April 22 – 28, 2019 | Crypto Hedge Funds, OSC Hearing Update & More Crypto News
3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Report: Crypto-related Hedge Fund Holdings Grew 40% Q/Q
April 26 – According to a new research report released by Circle, the Goldman Sachs backed crypto startup, crypto-related hedge funds, private equity firms, and other venture capitalists had increased their holdings by almost 40% quarter-over-quarter. According to the research, most of the increases occurred before the most recent bull run, which could indicate that the next quarter may see an even larger increase. The research report also indicated that almost 20% of ether in circulation has been locked in various smart contracts, such as the popular MakerDAO, or the prediction markets found on the Augur network.
Next Hearing Date Set for 3iQ Corp. and “The Bitcoin Fund” at OSC Offices
April 28 – 3iQ Corp. has advanced to the next public hearing stage with the Ontario Securities Commission (OSC). The next hearing is scheduled to be on the week of June 3rd, 2019 at the OSC offices in Toronto. 3iQ had publicly filed a non-offering preliminary prospectus for The Bitcoin Fund on October 31, 2018. The decision of Raymond Chan, Acting Director of the Investment Funds & Structured Products Branch of the Ontario Securities Commission (OSC) to refuse to issue a receipt for the prospectus of 3iQ’s The Bitcoin Fund was published on February 15, 2019. According to the OSC’s own regulatory process, 3iQ needed a formal rejection of the prospectus from the Director in order to later appeal at a public hearing in front of a panel of OSC Commissioners.
Genesis Global Trading Lends $425 Million USD of Crypto in Q1 2019
April 25 – The major crypto trading firm Genesis Global Trading has reportedly wrote $425 million USD worth of cryptocurrency loans through Q1 2019. The loan book indicated that bitcoin-denominated loans reportedly made up 68%, ripple-denominated made 6.7%, and ether and litecoin-denominated loans both made 3.6%. Genesis Global Trading is known for being one of the few firms who offer clients the ability to short real cryptocurrencies, rather than derivatives and other synthetics that track cryptocurrency prices. Not all of the $425 million USD of loans were made for short-sellers. Notably, short sellers only accounted for 3-5% of bitcoin loans, which was down half from early 2018. “This speculative bet on the downside of bitcoin started to disappear towards the end of 2018 and now it doesn’t exist,” said Michael Moro, the CEO of Genesis Trading. Read the full article here.
Crypto Custodian Completes a SOC 2 Type 2 Examination
April 23 – The crypto custodian BitGo has passed a SOC 2 Type 2 examination, which would make it the first crypto company in the world to receive this type of certification. The main difference between the two examinations is that in the Type 1 examination, an auditor ensures that a company has implemented a set of internal controls to maintain its security, while the Type 2 examination checks to ensure that the firm is following the rules it set for itself. “As part of the examination, a service auditor needs to obtain written representations from the company’s management with the description of the company’s system,” said Olga Usvyatsky of Audit Analytics. “In a type 2 report, the auditor will also provide a statement whether these controls were operating effectively at a point in time.”
E*Trade is Close to Launching Cryptocurrency Trading
April 26 – E*Trade, a leading online retail brokerage, is coming close to allowing its users to buy and sell cryptocurrencies. The company will initially allow the trading of bitcoin and ether, and will plan to introduce additional cryptocurrencies in the future. E*Trade will be one of the largest securities brokers that will give its users the ability to trade cryptocurrencies. The cryptocurrency exchange market is a highly-competitive industry with heavyweights such as Coinbase and Gemini, and others such as Square and Robinhood. Last year, Coinbase had reached an evaluation of $8 billion USD and had projected sales of around $1.3 billion USD. The retail brokerage Robinhood was also recently valuated at $5.6 billion USD. While the industry is already packed with leading initiatives, the entrance of E*Trade into the cryptocurrency trading space should help further legitimize cryptocurrencies as an investable asset class.
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