Retail investors are matching institutional investors in terms of Bitcoin flow as more banks open up to the idea of providing cryptocurrency services to their clients
Retail and institutional Bitcoin investment balances out in Q1 2021
Analysis by JPMorgan Chase revealed that the retail and institutional Bitcoin flow balanced out in the first quarter of 2021. According to the bank, retail Bitcoin flow has increased since the fourth quarter of 2020 while institutional Bitcoin flow flattened. This means that institutional investors dominated the previous quarter, but retail investors caught up to them in the current quarter. The investment bank obtained retail Bitcoin flow data from Square and PayPal while using CME Group’s Bitcoin futures market to track institutional Bitcoin flow. Retail and institutional investors both played crucial roles in pushing Bitcoin’s price higher as it set a new all-time high above $61,000.
Morgan Stanley offers wealthy clients access to Bitcoin funds
Major banks are starting to open up to Bitcoin, and Morgan Stanley is now leading the way. The investment bank is set to offer its wealthy clients access to Bitcoin funds starting next month. The move makes Morgan Stanley the first leading US bank to offer such a service to its clients. Morgan Stanley will work with Galaxy Digital, FS Investments and NYDIG to offer access to the Bitcoin funds. The bank also set requirements for both retail and institutional investors that want to enjoy the service. According to the bank, the service is available to wealthy clients because they can withstand the cryptocurrency’s massive price volatility. The wealthy clients would only be allowed to allocate 2.5% of their total net worth into the funds, ensuring that they don’t overexpose themselves to the volatile asset class.
Grayscale launches five new digital asset trusts
Grayscale Investments announced the launch of five new digital asset trusts. The new digital assets trusts will provide investors with more options in the cryptocurrency market, allowing them to invest in other cryptocurrencies. The trusts grant investors exposure to five alternative digital assets; Filecoin, Decentraland, Livepeer, Chainlink and Basic Attention Token. The investment firm launched the asset trusts due to investors’ huge demand to gain exposure to other asset classes.
Bank of Japan to start CBDC experiment soon
The Bank of Japan governor Haruhiko Kuroda revealed that the apex bank would begin experimenting with its central bank digital currency (CBDC) in Spring of 2021. The governor said the central bank doesn’t have immediate plans to launch a CBDC. However, they need to be adequately prepared for when the time comes, as demands for CBDCs could increase over the next few years. Kuroda admitted that central banks are lagging private institutions in terms of digital currency innovation and development. Hence, central banks need to work together to ensure they catch up to the times. The first phase of experiments will begin next month, and the BOJ will focus on the basic functions of the CBDC, including issuance and distribution.
SEC confirms VanEck Bitcoin ETF application
The US Securities and Exchange Commission (SEC) confirmed the Bitcoin ETF application submitted by VanEck earlier this week. By acknowledging the proposal, the commission now has 45 days to accept or reject the application. It can also extend its review period to ensure it gets more time to access the application. The general public will be given 21 days to comment on the ETF application once it is uploaded on the Federal Registry. The cryptocurrency space is optimistic that the US will approve a Bitcoin ETF soon as neighboring Canada already has three Bitcoin ETFs currently available to institutional investors.
DC Comics set to enter the NFT market
DC Comics is currently weighing the option of entering the NFT market. The company’s legal affairs office issued a letter earlier this week indicating DC Comics intent to enter the NFT space. By venturing into the NFT market, DC Comics will put together new art created solely for the NFT market and original digital art designed for its comic book publications. DC Comics warned its staff and freelancers about issuing NFTs similar to its licensed characters since it intends to digitalise its various action figures. However, the company didn’t indicate when it intends to enter the NFT market but expects the participation of its freelance talent team to help the NFT program.
Bitmex co-founder Ben Delo surrenders
The founders of the cryptocurrency trading platform Bitmex have been in trouble with the authorities for a while now. This week, co-founder Ben Delo surrendered to the US authorities. According to the court documents, the co-founder pleaded not guilty and was released on a $20 million bail. Delo’s spokesperson told Bloomberg that charges against the Bitmex co-founder were unfounded and represented unwarranted overreach by the law enforcement. The Bitmex founders were accused of operating the Bitmex platform without registering with the US Commodity Futures Trading Commission (CFTC). The executives were also charged with violating CFTC rules such as anti-money laundering and know-your-customer requirements. Fellow co-founder Arthur Hayes is also expected to surrender to the authorities over the next few weeks.
Canadian regulators rollout new crypto guidelines
The Canadian Securities Administrators (CSA) announced that it had updated its cryptocurrency guidelines to improve the level of disclosures associated with cryptos and other digital assets. The new regulation targets issuers directly linked to the cryptocurrency market. CSA chair Louis Morisse said the cryptocurrency space presents a challenge in terms of accounting and auditing. However, the new guideline will help support crypto-asset reporting issuers provide the information necessary for investors to make informed investment decisions. Cryptocurrency issuers will have to provide information such as risk factors, ways of safeguarding crypto assets, the use of crypto assets trading platforms, material changes and promotional activities.