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mike novogratz crypto industry

The Tale of Crypto Talking Head Mike Novogratz

mike novogratz galaxy digital

For those not aware, Michael Novogratz, the famed crypto industry ‘pioneer’ and crypto evangelist is a former Goldman Sachs ‘global macro wunderkind’ who then did a stint at asset management firm Fortress Investments, which cratered during his watch, turned into a bitcoin evangelist and became the “bitcoin billionaire” brains behind “crypto investment firm” Galaxy Digital. He has a long history of making big bets with other people’s money. Unfortunately, his gambles have often turned into snake-eyes when the dice stopped rolling.

But that’s OK, his personal investment accounts weren’t exposed to the slaughter that was wreaked on Fortess’s institutional investors when his misguided bets on Brazil currency back in 2014 turned into sour coffee grinds. The losses on bets he made or oversaw devastated Fortess, yet the firm managed to extricate its stakeholders through an IPO, enabling Fortress executives to cash out with tens of millions of dollars each.  

“At Fortress troubles first surfaced in the macro funds run by Novogratz, a man known for his glitzy lifestyle, complete with a Tribeca duplex once owned by Robert De Niro and a flamboyant wardrobe featuring diamond-studded belts and cowboy boots.”

He quit Fortress to start a firm to invest his own wealth. He kept investigating bitcoin and other cryptocurrencies, becoming more serious about the investments.

Over time, Mr. Novogratz came to see them as a “really cool new technology” that was likely better capable of storing value amid rising inflation than alternatives, he said at a recent conference. Soon, he was a true convert, buying $10 million of bitcoin and another cryptocurrency called ether partly because he sensed a lack of trust in global currencies, he said.  See https://www.wsj.com/articles/mike-novogratzs-crypto-comeback-faces-a-trial-by-fire-11654315211

mike novogratz luna

During the past five years, Novogratz has become the poster child for crypto and bitcoin, “talking his book” at every opportunity, and helping to lead thousands of blind mice investors to pump up the price of bitcoin and to plow hundreds of millions of dollars into his firm Galaxy Digital (OTCMKTS: BRPHF) so that he could “invest for them”—while reaping fees that would make most people’s eyes pop out.

Throughout the unprecedented bubble building in crypto “currencies”, Novogratz and many other evangelists/promoters including Jack Dorsey, Elon Musk, Michael Saylor, Disney film star Brock Pierce, the Winklevoss twins, investing genius and former Donald Trump PR trumpeter Anthony Scaramucci, Internet Billionaire and Game Show Host Mark Cuban among so many others, have proclaimed that Bitcoin, Ether, Tether, and many others represent “a store of value”, “a hedge against inflation”, “a safe haven when traditional financial assets (stocks, bonds, sovereign currencies) suffer from global economic and geopolitical turmoil.” All the crypto evangelists, and in particular, famed hedge fund manager Ray Dalio, proclaim that Bitcoin and other so-called currencies represent the “digital version of gold“; which many global investors believe to be a useful hedging tool that should be part of every portfolio.

So let’s take a measure. Since January of 2022, the US equities markets (as measured by S&P 500 index, DJIA, as well as markets in many other advanced countries have suffered generational losses in share prices. The declines of 25% in value in equity prices are thanks to an inflationary spiral caused by supply-chain challenges brought on by Covid 19, monetary policies that created historic government hand-outs in an effort to stem the impact of Covid-19, along with a global geopolitical crisis thanks to Russia invading Ukraine, and a sober reaction to over-inflated enterprise valuations and hysterical stock market speculation. The combination of these events has almost no comparison when looking back five decades.

Yes, stock markets are cyclical and suffer bear markets and crashes; some short-lived, others longer-lasting. The global benchmark S&P 500 is off 24% from its Dec 2021 all-time high; the German Stock Market Index has shaved 20% from its high, and the Shanghai Stock Index is off 10%. Gold, the universal hedge against both geopolitical crisis and inflation, is up a scant 1% YTD. Bitcoin, the proclaimed “hedge against all of the above-noted crisis events” has plunged 69% from its stratospheric all-time high.

As of June 18 2022, Bitcoin has lost more than 60% of its “value” on a YTD basis.

Among other investments, Mike Novogratz, via Galaxy, was a big backer of Terra Luna–a platform based on Tether, the digital asset platform that was co-founded by another crypto genius, former child-actor Brock Pierce. He’s a self-proclaimed billionaire too–and many refer to him as the “Prince of Puerto Rico” in view of the real estate he has acquired and the influence he has over the swarm of crypto ‘entrepreneurs’ who have taken over much of that island.

Like Novogratz, Pierce is an active investor in a broad swath of crypto initiatives and start-ups, one of which is a phony funny, yet apparently, a fraudulent firm calling itself Seaquake.io, for which Pierce is identified as an advisor. It is also a criminal enterprise that MarketsMuse has profiled for the past two years, and its founder Andrew Katz, is now purportedly a fugitive from justice.

SEE THE JUNE 2022 UPDATE https://www.marketsmuse.com/andrew-katz-seaquake-crypto-firm-still-at-it/

brock pierce investments
https://www.marketsmuse.com/founder-ceo-of-crypto-trading-firm-seaquake-io-andrew-katz-convicted-in-new-york-now-a-fugitive/

Let’s not forget that investments made by Galaxy included Novogratz and his partners receiving ‘tokens’ issued by the companies they invested in that were priced at pennies. Those tokens were no different than penny-priced ‘warrants’ given to underwriters of traditional IPO offerings.

After pumping the news of those investments, those tokens turned into ‘real money’ for the promoters—who cashed out into the frenzy and bought mansions and boats; reminiscent of the antics made famous by the infamous  Jordan Belfort’s firm Stratton Oakmont—the underwriter for the 1993 IPO of shoe company started by Steve Madden.

[Belfort and Madden were then convicted of securities fraud and both went to jail. Flash forward to 2021, Jordan Belfort repurposed himself into a crypto evangelist and is minting millions by ‘advising’ people on how and what crypto deals to invest in.]

February 2021– Novogratz Sees Bitcoin at $100k 

Bloomberg Technology- Michael Novogratz, a long time proponent of cryptocurrencies through his firm Galaxy Digital Holdings Ltd., said Bitcoin and other digital coins have become “an institutional asset class” and banks are “frantically” trying to get in on the action.

https://www.bloomberg.com/news/videos/2021-03-04/mike-novogratz-says-bitcoin-will-hit-100k-by-end-of-year-video

https://coinfomania.com/novogratz-says-crypto-is-closer-to-bottom/

Mar 31 2022 In Midst of Crypto Sell-Off, Novogratz Says “I’m More Constructive about the market than I was previously..” Michael Novogratz, the billionaire cryptocurrency investor who leads Galaxy Digital Holdings Ltd., said that while he still expects a volatile year, he has become more “constructive” about digital-asset markets than he was earlier. 

“It wouldn’t surprise me to see crypto significantly higher by the end of the year,” Novogratz said during Galaxy’s earnings conference call on Thursday. “Given the adoption cycle I’m seeing, given the way markets trade, and how I see new people wanting to get in, the innovation we’re seeing in web3 and the metaverse space, I’ve gotten more constructive than I was at the beginning of the year.” 

No surprise then that soon thereafter, while talking up bitcoin investing and predicting meteoric price rises, he was selling stakes that his firm Galaxy Digital held in various “cryptocurrencies”.  Nice.  

May 9 2022 CEO Michael Novogratz highlighted weakness across crypto and equity markets during Galaxy’s earnings call Monday, though said he isn’t “panicked by any stretch.” He added that his recent investor meetings point to growing adoption, and noted that “crypto as a tech play” is gaining momentum.

“Volatility will continue,” according to Mike Novogratz, although he said he expects bitcoin to hold around the $30,000 level and ether to stick around the $2,000 level.

Source: https://www.coindesk.com/business/2022/05/09/galaxy-digital-records-q1-loss-of-1117m-amid-crypto-losses/

June 5 2022 Novogratz Says “Bitcoin Won’t Break $20k” speaking at the Morgan Stanley Financials Conference, the billionaire investor, known for always sharing his opinions on events surrounding the asset class, showcased his bullish stance on cryptocurrencies. 

Novogratz said he is confident that bitcoin (BTC) and Ether (ETH) would not crash below $20,000 and $1,000, respectively.

The crypto proponent stated that the two leading cryptocurrencies would hold strongly at those levels while noting that the benchmark of S&P 500 (.SPX) has dropped more than 20% from its record high earlier in January, and the stock market might plummet further to 15% to 20%.

June 15 2022 “Crypto Crisis Evokes 1998 Hedge Fund Crash that Crippled Market”

That’s what Mike Novogratz, CEO of top crypto investment firm Galaxy Digital, told CNBC Wednesday (June 15), referring to the 1998 collapse of a large and highly leveraged hedge fund that sent shockwaves so large through the economy that the U.S. government was forced to intervene and broker a $3.6 billion bailout.

June 18 2022  BTC sold down to $18,500.00

Our Editorial Team begs to ask the question, “Aside from making mediocre investment managers become multi-millionaires and billionaires, along with similar exponential gains in net worth for tens of hundreds (and upwards of many thousands of “innovators” and “disruptors”), what product or service, or what actual efficiency has been created for any industry that would justify the outsized gains in net worth afforded to a relatively few?” Contact Us to provide a rebuttal.

goldman-sachs-crypto-trade-desk

Goldman Sachs Goes Crypto; Opens Bitcoin Trade Desk

Goldman Sachs, the venerable investment bank and trading house, has been called lots of things, including “Squid.” But nobody on Wall Street can dispute the fact that $GS is uniquely innovative and perhaps, a firm that can smell the trail of money better than its peers and explains why Goldman is opening a bitcoin trade desk. While JPMorgan CEO Jamie Dimon has repeatedly said bitcoin and other cryptocurrencies are at worst, the foundation to a Ponzi scheme, and at best, a passing fad, Goldman’s CEO Lloyd Blankfein has a different, more open-minded view. As evidenced by last week’s announcement, Goldman is opening a digital asset trade desk to accommodate a growing spectrum of hedge funds, endowments and foundations that already own digital assets or intend to deploy funds to the alt currency asset class. The new digital asset desk will be led by a fellow named Justin Schmidt, an MIT quant jock who previously worked at several quantitative investment management firms, including a hedge fund connected to The Schoenfeld Group.

jason-schmidt-crypto-trader
Jason Schmidt, Goldman Sachs Crypto Trader

As reported by NYT reporter Nathan Popper, “…While Goldman will not initially be buying and selling actual Bitcoins, a team at the bank is looking at going in that direction if it can get regulatory approval and figure out how to deal with the additional risks associated with holding the virtual currency….Rana Yared, one of the Goldman executives overseeing the creation of the trading operation, said the bank was clear-eyed about what it was getting itself into…”

Ms. Yared said the bank had received inquiries from hedge funds, as well as endowments and foundations that received virtual currency donations from newly minted Bitcoin millionaires and didn’t know how to handle them. The ultimate decision to begin trading Bitcoin contracts went through Goldman’s board of directors.

Whether your company is a fintech startup planning a private placement offering, a crypto concern with a custom token offering that is seeking to raise capital from qualified or accredited investors via an Initial Coin Offering (ICO), a Securities Token Offering (STO)or if you are fast growth firm setting the stage for an initial public offering (IPO), a properly prepared offering prospectus or offering memorandum is required by your investors and industry regulators that govern securities offerings. Issuers seeking expert, yet affordable investor document solutions rely on experts at Prospectus.com.

Goldman has already been doing more than most banks in the area, clearing trades for customers who want to buy and sell Bitcoin futures on the Chicago Mercantile Exchange and the Chicago Board Options Exchange.

In the next few weeks — the exact start date has not been set — Goldman will begin using its own money to trade Bitcoin futures contracts on behalf of clients. It will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.

To read the full NYT story, click here.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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BlockTech Bid Repeats via Bloomberg: Its About Blockchain, NOT Bitcoin

(MarketsMuse fintech and blocktech curators extend our thanks to Prospectus.com LLC for the following contribution)-Bloomberg Intelligence reporter Jonathan Tyce wins the Valentine’s Day Award for Very Good Framing courtesy of his latest piece “Blockchain is Coming Everywhere, Ready or Not” –one of a series of articles by Tyce that puts the blockchain value proposition into proper perspective. Without suggesting there is any IP underlying the thesis advanced by Tyce,  the opening sentence speaks volumes to those who are crypto challenged and have the misinformed view that blockchain = bitcoin=all kinds of bad things, including but not limited to ‘investment bubble”, Ponzi scheme, “pump and dump” ICOs where the Issuer is now hiding in the ‘dark web’ or sun-tanning in Belize, and lastly, ‘one of the things that lets people create crazy currency that isn’t even fungible’. Bid repeats: Its all about the blockchain, blockhead. Not bitcoin. Welcome to BlockTech.

Without intending to invite the BloombergLP copyright cops to castigate this blog for infringement violations, this blog has posted a series of original articles themed with the same title of this post. With that disclaimer, we’ve responsibly stayed within the goal posts and merely excerpted select portions of Tyce’s piece to advance smart thinking and give credit where due…

The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services. Significant disruption and new business opportunities are on the menu. Four of the most-critical benefits from distributed-ledger technology can be encapsulated within trust, transparency, cost and speed. Where will the disruption occur?

Blockchain is now a familiar term to many, though in most cases, its meaning will be inextricably linked to bitcoin after a 10-fold price surge in 2017 valued the cryptocurrency at more than $180 billion.

This is only one strand of the story for Europe and globally. The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services.

For starters, huge improvements in efficiency and transaction speeds, cost savings and enhanced security are on the menu, with significant disruption and new business opportunities likely to follow.

Distributed-ledger technology

Putting the semantics to bed early, blockchain is the name designated to a string or chain of transaction records (blocks), cryptographically signed with “hashes,” or digital signatures. Though undoubtedly the most high-profile application of blockchain, the bitcoin network is just one example of how cryptocurrencies and other transactions can use this technology.

Blockchain is effectively the means to create tamper-proof records of data and transactions — whether that is a money transfer, vote cast, medical record or change of property ownership. It is just one of a variety of decentralized database technologies that exist across multiple locations. These are known as distributed ledgers, and it is within these so-called DLT technologies that great opportunity exists.

To continue reading, please visit Prospectus.com LLC blog

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

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Bitcoin Barista of the Day Award: BnkToTheFuture

When it comes to corporate monikers, MarketsMuse fintech curators are big fans of catchy names and have made it a New Year’s resolution to compile and share a weekly list of firms that earn special recognition within the burgeoning world of blockchain, bitcoin and crypto handles. And, the winner for the first week of 2018 is”BnkToTheFuture.” No, its not a futuristic bank run by Doc Brown and no, Marty McFly is not the crypto credit lending officer. Its a current generation “cool kids only investment bank” that appears to be based in Hong Kong and staffed by the now ubiquitous-to-the-industry line-up of slick looking folks from UK, HK and of course, Eastern Europe. Arguably, the management team can be considered blockchain industry pioneers given this firm was formed way back in 2011.

Our thanks for guidance to this “Global FinTech, Bitcoin and blockchain online investment platform” goes to TradersMag Senior Editor John D’Antona  who pushed this release to us, which is chock full of  mentions of ‘crypto industry celebrities’ who recently joined the firm’s advisory board. Our compliance desk loved the “About BnkToTheFuture” section of their press release; it conforms beautifully with global financial industry best practice protocols: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform.”  Below is an excerpt of the news story:

simon-dixon-banktothefuture
Simon Dixon, CEO BankToTheFuture

BnkToTheFuture today announced its token sale advisory board, with executives from Civic, Smith + Crown, Abra, BitAngels, and more signing on to help BnkToTheFuture launch a tokenized secondary market and due diligence platform for equity tokens. BnkToTheFuture’s online investment platform already brings vetted deals to qualifying investors and has invested in many of the most valuable companies in the sector, and will now incorporate its BFT cryptocurrency token to reward due diligence, deal flow analysis and investor relations on prospective and current deals.

“Investors in today’s burgeoning ICO landscape are seeking more professionalism, accountability, and compliance, while equity investors are seeking greater liquidity and trading,” said Civic CEO and BnkToTheFuture Identity/KYC Advisor Vinny Lingham. “BnkToTheFuture provides this gap in service, and I’m excited to see this project grow through its next phase.”   The company’s press release includes: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform including BitFinex, BitStamp, Kraken, ShapeShift and over 100 others.”

Joining BnkToTheFuture’s advisory board alongside Lingham are Jonathan Smith, Civic Co-Founder and CTO; Bill Barhydt, CEO of Abra; Diego Gutierrez Zaldivar, CEO and Co-Founder of Rootstock (RSK), Michael Terpin, CEO of Transform Group, Founder of CoinAgenda, and Co-Founder of BitAngels; Sunny Ray, President of Unocoin; David Johnston, Chairman of Factom and Co-Founder of BitAngels; Li Huo, Director at Huobi; Adam Vaziri, Blockchain lawyer and Director at Diacol; Brian Lio, CEO at Smith + Crown; Matt Chwierut, Researcher at Smith + Crown; Tony Simonovsky, CEO of InsightCryp.to; and David Drake, Chairman at LDJ Capital. BnkToTheFuture will continue to list new advisors here.

Whether your company is a fintech startup that is planning a private placement offering, a crypto concern with a custom token offering that is seeking to raise capital from qualified or accredited investors via a Initial Coin Offering (ICO), or if you are fast growth firm setting the stage for an initial public offering (IPO), a properly prepared offering prospectus or offering memorandum is required by your investors and industry regulators that govern securities offerings. Issuers seeking affordable investor document solutions rely on experts at Prospectus.com.

“While building BnkToTheFuture’s advisory board for our upcoming token launch, we sought leaders in the blockchain industry and those who have been consistently involved advocating for Bitcoin from very early on to help guide our efforts to further develop a transparent platform compliant with regulatory requirements,” said Simon Dixon, CEO of BnkToTheFuture. “We’re confident that our advisory team of experts will be instrumental in this process.”

Already popular as an online investment platform with 45,000 qualifying investors and over $200 million invested in rounds listed on its platform including companies like Kraken, BitFinex, BitStamp, ShapeShift and others, BnkToTheFuture will incorporate blockchain technology to allow for the trading of equity tokens and will issue its own token, BFT, to support deal flow analysis, due diligence and investor relations on the platform. BFT will be available in a public token sale in February 2018.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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CFTC Approves LedgerX Exchange to Facilitate Bitcoin Options Trading

What’s Next for Option Markets? A CFTC regulated platform for bitcoin options; NY-based firm gets approval to trade puts and calls on cryptocurrency.

For bitcoin aficionados, the road to legitimacy has been pockmarked with obstacles and detractors, including those who have insisted that bitcoins are the currency of money launders, drug dealers and illegal arms dealers, as well as those who believe ‘bitcoin is a massive Ponzi Scheme’. In the meanwhile, the price of a bitcoin has increased exponentially in the last 12 months alone and has vaulted past the price of gold–which has historically been the back-up currency of choice for those hedging fiat currencies of sovereign governments.  But, innovation and disruption knows no barrier or limits, demonstrated by fact the US CFTC has put its impromptu er on New York-based LedgerX, which will be the first regulated platform to trade options contracts on cryptocurrency.

Per CNBC coverage–The U.S. Commodity Futures Trading Commission announced Monday it unanimously approved digital currency-trading platform LedgerX for clearing derivatives. LedgerX initially plans to clear bitcoin options, the release said.

“A U.S. federally-regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base,” Paul L. Chou, LedgerX CEO, said in a separate release from the trading firm.

“We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues,” Chou said, noting a desire for assets that aren’t correlated with the broader stock market.

The firm plans to launch bitcoin options in early fall, and ethereum options “within a few months,” Chou told CNBC in a phone interview. That will mark the first federally supervised options venue for bitcoin.

LedgerX received an order of registration as a Swap Execution Facility on July 6.

The firm primarily operates in New York and said in May it raised $11.4 million in a Series B round of financing led by Miami International Holdings and Huiyin Blockchain Venture Investments.

Prospectus.com team of capital markets experts and securities lawyers specialize in preliminary offering prospectus, secondary offering prospectus and full menu of financial offering memorandum document preparation. More information via this link

The CFTC noted that its Division of Clearing and Risk also issued Monday a letter “exempting LedgerX from complying with certain Commission regulations due to LedgerX’s fully-collateralized clearing model.”

Chou said the exemption was due to LedgerX’s plan to “not allow very leveraged trading.”

The authorization “does not constitute or imply a Commission endorsement of the use of digital currency generally, or bitcoin specifically,” the CFTC said in a release.

Bitcoin traded Monday afternoon about two-thirds of a percent higher, near $2,780, while ethereum traded about half a percent lower, near $225, according to CoinDesk.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

blockchain-equities-ats-overstock

What’s Next? A Blockchain-Powered ATS for Equities

“What’s Next? Well, for those familiar with Patrick Byrne, the controversial and innovative founder of Overstock.com, one of the first online retailers to embrace the use of bitcoins, it should not be a surprise that Overstock’s chief honcho would ‘get the joke’ and realize its all about the underlying technology that powers cryptocurrency applications, known as distributed ledger. While bitcoin currency continues to encounter challenges in terms of mass embracement, the real grease that makes the makes the wheels turn is under the hood. With that, Overstock subsidiary “T0” (T-zero) is taking a page from both the industry consortium formed by R3 and the Senahill-backed Symbiont –both of which target institutional capital markets usage–and aiming it’s own sights on retail investors by setting to launch an equities-centric Alternative Trading System aka ATS powered by their own blockchain formula.

A distributed ledger is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, and/or institutions.
A blockchain is a type of distributed ledger, comprised of unchangable, digitally recorded data in packages called blocks.
Rob Daly of MarketsMedia (not related to MarketsMuse) provides the scoop..

Online retailer Overstock.com expects trading to begin on its blockchain-based alternative trading system before the end of the year, according to company officials.

The ATS will be operated by Overstock.com subsidiary TO as part of the company’s Medici Project, and it will only handle trades in the company stock, at least at first. So while it’s not an immediate competitive threat to the existing field of 13 U.S. stock exchanges plus several dozen ATSs, the initiative will be closely watched as a gauge of the potential of distributed-ledger technology in capital markets.

The ATS will write completed trades to its blockchain instead of routing them to the National Securities Clearing Corp., a subsidiary of Depository Trust & Clearing Corp., for clearing.

Overstock.com plans to prime the liquidity on the ATS through a new issue of corporate shares to existing shareholders the day before trading commences on the new trading venue.

judd bagley blockchain ATS
Judd Bagley

T0 officials plan to formally announce its partnership with a broker-dealer on Sept. 12. “For those who want to trade on the ATS, they will have to create an account with the broker-dealer,” said Overstock’s man-in-charge Judd Bagley, who declined to name the brokerage firm.

If you’ve got a hot tip, a bright idea, or if you’d like to get visibility for your firm through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, etc., please reach out to our Senior Editor

Investors will be able to select from multiple “very vanilla” order types, which are still in development, he added. T0 may use a so-called maker-taker rebate model to encourage liquidity, but officials have not made a final decision.

The new trading venue is a mix of internally developed technology and the technology T0 acquired with its purchase of order-routing firm SpeedRoute in October 2015. T0 built its matching engine internally as well as the necessary interfaces to the rest of the U.S. equity marketplace.

The company, in conjunction with Bay-area consultancy PeerNova, also developed a proprietary blockchain architecture for the ATS instead of using Bitcoin, Ethereum, or Ripple.

To continue reading the story from MarketsMedia, please click here

cryptocurrency

Goldman Sachs Wants Patent To Settle Trades in Bitcoin Tool

(TradersMagazine) Trading settlement and clearing could go the way of bitcoin, as white glove bulge bracket brokerdealer Goldman Sachs and fintech aficiondo has filed a patent for technology to settle securities in the cyber cryptocurrency.

As first reported in Bitcoin Magazine on November 19, the United States Patent & Trademark Office (USPTO) published Goldman, Sachs & Co.’s patent application 20150332395 or “Cryptographic Currency For Securities Settlement.” The patent described “ […] methods for settling securities in financial markets using distributed, peer-to-peer, and cryptographic techniques ” using a cryptocurrency named SETLcoin.

The application lists Paul Walker and Phil J. Venables as the inventors of the technology.

Walker is the co-head of technology at Goldman and a member of the Board of Directors of the Depository Trust and Clearing Corporation (DTCC).  Venables is managing director and chief information security officer at Goldman Sachs.

The patent application addresses chain of custody of an asset, counterparty risk and settlement through a cryptocurrency called SETLcoin. According to the patent application viewed by Bitcoin Magazine, SETLcoin ownership can be used to prevent fraud, including float fraud such as kiting.

Goldman Sachs and IDG Capital Partners co-led a $50 million strategic investment round in Bitcoin company Circle in late April of this year. This was the first publicly announced cryptocurrency investment by Goldman. However, as reported by CB Insights, Goldman’s investment activity into fintech startups has been intensifying.

FinTech Dept: Banks Embrace Bitcoin’s Blockchain

It doesn’t take a “markets muse” who speaks in tech talk to know that Fintech is not only fashionable, its now mainstream. And, whilst the early “jibber jabber” surrounding Bitcoin was fodder for Wall Street naysayers, including JPM’s Jamie Dimon, “the worm has turned” according to NYT columnist Nathaniel Popper, a bitcoin expert and the author of “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.”

For earlier MarketsMuse coverage of the bitcoin and blockchain movement, click here

In Popper’s most recent NYT column profiling the cadre of banks, along with assortment of startups founded by banking expats, the fintech fascination is less about bitcoins as a currency, and all about the blockchain technology that powers the virtual currency.

MarketsMuse Editor Note: Though some of skeptics sitting on the MarketsMuse editorial stools suggest that these fintech applications should be targeting industries that actually embrace innovation, such as online gambling and adult entertainment, we won’t diss anyone by selling near-term straddles.

“…Nowhere, though, are more money and resources being spent on the technology than on Wall Street — the very industry that Bitcoin was created to circumvent.

“There is so much pull and interest on this right now,” said Derek White, the chief digital officer at Barclays, the British global bank, which has a team of employees working on about 20 experiments that explore how the technology underlying Bitcoin might change finance. “That comes from a recognition that, ‘Wow, we can use this to change the fundamental model of how we operate to create our future.’”

For people like Mr. White, Bitcoin isn’t just a digital token to use for online purchases. Instead, many of the top minds in finance have come to believe that the software that brought the virtual currency into existence also enables a fundamentally new way of transacting and maintaining records online — allowing people and banks to directly exchange money and assets like stocks and bonds without having to rely on a long chain of expensive middlemen…”

A few banks have gone public with their work, but most of the activity has been happening behind the scenes. At one private meeting, held in April at one of the Manhattan offices of Bank of America, executives from more than a dozen large banks gathered to confidentially discuss how the technology underlying Bitcoin could be used to change foreign currency trading, the largest financial market in the world, according to people who attended the meeting.

Central banks like the Federal Reserve and the Bank of England have their own teams looking at the technology.

“A year ago, it was more of an idea,” said Max Neukirchen, the head of corporate strategy at JPMorgan Chase. “Now, it is a real opportunity. You test it and realize that this can play a big role in our thinking about how our own infrastructure will evolve.”

Who are the players to watch? Aside from the secretive projects inside of each of the 6-pack shops (including JPM!), major exchanges including NASDAQ and NYSE owner ICE are actively throwing resources at blockchain technology applications. On the startup scene, Dave Rutter, a former inter-dealer broker who was a head capo at Prebon Yamane, and then CEO OF ICAP before starting electronic broker LiqudityEdge is now wearing two hats via his role at blockchain wannabe R3CEV LLC. Not to be outsmarted is Mark Smith’s “Smart Securities” product, created by his startup Symbiont. Smith is the former co-founder and COO of Lava Trading and a certified tech wonk with a keen FX markets expertise.  His company, with help from fintech merchant bank SenaHill Partners has so far outfoxed R3CEV by having already set the stage to facilitate the first corporate bond issuance using the blockchain technology.

For Nathaniel Popper’s latest commentary “Bitcoin Technology Piques Interest on Wall St”., please click here

Attention Wall Street BlockHeads: Get Your Bitcoins Here

MarketsMuse fintech update is a “bid on” to prior Wall Street bitcoin initiative coverage, and following is courtesy of excerpt from 4 Aug story by Bloomberg LP reporter Andrew Leising, ” Wall Street, Meet Block 368396, the Future of Finance.”

Justin Brownhill, SenaHill
Justin Brownhill, SenaHill

When Justin Brownhill wants to check up on one of his latest investments through fintech merchant bank SenaHill Partners LP, he only needs to check the ledger unpinning bitcoin. The address: block 368396.

That’s the new digital home for the equity stake his firm made in Symbiont, a startup using bitcoin’s underlying blockchain software to make it quicker and easier to prove ownership of assets or transfer them between buyers and sellers.

Putting its money where its mouth is, Symbiont on Tuesday morning digitized and published several of its equity investments to the blockchain, which drives the bitcoin digital currency. That means the stakes will forever be part of that public record, allowing dividend payments or stock-option conversions to happen automatically.

“I woke up this morning and thought, ‘This is a historic moment,’” Brownhill, a managing partner at New York-based SenaHill, said in an interview after the Symbiont presentation on Tuesday. The merchant bank has investments in over a dozen other private companies. “Our job now is to go and espouse the benefits to all our portfolio companies,” he said.

Wall Street is becoming enamored with the potentially transformational way blockchain could overhaul how derivatives, bonds, loans and other asset classes work, dramatically simplifying the process of tracking ownership and accelerating the transfer of assets from one person to another.

Smart Securities

Symbiont’s innovation is creating what it calls smart securities. The company is now practicing what it preaches: its founders’ stakes as well as shares and options granted to employees have been converted into encrypted code that lives in the bitcoin blockchain — the same ledger where any purchases and sales of the digital currency are recorded. Symbiont customers can do likewise to track changes in ownership interests.

“Today is the day crypto joins Wall Street,” Symbiont Chief Executive Officer Mark Smith said to the room full of investors, bankers and reporters in New York. Representatives of JPMorgan Chase & Co., Morgan Stanley and other financial institutions were among the audience members.

Symbiont’s not alone in trying to bring the blockchain to Wall Street. Other firms investigating finance-related uses of blockchain include Digital Asset Holdings LLC, headed by former JPMorgan Chase & Co. banker Blythe Masters; Nasdaq OMX Group Inc.; Ripple Labs; and the New York Stock Exchange.

In June, Symbiont raised $1.25 million from a group of investors including former NYSE chief Duncan Niederauer; former Citadel LLC executive Matt Andresen; two co-founders of high-frequency trading firm Getco LLC, Dan Tierney and Stephen Schuler; and SenaHill.

For the full story from Bloomberg LP, please click here

NASDAQ Embraces Bitcoin; First Mover For Pre-IPO Application

MarketsMuse Tech Talk update profiling Wall Street’s latest embracing of Bitcoin technology and a look at 11 May announcement from NASDAQ is courtesy of extracts from CNN.com and WSJ.

The Nasdaq stock exchange is tapping Bitcoin’s powerful new transaction technology to create a more secure, efficient system to trade stocks. Step 1: Pilot to take place in fledgling Nasdaq Private Market.

High-tech bankers are starting to realize Bitcoin could revolutionize trading. Nasdaq (NDAQ), a favorite exchange among many technology companies, is making the first move.

On Monday, the stock market announced it will start using a blockchain system to keep records for its Nasdaq Private Market, which handles trading of shares in the pre-IPO phase before a company goes public.

Nasdaq sees the blockchain’s perfect recordkeeping as a major step in the right direction for more transparency. The pre-IPO market doesn’t typically see as much trading and what does occur is often by a tight circle of employees and early investors.

See more at BrokerDealer.com

Bitcoins Become Trading Firms’ Focus

MarketsMuse blog update profiles how the increasing interest in bitcoins is leading some investors in opening bitcoin financial services firms. Many believe that this move can help reduce the volatility and increases favorability of bitcoins.  This update is courtesy of the Wall Street Journal’s article, “Big Investor Involvement Could Boost Bitcoin“, with an excerpt below.

Some of the U.S.’s biggest proprietary traders and investors are testing the waters for a bigger move into bitcoin, giving a potential boost to the fledgling virtual-currency industry.

While still cautious of becoming exposed to “cryptocurrencies,” some of the firms, which trade with their own money on the.ir own behalf, say they see potential for big profits in trading bitcoin as more investors enter the market and financial-services firms use the currency to streamline transactions.

Their involvement could help reduce volatility in the market for bitcoin, which has struggled to gain legitimacy in part because of concerns about wild swings in its price.

Among the companies at the forefront of this move is DRW Holdings LLC, a high-frequency trading firm in Chicago founded by former options-pit trader Donald Wilson in 1992. DRW is a founding investor in a new bitcoin financial-services firm called Digital Asset Holdings that launched last month. Cumberland Mining & Materials LLC, a DRW subsidiary, has “begun to experiment with cryptocurrency trading,” DRW said.

To continue reading the article on bitcoin firms from the Wall Street Journal, click here.

 

Nasdaq Agrees To Power New Bitcoin Marketplace

MarketMuse blog update profiles Nasdaq recent agreement to power a new marketplace from bitcoin trading. Bitcoins are the largest decentralized digital currency in the market and has been taking the investment world by storm since its introduction in 2009 by its founder,  Satoshi Nakamoto. MarketMuse blog update is courtesy of Nasdaq’s article, “Nasdaq to Provide Trading Technology for Bitcoin Marketplace — Update” with excerpts from the article below. 

Nasdaq OMX Group Inc. has agreed to provide New York-based startup Noble Markets with core technology to power a new marketplace aimed at allowing companies and institutional investors such as hedge funds to trade bitcoin and related digital-currency assets.

According to a joint statement provided to The Wall Street Journal, Noble’s platform will use Nasdaq’s X-stream trading system, a high-tech system for matching market participants’ orders that is used by more than 30 exchanges and marketplaces worldwide. Nasdaq will also provide marketing support.

The agreement follows other Wall Street initiatives that could pave the way for financial institutions to own and trade digital currencies, which fans say have the potential to make the global financial system more efficient but which have also been marred by price fluctuations, investment scams and cybersecurity concerns.

 

Recent developments include: the New York Stock Exchange’s investment in bitcoin exchange Coinbase; regulatory approval of public trading in the Digital Currency Group’sBitcoin Investment Fund; former J.P. Morgan Chase & Co. executive Blyth Masters’ appointment to a lead new digital-asset settlement service; and news earlier Monday that former NYSE Chief Executive Duncan Niederauer will work as an adviser to bitcoin derivatives platform TeraExchange.

To read the entire article from Nasdaq, click here

Change is Coming: What to Expect With Bitcoin ETF

MarketMuse update courtesy of Inside Bitcoins’ Kyle Torpey. 

Much of the bitcoin community is excited at the prospect of a bitcoin ETF due to the assumption that it could bring many new speculators into the market. After all, if everyone with access to assets traded on the NASDAQ can just as easily trade bitcoin in the same account as their other investments, it’s possible that more traditional investors may take a shot at the digital currency.

While there’s been plenty of attention on the possible Winklevoss bitcoin ETF, there hasn’t been much discussion on the effect the ETF could have on current bitcoin exchanges. Once traders have access to a regulated bitcoin ETF on the NASDAQ, why would they spend time trading on one of the frequently-hacked bitcoin exchanges?


Trading fees and unique trading options

I reached out to BTC China Senior Business Development Manager Greg Wolfson to get his reaction to the possibility of a bitcoin ETF becoming a reality in the near future. When asked what a traditional bitcoin exchange can offer that won’t be found with a bitcoin ETF, Wolfson was quick to point to zero-fee trading. The trend of offering free trading has become a popular way for new bitcoin exchanges to make a name for themselves, and this is something that simply cannot be offered by a bitcoin ETF.

When trading an ETF, you’re always going to have to pay brokerage fees and the expense ratio, which is used to pay the costs of operating the ETF. For example, GLD — on which the Winkless ETF is based — has a 0.40% expense ratio. You can bet that a bitcoin exchange will not charge you money simply for holding onto your bitcoins throughout the year — although leaving your bitcoins on an exchange for long periods of time is also not recommended.

“On the other hand, the the ETF will be regulated by the SEC and therefore, open to many types of institutional investors that are otherwise prohibited from investing in bitcoin.”

Wolfson went on to explain certain trading options that are unique to bitcoin exchanges in his full response on the matter:

“An ETF may best fulfill the needs of individuals who want to simply hold bitcoin, but exchanges still offer a diversity of trading options that set them apart. Zero-fee trading, derivatives, cross-trading with altcoins, and direct access to BTC, to name a few. On the other hand, the the ETF will be regulated by the SEC and therefore, open to many types of institutional investors that are otherwise prohibited from investing in bitcoin.”

Access to actual bitcoins

Direct access to bitcoins was another feature of bitcoin exchanges mentioned by Greg Wolfson. While you’re purchasing actual bitcoins on a traditional bitcoin exchange, such as BTC China, you’re only purchasing shares of assets owned by someone else when you buy an ETF. You cannot trade your ETF shares for actual bitcoins. If you’re looking for ownership over physical bitcoins rather than exposure to the bitcoin price, then a traditional bitcoin exchange — or even an OTC trade — will be a better option.

What about insurance?

Although Wolfson did not mention insurance in his comments regarding the bitcoin ETF, it’s possible that this could be another opportunity for bitcoin exchanges. As mentioned in a previous article, there is no insurance to be found for shareholders of the Winklevoss Bitcoin Trust (COIN).

As we’ve seen in the past — and as recently as a few weeks ago with the Bitstamp hack — thefts are a rather common occurrence in the bitcoin world. An exchange that decides to offer insurance for all deposits — outside of user error — could offer peace of mind to the paranoid trader who doesn’t want to worry about a possible MtGox fiasco. The only bitcoin companies that seem to be bragging about their insurance coverage publicly are Coinbase, Xapo, and Circle; none of which are useful for even moderately high frequency trading.

For the original article from Inside Bitcoins, click here

Winklevoss Twins’ Bitcoin Trust ETF Makes Progress to go Public

MarketMuse update courtesy of extracts from Tom Lydon’s 31 December ETF Trends story.

The Winklevoss twins, Cameron and Tyler, famed for suing Mark Zuckerburg, claiming he stole Facebook from their own social networking site ConncetU, have started another new venture.  In April 2013, they claimed that they owned of 1% of all Bitcoins in existence. The Winklevoss twins now prepare to sell their Bitcoin shares on the Nasdaq.

Slowly but surely, Cameron and Tyler Winklevoss’ Bitcoin Trust is putting the final touches on its proposed cryptocurrency-backed exchange traded fund, filing for shares on the Nasdaq.

On Wednesday, the Bitcoin Trust filed with the Securities and Exchange Commission to sell 20.1 million shares on the Nasdaq exchange, reports Ciara Linnane for MarketWatch. The filing did not include a launch date or expense ratio, indicating the Bitcoin Trust is not close to coming to market.

In May, a regulatory filing revealed the Winkelvoss Bitcoin Trust will trade on the Nasdaq. In July, a Form S-1 filing with the Securities and Exchange Commission reveled the ETF, assuming it comes to life, would trade under the ticker “COIN.”

“The investment objective of the Trust is for the Shares to reflect the performance of the price of Bitcoins, as measured by Winkdex, less the expenses of the Trust’s operations,” according to the SEC filing.

The brothers have also introduced the bitcoin index, or so-called Winkdex, which will also be used to price the value of assets held by the Winklevoss Bitcoin Trust.

The trust’s sponsor is Math-Based Asset Services LLC, which was formed in mid-2013. The company will run the new benchmark, tracking bitcoin prices based on “qualified bitcoin exchange transaction data… over a trailing two-hour period,” according to the SEC filing.

Bitcoin is one of the more popular digital currencies available. The cryptocurrency can be stored and traded electronically. The currency is stored in a digital wallet and is traded through a downloadable software or through a third party provider. The main thing traders should understand is that the Bitcoin is itself is considered a form of currency and not just an online service to transfer U.S. dollars.

Many users utilize the currency because the bitcoin is decentralized – there is no central bank issuing or monitoring the currency. Every transaction is validated by a Bitcoin miner – miners are entities within the Bitcoin network that validate the transaction by solving a mathematical proof. This system prevents double counting of Bitcoins and keeps a record of all transactions.

Bitcoin prices have gained widespread attention when the value of the currency skyrocketed above $1,000. However, the cryptocurrency has stumbled in 2014, declining 58.7% year-to-date to about $315.

For Lydon’s original article from ETF Trends, click here.

Bitcoin: Now Coming To a Trading Screen Near You?

bitcoin  MarketsMuse Editor Note: On the heels of the recent announcement that the proposed Bitcoin ETF aka “Winklevoss Bitcoin Trust” with slated ticker symbol COIN is about to be bankable by ETF traders and investors, below extract courtesy of Traders Magazine Online News, July 15, 2014, written by Gregg Wirth

Bitcoin, the crypto-currency that initially became infamous as the tender of choice for drug traffickers and mercenaries, may be coming to a trading desk or institutional portfolio near you – and sooner than you think.

“2014 is going to be the year Bitcoin hits Wall Street,” said Barry Silbert, founder and CEO of SecondMarket, a capital-raising platform for private companies and investment funds. Indeed, there is a growing consensus in some corners of Wall Street and the buyside community that the $7.8 billion  Bitcoin industry is going to become the new, flashy darling of investors, with dedicated digital currency funds, venture capitalists and asset managers all chasing after those 12 million bitcoins currently in circulation.

“Digital currencies like Bitcoin are not going away,” Silbert explained. “And Wall Street and the regulators know this, they’ve studied how to deal with it, and now they are starting to understand its potential.” SecondMarket has gone heavy into the Bitcoin phenomenon, launching the Bitcoin Investment Trust, a $70 million open-ended trust that invests exclusively in bitcoins, as well as a dedicated desk of 10 traders who buy and sell bitcoins for the trust and other institutional clients. SecondMarket is also creating what it hopes to be the largest, best-capitalized and well-run Bitcoin exchange in the U.S., and is enlisting banks and Bitcoin-related firms to be exchange members. Continue reading

The Anger Indicator: A Rareview

Below extract courtesy of this a.m.’s edition of Rareview Macro’s Sight Beyond Sight..(Re-published with permission from Neil Azous)

Neil Azous, Rareview Macro LLC
Neil Azous, Rareview Macro LLC

Here is an aggregation of the various statistics either sent to us from subscribers or we came across during our readings this weekend.

1.  Japan Government Pension Fund (GPIG):  Apple (AAPL), Exxon and Microsoft have the heaviest weighting in the MSCI Kokusai Index; ~87% of GPIF’s foreign stock holdings follow this benchmark. (Source:  Eurofaultlines)

2.  As far as we can tell the degree of these inflows have not yet been widely observed by other paid forecasters on the Street. EM Portfolio Inflows Reach New High In May: Our EM portfolio flows tracker indicates that portfolio inflows to emerging economies continued their upward trend of the last several months, reaching the highest level since September 2012, when the Fed launched QE3 (Chart 1). In May, EMs are estimated to have received $45 billion in portfolio inflows from global investors, up from $28 billion in April and $27 billion in March. The May figure reflects $28 billion going into EM bond markets (portfolio debt flows,Chart 2) and $17 billion into EM stock markets (portfolio equity flows, Chart 3). (Source: Institute of International Finance) Report

3.  This week the S&P 500 will surpass the 1995-96 record for number of consecutive days in which the index has traded above its 200-day moving average.

4.  SPY closed above its upper Bollinger 5 days in a row through Friday. SPY has only closed above its upper Bollinger 4 days in a row 4 times since 2009. (Source: Fat Pitch)

5.  Relative Strength Indicators (RSI)

a.  The S&P 500 (SPY) 9-day RSI is over 70 = Overbought

b.  The NASDAQ (NDX) 9-day RSI is 74 and AAPL’s is 80 = Overbought

c.  The Transports (IYT) 9-day RSI is over 77 = Overbought

d.  The Semiconductors SOX) 9-day RSI is over 70 = Overbought

6.  Since 1950, the DJIA has lost -1.9% and SPX -2.1% in June. The last 20 years have been even weaker. Moreover, the SPX has been down in 11 of the last 16 mid-term elections Junes (Source: Stock Traders Almanac).

7.  The VIX has closed below 12 for five straight days, the longest streak at that level since 2007 (Source:  Volatility Trader) Continue reading

Batter Up: New Hedge Fund For Bitcoins

FINalternatives  Below excerpt is hot of the press and courtesy of one of MarketsMuse’s favorite outlets: FINalternatives..

Coin Capital Management is this week launching a Bitcoin-focused hedge fund, which will buy and hold the leading crypto-currency in an institutional grade environment.

“We are pretty excited about Bitcoin…it is an exciting payment technology,” said Samuel Cahn, managing partner at the New York-based firm. “We are fully dedicated to holding Bitcoin, and we are the first ones to do so in an institutional grade hedge fund using the same types of checks and balances that investors have come to expect.”

For the rest of the reporting, please visit FINalternatives

Bitcoin: Debunking the Myths

tabb forum logoCourtesy of TABB Contributor Nicholas Colas, ConvergEx Group

In the rush to understand what bitcoin is – and isn’t – the public discussion on the topic has gotten a bit muddy. Here are 11 bitcoin myths and the reality under the hype and confusion.

MarketsMuse Editor Note: In deference to copyright and proprietary content protocols, below are 7 of the 11 myths characterized by Nick Colas.. Link below brings you to the full article at TABB Forum. If you are not a paying subscriber, no worries; unconfirmed rumors indicate that TABB is said to be pondering the acceptance of Bitcoins

Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. Today we separate fact from fiction and review 11 bitcoin myths.

Myth #1: Bitcoin is huge

Myth #2: Bitcoin is a major problem in dealing with drugs and terrorism

Myth #3: Bitcoin is a currency. Reality: Bitcoin really is a cross between a mutually held company or large partnership and a money transfer business.

Myth #4: Bitcoin has never been more volatile than now, with all the attention it is getting.

Myth #6: Bitcoin is a store of value.

Myth #7: Bitcoin is untraceable.

Myth #8: Loss of anonymity will make bitcoin worthless.

To read the full article from TABB, click here.