3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
VanEck and SolidX Will Offer an ETF-Like Bitcoin Product to Institutional Buyers
September 3 – VanEck and SolidX have recently identified a workaround to offer an ETF-like bitcoin product to qualified institutional investors in the United States. Both VanEck and SolidX said in a statement last Tuesday that by using Rule 144A of the Securities Act of 1993, they will be able to issue shares of VanEck SolidX Bitcoin Trust to qualified institutional buyers. The fund’s shares will be quoted on OTC Link ATS, which is an SEC-regulated alternative trading system. “We are in the midst of a sea change for institutions, for the Bitcoin ecosystem and for how market participants define an ETF,” said Daniel H. Gallancy, the CEO of SolidX. “The launch welcomes an entirely new class of investors to the table, promoting the maturation of the Bitcoin market.” For over one year, VanEck and SolidX have been actively working with the US Securities and Exchange Commission (SEC) to bring a bitcoin ETF to the public market, although approval of the public fund has been delayed several times by the regulator due to concerns relating to market manipulation. “There continues to be steady demand from institutional investors seeking access to a cleared product that offers the price return of bitcoin,” said Ed Lopez, the head of ETF products at VanEck. “We believe this offering solves issues associated with direct bitcoin investments.”
Read the full article from Bloomberg here.
*Van Eck Mutual Funds and Associated ETFs are considered to be Associated Issuers of 3iQ Corp. under applicable securities laws.
$1 Billion USD Worth of Bitcoin Sent for Just $700 USD
September 6 – Over 94,504 bitcoin were recently sent from an unknown wallet for a total fee of just $700 USD. The equivalent dollar value of the sent bitcoin was around $1 billion USD. Token Analyst, a blockchain research company, traced most of the bitcoin to its origins from a cryptocurrency exchange Huobi Global, but the origins of the remaining bitcoin remain unclear. Back in November 2018, a leading cryptocurrency exchange Binance had confirmed it had sent the equivalent of $600 million USD worth of bitcoin for a mere $7 transaction fee, strengthening the notion that bitcoin was a cost-effective way of sending value across the world. “Only banks can participate in most settlement networks (like SWIFT, Fedwire, ACH in the US, CHAPS in the UK, SEPA in Europe, Visa, and Mastercard, etc). Individuals, corporations, and governments can only access these settlement networks through banks. Using the settlement networks takes time (sometimes days), the process is opaque and costly and, increasingly, the ability to use them is determined by political considerations,” said Wences Casares, the CEO of Xapo in an essay.
Read the full article from CCN here.
Ethereum Will Test Upcoming Istanbul Hard Fork in Early October
September 6 – Ethereum’s testnet activation for its upcoming Istanbul hard fork has been set for early October. Hudson Jameson, the community manager for the Ethereum Foundation, stated in a developers meeting that the testnet launch should occur around October 2nd, but could arrive sooner depending on how fast blocks are created on the Ethereum blockchain. The testnet activation was scheduled to occur around September 2nd, but large numbers of Ethereum Improvement Proposals (EIPs) were submitted and needed to be reviewed before the testnet launch. Around 30 EIPs were mulled by Ethereum Developers, but just 6 will be included in the upcoming Istanbul hardfork. “One of the lessons learned in the [previous] Byzantium fork last year is that we shouldn’t try to set the testnet and mainnet fork at the same time,” said E.G. Galano, the chief infrastructure engineer of an Ethereum-based startup Infura during the developers meeting. “Let’s start with setting the testnet fork and see how that goes and find a period of stability before revisiting when to set the mainnet fork.”
Read the full article from Coindesk here.
China’s Central Bank Says its Digital Currency will be Similar to Facebook’s Libra
September 5 – A senior central bank official at the People’s Bank of China (PBOC) has stated that China’s proposed digital currency would bear similarities to Facebook’s Libra digital currency. The new digital currency would be able to be used across multiple payment platforms, such as Tencent Holdings’ WeChat or Alibaba’s Alipay. The official also noted that the digital currency would be as safe as paper notes issued by the central bank, and could even be used without an internet connection. Facebook’s Libra digital currency will be backed by a basket of real-world assets, which includes bank deposits and short-term government notes; however, it remains unclear which assets China’s central bank will choose to back its digital currency. “Why is the central bank still doing such a digital currency today when electronic payment methods are so developed?” said Mu Changchun, the deputy director of the People’s Bank of China’s payments department. “It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day.”
Read the full article from Reuters here.
Record Bitcoin-Yuan Divergence Signals Chinese Currency Woes
September 6 – This past week, Bitcoin has been strongly uncorrelated to the Chinese Yuan, signaling that it may have become a short-term refuge against the Yuan’s depreciation. The 30-day correlation of bitcoin to the Chinese Yuan reached its lowest point of the year this past week to a correlation of -0.60. The strong inverted relationship between the two currencies was also noted back in April and May as trade tensions rose between China and the United States. “There’s corroborating evidence for this, in that people in Asia were paying more for Bitcoin than elsewhere when the yuan fell,” said Dr. Garrick Hileman, a researcher at the London School of Economics and research director at Blockchain.com. “You can see it in the premium price paid sometimes for Bitcoin in exchanges like Huobi that primarily cater to Chinese.”
Read the full article from Bloomberg here.
3iQ Bitcoin Trust (Class A) : NAV as at September 9, 2019
Underlying cryptoasset prices sourced from Bloomberg.
3iQ Global Cryptoasset Fund (Class A): NAV as at September 9, 2019
Underlying cryptoasset prices sourced from Bloomberg.View charts and more fund data at https://www.theglobeandmail.com/investing/markets/funds/TIQ101.CF/performance/
3iQ Corp. (“3iQ”) is the first Canadian investment fund manager to agree to terms and conditions with the Canadian securities regulatory authorities which permit 3iQ to manage a multi-cryptoasset investment fund available to Canadian accredited investors. 3iQ provides accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.