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Half Of Goldman’s Ultra Wealthy Clients Will Be Adding Crypto To Their Portfolio

Half Of Goldman’s Ultra Wealthy Clients Will Be Adding Crypto To Their Portfolio

A recent analysis by CapGemini found that there are now a record 21 million millionaires in the world who hold a total $80 trillion in wealth among them. The…

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Half Of Goldman's Ultra Wealthy Clients Will Be Adding Crypto To Their Portfolio

A recent analysis by CapGemini found that there are now a record 21 million millionaires in the world who hold a total $80 trillion in wealth among them. The number of millionaires grew by 7.6% in just the last year alone, despite - or rather thanks to - the coronavirus pandemic.

Some have said that if each of these high net worth individuals were to buy and hold just one bitcoin, there would be no more bitcoins in circulation. Of course, that can't possibly happen: we know that a handful of whale hold the vast majority of bitcoins. So much so that according to JPMorgan just 5% of the roughly 18.7 million bitcoin currently in circulation have actually changed hands in the past year, meaning that millions of bitcoin are held by a handful of accounts.

Naturally, we don't expect every millionaire in the world to want to own bitcoin... but many of those who don't currently will want some exposure. That's what Goldman Sachs found recently when a survey among its family office clients (read very reach clients) want to add digital currencies to their stable of investments.

Goldman found that just 15% of of the respondents in the survey — which polled more than 150 family offices worldwide — are already invested in cryptocurrencies (which is almost identical to how many Americans in total own crypto according to a recent survey released from Gemini.) But what is remarkable is that another 45% would be interested in diving into the space as a hedge for “higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus."

Unlike hedge funds, family offices which manage the net worth of single individuals and/or their closest friends and family, are unregulated and have no obligations to diclose their holdings, something which Credit Suisse and Nomura learned the very hard way after the Archegos collapse. It also shows that while many hedge funds are loathe to admit they have an interest in buying cryptos - perhaps due to fears of spooking some of their more conservative LPs - family funds have no such qualms and are preparing to unleash a buying wave the likes of which the world has never before seen and will eclipse any retail buying interest observed in the past.

And yes: we are talking size - of the firms that participated in the survey, 22% had assets under management of $5 billion or more, and 45% oversaw $1 billion to $4.9 billion. In other words, two-thirds of family offices manage more than $1 billion and if just a half of these funds allocated a few basis points to bitcoin and ethereum which would amount to hundreds of billions in new capital... well, the sky's the limit.

According to Bloomberg, respondents in the survey also indicated interest investing in the “digital asset ecosystem.” The majority of families want to talk to us “about blockchain and digital ledger technology,” said Goldman's Meena Flynn, who helps lead private wealth management for the vampire squid which has been aggressively growing into the bitcoin space. There are many who think that “this technology is going to be as impactful as the internet has been from an efficiency and productivity perspective."

In other words, they are not only richer but far smarter than Paul Krugman, who of course hates bitcoin, calling it a "natural ponzi scheme."

Family offices have proliferated this century, partly due to the boom in tech billionaires. According to Bloomberg, more than 10,000 family offices globally manage the wealth of a single family, with at least half having started this century, according to EY. A 2019 estimate by researcher Campden Wealth valued family office assets at almost $6 trillion globally, larger than the entire hedge fund industry.

The firms vary markedly in size. Some manage hundreds of millions of dollars, while others oversee the fortunes of multi-billionaires such as Sergey Brin and Jeff Bezos. Many choose obscure names to operate out of the public eye. Alphabet Inc. founder Brin’s family office, Bayshore Global Management, gets its name from the location of the company’s headquarters. Charles and David Koch named theirs after the year their grandfather emigrated to America: 1888.

They’ve also surged in number across Asia following booming fortunes of the region’s ultra-wealthy, with China’s Jack Ma and real estate billionaire Wu Yajun both establishing their own family offices in the past decade. Meantime, members of the ultra-wealthy based outside Asia including Bridgewater Associates founder Ray Dalio are increasingly setting up branches of their family offices in the area.

Tyler Durden Wed, 07/21/2021 - 13:00

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SpaceX owns BTC, daily Dogecoin volume soared to nearly $1B in Q2, Grayscale eyeing DeFi and ETF: Hodler’s Digest, July 18–24

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in…

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Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.

Top Stories This Week

 

SpaceX owns Bitcoin, Elon Musk and Nic Carter believe BTC is becoming greener

Elon Musk, Dogecoin (DOGE) proponent and fair-weather friend to Bitcoin (BTC), revealed for the first time on July 21 that his aerospace firm SpaceX owns an undisclosed amount of Bitcoin.

I do own Bitcoin; Tesla owns Bitcoin; SpaceX owns Bitcoin, he said.

Musk was speaking at The Word a virtual event dedicated to Bitcoin alongside Twitter CEO Jack Dorsey and Ark Invest CEO Cathie Wood, and the erratic tech billionaire suggested Tesla was on the verge of accepting the cryptocurrency again following promising signs that the percentage of renewable energy used for mining was increasing.

Teslas $1.5 billion foray into Bitcoin earlier this year sparked a major BTC price rally. However, Teslas suspension of Bitcoin as a payment method over environmental concerns in May appeared to tank the price of Bitcoin, with BTC crashing around 40% over the past two months.

Now that there is a diminishing Chinese coal-powered hash rate after the mining ban, it appears that Musk is warming up to digital gold again. Musk has stated that, after he does a bit more due diligence on mining sustainability and can confirm it’s backed by 50% renewables or more, Tesla may re-enter the market.

One wonders what said due diligence this entails, and why he didnt do it before the $1.5 billion Tesla BTC buy.

Musk also revealed, for the first time, that he holds Ethereum (ETH), and unsurprisingly reaffirmed his support for the meme-inspired Dogecoin.

I do personally own a bit of Ethereum, and Dogecoin of course, he said.

 

Daily Dogecoin volume soared to nearly $1B during Q2

Speaking of Musks favorite cryptocurrency, trading volume for Dogecoin increased by more than 13 times during the second quarter of 2021, nearly tagging $1 billion daily.

According to data compiled by Coinbase and reported by Business Insider, Dogecoin trading volumes soared 1,250% between April and June, with $995 million worth of DOGE changing hands daily on average during the quarter.

By comparison, Dogecoins average daily volume for the first quarter of 2021 was $74 million.

While those figures are sure to spark hype among the fiery-eyed Dogecoin community, the subject of the top canine coin may be a touchy one for Coinbase.

A Coinbase user has filed a class-action lawsuit seeking $5 million in damages because of an allegedly misleading Dogecoin campaign.

According to court documents, plaintiff David Suski said he was deceived into trading $100 of Dogecoin for entry into a $1.2 million sweepstakes offer on Coinbase. The lawsuit asserts that Coinbase failed to communicate that a person could enter the sweepstakes without purchasing $100 of Dogecoin.

 

Ethereum must innovate beyond just DApps for DeFi degens: Vitalik Buterin

Ethereum co-founder and lead developer Vitalik Buterin has urged the Ethereum community to innovate beyond the confines of decentralized finance, or DeFi.

Buterin was speaking during his keynote at the Ethereum Community Conference in Paris on July 21, and described non-financial utilities as the most interesting part of the vision of general-purpose blockchains.

The 27-year-old outlined several non-financial applications for Ethereum, including decentralized social media, identity verification and attestation, and retroactive public goods funding.

The Ethereum co-founder has had a busy week, and after speaking at the Ethereum conference, he also surfaced in Ashton Kutchers and Mila Kunis living room. He wasnt trespassing of course, and was there as part of the promotion for Kunis NFT project dubbed Stoner Cats.

Buterin launched into a lengthy explanation of Ethereums fundamental components and articulated how the smart contract protocol differs from single-purpose chains such as Bitcoin.

 

Grayscale sets sights on institutional DeFi fund

While Buterin is looking beyond the decentralized bounds of finance, digital asset management giant Grayscale is looking to gain exposure in the sector.

On July 19, Michael Sonnenshein, CEO of Grayscale, announced a new investment vehicle aimed at DeFi assets.

In an interview with CNBCs Squawk Box, the CEO chimed in to announce Grayscales plans for a DeFi Fund and index. Detailing the purpose of the new product, the Grayscale CEO said the fund would offer exposure to DeFi assets, such as Uniswap and Aave, for its institutional clients.

During the same week, Sonnenshein stated he thinks that only a couple of maturation points separate the United States from its first Bitcoin exchange-traded fund, or ETF.

After many rejections of BTC ETFs in the past, along with 13 ETF applications under consideration, Sonnenshein is undeterred and said the firm is 100% committed to transforming its Bitcoin product, the Grayscale Bitcoin Trust, into an ETF once conditions are right.

 

US lawmakers don’t want Olympic athletes to use digital yuan at 2022 games

Despite the majority of Japanese citizens reportedly wanting the Olympics canceled over pandemic-related concerns, the event is going ahead.

The U.S. government has already got its eyes on the 2022 Winter Olympics in Beijing, however, and three U.S senators signed a letter urging Olympic officials to forbid American athletes from using the digital yuan during the upcoming event earlier this week.

In a July 19 letter to the U.S. Olympic and Paralympic Committee board chair Susanne Lyons, Republican Senators Marsha Blackburn, Roger Wicker and Cynthia Lummis, also a BTC proponent, requested that officials prevent U.S. athletes from using or accepting the digital yuan.

The senators asserted that the athletes use of the central bank digital currency can be “tracked and traced” by the Peoples Bank of China.

The senators stated that the Chinese government recently rolled out new features for the digital yuan, giving officials the ability to know the exact details of what someone purchased and where.

If Olympic officials approve of the request, China will, unfortunately, have to deploy other methods to track and trace the U.S. athletes that do enter the country.

Winners and Losers

 

 

At the end of the week, Bitcoin is at $32,580, Ether at $2,070 and XRP at $0.60. The total market cap is at $1.35 trillion, based on CoinMarketCap data.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Telcoin(TEL) at 26.82%, SushiSwap(SUSHI) at 26.17%, and Axie Infinity (AXS) at 23.12%.

The top three altcoin losers of the week are Mdex (MDX) at -25.55%, THORChain (RUNE) at -18.98%, and Theta (XDC) at -11.26%.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.

 

 

Most Memorable Quotations

 

I might pump, but I dont dump. I definitely do not believe in getting the price high and selling it or anything like that.

Elon Musk, Tesla CEO

 

Moving beyond DeFi is not about being against DeFi. I actually think […] the most interesting Ethereum applications are going to combine elements of finance and non-finance.

Vitalik Buterin, Ethereum co-founder

 

Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are stablecoins in anything other than name.

Paxos, stablecoin provider

 

I think that digital art is probably going to last a lot longer than galleries. I mean, you probably wont be going into galleries. Well be sitting in bars showing each other what weve recently bought on our phones, and thats kind of what we do now.

Damien Hirst, world-renowned contemporary artist

 

Make no mistake: It doesnt matter whether its a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms whether in the decentralized or centralized finance space are implicated by the securities laws and must work within our securities regime.

Gary Gensler, SEC Chair

 

More than ever, we need to take advantage and harness the potential of these new technologies to ensure that we are better equipped and more united in the future, in order to make our planet a more livable, equitable place for all.”

Irakli Beridze, head of the Centre for Artificial Intelligence and Robotics at the United Nations Interregional Crime and Justice Research Institute

 

If a Bitcoin ETF is coming through the Gensler administration, my view is it’s not going to happen this year. […] There’s also been quite a bit of sort of a body of language and rhetoric and points that have been made by the staff with previous applications that need to be addressed. And so this isn’t a slam dunk.

Greg King, CEO of Osprey Funds

 

Recent calls to establish a more appropriate standard for technologically complex digital assets have turned into a firestorm since the Ripple case was filed. Some tech policy experts closely following the case have called for a Ripple Test to replace Howey.

George Nethercutt Jr., former member of U.S. Congress

Prediction of the Week

 

$13K Bitcoin price predictions emerge with BTC falling below historic trendline

Ever since the crypto downturn began around May 12, the bears have been on parade as they forecast doom and gloom for the future price of BTC.

This week, Cointelegraph reported that a pseudonymous chartist who goes by the name “Bitcoin Master” shared concerns about Bitcoin’s potential to undergo an 80% average price decline upon breaking bearish on its 50-day simple moving average (SMA). The analyst noted that if the said fractal plays out, BTC/USD exchange rates could crash to as low as $13,000.

The 50-week SMA represents the average price traders have paid for Bitcoin over the past 50 weeks. Over the years, and in 2020, its invalidation as price floor has contributed to pushing the Bitcoin market into severe bearish cycles.

However, previous market cycles havent been impacted by Elon Musks inclination to cause mayhem in crypto through his tweets, so we may see a 50-week Musk tweeting average become the accepted method for BTC price predictions in the future.

FUD of the Week

 

SEC Chairman says cryptocurrency falls under security-based swaps rules

The United States Securities and Exchange Commission, or SEC, may soon issue new rules for the regulation and registration of security-based swaps, including cryptocurrency.

In a speech to the American Bar Association Derivatives and Futures Law Committee, SEC Chairman Gary Gensler outlined that, from November, new requirements will go into effect, which include internal risk management, supervision and chief compliance officers, trade acknowledgment and confirmation, and recordkeeping and reporting procedures, to name a few.

Make no mistake: It doesnt matter whether its a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms whether in the decentralized or centralized finance space are implicated by the securities laws and must work within our securities regime, Gensler said.

 

Auditors reveal USDC backing as Jim Cramer sounds alarm over Tethers mad money

Speaking during a July 20 interview with TheStreet, Jim Cramer, the host of CNBCs Mad Money, questioned Tethers lack of transparency and asked why the firm hasnt disclosed the composition of its commercial paper, which accounts for a large percentage of its holdings.

Tethers brief reserve breakdown in May showed that, as of March 31, three-quarters of its reserves were held in cash, cash equivalents, other short-term deposits and commercial paper. Within that category, commercial paper accounted for 65.39%, with cash alone accounting for just 3.87%.

I am concerned about Tether, and Im not gonna stop sounding the alarm until I know what Tether has. Theyve got about $60 billion in commercial paper. Tether, open up the kimono, what commercial paper do you own? Cramer said.

 

Crypto is an untested asset category, says UBS CEO Ralph Hamers

Ralph Hamers, CEO of Swiss bank UBS, said on July 20 that he does not fear missing out on crypto, citing that it’s an untested and volatile asset.

Speaking to Bloomberg, Hamers asserted, Clients are looking at different alternatives, and they hear about crypto, and there is a bit of a fear of missing out as well. They read it in the papers, but they also see the volatility.

Commenting on the banks approach to providing exposure to crypto for its wealth management clients, the UBS CEO emphasized that he holds no FOMO towards crypto, noting, We dont offer it actively. [] We feel that crypto itself is still an untested asset category.

Hamers, of course, works within the confines of the traditional finance and banking system, which is a well-tested industry that has caused multiple global financial crises.

 

Best Cointelegraph Features

Stock-to-flow model possibly invalidated as Bitcoin price loses $30K

Plan Bs stock-to-flow model is the closest its ever been to being invalidated as Bitcoin stagnates in the $30,000 range.

China is pumping money out of the US with Bitcoin

Chinese authorities seem to be putting things in order rather than declaring war on crypto, aiming to further weaken the U.S. economy.

It is time for the US to create a Ripple test for crypto

The SECs approach to crypto must be modified to more clearly articulate how securities laws should apply to digital assets.

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Crypto

3 reasons why Bitcoin price has not been able to rally back above $40K

Bitcoin bulls appear to be back, but a strengthening U.S. dollar, a new wave of COVID-19 infections and low trading volumes threaten the current recovery.
The ongoing story for the past couple of months in the cryptocurrency market…

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Bitcoin bulls appear to be back, but a strengthening U.S. dollar, a new wave of COVID-19 infections and low trading volumes threaten the current recovery.

The ongoing story for the past couple of months in the cryptocurrency market has been confusion on whether Bitcoin (BTC) is destined for another leg down or is finally ready to break out toward new highs.

Bitcoin's price history and data from previous corrections suggest that the current struggles for the top cryptocurrency could persist for a little bit longer due to the strengthening dollar, the possibility of decreasing economic stimulus and a slew of technical factors connected to Bitcoin's price action.

A strong dollar threatens Bitcoin's recovery

According to data from Delphi Digital, one of the biggest factors placing strain on risk assets around the globe is the strengthening U.S. dollar which appears to be attempting a trend reversal after falling below 90 in late May.

DXY 1-day chart. Source: TradingView

Rising dollar strength put a halt to the year-long uptrend in the 10-year US Treasury yield which is also a reflection that the economic expansions seen in the first half of 2021 are beginning to lose steam and there is a threat that a new wave of Covid-19 infections threatening the global economic recovery.

Fractals and the Death Cross suggest the correction is not over yet

The short-term outlook for Bitcoin remains bearish as previous instances of the “Death Cross,” which appeared on BTC's chart in late June, have been followed by a corrective period that can last for nearly a year.

Bearish crossover of the 50 day and 200-day MA. Source: Delphi Digital

According to the analysts at Delphi Digital, the 12-month moving average is being tested as support, and a dip below this level would signal further downside for BTC price.

Bitcoin price testing the12-month moving average. Source: Delphi Digital

The 12-month moving average has been a key support level for Bitcoin historically, so how the price performs near this level could dictate whether the current uptrend remains intact.

Related: El Salvadorians take to the streets to protest Bitcoin law

Overall, caution is warranted for traders because low volumes have historically led to higher volatility when fewer open bids can lead to rapid price fluctuations.

As explained by Kevin Kelly, a certified financial analyst at Delphi Digital, “the short-term outlook turns quite a bit more bearish if and when we break those key levels” near $30,000.

Kelly said:

“I don’t necessarily think that we will see as nearly as significant of a drawdown as we did in say, post-December 2017, early 2018, and into the end of that year. But I do think, just given the structure of the market, that we could potentially be in for a bit more short-term volatility and potentially some more headwinds here, in the near term.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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$10B asset manager registers new Bitcoin fund with SEC

Stone Ridge Asset Management, the parent company of New York Digital Investment Group, or NYDIG, has been actively pursuing new investment vehicles for Bitcoin. On Friday, Stone Ridge’s open-end mutual fund revealed a new Bitcoin-focused investment strate

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Stone Ridge Asset Management, the parent company of New York Digital Investment Group, or NYDIG, has been actively pursuing new investment vehicles for Bitcoin. On Friday, Stone Ridge's open-end mutual fund revealed a new Bitcoin-focused investment strategy.

Stone Ridge Asset Management, the alternative investment manager behind New York Digital Investment Group, has filed a new prospectus with the United States Securities and Exchange Commission, or SEC, to add Bitcoin (BTC) to its open-end mutual fund. 

The prospectus for Stone Ridge Bitcoin Strategy Fund appeared on the SEC website on Friday, though the actual filing is dated July 26, 2021. The Fund is part of an investment portfolio of Stone Ridge Trust, an open-end investment company registered in Delaware.

According to the prospectus, the primary investment objective of the Stone Ridge Bitcoin Strategy Fund is “capital appreciation.” The Fund seeks exposure to Bitcoin via futures markets as opposed to spot purchases, as explained below:

“The Fund pursues its investment strategy primarily by investing in bitcoin futures contracts and in pooled investment vehicles that invest directly or indirectly in bitcoin (collectively, “bitcoin-related investments”). The Fund does not invest in bitcoin or other digital assets directly.”

The filing was made under SEC Form N-1A, which is required for establishing open-end management companies, including mutual funds. In terms of structure, the Fund is very similar to the NYDIG Bitcoin Strategy Fund II filed in May of this year.

It is further explained in the prospectus that the Fund “expects to have significant holdings of cash, U.S. government securities, mortgage-backed securities” and other assets.

Regarding the Fund's target exposure, the document states:

"The Fund seeks to invest in bitcoin-related investments so that the total value of the bitcoin to which the Fund has economic exposure is between 100% and 125% of the net assets of the Fund."

Earlier this year, Stone Ridge filed a prospectus for its Diversified Alternatives Fund, which sought exposure to Bitcoin and other alternative assets.

As Cointelegraph reported, Stone Ridge purchased 10,000 BTC in October 2020 through NYDIG as part of its post-pandemic investment strategy. The timeline of the purchase coincided with the beginning of a seven-month uptrend for Bitcoin that would see its value peak near $65,000 in April. 

Related: NYDIG set to bring Bitcoin adoption to 650 US banks and credit unions

More institutional investors have gained exposure to Bitcoin over the past year, reflecting broader mainstream acceptance and a growing appetite for digital assets. As Cointelegraph reported, the next wave of institutional adoption could be driven by financial advisers – a broad category of professionals who are always looking for new investment horizons. For financial advisers, investing in Bitcoin no longer carries the same stigma it did a few years ago. 

The Bitcoin price is in a clear uptrend this weekend, though analysts continue to warn of overhead resistance near $35,000. At the time of writing, BTC was up 6.5% to $34,230.

Related: Bitcoin price hints at 'megaphone' bottom pattern, and a breakout toward $40K

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