Bitcoin Magazine

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Rise to $44 Billion This Month

27/02/2021 by Idelto Editor

Institutional Investors Pile Into Crypto Exchange-Traded Products: Managed Assets Surge 50% to $44 Billion This Month

The total assets under management across all crypto exchange-traded products (ETPs) worldwide have risen 50% this month to nearly $44 billion. Among listed products, Grayscale’s bitcoin trust tops the list with the most assets under management while Bitwise’s fund was the best performing bitcoin product by market price over the last 30 days.

Cryptocompare published its “Digital Asset Management Review” for the month of February on Friday. The report states that the total assets under management (AUM) across all exchange-traded products (ETPs) increased 50% to $43.9 billion from mid-January to Feb. 23.

The price of bitcoin was above $50K on Feb. 23. It has since fallen to $46,876 at the time of writing, based on data from markets.Bitcoin.com.

The crypto exchange-traded product with the most AUM was Grayscale Bitcoin Trust (GBTC) with $35 billion in assets under management, according to the report. As of Feb. 26, GBTC’s AUM has dropped to $30.72 billion due to the lower BTC price. Other listed crypto products with the most AUM include Grayscale’s Ethereum Trust, Litecoin Trust, and Bitcoin Cash Trust. The bitcoin fund by 3iq (QBTC) also made the top five list with $1.27 billion under management.

Most of the investments into crypto exchange products are made by institutional investors, particularly hedge funds. In its Q4 2020 report, Grayscale wrote that “Institutions are here,” noting that institutions accounted for 93% of all its capital inflows during the period.

As for exchange-traded notes (ETNs), ETC Group’s BTCE has the largest AUM with $1.01 billion. Wisdomtree’s BTCW came second with $314.8 million and 21shares’ ABTC with $257.8 million.

The report also ranks exchange-traded certificates. XBT Provider by Coinshares’ Bitcoin Tracker Euro holds the highest AUM with $1.72 billion, followed by Bitcoin Tracker One with $1.06 billion.

The best performing bitcoin exchange-traded product by market price over the last 30 days was Bitwise 10 Crypto Index Fund (BITW) with 156%, the report notes. Its performance exceeded both Cryptocompare’s CCCAGG BTC/USD Index performance (64%) and MVIS’ MVDA Index performance (48.9%).

Furthermore, North America now has two bitcoin exchange-traded funds (ETF): Purpose Bitcoin ETF and Evolve Bitcoin ETF. The former accumulated $165 million on its first day of trading.

What do you think about investing in crypto exchange-traded products? Let us know in the comments section below.

Despite The Bitcoin Price Dip, This Week Was Incredibly Bullish

27/02/2021 by Idelto Editor

I know that this advice is easier said than done, but don’t get distracted by the price of bitcoin.

We closed last Friday at $56,000 and saw the price reach and all-time high over the weekend, yet the market decided to pull back. This is a feature, not a bug. Remember that bitcoin is a mature asset and the market is in price discovery mode 24/7.

If you look beyond the charts and read the headlines from this week, you would think a dramatic price rise would be taking place.

Tuesday, February 23

In a deceptively lackluster announcement, Cash App parent company Square announced a purchase of $170 million worth of BTC that now puts 5 percent of its reserves in bitcoin. If it wasn’t for the insanely bullish headlines from Tesla and MicroStrategy in the past weeks, this announcement might have made bigger waves. Musk set the bar and this move from Square left many Bitcoiners wondering, “What is this, a treasury reserve allocation for ants?”

Wednesday, February 24

In their never-ending quest to buy all the sats, MicroStrategy announced it’s purchase of $1.026 billion of bitcoin. This headline made waves through Bitcoin Twitter and MicroStrategy CEO Michael Saylor made appearances on mainstream media justifying the move and making the case for bitcoin as a necessary treasury reserve asset. Every time he made an appearance, he furthered the Bitcoin meme and no doubt left viewers questioning their worldview.

Thursday, February 25

Coinbase announced it’s S-1 filing to go public on NASDAQ. This announcement did not signal any big purchases of bitcoin, but shared some very interesting insights into Coinbase’s users and its current BTC holdings.

We learned that the exchange has more than 43 million KYC-compliant users and holds approximately $130 million in BTC. We’ve long speculated about how many HODLers are out there, and now that we know Coinbase has 43 million users, we have a line in the sand. The big head scratcher is how a company that was founded in 2012 only has $130 million in BTC to it’s name.

But I believe that the key piece of information here is that this was an incredibly bullish week, despite price dips that might suggest otherwise. These are all massive headlines that further support the idea that the herd is coming, and this time it’s being led by institutions.

The question you should be asking yourself is: What’s my personal treasury reserve strategy?

The post Despite The Bitcoin Price Dip, This Week Was Incredibly Bullish appeared first on Bitcoin Magazine.

Investment Firm Launches the First ‘Crypto Hedge Fund’ in Spain- Plans to Expand Across Europe, Latin America

27/02/2021 by Idelto Editor

In Spain, an investment company has begun to promote what they called the “first crypto hedge fund.” The product has been registered in Malta by Avenue Investment Crypto, headed by a crypto advocate, Martin Huete.

Investments Allocated Mainly in Bitcoin and Ethereum

According to Infobae, the hedge fund “exclusively” targets qualified investors whose minimum investment starts at 100,000 euros ($120,600). However, anyone who would like to join the crypto hedge fund should prove to the firm that they hold assets for 750,000 euros ($904,900).

Although Avenue Investment Crypto just launched the product, it was created by the firm in 2019. Huete was appointed as the institutional relations manager amid the commercialization phase of the crypto hedge fund.

Within the portfolio offered by the firm, the total exposure of the crypto hedge fund ranges between 40% and 100% of the fund with investments in ethereum (ETH), bitcoin (BTC), and other undisclosed cryptos.

Still, the fiat serving as base currency fund is the euro, and Avenue Investment Crypto clarified all profits accrue.

Firm Expects to Raise $122 Million by the End of 2021

The people in charge of managing the crypto hedge fund are Arne Vaagen and Francisco Gordillo.

Vaagen co-founded the hedge fund Futuris with Brummer & Partners in 1999, with over 1,300 million euros under management. Also, Gordillo has 25-years’ experience in the banking sector, and since 2012, it has been studying the cryptocurrencies sector, said the firm.

Gordillo commented about the crypto hedge fund:

What we propose to the investor is that they keep a plot of the future; it is like investing in Wall Street in its founding moments, taking a position on the foundations of the future.

In the first instance, the investment company seeks to promote the fund across Spain, Portugal, and North Europe. Moreover, the second stage targets Latin America and the rest of Europe.

Avenue Investment Crypto expects to collect almost $122 million before the end of 2021. As of press time, they’ve raised over $24 million.

What are your thoughts on the idea of a crypto hedge fund? Let us know in the comments section below.

Why Won’t Bitcoin Die? Because You Need It

27/02/2021 by Idelto Editor

“Why won’t bitcoin die?” is a common question I’ve heard asked throughout the years by people sitting on the sidelines watching the bitcoin price hectically rise and fall, time and time again.

The mainstream media will tell you that bitcoin is a speculative bubble, your financial advisor will tell you that you’re wasting your time by investing in it, your friends and family will tell you that it’s a scam and economists will tell you that it won’t work. So, why is bitcoin consistently rising in price and proving them all wrong? If bitcoin really is everything that these people say it is, then why won’t it just die already?

Many people in developed countries see bitcoin as an investment opportunity, thinking “I’ll buy low here, and sell high here” in the hopes of purchasing a good or service that they wish to acquire. We also aim to increase our net worth and improve our quality of life, earn a higher social status, provide value, etc. But many people in the first world have not yet had to learn about the frightening reasons why bitcoin is needed in the first place, but that is changing.

People in developing countries see Bitcoin in an entirely different light. They’re not buying bitcoin in the hopes of purchasing a 10-bedroom mansion in Los Angeles, they’re not buying bitcoin in the hopes of owning a Lamborghini, they’re buying bitcoin because they need it to survive. In third-world countries where the national currency is being printed into oblivion, those countries’ citizens are seeing their life savings vanish right before their eyes.

I remember giving a speech at my college during my freshman year (I went to school in the United States) on what’s better: fiat currency or bitcoin. One argument I made is that fiat’s hyperinflation tendencies lead to a 100 percent guaranteed result of wealth evaporation. I showed the video below, featuring a chart with multiple national fiat currencies and demonstrating how the Venezuela bolivar was completely destroyed in a small window of time. It’s very ironic to hear bitcoin critics when they claim that “bitcoin can go to $0” when their own national currency is the one that’s going to zero in terms of purchasing power.

Thanks to Twitter, I was able to see firsthand what was going on in the country, hearing stories from people who would get paid in the bolivar and then have to literally sprint to the local market to buy food before it lost its purchasing power. Many could not afford to eat, keep their jobs or even survive. This is the inevitable result of all fiat currencies, as history has proven.

Bitcoin is not a speculative bubble fueled by degenerate gamblers hoping to make a quick buck, it’s capital flight from collapsing fiat currencies.

When people say Bitcoin is a lifeboat, they’re not exaggerating. Bitcoin is providing immense value to those being affected by hyperinflation by allowing people to store their monetary energy into something that won’t evaporate into thin air. Individuals storing their wealth into this hard money, capped in supply at 21 million, helps assure them that they’ll be able to eat this week. That they’ll be able to actually afford whatever they need to survive. And Venezuela is just one of the many countries going through this situation.

Many in first-world countries, especially the United States where we have the global reserve currency, have not had to deal with this. Yet.

The U.S. M2 money supply expanded by $369 billion last week, the most since March. The YoY growth rate is now 26.54%, which is unprecedented. #Inflation pic.twitter.com/yaw1cVfDtH

— Spencer Schiff (@SpencerKSchiff) January 24, 2021

The supply of money is growing ever larger every day. Inflation has been ramping up and you can see it with your own two eyes. I’ve noticed the prices of all of my go-to groceries at the market go up, and I’m not alone. Many other individuals on Twitter have been voicing their concerns as well.

Holding money for which the purchasing power is going down while the cost of goods and services goes up is a road to serfdom. Oh, and let’s not forget that the Biden administration has not even begun printing the funds for the $1.9 trillion relief package.

So, why won’t bitcoin die? Because people need it to protect their savings from hyperinflation, now more than ever.

The post Why Won’t Bitcoin Die? Because You Need It appeared first on Bitcoin Magazine.

Taproot Activation And LOT=True Vs. LOT=False

26/02/2021 by Idelto Editor

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In this episode of “The Van Wirdum Sjorsnado,” hosts Aaron van Wirdum and Sjors Provoost discussed activation of the Taproot soft fork upgrade, and more specifically, the lock-in on timeout (LOT) parameter.

The LOT parameter can be set to either “true” (LOT=true) or “false” (LOT=false). LOT=false resembles how several previous soft forks were activated. Miners would have one year to coordinate Taproot activation through hash power; if and when a supermajority (probably 90 percent) of miners signal readiness for the upgrade, the soft fork will activate. But if this doesn’t happen within (probably) a year, the upgrade will expire. (After which it could be redeployed.) LOT=true also lets miners activate the soft fork through hash power, but if they fail to do this within that year, nodes will activate the soft fork regardless.

Van Wirdum and Provoost discussed the benefits and detriments of each option. This also includes possible scenarios of what could happen if some users set LOT to true, while other users set LOT to false, and the associated risks. Finally, the hosts discussed what they think is most likely going to happen with Taproot activation.

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