Crypto Asset Management: Nearly Half of Institutions Adopt Digital Assets

Audy Castañeda
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Crypto Asset Management: Nearly Half of Institutions Adopt Digital Assets

According to research by Coalition Greenwich and Amberdata, asset managers and hedge funds are increasingly exuding optimism and fervor when it comes to the growing potential within the cryptocurrency asset class.

A recent study has revealed that the cryptocurrency markets in the United States and Europe remain remarkably strong and are making significant progress, despite facing intense scrutiny and uncertainty in the US market.

Research by Coalition Greenwich and Amberdata reports that asset managers and hedge funds are showing increasing enthusiasm and fervor when it comes to the potential of cryptocurrency assets. Not only are they excited about the growth prospects, but they are also actively exploring and capitalizing on the multiple business opportunities this space has to offer.

In this dynamic landscape, these financial professionals see the cryptocurrency asset class as fertile ground to expand their portfolios and diversify their investments. They are not mere spectators; instead, they are actively positioning themselves to take advantage of cryptocurrencies’ growth.

Cryptocurrency Adoption Is On the Rise

Research conducted by Coalition Greenwich, a recognized global leader in strategic benchmarking, analytics and insights for the financial services sector, in collaboration with Amberdata, a leading Blockchain and cryptoasset data firm, has revealed a significant trend: its findings indicate that a substantial amount

Nearly half of asset management institutions proactively monitor cryptocurrency assets on behalf of their clients. Surprisingly, these institutions maintain a positive and optimistic outlook on cryptocurrencies, even in the face of generally bearish market sentiment.

The study, titled “Digital Assets: Managers Fuel Data Infrastructure Needs,” sought to examine how these institutions are incorporating digital asset services into their offerings, including customer interactions, investment products and related technologies, to meet the demands of their clients.

According to the study, 24% of asset management companies have implemented a strategy for digital assets and an additional 13% intend to do so in the next two years.

The data also reveals that a survey was conducted of 60 companies spanning three jurisdictions, and 25% of them currently own digital asset managers and related teams. This percentage is expected to increase by a third in the next 12 months as more companies express interest in expanding their capacity in this area.

More Countries Explore Digital Assets

Meanwhile, the cryptocurrency market remains strong, supported by centers in Dubai, Singapore, Switzerland, the United States and the United Kingdom. Financial institutions are exploring asset tokenization, while a well-regulated custody infrastructure is essential.

The competitive landscape is shifting toward data, analytics and tools for front-office professionals seeking higher returns. Over the next 6 to 12 months, increased investments in crypto data and portfolio management are expected, indicating that the industry is poised for future opportunities, according to the study.

Among institutions that do not provide crypto services, 52% attribute their stance to regulatory challenges. These entities point to several factors, such as the unique characteristics of cryptocurrencies, ambiguous tax regulations, security fears, and issues related to Know Your Customer (KYC) compliance. Asset managers anticipate growth in the overall market over the next five years, a view that aligns with previous observations made by digital asset executives.

Regarding regulations, 85% of institutional respondents believe the U.S. Securities and Exchange Commission will move away from its strict approach and encourage more favorable opportunities in the coming years, the study shows.

By Audy Castaneda

Metaverse Steals the Spotlight: The Week’s Highlights

Audy Castañeda
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Metaverse Steals the Spotlight: The Week’s Highlights

The five top news related to the Metaverse are presented.

In today’s digital age, the Metaverse has become a fascinating concept, which is why being up to date in this context is essential to stay current and take advantage of all its opportunities.

Salvador Allende’s Technological Project Revived in the Metaverse

Half a century passed, authorities and experts recognized the value of Cybersyn, through the Metaverse, in a virtual replica of what would have been its control center, accompanied by the precursor of the initiative and president of that time, Salvador Allende.

A virtual twin of the Cybersyn room, developed the Startup Metaverse Ltda., in an experience in the Metaverse that included the participation of the Undersecretary of Science and the UFRO, with the support of the Allende Foundation.

The activity featured a special guest, former President Allende’s own avatar giving his UNCTAD III speech, recreating his voice using Artificial Intelligence. Subsequently, there was an extended dialogue on science and technology between authorities and experts.

Shandong, China: Driving Metaverse Growth Toward $20.5 Billion by 2025

The Shandong provincial government aims to cultivate the development of projects related to the Metaverse, with the aim of reaching a market size of approximately $20.5 billion by 2025. This represents 10% of the global market share, according to a report of the Shandong Provincial Development and Reform Commission.

The plan encompasses the construction of multiple Metaverse-related industrial parks and the nurturing of at least 100 Metaverse companies. In addition, the provincial government intends to support these companies in applying for at least 3,000 national and international patents.

Jonathan Taplin’s Ideas on the Metaverse

Jonathan Taplin shares key insights from his new book, “The End of Reality: How Four Billionaires Are Selling a Fantastic Future of the Metaverse, Mars, and Crypto,” referring to Elon Musk, Peter Thiel, Mark Zuckerberg, and Marc Andreessen.

Specifically, he indicated the following:

“The future they are now selling (a world run by Artificial Intelligence, crypto fortunes, living to be two hundred years old, spending our lives in the Metaverse or on Mars) is largely hype. But because of their wealth, people are buying a dangerous future.”

Crucible and Futureverse Team Up

Crucible and Futureverse have presented their partnership that promises to bring significant advances in the development of the open Metaverse. In the words of Crucible founder and CEO Ryan Gill, this partnership is not just about technological innovation, but about driving a more inclusive digital sphere. He envisions a future where open systems and game worlds will reign, with Crucible and the Futureverse leading the way.

Transmira Partners with Zetly to Access the Metaverse

The Polish-Estonian company Zetly, which creates a sports platform based on the Blockchain network, has signed a cooperation agreement with the American company Transmira Inc., which provides the XR Metaverse platform.

On September 20 and 21, 2,500 people, including 200 football clubs, leagues and federations, will arrive in Seville, Spain, to attend the World Football Summit (WFS) in Europe. Michal Glijer of Zetly and Robert Rice of Transmira will showcase their platforms to educate stakeholders on how to increase fan engagement and monetization through a Blockchain-powered Metaverse.

By Audy Castaneda

Bitcoin Bears Gain Ground as Fund Holdings Fall to 2020 Lows

Leonardo Perez
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Bitcoin Bears Gain Ground as Fund Holdings Fall to 2020 Lows

Bitcoin fund holdings have fallen to their lowest level in more than two years. The liquid supply of the currency has also decreased as short traders exit the spot market.

The number of Bitcoins held in BTC Fund Holdings has fallen to its lowest level in thirty months, a pseudonymous analyst at CryptoQuant Chained noted in a recent report.

The BTC Fund Holdings metric tracks the total amount of major coins held in the form of investment vehicles such as trusts, exchange-traded funds (ETFs), and funds. The cumulative amount of coins held in these holdings may grow alongside the growing interest in indirect investing.

According to data tracked by CryptoQuant, as of September 8, this metric was 684,435 BTC. Year-to-date (YTD), the metric has seen a 1% decline in value.

While noting that the prolonged drop in fund holdings could be due to several reasons, Onchained added that “it may signify a deeper change in investor sentiment or strategy.”

The analyst added that the sharp decline in fund holdings over the past year overall reflects a cautious sentiment among investors and institutions, possibly due to regulations and concerns about market volatility.

Additionally, it can result from profit-taking or portfolio adjustments, highlighting the dynamic nature of the cryptocurrency market.

A change in the investment behavior of this group of investors can have a major impact on the price of BTC because they control a large portion of the coin’s supply.

“This development highlights the pivotal role of institutional investors, trusts, ETFs, and funds in influencing Bitcoin’s market dynamics. Their actions can have a considerable impact on Bitcoin’s price and market stability, reinforcing the earlier understanding of their significance,” the analyst remarked.

Short-Term Holders Run for Their Lives as Liquid Supply Plummets

As BTC continues to face strong price resistance at $26,000, the coin’s liquid supply has fallen to a low of 4,120,775 BTC, Onchained discovered.

According to the CryptoQuant analyst, this metric tracks the portion of the circulating supply of BTC that is available for trading in the market. It is mainly in the hands of short-term investors who are willing to sell their coins quickly if the price drops.

When the liquid supply of BTC is reduced in this way, price volatility often results. This is because there are fewer sellers available to sell their coins if the price rises and there are fewer buyers available to imitate if the price falls. This can cause strong price movements, both up and down.

Bitcoin Price Performance in September: A Preview

Bitcoin price performance continues slowly, with the asset failing to produce significant moves in either direction. September has not been the most exciting month in terms of BTC price performance, at least for now. The asset started the month with a drop to an 11-week low of $25,350, which followed rising over $28,000 after the Grayscale win.

Since then, Bitcoin has only managed to recover about $500 and remained still for a week until Thursday. At that point, the bulls took charge and pushed BTC north by several hundred dollars, culminating in a weekly high of $26,400.

However, as has been the case with all other recent price surges, this one was short-lived and the cryptocurrency lost all momentum almost immediately. It has been stuck below $26,000 since then, and the last 24 hours have not changed that.

Its market capitalization has remained above $500 billion, while its dominance over alts has increased slightly to 48.5%.

By Leonardo Pérez

Coinbase CEO Brian Armstrong on International Expansion and Regulatory Challenges

Leonardo Perez
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Coinbase CEO Brian Armstrong on International Expansion and Regulatory Challenges

Armstrong highlighted that 83% of G-20 countries are in the process of implementing cryptocurrency legislation or have already done so.

Coinbase CEO Brian Armstrong appeared on CNBC’s Power Lunch to discuss the company’s international expansion efforts. Armstrong noted that 83% of G-20 countries are in the process of implementing cryptocurrency legislation or have already done so. He emphasized that Coinbase is directing its resources toward these international markets, citing recent launches in Canada and the introduction of an international derivatives exchange.

When asked about the potential disruption of U.S. operations due to regulatory hurdles, Armstrong said, “America is going to do this right.” He also noted that important bills with bipartisan support are currently being reviewed in the House of Representatives, indicating that Congress realizes the need to establish clear rules for the crypto industry.

US Regulatory Landscape and Public Opinion

Armstrong expressed his disappointment with the US Securities and Exchange Commission (SEC) for its lack of a clear regulatory framework for cryptocurrencies. He stressed that this regulatory ambiguity does not reflect the will of the American people.

Armstrong noted that approximately 56 million Americans, or about 1 in 5, have interacted with cryptocurrencies. He used this statistical data to highlight that cryptocurrencies have become commonplace in American society, noting that the number is five times greater than the number of Americans who own electric vehicles.

Armstrong criticized the SEC’s approach of regulating through enforcement actions rather than through a legislative framework. He warned that this lack of clarity has had negative consequences, including crypto companies moving abroad and a decline in US financial and technological leadership.

The Coinbase CEO also claimed that the absence of clear rules has resulted in “terrible things,” such as the explosion of exchanges.

In another vein, during a recent interview with Yahoo Finance, Armstrong said that one-way Coinbase’s dispute with the US financial regulator could be resolved is if another person replaces the agency’s president, Gary Gensler. Armstrong said perhaps this will happen in 2024, either way, it would “certainly help” the exchange in its dispute with the SEC.

Judicial Support and Industrial Equity

Armstrong praised the American judicial system for its role in upholding the rule of law in the crypto industry. He cited a recent court ruling that found the SEC’s actions against Grayscale to be “unlawful” and “arbitrary and capricious.”

Armstrong believes such rulings instill confidence in the industry and emphasizes that the judiciary has been effective in upholding the rule of law in the crypto space.

Bitcoin ETF and Its Impact on Coinbase

Discussing the potential impact of Bitcoin ETFs, Armstrong stated that Coinbase has been named custodian in numerous ETF applications. He believes that the introduction of ETFs will not only bring new capital to the crypto ecosystem but will also be beneficial for both the industry and Coinbase.

Expanding the Crypto Ecosystem

On the topic of business competition and revenue, Armstrong clarified that he has not seen any margin compression in the industry. He highlighted that Coinbase’s main goal is to expand the overall size of the crypto market.

Armstrong sees cryptocurrencies being integrated into all emerging financial services companies, fintech companies, and Web3 platforms and says he doesn’t see them as a competitive threat but rather as a growth opportunity.

By Leonardo Pérez

Does Bitcoin Mining Lose Its Profitability? Hash Price Registers All-Time Low

Audy Castañeda
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Does Bitcoin Mining Lose Its Profitability? Hash Price Registers All-Time Low

Bitcoin hashrate and mining difficulty periodically set new all-time highs. At the same time, the hash price indicator, which measures the profitability of BTC miners, is in the zone of all-time lows. Is the mining business doomed to collapse? Will BTC mining become unprofitable over time?

As the Bitcoin network becomes more efficient and secure, concerns are arising about the profitability of BTC miners. Some argue that their declining revenue could, over time, lead to more mining pools closing, slowing down, and the eventual collapse of the largest blockchain.

On-chain analysis shows that, in fact, both the hashrate of the Bitcoin network and the difficulty of mining successive blocks are today at all-time highs.

Is there still room for miners to earn adequate income on a technologically advanced and energy-intensive network? Or will declining profits (as measured by the hash price index) lead to the termination of more mining businesses?

Hashrate and Mining Difficulty Record All-Time Highs

Hashrate is a basic indicator of the performance and security of the Bitcoin network. It is calculated based on the estimated average number of hashes per second produced by miners on the network.

On the long-term chart of the hashrate (30-day moving average), you can see its exponential growth since the inception of the oldest blockchain. Currently, the indicator is constantly recording consecutive all-time highs (ATH) and is close to 400 million TH/s.

For those who understand how the Bitcoin network works, it is obvious that as computing power as measured by hashrate increases, the difficulty of mining BTC also increases. The chart of this indicator is almost identical to the hashrate and today it also records its ATH.

Hash Price Reaches a Record Low

The increasing difficulty of mining and the hashrate of the Bitcoin network are challenging BTC miners. This is because more and more resources, energy, equipment, and computing power must be involved to compete for the rewards of block mining. These rewards are halved on average every four years as a result of the halving event.

Currently, the block mining reward is 6.25 BTC. However, another halving will occur around April 2024, which will reduce it to 3,125 BTC. Therefore, BTC miners face two unfavorable trends. On the one hand, it is becoming increasingly difficult to compete with numerous rivals, enormous computing powers, and mining blocks. On the other hand, even successful block mining no longer guarantees rewards as high as in the past.

The long-term chart of the hash price indicator has a long-term downward trend. In a sense, it is the opposite of the hashrate chart, but it is still more prone to BTC price fluctuations. This is obvious because as the price of BTC increases, the miners’ income also increases.

Currently, the hash price chart is near the all-time low (ATL). This has raised some concerns about the viability of mining operations and, consequently, the security of the entire Bitcoin network.

Will Bitcoin Mining Stop Being Profitable?

A well-known on-chain analyst @DylanLeClair_ recently described a hypothetical and bleak future for the Bitcoin network, in which miners would not receive enough reward for their work.

Maintaining a huge amount of equipment and electricity bills become too high to remain profitable, so their businesses must cease and an exodus of equipment from the grid occurs. Transaction times become longer, and transaction fees increase as they cannot be validated continuously due to the loss of miners. Thus, it can be said that blockchain is slowing down.

By Audy Castaneda

DeFi Week: Sector Remains Stagnant Amid Bad News

Audy Castañeda
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0
DeFi Week: Sector Remains Stagnant Amid Bad News

The DeFi sector continued its negative march this week amid lawsuits and negative assessments by regulators.

This week, the news did not smile on the decentralized finance (DeFi) sector, which continues to lose ground in the current bear market. The news for the area has not been encouraging at all, except for some predictions from Changpeng Zhao. Regulators remain the main threat on the horizon for decentralized projects, especially in the United States.

Hackers are also on the list of threats. These two actors are the main deterrents for investors when placing capital in dApps. Hence, the total value locked (TVL) in general continues to decline.

Global Securities Regulator Lashes out at DeFi This Week

The global securities regulator IOSCO considers that the MEV within decentralized finance is an unlawful activity. The maximum extractable value (MEV) is the total that can be extracted by validators within a network. This allows them to sort, include, and exclude transactions to maximize the profits they can make with each block.

Although this is one of the most popular ways to attract capital through incentives, its days could be numbered. If this type of practice is illegal within traditional finance, it is a matter of time before regulators hunt them down in decentralized finance. Consequently, to the same extent that adoption increases, cases of regulatory treatment in this regard will multiply. This week’s IOSCO report becomes bad news for the DeFi sector.

CFTC Charges Against Three Decentralized Protocols

The Commodity Futures Trading Commission (CFTC) attacked several protocols that it accused of operating assets without the proper license. In a press release, the commission announced legal proceedings against ZeroEx, Opyn, and Deridex. This agency attacks firms focused on the trading of digital assets based on the blockchain from its territory.

“At some point, DeFi operators had the idea that illegal transactions become legal when facilitated by smart contracts… This is not the case,” said Ian McGinley, director of enforcement at the CFTC.

There are several charges against these decentralized platforms. Deridex and Opyn were accused of some irregularities with registration. All three protocols will have to answer for the illegal offering of leveraged and margined retail commodity transactions in digital assets.

CZ Hopes for a Bright Future for Decentralized Finance

It can’t all be bad news. There are also possibilities that capital will flow into DeFi protocols. At least, that is the opinion of Binance CEO Changpeng Zhao.

Recently, the businessman praised the sector during his participation in a live on the social network X. He stated that in the next bull run of the crypto market, DeFi would surpass CeFi in terms of trading volume. “I think the more decentralized the industry becomes, the better,” CZ commented.

Despite the little competition they currently represent, the businessman highlighted that decentralized finance is part of the future. The SEC’s onslaught against centralized trading exchanges is leading many investors to take the path of decentralized exchanges.

This vision of CZ is similar in nature to that of his rival Brian Armstrong of Coinbase. The latter proposes the creation of a global decentralized exchange to take over.

With this positive news, the DeFi sector, which appeared worn out this week, could keep its future potential intact. Either way, everything will depend on regulators’ plans to prevent or allow the expansion of privacy- and technology-based finance.

By Audy Castaneda

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