New data from Bitcoin brokerage firm River reveals that the largest US hedge funds have combined to accumulate billions of dollars worth of BTC exchange-traded (ETF) shares. In a new thread on the social media platform X, River says that even though BTC’s market cap is relatively small, many of the largest hedge funds in […]
The post Largest US Hedge Funds Collectively Own Over $2,600,000,000 in Bitcoin ETF Shares: BTC Brokerage Firm River appeared first on The Daily Hodl.
The frenzy surrounding GME and AMC remains ongoing, with both stocks experiencing increases of 200% and 150%, respectively, over the past five days. In the midst of this excitement, CNBC’s Mad Money host Jim Cramer suggested that the companies would be foolish not to seize the opportunity to raise capital by issuing shares. Socialite Andrew […]
Many of Goldman Sachs’ largest clients are ramping up their activity in the crypto space following spot bitcoin exchange-traded fund (ETF) approvals and BTC price recovery. “The recent ETF approval has triggered a resurgence of interest and activities from our clients,” said Goldman Sachs’ Asia Pacific head of digital assets. Goldman Sachs’ Clients Getting Active […]
The SEC and its staff are “continuing to consider” the term “digital assets” despite proposing a definition of the term around nine months ago.
The United States securities regulator is holding off from ratifying the definition of the term “digital assets” in rules that govern reporting disclosures for hedge and private equity funds, despite proposing to do so some nine months ago.
On May 3 the Securities and Exchange Commission (SEC) published amendments to Form PF — a form that SEC-registered funds complete to disclose basic information about their fund so the regulator can assess potential “systemic risks.”
The SEC originally included a digital assets definition in an August 2022 proposal for the changes. If it went into effect, it would have been the first time the SEC defined “digital assets.”
Fast forward to today and the regulator says it's not going ahead with adding the definition, at least for now.
“We proposed adding ‘digital assets’ as a new term to the Form PF Glossary of Terms. The Commission and staff are continuing to consider this term and are not adopting ‘digital assets’ as part of this rule at this time.”
The definition the SEC put forward for digital assets was an asset “that is issued and/or transferred using distributed ledger or blockchain technology” and included other commonly used terms such as “virtual currencies,” “coins” and “tokens.”
Today the SEC finalized their new Form PF rules. The proposal included the 1st definition of “digital assets” in a rule. It is interesting that the SEC choose to NOT adopt the definition in their final rule. https://t.co/5y1UXbJqBd
— Anne Kelley (@amk_dc) May 3, 2023
The SEC said in its August proposal that currently, information regarding a fund's digital assets are reported in an “other” category and results in “less robust Form PF data for analysis.”
It proposed the definition in order to obtain separate, and by extension, more accurate reporting on such assets.
“We believe it is important to collect information on funds’ exposures to digital assets in order to understand better their overall market exposures.”
However, the latest updates to the SEC’s Form PF rules now require — among other new requirements — that SEC-registered funds report the occurrence of key events that could indicate systemic risk or harm to investors in a likely response to the U.S. banking crisis.
Related: SEC’s war on crypto: How far will it go?
Firms must also disclose details of their fees and expenses as the SEC tries to cast a light on the multi-trillion dollar sector.
The SEC hasn’t always shied away from crypto-related definitions, announcing in mid-April that it would revisit its definition of an “exchange” to possibly include decentralized finance (DeFi).
SEC chair Gary Gensler has also long been vocal on his claim that cryptocurrencies are securities under his Commissions remit and the U.S. crypto sector is acting afoul of securities laws.
Hall of Flame: Crypto Wendy on trashing the SEC, sexism, and how underdogs can win
After Kevin Zhou, the co-founder of the hedge fund Galois Capital, revealed half of the firm’s assets were held on FTX, another crypto asset management firm called Ikigai detailed that “a large majority of the hedge fund’s total assets” were stored on FTX. Ikigai chief investment officer, Travis Kling, told the public on Twitter and […]
Two prominent US regulators are looking to add beefed-up crypto disclosure guidelines for private hedge funds. According to a recent press release, the US Securities and Exchange Commission (SEC), in conjunction with the Commodity Futures Trading Commission (CTFC), is proposing enhanced reporting rules for large private funds. The updated regulations would require funds to provide […]
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Tether said the hedge funds that saw Terra’s collapse as a reason to short USDT have “a fundamental misunderstanding of both the cryptocurrency market and Tether."
Tether, the issuer of Tether (USDT), says that hedge funds that attempted to short its stablecoin after Terra’s collapse in May are using a thesis that is “incredibly misinformed” and “flat out wrong.”
In a blog post from July 28, Tether pointed to a June 28 Wall Street Journal podcast in which host Luke Vargas and guest Caitlin McCabe discussed the bearish crypto market and concerns over Tether’s backing assets as the reasons for short sellers’ appetite for Tether.
Tether said that the hedge funds, which saw Terra’s collapse as a reason to short USDT, have “a fundamental misunderstanding of both the cryptocurrency market and Tether."
“The simple fact that hedge funds view Terra’s collapse as a constructive thesis to short USDT represents the asymmetric knowledge gap between cryptocurrency market participants and entities in the traditional finance space.”
In early May, UST lost its peg in dramatic fashion and pulled down the price of Terra ecosystem’s native token LUNA - now known as LUNC - to fractions of a cent from over $60.
In that time, Tether experienced a 21% drop in market cap since May 11 from $85.3 billion, though it is still the largest stablecoin in the crypto market today with a $65.8 billion market cap according to CoinGecko.
In late June, Tether chief technology officer Paolo Ardoino confirmed that USDT had become the subject of a "coordinated attack" by hedge funds looking to short-sell the crypto asset.
He alleged that hedge funds have been trying to create pressure “in the billions” to “harm Tether liquidity” with the aim of eventually buying back tokens at a much lower price.
Tether in its most recent blog post noted that several misconceptions about its holdings have been the basis of this short-selling movement — including Tether holding significant Chinese commercial paper or Evergrande debt, that USDT is created “from thin air,” or that Tether has issued unsecured loans.
“In short, the underlying thesis of this trade is incredibly misinformed and flat-out wrong. It is further supported by a blind belief in what borders on outright conspiracy theories about Tether.”
In a separate post the previous day, Tether attempted to reaffirm the strength of its financial backing and ability to honor redemptions, reiterating that it holds no Chinese commercial paper and had cut its total holdings of commercial paper by 88% from $30 billion to $3.7 billion over the past year.
It added that commercial paper holdings would be as low as $300 million by the end of August, and it will hold zero commercial paper by early November.
Related: Tether fortifies its reserves: Will it silence critics, mollify investors?
The week that the UST fiasco started, USDT depegged briefly on the open market to a low of about $0.96 as investors dumped tokens either for fiat through direct redemptions or for other tokens, such as competitor USD Coin (USDC). However, Tether continued to honor fiat redemptions of $1 per token through that period.
Its last financial disclosure on March 31 revealed that 85.64% of Tether’s financial backing is in cash and cash equivalents, including commercial paper.
The chief executive of crypto asset management company Galaxy Digital, Mike Novogratz, thinks the majority of crypto hedge funds could be headed toward dark days in the future. Novogratz outlined his opinions while speaking at Piper Sandler Global Exchange & Brokerage Conference on Wednesday, predicting that two-thirds of the roughly 1900 crypto hedge funds in […]
The post The Majority of Crypto Hedge Funds Will Go Out of Business, Predicts Galaxy Digital CEO Mike Novogratz: Report appeared first on The Daily Hodl.
Billionaire hedge fund manager and founder of Pershing Square Capital Management, Bill Ackman, believes “inflation is out of control.” The investor thinks that if the Federal Reserve “doesn’t do its job” by applying “aggressive monetary tightening,” the U.S. economy could collapse. Pershing Square Founder Bill Ackman Thinks ‘Inflation Is out of Control’ While the headlines […]
Company founder Ken Griffin has backtracked on his anti-crypto stance and wants his firm to offer digital assets to its clients this year.
American multinational hedge fund and financial services company Citadel is poised to enter cryptocurrency markets this year.
Speaking on Bloomberg Wealth with David Rubenstein, Citadel founder Ken Griffin commented on the current state of markets in light of recent geopolitical conflicts stating that they are at a “very volatile inflection point.”
When the interview turned to digital assets, Griffin who has previously warned the younger generation away from them and said “there’s no need for cryptocurrencies,” revealed that the firm would be engaging in crypto asset markets this year.
“It’s fair to assume that over the months to come, you will see us engage in making markets in cryptocurrencies.”
Its quite the turnaround from November 2017, when Griffin said: “Bitcoin right now has many of the elements of the tulip bulb mania we saw back hundreds of years ago in Holland.” At the time, when BTC was trading around $10,000, he added “these bubbles tend to end in tears. And I worry about how this bubble might end.”
During the Bloomberg Wealth interview Griffin acknowledged that he was wrong to have been in the "naysayer camp" with regard to digital assets. “Crypto has been one of the great stories in finance over the course of the last 15 years,” he stated before adding:
“And I’ll be clear, I’ve been in the naysayer camp over that period of time. But the crypto market today has a market capitalization of about $2 trillion in round numbers, which tells you that I haven’t been right on this call.”
He said that he was still skeptical but “there are hundreds and millions of people in this world today who disagree with that.”
“To the extent that we’re trying to help institutions and investors solve their portfolio allocation problems, we have to give serious consideration to being a market maker in crypto.”
Citadel analyzes global markets employing a range of strategies to deliver market-leading investment returns to its capital partners. Griffin wants the firm to encompass crypto assets into these strategies over the coming months.
In January, Citadel Securities announced its first outside investment worth $1.15 billion from two prominent crypto venture capital firms Sequoia Capital and Paradigm. Citadel, which currently has around $38 billion in assets under management, was valued at $22 billion following the investments.
Related: Citadel Securities takes in $1.15B investment from Sequoia and Paradigm
As recent as November, Griffin remained highly skeptical about cryptocurrencies stating at the time that people are focused on new ideas and that he worried “that some of this passion is misplaced when it comes to cryptocurrencies.”
The billionaire investor did go on to tout the properties of Ethereum, however, opining that assets based on Ethereum will eventually replace Bitcoin which has a greater environmental impact.
