1st September 2021 > > Crypto funds.

tl;dr

All the large investment banks are promoting crypto funds to their wealthy client base.

Market Snap

Market Wrap

Well done for keeping the BTC price above where I left it on Friday. I was hoping you might do a little better, but it takes time I know.

Occasional Series – Geronimo

Llama drama is terribly sad.

Occasional Series – Eco-warrior hypocrisy

We already know that Alok Sharma, Chairman of COP26, Allegra Stratton, Boris Johnson’s climate spokeswoman and Dr Gail Bradbrook, one of the founders of that other Marxist organisation, Extinction Rebellion, all drive diesel cars.

But they have nothing on John Kerry, climate-change envoy for Joe Biden.

He recently flew in his personal private jet to Barak Obama’s 60th birthday party (I guess the CCC invite got lost in the post). What is wrong with using trains?

That is the 16th flight he has taken in 2021 in his personal private jet.

When Emma Thompson flew from LA to London specifically to attend and speak at an XR protest, she did at least use a scheduled flight. First class of course.

It is just too easy to poke fun at the eco-warriors’ hypocrisy. I do wonder why that might be?

Curious Cryptos’ Commentary – Crypto funds

Morgan Stanley became the first major US bank to offer its wealthy clients access to BTC funds (see CCC 4th April 2021).

The list of banks offering such exposure is growing. Citigroup and Goldman Sachs followed suit shortly thereafter. Very recently both Wells Fargo and – joy of joys – J.P. Morgan have registered similar products with the SEC.

This is the same J.P. Morgan whose CEO – Jamie Dimon – has called BTC a fraud and threatened to sack any of his traders who bought cryptos. This filing also comes hard on the heels of the prediction by the analysts at that firm of the BTC “Death Day” on 19th July 2021, since when the price of BTC has rallied over 65%.

These funds will largely invest, for the time being, in the Grayscale BTC Fund (GBTC) which is currently trading at a discount in the secondary market to the spot price of BTC seen on retail exchanges.

Due to regulatory restrictions and reputational risk considerations, these new funds will be marketed only to wealthier clients. These funds remove execution risk and, more importantly, custodial risk from investors, making them an attractive entry option for those who are possibly less tech savvy.

In general, one should expect these clients to be older than most participants in the crypto markets, meaning that cannibalisation away from current crypto holders will be very small. The effect is a new source of funds into cryptos which can only put upward pressure on price action.