Steady inflows into crypto, fund holdings up 40%

1 May 2019 12:00
Independent Reserve Trading Desk

Market Update 24th April - 1st May 2019

Welcome back to another Australian crypto market update.

Crypto prices may have been volatile this week, but the fundamentals are looking stronger than ever, with institutional money pouring into the space and two major traditional US financial platforms set to offer crypto trading.

In Markets

The markets have had a rocky week in light of the most recent allegations of impropriety by Bitfinex and Tether. On Thursday night Bitcoin dropped sharply from $7,833 to $7,263 in the space of just 90 minutes. As of today (1 May), BTC has climbed and it’s now back trading around $7,570. The combined crypto market cap has also mostly recovered the $14 billion drop on Thursday, 25 Apr. Ethereum is currently at $230 (up 5.74% from last 24 hours) and Ripple $0.43, up 6.5% from the same period. Further gains from last 24 hours - EOS is $6.94 up 10.3%, BCH is $389.86, up 14.4%, Litecoin is $105.76, up 8.2% and Stellar is $0.14, up 6.1%.

In Headlines

Bitfinex in 'cover up' to hide $1.2 billion 'loss'

The New York Attorney General's (NYAG) office has alleged that Bitfinex and Tether "may have defrauded" investors by taking money from Tether's cash reserves to hide the “apparent loss” of US$850 million (A$1.2 billion). Bitfinex hit back, saying the filings were "written in bad faith and are riddled with false assertions" and queried whether there was even a "loss" anyway. Some see the AG's move as a necessary clean up before institutional investors get on board, while others think it's the financial establishment picking on crypto again. Interestingly, CNBC crypto analyst Ran NeuNer (who tends to the former view) has suggested that JP Morgan might have exerted some influence on the AG's decision...

Probably not a good arbitrage opportunity

Bitcoin has been trading at a $300 or so premium on Bitfinex much of this week. Some pundits attribute this to 'exit buying' as people hurriedly convert to BTC to get out of the exchange fast, rather than wait for slower fiat withdrawals.

Crypto fund holdings increase 40% to US$14.4 billion

According to a Circle Research report, crypto hedge funds, private equity firms, and venture capitalists increased their holdings by almost 40% in the first quarter of this year. As of April total crypto fund holdings were $20.5 billion (AUD). The whole report is worth a read.

Money pouring back into blockchain startups

More signs the bulls are back - according to data compiled by PitchBook for Reuters, major financial institutions have invested $1.2 billion into blockchain and crypto startups over the past four months across 13 large deals.

Korean exchanges could become 'most wonderful place on earth'

Disney could become the proud owner of two major cryptocurrency exchanges, if a mooted $18.5 billion deal for online gaming giant NXC (Nexon) goes through. The company owns South Korean exchange Korbit and European platform Bitstamp.

ETrade and TD Ameritrade look to offer crypto trading

Two major traditional financial asset platforms in the US are on the verge of offering crypto currency trading. The Block reports leading US online broker TD Ameritrade is experimenting with ErisX’s new crypto exchange to offer crypto to its 11 million users. And New York Times journalist Nathaniel Popper tweeted this week that ETrade is preparing to integrate Bitcoin and Ethereum trading for its 5 million users and is "just finalizing a third party to actually hold the coins". The opportunity is wide open for Aussie platforms and intermediaries to do the same - an Australian first!

Europeans confident on crypto, unsure about Bitcoin

The majority of Europeans believe cryptocurrencies are here to stay, according to a poll of 10,000 Europeans by Japanese crypto company bitFlyer. Of those surveyed, 63 percent believe will be around in a decade's time. Sadly for Bitcoin, less than half (49%) believe Bitcoin will still be around in the same time period.

Grayscale's best weekly inflow of funds since 2017

Crypto bulls have pumped $28.3 million into the Grayscale funds in the past week or so - its highest week since 2017. It brings total assets under management to $1.71 billion. Grayscale also recently rebalanced its Digital Large Cap Fund to increase BTC from 66.8% to 68.3%, and Litecoin from 1.8% to 3.3%, and it decreased Ethereum (13.9% to 13.6%) and XRP (14.7% to 11.9%).

Check out Independent Reserve's latest review from Crypto Wisser.

That's all from us. Until next week, happy trading!

Independent Reserve Trading Desk

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