First, let’s do a quick market update. Markets have been subdued the last few days, with bitcoin trading around the $5,900 level and the overall market hovering around a $235 billion valuation.
However, I remain highly optimistic. We continue to see strong signs of growing institutional interest. And legendary venture capital firm Andreessen Horowitz just launched a $300 million crypto fund (more about that here).
Crypto trading platform Circle announced a big increase in institutional client business in May. The firm saw a “30% increase in new institutional clients and was doing 15 times more transaction volume per day” than a year ago, according to CNBC.
That’s strong growth, despite the price pullback (or maybe because of it, in part). This is a good time to invest in promising cryptocurrencies. We may go lower before the next cycle begins, but historically it’s almost always a good idea to buy when the market is down nearly 70%.
Now, I have a bunch of interesting news to share – some about our portfolio companies, some about the overall market. Let’s get started.
Regulated Custody Solutions Will Attract Big Money
Hedge fund manager Kyle Samani spoke with Bloomberg News about how regulated cryptocurrency custody services (like the ones being launched by Coinbase and others) will spur institutional investors to enter the market.
“There are a lot of investors where custodianship was the final barrier,” Samani told Bloomberg. “Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital.”
I couldn’t agree more. Big financial firms will only move in once they’re sure everything is legitimate. It’s a CYA (cover your a**) situation. With firms like Coinbase acquiring broker/dealer licenses – and subjecting themselves to SEC regulation – they will begin to see crypto as a legitimate investment class.
South Korean Regulators Take a Positive Approach to Crypto
We continue to get encouraging news on the regulatory front. This week it was from South Korea, a major crypto trading hub. Here’s an excerpt from CCN’s coverage:
| Financial Services Commission (FSC), the main financial agency of South Korea, has revealed a new crypto regulatory framework and guidelines pertaining to anti-money laundering (AML) and Know Your Customer (KYC) requirements for crypto exchanges. |
This is much better than the original position of the Korean government, which was considering suspending cryptocurrency trading outright.
Nano Wallet Launches in Apple’s App Store
A new spinoff company founded by several Nano core developers, the Nano Wallet Company, has launched a new Nano wallet in the iTunes app store.
St. Louis Federal Reserve Launches Crypto Price Indexes
The influential St. Louis Fed has started tracking prices of four cryptocurrencies: bitcoin, bitcoin cash, litecoin, and ethereum. This is a clear nod to the rising legitimacy of crypto from one of the most influential Federal Reserve branches. It follows its article earlier this year explaining that cryptocurrencies are a lot like other currencies.
Goldman CEO Blankfein Talks Crypto
Goldman Sachs CEO Lloyd Blankfein shared some nuanced thoughts on bitcoin and cryptocurrencies at a recent economic conference in New York. Here’s a brief analysis from Cointelegraph (emphasis mine):
|
Addressing the evolution of money, Blankfein pointed out the common features between paper money and crypto, apparently implying that they both do not have intrinsic value. Noting that paper money has managed to become the main form of money regardless of that, he then rhetorically asked: “why couldn’t you have a consensus currency?”
According to Blankfein, it is “too arrogant” to argue that cryptocurrencies cannot be adopted on a large scale only because they are “uncomfortable” or “unfamiliar.” |
Mr. Blankfein is a smart man. He clearly sees the big picture, but his position as head of one of the most influential banks in the world complicates matters…
Goldman Sachs Eyes Trading “Real” Crypto, Not Just Futures
Goldman is already trading some crypto futures for its clients. But it has signaled interest in trading actual cryptocurrencies in the future. Chief Operating Officer David Solomon stated that the firm must “evolve its business and adapt to the environment.”
Good investing,
Adam