Weekly Roundup – Institutional Demand

We saw bitcoin’s price increase by nearly 30% in October, and the day after the 12th anniversary of its white paper, bitcoin managed to close the month at $13,801, its second highest monthly in history. A few institutions made historic crypto moves in the month of October: PayPal, Square, Fidelity, JPMorgan, KPMG, Franklin Templeton and the US Federal Reserve.

Here’s our weekly roundup of the industry news and big reads.

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Cryptocurrency Hedge Funds Post Steep Gains

Cryptocurrency hedge funds have posted hefty gains so far this year, according to Reuters, benefitting from the surge in transactions that allow lenders and borrowers to transact without banks, as well as a steady rise in the bitcoin price. A crypto hedge fund index launched in September 2018 by crypto fund of funds Vision Hill Group showed a return of 126% in 2020.

Southeast Asia’s Largest Bank DBS Plans to Launch a Cryptocurrency Exchange

DBS, the Singapore-based bank and financial services corporation, is reportedly building a digital assets trading platform.

DBS’ upcoming crypto service – the DBS Digital Exchange – will support five major cryptocurrencies including BTC, ETH, XRP, BCH and ETC.  The bank published information on the subject and then swiftly removed the announcement, but crypto proponents have learned about the upcoming support for assets like bitcoin, ethereum, and bitcoin cash.

Before it was taken down, the DBS exchange announcement concluded: “Digital assets are poised to be the future of tomorrow’s digital economy. With DBS Digital Exchange, a bank-backed digital exchange, companies, and investors can now leverage an integrated ecosystem of solutions to tap the vast potential of private markets and digital currencies.”

Discovering Institutional Demand for Digital Assets

Last week saw the publication of a landmark study on over 55 registered professional investors including pension funds, insurance companies, banks, asset managers, and family offices, to understand the demand for institutional-grade and blockchain-inspired investment vehicles. The study looks at how much professional investors have already invested, how much they expect to invest over the next year, and what sectors of the industry are attracting the most investment.

The author joined Coinscrum Markets to discuss the findings in further depth.

Bitwise Tops $100 Million in AUM, Helped by Demand for Crypto from Professional Investors

San Francisco-based crypto investment firm Bitwise Asset Management, a leading provider of index and beta funds in the crypto space, has announced that it has managed to achieve over $100 million in in assets under management. Bitwise, which was founded in 2017, has several funds that serve “high net worth individuals, financial advisors, family offices, multifamily offices, investment managers, and institutions” and indexes that serve “as the benchmark for dozens of financial institutions and crypto funds.”

Matt Hougan, CIO, discusses the milestone and also covers what has been driving interest in Bitwise products, the two types of customers who have been especially interested in purchasing crypto assets this year, what impact the recent bullish JPMorgan research note about bitcoin could have on investors and what a Trump win vs. a Biden win could mean for the crypto industry.

PBoC Governor Says ‘Successful’ Digital Yuan Trials Have Transacted $299M

The governor of the People’s Bank of China praised recent tests of its national digital currency at the Hong Kong Fintech Week conference on Monday. As reported by Bloomberg, Yi Gang said the pilot program, which has spanned multiple Chinese cities this year, has proven successful.

Over 4 million transactions totalling more than 2 billion yuan ($299 million) have been conducted using the digital yuan, Yi said. In related news, the Australian central bank announced Monday that it is partnering with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys to explore the possible use and implications of a wholesale form of central bank digital currency using distributed ledger technology.

US Banks Could Seek to Partner With or Buy Crypto Custodians, OCC’s Brooks Says

“U.S. banks are looking at ways to handle crypto adoption in the wake of the Office of the Comptroller of the Currency’s (OCC) July decision to allow banks to provide custody for cryptocurrencies, Acting Comptroller Brian Brooks said Laura Shin’s Unchained podcast. That may mean partnering with or purchasing custodians, he added. He continues: “Well, what I have heard…a number of big crypto custodians Anchorage, Coinbase, and a number of others, have been contacted by banks about whether they’d be willing to be like the third-party custody providers for national banks whose customers want to invest in bitcoin.”

Banking Crypto Webinar

Our Founder and CEO Oliver von Landsberg-Sadie will be joining Johannes Schmidt of Kraken and Alexis Hammel of Solarisbank to discuss the role of banks and financial institutions in shaping the future of crypto. Click here to register for this live event.

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