Bank of America is offering crypto exchange-traded products for some of its clients, report says

Bank of America
Bank of America

  • Bank of America clears and settles crypto exchange traded products for selected clients, according to a report by Coindesk.
  • Last week, the company said in an internal memo it plans to add a crypto research team.
  • A Coindesk report on Tuesday said the bank was offering ETPs to some of its hedge fund clients.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bank of America is now offering crypto exchange-traded products for some of its global clients, as it seeks to tap into investor demand for digital assets, according to a report by Coindesk.

Coindesk said on Tuesday the bank was offering ETPs to some of its hedge fund clients, according to three sources with knowledge of the matter.

The bank, the largest in the US by assets, follows competitors JPMorgan, Goldman Sachs and UBS in offering crypto-linked ETPs to some of its customers.

The bank occasionally clears and settles crypto-related ETP trades to some of its global clients and has done so for some time, according to a source familiar with the matter that spoke with Insider on condition of anonymity.

Bank of America declined to comment when contacted by Insider.

To bolster its trading and investment options in digital currencies, the bank also plans to create a crypto research team, according to an internal memo earlier this month.

A number of major banks and fund managers have added crypto-related products and services to tap into demand from anyone from institutional investors to individual traders, largely thanks to the kind of returns that volatile cryptocurrencies can bring.

Bitcoin, the largest cryptocurrency by market value, is up by more than 200% year on year, trading at around $31,800. But it swung from lows of just $8,905 to highs of almost $65,000 in that period of time.

This story has been updated to include Bank of America’s official response and to add that it offers these services to clients globally.

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60% of super-rich family offices own crypto or are interested as inflation soars, Goldman Sachs says

GettyImages 1294702554
Cryptocurrencies have boomed in 2021, despite a recent plunge.

  • 60% of family offices have already invested or are interested in crypto, Goldman Sachs has found.
  • Many investment firms of the rich increasingly see crypto as a hedge against inflation, the survey said.
  • Yet others remain concerned about cryptocurrencies’ volatility and the safety of the market.
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The investment firms of the super-rich are increasingly interested in cryptocurrencies, a survey by Goldman Sachs has found, with 15% already having bought in and 45% saying they could well do in the future.

Goldman said in a report on Wednesday that many respondents said they were considering cryptocurrencies “as a way to position for higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”

The bank surveyed 150 family offices – investment firms that look after the wealth of the very rich.

Interest in cryptocurrencies such as bitcoin varied from region to region. Goldman found 24% of family offices in the Americas had put some money in the space already, compared to just 8% in Asia and 8% in Europe, the Middle East and Africa (EMEA).

In Asia, 68% of family offices said they are interested in investing in the future, compared to 39% in the Americas and 35% in EMEA.

Read more: WATCH: Crypto analyst David Grider and venture capital investor Ria Bhutoria discuss state of the market, under-the-radar altcoins, and outlook on regulation

Goldman said digital assets were mentioned as one investment solution by those concerned about inflation. Around 40% of respondents said they were concerned about monetary debasement as central banks pump money into economies, with more than 40% of this group saying they would consider buying digital assets.

However, 39% of family offices around the world said they were not interested and would never invest in crypto. Of these, 49% said cryptocurrencies, which are highly volatile, were not a good store of value. Just shy of 40% said they were not currently comfortable with the infrastructure, such as trading and storing.

Family offices are a growing force in the investing world, thanks in large part to the boom in billionaires. Of the 150 firms surveyed by Goldman, 22% managed $5 billion or more and 44% managed between $1 billion and $4.9 billion.

Goldman’s report said: “Our conversations with family offices indicate they are interested in getting exposure not only to cryptocurrencies but also to innovation in the digital assets ecosystem.”

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Bank of America is joining the growing number of banks that will allow clients to use various crypto exchange-traded products, report says

Bank of America
Bank of America

  • Bank of America will allow its clients access to a number of crypto exchange-traded products, according to a Coindesk report Tuesday.
  • Last week, the company said it would allow some clients to trade bitcoin futures and plans to add a crypto research team.
  • The company has joined JP Morgan, Goldman Sachs and UBS in creating crypto products and services in response to client demand.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bank of America is going to offer its clients access to a number of cryptocurrency products, joining a growing number of its peers that are rapidly tapping into investor demand for digital assets, according to a report on Tuesday by Coindesk.

The bank will allow its clients to use various crypto exchange traded products (ETP’s) according, to three knowledgeable sources, Coindesk reported on Tuesday. These ETPs will be aimed at European hedge funds, the report said.

Bank of America was not immediately available for comment when contacted by Insider.

Bank of America, the largest US investment bank by assets, follows competitors JPMorgan, Goldman Sachs and UBS in offering crypto-linked ETPs.

This is the bank’s second big step to expand its cryptocurrency products. Last week, it allowed some customers the option to trade bitcoin futures.

To bolster its trading and investment options in digital currencies, Bank of America also plans to create a crypto research team, according to an internal memo earlier this month.

A number of major banks and fund managers have added crypto-related products and services to tap into demand from anyone from institutional investors to individual traders, largely thanks to the kind of returns that volatile cryptocurrencies can bring.

Bitcoin, the largest cryptocurrency by market value, is up by more than 200% year on year, trading at around $31,800. But it’s swung from lows of just $8,905 to highs of almost $65,000 in that period of time.

This story has been updated to include Bank of America’s response, with no further changes to the text.

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Cathie Wood’s ARK bought more shares in Grayscale’s trust after bitcoin’s fall below $30,000

Cathie Wood
Cathie Wood

Cathie Wood has added to her bitcoin holdings with another purchase of shares in the Grayscale Bitcoin Trust after the cryptocurrency fell below $30,000 on Tuesday for the first time in almost a month, according to data from her ARK Invest fund.

Wood’s ARK Next Generation Internet fund bought 140,157 shares in the Grayscale Bitcoin Trust.

She’s a self-proclaimed cryptocurrency fan. Her funds hold stakes in crypto exchange Coinbase and payments company Square, which in turn owns a sizeable amount of bitcoin on its balance sheet.

As of Tuesday, ARK’s holdings in Grayscale’s bitcoin trust reached 8.986 million shares.

Grayscale’s trust is the world’s largest bitcoin investment vehicle. It gives investors exposure to the price of bitcoin without having to buy or store it.

Bitcoin reached a five-week low of around $29,400 on Tuesday. Bitcoin has been trading up 5.74% in the last 24 hours. Since hitting an all-time high in April near $64,000, it’s fallen by more than 50%, but is still up by more than 220% compared with last year.

ARK also purchased another 18,735 shares in Coinbase via its ARK Fintech Innovation Fund, according to the company’s website.

Wood is hosting the “B Word” cryptocurrency conference later on Wednesday. It will feature the likes of crypto-influencers like Elon Musk, CEO of Tesla and Jack Dorsey, CEO of Twitter.

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Bitcoin has seen two straight weeks of outflows, while investors have poured money into ether for a third week ahead of a key network upgrade: CoinShares

Ethereum and bitcoin
Ethereum and bitcoin

Investors pulled their money from bitcoin products for a second straight week in the seven days to July 16, with many likely booking profits on long-held positions, while pouring money into ether for a third week, according to data from CoinShares.

Bitcoin assets saw flows drop 10.4% over the week, while ether saw flows rise 11.7%, according to the company’s most recent weekly flows report released on Tuesday.

Bitcoin lost around 7% in value in the week to July 16, when it fell below $32,000. Since then, it has fallen another 6.5% to around $29,720, driven by rising investor risk aversion over the surge in cases of COVID-19 that has battered global markets this week.

Since the currency peaked in April at almost $64,000, it has lost more 50%, although it is still up by over 200% over the last year. CoinShares investment strategist James Butterfill told Insider he believed a portion of the bitcoin outflows were down to longer-standing investors taking profit now in case of a steeper slide over the coming months.

CoinShares graph
CoinShares

“Most of our funds were launched in 2015 and we saw profit-taking earlier this year and not now. So the outflows we are seeing in some funds is simply due to when individuals first invested, rather than negative sentiment towards bitcoin,” he said.

In 2015, bitcoin traded between lows of around $110 and a high of close to $500. It’s risen by almost 30,000% since then.

“People that are seeking out, might not necessarily be doing so for bearish reasons, but instead their deciding to profit now, perhaps their line of thinking is that ‘I should have sold at $55,000, but it’s fallen down to $30,000, so I’ll just take profits here because my worry is that the BTC price is not going to do much over the summer,” Butterfill said.

Meanwhile, over the last 7 days ethereum’s ether token has fallen by around 13% to $1,748.85, Coinmarket cap data shows. After peaking in May above $4,300, much like bitcoin, it’s also lost around 50% in value. Over the last 12 months, however, it’s up by more than 600%.

Investors are hoping to profit from the upcoming upgrade to the ethereum network. Ethereum 2.0 is scheduled to roll out on August 4 and some investors may be buying, given that the shift will result in supply reduction and the price potentially rising sharply.

Bitcoin products were the only ones that saw outflows in the latest week. The smaller altcoins, together with ether, all registered modest inflows. According to the CoinShares data, which is an accumulation of global flows, XRP and dot saw a 0.3% rise in inflows, while ada saw an increase of 0.4%.

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Crypto lending is booming as investors hunt for yield. It turned this company from niche startup to $1 billion unicorn in just 4 years.

Crypto bitcoin ATM symbol
Cryptocurrency investors are looking for yield as bitcoin and other coins consolidate.

The recent plunge in cryptocurrencies has sent investors searching elsewhere in the digital universe for sky-high returns.

Many of them are getting into the fast-growing sector of crypto lending, which can net investors returns far above the measly 0.05% or so that banks offer on deposits.

Retail investors can get crypto “savings” accounts that typically offer annualized returns of between 5% and 12%. Braver braver souls can lend to decentralized finance projects in the wilder corners of the market and earn several thousand percent.

One beneficiary of the crypto lending boom has been Amber Group, a Hong Kong-based startup that has become worth $1 billion after a June fundraising round – and after just four years in existence.

Amber offers high-frequency and algorithmic trading, derivatives and various other fancy products. But, like many crypto lenders, its core business model is simple. It takes crypto from “savers” who want to lend, and lends crypto to institutions or people that want to borrow it, for example hedge funds shorting bitcoin.

Read more: The co-founder of the first federally chartered crypto bank shares his favorite strategy for finding the best yields in crypto lending – including specific ‘low-hanging fruit’ for traders

Its products offer returns ranging from 3% and 40% or above. Focused on Asia, it mainly serves institutions, but is expanding its offering to retail customers.

“What we are doing essentially is similar to a bank,” Amber’s chief executive officer Michal Wu told Insider this week. “Of course, we do take a bit of interest margin on that ourselves.”

That interest margin accounts for 70% to 80% of Amber’s revenues, which could be around $500 million in 2021. The business, which has about $1.5 billion under management, has attracted investment from the likes of crypto exchange Coinbase and hedge fund Tiger Global Management.

Coinbase is itself getting in on the lending game. The biggest US crypto exchange announced at the end of June that it’s launching a crypto savings account that offers 4% annualized interest. Gemini, Bitfinex and BlockFi are among the numerous other companies offering similar products.

So what’s the catch? Well, if a return is much higher than on a standard savings account, it must be a much riskier investment.

The chief danger for retail investors is that these savings products have no federal deposit insurance. Investors are handing over control of their crypto to relatively new companies, who could run off with it or go bust.

David Grider of research house Fundstrat said in a recent note: “If the lender’s assets become impaired somehow during a sell-off, where liquidated collateral doesn’t cover loans issued, or during a hack lose funds… or due to improper management of the business – users can lose a substantial portion of their funds.”

Coinbase has sought to calm investors’ nerves by assuring them that it doesn’t lend to unauthorized third parties. And Wu says Amber Group only lends to institutions on an over-collateralized basis, meaning borrowers have to stump up more of one asset than they’re borrowing of another.

Wu says crypto finance’s promise of steady returns is drawing in large numbers of new investors, including retail traders and the uber-wealthy – and even traditionally conservative family investment offices.

Like many more financially minded crypto advocates, Wu says he welcomes tougher regulation. “There are a lot of bad actors in this industry, let’s be honest,” he says. “It’s actually better for the regulators to be more involved early on… the [companies] that can both innovate and also be compliant and really deal with global regulation will prevail.”

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Bitcoin bull Michael Saylor says the cryptocurrency’s volatility will always hurt those who invest purely to trade

Michael Saylor, CEO of MicroStrategy
Michael Saylor, CEO of MicroStrategy

  • Michael Saylor said bitcoin’s volatility will always be disappointing for some investors.
  • In an interview with Sven Henrich, Saylor said anyone who invests purely to trade could run into trouble.
  • The MicroStrategy CEO also said he views his bitcoin holdings as long-term tech and savings investments.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin bull Michael Saylor said the cryptocurrency’s volatility will always hurt those who invest purely to trade or based on speculation in a recent interview with Northman Trader’s Sven Henrich over the weekend.

“The people that invest in bitcoin as traders – and they don’t, they don’t have a technology view or the macro view – they’re always going to be disappointed because of volatility,” Saylor said.

He urged investors not to put more money than they can lose into bitcoin and crypto markets, especially if they were basing trades on speculation and said he is not in a place to give advice to anyone planning to invest or trade with bitcoin over a short timeframe.

“If on the other end you have a 10-year technology conviction and a 10-year macroeconomic conviction, or if you have an ideological conviction, then take money that you can hold for ten years,” Saylor said, adding that the volatility of bitcoin does not impact him personally as he has invested money he can afford to lose and can wait for the cryptocurrency to pick up from bigger sell-offs.

MicroStrategy CEO Saylor is a key figure in the online bitcoin and crypto space, who has consistently said the cryptocurrency is a form of investment. He sees it as a way to store value in place of traditional assets like gold and a way to protect his investments from increasing inflation and taxes.

In recent months, he has made bitcoin part of his company’s financial. Just last month MicroStrategy sold shares worth $1 billion, in parts to purchase more bitcoin, after having already completed a $500 million bond sale to raise cash for more crypto buying.

At the time, the company owned 92,079 bitcoin – currently worth over $3.2 billion based on the most recent price of bitcoin according to Coingecko data.

In comparison to those who buy bitcoin to trade with it or based on speculation, Saylor told Henrich that he is focused on the long-term and views himself as somewhat of a tech investor – not least because of bitcoin’s functionalities including ease of transfer and bitcoin applications.

“I am on the tech long-term tech investment, like the decade-long trend, and on the savings side,” Saylor said.

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JOIN US JULY 15: Crypto experts from Ark Invest and more share their industry outlooks and the biggest opportunities they’re pursuing

“What’s Next for Crypto” Webinar poster featuring Mrinalini “Ria” Bhutoria of Castle Island Ventures, Yasshine Elmandjra of Ark Invest, and David Grider or Fundstat Global Advisors.
What’s Next for Crypto featuring Mrinalini “Ria” Bhutoria of Castle Island Ventures, Yasshine Elmandjra of Ark Invest, and David Grider or Fundstat Global Advisors.

No asset class has evoked shock and awe across financial markets this year in the way that cryptocurrencies have.

The relatively nascent market pushed the boundaries of what investors had thought was possible. From the record $69 million sale of a non-fungible token to the explosive gains of memecoins, investors have had to quickly smarten up on the space.

To help you get even smarter and distinguish the real opportunities from the noise, Business Insider will host ‘What’s next for crypto?” a webinar on Thursday, July 15 at 2 p.m. ET. Join Insider’s senior investing reporter Vicky Huang, and senior investing editor Akin Oyedele, in conversation with Yassine Elmandjra, the blockchain and cryptoasset analyst at Ark Invest; David Grider, the head of digital assets research at Fundstrat; and Ria Bhutoria, the principal at Castle Island Ventures.

The panel of these three experts will discuss topics including:

  • Investing ideas, opportunities, and use cases in crypto broadly and in specific tokens or coins.
  • Whether the bull market in bitcoin is over for this cycle, and what may happen next following the largest crypto’s plunge from its all-time highs.
  • The prospects for wider and deeper adoption of crypto by institutional asset managers.
  • Price targets for bitcoin, ether, and other major cryptocurrencies, including breakdowns of the theses that back them up.
  • And, the debate around bitcoin’s environmental impact.

The webinar will touch on other major developments in the volatile and evolving space.

Join us on July 15 at 2 p.m. ET/11 a.m. PT for the live conversation. You can register here if you’re an Insider subscriber.

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A teen crypto influencer who started by investing her pocket money into bitcoin says Gen Z could make crypto go mainstream – once they understand its benefits

Crypto Influencer Miss Teen Crypto
  • Miss Teen Crypto says Gen Z could push bitcoin mainstream once they understand and adopt it.
  • She began investing in crypto at 16 with her pocket money, after her dad introduced her to bitcoin.
  • Digital-native teens could easily dive into NFTs, once they understand the financial side, she said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Miss Teen Crypto, a cryptocurrency influencer who started investing her pocket money into bitcoin when she was 16, told Insider she believes Gen Z could be the catalyst to take crypto and NFTs into the mainstream, if someone would just explain the benefits and how they work.

The 18-year-old, who has tens of thousands of followers across the major social-media platforms, believes her digital-native generation could easily understand the digital side of crypto, but not the financial side – but more education could fix that.

“I think that Gen Z – we’re a little behind in terms of the financial aspect, but we’re not behind in terms of technology,” she told Insider in an interview.

“We’ve been on Snapchat since it came out, we’ve been on the internet our whole lives. So we know the concepts of digital property, we understand how to use this technology,” she said. “We just have to be educated on why we should and how we could.”

Her first investment, at 16, was around $200 saved up from her pocket money and birthday gifts. Her dad had got involved with bitcoin and crypto five years before that, when she was 13 – but at that time, she paid no attention to his passion.

“I was just tuning out. I was like, ‘This is boring, I don’t want to hear about it,'” she said. “But then a few years after, he actually showed me how a bitcoin transaction worked.”

When the New Yorker saw that bitcoin transactions were easily carried out on her phone, she recognised bitcoin’s potential, both in terms of investing and changing the world, she explained.

The crypto HODLer – who grew up Randi Hipper but is known by @MissTeenCrypto on Twitter, her podcast and Instagram – has seen others have the same experience when she has talked to them about crypto and bitcoin. Her high-school peers knew as little as her teachers about the assets, and 95% of the people she has talked to at Times Square have never heard of them.

Non-fungible tokens, or NFTs, are a great way for young people to realise crypto’s potential, the influencer believes. These are unique digital assets – such as image, video or audio files – that are built and stored on blockchain technology. As they cannot be duplicated, so they can be Collectable and hold value.

The key advantages, she said, are that anything can be turned into an NFT – from digital art, to music, to “your high school diploma” – and everything is documented on blockchain. There are also no age limits to creating them.

“Especially with Gen Z, we could take the space and run with it,” the crypto fan said. “It’s just amazing. I think NFTs could be everything,” she added.

All that is needed for a wider adoption of crypto assets is more education, she argues. That could spark a digital revolution that goes beyond finance, she said, bringing changes to not just the financial system, but also to the way people interact and make transactions work.

“We have to be able to reach more people and educate more people, which is what my mission is,”she said. “I’m trying to use social media, and I’m trying to make more educational content just to reach more Gen Z – because it really is the education that matters.”

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US bitcoin investors saw quadruple the gains of their Chinese peers in 2020, even though China has the world’s highest crypto transaction volume, new study shows

GettyImages 1231727725
  • US investors gained $4.1 billion in bitcoin profits last year – nearly four times more than the Chinese, said Chainalysis.
  • This, despite the Asian superpower having the highest volume of cryptocurrency transactions in the world.
  • The disparity in gains stemmed from the huge inflows that US-focused exchanges saw in 2020.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Investors in the US saw $4.1 billion in bitcoin profits last year – nearly four times more than Chinese investors – even as the Asian superpower has the highest volume of cryptocurrency transactions in the world, new data from Chainalysis shows.

The disparity in gains stemmed from the huge inflows that US-focused exchanges saw in the latter part of 2020. Most of the activity came from Coinbase, the largest cryptocurrency exchange in the US, which debuted on the Nasdaq on April 14.

photo1chart

To arrive at the figures, Chainalysis tracked cryptocurrency exchange transactions, although it did not account for gains on coins yet to be withdrawn. The New York-based blockchain analysis company also acknowledged that the decentralized nature of the technology makes it difficult to determine with certainty where the deals transpired.

Looking closely, the sharp rise can be seen from October to December, the timeframe when the price of bitcoin more than doubled – and kept rising to new all-time highs.

The steepness of the US curve may also suggest that many investors in America sold at higher prices compared to those in other countries who may have held on to their cryptocurrencies more.

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Chainalysis

The price of bitcoin exploded in the past year, catapulting into the mainstream as institutional investors from Tesla to MicroStrategy adopted the cryptocurrency. It peaked to $64,829 ahead of Coinbase’s listing before losing nearly 50% of its value in the following month.

Bitcoin is trading lower Tuesday by 11.68% at $31,781.

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