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Two MAS-regulated Bitcoin funds launch in Singapore

The new Bitcoin funds aim to provide simple and secure exposure to Bitcoin for professional investors.

Singapore-based fund manager Fintonia Group has launched two institutional-grade Bitcoin (BTC) funds approved by the Monetary Authority of Singapore (MAS).

The new funds, the Fintonia Bitcoin Physical Fund and the Fintonia Secured Yield Fund, are intended to provide simple and secure exposure to Bitcoin for professional investors, Fintonia announced on Thursday.

The Fintonia Bitcoin Physical Fund targets institutional investors seeking direct exposure to Bitcoin, allowing them to buy, store and sell large amounts of the cryptocurrency. “The fund acquires physical Bitcoin, meaning we will buy the actual Bitcoin rather than a derivative instrument on Bitcoin,” Fintonia founder and chairman Adrian Chng reportedly said.

The Fintonia Secured Yield Fund, on the other hand, provides investors with access to private loans secured by Bitcoin. “Bitcoin is an excellent form of collateral for loans. It trades 24/7 and is highly liquid, with approximately $30 billion to $60 billion per day. If required, it can be quickly liquidated in comparison with, for example, commodities and real assets,” Chng noted.

Both funds rely on a third-party licensed custodian storing clients’ cryptocurrencies on cold wallets. Investments are also insured against theft and hacking, the company said.

Fintonia aims to reduce crypto-to-fiat friction as an MAS-regulated fund manager that complies with Know Your Customer and Anti-Money Laundering requirements. “These open-ended funds provide professional investors with a recognized legal and regulatory structure, similar to that of a typical mutual fund,” the announcement reads.

MAS and Fintonia did not immediately respond to Cointelegraph’s request for comment.

Related: Singapore to position itself as global crypto center, says regulator

The news further reaffirms Singapore’s commitment to becoming a central global cryptocurrency hub as local regulators have issued multiple licenses to legalize crypto trading in the country. According to MAS managing director Ravi Menon, Singapore is developing “very strong regulation” to strengthen its position as the world’s crypto center.

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Russians transact $5B in crypto each year, Bank of Russia says

Though Russia has become a global leader in the crypto market, the Bank of Russia is still skeptical about Bitcoin.

Russian people are among the world’s most active participants of the cryptocurrency market, according to the country’s central bank.

The Bank of Russia published a fresh review on financial stability on Thursday, pointing out the country’s growing role in the $2.8 trillion market.

Citing estimations reported by major local banks in July 2021, the Bank of Russia suggested that the total annual volumes of crypto transactions of the Russian population amount to 350 billion rubles, or $5 billion.

It is unclear whether the Bank of Russia has converted these estimations as the price of Bitcoin (BTC) has almost doubled since July, surging from around $30,000 to over $60,000 in November.

In the report, the Bank of Russia also noted that the Russian Federation is among global leaders in terms of visits to the Binance cryptocurrency exchange. According to data from the digital intelligence provider SimilarWeb, Russia is the second bigg in terms of total traffic on Binance after Turkey.

The Russian central bank also noted that Russia is one of the world’s largest Bitcoin mining countries, ranking third in terms of national hash rates, according to Cambridge Bitcoin Electricity Consumption Index as of August 2021.

Despite admitting Russia’s leading position in the global cryptocurrency market, the Bank of Russia still outlined major risks associated with the industry, including those associated with financial stability, investor protection, money laundering and criminal financing as well as ESG risks.

The central bank did not suggest any immediate measures to address these risks but said that it would be closely monitoring the market to identify potential threats:

“The relationship between digital currencies and the financial sector remains limited at the moment. However, the rapid growth and the widespread adoption of digital currencies would pose higher risks both globally and for the Russian financial market.”

Related: Russian crypto market worth $500B despite bad regulation, says exec

The Bank of Russia has taken a hard stance on cryptocurrencies, with governor Elvira Nabiullina arguing that responsible governments should not drive crypto adoption. The central bank is known for not allowing local banks to deal with crypto and promoting the use of its own digital currency instead. This has led to a situation where no Russian crypto exchange can now offer its services legally.

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Finnish regulators tighten the screw on virtual currency marketing

The Finnish Financial Supervisory Authority published stricter rulings regarding crypto marketing.

Hot on the heels of the rising cryptocurrency hype, Finnish regulators have dropped a formal notice. On Nov. 24th, the Financial Supervisory Authority (FIN-FSA) stated:

“Only registered virtual currency providers can market virtual currencies and related services in Finland. The marketing of virtual currencies in Finnish and in Finland is only allowed for entities registered as virtual currency providers in Finland.”

Finland is a highly economically free country, ranking 17th in the Index for Economic Freedom. However, as LocalBitcoins CEO Sebastian Sonntag told Cointelegraph upon receiving their FSA license in 2019:

“The controls in the financial sector are of particularly high quality and the position of the clients is well protected.”

It appears that the FSA is keen to protect investors — particularly retail — who are more likely to be influenced by marketing activities. If the 2020–2021 bull runs' meme mania is anything to go by, there will be more retail FOMO across the globe.

The FSA press release is a direct response to the rise in marketing of virtual currencies and related services across Finland. Finnish media observed increasing traffic for cryptocurrency articles, while in a recent editorial by mainstream outlet the Helsinki Times, writers concluded that crypto is trendy in Finland and will hold its popularity for years to come.

Elsewhere in Finland, local crypto adoption is brewing. Finnish esports company Elisa Esports announced a partnership with cryptocurrency firm Coinmotion to bolster the Nordic esports scene. 

Related: Finnish Customs Puzzled on What to Do With 15M Euro Seized in Bitcoin

However, the list of Supervised Entities operating in the cryptocurrency and virtual currency space is still small. Less than 10 companies are registered, so the recent notice may be a nod toward future regulation and the evolving regulatory landscape.

Crucially, the FSA cannot advise on Finnish customers visiting foreign websites. Nor does the recent initiative affect advertising on international websites not explicitly targeted at Finnish citizens.

As a result, while regulators get to grips with the local market, Finnish crypto-advocates can continue to visit international crypto websites.

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Morgan Stanley increased exposure to Bitcoin, held $300M in Grayscale shares

The investment firm's exposure to Bitcoin across three major funds totals roughly $303 million with 6,626,381 shares as of Sept. 30.

Investment funds from major U.S. investment bank Morgan Stanley have increased their exposure to Bitcoin through purchases of shares of Grayscale Bitcoin Trust.

According to filings from the United States Securities and Exchange Commission on Tuesday, the Morgan Stanley Insight Fund increased its holdings of Grayscale Bitcoin Trust, or GBTC, shares more than 63%, from 928,051 in the second quarter of 2021 to 1,520,549 as of Sept. 30. In addition, filings on the firm’s Growth Portfolio show it holding 3,642,118 GBTC shares in the third quarter of 2021, an increase of 71% when compared with 2,130,153 shares as of Q2. The Morgan Stanley Global Opportunity Portfolio held 1,463,714 GBTC, a 59% increase from 919,805 shares in three months.

At the time of publication, the price of GBTC is $45.72, making the investment bank’s exposure to Bitcoin (BTC) across these three funds roughly $303 million with 6,626,381 shares as of Sept. 30. The BTC price was under $50,000 for much of September, but the crypto asset has since reached an all-time high price of $69,000 before sliding back to the $56,000s.

The respective portfolios and funds allow Morgan Stanley to gain exposure to Bitcoin (BTC) without investing directly in the cryptocurrency. Cointelegraph reported in September that the firm’s Europe Opportunity Fund, which invests in established and emerging companies throughout Europe, more than doubled its shares of Grayscale Bitcoin Trust since April. However, the fund has not reported additional BTC exposure at the time of publication.

Related: Grayscale hints at plans to convert Bitcoin trust into BTC-settled ETF

Whether investing indirectly through Grayscale or by backing blockchain platforms, Morgan Stanley seems to be dipping its toes deeper into the crypto space. In September, the firm announced it would be setting up a crypto-focused research division aimed at exploring the “growing significance of cryptocurrencies and other digital assets in global markets.”

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Binance reportedly wants global wealth funds to get a stake in exchange

Binance CEO Changpeng Zhao is the biggest shareholder of Binance, with a net worth estimated at $8 billion in early 2021.

Binance, the world’s largest cryptocurrency exchange, is reportedly in talks with sovereign global wealth funds to sell them a stake in the company.

In addition to planned “mega funding” for its United States-based business Binance.US, Binance is now also seeking global funding to improve relationships with regulators, Binance CEO Changpeng Zhao said in a Tuesday interview with The Financial Times.

According to Zhao, the upcoming funding is aimed to improve its “perception and relationships” with many governments as multiple financial regulators around the world have been cracking down on Binance this year.

“But it may also tie us to specific countries, which we want to be slightly careful with,” the CEO noted.

As Binance is currently at the preliminary stages of discussions, it’s still early to disclose the names of wealth funds involved in the capital raising, Zhao said. “The ticket size involved will not be small. It won’t be a short process.”

Being the biggest shareholder in Binance, Zhao is one of the world’s richest men in the cryptocurrency industry, with a total net worth estimated at $8 billion as of January 2021.

According to the CEO, Binance’s daily transaction volumes surged up to $170 billion in November 2021 from just $10 billion to $30 billion two years ago. Binance.US, the American business operating separately from the global Binance exchange, is planning to raise a “couple hundred million dollars” by early 2022.

Global regulators have been increasingly scrutinizing the Binance exchange this year, with at least a dozen of governments publishing warnings against the firm, including countries like the United States, the United Kingdom, Italy, Canada, Japan, Singapore, Germany and others.

Related: Binance continues push to become regulated crypto exchange with new hire

Binance has taken a number of measures to improve its relationships with global regulators, halting some of its services in certain countries and hiring high-profile executives from traditional finance.

Zhao reportedly said he was not worried about illegal activity on Binance’s platform because the company was “probably better than banks” regarding Know-Your-Customer (KYC) and Anti-Money Laundering (AML) policies and measures.

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Institutional managers bought the dip as crypto funds see $154M in weekly inflows

Bullish sentiment surrounding crypto has not wavered despite the recent market correction that saw Bitcoin fall to sub-$57,000 levels.

Institutional investors were unfazed by the recent correction in the cryptocurrency markets, as digital asset funds dedicated to Bitcoin (BTC) and Ether (ETH) continued to grow, according to data from CoinShares. 

Crypto investment products, which include exchange-traded funds (ETFs), saw weekly inflows totaling $154 million for the week ending Nov. 20, according to CoinShares’ latest fund flows report. Like in previous weeks, Bitcoin investment products attracted most of the inflows at $114.4 million. Funds devoted to Ether saw weekly inflows of $12.6 million and multi-asset products registered $14.1 million in net investments.

Year-to-date, institutional investors have allocated over $6.6 billion to Bitcoin products, $1.17 billion to Ether products and more than $9.2 billion to crypto as a whole.

Grayscale, which is the largest crypto asset manager, recorded $51.9 billion in assets under management as of Nov. 19.

October was a record-breaking month for Bitcoin funds thanks in part to the approval of two futures-linked ETFs in the United States. Institutional managers bought $2 billion worth of Bitcoin funds over the course of the month as the BTC price reached new all-time highs. 

Although November has been less bullish for Bitcoin from a price perspective, the latest funds flows data suggests that investors are not concerned by the market correction. As Cointelegraph reported, Bitcoin touched a low of around $56,500 on Nov. 20 before correcting higher. The flagship cryptocurrency remains vulnerable to another pullback in the short term as price consolidates below $58,000.

Related: $60K becomes resistance — 5 things to watch in Bitcoin this week

According to a recent tweet from crypto analyst TechDev, the 2021 bull market has been lagging the 2017 cycle by five-to-eight days as of July. If the trend continues, Bitcoin and the broader market could be poised for a breakout higher in the medium term.

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Crypto startup MoonPay raises $555M to hit $3.4B valuation

Launched in 2019, MoonPay says it has processed more than $2 billion in transactions and hit 7 million users so far.

Cryptocurrency fintech startup MoonPay has closed its first-ever venture capital round, reaching $3.4 billion in post-money valuation.

The firm officially announced Monday that it closed a $555 million Series A funding round led by prominent industry investors like American investment firm Tiger Global and tech-focused investment manager Coatue. Other participants included Blossom Capital, Thrive Capital, Paradigm, and the New Enterprise Associates venture capital firm.

The raised capital is the first funding secured by MoonPay in 2.5 years since the company was founded in 2019 by two young entrepreneurs, Ivan Soto-Wright and Victor Faramond. The firm says it has processed more than $2 billion in transactions and reached a customer base of over 7 million users.

The fintech firm is focused on providing payments infrastructure for crypto, enabling crypto-to-fiat transactions for 30 fiat currencies and more than 90 cryptocurrencies like Bitcoin (BTC). According to the announcement, MoonPay’s fiat-to-crypto on-ramp enables over 250 crypto applications, websites and wallets, including Bitcoin.com, covering more than 160 countries.

Apart from offering classic crypto services, MoonPay also provides a native nonfungible (NFT) token solution that allows users to buy and sell NFTs. Last week, rapper Post Malone promoted MoonPay in a music video with The Weeknd by buying two Bored Ape Yacht Club NFTs for a combined 160 ETH via the exchange.

Related: TradingView completes new funding round with $3B valuation

With the new funding, the firm expects to expand its services over the world and continue hiring new talent. According to MoonPay co-founder and CEO Soto-Wright, the firm is positioning itself as the world’s “largest provider of crypto payments infrastructure.”

MoonPay did not immediately respond to Cointelegraph’s request for comment.

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Shiba Inu team issues scam alert to SHIB investors

The team warned SHIB investors about scammers that are impersonating official accounts and creating fake users.

The team behind meme cryptocurrency Shiba Inu (SHIB) has issued a public warning against ongoing online scams that primarily target altcoin investors interested in SHIB tokens. 

The proactive scam alert came in the form of a tweet detailing the various methods used to dupe unsuspecting victims from the Shiba Inu community. 

The warning further stated, “A fake Shiba Telegram group is being shared across all social media. The scammers impersonate official accounts and create fake users. These scammers reply to general posts.”

While Shiba Inu attracts aspiring crypto millionaires and billionaires, bad actors have ramped up efforts targeting unwary investors on social media platforms including Twitter and Telegram. Some of the common methods used to contact potential victims are impersonating official accounts and targetting hashtags such as #shib #shibarmy #leash #shibaswap and #bone.

Furthermore, Shiba Inu’s scam alert highlighted that the community is not offering any kind of promotions including airdrops, bonuses, giveaways or gifts. As a general rule, investors are expected to refrain from sharing wallet keys, credentials or joining and following fake social media accounts.

Related: Meme tokens and dogcoins flood the market as price wars heat up

Taking inspiration from Shiba Inu’s success, numerous dog-themed tokens have started to flood the crypto marketplace. Most recently, SHIB hit an all-time high of $0.000086 on Oct. 28 but has been struggling to keep up its value.

Shiba Inu’s development team has also developed and released another token called Doge Killer (LEASH), which has also seen 130.3% gains recently.

In addition to the token’s mainstream adoption, a growing community of investors has placed SHIB in some of the most popular crypto exchanges including Binance.US and Crypto.com.

The hype around the Dogecoin (DOGE) spinoff is attributed to an extended bull market period that returned high profits for small-time investments. As Cointelegraph reported, an $8,000 investment made by a 35-year-old supermarket warehouse manager in early 2021 is now worth over a million dollars. 

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NFT sales boom, but ownership is highly concentrated

There were two surges in the market this year that also coincided with solid spikes in internet searches for the term “NFT.”

Trading volumes across various verticals of nonfungible tokens (NFTs) have been on a tear this year.

Combined sales for collectible and art NFTs have reached $7.4 billion as of Q4 2021. The art NFT market has grown from $17.8 million on January 1 to $1.8 billion in total sales as of Nov. 5, 2021. At the beginning of 2021, the collectible NFT market started with a total sales volume of $55.5 million. It has since ballooned to $5.6 billion. As reported by Reuters, total NFT sales volumes jumped from $1.3 billion in Q2 to $10.7 billion in Q3.

Record sales like that of the rare Bored Ape Yacht Club NFT, which went for a record $3.4 million on Oct. 26, puts the frenzy of the NFT market into more context. The sale closed on Sotheby’s online art auction platform Metaverse. The last record auction of a Bored Ape Yacht Club NFT happened in September, closing at $2.9 million. The Oct. 26 record took place in tandem with another expectation-beating auction the same day in which a Bored Ape Yacht Club NFT collection auction of 101 pieces sold for $24.39 million.

The Bored Ape Yacht Club NFT art series, which launched in April 2021, has accumulated almost $1 billion in total sales this year, according to DappRadar. Sotheby’s first auction of NFT artist Pak fetched $16.8 million in April as well, and Christie’s followed with an NFT piece by artist Beeple for $69 million. 

“What we are seeing with NFTs is the emergence of an entirely new audience of traders into the space, driven by possibly the most friendly on-ramp to crypto ever seen,” Pedro Herrera, senior blockchain analyst at DappRadar, told Cointelegraph.

The “hype machine” is real

In April, the art and data science blog Artnome highlighted the correlation between the number of views by registered collectors on SuperRare and an NFT’s sale price on the platform. The authors concluded that “the hype machine is real,” as data showed that the number of views by registered collectors of a work correlated to a higher sales price for the NFT. 

There were two surges in the market this year that also coincided with solid spikes in internet searches for the term “NFT.” The first happened after the highest-paid price for an NFT — Beeple’s $69 million auction of his photo collage “Everydays: The First 5,000 Days” — was sold through Christie’s online auction site on March 11. It was the first NFT ever to be auctioned at a major fine art auction house, and the hype poured fuel on the market. The total monthly sales volume in the art NFT market surged from $32 million on March 1 to $83 million by April 1.

The second surge came on July 31, when sales in the collectible NFT market increased from $1.2 billion in total all-time yearly sales to $4.65 billion by Sept. 30. The peak of the “NFT” search term coincided with two of the most popular AI-generated collections, CryptoPunks and the Bored Ape Yacht Club, beginning to dominate the crypto art market. 

Concentrated ownership

In a May 2021 New York Times op-ed, Hungarian network scientist Albert-László Barabási described his analysis of transactions that took place on the SuperRare crypto art NFT marketplace platform.

In the analysis, Barabási examined the number of co-owned art NFT transactions between collectors on the platform. He defined co-owned art NFTs as art NFTs that had been bought and sold between more than one collector through SuperRare. He analyzed each artwork as a “node” on a “network” of transactions between registered SuperRare collectors to see how many of the same pieces had been owned by different collectors. 

His reasoning was that art collectors typically collect and trade in one type of art, whether a particular artist, style, genre or medium. Therefore, he hypothesized that there were only a small group of collectors making the purchases of the high-end art NFTs. 

As it turns out, he was correct. Barabási found that a group of four collectors owned most of the works with only three degrees of separation between any one of them and the 16,000 works of art they collected.

In a report released by crypto analytics firm Moonstream that analyzed transactions on the Ethereum blockchain between April and the end of September, the authors found that there is great inequality in the Ethereum NFT market, with the top 16.71% of NFT owners controlling 80.98% of the NFTs. 

Furthermore, most of those purchases are for NFTs with more extrinsic than intrinsic utility — think utility tokens like name service NFTs — that have a common functionality on-chain versus rare CryptoPunks collectible NFTs going for seven figures.

The report also discovered that 83.29% of the addresses which assumed ownership of an NFT, did so for less than 10 Ether (ETH). 

Even though the Moonstream data looks at the broader NFT market, it seems to support Barabási’s analysis that, for the higher-end, intrinsically-valued crypto art market, there is a small, tight club of whales who own the majority of the NFTs. Many of these owners are collectors and marketplaces. But, the report also noted that the barrier to entry for the NFT market is low, and disbursement of NFT ownership is correlated to the level of extrinsic utility of the NFT. 

In a poll conducted by The Harris Poll and Adweek in April, 40% of the 1,088 participants surveyed said they were “familiar” with NFTs and 81% said they were aware of NFTs.

“Overall, not many Americans have jumped on the NFT bandwagon yet — only 12% of respondents said they’ve invested in the digital collectibles. But among millennials, that number’s a bit higher: 27% say they’re currently investing in NFTs. Millennials are also the most likely cohort to invest in cryptocurrencies at 37%,” according to the poll.

“Predictably, those who consider themselves ‘collectors’ are also more likely to want a piece of the shiny new digital collectible pie. For overall collectors, 22% said they own NFTs, and for collectors with more than $100,000 in annual income, that jumps to 33%.”

As conveyed in the Hiscox Online Art Trade Report for 2021, the current situation in the market has become hard for many art veterans to understand due to the current values of CryptoPunks and Bored Ape Yacht Club pieces at auction. Many do not know what’s hype and what is not. Perceptions are changing, though. The report’s survey of art auction houses and online websites found that 14% of art marketplace platforms already offer NFTs for sale on their platforms, with another 38% surveyed stating that they are planning to do so soon. 

According to the report, there is speculation that the traditional and crypto art markets could merge into a permanent hybrid experience where physical art galleries showcase crypto art and traditional artworks are digitized and sold online. This year, at least four of the most expensive crypto art sales took place on traditional online art auction platforms.

Bobby Ong, co-founder and chief operating officer of CoinGecko, told Cointelegraph:

“Perhaps one of the biggest signs of traditional art collectors entering the NFT market is the fact that traditional auction houses like Christie’s and Sotheby’s are conducting NFT auctions and bridging the gap between NFTs and art collectors.” 

Besides the pandemic, the report highlighted two instigating factors fueling the proliferation of the crypto art market in 2021. First, two of the major traditional art auction houses, Christie’s and Sotheby’s, began accepting cryptocurrency as a form of payment. The use of cryptocurrency as payment was a way for the two auction houses to attract and cater to wealthy crypto investors. 

Secondly, NFTs provide artists with a public ledger that creates proof of title and authenticity for their work. Besides protecting against theft and forgery, this allows artists to collect royalties in the secondary NFT art market.

Will digital art go mainstream?

With individual CryptoPunk NFTs going for seven-figure price tags, what will it take for the art and collectible NFT markets to go mainstream?

In the April 2021 post on Artnome, the authors stated one of crypto art’s greatest achievements so far has been to “puncture the illusion of contemporary art as a space for ‘high’ culture.” The authors also voiced their intention “to point a way beyond the current situation, in which speculation appears to be as much a driver of art’s value as the works themselves.” 

As DappRadar’s Herrara said, “It’s important to draw lines between different types of NFTs. Sure, a CryptoPunk is now the equivalent of a Picasso. Therefore it’s outside most people’s financial reach. However, new and exciting collections, with the potential to become as valuable as CryptoPunks arrive daily with price tags under $400. So frankly, you don’t need millions in your wallet to get involved.”

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