Big players are making waves

Jacob Pouncey

Cryptocurrency analyst, Saxo Bank

This week the entire crypto market cap rose 17% to just under $300bn. Similarly, Bitcoin rose by 15% with most of the gains happening on one single day. Ethereum underperformed its larger competitor by rising 13% over the week. The market saw a majority of its returns during a three-hour window on July 17. Although there were no major announcements during that time to cause markets to react so aggressively there has been a recent string of positive news. 

Blackrock forms Blockchain taskforce

Earlier this week news broke that Blackrock has formed a working group to evaluate blockchain and cryptocurrencies. The asset management firm has over $6.3tn assets under management. The market reacted positively after the announcements. However, this is not the first time executives at the company mention blockchain. Larry Fink said last year that he was a “big believer” in the potential of cryptocurrencies. It is should only be a matter of time before they announce their first investments in the sector.

IBM partners with insured stable coin project

A stable cryptocurrency is said to be the holy grail of crypto, and this week IBM announced a partnership with a company do just that. The start-up Stronghold is building a USD-backed token on the Stellar blockchain, that is backed 1:1 with an insured USD stored in a chartered trust. This is one of the many attempts to create a stable coin, but this is the first time a large company such as IBM is backing a project. USD-backed stable coins have been wrapped in controversy with many accusing companies of running fractional reserves while advertising full reserves. Bitmex Research released a great post detailing stable coins in all their forms.

Crypto investment funds continue to raise money

Grayscale investments, run by Barry Silbert, raised $250m in the first six months of this year. This is the largest amount raised in a similar period for a company with $2bn AUM. The company offers several products with exposure to various cryptocurrencies. Additionally, the company stated in its report that 56% of the interest was from institutional investors. These numbers could be the canary in the coalmine, alerting the market to the increase wave of institutional investors flocking to the space. 

Crypto Weekly Update is taking a summer break. We'll be back again in August.

You can access both of our platforms from a single Saxo account.

Disclaimer

Saxo Capital Markets Pte. Ltd. (“SCM SG”) may distribute information/research produced within the Saxo Bank Group pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, SCM SG accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact SCM SG at +65 6303 7800 for matters arising from, or in connection with the information distributed. All legal documentation and disclaimers can be found at https://www.home.saxo/en-sg/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication. 

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)