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Pension funds and insurance firms alive to Bitcoin investment proposal

Bitcoin’s appeal among institutional investors is spreading toward insurance firms and life and annuity companies.

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Life and annuity companies are increasingly dedicating part of their asset base to Bitcoin (BTC). While the top crypto has delivered the best returns over the past decade, the long-talked-about institutional herd seems to be finally making its way to the BTC market.

During the bear market of 2018, Bitcoin developmental efforts from multiple stakeholders seemed to focus on improving BTC’s regulatory stance. These efforts saw the emergence of institutional-grade custody platforms among other prerequisites needed for greater participation by regulated entities.

Over the last year, publicly listed firms have begun to add Bitcoin to their balance sheets, citing fiat currency debasement concerns. Significant cash influxes by major central banks to support stimulus packages enacted by governments to soften the economic blows struck by the coronavirus pandemic has market commentators fearful of rising inflation.

With pension funds and insurance joining other public corporations in investing in Bitcoin, attention is now shifting to whether governments themselves will begin to invest in BTC via their sovereign wealth funds. Meanwhile, 2021 remains a bullish year for the largest asset by market capitalization with its March closeout representing the best Q1 performance in eight years.

Retirement funds holding Bitcoin

As previously reported by Cointelegraph, KiwiSaver, a $350-million retirement plan operated by New Zealand Funds Management, recently allocated 5% of its assets into Bitcoin. At the time, James Grigor, chief investment officer at NZ Funds, remarked that Bitcoin’s similarities to gold make BTC an attractive asset for life and annuity firms.

According to Grigor, NZ Funds amended its offer documents back in 2020 to include cryptocurrency investments in its catalog. This move allowed the company to purchase BTC back in October when Bitcoin was trading around the $10,000 price mark.

In less than six months, NZ Funds’ KiwiSaver product is now likely sitting on almost six-fold profit on its Bitcoin investment. For the NZ Funds’ executive, Bitcoin presents another set of opportunities outside the usual traditional asset route.

Indeed, Bitcoin’s established history of aggressive compounding capabilities despite any price retracement seems to be catching the attention of big-money players. Hedge funds, family offices and publicly listed companies have been allocating assets to Bitcoin in recent times.

Back in 2018 and 2019, Morgan Creek’s Mark Yusko and Anthony Pompliano identified pension funds and insurance as a class of institutional investors that should consider investing in Bitcoin. At the time, Pompliano predicted that pension funds would face significant challenges in meeting their future obligations if they did not aggressively pursue portfolio diversification beyond the usual investments in bonds and stocks.

In February 2019, Morgan Creek announced a blockchain-focused venture fund anchored by two public pension funds in the United States, among other investors. Since then, a few other pension funds and insurance firms have executed some form of exposure to Bitcoin.

As reported by Cointelegraph at the time, Massachusetts-based insurance provider MassMutual added Bitcoin to its general investment account. MassMutual reportedly bought $100 million worth of BTC from New York Digital Investment Group while also putting up a $5-million equity stake in the company.

Detailing the company’s Bitcoin investment thesis, MassMutual’s Chelsea Haraty told Cointelegraph that the move was indicative of the firm’s broader strategy of capitalizing on emerging opportunities while diversifying its asset portfolio, adding:

“In addition, our investment in NYDIG and Bitcoin aligns with MassMutual’s overall commitment to innovation, giving us measured yet meaningful exposure to a growing economic aspect of our increasingly digital world. Importantly, our $100-million investment in Bitcoin through NYDIG represents .05% — or less than one-tenth of 1% — of our total GIA.”

Haraty’s characterization of MassMutual’s Bitcoin outlay as “measured yet meaningful” echoes the sentiments espoused by market proponents like Yusko and Pompliano who have encouraged insurance firms and pension funds to invest in Bitcoin. Indeed, 1% is often used as an adequate proportion for BTC exposure for institutional investors.

Hedging dollar-denominated liabilities

Back in January, Michael Sonnenshein, CEO of Grayscale crypto fund, remarked that pension funds were fuelling the growth of the crypto asset management firm. According to Sonnenshein, endowments and pensions were among the active investors in the firm’s Bitcoin trust.

NYDIG CEO Robert Gutmann has also provided further confirmation that life and annuity companies are increasingly reevaluating their investment allocation with a view to engineering some exposure to Bitcoin.

In a virtual podcast with Raoul Pal, an investment strategist and founder of Real Vision, Gutmann declared that several life-and-annuity companies were making inquiries about investing in Bitcoin. According to Gutmann, the current drive for BTC exposure for pension funds and insurance firms went beyond fears of currency debasement to concerns over the risks associated with having insufficient cover for dollar-denominated liabilities, stating:

“If you look at the world today on a forward basis, it is reasonable to be asking yourself as an investment committee or as an allocation committee [if] having all of [their] assets denominated in dollars against dollar-denominated liabilities is the right allocation mix.”

Pension funds have not been exempted by the economic stresses occasioned by the ongoing coronavirus pandemic. In July 2020, Japan’s Government Pension Investment Fund — touted to be the largest in the world — posted a first-quarter loss of $165 billion, roughly Bitcoin’s market capitalization at the time. The loss was indicative of the market turmoil caused by the events of March 12, 2020, known as Black Thursday.

While not as heavy as the dents taken by pension funds during the global financial crisis of 2008, COVID-19 has negatively impacted the performance of many pension funds around the world. According to a report by Bloomberg back in February, the Ontario Municipal Employees Retirement System, or OMERS — one of Canada’s largest pension funds — recorded a 2.7% asset decline on a year-on-year basis.

Poor investment choices during the ongoing COVID-19 pandemic are reportedly to blame for Omers’ asset depreciation, with investments in markets such as legacy financial services, energy companies and other “old economy” equities failing to yield gains. Even Berkshire Hathaway CEO Warren Buffett dumped bank stocks in favor of gold back in August 2020.

Amid the substantial losses suffered by pension funds during the 2008 global financial crisis were calls for reforms in the private pension sector. Indeed, pension funds in countries under the Organization for Economic Co-operation and Development umbrella lost an estimated $3.5 trillion due to the crisis.

For OMERS and other pension funds suffering their largest losses since the 2008 crisis, the foregone opportunity of not adding any Bitcoin exposure is becoming more apparent. To put Bitcoin’s dominance over traditional assets in perspective during the COVID-19 era, BTC is up more than 650% since the World Health Organization classified the coronavirus as a pandemic in March 2020.

Sovereign wealth funds next in line?

Apart from pension funds and insurance firms, reports are emerging that sovereign wealth funds may become the next major participants in the institutional Bitcoin investment scene. According to NYDIG’s Gutmann, governments are also in talks with the company toward allocating some of their assets to BTC.

While having direct exposure is likely what these talks are about, Norway’s oil fund — the government’s pension fund — holds an indirect Bitcoin investment. The world’s largest sovereign wealth fund, with over $1 trillion in assets, has indirect BTC exposure via its investment in business intelligence firm MicroStrategy.

During Gutmann’s podcast appearance with Pal, the Real Vision founder also revealed that Temasek — Singapore’s sovereign wealth fund — is also a Bitcoin investor. According to Pal, Temasek, with an asset base valued at about $306 billion, has been buying virgin BTC from miners.

Market commentators like Pal say sovereign wealth funds will bring in a “wall of money” into the Bitcoin space. Such an influx of institutional buying power could likely fuel another parabolic advance in BTC’s price. As is the case with insurance companies and life and annuity firms, Bitcoin likely offers a suitable investment instrument to be used as a hedge against dollar-denominated liabilities.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/pension-funds-and-insurance-firms-alive-to-bitcoin-investment-proposal

Blockchain

3iQ Expects to Launch Bitcoin ETF After “favorable” Ruling From Canada’s Top Securities Regulator

The Ontario Securities Commission (OSC) has ruled to allow crypto fund manager 3iQ to issue a prospectus for its prospective exchange-traded Bitcoin fund, signalling that Canada’s top securities regulator may be about to approve the launch of the nation’s first Bitcoin ETF. Toronto-based 3iQ said in a press release Wednesday that its planned closed-end BTC fund, “The … Continued

The post 3iQ Expects to Launch Bitcoin ETF After “favorable” Ruling From Canada’s Top Securities Regulator appeared first on CryptoCanucks.

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The Ontario Securities Commission (OSC) has ruled to allow crypto fund manager 3iQ to issue a prospectus for its prospective exchange-traded Bitcoin fund, signalling that Canada’s top securities regulator may be about to approve the launch of the nation’s first Bitcoin ETF.

Toronto-based 3iQ said in a press release Wednesday that its planned closed-end BTC fund, “The Bitcoin Fund,” had moved on to the final stage of judgment with the OSC and that it expected it would receive clearance to launch on a major Canadian stock exchange as early as this quarter.

3iQ painted the ruling as a conclusion to three years of work with the OSC’s Investment Funds and Structured Products division, convincing the regulator that the fund will be able to resolve “pricing, custody, audit, and public interest issues.”

Beating the U.S. to the Punch on the Coveted ETF

The news will come to many as a watershed moment in Bitcoin’s history after years upon years of failed efforts to launch a BTC ETF in the United States. Traditionally, the expectation has been that a Bitcoin ETF could inject tens, if not hundreds of billions of dollars into Bitcoin’s market capitalization by seeing the original cryptocurrency incorporated into mainstream financial products like retirement accounts and mutual funds (alone a multi-trillion-dollar market).

The OSC’s U.S. counterpart, the Securities and Exchange Commission (SEC), seemed to create a tone of despair amongst Bitcoin proponents and its own members over the last two years, having dismissed more than nine applications citing concerns chiefly around custody and market surveillance.

Incredibly, both of 3iQ’s custody and surveillance providers are U.S. institutions, suggesting Canadian regulators have a softer, if not more progressive, view of how a Bitcoin fund could be operated safely in the securities market. 3iQ plans to custody the fund’s BTC with Gemini Trust Company while using VanEck for its index and market data. Both firms are based in New York and ironically are counted amongst the SEC’s rejected ETF applicants.

Should the OSC give the final green light to 3iQ’s plan—a likely outcome it seems—the SEC may be forced to reconsider its evidently stern stance on Bitcoin ETFs.

Read more about 3iQ’s journey here.


Cryptoslate

Source: Cryptoslate: 3iQ expects to launch Bitcoin ETF this quarter after “favorable” ruling from Canada’s top securities regulator

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptocanucks.com/3iq-expects-to-launch-bitcoin-etf-after-favorable-ruling-from-canadas-top-securities-regulator/

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Musk Puts Bitcoin on Pause, Tesla Suspends BTC Payments

Elon Musk revealed that Tesla would pause accepting bitcoin as payment for its product as a consequence of its high energy consumption.

The post Musk Puts Bitcoin on Pause, Tesla Suspends BTC Payments appeared first on BeInCrypto.

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Elon Musk revealed on Twitter that Tesla would pause accepting bitcoin as payment for its product as a consequence of its high energy consumption.

Tesla CEO Elon Musk has roiled the crypto markets after announcing that Tesla would stop accepting bitcoin as payment for its vehicles. The reason cited was that bitcoin mining consumed far too much energy and was damaging the environment. The market responded by turning red, with bitcoin dropping around 16% in just a few hours.

Specifically, the tweet states that Tesla is concerned about the increasing use of fossil fuel, especially coal. While the note does state the benefits of cryptocurrencies, Musk stated that it should not come at the cost of the environment.

Tesla will continue to keep its bitcoin holdings and resume bitcoin transactions once mining transitions to renewable energy. The company will also look for cryptocurrencies that consume less than <1% of bitcoin’s energy/transaction.

The news is a quick change of heart from one of the market’s strongest high-profile supporters. Musk has offered support for cryptocurrencies as assets several times and is most well-known for his thoughts on Dogecoin.

Some in the market have complained about how Musk’s influence has a seismic effect on the market, whether good or bad. His comments on Dogecoin have greatly bumped the price up, while the recent bitcoin news has tanked the market as a whole. The complaint is that Musk has enough clout to influence the market, which is a questionable matter on the whole.

However, while bitcoin does require a high amount of energy for mining, an increasing number of entities are moving towards renewable sources of energy. Furthermore, the data on how badly bitcoin is affecting the environment isn’t entirely conclusive.

Reports on bitcoin’s renewable energy usage vary, with some saying it is as high as 70%, while others say it is 39%. The point is, the industry is making note of these concerns and working towards going green.

BTC crashes below $50k

Naturally, the market has taken a huge beating from the change of face from one of the most prominent market entrants in recent times. In total, the market lost about $365 billion following the announcement, though it has recovered slightly since.

Tesla only began accepting bitcoin payments about two months ago and the decision to stop is a quick U-turn that has tanked the market. For the first time in months, the price of bitcoin had crashed to below $50,000, and it currently sits at roughly $51,000.

Several figures in the cryptocurrency space chimed in with their thoughts, and some of them seemed to chide Musk for being seemingly ignorant. The argument about bitcoin’s energy consumption has been a thorn in the market’s side for a while now.

Blockstream CSO and Pixelmatic CEO Samson Mow called the comments “uneducated,” even going so far as to say that he would never buy another Tesla product. Cameron Winklevoss was far more friendly with his response, simply saying that bitcoin is pushing the renewable energy industry forward and expecting Musk to refresh his position.

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Rahul Nambiampurath is an India-based Digital Marketer who got attracted to Bitcoin and the blockchain in 2014. Ever since, he’s been an active member of the community. He has a Masters degree in Finance.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://beincrypto.com/musk-puts-bitcoin-on-pause-tesla-suspends-btc-payments/

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How to Choose a Prospective Cryptocurrency

Cryptocurrencies are developing rapidly. Today, these digital assets are used for everything. You can even make a deposit with crypto and get the best live casino offers. These tips will help you choose the right coin. Function To identify a prospective cryptocurrency, you need to pay attention to its function. The function of a project […]

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Cryptocurrencies are developing rapidly. Today, these digital assets are used for everything. You can even make a deposit with crypto and get the best live casino offers. These tips will help you choose the right coin.

Function

To identify a prospective cryptocurrency, you need to pay attention to its function. The function of a project must be clear and understandable, even if it is a complex technology or a system that is difficult to develop. The technology or system must have a real application and solve real problems both in the crypto market and in other areas.

Development Team

Another important attribute is the team behind the project. Sometimes among the representatives you can see former employees of companies like Microsoft, Google, Goldman Sachs, or JPMorgan Chase. But work experience varies – you can work as a senior assistant to a junior janitor or develop complex products, the expert explained. So check exactly what positions project members have held and what products they have developed before.

Known and proven specialists, as in any other field, are not many. So, projects with big plans usually try to attract famous developers because they know that this will draw the attention of the crypto community.

Software Code

In order to define a successful cryptocurrency, it is advisable to understand programming. At the same time, it is important to follow what the project team publishes on GitHub. This is a kind of social network for developers, where they publish created solutions and share the results of the project development.

Many projects have open source code. By studying it, as well as the activity of the developers, it is possible to understand whether there is dynamics in the development of the project and how positive it is.

The peculiarity of the crypto market is that an analyst must be more than just a financial expert. Here it is not enough to be able to understand the financial market, valuation methodologies, the possible value and liquidity of the asset. Cryptocurrencies often include different components written in different languages. An expert must be immersed in both areas to correctly evaluate new projects.

How Much to Invest

Any project can seem extremely promising. But this does not guarantee its success in the future. The idea may be poorly implemented, fail to find application, fade out against the competition or even turn out to be a product of fraud. So, such investments are of a high-risk nature.

10-20% may be set aside in an investment portfolio for venture capital investments. It is possible to invest a few percent in each interesting project, thus assembling a portfolio of a dozen altcoins or other high-risk instruments.

You can allocate up to 25% of your investment portfolio to buy the tokens of projects that were launched during the ICO and continue to operate and develop to this day. They have survived all the ups and downs of the industry in recent years. Such projects are more reliable and have real potential for development and growth, the expert believes.

Disclaimer. This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Cryptopolitan.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptopolitan.com/how-to-choose-a-prospective-cryptocurrency/

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How Is Trustworthiness Measured In A Crypto Exchange?

Trust is crucial in any financial system. While Cryptocurrency is taking the world to the moon, it is very easy for some of the fake crypto exchanges to make a fool of beginners as well as experienced users all around the globe. Opting for an exchange system that is not secure and dodgy is becoming […]

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Trust is crucial in any financial system. While Cryptocurrency is taking the world to the moon, it is very easy for some of the fake crypto exchanges to make a fool of beginners as well as experienced users all around the globe. Opting for an exchange system that is not secure and dodgy is becoming a widespread mistake. For trust building, the most important thing is how safe and transparent a crypto exchange is. It is crucial to look into the various factors to check the trustworthiness of a crypto exchange before opting for it.

Trustworthiness: The most crucial characteristic of a good crypto exchange

A research paper published recently called “Characterizing cryptocurrency exchange scams” used typosquatting generation technique and existing data to identify over 1500 scam domains with 300 plus fake crypto exchange apps. After exploring the relationship between fake apps and scam domains, it identified 30 fake app families and 94 scam domain families.

The researchers revealed that these scams and fake crypto exchanges have resulted in a financial loss of a minimum of $520,000. Along with this, they found that these phony crypto exchange apps have sneaked to big app stores like Google Playstore, to defraud unaffected users. This shows an urgent need to identify and avoid such untrusted crypto exchange scams.

These days, hundreds of crypto exchange and trading platforms are floating in to the market, making promises of transparency and security. But before opting for a crypto exchange platform, you should look at these four factors to judge the trustworthiness:

  1. Security: The platform should implement high-security measures in all exchange functions such as user authentication, user verification, sessions management, trading and withdrawal policies. 
  2. Data Transparency: Trading volume, average liquidity, user activity, and other on-chain and off-chain data should be transparent and also, available to the public.
  3. Ease of use: A user friendly platform will attract more users and earns their trust. 
  4. Founders and Team: The founders and developers behind any successful project have long experience and a strong record of past projects in similar niche. 

Why is Aurix becoming the star of all eyes?

A popular and successful crypto exchange system should excel in all four factors mentioned above. With experienced developers and superior blockchain technology, Aurix aims to be one of the most trusted platforms worldwide. 

The Aurix chain ensures seamless payments and top-notch security. Aurix CEO, Majed Mohsen, has said that they pay their most attention to its integrity and adherence to the best international security standards.

The Aurix chain offers financial services that are fast, transparent and secure. Decentralized finance enables carrying out transactions without the company’s operations and permissions. This means that even if, because of any reason, Aurix ceases to exist, the chain will continue doing its task of transferring the users’ cashback properly.

It has a user-friendly design with the ability to trade multiple coins with a customized interface. It allows tons of trade orders and transactions to process in a couple of seconds. The platform provides trading charts and analysis tools. This simplicity of the system helps users to understand the system quickly.

Along with all the fantastic things, Aurix’s team is highly reputed and have worked for years in the field. They have ensured the building of a highly ethical system.

Change your crypto exchange before it’s too late

The facts mentioned above make it necessary to realize the importance of using trustworthy and secure crypto exchange platforms, to avoid financial suffering and losses. It is evident from the technologies it uses that Aurix is passing all the mentioned parameters to become one of the most trustworthy crypto exchange platforms. The complete ecosystem of Aurix ensures a transparent, trusted, and resilient service. Aurix CEO, Majed Mohsen, promises the utmost care and security to its users. It is a self-reliant ecosystem of financial services which are fully designed on the technology of decentralized finance, maining that all the transactions will be executed in any case. Aurix will never disappoint you, no matter what happens.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.cryptopolitan.com/how-is-trustworthiness-measured-in-a-crypto-exchange/

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