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Cryptocurrency

About 33% of pension funds, hedge funds now own digital assets such as Bitcoin

In the US 27% of financial institutions like family offices, investment advisers, pension funds, and hedge funds said they own crypto assets.

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SEC proposes rules regulating Blockchain and Crypto investments, About 33% of Pension Funds, hedge Funds now own digital assets such as Bitcoin

It seems the stake in crypto-assets by institutional investors, is rising by the day, as reports from Bloomberg News, in a survey, done by America’s leading money manager, Fidelity Investments shows a third of large institutional investors owning crypto assets such as Bitcoin.

In Europe and America, 36% of about 774 respondents said they own crypto assets or its derivatives.

In the U.S, 27% of financial institutions like family offices, investment advisers, pension funds, and hedge funds said they own crypto assets, up from 22% this year.

READ ALSO: Satoshi Nakamoto highly unlikely to spend his 1.1 million BTC

About 25% of the respondent held Bitcoin, while 11% hold Ethereum.

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Why institutional investors are now so keen on cryptocurrencies? In a study carried out by Nairametrics using various crypto exchanges data feeds, results show many Pension Funds, Hedge Funds and Family Offices around the world, are increasingly going into crypto assets because of its low correlation to other financial assets, and low-cost transactional charges in executing large trades.

Meanwhile, Bitcoin has increased in value by 36% since the beginning of 2020, and while other traditional financial assets plunged during the Covid-19 pandemic.

READ MORE: Investment One records highest month on month growth on RSA Fund II

“Europe is perhaps more supportive and accommodating,” Tom Jessop, president of Fidelity Digital Assets, said in an interview. “(It could) be just things going on in Europe right now, you got negative interest rates in many countries. Bitcoin may look more attractive because there are other assets that aren’t paying return.” 

These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class,” Jessop said.

READ MORE: FG concludes plan to borrow N2 trillion from Pension Fund  

Fidelity declined to comment on the number of customer assets or holdings by institutional groups. 

 

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Olumide Adesina is a French-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Member of the Chartered Financial Analyst Society. Behavioral Finance, Duke University. You can follow Olumide on twitter @tokunboadesina or email [email protected]

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Cryptocurrency

OUSD: Stablecoin that pays you interests like a bank

OUSD is a natural extension of Origin’s mission in facilitating peer-to-peer commerce.

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OUSD: Stablecoin that pays you interests like a bank

OUSD was recently launched. It automatically makes you earn competitive yields from DeFi protocols, while still sitting in your wallet.

OUSD is a natural extension of Origin’s mission in facilitating peer-to-peer commerce.

It believes in having a trustworthy stablecoin that leverages the best parts of decentralized finance by enabling buyers and sellers to transact with ease and trigger the growth of a decentralized commerce platform. It is built by seasoned experts of cryptocurrency and fintech experts at Origin Protocol.

READ: Some experts are uncertain of what to expect from money markets in H2 2020

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How it works: The recent launch of OUSD will facilitate a simple lending strategy designed on top of Compound.

Similarly, you don’t need to unstake or unlock your OUSD when you want to transfer it to another wallet. This both saves you gas fees and makes it much more convenient to switch between earnings and spendings.

READ: Yearn.Finance, a lending aggregator scarcer than Bitcoin

Your earnings compound continuously and are revealed in your ever-increasing OUSD balance, while still being available for payments, commerce, and peer-to-peer transactions.

The creators are taking a more cautious strategy for the first few weeks in ensuring that the smart contracts are secured and safe.

Thereafter, new strategies will be momentarily deployed that boost yields while curbing risk and dependencies. It is planned to directly integrate with Uniswap, Curve, Compound, Aave, dYdX, and Balancer.

READ: Global stocks plunge over doubts of America’s economic recovery

Origin Protocol is focused on three types of strategies:

  • Lending fees
  • Automated market maker fees
  • Rewards tokens provided by the above and new DeFi protocols

However, Nairametrics, advises on caution as the OUSD contracts have not yet been formally audited, though it shows great promise of security and transparency, coupled with the bias that it has household names of cryptos behind the project.

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READ: Shell to focus on Nigeria, Gulf of Mexico and others as it seeks to cut 40% of costs

What are Stablecoins?

Stablecoins are cryptocurrencies created to minimize the price swings that occur in a crypto asset. They are usually pegged to fiat currencies and often exchange-traded commodities.

Stablecoins give owners a sense of security as users can store their assets whenever there is high volatility in the crypto-verse or other financial markets.

Consumers can also with great ease convert from unpegged cryptocurrencies to stablecoins when they are worried about where the markets are heading next, eliminating the need to return to a fiat currency.

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Cryptocurrency

Ripple’s chairman transfers 500,000,000 XRP

Chris Larsen, Ripple’s co-founder and Chairman transferred 499,999,979XRP. 

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Ripple’s chairman transfers 500,000,000 XRP

The fourth most valuable crypto in the crypto-verse is on limelight again. Data from Whale Alert revealed that Chris Larsen, Ripple’s co-founder and Chairman transferred 499,999,979XRP  worth (115,847,491 USD) to unknown wallet.

The Ripple’s co-founder, via his Twitter feed, commented on the move, and further revealed the unknown wallet, he transferred the huge stacks of Ripple.

READ: U.S Banks now permitted to hold Tether, Circle

“As some of you may have noticed, I moved an $XRP wallet to NYDIG. I’ve known the founders for a while, and am impressed by their security and top-notch institutional standards — this is truly custody 2.0.,” Larsen tweeted.

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What we know: NYDIG provides digital asset services to investors around the world. NYDIG’s custody platform, built fully in-house, is designed to satisfy the highest regulatory, audit, and governance standards, and NYDIG’s team is comprised of professionals with deep experience in capital markets, technology, and digital assets.

READ: Despite COVID-19, top Nigerian Banks declare N36.7 billion dividends

Quick fact: Ripple (XRP) plays dual roles as a payment platform and a currency. The platform is an open-source platform that is created to allow quick and cheap transactions.

Unlike its crypto rival, Bitcoin, which was never intended to be a simple payment system, Ripple has gained the attention of major global banks such as Standard Chartered and Barclays for international transactions worldwide.

Explore the Nairametrics Research Website for Economic and Financial Data

Global banks having a relationship with Ripple

Japan-based Mitsubishi UFJ Financial Group, with assets of more than USD 2.8 trillion, announced in November 2018 that, in cooperation with Ripple, it would provide an international money transfer service on the payment corridor from Japan to Brazil.

Banks using Ripple include Europe’s banking giant, HSBC Holdings Plc, with assets of about $2.5 trillion, which disclosed in 2019 that it would use the XRP payment solution.

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READ: Whales are buying XRP, Ripple becomes world’s 3rd most valuable crypto

Japan Post Bank with assets of USD 1.9 trillion, Sumitomo Mitsui Financial Group, and Mizuho Financial Group with trillions of dollars in assets, also have a close relationship with Ripple Asia. Others having a relationship with Ripple include Banco Santander, Barclays PLC, Royal Bank of Canada, and Toronto-Dominion Bank.

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Cryptocurrency

U.S Banks now permitted to hold Tether, Circle

The OOC has insisted that national banks and federal savings associations may hold “reserves” on behalf of customers who issue stablecoins.

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Tether expected to surpass Ethereum, based on strength of the U.S dollar, ther mints 80,000,000 USDT to unknown wallets within 24 hours, Tether mints over a billion dollars’ worth of USDT, Tether mints over a billion dollars’ worth of USDT

These are surely good times for Stabelcoins. The world’s largest economy’s banking regulator.

In a detailed letter released yesterday, permitted national banks to hold reserve currencies for stablecoins (Tether, Circle). The letter which was released by the Office of the Comptroller of the Currency (OCC) responds to questions regarding the application of stablecoin-related bank activities. It concludes that national banks and federal savings associations may hold “reserves” on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets.

“National banks and federal savings associations currently engage in stable coin-related activities involving billions of dollars each day,” Acting Comptroller of the Currency, Brian P. Brooks, said. “This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”

READ: GTBank, Access Bank, 11 others pay workers N271.64 billion in H1 2020

The letter addresses the use of stablecoins backed by a single fiat currency on a one-to-one basis, where the bank verifies at least daily that reserve account balances meet or exceed the number of the issuer’s outstanding stablecoins.

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What are Stablecoins?

Stablecoins are cryptocurrencies created to minimize the price swings that occur in a crypto asset. They are usually pegged to fiat currencies and often exchange-traded commodities.

Stablecoins give owners a sense of security as users can store their assets whenever there is high volatility in the crypto-verse or other financial markets.

Consumers can also with great ease convert from unpegged cryptocurrencies to stablecoins when they are worried about where the markets are heading next, eliminating the need to return to a fiat currency.

READ: CBN allows banks to pay winnings, salaries for 7 banned betting & gaming companies

These conversions can also be less expensive than when switching between crypto and fiat, as it takes the transaction fees of payment processing providers and banks out of the equation.

Global Investors and traders are using it to give their investment portfolios exposure to the US Dollar during these times when uncertainty is high, as a result of the worst pandemic (COVID-19) known to man.

READ: Jaiz Bank: First shared-profit bank in Nigeria approaches 10 years

Sequel to this landmark statement, Nairametrics about a month ago, detailed the importance of stablecoins in modern-day finance.

Stablecoins like Tether are particularly useful for capital flight, as their USD-pegged value means users selling off large amounts in exchange for their fiat currency of choice can rest assured that it’s unlikely to lose its value as they seek a buyer,” Chainalysis said in the report.

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