Large FoF in sight, Van Eck’s “ETF” update, and Blockchain in Higher Education
Sept 5 — Crypto assets increased 8.5% this week, bringing the total market cap up to $267 billion. The Crescent Crypto Market Index (CCMIX) was up 9.7% while BTC gained 11.9 % over the same period.
The crypto market saw a significant run-up after a strong sell-off last week. The total value of the crypto market has dropped around 20% month-to-date, with Bitcoin dropping 9.7%. Bitcoin performed in the top portion of digital assets as a whole this week. Bitcoin outperformed all other CCMIX constituents and all other Crescent Crypto indices.
Binance, as widely reported, will no longer be available for US investors beginning on September 12. Although there are imminent plans to launch a Binance US with different crypto listings, it will not be available until later this year. Binance has played a huge part in providing liquidity to the ecosystem, particularly in altcoins where the exchange dominates its counterparts.
Crescent Crypto indices consider market cap, custody/security, trading volume, and require multiple “eligible exchange” listings. Presently, these eligible exchanges are as follows: Coinbase, Kraken, itBit, Bitstamp, Bittrex, and Poloniex. The requirements for eligible exchange consideration are:
▪ Strong history of security controls
▪ Available to US institutional investors
▪ Substantial trading volumes
▪ Local regulatory compliance and accurate reporting
Binance no longer meets these criteria as it will no longer be available to US-domiciled investors. Additionally, trading volumes on Binance’s exchange no longer contribute to the index.
The removal of Binance as an eligible exchange resulted in the Crescent Crypto Market Index shedding 8 constituents which represented, in sum, about 3% of the portfolio at time of rebalance: ADA, TRX, DASH, NEO, ATOM, ONT, LINK, ZEC.
9 constituents remain in the CCMIX portfolio with a ~75% BTC dominance in the index. Read our full index methodology here
Aug 30th — Sep 5th, 2019
Aug 30th — Sep 5th, 2019
Summary
- BTC outperformed all other large-cap constituents, finding itself up 10.6% on the week.
- The CCMIX saw strong gains this week, with eight out of nine constituents ending the week in the green. BTC was the only constituents ending the week with double-digit gains.
- XMR was the second-best performer this week with a 7.7% gain. This was a much-needed rebound after dropping more than 15% last week.
- The CCMIX increased by 9.7% in value outperforming CCALT, CCSMART, and CCDARK indices. The CCDARK index performed second best with a 7.7% gain. This gain was almost entirely due to XMR as ZEC remained fairly flat.
- EOS and ETH performed in the middle of the pack this week down 2.8% and 3.0% respectively. This comes right after both assets posting over 10% losses last week. Smart-contract platforms, in general, saw weaker results as CCSMART gained 3.3% as the worst-performing index this week.
- XLM was the worst performer this week down 2.6% and the only constituent in the red. This comes after posting a little over than 8% loss last week,
- BTC dominance increased to 70.8% of the total crypto market cap compared to 69.2% last week. Bitcoin has not comanded this great of marketshare since early 2017.
What Happened?
Elwood Asset Management, an investment firm owned by billionaire hedge fund manager Alan Howard, plans to launch a $1billion venture that will invest in cryptocurrency hedge funds. While the details of this fund of funds are not yet finalized, investors will be presented with a portfolio of funds to invest in. Investors will have various options depending on the risk profile, expected returns, and liquidity requirements. Elwood CEO Bin Ren told The Financial Times Friday that the new venture aims to help investors select quality funds, and that he “sees this as a big growth opportunity.” Per the report, Elwood has identified around 50 hedge funds that “probably satisfy [its] due diligence.” This move comes after Elwood launched an exchange-traded fund (ETF) on the London Stock Exchange earlier this year which invests in an index of companies with blockchain exposure.
Why Does This Matter?
Elwood Asset Management’s new venture solidifies the fact that cryptocurrency is indeed an investable asset class for institutions and not just for retail. While only a fund of funds, Elwood still opens the gates for institutions to gain exposure to the digital asset market with the addition of tailoring to individual specifications. This route is common for incumbent asset management institutions as it is much easier on an operational and regulatory level. The size of the fund further indicates that there is not only a significant latent demand for digital assets but also the conviction that digital assets are institutional-grade investment products. It remains to be seen how this venture is structured and develops, but as it stands this is highly bullish for this ecosystem.
What Happened?
On Tuesday, VanEck Securities and SolidX Management announced that they will use the SEC exemption to allow shares in their VanEck SolidX Bitcoin Trust to be offered to institutions such as hedge funds and banks. This reveal comes after the SEC has postponed VanEck’s Bitcoin ETF numerous times. This product will not be available for retail investors. Ed Lopez, head of ETF product at VanEck, clarified that the offering “allows for shares to be created and redeemed like ETFs, but it is not an ETF…unlike an ETF it isn’t listed on a national exchange, rather it is quoted on the OTC Link ATS platform. This is a first-of-its-kind type of offering. Given it will trade over-the-counter via broker-to-broker transactions, we’ve been casually referring to it as a Broker Traded Fund, a BTF.” The firm has also stated that investors are insured against the theft or loss of the bitcoin private keys held by the trust, and are provided the open-ended creation and redemption of shares.
Why Does This Matter?
Compared to Grayscale, it’s much more limited since it’s qualified institutional buyers (QIBs) only, but it should eliminate the premium that GBTC suffers from. Therefore, a small subset of GBTC holders may be interested in switching over, but the number of QIBs in crypto is still limited. Some analysts have come out with views that this is more of a marketing play than anything. Gabor Burbacs, director of digital assets strategies at VanEck/MVIS, on the other hand, has stated: “this Qualified Institutional Buyers (QIBs) only 144A Bitcoin product may pave the way for institutional Bitcoin adoption and showcase that an appropriately regulated ETF structure can work in practice.” This makes this offering seem like a stepping stone for VanEck to illustrate the functionality of a bitcoin ETF. It remains to be seen if the product will make it to market or if the SEC will step in even if it’s a valid exception. We saw the SEC do something similar when the Coinshares XBT tracker product from Nasdaq Stockholm attempted to cross-list in the US and the SEC shut it down due to ‘confusion in the market’. VanEck SolidX Bitcoin Trust, however, has a better shot as it has a much more limited scope.
What Happened?
Coinbase released The 2019 Leaders in Crypto Education report that illustrates the developments in crypto specifically on higher education. These are the key takeaways: 1) 56% of the world’s top 50 universities offer at least one crypto or blockchain course — up from 42% in 2018, 2) twice as many students enrolled in these courses than they did in 2018, 3) 70% of crypto courses are in departments outside of computer science, 4) 9/20 of the schools on Coinbase’s Leaders of Crypto Education list are outside the United States, 5) 41/50 if the top universities have at least one student-run crypto club, and 6) 34% of students indicated that they would like to learn more about crypto.
Why Does This Matter?
There is a recurring trend that while crypto asset prices on aggregate have declined year-over-year, there has been clear protocol development and developer growth in many of the prominent networks. Coinbase’s annual report on higher education reconfirms this narrative as cryptocurrency as a whole is growing in other fundamental metrics, such as educational interest and growth. Notably, this ecosystem is attracting highly intelligent individuals from the top universities, and this does not seem to be letting up any time soon. As stated before, tokens and digital assets draw significant interest from younger generations, and this is a bullish signal for the growth of the space as a whole. Bitcoin and cryptocurrency is a generational technology with huge interest from younger population segments. It is refreshing to see the adoption and interest grow in the group of people that will most likely be the ones championing the success of the sector.
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Published at Mon, 09 Sep 2019 18:09:02 +0000
Bitcoin Pic Of The Moment
✅ This image from Marco Verch (trendingtopics) is available under Creative Commons 2.0. Please link to the original photo and the license. 📝 License for use outside of the Creative Commons is available by request.
By trendingtopics on 2019-03-19 09:45:03
