The two firms have formed a “strategic alliance, of which the ETP development is the initial aim.
Crypto-focused financial services firm Galaxy Digital (GLXY) has teamed up with asset manager DWS to develop a set of exchange-traded products (ETPs) for listing in Europe.
The two firms have formed a “strategic alliance,” according to an announcement on Wednesday, of which the ETP development is the initial aim.
The ETPs will give European investors cost-effective means of accessing digital asset investment through traditional brokerage accounts. Frankfurt-based DWS, which has 821 billion euros ($907 billion) in assets under management, will be Galaxy’s “exclusive ally” for crypto ETPs in Europe, the announcement said.
Galaxy has previously listed exchange-traded funds (ETFs) in Canada alongside CI Küresel Asset Management.
While the U.S. Securities and Exchange Commission (SEC)’s repeated rejection of applications to list spot bitcoin ETFs in the U.S. has been a source of ongoing frustration in the industry, similar products are now well established in Europe and Canada.
The significance of such investment vehicles lies in their providing institutional investors with an entry point to crypto investment while not requiring them to take direct control of the underlying assets, which could prove an impediment to adoption for such firms.
Edited by Parikshit Mishra.
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Not everyone is aiming for community growth and market capture with the ARB stimulus.
Ethereum scaling blockchain Arbitrum on Tuesday completed the distribution of more than $120 million worth of its arb (ARB) tokens to projects that were built on the network, blockchain data shows.
In March, Arbitrum issued and airdropped its tokens to individual users in amounts ranging from 625 arb to over 10,000 arb, based on their network activity and number of wallets.
Airdrops occur when crypto projects send free tokens to their communities in a bid to encourage adoption. Crypto users who frequently interact with new and existing platforms are likely to receive an airdrop at some point. That has spurred the narrative of “airdrop farming” because large airdrops can be valued at thousands of dollars in effectively free money at peak.
Projects that built on the Arbitrum network, such as perpetual trading protocol GMX and token launchpad Camelot, were eligible for the airdrop, receiving tokens in proportion to the number of smart contract deployments, users and trading volumes, among other factors.
For some, like Vesta Finance, the airdrop provided a multimillion-dollar stimulus: The project was eligible for 2.7 million arb tokens, worth just under $6 million, despite holding only $3 million in its treasury. This can allow the project to, over time, sell the tokens to bolster its own development or even provide token incentives to users to further jumpstart activity.
Projects such as yield rewards-focused PlutusDAO said they will use their airdrop allocation in “multiple ways to make the project stronger,” without revealing specifics.
Other projects decided to sell as soon as they received the tokens, however. Gaming-focused TridentDAO sold $175,000 worth of arb, or half the amount it received, through three addresses. The move invited criticism from the community for its action.
On-chain data compiled by Lookonchain shows some 90 million ARB tokens – about $120 million at current prices – were sent to over 131 decentralized autonomous organizations, or DAOs. NFT marketplace TreasureDAO and GMX received the most at 8 million arb, or $12 million.
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These were followed by decentralized exchanges SushiSwap, Balance, Uniswap, Curve, and Dopex, which will each receive between 3 million and 5 million ARB tokens.
The platform offers another venue to trade digital assets.
Vertex, a decentralized exchange (DEX) for the spot and derivatives trading of digital assets, has gone live on Arbitrum (ARB), a popular network built atop the Ethereum blockchain.
Vertex, which had been operating on a test network, combines an off-chain order book layered on top of an on-chain automated market maker on a decentralized, self-custodial exchange. The firm, which has bases in Singapore and the Cayman Islands, counts Jane Street, Dexterity Capital, Hudson River Trading, GSR, Collab+Currency, JST Capital, Big Brain and Lunatic Capital among its early backers.
The messy collapse of FTX and other centralized trading platform blowups last year has fueled a shift toward decentralized exchanges and self-custody. Ethereum layer 2 system Arbitrum is now the fastest-growing blockchain in total value locked and has surpassed Ethereum in daily transaction volume.
The Vertex team has been working on the protocol for about a year. Co-founder Darius Tabatabai said the platform has drawn interest from institutional traders and from retail traders who use Arbitrum.
“We built all the smart contracting ourselves, so we’re not forking anything,” Tabatabai said in an interview with CoinDesk. “The [automated market maker] is quite conventional, but we have a bunch of tech under the surface that enables you to do leveraged AMMs, to do looping, and we have an inbuilt money market. So you can think of it as a combination of Aave, dYdX and Uniswap, with an order book.”
Building Vertex on Arbitrum and using an off-chain sequencer for the order book has enabled the venue to process between 10,000 and 15,000 transactions per second with the ability to match orders in 10 to 30 milliseconds, a speed that rivals leading centralized venues and surpasses that on other decentralized exchanges, Tabatabai added.
Edited by Mark Nacinovich.
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EU banks’ forays into crypto have been meek so far, but new laws are on the way
Crypto exchange Bitpanda and a Vienna-based unit of Raiffeisen Bank have announced they are working together to offer crypto to the lender’s customers, according to a Wednesday statement.
The two have signed a letter of intent to cooperate, and will have finished evaluating the offer by the end of the year, said a statement by the lender.
“Examination of the partnership with Bitpanda aims to add an innovative, secure aspect to our product range and to enable all customers to easily accumulate wealth,” said a statement by Michael Höllerer, General Director of Raiffeisenlandesbank NÖ-Wien, which groups the bank’s operations in the Austrian capital and surrounding region.
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In February, a survey published by the European Central Bank suggested that lenders’ crypto activities were “insignificant,” and that the underlying distributed-ledger technology is “barely used.”
Analysts in both the crypto and traditional finance sectors have been hopeful that a new EU law known as the Markets in Crypto Assets regulation will encourage institutional adoption.
The paper rejects conventional wisdom that limits are needed to avoid supplanting the banking system.
A digital euro system shouldn’t limit users’ holdings, a paper produced for the European Parliament said, arguing that the risks to financial stability of people deserting conventional banks are overstated.
The paper turns on its head central bankers’ conventional wisdom that individuals shouldn’t be allowed more than a few thousand euros worth of the central bank digital currency (CBDC) to prevent them from using it as a savings vehicle.
The banking industry issued a sigh of relief when the European Central Bank’s Fabio Panetta said individual users of the putative currency would be limited to holding around 3,000 euros ($3,317) worth at a time because he wants the CBDC only used for day-to-day payments.
Panetta’s goals for the project are wrong, said the report produced by academic Christian Hofmann at the request of the European Parliament’s Economic and Monetary Affairs Committee.
“The key role of a digital euro consists of the important role it can play as a store of value option for the public,” said Hofmann, who is an associate professor at the National University of Singapore. “All of this requires that the public’s access to a digital euro is unlimited.”
Though the study doesn’t bind the parliament, some lawmakers are thinking on similar lines.
“I have strong doubts about the restrictions” on holdings, socialist Dutch lawmaker Paul Tang told the chamber in an April 19 debate, arguing the CBDC should compete with banks. “A digital euro should be viable – why use something you can hardly hold?”
Central bankers such as Panetta have warned that a mass exodus from commercial banks could choke lending to the economy and damage financial stability.
The ECB is due to decide later this year whether to continue with the digital euro project, and the Bank of England has said that holdings of its own digital pound could also be limited to 10,000 pounds ($12,480).
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More than six billion IOT tokens have been minted since Helium migrated to Solana.
Helium’s newly-issued IOT token has risen by over 370% in the past 24 hours following the protocol’s successful migration to the Solana blockchain last week.
IOT is the protocol token of Helium’s internet-of-things network, it is mined from Helium’s hotspots – the hardware infrastructure behind the IOT network.
The tokens will always be backed by Helium Network’s HNT token and can always be converted to HNT, with the redemption rate being set algorithmically by its treasury swap contract.
With a maximum token supply of 200 billion, there are around six billion tokens in circulation, according to Solana’s block explorer.
Solana-based decentralized finance (DeFi) protocol Kamino Finance revealed that it had opened two Helium vaults that lets investors stake their IOT and HNT tokens for a yield.
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The token is currently trading at $0.00248 with a fully diluted market capitalization of $495 million. However, based on circulating supply the current market cap is around $15 million.
The stablecoin has upgraded its market infrastructure after losing its peg during the crisis.
AUSTIN, Texas — The USDC stablecoin has emerged from March’s banking crisis stronger and safer, Jeremy Allaire, CEO of issuer Circle Internet Financial, said Wednesday.
USD Coin, a critical rail for moving money through the crypto industry, lost its dollar peg in mid-March after Silicon Valley Bank’s failure temporarily imperiled billions of dollars of its cash reserves. Though it quickly recovered ground, the event spooked investors and sparked massive outflows from the second-largest stablecoin.
“We’ve successfully navigated this crisis, and have actually upgraded the market infrastructure behind USDC to be by far the strongest, safest digital dollar on the internet today, hands down, there’s no question,” Allaire said onstage at CoinDesk’s Consensus conference in Austin.
He drew a contrast between USDC and other “alternatives we don’t know much about.” That unspoken competitor was Tether (USDT), long the stablecoin market leader despite some critics’ misgivings about its banking relationships and backing.
But the market disagreed. Since March’s banking crisis, USDC’s market cap has fallen to $29 billion from $39 billion, according to Nansen. Tether, meantime, has grown in size.
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Still, Allaire said USDC needs to become safer still. He said that can only happen with legislation at the Federal level.
The round was led by Spartan Group and included participation from Robot Ventures, Maven 11, Alchemy Ventures, HashKey Capital, Circle Ventures and Superscrypt.
Cata Labs, a blockchain infrastructure startup, has raised $4.2 million in seed funding at a “mid-eight figure valuation,” the company announced Wednesday.
The fundraising round, which closed in March, was led by crypto venture-capital firm Spartan Group and included participation from Robot Ventures, Maven 11, Alchemy Ventures, HashKey Capital, Circle Ventures and Superscrypt, among others.
Cata Labs is building Catalyst, a cross-chain bridge that aims to make it easier for blockchains to communicate with each other. At present, popular layer 1 blockchains such as Ethereum and Solana cannot easily transact with other blockchains, creating a spurt in bridging projects like the Jump Capital-backed Wormhole and Andreessen Horowitz-backed LayerZero.
“It’s become stupidly easy to make new blockchains,” said Jim Chang, co-founder of Cata. “There are ways where you can click a button and make a new blockchain. It doesn’t really make sense to have all these blockchains if they can’t talk to each other.”
Chang, who was previously a product manager at decentralized-finance protocol Aave, is working with Cata co-founder Alexander Lindgren to launch Catalyst.
Catalyst is different from existing bridges in that it can come already integrated into blockchains that opt into its ecosystem, forgoing the laborious and manual integration process characteristic of bridges such as Wormhole.
Catalyst’s thesis is that the future will hold thousands of modular blockchains that will need to communicate with each other. Modular blockchains are easier to deploy than traditional blockchains and break down the core functions of a blockchain into several different specialized blockchains.
“With the proliferation of rollups and app-specific chains, liquidity fragmentation is becoming a significant pain point and we have yet to see a unified liquidity layer that allows users to trade native assets seamlessly and efficiently cross-chain,” said Kelvin Koh, managing director of Spartan Group. “We believe Catalyst is in a great position to solve this pain point.”
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A major challenge for the modular thesis, however, is attracting user activity onto its blockchains. “At the end of the day, all of these bridges are in a winner-takes-all race to build network effects,” Chang said.
Titled, “The Future of Digital Assets: Identifying the Regulatory Gaps in Spot Market Regulation,” the hearing will take place on Thursday afternoon.
The House Subcommittee on Commodity Markets, Digital Assets, and Rural Development has provided the witness list for Thursday’s hearing examining regulatory holes in crypto spot market regulations.
The panel notably includes former Commodity Futures Trading Commission (CFTC) Chair Timothy Massad, who is currently a research fellow at the Harvard Kennedy School and director, M-RCBG Digital Assets Policy Project.
Other witnesses include Purvi Maniar, general counsel at institutional crypto trading platform FalconX, and Nilmini Rubin, head of global policy at decentralized proof-of-stake ledger Hedera. Rounding out the panel are Daniel Davis, partner at law firm Katten Muchin Rosenman LLP, as well as its co-chair, Financial Markets and Regulation and Joseph Hall, partner at law firm Davis Polk & Wardwell LLP.
The hearing is set to begin Thursday at 2 p.m. ET.
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Todd Groth of CoinDesk Indices shares some thoughts on how macro analysis works in crypto.
One thing I like about macro investing is the scope.
While financial analysts and their respective crypto degens counterparts are looking at balance sheets, earnings statements, Solidity code and social media sentiment, macro strategists get to think about the consequences of exogenous things.
Put another way, while the analysts examine the forest tree by tree, macro investors sit on a hill, surveying the whole valley and considering which parts of the forest will be nourished or threatened by rainfall, forest fires, changes in land use and other factors outside of the idiosyncrasies of the micro analysis.
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Being macro in digital assets means considering historical environments in which cryptocurrencies have thrived as well as more challenging environments, such as 2022.
Last year, digital assets were clearly sensitive to the Federal Reserve’s efforts to tighten financial conditions. There are many ways to measure financial conditions, but to keep it simple we can simply use trends in nominal and real yields, U.S. dollar exchange rate baskets and corporate credit spreads. From these measures we can create a financial conditions indicator and see how it relates to the historical risk-adjusted performance of digital assets, as proxied by bitcoin (BTC) and ether (ETH).
To estimate trends in these financial-condition proxies we utilize a trend signal similar to the one used in the Bitcoin Trend indicator (BTI) released recently by CoinDesk Indices.
To represent nominal yields (“NomRates”), we use two-, five- and 30-year U.S. Treasury yields; we subtract the five-year breakeven inflation rate derived from TIPS to create a proxy for two-, five- and 30-year real yields (“RealRates”). U.S. dollar denominated baskets of advanced and emerging economy currencies are used alongside a broader basket as three proxies for the dollar (“FX_USD”). And option adjusted spreads (OAS) for high-yield corporate bonds rated BB and CCC are used alongside an investment-grade index to represent U.S. credit conditions (“Credit_OAS”).
Trend signals are generated from the data within these four macro indicator buckets, then averaged to result in a positive, neutral and negative score for the financial condition regime. Risk-adjusted return ratios (annualized return per unit of volatility) are calculated on BTC and ETH within each regime and compared to an unconditional buy-and-hold strategy (“BuyHold”) shown in the figure below.
(CDI Research, St Louis FRED)
From this preliminary macro regime analysis it’s clear that financial conditions matter when investing in digital assets. Keeping a pulse on market conditions, particularly real and nominal interest rates and credit conditions, can help to navigate the crypto cycle better by offering a better risk-adjusted return than a simple buy-and-HODL approach.
In summary, as investors in cryptocurrencies we’d all benefit from taking a broader macroeconomic and market perspective to not miss the forest for the trees.
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P.S.: See you in Austin this week at Consensus 2023. Come meet the CoinDesk Indices team at booth #1306!
