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


Berlin-based Mondu raises $14m Seed round led by FinTech Collective - Founded by Malte Huffmann and Philipp Povel, previously co-founders of Latin America’s largest online fashion and lifestyle platform Dafiti, Mondu will begin with a “buy-now-pay-later” (BNPL) product for B2B marketplaces and B2B merchants that will offer their customers, mostly SMBs, a seamless and flexible payment method with net terms without the financial and operational burden. The solution ultimately aims at empowering SMBs and allowing them to more strategically approach their finances. Read more

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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After 401(k) account growth catapults ahead of curve, Vestwell CEO scrambles to make big hires and abdicates chairmanship to freed-up Lori Hardwick - The volume of small businesses signing up to use Vestwell’s record-keeping and plan administration services has also leaped five fold, according to Schumm, who refuses to entertain offers for a firm he expects will become a "multi-billion-dollar business in short-form." Read more

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


Coinbase is launching its own NFT platform to take on OpenSea - Coinbase has limited details to share on its upcoming platform, but notes in a blog post that they hope to more deeply integrate social features into the platform. “Coinbase NFT will make minting, purchasing, showcasing, and discovering NFTs easier than ever. We’re making NFTs more accessible by building intuitive interfaces that put the complexity behind the scenes. We’re adding social features that open new avenues for conversation & discovery.” Read more

Nearly 90% of Americans now use fintech—with boomers the fastest-growing demo - Fueled partly by the coronavirus pandemic—which accelerated consumers’ use of fintech for banking, payments, and investing—fintech has now “reached mass adoption,” according to the annual report by fintech startup Plaid. The percentage of U.S. consumers using fintech swelled to 88% in 2021, compared with only 58% in the 2020 edition of the survey. Read more

How Latin America became tech’s next big frontier - The region is attracting more investment than south-east Asia, says the Financial Times. Read more

Home equity startup Point powers first-of-its-kind securitization - With co-sponsor Redwood Trust, Point has completed the first-ever securitization backed solely by residential Home Equity Investment agreements. Read more

Some investors find stability in SPACs - Shares of special-purpose acquisition companies have lost their luster for those who recently saw them as a ticket to fast riches. That is good news for a different group of investors, who treat them as an alternative to bonds. Read more

U.S. banks see wealth management boom on borrowing, new assets - Global financial wealth soared to a record high of $250t in 2020, according to a June report by Boston Consulting Group. Big U.S. banks' wealth management businesses have benefited with record levels of new money flowing into accounts and surging demand from clients to borrow against their investment portfolios. Read more

Brazil’s Central Bank built a mobile payment system with 110m users - One year ago the Pix platform didn’t exist. Now half the population of Brazil uses it, showing just how quickly adoption of digital payments can spread. Read more

Reaching net-zero will require $5t every year for the next 30 years - Ahead of COP26, Bank of America Global Research has issued a net-zero primer and stocks picks report, which predicts that $5t will need to be invested every year for the next 30 years, if global emissions targets are to be reached. Read more

Latest data shows the US is now the leading bitcoin mining region in the world with 35% of hash rate - The latest data compiled by the Cambridge Centre for Alternative Finance (CCAF) suggests that the U.S. has replaced China as the country with the biggest market share of Bitcoin's hash rate. The CCAF estimates that the U.S. is responsible for 35.4% of the mining activity, based on an analysis of 44% of the market's hash rate. Read more

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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Atomic - Salt Lake City based payroll startup raised $22m in Series A funding led by Core Innovation Capital. Read more

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

Bolt Financial - San Francisco based ecommerce checkout experience company raised $389m in Series D funding from investors including Untitled Investments, Willoughby Capital, Soma Capital and insiders General Atlantic, Tribe Capital, Activant Capital and Moore Strategic Ventures. Read more

Celsius Network - London based DeFi lending platform that uses the Ethereum blockchain raised $400m in new funding led by WestCap and CDPQ. Read more

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

Dutchie - Oregon based provider of payment tools for cannabis dispensaries raised $350m in Series D funding led by D1 Capital Partners. Read more

Elliptic - London based crypto asset risk management company raised $60m in Series C funding led by Evolution Equity Partners. Read more

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

Halo - Chicago based structured investing platform raised $100m in Series C funding led by Owl Capital. Read more

Juni - Sweden based provider of banking services for e-commerce raised $52m in new Series A funding led by EQT Ventures. Read more

Lendflow - Boston based small and medium business lending company raised $10.8m in Series A funding led by Underscore VC. Read more

Mono - Nigeria based Africa-focused fintech company that connects bank accounts to financial apps raised $15m in Series A funding led by Tiger Global. Read more

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

Productfy - San Jose based banking-as-a-service platform that aims to build “DeFi for traditional finance" raised $16m in Series A funding led by CMVentures. Read more

Swile - France based provider of payment cards for employee benefits raised $200m in Series D funding led by SoftBank. Read more

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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