Posted In:

Bitcoin, ETF


#409
Bitcoin's Coming Of Age

Published:

Oct 16, 2021


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Posted In:

Bitcoin, ETF

Published:

Oct 16, 2021


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Bitcoin is growing up. It has been a trying journey for the long list of bitcoin ETF campaigns, starting in 2013 when the Winkelvoss twins filed the first bitcoin ETF proposal.

But soon — barring an unexpected last hour interference from the SEC — at least one US regulated bitcoin ETF product will finally hit list on a US exchange this week, with as many as 4 different bitcoin ETF products pointing towards approval in the US within the month.

The catch? The products poised to launch next week will be exchange-traded funds that own cash denominated regulated bitcoin futures contracts, rather than offering direct exposure to the spot bitcoin market. That means the ETF will be using funds to purchase the next two month bitcoin futures contracts rather than holding bitcoin.

While the differences between the two may appear negligible to non market structure wonks, there are a laundry list of items that make the futures based product less than ideal in terms of both relative cost and ability to effectively track the global reference price for bitcoin.

Research from Bitwise this week suggests that the all in costs of a futures-based Bitcoin ETF product can be as high as 15% when factoring in the annualIzed basis or spread between futures and spot prices and the cost to roll into new contracts each month. However, product imperfections aside, the launch of the first regulated bitcoin futures ETF in the U.S. marks yet another coming of age moment for digital assets, and is certainly deserving of fists pumps all around!

Portfolio News


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Flutterwave


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Nigeria’s Flutterwave in talks to triple valuation to $3b - The startup, which has offices in Lagos, Nigeria and San Francisco, recently held discussions with potential investors, the people said. Led by CEO Olugbenga Agboola, the company in March said it had achieved unicorn status after raising $170m in a round led by Avenir and Tiger Global. Read more

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Bitcoin's Coming Of Age


Bitcoin exchange traded funds prepare for US debut - The ETFs are likely to be given a green light by the US Securities and Exchange Commission, marking the culmination of an eight-year battle to win approval. All the ETFs will be based on bitcoin futures contracts, rather than the spot price, with the SEC known to be concerned about a potential lack of liquidity and the risk of price manipulation on spot exchanges. Read more

Cathie Wood's ARK Invest throws weight behind new bitcoin futures ETF - The proposed ETF, called ARK 21Shares Bitcoin Futures Strategy, is an attempt by the fund managers to take advantage of the surge in cryptocurrency this year. However, the SEC has yet to approve a bitcoin ETF. Other asset managers and exchanges such as Fidelity, CBOE Global Markets and Nasdaq are also waiting for the green light to launch ETFs tracking the digital currency. Read more

SEC set to allow bitcoin futures ETFs as deadline looms - The regulator isn’t likely to block the products from starting to trade next week, said people familiar with the matter. Unlike Bitcoin ETF applications that the regulator has previously rejected, the proposals by ProShares and Invesco Ltd. are based on futures contracts and were filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant investor protections.” Read more

Industry News


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Stripe is hiring a crypto team 3 years after ending bitcoin support - The team – described in LinkedIn posts and job listings – will be run by Guillaume Poncin, Stripe’s former head of engineering for banking and financial products. He is looking to hire at least four staffers to help plot Stripe’s crypto strategy. Read more

Chinese online brokers Futu and UP Fintech face regulatory risks - U.S.-listed Chinese online brokerages Futu Holding and UP Fintech Holding face regulatory risks as China's new personal data privacy law takes effect on Nov. 1, the official People's Daily said in an analysis on its website. Read more

A US bank has unionized for the first time in 40 years - Founded in 2007 with a focus on community development and social and environmental justice, the company has $1.5 billion in assets and 8 branches in California, Oregon, and Washington. Read more

Buffett-backed Nubank turns a profit in Brazil - The earnings did not include Nubank’s operations in Colombia or Mexico, but help put wind in the sails for the company’s hoped-for blockbuster IPO in the coming months. Read more

S&P 500 membership may be ‘for sale,’ NBER research suggests - A new study has made explosive claims about the world’s largest stock benchmark: Major U.S. corporations that purchase ratings from S&P Global Inc. have a higher chance of entering the S&P 500 Index -- even when they don’t meet all criteria for inclusion. Read more

Australian pension fund considers crypto investment - Queensland Investment Corporation, which manages A$92.4b (US$69b) of assets and is Australia’s fifth biggest pension fund, told the FT that it is open to investing in cryptocurrencies in the future. Read more

Blockchain says it posted $1.5b in revenue this year - Blockchain.com recently celebrated its tenth anniversary and shared that Its revenue just surpassed $1.5b year to date, according to vice chairman Nicolas Cary and chief executive Peter Smith. Read more

Select Financings


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Beacon Platform - New York based quant development platform for custom trading and risk management apps raised $56m in Series C Funding led by Warburg Pincus. Read more

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Crabi - Mexico based auto insurance startup raised $4m in Seed funding led by Kaszek Ventures. Read more

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Fount - South Korea based robo-adviser raised $33.4m in Series C funding led by Hana Financial Investment. Read more

GoodLeap - San Francisco based sustainable home financing platform raised more than $1b in new funding from investors including Michael Dell and Laurence Tosi. Read more

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MoonPay - Miami based crypto payments infrastructure startup raised $400m in funding led by Tiger Global and Coatue. Read more

Nelo - Mexico City based BNPL startup raised $20m in Series A funding led by Two Sigma Ventures. Read more

Open - India based neobank raised $100m in Series C funding led by Temasek. Read more

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Tala - Los Angeles based online loan application platform for emerging markets raised $145m in Series E funding led by Upstart. Read more

TradingView - London based financial information platform and social network raised $298m in funding led by Tiger Global. Read more

Trumid - New York based credit trading platform raised $208m in new funding led by Point Break Capital Management. Read more

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