3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Ontario Securities Commission Refuse to Issue Prospectus Receipt for 3iQ’s “The Bitcoin Fund”
February 22 – 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. This rejection is disappointing although it is what we expected following over 2 ½ years of working closely with OSC Staff to bring a professionally managed bitcoin investment product to the retail market in Canada. Surveys conducted by the OSC and the Bank of Canada(1) (2) show that five percent of Canadians hold some cryptoassets, primarily for investment purposes.
According to the OSC’s regulatory process, 3iQ needed a formal rejection of The Bitcoin Fund’s prospectus from the Director to appeal at a public hearing in front of a panel of OSC Commissioners. 3iQ believes that it is well positioned to argue that it is in the public interest to have a regulated bitcoin fund in Canada. The levels of security and tested processes of 3iQ and our partners have addressed “issues concerning the valuation, safeguarding and liquidity of bitcoin” upon which the Director based his decision to reject The Bitcoin Fund. 3iQ believes we can make it the best investment alternative for Canadian and global growth investors who believe in the exciting bitcoin and blockchain space. 3iQ believes that a regulated, professionally managed public investment fund would be superior to current cryptoasset investment options for Canadians, many of whom buy bitcoin on unregulated exchanges such as the failed QuadrigaCX. Long-term, 3iQ believes a strong investment management presence in digital assets goes a long way to helping Canada become a leader in this exciting and rapidly growing area of Fintech.
Please follow the attached link to view the full text of the letter:
Read the Investment Executive article here.
Pension and Endowment Advisor Believes it’s Time to Consider Crypto Investments
February 18 – According to the pension and endowment advisor Cambridge Associates, institutional investors should start to consider cryptocurrencies as part of their portfolios as the industry appears to be developing for the long term. Cambridge Associates recommends that investors should first spend a “considerable amount of time” on education in the sector before taking the plunge. Additionally, institutional investors should survey the many ways of gaining exposure to the space, which includes investing in crypto private equity or buying tokens and other cryptoassets through secondary markets.
“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term,’’ said analysts at Cambridge Associates. “Though these investments entail a high degree of risk, some may very well upend the digital world.’’ Analysts at Cambridge Associates also noted that the bear market that has stretched over the past year had raised questions about the future of cryptoassets, although the industry is showing signs of developing. “The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.’’
Read the full article here.
Elon Musk: “Paper Money is Going Away”, Bitcoin is “Brilliant”
February 19 – Elon Musk, the famed founder and CEO of Tesla and SpaceX, has noted in a recent podcast interview that cryptocurrencies offer an improvement to conventional money. In a recent podcast with ARK Invest on February 19, Musk discussed his thoughts on his companies and what roles they will play in the future as technology advances. While on the topic of futurism, Musk was asked about what he thought about cryptocurrencies. Musk particularly sees a bright future for Bitcoin, noting that the leading cryptocurrency has a structure that is “quite brilliant”.
“[Cryptocurrencies] bypasses currency controls. … Paper money is going away. And crypto is a far better way to transfer values than a piece of paper, that’s for sure,” said Musk on the interview. While Musk sees a future for cryptocurrencies, he doesn’t believe they are a good fit for his companies at this time, particularly due to their “energy intensive” nature. For the case of Tesla, which aims to boost the adoption of clean energy technologies, cryptocurrencies would not be a good fit in their current form.
Listen to the full podcast here.
Major Japanese Bank Mizuho to Release Digital Currency Service
February 21 – The major Japanese bank Mizuho Financial Group is planning to launch its own digital currency service on March 1. The launch of the digital currency service will help leverage the existing links to customer bank accounts in order to gain a competitive edge against outside players in the growing market for digital and cashless payments. The bank is reportedly teaming up with approximately 60 fellow financial institutions that operate throughout Japan on the digital currency service. Between all of the participating financial institutions, approximately 56 million customer accounts would be integrated into the “J-Coin Pay” service.
The J-Coin pay service works as a QR code at checkout and be charged through the J-Coin Pay app, with a a 1:1 ratio to the Japanese yen. The J-Coin is essentially a “stablecoin” as each coin is fixed at a value of 1 yen. Notable Japanese retail, e-commerce, and service businesses are considering signing up with the J-Coin service, such as FamilyMart, Bic Camera, and East Japan Railway.
Read the full article here.
Google Keyboard Now Enables Bitcoin Symbol “₿” for iPhone/iOS Users
February 19 – The technology giant Google has recently added the Bitcoin “₿” symbol to its “Google Keyboard” application that is available for Apple iPhone/iOS users. At the time of writing, the “₿” symbol is still not available on Android devices, and it is not clear why it hasn’t been added. In order to access the “₿” symbol, Apple iPhone/iOS need to download the Google Keyboard application first. To use the symbol, hold down the dollar sign button and there will be a pop-up of several other world currencies.
Around one year ago, a Reddit user noted that if the Apple iPhone added the Bitcoin “₿” symbol to its default keyboard, it would be a signal relating to the legitimacy of the cryptocurrency and could help spur its adoption. While Apple and the iPhone/iOS default keyboard has yet to offer the symbol, the fact that one of its biggest rivals in mobile devices has made the symbol available to iPhone users is quite interesting.
Read the full article here.
3iQ Global Cryptoasset Fund: Price as at February 22, 2019
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.