Weekly Cryptocurrency Market Review: New Funds and Financial Penalty

Morgan Stanley is reportedly supposed to offer wealthy clients access to three funds bitcoin. Thus, for the first time a large American bank will offer customers this type of product. Two of the funds come from the provider of financial and cryptocurrency services - Galaxy Digital, listed on the stock exchange as GLXY: tsx, while the last fund is the result of cooperation between FS Investments and NYDIG. 

About the Author

Mads Eberhardt, Cryptocurrency Market Analyst, Sax Banks. Cryptocurrency Market Analyst at Saxo Bank. He gained experience as a trader at Bitcoin Suisse AG and founder http://BetterCoins.dk (website taken over by Coinify).

BTC funds from Morgan Stanley

However, Morgan Stanley's offer is associated with quite large restrictions. First, private clients must have at least $ 2 million in assets in Morgan Stanley to qualify for such a fund. For investment firms, this requirement is $ 5 million. Second, the accounts must be kept for at least 6 months. Third, customers who qualify will only be able to invest up to 2,5% of their total net worth in funds. As a result, this limits both the number of customers who will be able to take advantage of this offer and their potential involvement in cryptocurrencies. 

There are many indications that Morgan Stanley aims to expand its activities in the cryptocurrency marketas it is reportedly negotiating the acquisition of a significant portion of the leading Korean cryptocurrency exchange Bithumb. Its valuation would amount to USD 2 billion. Thus, Morgan Stanley joins such American banks as JPMorgan, Goldman Sachs or BNY Mellonwhich also offer cryptocurrency products.

Coinbase is delaying its listing

Since the end of 2020, it has been known that the largest cryptocurrency exchange based in the United States, Coinbase, is preparing to introduce shares to public trading. About a month ago, Coinbase published application S-1 filed with the United States Securities and Exchange Commission (Securities and Exchange Commission, SEC) for the first time by making their finances public. Coinbase was then able to go public in March. Currently, however, this entry has been postponed until at least April. 

The delay is due to the publication on Friday settlement with the Commodity Trade Commission for Futures (Commodity Futures Trading Commission, CFTC). As part of the settlement, the company was fined USD 6,5 million. The CFTC found that, from January 2015 to September 2018, Coinbase was using two automated trading programs. In some cases, these programs transacted with each other. As a result, the CFTC maintains that Coinbase provided misleading data via its API to indices such as the CME Bitcoin Real Time Index and the NYSE Bitcoin Index, as trading activities could potentially be misleading in terms of volume and liquidity levels. Coinbase did not explain why it used trading programs. The aim could have been to better hedge orders from retail clients using two separate methods, which would mean that in some cases these programs would transact with each other.

Grayscale adds five new cryptocurrency trust funds

Grayscale, the world's largest cryptocurrency asset manager, last week included five new cryptocurrency trust funds. They invest in Chainlink, Filecoin, Basic Attention Token, Livepeer and Decentraland respectively. The new funds were registered in the state of Delaware in December and October 2020. Since then, the cryptocurrency community has speculated when (if any) these funds would be made available to investors. Grayscale was managing value assets this Monday USD 44,2 billionwhile the overall cryptocurrency market capitalization is $ 1,7 trillion. Due to the fact that Grayscale is responsible for a significant part of the overall market capitalization, it is quite logical to include newly added cryptocurrencies in the mutual funds. Institutions most often invest in Grayscale mutual funds, which may indicate an interest in exposure to these cryptocurrencies.