Following the week that saw much excitement and discussion around the Goldman Sachs investment advisory call for its clients, slamming bitcoin as an investment, here’s our weekly roundup of industry news.
Major Crypto Firms Make their Move into Prime Brokerage
Over the past week several “blue chip” names (at least in the crypto sector) have revealed plans to move into the crypto prime brokerage space, as the importance of the function to attract institutional investors becomes abundantly clear.
Last week crypto exchange Coinbase announced the acquisition of crypto prime broker Tagomi in an all-share deal that boosts the exchange’s institutional offering and gives Tagomi access to a strong balance sheet.
And BitGo, one of the sector’s largest custodians, launched its prime broker services, adding lending and software to its existing suite of services.
And finally last week, Genesis Capital revealed the acquisition of crypto custodian Vo1t, which will enable it to add custody to its institutional lending and trading.
Ari Paul, BlockTower’s chief investment officer (Source: CoinDesk archives)
Defying Coronavirus Crash, BlockTower Crypto Fund Stretches 30% Total Return to 73%
BlockTower Capital’s cryptocurrency hedge fund has defied this year’s coronavirus-induced crash and returned 33% profits in the first four months of 2020.
Despite the havoc coronavirus has wreaked on markets, the fund did better in those four months than the stock index did in any full year since 1997. And as a result of the climb, the fund returned 73% for those who invested from day one and held on through to last month.
Goldman Sachs – Investment Advisory Call
Goldman Sachs held an investment advisory call for its clients during which it slammed bitcoin as an investment and refused to accept it as an asset class.
A CoinDesk columnist who used to work at Goldman Sachs gives her views on what they get wrong about bitcoin, pointing out “the fact someone else is willing to pay a higher price for a given instrument is probably the only criteria necessary to know something is a suitable investment.”
Peter McCormack was joined by Bill Barhydt, CEO and Founder of Abra, on the Whatbitcoindid podcast to discuss Goldman’s arguments against bitcoin and the reasons behind their research.
“It’s their financial incentive, for their client base to not want to put 10% of their assets in bitcoin.”
Societe Generale Details How its Blockchain Unit is Tokenizing Assets
French banking giant SocGen appears to be betting big on blockchain tech and tokenisation. Last week, the bank carried out an experiment with the Banque de France, the country’s central bank, to issue bonds as tokens, and then settle them in digital euros. SocGen Forge CEO Jean-Marc Stenger confirmed that the bank is working on other similar projects, as well as building asset tokenisation solutions to help improve liquidity for investors.
Why Family Offices Should Consider Digital Assets for their Portfolios
Constantin Kogan, a venture partner at BitBull Capital, has been a cryptocurrency investor since 2012. He shares his views that blockchain-based digital assets can be an alternative for investors hoping to reduce reliance on a failing traditional financial system. Because of this, institutions have kept a keen eye on happenings in the digital asset market – and wealthy investors, particularly family offices, could capitalise on the potential success story of blockchain’s ultimate breakthrough.
(Source: Compass Financial Technologies)
CoinShares Launches the CoinShares Gold and Cryptoassets Index
Digital asset manager CoinShares has launched the CoinShares Gold and Cryptoassets Index (CGCI), the first EU Benchmark Regulations-compliant index that combines digital assets and gold. This brings bitcoin and traditional assets such as gold even closer together in the minds of portfolio managers by combining them into one index, designed to play on the relative lack of correlation between the two. The firm is looking into deploying the index as an investable benchmark, providing yet another example of how crypto assets are giving rise to innovative investment vehicles.
Bitcoin Investors’ Exodus from Major Exchanges Continues
The number of BTC on exchanges continues to decline, reaching its lowest point in over a year. Glassnode’s latest insight’s report analyses potential explanations for this exodus. One widespread narrative is that this exodus is due optimistic long-term sentiment, leading investors to withdraw their funds for hodling in anticipation of a bull run in the future. This is supported by the growing number of BTC whales, as well as continued hodler accumulation over the past 2 months. However, Glassnode’s deeper analysis of prominent exchanges reveals that this is not the whole story.
Unconfirmed Podcast: The ‘Brilliant Asshole’ who almost Blew Up Coinbase
Jeff Roberts, staff writer at Fortune and author of the recent Audible book, “Kings of Crypto: Coinbase and the Coming Disruption of Finance,” discusses Coinbase’s past, present and future in this episode of Unconfirmed with Laura Shin. They cover:
– When Coinbase duped Apple with its app and eventually got kicked out of the App Store
– When Coinbase’s hot wallet got hacked
– How Brian Armstrong handled challenges like the bitcoin block size debate and an IRS summons on all its customers’ activities for years
– How Coinbase handled competition from Binance
– The ‘complete mercenary and ‘brilliant asshole’ who tore the leadership ranks apart and led to a number of departures by top execs
– Where Coinbase goes from here
Oil Price Crash Gives US Bitcoin Miners an Advantage
Following the oil market crash in April, electricity prices have continued to fall globally. Andreas Antonopoulos believes that despite the disruption to industries, the oil market downturn could give US cryptocurrency miners a new advantage.
On his YouTube channel in a video entitled “Down the Rabbit Hole”, Antonopoulos describes how falling oil prices will benefit crypto miners by providing cheaper electricity worldwide.
He views theis as an opportunity for US crypto miners to become competitive with Chinese miners. He specifically mentions the new Bitmain mining facility recently opened in Texas.