The theme of last week seems to have been institutional asset management, with Paul Tudor Jones, BlackRock, AllianceBernstein and The Guggenheim Fund all making the headlines with their bullish outlooks on bitcoin.
And as bitcoin reached an all-time-high, that wasn’t the only thing everyone was talking about last week, with US securities regulator Hester Peirce, Grayscale MD Michael Sonnenshein and Paul Tudor Jones again all making important statements about Ethereum in the past few days.
Here’s our weekly roundup of the industry news and big reads.
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NYDIG Raises $100 Million from a Single Investor for its New Crypto Fund
Crypto asset manager NYDIG has raised $100 million from a single investor for its new fund, Digital Assets Fund II.
The detail was revealed in a form filed by NYDIG with the U.S. Securities and Exchange Commission last Tuesday. The new fund’s strategy remains unclear, although NYDIG mainly invests in bitcoin and other digital assets.
The raise comes shortly after NYDIG netted $50 million for its Digital Assets Fund I in November. Fund I collected the amount from just two investors, and it reportedly only invests in bitcoin.
Given both funds’ size and the limited number of investors, it appears that NYDIG is attracting investments from high net-worth institutional clients, possibly corporates and banks.
Bitcoin will go ‘Substantially Higher’ over the next 20 Years as Adoption of Digital Currencies Increases Globally
Bitcoin has plenty of room to run over the next 20 years, according to billionaire investor Paul Tudor Jones
He told Yahoo Finance on Thursday that he expects every nation to use a digital currency in 20 years, and cryptocurrencies could trade like the metals market. While he said he’s “no expert on bitcoin,” he said it could be traded like a precious metal, while other cryptocurrencies trade like industrial metals.
The founder of Tudor Investment Corporation added that bitcoin will likely go “substantially higher” as adoption of digital currencies increases. Bitcoin hit a record high of $19,918 on Monday, and has surged over 150% in 2020. But Jones noted that its market capitalisation is less than $500 billion, significantly lower than the $9 trillion market capitalisation of gold, indicating there is significant room to run for bitcoin.
“There’s no way possible today to know what the next 10 or 20 years are going to be like and I know that if I had to again take a position I’m going to take the brand name which is bitcoin,” Jones said. “I’m going to assume that it’s the wrong price for the possibilities that it has and I’m going to assume that the path forward from here is north.”
Bloomberg Crypto Outlook December 2020: Bitcoin Joining 60/40 Mix
Bloomberg Crypto’s latest research note posits that bitcoin could more than double its current value in 2021, reaching $50,000, based largely on demand-supply mechanics.
They noted: “Bitcoin will maintain its propensity to advance in price into 2021, in our view, with macroeconomic, technical and demand [versus] supply indicators supportive of $50,000 target resistance, implying about a $1 trillion market cap,” in the monthly report.
Bloomberg analysts said they expect these trends to continue in 2021 because major central banks and governments are unlikely to scale back or halt their inflation-boosting stimulus programs anytime soon. The unconventional policies adopted by authorities to counter the coronavirus-induced slowdown have boosted demand for bitcoin and gold this year.
Past data also favours a rally to $50,000, according to Bloomberg. “The 2017 advance followed a 2016 supply reduction to 1,800 coins a day, and similar occurred in 2012-13,” analysts noted.
US Representative Emmer Voices Opposition on New Stablecoin Regulation Bill in Congress
Last Wednesday night, Congresswoman Rashida Tlaib introduced a bill before the U.S. House of Representatives looking to make fiat-pegged stablecoin operators abide by the same rules and registration requirements expected of banks.
Almost immediately, the bill (known as STABLE Act) drew strong pushback from the crypto community. The CIO of BlockTower Capital, Ari Paul, commented that the Act would do the exact opposite of what it is promising, while Gemini co-founder Tyler Winklevoss called out Tlaib in a tweet, saying: “When has less competition and giving banks more power ever lead (sic) to more consumer protection?”
A number of congressional members have also openly opposed the bill. Speaking to The Block,US Representative Tom Emmer, who has long been an advocate for blockchain, said: “Those of us supportive of developing these new innovations in the United States have worked to learn about and understand this technology, which stands to have enormous beneficial impacts on low-to-moderate income Americans, and individuals worldwide.”
Private German Bank to Launch Cryptocurrency Fund
Frankfurt-headquartered Hauck & Aufhauser is launching a cryptocurrency fund in January 2021. The fund will be called the HAIC Digital Asset Fund, will hold a range of cryptocurrencies and is aimed at institutional investors. The minimum investment will be €200,000.
The bank is teaming up with the custody arm of Berlin-based fintech company Kapilendo, which will manage the secure storage of the crypto assets in the fund. The fund managers will take a passive investment strategy while the cryptocurrency allocation will be based on the current market capitalisation.
BIS, Swiss National Bank and SIX Announce Successful Wholesale CBDC Experiment
The Swiss National Bank and partner organisations said they have successfully conducted experiments to push forward an understanding of how digital currencies could work within the country’s financial system.
In Project Helvetia the SNB, the Bank for International Settlements and the financial infrastructure operator SIX linked the existing interbank payment system to a distributed ledger, according to a joint press release last Thursday.
They added that while integrating DLT into existing payment systems would be a relatively simple approach and would resemble the current system, it would also cut back on efficiencies raised by integrated tokenised central bank money and securities because it would function more like a link than a common base.
Noting that the experiment is no indication of the SNB’s intentions to issue a wholesale CBDC on SIX Digital Exchange’s (SDX) platform, the announcement said that different design choices to trade off some risks and benefits in issuing a CBDC would also need to be explored.
“If DLT can deliver significant improvements in securities trading and settlement, then the SNB will be prepared,” Andréa M Maechler, member of the SNB’s governing board, said in the announcement.
The report said the next step would be to better understand the policy and fiscal implications of integrating wholesale CBDCs into core banking systems and explore their functionality across borders.
New Blog Post: Crypto and Proposals For New European Regulation
Following the EU’s publication of its proposed Regulation on Markets in Crypto Assets (MiCA) on 24th September, our latest guest blog focuses on its key points, what regulation will entail and the likely impact of Brexit.
Webinar: Cryptoasset Compliance: A Year in Review and Outlook for 2021
We’re joining Elliptic’s Head of Policy and Regulatory Affairs, David Carlisle, and industry experts in both crypto and compliance to discuss what made the year 2020 so significant for the crypto world and the impact it’s had on the future of cryptoassets and compliance.
⏰ 8 December, 4-5pm GMT
Register here for free.