institutional investors

Japan’s Nomura Research Institute Considers Introducing a New Cryptocurrency Index

Cryptocurrency investment solution provider Intelligence Unit (IU) announced a partnership with Japanese-based consulting company Nomura Research Institute (NRI) to introduce a new cryptocurrency index, popularly known as IU/NRI Crypto-Asset Index.

The new cryptocurrency index offers an investment solution for financial institutions in Japan as well as global investors. The index will be drawing data from CryptoCompare, a cryptocurrency data platform, and MV Index Solutions, a crypto index platform. The cryptocurrency index is the initial crypto-asset benchmark designed for institutional investors in Japan.

A tradable crypto market index

The two firms (the Intelligence Unit and the Nomura Research Institute) have mentioned that the cryptocurrency index focuses on covering all aspects of the crypto market. The index will track the prices of five cryptocurrencies – Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and XRP. The five digital assets will be tracked based on the use of only two currencies (the United States dollar and the Japanese Yen) and will be available to trade in the two fiats.

The press release indicates that the cryptocurrency index can be utilized by institutional investors as a benchmark for objective investment appraisal. Moreover, it will allow financial information providers and crypto exchanges to display index values and charts to investors to be utilized as objective criteria to assess their investments.

The new instrument will be available through Nomura Research Institute’s financial information database to both international and domestic institutional clients. The offerings intend to start on January 31st, 2020.

Thomas Kettner, managing director at MV Index Solutions, said, “We are delighted to unveil this index for the Nomura Research Institute and the Intelligence Unit. We are pleased to offer our deep expertise and services in digital assets indexing to the Japanese market.”

Rising institutional demand for cryptocurrency investments

Akihiro Niimi, CEO of Intelligence Unit, mentioned, “Increasing demand from global institutional investors is what leads to the growing crypto-asset funds, and therefore well-diversified products/portfolios such as index funds are affordable and attractive as alternative investments. We intend to bridge the crypto-asset world and the traditional financial world by offering institutional-grade benchmarks for crypto assets, to further develop the status of crypto-assets as an alternative investment.”

The partnership is strategic to both parties. Nomura Research Institute’s collaboration with the Intelligence Unit gives cryptocurrencies to become widely recognized as an asset class. Thus, a significant number of companies see the potentials in introducing derivatives to help protect investors against exposure to price fluctuations.

With increasing institutional demand for digital asset investment, several index funds are set to emerge in the market. For instance, Stack, a Singapore-based digital asset platform, recently announced its intention of launching a Bitcoin index fund.

Meanwhile, Nomura Research Institute is a subsidiary company controlled and owned by Japan-based global investment bank Nomura Holdings that has embraced blockchain and provides many services associated with crypto assets. In May 2018, Nomura Holdings launched crypto custodial services at its banks to remove barriers to institutional investments in the crypto space.

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Grayscale Investors Buying Bitcoin at Remarkable Rate Despite Goldman Sachs’ Skepticism

Since the Bitcoin halving event on May 12, Grayscale Investment, the world’s largest digital asset management company, has bought more Bitcoins on behalf of its institutional clients than the number of Bitcoins mined in the same period. The American-based digital asset manager continues accelerating its rate of Bitcoin acquisition, despite Goldman Sachs recently determining the cryptocurrency an asset unworthy of investment.

Kevin Rooke, an independent researcher and technology analyst, supplied data on Twitter showing that Grayscale acquired 18,910 coins to its Bitcoin Trust within a span of over two weeks since the block reward halving. Surprisingly, just about 12,300 bitcoins have been mined in the same period of time. This shows that Grayscale has purchased almost twice the number of Bitcoins mined since the recent halving event in May. Institutional demands for Bitcoin are skyrocketing. Thanks to the impact of halving.

Goldman Opinion Does Not Hold Water

Rooke’s comment on the statistics indicates that Grayscale‘s acquisition disregards Goldman Sachs professional opinion regarding Bitcoin. Rooke saw that since halving, the number of Bitcoins going into Grayscale’s Bitcoin Trust have exceeded the amount of Bitcoin produced by miners by over 52%.

The increased institutional demand for Bitcoin among Grayscale investors comes as a time when Goldman Sachs shocked the world by saying that Bitcoin is not an asset class. The Wall Street giant made such comments during its recent conference client call event on May 27. The investment bank identified high volatility and the inability to generate cash flows as some of the main reasons why bitcoin is not an asset class. The bank, therefore, does not consider Bitcoin as a suitable investment choice for its clients.

Despite Goldman Sachs tainting Bitcoin’s reputation, Grayscale Bitcoin Trust is seeing rising institutional demand for the top-ranked cryptocurrency by market capitalization. A recent report showed that in the last 100 days before the block reward halving on May 12, the number of Bitcoins held in Grayscale Bitcoin Trust (GBTC) has risen by 60,762, thus indicating a rapid increase in Bitcoin holding.

The current institutional Bitcoin buying figures at Grayscale Bitcoin Trust are a continuation of the trends witnessed in 2019. In the previous year, Grayscale Bitcoin Trust saw a total investment inflow worth of $607 million, an amount that exceeds, by far, the figures generated in the last five years.

Grayscale Announced the Launch of Its Diversified Crypto Investment System for Trading

November last year, Grayscale Investments launched its diversified crypto investment system for trading, an investment product made open to the public. Although high net-worth individuals and institutions are allowed to create registered accounts with Grayscale’s Bitcoin Trust, the investment company has not restricted trade on secondary markets. As a result, several retail traders/investors take advantage of opening accounts with Grayscale’s Bitcoin Trust to expose their retirement savings plans to Bitcoins.

Appetite for Bitcoin has increased especially from institutional investors. Institutions are now actively allocating huge amounts of funds to buy Bitcoin as a political and economic hedge. Grayscale is a US-based investment company that is capitalizing on this rise on demand as it offers the simplest custodial solution for investors. Since halving, Bitcoin miners have not been able to produce adequate coins to meet demands from Grayscale customers alone. That is why it is reported that Grayscale Bitcoin Trust is buying more Bitcoins for its customers.

Millennials and retail investors are still the largest demographic in cryptocurrency. But with an improved outlook from institutions, demand for Bitcoins is skyrocketing. This seems to fulfill the halving prophecy as experts believe that halving would have a positive effect on Bitcoin prices. However, it is worthy to take note that there are still skeptics across the board, including one of the largest financial institutions in the world – Goldman Sachs.

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Bakkt And Galaxy Digital Announce New Bitcoin Service Aimed at Institutional Investors

Regulated Bitcoin futures provider Bakkt and Galaxy Digital’s trading arm seek to cater to the rising institutional demand for Bitcoin. The two firms have just developed a new service targeting institutional investors looking to purchase and store Bitcoin.

The two New-York based crypto companies announced that they partnered to create a new service in which they take care of the entire process including onboarding, trade execution, and storage of digital assets for institutional investors. They call the new service as a “white glove” custody and trading solution.

Bitcoin bandwagoning

Galaxy Digital will offer all the trading functionalities and services, thus leveraging its existing plugins to thirty different exchange venues. On the other hand, Bakkt will provide custody services through its Bitcoin institutional custody (Bakkt warehouse) that it currently utilizes to enable clients to invest in Bitcoin futures.

Time Plakas, head of sales at Galaxy Trading, said: “We designed this partnership to serve the uptick in demand our two firms have received from traditional asset managers seeking access to physical Bitcoin.”

According to a recent survey conducted by Fidelity among 800 institutional investors, almost 80% of them are interested in investing in digital assets. In the previous month, the billionaire investors and hedge fund manager Paul Tudor also made a compelling case for buying Bitcoin, stating that it can act as a hedge against inflation. Therefore, it is not surprising for Bakkt and Galaxy Digital to have decided to work together to take advantage of the high demand.

A recent rise in the Bitcoin derivative market also indicates that more institutional investors are entering the space. The Fidelity survey shows that the percentage of US investors with exposure to crypto futures rose from 9% in 2019 to 22% in 2020.

Bakkt and Galaxy Digital are jointly seeking to provide this new service to institutions like traditional finance asset managers and hedge funds. Bakkt has to date onboarded over 70 firms for its custody business while Galaxy Digital’s trading unit experienced over $1 billion of volume in the first quarter of 2020.

Crypto-Spring in bloom

The recent increase in Bitcoin price is evidence of cryptocurrency revival. The demand is fueled by institutions going for the leading cryptocurrency. The mass psychology of cryptocurrency investing is real. Institutional investors have seen the increase of new tools, use-cases, and innovations that have forced them to change their minds about cryptocurrency. They have realized how cryptos such as Bitcoin could be an important hedge against financial crisis.

Institutions are increasingly embracing technology and considering digital assets as an innovative technology play. They seek to invest in cryptocurrencies due to their low correlation to other assets. It is a new era that marks the acceptance of cryptocurrency as a full-fledged asset class, hedge against economic uncertainty, and form of sound money.

Fidelity: 60% of Institutional Investors Believe that Digital Assets Have a Place in their Portfolio

Fidelity Digital Assets surveyed 774 institutional investors across the United States and Europe, and 80 percent of those who were surveyed found something appealing about digital assets.

The research was conducted from November 2019 to early March 2020 and is the second consecutive year that Fidelity Digital Assets has conducted this survey for US institutional investors and the first for European investors.

60 percent of the institutional investors surveyed believe that digital assets have a place in their investment portfolio.

Over a quarter of institutional investors surveyed by Fidelity Digital Assets are holding Bitcoin, while 11 percent have exposure to Ethereum.

36 percent of respondents, including 27 percent from the US and 45 percent from Europe say that they are currently investing in digital assets.

91 percent of respondents who are open to exposure to cryptocurrencies in a portfolio expect to have at least 0.5 percent of their portfolio allocated to digital assets. Investors in the US has seen a 9 percent increase this year (88%) compared to 79% in 2019.

Tom Jessop, the president of Fidelity Digital Assets commented, “These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class. This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions.”

The trend of cryptocurrency and digital asset adoption is expected to increase next year.

The Great Monetary Inflation

Billionaire hedge fund manager Paul Tudor Jones was reportedly looking to buy Bitcoin to hedge against inflation as central banks across the world are printing money to relieve economies affected by the coronavirus pandemic.

Jones is one of Wall Street’s most seasoned and successful hedge fund managers, CEO and founder of Tudor Investment Corp, a hedge fund that managed $8.4 billion assets under management as of March 30, based on data from the Securities and Exchange Commission.

Jones compared Bitcoin to gold by saying that the digital currency reminds him of the role that gold played in the 1970s. Jones was well known for his correct prediction of the 1987 market crash and shorted Japanese equities several years later before Japan’s economy crashed.

Jones said in an investor letter, called The Great Monetary Inflation, “The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.”

Coinbase Sees a Significant Uptick in Institutional Demand in Cryptocurrencies in H1 2020

Coinbase recently said that there was a significant uptick in institutional demand in cryptocurrencies in H1 2020. The world’s first and largest digital asset, Bitcoin continued to grow in HQ, and the cryptocurrency appreciated 27.3 percent in the first half of the year.

According to Coinbase’s recent report, cryptocurrency fund managers are seeing more backing from institutional investors as the crypto market has been seen as an alternative investment strategy.

With the increase in institutional business growth in the crypto sector, leading university endowments, traditional hedge funds, venture capital firms, and family offices are also looking into buying cryptocurrencies directly. The report said:

“Greater visibility of reputable investors warming up to digital assets has fueled confidence among this community.”

Billionaire Paul Tudor Jones argued in May this year that Bitcoin is a better hedge against inflation. Jones is one of Wall Street’s most seasoned and successful hedge fund managers, CEO and founder of Tudor Investment Corp, a hedge fund that managed $8.4 billion assets under management as of March 30, based on data from the Securities and Exchange Commission.

Paul Tudor Jones compared Bitcoin to gold by saying that the digital currency reminds him of the role that gold played in the 1970s. Jones was well known for his correct prediction of the 1987 market crash and shorted Japanese equities several years later before Japan’s economy crashed.

Bitcoin price crossed the $11,000 mark recently, reaching its highest level in almost two months. Bitcoin (BTC) is trading around the $11,047 level at press time. Coinbase’s report added:

“Investors are still in the early days of untangling the relationship between macroeconomic policy and crypto, but we are seeing a growing base of our institutional clients organizing around the thesis that BTC, specifically, provides exposure to an alternative monetary policy system with supply mechanics that are diametrically opposed to those of central banks in 2020: scarcity versus expansion, predictability versus uncertainty, decentralization versus centralization, software versus humans.”

Fidelity finds similar results in institutional investor demand

Fidelity Digital Assets surveyed 774 institutional investors across the United States and Europe, and 80 percent of those who were surveyed found something appealing about digital assets.

36 percent of respondents, including 27 percent from the US and 45 percent from Europe say that they are currently investing in digital assets.

Coinbase plans to go public this year

According to sources, Coinbase has started planning for a stock market listing this year, which would make it the first major US cryptocurrency exchange to go public.

The listing would require the US Securities and Exchange Commission (SEC)’s greenlight. If the SEC approves the cryptocurrency exchange, it could mean a landmark victory for crypto to go mainstream.

Coinbase was valued at over $8 billion in 2018, during its latest private fundraising round, and the crypto exchange is looking into going public via direct listing instead of an initial public offering (IPO).

Bitcoin's Value to Increase Fivefold by 2023, Institutional Investors Swap Gold for BTC

Bitcoin’s price in 2020 has beaten stocks, gold, and many other assets in year-to-date return on investment (ROI). Even billionaire hedge fund manager Paul Tudor Jones has stated that he has just over 1 percent of his assets in Bitcoin.

Paul Tudor Jones made headlines when he compared Bitcoin to gold by saying that the digital currency reminds him of the role that gold played in the 1970s. Jones was well known for his correct prediction of the 1987 market crash and shorted Japanese equities several years later before Japan’s economy crashed.

According to a British hedge fund manager with tens of billions of pounds under management, Bitcoin could trade at $40,000 to $50,000 within two years in the best-case scenario. Bitcoin (BTC) could see a fivefold increase in value in 2023, as traditional investors enter the market.

Bitcoin has recently rallied to $12,000 but has struggled to maintain that level. Bitcoin is currently trading at $11,815 at press time. While the world’s first cryptocurrency has pushed past $12K for the second time this month, altcoins have also witnessed double digital gains. Gold hit a record high, reaching past $2,000 on the weekend, as investors debate the prospects of another stimulus payout in the US, and increased geopolitical risks.

The British fund manager echoed Jones’ statement regarding Bitcoin and gold, saying that the case for owning Bitcoin was the same as the case for owning gold. Bitcoin is seen as a safe haven, similar to gold which acts as a store of value when central banks around the world are printing money freely, as seen with the US stimulus in response to the COVID-19 pandemic. The hedge fund manager said:

“I believe we are approaching the now-or-never moment for Bitcoin before institutional investors adopt the asset.”

Dumping gold for Bitcoin?

The fund manager further stated that the fund could end up moving 30 percent of its gold investments into Bitcoin for 18 months to profit from a “sharp rise” in price if other institutional hedge funds did the same; seeing that Bitcoin’s price has surged 70 percent in 2020.

Recently, JPMorgan strategists found that there has been a diversification in asset preference among different ages, with the younger investors tending to invest in cryptocurrencies, while the older cohorts favored gold. While both the yellow metal and Bitcoin have deemed to be safe-haven assets, the strategists wrote:

“The older cohorts continued to deploy their excess liquidity into bond funds, the buying of which remained strong during both June and July..the older cohorts prefer gold while the younger cohorts prefer Bitcoin.”

Guggenheim’s Scott Minerd Says Bitcoin Price Should Rise to $400,000

As Bitcoin trades at a fresh record high above $20,000, Scott Minerd, Global Chief Investment Officer at Guggenheim Investments, believes that the true value and scarcity of the leading cryptocurrency means that the BTC price still has the potential to continue rising exponentially.

In an interview with Bloomberg Television on Wednesday, December 16, Minerd said that Bitcoin’s scarcity together with the frequent money printing by the U.S Federal Reserve implies that the cryptocurrency would eventually increase its value to about $400,000. Minerd remarks came the same day when Bitcoin price reached $20,000 for the first time, thus bringing its gain in this year to 190%.

Minerd said:

“Our fundamental work shows that Bitcoin should be worth about $400,000. It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP. So, you know, Bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of transactions.”

Guggenheim Investments is one of the several institutional investors that have embraced the crypto landscape. In the previous month, the global investment financial company reserved the right to invest up to 10% of its net asset value ($5.3 billion Macro Opportunities Fund) in the Grayscale Bitcoin Trust, which solely invests in Bitcoin, thus enabling investors to gain exposure to BTC in form of a security while avoiding the challenges of purchasing, safekeeping, and storing Bitcoin directly.

Bitcoin Gains Greater Acceptance

This year, Bitcoin, the world’s best-known cryptocurrency, has increased its value to new records, a phenomenon that has attracted a growing number of investors who have backed it as an alternative to other assets. In the last 24 hours alone the Bitcoin price has gained almost 10% and BTC is valued at $21,312 according to CoinMarketCap at the time of writing.

Just like Minerd, some Bitcoin advocates including famous macro investor Paul Tudor Jones have also stated similar sentiments. Earlier this year, Paul Tudor Jones said that he has been purchasing Bitcoin as a hedge against inflation that he sees coming from Central Bank money printing and muted rise of consumer prices. Galaxy Digital’s Mike Novogratz also stated that the cryptocurrency can assist in protecting against macro risks.

Bitcoin Is at a Critical Point on The Adoption Curve, Says On-Chain Analyst

Bitcoin (BTC) continues to make headlines thanks to its bull run, which has shed light on the tremendous potential the crypto space has to offer.

The leading cryptocurrency is making merry by shuttering its previous records and surging to levels never seen before. Recently, it went through the roof and surpassed the $24,000 mark. It has since fallen back slightly, trading at $23,500 at the time of writing.

Cole Garner, an on-chain analyst and market cyclist, disclosed in a series of tweets that BTC is at a critical inflection point in its adoption journey as institutional investors step in. He affirmed:

“We’ve reached a critical inflection point in Bitcoin’s adoption curve. A moment wholly unique in the history of markets.”

The analyst revealed that the cryptocurrency adoption curve was at a turning point and a paradigm shift was in the offing, given that it was being fueled by institutional investments. His critical inflection point on the adoption curve translates to the level where innovators were handing over the baton to early adopters and where Bitcoin adoption has been accelerated by institutional adoption.

Source: Twitter

Institutional investments have been trickling in overwhelming doses, and this is a major factor that has caused Bitcoin’s price to skyrocket. For example, leading business intelligence firm MicroStrategy earlier this week purchased more BTC worth $650 million. Garner acknowledged:

“After years asleep at the wheel, institutional leaders are now jarred awake, en masse. If they want this asset: they’ll have to hustle, compete with the masses, and FOMO in above ATH’s. Against a backdrop of scarcity, unlike anything they’ve ever see.”

The on-chain analyst added that increased demand is what is driving Bitcoin’s price, which has made the leading cryptocurrency’s adoption curve set off. His sentiments come at a time when CoinShares chief strategist Meltem Demirors disclosed that BTC’s volatility had slowed down compared to the astronomical rise in the equities market.

Institutional Investors Own 16% of Bitcoin’s Realized Market Capitalization

Bitcoin (BTC) is set to end the year on a high after making a bull run that has made it skyrocket to the $28,000 mark on Christmas weekend. It is still going strong, although it has since slid back to trade at $26,665.41 at the time of writing, according to CoinMarketCap.

Thanks to substantial institutional investments and stimulus money printing, BTC is continuously showing its potential as its bullish momentum is not showing signs of slowing down. CEO of on-chain data provider CryptoQuant.com, Ki Young Ju, took to Twitter to showcase how institutional investors have stamped their authority in the Bitcoin space. He said:

“16% of the $BTC realized market cap is now owned by institutional investors. – Realized Market Cap: $186 billion – Grayscale AUM: $19 billion – Institutions AUM: $30 billion.”

Realized market capitalization is a metric calculated by valuing each supply unit at the exact price it last moved on-chain or at the last time it was transacted. As a result, it does not calculate coins which remain unmoved because cryptocurrencies can be lost, unreachable, or unclaimed. This contrasts with the standard market capitalization that values every unit of supply evenly at the current market price.

Institutional support has brought Bitcoin higher

This high realized capitalization by institutional investors does not come as a surprise because the latter has been on a notable spending spree, with institutions jumping on the Bitcoin bandwagon one after the other. Corporate giants like MicroStrategy have been flexing their huge Bitcoin investments. For instance, the leading business intelligence firm recently purchased BTC worth $650 million.

Grayscale Investments, an institutional-grade digital asset manager, is also making headlines based on its appetite for Bitcoin. It has revealed that its total asset under management (AUM) stands at $19 billion with BTC taking the bulk at $16.3 billion.

Source:Twitter

Bitcoin price is expected to rally higher as President Trump signed a $900 billion pandemic stimulus bill on Sunday night. Moreover, the fear of missing out (FOMO) is also expected to continue gripping institutional investors.

Big Investors Are Fueling Bitcoin’s Record-Breaking Rally, According to PWC

Bitcoin (BTC) has been on overdrive because it has been scaling heights not seen in its twelve-year existence. Top-four accounting firm PricewaterhouseCoopers (PwC) has acknowledged that big investors have been driving BTC’s price upwards based on their overwhelming appetite for the leading cryptocurrency.

Institutional investors have been on a frenzy

According to PwC’s global crypto leader, Henri Arslanian:

“Bitcoin’s record-smashing rally seen in recent weeks was partly driven by the entry of more big, institutional investors into the market.”

The trigger towards the $30,000 price was pulled after Bitcoin surged past the all-time high (ATH) level of $20,000 in mid-December. On Dec 31, the price had skyrocketed to $29,200, and crypto traders were optimistic that it was just a matter of time before Bitcoin breached the $30,000. Over the weekend, BTC’s bull run pushed the price to $34,800 even though it has retracted to $32,093 at press time.

Arslanian added:

“When you look at this Bitcoin rally that we have been seeing in the last couple of weeks and months, really, there’s two big elements driving it. One is the continuous entry of institutional players.”

Institutional investors have been on a massive spending spree instigated by factors like the fear of missing out (FOMO). For instance, Nasdaq-listed MicroStrategy recently added Bitcoin worth $650 million to its portfolio. Furthermore, Grayscale Investments has been making headlines as its total asset under management (AUM) stands at $19 billion with Bitcoin taking the bulk at $16.3 billion.

Big investors’ endorsements are giving Bitcoin the upper hand

PwC alluded to the fact that institutional investors’ endorsement is watering down the skepticism by mainstream investors. As a result, confidence in the leading cryptocurrency has been pushed through the roof given that large financial companies like Fidelity and PayPal are making notable moves in the crypto space.

Retail investors also have a hand in the recent BTC rally. Arslanian acknowledged:

“A second development driving the current bitcoin rally is retail investors and their fear of missing out. A lot more people today have accounts on crypto exchanges than before as buying cryptocurrencies is easier now than before.”

Bitcoin’s existence in the financial scene is no longer in oblivion given that its rally towards $30,000 was recently featured on the front page of Financial Times.