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A big week for institutional interest in cryptocurrencies » Brave New Coin

It’s been a big week for institutional interest in crypto, bitcoin (BTC) in particular. There has been a build-up of talk around Wall Street firms for months showing cursory interest in blockchain technology, but recently this interest is becoming explicit and the managerial announcements more specific.

JP Morgan’s boss of blockchain project says more to come

Thursday 10:

JP Morgan, whose CEO Jamie Dimon has been famously bearish on bitcoin, calling it a fraud, has appointed a new boss to its ethereum-based blockchain project, Quorum, which is investigating finance applications for DLT.

While the bank is supposedly spinning it off to continue its open-source experimenting, Quorum’s new head Christine Moy said this week in an interview with Coindesk that it is only a part of JP Morgan’s ventures in blockchain: “That’s not the most exciting part about our team’s agenda; it’s part of the story but it’s not the story.”

The bank is purportedly involved in a number other blockchain projects separate from Quorum including Digital Asset Holdings, Axoni and Nivaura.

Nasdaq boss believes in global crypto adoption

Wednesday, 9:

Last month Nasdaq CEO Adena Friedman said the Nasdaq was “certainly consider becoming a crypto exchange over time” but that there was a long road before the market would be mature enough to enter.

In an interview on CNN’s The Boss Files on Wednesday, Friedman took her statements a step further and expressed a bullish sentiment to cryptocurrencies in general, saying she believes that they are the right step in the evolution of currencies and that a dominant crypto will prevail, but which one is yet unclear.

“How it evolves and which of the cryptocurrencies may or may not be the one that ultimately gets embraced, I think that really the jury is still out on that. But I do think the idea of a more globalized payment mechanism that is more efficient than what we have today allows for money to transfer across countries and certainly supports the Internet economy,” she said.

In April Nasdaq announced it was working with Gemini, the institutional crypto exchange owned by the Winklevoss twins, to oversee security and supervision of trading on the platform to ensure compliance. Friedman believes that blockchain has potential in the trading space: “[Blockchain] takes a lot of risk out of the system and therefore it makes it so that the banks don’t have to be as capital intensive. And that’s a big incentive.”

Bloomberg partners for cryptocurrency index

Wednesday, 9:

Ex-hedge fund manager billionaire Mike Novogratz announced that his cryptocurrency merchant bank Galaxy Digital Capital Management is partnering with Bloomberg to create an index of the most liquid cryptocurrencies. The Bloomberg Galaxy Crypto Index (BGCI) will be market capitalization-weighted and measure the performance of ten USD-traded cryptocurrencies, including Bitcoin, Ethereum, Monero, Ripple, and Zcash.

The index constituents are diversified across different categories of digital assets, including stores of value, mediums of exchange, smart contract protocols, and privacy assets.

Novogratz said on his Twitter: “This is an important piece of the architecture that institutional accounts need to treat crypto as a new asset class.”

Galaxy Digital will mark Novogratz’s return to Wall Street after he left the Fortress Group in 2015. The high-profile fund manager was bullish on crypto before he left Fortress, explaining his intrigue with bitcoin in 2014:

“So there’s this open source community where there’s huge brain power, let alone all the VC money that’s going in. And so from Marc Andreessen and his company to Benchmark… there’s lots of smart money going in. I’ve never seen a small project with more human capital going into it, and so I kind of want to bet just on that alone.”

NYSE owner planning bitcoin swaps and crypto exchange

Monday, May 7:

Evidence was leaked at the start of the week to the New York Times that ICE, the parent company of the New York Stock Exchange (NYSE), is working on a strategy to set up a crypto exchange that will allow big investors to trade bitcoin.

Unlike the CME and CBOE bitcoin futures which trade on their respective exchanges, the NYSE exchange will actually deliver the bitcoins to a traders account upon payment settlement, using swap contracts with the backing and security of the exchange. This means that for the first time institutional players will be able to exchange “physical” bitcoin, while doing so under US compliance standards, that are applicable to swap contracts.

ICE was also considering launching a swap contract linked to ether, but has backed off due to regulatory uncertainty currently around it, the Times reported. The Japanese bank Softbank, which has stakes in Sprint and Uber, was in discussion with ICE about the project, but a Softbank spokesperson this week said the talks had ended.

Former Goldman Sachs president backs blockchain

Tuesday 8:

While the market is awaiting the investment bank’s entry to the bitcoin market, former Goldman Sachs president and ex-Trump advisor Gary Cohn told CNBC on Tuesday that although he isn’t a believer in bitcoin, “I am a believer in blockchain.”

The former economic advisor to the US President said, “I do think we will have a global cryptocurrency at some point where the world understands it and it’s not based on mining costs or cost of electricity or things like that,” Cohn said.

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