Biz Builder Mike

You can't sail Today's boat on Yesterdays wind - Michael Noel

Institutional investors plan to buy every Bitcoin price dip, data suggests

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A new survey commissioned by crypto asset insurance company, Evertas, a cryptocurrency insurance firm, found that institutional investors plan to significantly increase their stakes in Bitcoin (BTC) and other digital assets in the future.

After surveying 50 institutional investors that collectively manage over $78 billion in assets in the United States and United Kingdom, a standout response was that 26% of participants believe that pension funds, insurers, family offices and sovereign wealth funds will raise their stakes in cryptocurrency “drastically”.

64% of participants believe the increase in interaction will be moderate, but the group also expects that hedge funds will be more actively engaged in crypto. 32% of respondents believe hedge funds will increase their crypto holdings drastically.

Institutions have a love-hate relationship with crypto

Institutional investors seem keen to invest in Bitcoin and other cryptocurrencies partially because they believe regulations for the crypto market will improve and become clearer in the future.

Others believe that the market will eventually become bigger, providing better liquidity, a feature that most institutional investors require. As the market improves, many also believe there will be a wider range of investment vehicles for institutions to choose from.

The survey also found that there are still many bumps in the road to crypto institutionalization. More than half of the participants said that they are concerned about the lack of insurance for digital assets, while others are worried about the quality of custodial services, trading desks, reporting facilities and the procedures of other companies working in the sector.

J. Gdanski, CEO and Founder of Evertas, told Cointelegraph:

“Our research shows that institutional investors are enthusiastic about increasing their exposure to cryptocurrencies and crypto assets in general, but there are clearly many issues regarding the infrastructure that supports these markets that still concerns them. These clearly need to be addressed if the full potential of investment from institutional investors in crypto assets is to be realised.”

While the outlook on regulating Bitcoin and other established crypto assets may be positive among institutional players, the same may not be true for other sectors of the cryptosphere.

Such sectors include decentralized finance (DeFi) and stablecoins, which have seen massive growth in 2020 and may soon face their own regulatory hurdles.

Institutions ignore Bitcoin’s volatility by taking a bird’s-eye view

While the price of Bitcoin has failed to live up to the post-halving rally that many investors anticipated, institutions remain interested in Bitcoin. Recently, the trading volume for Bakkt’s Bitcoin futures reached a new record of more than $200 million worth of contracts exchanged, suggesting that institutions are still accumulating BTC.

Furthermore, mainstream fund managers are beginning to enter the market, a sign which the majority of the Evertas survey participants believe is a major factor in the institutional adoption of crypto.

Just last week MicroStrategy CEO, Michael Saylor, followed the footsteps of veteran investor, Paul Tudor Jones by purchasing 21,454 BTC. Earlier in the year Jones revealed his stake in Bitcoin, describing the assets as the “fastest horse” with the best odds performance wise.

As investors’ interest in crypto-assets grows and the regulatory landscape for these assets becomes more clear, it’s expected that the wave of institutions flocking to Bitcoin will continue to increase.

Institutional investors plan to buy every Bitcoin price dip, data suggests

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World’s “Smartest” Cities: Singapore, Helsinki, Zurich, According to Smart City Index Report for 2020

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Singapore, Helsinki (in Sweden) and Zurich (in Switzerland) have been named as the world’s “smartest” cities during this year. They’ve managed to outperform other major European and global financial hubs, according to the Smart City Index Report for 2020.

Geneva is another Swiss city that was ranked in the top 10 smartest cities (at the seventh spot).

The report has been published by the Institute for Management Development (IMD) and Singapore University of Technology and Design (SUTD).

The 2020 Smart City Index ranked 109 cities, which is 7 more than the 2019 inaugural edition. The rankings were determined by using economic and technological data. The Index also took into consideration the perceptions of local residents about how “smart” they think their cities were. It has been released under the guidance of the IMD Smart City Observatory (SCO).

The Index results for 2020 aim to provide insights into how digital technology is serving an important role in supporting critical services during the COVID-19 crisis. According to the report, there’s a positive correlation between “smarter” cities and those that have the most effective response to the Coronavirus.

In each city that has been ranked this year, 120 citizens were asked various questions during  April and also in May 2020 about the technological provisions of their cities across several  areas, including health and safety, mobility, activities, opportunities and governance. The score for each city has been determined using the “perceptions” of the past couple years that the survey has been conducted.

The top 3 “smartest” cities in 2020 represent a reshuffling of last year’s rankings. During 2019, Singapore was ranked first, Zurich came in second and Oslo (in Sweden) was third. Some of the most noticeable changes and arguably the most important findings of the 2020 Smart City Index were in underdeveloped cities across the globe.

The report noted that if we simply added free Internet services or WiFi to a city like Medellin (which is notably up by 19 places in the rankings in 2020), the locals would have perceived the positive change in their quality of life with technology to be quite significant.

Notably, a technologically advanced city like Zurich has residents that would naturally expect major changes or improvements to existing tech solutions before they would “perceive” anything to have really become better than before.

Singapore’s government has introduced several initiatives that will most likely continue to support digital technology adoption in the Asian country. Financial technology firms Active.ai, Cardup, Funding Societies, PolicyPal, and Transwap will be receiving new investments from Singapore’s AMTD Group.

Razer Fintech and Franklin Templeton will be offering digital wealth management services to Millennials in Singapore and other Asian countries.

Meanwhile, in Switzerland (a country that’s home to smart cities like Geneva and Zurich), the SIX Group will be leveraging Luxembourg Fintech LUXHUB’s Open Banking technology to streamline Switzerland’s financial sector. Switzerland’s Credit Suisse will also introduce app-only banking services to compete with Fintech Challengers.

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SEC to Hold Open Meeting to Address Accredited Investor Definition

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The Securities and Exchange Commission (SEC) has scheduled an open meeting of the Commission to address several regulatory issues including an update to the current definition of an Accredited Investor.

Regarding the Accredited Investor definition the SEC states it will consider:

“whether to adopt amendments to the definition of “accredited investor” in Commission rules and the definition of “qualified institutional buyer” in Rule 144A under the Securities Act to update and improve the definition to identify more effectively investors that have sufficient financial sophistication to participate in certain private investment opportunities. The amendments are the product of years of efforts by the Commission and its staff to consider and analyze possible approaches to revising the accredited investor definition.”

Currently, an Accredited Investor is determined off a wealth metric. An individual who earns over $200,000 a year, or has a net worth of over $1 million (minus their primary residence), is deemed accredited. If the individual is married, the salary metric rises to $300,000. Individuals who are accredited may participate in certain exempt offerings like securities issued under Regulation D – an enormous market of over $1 trillion annually.

While the wealth metric is currently in place in an attempt to defend individuals the government believes are not capable of making these types of investment decisions, it is widely believed the metric misses the mark as sophistication is obviously a far better metric.

Individuals who have the experience, or education, to assess investment risk are understandably better positioned to make decisions on more esoteric investment opportunities.

As private markets have boomed, and public securities have waned, a generation of retail investors has been boxed out of some of the most promising investment opportunities. Some observers believe the current definition has acerbated the wealth disparity as private securities have grown in popularity for institutions and the very wealthy. Even in light of this, some individuals believe the government should make it more difficult for even highly sophisticated individuals to purchase private securities.

Any update or change to the definition will be closely watched by the industry engaged in capital raising including online capital formation.

The second item to be considered by the Commission is:

“whether to adopt amendments to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K. These disclosure items, which have not undergone significant revisions in over 30 years, would be updated to account for developments since the rules’ adoption or last revision, to improve disclosure for investors, and to simplify compliance for registrants. Specifically, the amendments are intended to improve the readability of disclosure documents, as well as discourage repetition and the disclosure of information that is not material.”

Regulation S-K reporting requirements have become increasingly arcane. The Commission may attempt to make reporting requirements more approachable to a wider audience.

The meeting of the Commission will take place on August 26, 2020, at 10 AM ET and is open to the public as it will be live-streamed on the SEC website.

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