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The chief investment officer of the world’s largest asset manager, Blackrock, says he could see bitcoin going up significantly. “I like assets that are volatile that have upside convexity,” he said.

Blackrock CIO Sees Significant Upside to Bitcoin

Rick Rieder, Blackrock’s chief investment officer (CIO) of Global Fixed Income, was asked Friday in an interview with CNBC about his view on bitcoin now that the cryptocurrency is legal tender in a country.

Blackrock is the world’s largest asset manager, with about $9.5 trillion in assets under management (AUM) at the end of the second quarter. Rieder is also the firm’s head of the Fundamental Fixed Income business and head of the Global Allocation Investment Team. He is responsible for roughly $2.4 trillion in assets.

Rieder began by commenting on the popular opinion that cryptocurrency is either “a hedge or an alternative [currency].” Regarding cryptocurrency as a hedge, he said, “I’m not sure it’s a really great hedge,” citing its correlation to equities and risk assets. Noting that its price can move 15% a day, he reiterated, “I’m not sure it’s a great hedge.”

Regarding cryptocurrency as “an alternative currency,” he opined:

Part of why I own a small piece of bitcoin is I do think there are more people who are going to enter that fray over time … I like assets that are volatile that have upside convexity. I could see bitcoin go up significantly.

Rieder noted that Blackrock has a “very moderate” amount of cryptocurrency in its portfolio. Emphasized that bitcoin is volatile, he said he does not see it as a core asset like bonds or stocks. Nonetheless, he sees value in having a small amount as a speculative tool in a portfolio.

In November last year, he said that cryptocurrency was here to stay and could even replace gold to a large extent.

Do you agree with Blackrock’s CIO? Let us know in the comments section below.

Representations of the virtual currency stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration

Summary

LONDON, Sept 13 (Reuters) - Hedge fund Brevan Howard said on Monday that it was expanding its crypto business, the latest sign that institutional interest in the asset class is gaining momentum.

Brevan, more famous for its bets on macroeconomic trends, has been among the most high-profile of major hedge funds moving into the world of crypto trading, known for its volatile markets and scope for outsize gains.

The asset manager said it would launch a new unit, BH Digital, to manage cryptocurrency and digital assets. It said it would also hire Colleen Sullivan, currently CEO of the digital arm of trading firm CMT, to lead private and venture investments in crypto.

Brevan's expansion comes on the back of other high-profile money managers venturing into this space in recent months. Hedge fund manager Paul Tudor Jones has invested in bitcoin while Man Group (EMG.L) trades bitcoin futures. read more

An annual report published by PriceWaterHouseCoopers, Alternative Investment Management Association and Elwood Asset Management found total assets under management of crypto hedge funds globally nearly doubled to $3.8 billion in 2020 from US$2 billion in the previous year.

The rise in institutional interest comes as a wider range of cryptocurrencies become available while bitcoin and ethereum , the world's best known coins, are trading well below their record highs.

"What was initially seen as something of a fad now appears to be becoming a more permanent structure of the financial landscape and this has started to see what were initially fringe financial instruments moving to become more mainstream and very much forcing the institutional interest we are now seeing," said Stuart Cole, head macroeconomist at London-based Equiti Capital.

The rise in institutional interest has rippled over to the trading space. Eurex, Deutsche Boerse's derivatives exchange, launched bitcoin futures on Monday to feed on the growing interest.

Coinbase, one of the largest cryptocurrency exchanges in the world, says institutional interest in trading cryptocurrencies has soared this year.

In its second quarter letter to shareholders, Coinbase said turnover of cryptocurrencies hit a record $462 billion in the three months to June. Of this amount, $317 billion was traded by institutional investors and the rest by retail clients.

This ratio has flipped from the first quarter of 2018 when retail investors accounted for the lion's share of cryptocurrency trading.

While hedge funds and exchanges have scrambled to capture trading revenues, global banks have been relatively slow to latch on to the trend, with their wealth management clients largely pushing them to offer cryptocurrency trading.

Citigroup Inc (C.N) is considering offering bitcoin futures trading for some institutional clients while Standard Chartered has formed a newly minted research division for cryptocurrencies. read more

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Around 6% of Bitcoin’s circulating supply has been accumulated by asset managers and companies, signaling ever increasing mainstream and institutional adoption of crypto assets.

According to Buy Bitcoin Worldwide, 816,379 BTC worth $40.1 billion is currently held by 14 Bitcoin fund issuers and asset managers — representing 4% of the cryptocurrency’s supply.

Industry leader, the Grayscale Bitcoin Trust, represents more than 3% of the Bitcoin supply, managing 654,600 BTC (worth $32 billion). CoinShares’ XBT Provider ranks second with 48,466 BTC ($2.4 billion) representing 0.23% of supply. The 12 remaining issuers represent 113,313 BTC or 0.54% of thesupply combined.

The data provider also tracks 34 public companies that hold BTC on their balance sheets, which collectively command 1% of Bitcoin’s supply.

Half of all Bitcoin held by public companies is in the possession of MicroStrategy, which after adding 3,907 Bitcoin to its stash since the start of July, now holds 108,992 BTC worth $5.3 billion.

Electric vehicle manufacturer Tesla accounts for 20% of the Bitcoin held by private companies, with the firm having accumulated 42,902 BTC worth nearly $2.1 billion.

Private companies have absorbed another 174,068 BTC worth $8.5 million, cornering 0.83% of Bitcoin’s supply. Roughly 80% of BTC stashed away by private companies is held by Block.One — with the firm currently sitting on 140,000 BTC worth $6.8 billion.

Estimates vary among data providers however, with Bitcoin Treasuries tallying 1.4 million BTC on the balance sheets asset manager and companies. A further 260,000 BTC are attributed to the balance sheets of national governments.

Bitcoin’s supply will cap at 21 million BTC, with analysts estimating the final Bitcoin will be mined in the year 2140. At the time of writing, roughly 18.8 million BTC are in circulation. However access to one fifth of all Bitcoin (or more) is believed to have been lost, meaning that asset managers and companies may control an even greater share of the supply.

Related: Bitcoin hashrate triples since June 28 in recovery from China syndrome

While large entities are gobbling up BTC, Ethereum has appeared to have been undergoing a supply shock of its own in the wake of its London upgrades that introduced a burn mechanism to the crypto asset’s fee market.

According to Watch The Burn, 97,369 Ether worth $313.5 million has been destroyed in the 21 days since London, meaning that roughly 4,637 ETH are being burned daily on average. Overall, Ethereum’s burn mechanism has resulted in 35% a net reduction in the number of newly minted Ether entering supply.

Union Investment, a $500 billion asset manager, is planning to add Bitcoin (BTC) to several investment funds as part of a targeted pilot program for its institutional clients, offering compelling evidence that crypto is becoming more mainstream in Europe's largest economy. 

The Frankfurt-based institution told Bloomberg on Monday that it is considering adding BTC to a small number of investment funds that will only be available to private investors. For each fund, Bitcoin exposure will be limited to no more than 2% of total assets. Portfolio manager Daniel Bathe said the new investment strategy is likely to commence in the fourth quarter, though no fixed timetable was given.

Union Investment is the investment arm of DZ Bank Group, an institution with over 800 cooperative banks. As of June 30, Union Investment had $507 billion in assets under management, making it one of Germany’s largest asset managers.

Germany is quickly becoming a hotbed for crypto investments, especially among institutional players. On Aug. 2, a new law allowing institutional funds to hold crypto came into effect, setting the stage for a wider uptake of digital assets, even among German pension funds. Meanwhile, German securities broker S Broker recently announced a suite of crypto-focused product offerings.

Related: What the SEC can learn from the German regulator

At the retail level, Germans don’t rank as highly for crypto adoption, according to a recent survey by financial comparison website Finder. The 42,000-person survey estimated that only 11% of Germans had exposure to digital assets. Although that’s higher than the United States and the United Kingdom, it ranked well below emerging markets and other European nations.

Bitcoin is turning heads again as the first-launched cryptocurrency pushes toward $52,000. Its price has recovered roughly 79% from its summer trough. In the process, Bitcoin’s total market capitalization is once again approaching $1 trillion.

Bitwise Asset Management just launched a new index fund which caters to investors specifically interested in altcoins.

The San Francisco-based firm’s new “Ex Bitcoin” offering includes popular cryptocurrencies such as Ethereum (ETH), Cardano (ADA), and Bitcoin Cash (BCH), among others.

BTC’s total market capitalization of crypto has fallen from 69% to 41% in the past year while other tokens, such as ETH, have seen their share of the cap increase by nearly 75%, according to TradingView.

Chief investment officer Matt Hougan explains,

“This launch is being driven by customer demand. Many investors today [already] have exposure to Bitcoin, but are excited by the dynamic developments taking place around other assets.

This new fund allows investors to complement their existing Bitcoin exposure with a professionally managed solution that captures other large-cap cryptoassets.”

The platform will provide investment opportunities in the fields of decentralized finance (DeFi), smart contracts, and non-fungible tokens (NFTs).

The full roster of the Ex Bitcoin fund is made up of Ethereum, Cardano, Bitcoin Cash, Solana (SOL), Chainlink (LINK), Litecoin (LTC), Uniswap (UNI), Polygon (MATIC), and Stellar (XLM).

Bitwise is world’s largest crypto index fund manager with over $1 billion in assets. This is the firm’s second major move into crypto management, having launched the first-ever crypto index fund for retail investors last December.

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The global cryptocurrency market will hit $4.94 billion by 2030, more than triple its estimated size of $1.49 billion in 2020, according to a new study.

The report by Allied Market Research published Tuesday projects a compound annual growth rate of 12.8% between 2021 and 2030.The main drivers will be increased demand for international remittances and more transparency in global payments systems, Allied Market said.More than two-thirds of the industry's 2020 size was attributable to the mining segment, which is expected to retain this position of dominance through 2030. However, the transaction segment will see the fastest growth, the report found.Allied Market forecast that the Asia-Pacific crypto industry will be the fastest growing because of increased competition from a growing number of exchanges.The report largely echoes of another recent study by the same company into the crypto asset-management market, which it projects will grow to $9.4 billion in 2030 from $670 million in 2020. That also identified Asia-Pacific as the region for the most significant growth because of the large numbers of crypto mining enterprises there, driving demand for asset-management products and services to help manage their business processes.Read more: The Future of Bitcoin: 12 Scenarios From Bullish to BearishSubscribe to Crypto Long & Short, our weekly newsletter on investing.

Institutional demand for altcoin exposure has surged to record levels, with the altcoin market share now representing a record 35% of capital locked in crypto investment products.

According to the Sept. 7 issue of CoinShares’ Digital Asset Fund Flows Weekly, nearly 40% of the past week's inflows to digital asset investment products were allocated to instruments tracking altcoins.

While $97.8 million was invested into crypto investment products combined between Aug. 30 and Sept. 3 to mark the sector’s third consecutive week of inflows, $38.9 million was invested into altcoin products.

This past week also saw a sizeable increase in institutional crypto investments, with the previous two weeks recording inflows of $24 million and $21 million, respectively.

Roughly 35% of the capital invested in institutional crypto investment products is currently locked in instruments tracking assets other than Bitcoin — comprising a retest of the metric’s all-time high from May.

Ethereum (ETH) tracking products led the altcoin pack for the second week in a row, recording inflows of $14.4 million, a 16.2% decrease from the previous week’s $17.2 million.

There was a whopping 388% spike in weekly inflows for Solana (SOL)-based products, with SOL products absorbing $13.2 million. This coincided with the price of SOL gaining 37% over the same period.

CoinShares highlighted that inflows to Solana products doubled year-to-date (YTD) this past week, with $25 million having been invested into SOL instruments during the entirety of 2021 so far. SOL-based products now represent $44 million in total assets under management (AUM).

Cardano (ADA) and Polkadot (DOT)-based funds also saw notable inflows of $6.5 million and $2.7 million, respectively.

Bitcoin (BTC) investment products bucked an eight-week trend of outflows — the longest streak on record for any digital asset product — after enjoying inflows of $58.9 million for the week. Despite the bullish shift in momentum, BTC investment products have posted outflows for 14 of the past 17 weeks.

Related: The total market cap of public crypto stocks has quadrupled since January

According to CoinShares estimates, institutional asset managers currently represent a total AUM of $62.5 billion combined — nearing the record high of $66 billion posted during mid-May.

Top institutional asset manager Grayscale continues to dominate the competition, representing 73% of the sector's combined AUM with $46.2 billion.

The largest digital asset manager – Grayscale Investments – has announced that the Bitcoin Cash Trust, the Ethereum Classic Trust, and the Litecoin Trust have become SEC reporting products. Thus, the total number grew to six.

Speaking to Forbes, Grayscale’s CEO – Michael Sonnenshein – indicated that the company’s portfolio of funds reporting to the Securities and Exchange Commission has doubled.He specified that those funds were the Grayscale Bitcoin Cash Trust (BCHG), the Grayscale Ethereum Classic Trust (ETCG), and the Grayscale Litecoin Trust (LTCN).Having to report to the country’s securities regulator means that these products will need to provide the Commission with regular financial statements and disclosures.

“This is something that investors not only have expressed wanting, but something that we feel they deserve.” – commented Sonnenshein. The creation of SEC reporting companies has “opened Grayscale to a wider audience of investors who are typically used to seeing that [type of reporting] when they think about making investments.”

The necessary lock-up period for investments in the aforementioned funds has been reduced from 12 to 6 months. The same transition occurred when the first three Grayscale trusts became SEC reporting entities. Namely, those are the Bitcoin Trust, the Ethereum Trust, and the Digital Large Cap Fund.Grayscale’s assets under management have grown significantly in the past few years. As of yesterday, the amount was $43 billion, with GBTC having more than $30 billion.It’s worth noting that the company is striving to convert its largest trust into an exchange-traded fund tracking the performance of the primary cryptocurrency. Its latest push on this matter came a few months ago when it hired a new Global Head of ETFs.Facebook Twitter LinkedIn Telegram

Grayscale – the world’s largest digital asset fund based in the United States – has recently partnered with fintech investment platform iCapital to provide cryptocurrency investment strategy to the latter’s 6,700+ clients.

Crypto Exposure for Wealthy Clients

As reported by Globe News Wire, the partnership will be pairing iCapital’s technology and investment capabilities with Grayscale’s expertise in the cryptocurrency space. Together, iCapital will provide access to Grayscale’s “diversified market-cap-weighted investment strategy” to their thousands of clients.

Lawrence Calcano, Chairman, and CEO of iCapital Network, said cryptocurrencies are of great interest to wealthy clients, making a Grayscale partnership a logical next-step:

“Advisors and their clients have expressed an increasing appetite for uncorrelated return potential in their portfolios, and digital currencies are at the center of the conversation right now… We are delighted to partner with Grayscale, a recognized leader in digital currency investing with the experience to help investors navigate this dynamic asset class.”

Grayscale’s data indicates a similar trend. Their survey of financial advisors shows that 61% of their clients have approached them for more information about cryptocurrency investing.

Grayscale COO Hugh Ross outlined his excitement for the deal and recognized how diversifying into cryptocurrency can help wealth managers store their wealth over time – especially in today’s world.

“In a world with trillions of dollars of fiscal stimulus and negative real interest rates, the wealth management industry is recognizing the diversification benefits and inflation hedge potential that digital currencies can offer in an investment portfolio.”

Grayscale: The Best US Option for Crypto Exposure

Regarding the partnership, Ross added that Grayscale differentiates itself from other potential iCapital partners through its “transparency as an SEC reporting company.”

Indeed, though attempts at a Bitcoin or cryptocurrency ETF in the US have been repeatedly shot down by the SEC, regulators remain accepting of Grayscale and many of its products.

The digital asset manager has recently doubled the number of SEC reporting products to six – adding a Bitcoin Cash trust, Litecoin trust, and Ethereum Classic trust.

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On Friday, Grayscale Investments, the world’s largest digital currency asset manager in terms of assets under management (AUM), revealed that three trusts have been filed with the Securities and Exchange Commission (SEC) in order to become SEC reporting companies. The three trusts include individual crypto asset products such as the bitcoin cash trust, the litecoin trust, and the ethereum classic trust, which will join three other Grayscale trusts that are already SEC reporting companies.

Grayscale’s BCH, LTC, ETC Trusts to Join Three Other Products as SEC Reporting Companies

Grayscale Investments has detailed that three individual crypto trusts are moving forward with their product growth cycle. The company announced on Friday that the Bitcoin Cash Trust (OTCQX: BCHG), Litecoin Trust (OTCQX: LTCN), and the Ethereum Classic Trust (OTCQX: ETCG) have been registered with the SEC in a new filing. The Form 10 registration will effectively convert the trusts into SEC reporting companies and eventually, Grayscale hopes these trusts will become exchange-traded funds (ETFs).

The digital currency asset manager stated that the trusts’ “product development pipeline” was described in a blog post Grayscale published last April. The blog post, called “Grayscale’s Intentions for a Bitcoin ETF,” mostly discusses the firm’s bitcoin (BTC)-based trust, but the firm further says the company will “ultimately convert each product into a digital currency ETF.”

Grayscale commanding six crypto trusts with SEC reporting status is a milestone, according to Craig Salm, Grayscale Investments’ vice president of legal operations. “This milestone reflects Grayscale’s continued commitment to offering transparent investment vehicles that voluntarily exceed standard reporting requirements, meet a heightened level of disclosure, and are subject to additional regulatory oversight,” Salm explained in a statement sent to Bitcoin.com News.

“As we await regulatory approval for a Bitcoin ETF, we remain focused on providing investors with opportunities to access the digital currency ecosystem through Grayscale’s secure, trusted family of products,” he added.

Highly-Anticipated SEC Decision Concerning Bitcoin ETF

As SEC reporting companies, the LTC, BCH, and ETC trusts will need to file additional reports and provide more financial statements. The trusts must follow all the rules under the U.S. Exchange Act (SEA) and file a Form 8-K.

The three trusts that were previously granted SEC reporting status include Grayscale’s Bitcoin Trust, Ethereum Trust, and the Digital Large Cap Fund. Grayscale products are handled by the MSRB-registered and FINRA/SIPC member Genesis Global Trading, Inc.

At the time of writing, Grayscale Investments is also waiting to see if the U.S. regulator will approve the firm’s bitcoin (BTC) ETF filing. Furthermore, Grayscale is among a dozen prospects that are attempting to get SEC approval for a bitcoin exchange-traded fund.

What do you think about Grayscale announcing that LTC, BCH, and ETC trusts are becoming SEC reporting companies and aim to be ETFs in the end? Let us know what you think about this subject in the comments section below.

Cryptocurrency has introduced people to a new form of investment that can be very lucrative. While it’s a risky venture, it can earn a ten-fold return on your initial investment, in some cases.

Bitcoin holds the title for being the first cryptocurrency–and most popular for that matter–in the world. It rose dramatically from $3,237 at the end of 2018 to over $49,000 on Aug. 23, 2021.

Although it’s more volatile than bonds and stocks, it’s possible you can make a reasonable sum if you know how to invest in Bitcoin. For instance, most experts suggest you do not invest more than 3% of your investment portfolio in cryptocurrency.

What else do you need to know when you decide to buy Bitcoin? Here’s an overview.

How To Buy Bitcoin

Like any other cryptocurrency, there are four steps you need to take to buy Bitcoin. Here’s how:

4 Steps To FollowFind a way to buy Bitcoin. You need to buy Bitcoin from a cryptocurrency exchange, such as Coinbase. You can also purchase cryptocurrency from traditional brokers, such as Robinhood.Store Bitcoin. Secondly, you have to decide if you want to store your Bitcoin in a cold or hot wallet.Purchase. Then, buy the number of bitcoins you want.Manage. Finally, manage this asset by making a long-term plan for it.

Now, we’ll discuss all these steps in detail.

1. Find A Way To Buy Bitcoin

First off, you need to determine how to buy Bitcoin. Fortunately, there are a few different ways to do this.

Cryptocurrency Exchanges

Cryptocurrency exchanges facilitate cryptocurrency trading for several kinds of assets, including fiat currencies and digital currencies.

Such a platform would act as an intermediary between seller and buyer, making money through transaction fees and commissions.

Typically, there are two types of cryptocurrency exchanges:

: These cryptocurrency exchanges are third parties between sellers and buyers. They are more reliable since there’s a company involved. Some examples include GDAX, Kraken and Coinbase. These exchanges are very user-friendly; they allow users to view their accounts and make transactions via convenient websites and applications.Decentralized: Meanwhile, decentralized cryptocurrency exchanges facilitate peer-to-peer cryptocurrency transactions without an intermediary. Some examples include Blocknet and AirSwap. These exchanges are at a lower risk of being hacked since users do not have to transfer their cryptocurrency or other assets to an intermediary.Cryptocurrency Brokers

Cryptocurrency stockbrokers are a firm or agent that handles a client’s assets and trading .

The first mainstream cryptocurrency broker was Robinhood, offering free Bitcoin trades. eToro, a social trading platform, is another prominent cryptocurrency broker.

Other Ways

Here are some other ways to buy Bitcoin:

: These are just like regular ATMs but can be used to sell or purchase Bitcoins. According to Coin ATM Radar, there are over 42, 266 ATMs of this sort in the U.S.Bitcoin Futures: This option is for pros and is offered by firms like TradeStation. It lets you trade Bitcoin futures.Peer-to-Peer Sales: You can purchase Bitcoins from another owner directly, sort of like buying something off Etsy. Some tools for this include Bitquick and Bisq. However, you should be careful when purchasing cryptocurrency directly from someone without the involvement of a third-party intermediary.2. Store Bitcoin

You can store Bitcoin in a hot or cold wallet. Hot wallet transactions are quicker, while those in cold wallets have extra steps to maintain security. Thus, the latter takes longer, but is more secure.

Hot Wallet

Storing your cryptocurrency in a hot wallet means the assets are stored by a provider or trusted exchange in the cloud. You can access your Bitcoins through a computer browser or an app.

All trading exchanges come with complimentary hot wallets where all your Bitcoins are automatically stored. If you want to store your Bitcoin in a third-party hot wallet, you can download a free app and use it to keep your assets safe.

Some hot wallet providers include Coinbase, Blockchain, Electrum and Mycelium.

Some pros of a hot wallet include:

Quick to accessEasy to useUsually free

However, hot wallets are connected to the Internet, making them susceptible to hacking and presenting other, more technical, vulnerabilities.

Cold Wallet

A cold wallet is an offline encryptable device where Bitcoins can be downloaded. You can carry the device around. It’s considered safer than a hot wallet and costs around $100.

For example, two cold wallet providers are:

: Their cold wallets cost $60-120.Trezor: Their cold wallets range from $80-170.

When you’re creating digital wallet accounts, make sure the passwords are strong. Here are some pros of cold wallets:

More secure than hot walletsCompletely offline

On the flip side, cold wallets are expensive and require you to carry the device with you if you want to make regular transactions.

3. Purchase Bitcoin

Once you have linked your wallet to the exchange, you have to select the number of Bitcoins you want to purchase. One Bitcoin costs about $40,000, making it difficult for everyone to purchase a round-number amount.

You can buy the cryptocurrency in fractions, allowing you to purchase exactly the amount you want.

4. Manage Bitcoin

The simplest way to manage your cryptocurrency investment is to keep an eye on the cryptocurrency market and sell your Bitcoin when it goes up in value. However, if you think the currency will face a significant spike in the coming years, hold on to your Bitcoin for a long time.

How to Invest in Bitcoin Safely?

If you’re new to cryptocurrency investments, you should be pretty careful since the market is very volatile, and you can end up losing your money quickly. Here are some tips to be on the safer side:

: Make sure you learn all you need to know about cryptocurrency exchanges before you select one. You can also talk to experienced investors through online forums, especially those on Reddit.Diversify: Investing in Bitcoin seems like a lucrative move since the currency has spiked exponentially in the past few years, but you should not put all your money in one cryptocurrency. Instead, diversify your investments so that your money is more durable to shifts in the market.Good To Know

Remember that cryptocurrency, due to its volatility, can take a toll on your pocket and mental wellbeing. So, you should only dabble in Bitcoin investment if you’re not too bothered by the dramatic highs and lows in Bitcoin prices.

GOBankingRates’ Crypto GuidesWhat Is Cardano? (ADA) What is Bitcoin Cash? (BCH)What Is Chainlink? (LINK)What Is Dogecoin? (DOGE)What is Litecoin (LTC)What is Polkadot? (DOT)What is Ripple? (XRP)What is Stellar (XLM)What is Tether? (USDT)

Microsoft has been awarded a U.S. patent for software it says can help users develop blockchain applications by making it easier and more efficient to create crypto tokens for different distributed ledgers.

According to the patent, creating and managing tokens is currently “difficult and cumbersome” due to the lack of standardization across different blockchains.Microsoft’s patent describes a ledger-independent system for helping users to create tokens, and for managing them across different networks.On receiving a request from a user, the system offers templates with various attributes and control functions. Those would depend on the type of token required, representing, for example, a digital or physical asset. Once the user has selected the desired template, the system creates the token on the designated networks.The system also provides a common interface for managing the tokens, so developers don’t have to worry about token-specific code to interact with them.See also: Microsoft Files Patent Application for Crypto Mining System Powered by Human ActivitySubscribe to Valid Points, our weekly newsletter about Ethereum 2.0.

Two Californian men have agreed to plead guilty to securities fraud charges in connection with an unregistered ICO they conducted in 2017. The two raised $1.9 million by selling over 600 million native tokens, all while issuing false statements, presenting fake profitability statements and making unattainable promises to the investors, authorities said.

In a press release, the U.S. Department of Justice (DoJ) said the two men from Orange County in California were each charged with one count of securities fraud.

In addition to agreeing to plead guilty to the charges, 25-year-old Jeremy McAlpine and 28-year-old Zachary Matar, settled with the U.S. Securities and Exchange Commission (SEC). They agreed to permanent injunctions barring them from any further fraudulent conduct. They must also keep away from purchasing or selling digital securities and pay civil penalties, prejudgment interest and disgorge the ill-gotten wealth.

According to the DoJ, the two men founded Dropil Inc. in 2017. Dropil was a Belize-based firm operating out of Fountain Valley that claimed to manage and provide digital asset investments. The company claimed to offer an automated trading bot as well as a digital asset trading program.

As with the hundreds of the other ICOs that sprung up in 2017, Dropil also developed its own native token, DROP. Those that purchased DROP tokens had exclusive access to the bot. While providing all these services, the two men failed to register with the SEC as a broker or dealer.

To lure investors, the two purportedly made several false statements about the tokens and the trading bot. The bot, they claimed, could provide an “expertly managed portfolio balancing algorithm [that] manages risk.” The DROP tokens were touted as being able to ensure privacy and offer value and exclusivity.

McAlpine and Matar reportedly conducted an ICO in January 2018, selling the DROP tokens to investors. To lure investors, they made several false statements on their whitepaper, their website and via their social media pages, according to DoJ.

To give the impression of profitability, they made payments to the DROP token holders in the form of newly minted tokens. They also reportedly lied about the funds raised in the ICO, placing it at $54 million from 34,000 investors. However, the DoJ places this amount at $1.9 million from 2,500 investors. About $1.6 million of the amount they raised went to personal expenses and payments to their associates.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of peShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

While most of the cryptocurrency market suffers through a correction, one altcoin is surging 86% this week.

Algorand (ALGO), a blockchain for decentralized finance (DeFi) applications, was trading around $1.51 before this week and dropped like the rest of the crypto market to $1.20 by the middle of Tuesday.

However, since hitting that price point, the 17th-ranked asset by market cap shot up by more than 100% to a weekly high of $2.41 on Thursday. ALGO has since stabilized to at $2.13 at time of writing, according to CoinGecko.

The exact catalyst driving ALGO’s upswing remains unclear. The crypto project announced the release of the next version of its asset management platform on Thursday, though most of its price surge preceded that news.

One possible factor could be SkyBridge Capital founder Anthony Scaramucci giving Algorand a shoutout Tuesday on CNBC, saying it was one of the crypto assets likely to grow because of its utility.

The former Trump Administration official explains,

“There’s a lot of great stuff happening in this space… as more digital applications happen, some of those altcoins, stuff like Algorand or Cardano, or things like Ethereum, will continue to rise because there’s actually great use cases for them.”

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Bitcoin prices have been doing well lately, following a steady, upward trend for the last several weeks as they climb toward the record high they set earlier this year.

The world’s largest cryptocurrency by market capitalization reached $51,037.01 today, its highest since May 14, CoinDesk figures show. At this point, it had risen more than 75% since hitting a local low on June 22.

While this might sound impressive, other prominent digital currencies have been outshining bitcoin lately with their superior performance.

Ether, the second-largest digital asset by market value, more than doubled in recent months, and Cardano’s ada token tripled in the same time, according to CoinDesk price data.

Ether reached $4,026.93 earlier today, having climbed more than 130% after falling to a recent low of $1,711.23 on June 22, additional CoinDesk figures show. At this recent high, ether was up more than 400% year-to-date.

Cardano’s ada token has been benefiting from even more compelling gains, rising to an all-time high of $3.10 yesterday, at which point it had climbed more than 200% after reaching a local low of $1.00 June 22.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Amid these latest developments, some investors might wonder whether bitcoin is still the market leader it was for years.

“For most of its history, Bitcoin has acted as the reserve currency of the crypto ecosystem, leading the direction up or down for everything else,” said Jesse Proudman, cofounder and CTO of crypto hedge fund Strix Leviathan.

“Over the past few months, we’ve witnessed a marked change in that status and over the last week, we’re seeing the beginning of a clean break where Bitcoin is now following moves of other currencies like Ethereum,” he stated.

Jeff Dorman, chief investment officer of asset manager Arca, put things a bit more bluntly.

“Bitcoin does not lead markets anymore,” he stated. “It has exhibited both poor upcapture and poor downcapture all year, meaning it doesn't keep pace with rallies AND sells off more than other assets in downturns.”

“More importantly, everyone (other than the individuals and businesses that rely solely on Bitcoin's success) are beginning to understand that Bitcoin shouldn't be tied to the success or failures of other assets. They are completely different.”

“Unlike the early days of digital assets where Bitcoin was the only game in town, this asset class has now evolved far beyond cryptocurrencies,” he noted.

“There are new sectors that have much faster growth trajectories, like DeFi (decentralized finance), gaming, sports, NFTs and web 3.0, all of which have completely different factors and token attributes that contribute to their returns.”

Bitcoin’s ‘Maturation’

Blockstream VP of financial products Jesse Knutson offered a more optimistic take, weighing in on how the world’s most prominent digital currency continues to develop.

“I think what we’re seeing here is the maturation of Bitcoin,” he stated.

“Over the past 12 months, there’s been an incredible amount of institutional and even sovereign interest in the space,” said Knutson. “This interest has been focused almost exclusively on Bitcoin.”

“The largest asset managers in the world, firms like Capital, Fidelity, Blackrock, and Tudor are trying to build Bitcoin exposure, but are still largely limited to listed proxies and derivative products,” he noted.

“Morgan Stanley and JPM are rolling out dedicated Bitcoin products to private wealth clients, and countries like El Salvador are looking to Bitcoin not only as a growth driver but to also actually solve financial infrastructure challenges.”

“Given the massive change in market participants this year, I think it makes sense to see some price divergence between Bitcoin and more speculative digital assets from time to time,” Knutson stated.

“The macro backdrop is extremely supportive of the Bitcoin investment thesis and there is a wave of money building that I think will probably struggle to fit into what is still a relatively small asset class by institutional and sovereign standards.”

Continued Market Evolution

Other analysts offered differing perspectives, speaking to how they think the broader digital asset markets will mature over time.

“The crypto asset class is viewed by many as a monolith driven by Bitcoin,” claimed Amber Ghaddar, cofounder of decentralized capital marketplace AllianceBlock.

“Our thesis has always been that even if Bitcoin is the poster child of crypto, bifurcation and a decrease in correlation is to be expected in the long run.”

As time goes on, she expects individual digital assets to derive their values less from speculation and more based on their own specific characteristics.

“Prices are made of two components: a fundamental component and a speculative component. The speculative part is usually the largest and is driven by sentiment, future expected uses and scalability,” Ghaddar noted.

“We expect the fundamental component - easily calculated by looking at network data - to take a larger proportion of price as new layer 1 blockchains start maturing and/or go live.”

Jalak Jobanputra, founder and managing partner of Future Perfect Ventures, also spoke to the growing divergence between bitcoin and other digital assets.

“We have firmly believed in a multi-crypto world and that each currency will eventually be valued according to its particular use case,” she stated.

“Bitcoin has emerged as a store of value and inflation hedge while Ethereum has become the currency for DeFi and NFT applications, and thus in many ways the reserve currency for Web 3.0. I expect Bitcoin will follow more macroeconomic trends as it is doing right now.”

“This is an exciting transition as we are seeing some of these more blue-chip cryptos come into their own beyond being used as tools for speculators.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

…

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Though Bitcoin was first created in 2008, most of us had never heard of it until 2017 when it had its first meteoric rise to nearly $20k per coin. More people were then made aware of this revolutionary technology when Bitcoin made its historic bull run from $10k to over $60k in the span of six months from 2020 to 2021.

With the advent of Bitcoin, its creator Satoshi Nakamoto also gave us the gift of blockchain. This distributed ledger technology essentially lets millions of people contribute to the same Bitcoin network by lending their computing power for the purpose of verifying transactions while being rewarded in Bitcoin, otherwise known as “mining.”

In the midst of cryptocurrency having its meteoric rise to fame, NFTs have now entered into the running for the face of blockchain technology. So far in 2021, billions have been spent on NFTs and they only just hit the mainstream market at the beginning of the year.

Both of these technologies succeeded for various reasons but fundamentally they exist because of blockchain’s ability to bring a near bullet-proof level of verification to the age of the internet. This is due to the unique way blockchain stores data: Essentially, each new block of data connects to all the blocks before it in a cryptographic chain in such a way that it's nearly impossible to tamper with. All transactions within the blocks are validated and agreed upon by a consensus mechanism amongst the entire network, ensuring that each transaction is true and correct.

Total Network Services, Corp founded in 2019 by blockchain innovator Thomas Carter is a group of people who understand the potential of this technology and find opportunities to infuse blockchain where its unique abilities are needed to create a more sustainable and efficient technological environment.

One of the biggest industries that have a need for verification and improved security is ICT, specifically as it relates to supply chain and device management. So what does that mean exactly? It’s the phone in your hand you’re probably reading this article from now. It’s where we do our banking, consume content, store sensitive data, manage our schedules, and communicate with loved ones. With over five billion people using mobile phones, and the average user spending over four hours a day engaging with apps, smartphones are the number one target of malicious actors.

So then the obvious question is: Why not bring the power of blockchain into this space? Taking a technology known for its ability to provide verification and pairing it with an industry that has the most to lose from a lack of security.

Okay, blockchain could help but where would this solution fit into the ICT ecosystem exactly? And how would you get adoption?

Answer: Don’t reinvent the wheel, just attach it to the car.

Starting in early 2020, TNS approached the Telecommunications Industry Association with a concept referred to as an Enhanced Mobile Equipment Identifier (E-MEID). The E-MEID is based on the MEID, a globally unique 56-bit identification number for a physical piece of mobile station equipment. Globally administered by the TIA, MEIDs typically show the manufacturer code and the equipment serial number. The number is permanently affixed to the device and used to facilitate mobile equipment identification and tracking. Assignments are coordinated with International Mobile Equipment Identifiers (IMEIs) to enable global roaming and harmonization between 3G, 4G, and 5G technologies.

TNS’ concept was to attach an MEID to a blockchain specifically designed to support ICT supply chain security.

If an MEID is attached to a blockchain, a globally unique digital token can be created that can represent any associated physical or digital asset. This token would be referred to as an Enhanced MEID. “Tokenization” is the name of this process. When attached to a blockchain, the MEID documentation capabilities expand to include hardware bill-of-material (BOM), Software BOM, and software remediation activity. This additional capability can enhance an organization’s hardware and software supply chain visibility, component provenance, and internal change management processes.

TNS is also partnering with Rypplzz on this endeavor. Their Interlife™ spatial engineering technology adds time-tagged geolocation data and geofenced functional management capability to the Enhanced MEID solution. These additions can dramatically improve security measures and provide near-real-time operational options based on the location of the associated asset.

An organization, for example, could disable software running on an E-MEID provisioned piece of equipment based on its geolocation. As part of our collaboration, TIA has allocated up to thirty-two A1 blocks of MEID numbers to TNS (33,554,432 numbers). These can be “tokenized” to create 33,554,432 individual Enhanced MEID (E-MEID). Pre-assigned MEIDs can also be “tokenized” through a post-deployment blockchain registration process.

TIA is leading the way on ICT supply chain security with the development of the first-ever global supply chain security standard, “SCS 9001”, that specifies verifiable and measurable criteria and uses a process-based quality management system to verify trusted suppliers. TNS, as a participating member of the SCS 9001 Supply Chain Security Standard development process, was able to identify how the E-MEID could collect 5 of the 11 recommended supply chain security measurements in the upcoming standard. That is why we have extended our collaboration to include four industry partners to demonstrate how to apply the E-MEID to four specific ICT industry-relevant use cases as part of the SCS 9001 pilot program.

Our pilot partners:

Nivid IT

Internet of things management for smart city deployments.

Comsovereign

Wireless device deployment and management across US government, military, and commercial networks.

EIM Sensor

Virtual asset management on smart televisions and other light-emitting diode (LED) displays in the Hospitality industry sector.

ComSovereign / VirtualNetCom / Saguna Networks

Edge computing solutions within the computer industry sector.

To learn more about the E-MEID pilots check out these two articles:

E-MEID Use Cases with Nivid IT & EIM Sensor

E-MEID Use Cases with ComSovereign / VirtualNetCom / Saguna Networks

If you are interested in learning more about the Enhanced MEID or the associated SCS 9001 Pilot demonstrations, please contact Kevin L. Jackson, SVP, TNS Corporation, via email at Kevin@TNSCorp.io.

Image by Gerd Altmann from Pixabay

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In the first half of 2021 data aggregator CoinMarketCap added 2,655 new crypto assets to its database, bringing the total number of listed coins to 10,810, according to data shared with CoinDesk. 

For perspective, in 2018, during the peak of the initial coin offering (ICO) boom, CoinMarketCap listed its 2,000th asset on its website. 

This year “saw a Cambrian explosion of new crypto assets largely as a consequence of several tailwinds,” said Aaron Khoo, head of listings at CoinMarketCap, referring to the evolutionary event that took place 541 million years ago when large numbers of new organisms seemingly burst into existence.

Like CoinMarketCap, two other data aggregators also added 2,000 or more new assets to their databases in 2021. Singapore-headquartered CoinGecko listed 3,064 new assets on its website while the smaller, Poland-based crypto data and research platform Coinpaprika listed 2,000 new assets. Wojciech Maciejewski, business development manager at Coinpaprika, said the platform is currently inundated with new applications for coin listings.

“We don’t have enough people to go through all the applications,” Maciejewski said, adding that the platform is working on a system that can process more applications. 

Representatives from CoinMarketCap, CoinGecko and Coinpaprika agree the 2021 surge in new crypto assets is driven by a combination of bullish price action, the influx of traditional financial institutions, influencers and celebrities to the space, along with the non-fungible token (NFT) boom and the rise of meme coins like dogecoin, shiba and safemoon. 

But this is not the first time the crypto space has witnessed a dramatic surge in new assets. After the initial coin offering (ICO) boom kicked off in 2017, new crypto assets poured into the market much in the same way. However, more than three-quarters of those ICOs turned out to be scams, while almost half failed to raise funds. 

And if history’s any indicator, of the thousands of new crypto assets that have exploded onto the market in 2021, only a few will survive. 

“We have no data to back that but the expectation is that [the new assets] are more or less similar to the 2017 ICO round where only a handful managed to stick around after the initial craze,” Sze Jin Teh, principal product manager at CoinGecko, said in an email. 

Between 2014 and 2021, almost 16,000 crypto assets were created, according to data from CoinGecko. 

But this number includes all coins, both active as well as inactive assets (assets attached to disrupted projects). 

For instance, according to Maciejewski, active assets on Coinpaprika account for around half of the 8,000 or more assets listed on the site.  

And a portion of these deactivated crypto assets were born out of the ICO boom. 

CoinGecko, for instance, recorded its monthly high for the number of new coins listed on its platform in 2017, according to data shared with CoinDesk. The platform listed 914 assets in December 2017 alone. 

According to Kristian Kho, operations lead at CoinGecko, December 2017 was the peak of the ICO craze when retail interest in crypto rose, coinciding with the all-time high bitcoin price at the time. “This was the first time we saw a rush of a new class of tokens being created to capitalize on the success of the first few trailblazers (Filecoin, Tezos, EOS and the like). We even created a dedicated ICO page to track all the ongoing ICOs back then,” Kho said.  But a majority of those tokens were short-lived. 

“Many of the projects that had raised funds simply dissolved upon exhausting their runways,” said Kho.

But Jin said even more coins have popped up this time around compared to 2017, and across multiple chains including Ethereum, Polygon and Binance Smart Chain.

“There are more and more new ideas, but also more scams that we have to inform our users of,” Maciejewski said, adding that Coinpaprika is receiving up to seven times more requests than it did in 2018. 

And these staggering numbers still don’t reflect the total amount of crypto assets floating around the internet. 

“The coins listed on CoinMarketCap represent a thin sliver (~20% approval rate) of the total number of new coin applications,” Khoo said in an email to CoinDesk.

According to Khoo, during the first half of 2021, CoinMarketCap received a whopping 10,793 applications from crypto projects and companies seeking to have their new assets listed. 

To face the rising numbers of crypto assets and listing applications, each listing platform has its own set of criteria for approving a new asset.

CoinMarketCap reviews an extensive list of metrics shared on its website, but according to Khoo, there is also an element of competitive benchmarking, by comparing the asset to other, similar applicants.

“Listing evaluation by CoinGecko is done holistically with a set of internal criteria used to evaluate each coin. The exact listing criteria are not disclosed to prevent manipulation by the project team,” Kho said in a written statement. 

But both platforms, along with Coinpaprika, look closely at the coin’s active trading volume and  liquidity, along with other factors including social media presence, community attitude towards the coin and the team behind the project.

According to CoinGecko’s Kho, the rise of decentralized exchanges (DEXs), where the listing is permissionless and fees are low, has made it even easier to create and market coins. This means anyone can tokenize anything, fuelling the strange new world of meme coins, Kho said. “In light of this, CoinGecko has become much stricter in listing new tokens. This is because the instances of scam coins have increased with the rise of DEXs,” Kho said. 

Currently, Coinpaprika accepts 95% of requests for assets already listed on centralized exchanges like Binance or Coinbase, discarding only incomplete applications. But when it comes to DEXs, the acceptance rate drops to around 60% or 70% because they do not typically have stable or reliable API endpoints (communication channels) due to their decentralized nature. 

According to Kho, the highest percentage of applications received at CoinGecko are for meme coins. 

“The popularity and price increase of meme coins such as dogecoin and shiba inu coin has inspired many to come up with their own derivative meme coins in the hopes of capturing the success of the former two,” Kho said.

He added that the ease of creating a simple token allows anyone to launch a meme coin, and with it apply for listing at CoinGecko.

“In the last quarter, meme coins (especially those of the canine variety) dominated new coin applications, accounting for roughly three out of four new applications,” Khoo from CoinMarketCap said in an email to CoinDesk.

He also said that in keeping with the meteoric rise of Axie Infinity, a game partly owned and operated by its players, CoinMarketCap is witnessing a modest uptick in NFTs and gaming coins. 

But 2021’s meme coins appear to be the assets that most resemble 2017’s ICO tokens in terms of quantity and longevity. 

“Meme tokens tend to be ephemeral, and I'd say that approximately 75% of them meet a quick death if they do not go viral within the first few months,” Khoo said. 

He explained that the biggest determinants of failure are a hastily cobbled-together team looking to make a quick buck and the absence of true believers rallying around a common cause within the coins' respective communities. 

But it’s still too early to tell the fate of the nascent crypto assets that have just joined the market, according to Kho. 

“Quantity is there but quality remains very subjective – among meme tokens and yield farms,  there are projects genuinely looking to improve the space so it probably still takes time before we are able to tell,” Kho said. 

UPDATE (Aug 11, 2021, 10:01 UTC): After this story was published, Coinpaprika contacted CoinDesk to clarify the number of total assets listed on the platform. The article has been updated.

Bitcoin fell back below $50,000 on Monday after reclaiming that threshold over the weekend.

The cryptocurrency traded at roughly $49,400 by the afternoon session, still shy of its all-time high above $64,000 set in April.

The space has seen a boost in the past week on increasing adoption. PayPal said Monday it would open its platform in the U.K. to crypto buying and selling, and Coinbase said last week that it would buy $500 million in cryptocurrency on its balance sheet.

Bill Baruch, president of Blue Line Capital, is a bitcoin bull but remains wary of jumping in right here.

"I think it needs to be in your portfolio, but is $50,000 the place to be buying it? I wouldn't chase it," Baruch told CNBC's "Trading Nation" on Monday.

Bitcoin fell below $30,000 during a summer sell-off. Weakness in recent months was largely tied to a regulatory crackdown in China wherein some mining operations were forced to close. Since a June low of $28,600, it has rallied 73%.

In a separate email to CNBC, Baruch said he owns bitcoin but began to trim his holdings once it bounced back to $45,000 — roughly the same level as its 200-day moving average and a 50% retracement level measured from its April peak and its June low. He said that level could prove a good entry point if bitcoin falls back to it.

"Again, I think it's a great space to be in, but don't chase it just because you see $50,000 in the headlines. Pick your spots and stick to your game plan," he said.

John Petrides, portfolio manager at Tocqueville Asset Management, said there are more ways to play the bitcoin bounce than just through the asset itself.

"If you put your long-term investment hat on, there are two ways to look at this space — one is cryptocurrency the asset class and then the second one is an investment in the blockchain. For our team specifically, from a long-term theme perspective, we think that blockchain has a lot of value to it," Petrides said during the same interview.

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He plays the space specifically through the ETHE Grayscale Ethereum Trust, which solely invests in ethereum open source blockchain, and mirrors the value of the ethereum held by the trust. It has risen 105% this year.  

"As the world moves to more non-fungible tokens, NFTs, as we see more big players like PayPal and Visa and others start moving and converging in this space, we think that's going to lead to more activity on the blockchain, and ethereum is the largest open source blockchain out there," Petrides said.

Disclosure: Blue Line Capital holds bitcoin. Petrides holds ETHE.

Disclaimer

This week's "flash crash" that dragged bitcoin (BTC-USD) back below $50,000 — and sent other digital coins reeling in its wake — marred what should have been the momentous occasion of the first sovereign country on earth adopting a cryptocurrency as legal tender. 

Despite the ugly price action, most of crypto's true believers are still just that — even as some observers question bitcoin's head-spinning volatility, and El Salvador's decision to throw its weight behind it. 

Michael Sonnenshein, CEO of Grayscale Investments, the world's largest cryptocurrency fund manager by assets, who told Yahoo Finance Live this week that other countries are likely to join El Salvador in the race to make crypto legal tender.

And Matt Hougan, CIO of Bitwise, also told Yahoo Finance Live that “it’s the greatest time, I think, to enter the crypto market. A lot of the first decade of crypto was about zero to one. … Now the question is how fast we scale from one to 100. A lot of that is built on what regulatory clarity we get.”

To be sure, it's been a rocky week for digital currencies like bitcoin — which traded above $52,000 on Monday but hovered near $45,000 on Friday — as well as ethereum (ETH-USD) and Cardano (ADA-USD). However, from peak to trough, the latter two didn't lose nearly as much as bitcoin, which suffered offshore outflows upwards of $3 billion during Tuesday's selloff, according to one investor.

On the other hand, the price of cryptocurrency (SOL1-USD), which power the Solana blockchain, is already above its pre-flash crash highs, trading above $175 on Friday. 

Anatomy of a 'telltale' crypto crash

In an interview with Yahoo Finance, Jeff Sekinger, a financial guru, founder of the Miami-based crypto hedge fund Orca Capital, said he believes overall crypto market will likely see a lot of growth through the end of this year, despite this week's rout.

Like the week of Coinbase’s initial public offering, this week began with another major market event — El Salvador’s new Bitcoin Law, which was expected to be a boon to the industry.

Sekinger has witnessed his share of crypto market cycles. He first purchased bitcoin in college in 2013, and the 2017 bull market convinced him to leave his job at JPMorgan Chase to focus on the asset class full-time. He started Orca Capital in April two years later.

Breaking down trading volume, open interest levels and on-chain analysis, Sekinger actually called this week’s flash crash in a Youtube video he published on August 31. He told Yahoo Finance it came down to volume and three major upward trends.

“When the perpetual funding, opening interest and price action are all moving up but volume is slowing, it's been a telltale sign for the past three major crashes,” Sekinger told Yahoo Finance.

This time, the downturn came from the combination of high leverage in the markets on top of cryptocurrency traders “buying the rumor and selling the news,” he said. That was proof enough that the market is still relatively small — and still heavily manipulated by a few big players, according to Sekinger. 

Acknowledging that market cycles are notoriously difficult to predict, Sekinger said the current bull market in crypto will likely end in the first or second quarter of next year.

“There will be too much euphoria and too much leverage and everything will come crashing down. Because we are starting to see serious money within the space, I think in terms of a percentage correction, it will be less,” said Sekinger.

Currently, Orca has two funds that each hold about 10 to 15 different assets that cumulatively hold $50 million under management today, with 167 limited partners. Since Orca started, both funds have outperformed bitcoin while one doubled the cryptocurrency's return in the last year.

Within two months, Orca will rollout two more funds — including a more aggressive decentralized finance (DeFi)-focused fund. These additions should double their total asset value under management, Sekinger said.

Retail investors "see all these crazy stories about the ridiculous amount of money being made on NFTs and that sparks their interest.”Jeff Sekinger, crypto portfolio manager

In terms of leverage, Sekinger said that his funds can lever up to 5 percent of their value, but that they never have had a desire to go close to 5 percent, and typically use it at the most “two to three times per year in small quantities.”

Orca’s future offerings come from retail demand for nonfungible token (NFT)-related investment, according to Sekinger — something he connected to solana's skyrocketing growth over the summer. 

“One of the reasons why SOL is blowing up is because a ton of NFTs are moving from Ethereum to Solana because it's so much less expensive to launch, buy and sell on the Solana blockchain,” said Sekinger. 

Retail investors "see all these crazy stories about the ridiculous amount of money being made on NFTs and that sparks their interest,” he said.

In light of the wellspring of investment brought into the crypto market by NFTs, investor interest in blockchains with higher transaction speed has quickly dominated price action. 

Since its London hardfork update, the Ethereum blockchain is said to perform 15 transactions per second but reports of high fees due to network congestion have sent traders reeling.

I'm glad the gas fees are so high on ETH that I simply have to diamond hand everything anyway. The future of finance involves 0 transactions.

— Lily Francus (@nope_its_lily) September 3, 2021

Based on tests, Cardano is said to do 257 transactions per second and potentially much more with upgrades while Solana can complete 50,000 transactions per second.

David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.

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The top 21 crypto leaders to watch in the back half of 2021

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