3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Circle Announces a US Dollar-backed Stablecoin
September 26 – In a recent blog post, Circle has announced that they are launching a USD-backed digital token, dubbed the “USD Coin”. The USD Coin (USDC) will reportedly be available to trade on Circle’s Poloniex exchange as well as Coinbase and a number of other cryptocurrency exchanges. According to their blog post, over 20 companies could announce support for the USDC. A consortium called Centre, which includes the largest crypto mining company Bitmain and other major industry players, will act as a platform for deposits and fiat currency conversions to the stablecoin. Although Centre is a “wholly owned subsidiary of Circle,” there are reportedly plans to turn it into its own independent organization.
Jeremy Allaire, the CEO of Circle, notes that the USDC will be much different from Tether, which has been under controversy for its legitimacy. “Market infrastructure like stablecoins will become the base layer that supports every financial application. It has to be legitimate, trustworthy, built on open standards. We are solving a lot of these fundamental problems that exist. That’s a huge difference from something like Tether, and we think the market will very quickly gravitate to that,” said Allaire
Read the full article here.
Tom Lee: Ether Could “Rally Strongly”
September 27 – Tom Lee, Fundstrat co-founder and former J.P. Morgan Chief Equity Strategist, believes that ether could “rally strongly” in the near future. Ether (ETH) is the name of the cryptocurrency, but it is more closely associated with the Ethereum blockchain. While bitcoin gives access to a global financial network, ether gives you access to the application development network. Its use has been compared to the “gas” in a car, since developers use ether tokens as fuel for creating applications and functions on the Ethereum blockchain. Lee believes that “sentiment is currently overly negative on ETH”, and it is currently showing “a sign of capitulation”.
Lee thinks there could be a major trend reversal on the horizon, noting that ether has underperformed other cryptocurrencies by two standard deviations in the last four quarters. Last year, ether was one of the top performing cryptocurrencies, vastly outperforming bitcoin. Lee thinks that the cryptocurrency was “dogged” down by supplies being sold from EOS, which had first built its platform on Ethereum, then switched it to its own native token. Lee also notes that “panic selling” by ICO teams also could have had an influence on price.
Read the full article here.
Austria Utilizes Ethereum Blockchain for €1.15 Billion Bond Auction
September 28 – Austria is reportedly raising 1.15 billion euros in a federal bond auction set to take place on October 2 by using blockchain notarization. According to the Oesterreichische Kontrollbank (OeKB), the federal entity that oversees the auctions for these bonds, two outstanding German government bonds, the 0.75% Federal Bond 2018 – 2018 and the 0.00% Federal Bond 20166 – 2023, will be auctioned using the Ethereum blockchain. The OeKB IT department had reportedly implemented the Ethereum blockchain for their federal entity.
“The digitization of the financial sector, also known as fintech, has long arrived in Austria,” said Hartwig Loger, Austria’s finance minister. “We need to use the positive effects intelligently for the financial services sector. Blockchain technology is an economic policy focus for us. With the establishment of the FinTech Advisory Council in the Ministry of Finance, we are developing strategies to help Austria make the best possible use of these developments.” Angelika Sommer-Hemetsberger, who is a member of the OeKB management board, said “therefore, we have been dealing with this topic intensively for some time now and have already tested several prototypes. Starting the real operation on behalf of OeBFA is a pleasing and logical next step.”
Read the full article here.
Blockchain Impact Summit Wraps up in Toronto
September 28 – The 2018 Blockchain Impact Investment Summit hosted by Miller Thomson LLP and the Blockchain Impact Institute has wrapped up in Toronto. This year’s event attracted over 500 investors, 30 companies, and blockchain industry leaders from around the world. The event followed the success of the Vancouver Blockchain Summit back in June.
The Blockchain Impact Investment Summit was a great opportunity to bring together leading blockchain initiatives from Canada and around the world to the heart of Toronto to share developments, discuss technologies, realize practical applications, and build relationships that may transform the way that Canadian investors see the blockchain industry. Some notable panel speakers discussed Canadian cryptoasset and blockchain regulation, which remains uncertain. Despite uncertainties and a volatile year for cryptocurrencies, the event’s success highlights that Canadians are more interested than ever in digital assets.
Shaun Cumby, CIO of 3iQ, Presents at NAVex Luncheon in Toronto
September 27 – Last Thursday, Shaun Cumby, the CIO of 3iQ Corp, presented to NAVex and the TMX Platform Traded Funds group. 3iQ is in process of having their 3iQ Global Cryptoasset Fund listed on their exchange, which will allow approved dealers to access the OM Fund via the NAVex exchange. The luncheon had over 20 IIROC advisors in attendance. As an IFM/PM with OSC registration, and CSA cryptoasset approval, 3iQ has been in a unique position to offer an OM fund that holds 50% bitcoin, 35% ether and 15% litecoin. 3iQ has been working with the OSC since Oct. 2016 to get a bitcoin fund listed on the TSX.
3iQ believes that in small amounts, bitcoin, ether and other crypto assets have been high Sharpe ratio assets that have their own set of unique drivers. Buying bitcoin or other cryptoassets and leaving it on international exchanges is what many investors have been doing, and is the primary reason why hacks have occurred, as many of these exchanges still do not have the proper security and custody required for long term investments. Buying on cryptoasset exchanges can have high fees, possible outages, and limited ability to return to Canadian dollars. By allowing Canadian investors access to a cryptoasset fund, risks could be mitigated whilst maintaining reasonable fees.
3iQ Global Cryptoasset Fund: Price as at September 28, 2018
3iQ is the first regulator approved multi-cryptoasset portfolio manager in Canada, providing accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.