6th August 2022 > > Cryptos are dead.

tl;dr

Four reasons why cryptos are dead.

Market Snap

Market Wrap

Those strong job numbers out of the US have been largely discounted as a lagging indicator, as they do not fit the 2s-10s inversion narrative at 50bps, predicting a full blown (not just a technical) recession for 2023.

As US policymakers on both sides of the house weaponise the culture wars ahead of November’s midterms, no actual action to address the state of the economy in the form of tax liberation or a meaningful reduction in supply side constraints can be expected anytime soon.

Curious Cryptos’ Commentary – Four reasons why cryptos are dead

BlackRock and Coinbase

BlackRock, the world’s largest asset manager (AM) with $10 TRILLION AUM (assets under management), is also the most innovative with unrelenting focus on satisfying customer needs, in my opinion.

Coinbase is one of the earliest, largest, and most well-known centralised crypto exchanges that went public in the US in April 2021.

Institutional investors of BlackRock use a proprietary trading, risk management, and custodial system known as Aladdin which will now give direct access to Coinbase Prime, the proprietary trading, risk management, and custodial platform for institutional investors of Coinbase.

Joseph Chalom, Global head of strategic ecosystem partnerships at BlackRock explained:

"Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets."

…

Wait, what? You think this means that institutional interest in cryptos is growing?

Surely not. Nothing to see here, moving on.

Charles Schwab

At a mere $7.5 TRILLION of AUM, retail investors dating from the first pre-millennial internet boom are very familiar with Charles Schwab. As one of the first AMs to utilise the internet to allow online trading of stocks with a mere few clicks, this was a revolutionary idea when for many people the idea of talking to a broker to execute a trade was, and continues to be, wrought with anxiety.

On Thursday the very first crypto ETF from Charles Schwab started trading.

Managing director and head of equity product management and innovation at Schwab David Botset said the ETF will:

"… provide access to the growing global crypto ecosystem along with the benefits of transparency and low cost that investors and advisors expect from Schwab ETFs.”

…

Wait, what? You think this means that retail interest in cryptos is growing?

Surely not. Nothing to see here, moving on.

Brevan Howard

With $20bn AUM, in just 20 years four traders from Credit Suisse have created a powerhouse of a hedge fund, with a focus on global and macro trends.

A subsidiary of the firm, BH Digital, has launched a crypto currency fund (hedge funds are all about timing) that has raised $1bn from institutional investors. Details of specific investment strategies and actual investments are not available to the public.

…

Wait, what? You think this means that hedge fund interest in cryptos is growing?

Surely not. Nothing to see here, moving on.

Chicago Mercantile Exchange (CME)

Long the home of a liquid commodities futures market aimed at institutional investors, the CME has announced an extension of its product lines to include EUR denominated crypto futures.

A USD denominated BTC futures contract was launch in December 2017, and a USD denominated ETH futures contract in February 2021. These were augmented by micro contracts at 1/10th the size of the standard contracts.

Tim McCourt, global head of equity and FX products, CME Group, explained:

“Our bitcoin-euro and ether-euro futures contracts will provide clients with more precise tools to trade and hedge exposure to the two largest cryptocurrencies by market cap.”

…

Wait, what? You think this means that institutional interest in exchange traded crypto futures is growing?

Surely not. Nothing to see here, moving on.