based companies, with Grayscale, Purpose, and ProShares leading the board. The exact reasons remain unclear, but CoinShares said it’s likely a response to US President Joe Biden’s latest executive order, which calls on the government to examine the benefits and risks of cryptocurrencies.

Flows by asset. Source: CoinShares

Bitcoin (BTC) and Ether (ETH) were the most affected cryptocurrencies, with outflows of US$70 and US$51 million, respectively. The altcoin market also had its share of inflows – mainly Solana (SOL), Ripple (XRP), and Polkadot (DOT).

Solana, Ripple and Polkadot saw minor outflows totalling US$0.3 million, US$0.7m and US$0.9m respectively, while Cardano and Litecoin saw minor inflows of US$0.2 million.

CoinShares report

Blockchain equity and multi-asset investment products have also taken a hit. As per the report, inflows amounted to US$12 million and US$4.1 million respectively.

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Crypto Exchange Crypto News Institutions Russia

Coinbase Blocks 25,000 Russian Addresses Linked to ‘Illicit Activity’

Coinbase has blocked 25,000 addresses from Russian customers supposedly linked to “illicit activity”.

Not Your Keys, Not Your Coins

As per a March 6 blog post, Coinbase said it conducted its own investigations to identify and block 25,000 addresses believed to be linked to sanctioned actors and individuals that demonstrated “high-risk” behaviour.

Later, the exchange shared the addresses with the US government to “further support sanctions enforcement”.

Today, Coinbase blocks over 25,000 addresses related to Russian individuals or entities we believe to be engaging in illicit activity, many of which we have identified through our own proactive investigations.

Coinbase blog post

What turned up the heat for the crypto community is that five days ago, Coinbase claimed it would not sabotage Russian customers by freezing their accounts at the request of Ukraine’s vice prime minister as this would “harm economic freedom”.

Most people in crypto Twitter assumed that Coinbase had received pressure from the US Securities and Exchange Commission and the Biden administration to somehow take part in economic sanctions imposed on Russia.

The exchange, however, didn’t elaborate on what it meant by illicit activities:

It’s no surprise the announcement caused a lot of controversy, bringing back the old crypto saying – not your keys, not your coins:

The general reaction of politicians and most Western governments to the Russian invasion was to condemn it and impose severe economic sanctions on the federation’s economy.

A handful of online businesses suspended their services in Russia a few days after the invasion. These included some traditional finance companies, as well as some crypto platforms and products.

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Bitcoin Crypto News Ethereum Institutions

KPMG Canada Adds BTC and ETH to its Balance Sheet

“Big Four” accounting firm KPMG Canada has announced it has completed its first allocation of digital assets to its corporate treasury, comprising BTC and ETH.

‘Giant Melting Ice-Cube’ Behind the Decision?

Michael Saylor, the charismatic founder and CEO of MicroStrategy, first started converting the company’s cash reserves into Bitcoin in late 2020. At the time, he described his treasury as a US$500 million “giant melting ice cube”, a narrative that is seemingly gaining traction in institutional circles.

Unlike Saylor, who allocated only to Bitcoin and views cryptocurrencies other than Bitcoin as securities, KPMG has made an allocation to both Bitcoin and Ethereum.

In addition, as per its announcement, it has also made an allocation to carbon offsets to “maintain a net-zero carbon transaction to deliver on the firm’s stated environmental, social and governance (ESG) commitments”. Greenwashing much?

KPMG Canada’s managing partner, who facilitated the acquisition through the Winklevoss twins’ Gemini, added:

Cryptoassets are a maturing asset class … Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisers and brokerages are exploring offering products and services involving cryptoassets. This investment reflects our belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix.

Benjie Thomas, managing partner, advisory services, KPMG Canada

According to KPMG, the investment illustrates the firm’s outlook on emerging technologies underpinned by blockchain:

We’ve invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralised Finance (DeFi), non-fungible tokens (NFTs) and the metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come.

 Kareem Sadek, advisory partner, Cryptoassets and Blockchain Services co-leader, KPMG Canada

Institutional Wall of Money Still Coming?

KPMG Canada’s announcement follows that of US$2.5 billion insurance firm Lemonade, which recently added $1 million in Bitcoin to its balance sheet, as well as the City of Rio de Janeiro, which is allocating 1 percent of its treasury to Bitcoin.

However, the KPMG announcement somehow feels different. Who could have expected a global accounting firm to allocate to crypto?

One of the potential roadblocks towards institutional adoption has always been the innate conservatism of traditional finance, and who better epitomises conservatism than global accounting firms?

That said, it wouldn’t be surprising, in time, if KPMG Canada’s allocation is viewed as a watershed moment in the story of institutional adoption.

Categories
Facebook Institutions Stablecoins

Meta’s Diem Plans Fail, Zuckerberg in Talks to Offload Intellectual Property

Diem (formerly Libra), the stablecoin backed by Mark Zuckerberg’s Meta, hasn’t had the best start to the year. It appears that the Diem Association is selling off its intellectual property to Silvergate Capital for US$200 million, The Wall Street Journal reports, citing an unnamed source familiar with the matter.

Diem Fails to Receive Regulatory Approval

The Diem project was presented by Zuckerberg’s Meta (formerly Facebook) in June 2019, formed under the name of the Diem Association. The Libra stablecoin was meant to be backed by a handful of global currencies such as the US dollar, in similar fashion to the business model of Tether’s USDT or USDC.

The Diem Association secured Silvergate Capital, a bank that serves blockchain companies, as the exclusive issuer of the Diem USD. However, Zuckerberg was soon confronted with obstacles imposed by US regulatory bodies and abroad.

The lack of security and privacy was the main concern for regulators, warning off investors including eBay, Mastercard, Visa and PayPal – all of whom resigned as founding members in a single day. Zuckerberg then rebranded Libra to Diem, but it only made things worse.

Diem Association Trying to Repay Investors

The Diem Association is now selling its intellectual property to Silvergate to repay investors, which include tech and investment concerns such as Coinbase, Spotify, a16z, Ribbit Capital, and more high-profile institutions.

It wasn’t as if the news hurt the crypto community. We need to remember that Zuckerberg and his businesses have attracted controversial accusations ever since news broke in 2018 that Facebook had allowed Cambridge Analytica to harvest sensitive data from 87 million users.

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Crypto News Institutions NFTs Payments

Mastercard Partners with Coinbase Enabling Easy NFT Purchases

Payments giant Mastercard has partnered with crypto exchange Coinbase to enable easier NFT (non-fungible token) purchases.

In a blog post, Mastercard said that buying NFTs should be as easy as buying goods on e-commerce sites, which is why it will soon allow customers to use their debit/credit cards on Coinbase’s upcoming NFT marketplace.

Buying NFTs on decentralised marketplaces such as OpenSea is a step-by-step process in which the user is required to set up a cryptocurrency wallet such as MetaMask, fund the wallet, and then connect it to the platform to start buying and trading NFTs. This is a normal process for most in the cryptosphere, but not as easy for newcomers to the space.

A Million on the Coinbase Waitlist

Coinbase’s NFT platform hasn’t gone live yet, but it has a waitlist with more than 1 million people signed up already. It will be one of the first marketplaces to allow card payments to buy NFTs. Other platforms such as Nifty Gateway and OpenSea have thought about adding this modality in the past, though the third-party requirements are still there.

Coinbase was basically an on-ramp for crypto for many, many users. Millions of people were able to access bitcoin for the first time by using Coinbase. So we want to do the same thing for NFTs with Mastercard by solving the pain points – to make it as easy as possible to buy an NFT and make sure it’s the best consumer experience.

Prakash Hariramani, senior director of product, Coinbase

On October 27 last year, Mastercard announced a partnership with crypto firm Bakkt to enable its 1000-plus banks and merchants in the US to buy and sell digital assets through Bakkt’s crypto custody services.

And to keep things safe, a month earlier Mastercard acquired blockchain forensic firm CipherTrace to enhance its operations in the crypto industry, enabling both companies to combine their technologies in the space.

Crypto Community Takes it with a Pinch of Humour

The news drew a mixed reaction from crypto Twitter, some claiming the NFT movement is nothing but a major Ponzi scheme, others saying teenagers and kids will use their mothers’ credit cards to buy NFTs just like they do with Fortnite skins.