October 8 – 14, 2018 | Harvard, Stanford and MIT Endowments & More Crypto News

3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.


Harvard, Stanford, and MIT Endowments Invest in Crypto Funds

October 11 – Following an article last week claiming that Yale University’s endowment fund has invested into a crypto fund, a new article has suggested that more universities have done the same. According to the technology news site “The Information”, the endowments of Harvard University, Stanford University, Dartmouth College, Massachusetts Institute of Technology, and the University of North Carolina have all made investments into cryptocurrency funds. While the source of this information is still not known, it could be a sign that cryptoassets are increasing in popularity with institutional investors.

Harvard’s endowment has reportedly hit $39.2 billion USD so far in 2018, making it the largest university endowment in the world. According to the wealthiest US college rankings last year, both Stanford and MIT’s endowments made the top 10, being fourth and sixth respectively. Several other international schools have begun offering classes on blockchain, cryptocurrencies, and smart contracts. Cambridge University is now researching the relationships between crypto and finance, and the Swiss university Lucerne now accepts bitcoin as a payment method for tuition fees.

Read the full article here.


Tether Issues are Driving a Premium for Bitcoin on Bitfinex

October 14 – This past week, the price of Tether (USDT), a “stablecoin” which is supposed to be tied to the value of the US dollar with a 1:1 ratio, has fallen approximately 2%. Stablecoins, as their name suggests, are designed to be used as a pairing against other cryptocurrencies, essentially allowing traders to sell their cryptocurrencies for a stable trading cryptocurrency that does not fluctuate in value as much as others. Stablecoins, while useful for minimizing volatility, often take volume away from bitcoin pairings, which by volume, continue to dominate the cryptocurrency trading market.

According to media outlets, Bitfinex, a major cryptocurrency exchange which is incorporated in the British Virgin Islands, now requests that traders buy or sell major cryptocurrencies such as bitcoin and ether with USDT. The exchange’s action came into effect following rumours that there has been a suspension of fiat deposits into the Bitfinex’s HSBC banking account in which they were seeking to use. Noble Bank, Bitfinex’s previous banking provider which is based in Puerto Rico, has recently come under financial scrutiny as it is looking for a buyer. Due to Noble Bank’s dwindling financial stability, and the unclear relationship between Bitfinex and HSBC, investors may be speculating that Tether users can no longer redeem their USDT for its base price of $1 USD. This uncertainty has driven an approximate 2% premium for bitcoin on Bitfinex’s exchange when compared to other major cryptocurrency exchanges.

According to Tanvir Sodhi, the Vice President of Operations at 3iQ Corp, “it seems like they moved USDT funds out of Noble Bank. Changing banks may have caused funds to be frozen until HSBC does its due diligence, and with Bitfinex’s user base and the natural high risk of cryptos, this could take quite some time”. The premium for bitcoin on Bitfinex may continue to increase as rumours gather about the exchange’s fiat operations. “$2.6 billion USD of Tether selling into bitcoin could push it up a lot”, said Shaun Cumby, the CIO of 3iQ Corp.

Read the full article here.


Chainalysis: The “Not-So-Killer” Whales of Bitcoin

October 11 – Chainalysis, a leading blockchain research company that provides international law enforcement agencies and other clients with cryptocurrency transaction analysis software, has released a case study that suggests that “Bitcoin Whales” have not had a significant impact on bitcoin prices. Bitcoin Whales are a name given to the large holders of bitcoin, which for many years, cryptocurrency investors have claimed to be the drivers of the unpredictable price movements of bitcoin. Despite the generally accepted claim of Bitcoin Whales being a market moving factor, Chainalysis has concluded that their impacts are minimal and “overblown”.

Chainalysis notes that of the 32 Bitcoin Whale wallets it has investigated, they collectively hold only one million bitcoin, which at bitcoin’s current price, is valued at $6.3 billion USD. While $6.3 billion USD isn’t necessarily a small value of bitcoin, the total market capitalization of bitcoin is still at $110 billion USD, which indicates that whales represent a small fraction of the total market. Collectively, a $6.3 billion USD sell-off could negatively impact cryptocurrency exchange order books, but Chainalysis notes that only a third of Bitcoin’s 32 largest holders are active in today’s market. Chanalysis has found that the “trader whales” control just 332,000 coins. This group of traders largely consists of those who entered the cryptocurrency industry in 2017 during the most recent bull run.

Read the full article here.


Crypto Hedge Fund Launches Reach New Highs

October 10 – Despite cryptocurrency prices cooling off this year, crypto hedge fund launches are continuing to surge to new highs. In a new report from Crypto Fund Research, there has been 90 crypto hedge funds that have launched in the first three quarters of 2018. It has been estimated that the total number of new crypto hedge funds could reach as many as 120 this year. Out of the 600 new hedge funds of all types that are expected to be launched this year, crypto hedge funds could make up approximately 20% of that total. Last year, new crypto hedge funds accounted for about 16% of all new hedge funds, and in 2016, they were less than 3%.

Crypto Fund Research notes that these figures are a part of a larger group of crypto funds, which includes those that are based private equity and venture capital. When combined, there are now 622 crypto funds across all categories. “In the midst of 2018’s decline in traditional hedge fund launches, crypto hedge funds are a notable aberration,” said Joshua Gnaizda, the founder of Crypto Fund Research. “These seemingly unfavorable market conditions have not deterred managers from launching new crypto hedge funds at a record pace.”

Read the full article here.


How Blockchain Will Fit Into Your Life in 10 Years

October 10 – Joe Duran, the founder and CEO of United Capital, believes that blockchain will be “as big as the internet is in our lives” and has provided a number of possible scenarios where blockchain could be used. Duran compares the blockchain to a digital version of a book log that is used in libraries, where one can see who borrows the book and who returns it. According to PricewaterhouseCoopers, over 8 in 10 executives polled have said that their companies are “actively involved” with blockchain technology. Although Duran doesn’t believe that most investors will be directly investing in the blockchain, he sees them being an active part of all financial transactions in the near future. “Digital currency is the future of money — there is no doubt about it,” said Duran.

Duran believes that governments will begin to integrate the blockchain in their currencies in order to more easily track where currencies are being used. By using the blockchain, the government can ensure that they’re receiving tax dollars and assure that their money isn’t going toward illicit use. Duran also sees blockchain being a part of all financial transactions, which will help secure transactions to financial accounts and also drive down costs for providers. “With blockchain you can put in code that won’t allow the money to transfer unless there is an exchange of goods and services that’s approved on both sides,” said Duran. “It’s unimaginable just how broad the impact is going to be to our lives, but there is no doubt in my mind that 10 years from now, blockchain will be as big as the internet is in our lives.”

Read the full article here.


3iQ Global Cryptoasset Fund: Price as at October 12, 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.


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2019-08-06T19:52:12-04:00 October 14th, 2018|