|Here’s our roundup of the top stories from the past seven days in crypto.|
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BITCOIN – NOT GOLD – IS THE NEW INFLATION HEDGE, SAYS JPMORGAN
Last Wednesday, a note issued to clients by JPMorgan analyst, Nikolaos Panigirtzoglou, declared that the recent increase in price of BTC can primarily be attributed to institutional investors looking for a hedge to inflation.
Part of the motivation for these deep-pocketed investors to invest in bitcoin and other similar cryptocurrencies is their built-in protection against inflation.
“The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge,” the analyst said, arguing there has been a shift in perception as to the merits of bitcoin in relation to gold.
Bitcoin has been on a run lately, surpassing $50,000 for the first time in a month, and up 87% year to date. Gold is down 7.3% in the same time span.
BANK OF AMERICA IS BULLISH ON DIGITAL ASSETS; BELIEVES BITCOIN IS ONLY THE BEGINNING
Bank of America officially launched its cryptocurrency research division with a new 140-page report titled, “Digital Assets Primer: Only the first inning“, that covers bitcoin, NFTs, DeFi, central bank digital currencies (CBDCs) and more.
The report reveals that 221 million people have purchased or sold a cryptocurrency as of June 2021, up from 66 million in May 2020.
“It’s difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralized apps that have yet to be created could potentially be,” the report states.
BITCOIN MARKET SHRUGS OFF PANDORA PAPERS
Bitcoin found some buying support during the US weekend as the first batch of the Pandora Papers were released.
The Pandora Papers, the latest look at the shadowy vehicles the wealthy use to store their gains, are the biggest expose yet, according to the International Consortium of Investigative Journalists, which said it has 2.94 terabytes of data from 200 countries and territories around the world.
Although the ICIJ and its media partners have only begun to trickle out their findings, it’s expected that there will be a heavy Hong Kong focus. One fund manager in Hong Kong, operating under a pseudonym on Twitter, said that he expects some uptick in activity as people liquidate assets in shell companies that have been exposed by the leaks via crypto then rebuy crypto via a new shell company.
WHITE HOUSE WEIGHS WIDE-RANGING PUSH FOR CRYPTO OVERSIGHT
On Friday, Bloomberg reported that the Biden administration has drafted an executive order that could create a unified approach to crypto regulation.
Citing anonymous sources, Bloomberg claims the order would have federal agencies study various areas of the cryptocurrency industry and create recommendations within those areas. In particular, the order pertains to areas such as financial regulation, economic innovation, and national security.
The order would pressure departments that have so far overlooked cryptocurrency to deal with those matters. The White House could also appoint a ‘crypto czar’ to oversee the effort.
The White House declined to comment on the crypto initiative.
CRYPTO POSES ‘LIMITED RISK’ TO UK: BANK OF ENGLAND
In a Financial Summary published 8th October, the Financial Policy Committe (FPC) stated that despite the rapid growth of cryptoassets and associated markets, the direct risks to the stability of the UK financial system from cryptoassets are currently limited.
The FPC will continue to pay close attention to developments, including the relationship between cryptoassets and the UK financial system, and thereby seek to ensure resilience to systemic risks that may arise from further developments in cryptoasset markets.
Source: Bank of England
CRYPTO TRANSACTIONS SURGE 706% IN ASIA AS INSTITUTIONAL ADOPTION GROWS
New research from blockchain analytics firm Chainalysis finds that crypto transactions surged 706% in Central and Southern Asia and Oceania between July 2020 and June 2021. In dollar terms, the value of the transactions amounted to $572.5 billion, or 14% of the global transaction value.
Institutional and large payments accounted for the highest percentage of transactions, offering further evidence of smart money adoption of cryptocurrency. This trend was most pronounced in India, where large institutional-sized transfers above $10 million represented 42% of transactions. For Vietnam and Pakistan, that figure was 29% and 28%, respectively.
While Europe dominates in crypto transactions, Asian countries are leading in terms of overall adoption, as measured by on-chain value received, on-chain retail transactions and peer-to-peer transaction volumes. Vietnam, India and Pakistan ranked first through third, respectively, in Chainalysis’ 2021 Global Crypto Adoption Index.
COINSHARES SURVEY: ETHEREUM MOST COMPELLING FOR GROWTH
More fund managers see greater potential in Ethereum than bitcoin, according to a CoinShares report of survey data published Tuesday, despite the total value locked in Ethereum decreasing this year amid more competition in the layer-1 space.
Forty-two percent of investors see Ethereum as having the most compelling growth outlook, compared to bitcoin at 18%, the survey found.
“The conversations we were having two years ago were bitcoin and crypto is a joke,” CoinShares Investment Strategist James Butterfill stated. ”A year ago it was, OK, bitcoin’s a really interesting concept, tell me more. And this year the trend I’m seeing amongst investors is, I want to look at the altcoin space, I want to diversify, I want to see what else is out there.”
SEC APPROVES ETF FOR ‘BITCOIN REVOLUTION COMPANIES’, PORTFOLIO INCLUDES TESLA AND TWITTER
As the crypto world awaits anxiously for the Securities and Exchange Commission to approve a Bitcoin ETF, the agency took another step in that direction by approving a fund called the “Volt Bitcoin Revolution ETF.”
Managed by San Francisco-based Volt Equity, the fund will provide retails investors with exposure to bitcoin by creating a portfolio of “Bitcoin Revolution Companies” that hold a significant amount of the cryptocurrency on their balance sheets.
While the SEC’s green light of the Volt fund is still a far cry from the approval of a pure Bitcoin ETF, it suggests the agency’s apparent hardline against Bitcoin may be softening slightly.
BANKING GIANT US BANK LAUNCHES CUSTODY SERVICES FOR BITCOIN
US Bank rolled out its crypto custody services for fund managers last Tuesday, as one of the country’s largest banks doubled down on its commitment to the space.
US Bank Wealth Management and Investment Services had about $8.6 trillion in assets under custody and administration and $282 billion in assets under management, as of 30th June.
“Bitcoin is the coin that we are seeing the greatest client demand for today,” said Christine Waldron, the bank’s chief global strategy officer. “We will continue to evaluate additional coins from both a client demand and a risk perspective, and will add coins once and if they satisfy our stringent risk standards.”
CRYPTO M&A HAS REACHED AN ALL-TIME-HIGH
According to The Block, the number of crypto M&A deals in 2021 has doubled those in 2020. The larger trend being seen reflects the overall maturity of the crypto industry, particularly the number of large firms with the capacity to buy up smaller ones.
This news comes at the same time as venture funding for blockchain companies between July and September 2021 hit an all-time high of $6.5 billion in 339 rounds.
This is the third consecutive record this year, with $3.83 billion and $5.131 billion raised in Q1 and Q2, respectively.
SOROS ENDORSEMENT OF BITCOIN
Soros Fund Management, the asset management company founded by billionaire investor and philanthropist George Soros, has revealed that it owns bitcoin.
Dawn Fitzpatrick, CEO and chief investment officer of Soros Fund Management, confirmed in an interview that the family office owns “some coins but not a lot.” She also added: “I’m not sure bitcoin is only viewed as an inflation hedge here. I think it’s crossed the chasm to mainstream”.
FORMER CHANCELLOR PHILIP HAMMOND JOINS COPPER AS SENIOR ADVISOR
Lord Hammond will focus on promoting the UK as a global leader in digital asset technology. Copper’s latest funding round and strong growth throughout the last 18 months, evidences a growing appetite from institutional investors for digital assets.
A member of the British Conservative Party and a Life Peer, Lord Hammond is one of only three people to have served continuously in the UK cabinet from 2010 to 2019, serving under Prime Ministers David Cameron and Theresa May. Lord Hammond served as Chancellor of the Exchequer from 2016 to 2019, Foreign Secretary from 2014 to 2016, and Defence Secretary from 2011 to 2014.
Dmitry Tokarev, Chief Executive Officer, Copper, said: “We are delighted to welcome Lord Hammond to the Copper team…With [his] expertise adding to the strength of our team, we look forward to growing Copper and further enhancing the UK’s digital asset technology offering.”
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