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VanEck Report States Why Institutions Should Hold Bitcoin

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VanEck Report States Why Institutions Should Hold Bitcoin
VanEck Report States Why Institutions Should Hold Bitcoin

A report published by investment management firm VanEck on Jan. 29 suggests that institutional investors should allocate a small percentage of their capital into Bitcoin (BTC). Per the report, “Bitcoin may enhance the risk and return reward profile of institutional investment portfolios.” The researchers also claim:

“A small allocation to Bitcoin significantly enhanced the cumulative return of a 60% equity and 40% bonds portfolio allocation mix while only minimally impacting its volatility.”

Among all the portfolios considered by VanEck, the one consistently showing the highest return was the one that had 3% in Bitcoin. Still, the report explains that Bitcoin’s nature as a bearer asset and lack of infrastructure linking it to capital markets is an obstacle to institutional adoption. VanEck also claims that Bitcoin can potentially become digital gold given its scarcity, monetary value, and ease of transfer. The researchers admit that Bitcoin is not a currency, but still has the potential to become one:

“Bitcoin is not quite a currency but most certainly is a money, however it may become a currency in the future.”

An in-depth comparison of the features of the United States dollar, gold, and Bitcoin contained in the report also suggests that Bitcoin has more of the features that are desirable from an asset that serves as money than gold itself.

Many in the crypto community have high hopes for Bitcoin as an investment asset. As it was recently reported, founder and partner of crypto venture capital fund Morgan Creek Digital suggested that Bitcoin recently reaching $10,000 is just the first step in its way towards $100,000 by 2021.

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Finnish Customs No Sure What To Do with 15M Euro Seized in Bitcoin

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Finnish Customs No Sure What To Do with 15M Euro Seized in Bitcoin
Finnish Customs No Sure What To Do with 15M Euro Seized in Bitcoin

While some governments are selling bitcoins (BTC) confiscated through law enforcement actions, Finland is yet to decide what to do with its seized BTC. Finnish Customs, operating under the Ministry of Finance, has reportedly been deliberating about what to do with 1,666 bitcoins seized from drug criminals years ago. As reported by Finland’s national public broadcasting firm on Feb. 25, the Finnish Customs service doesn’t want to auction the confiscated Bitcoin because the cryptocurrency could be returned to the hands of criminals.

According to the report, at the time of the seizure the amount of confiscated Bitcoin was worth less than 700,000 euros, or roughly $760,000. As of press time, 1,666 BTC is worth nearly 15 million euros — or more than $15.5 million, according to data from Coin360. The authority was reportedly initially planning to auction the funds back in 2018, but eventually ended up with hodling the crypto, citing Anti-Money Laundering (AML) concerns. Pekka Pylkkänen, head of finance at the Finnish Customs service, said that cryptocurrencies like Bitcoin are primarily used for illicit practices:

“From our point of view, the problems are specifically related to the risk of money laundering. The buyers of cybercurrency rarely use them for normal endeavours.”

Apart from holding over $15 million in Bitcoin, Finnish Customs also holds a number of seized altcoins worth of millions of euros, the report notes. 

Whatever the reason behind Finnish Customs’ decision to hodl the confiscated crypto, the authority is apparently not alone in thinking that Bitcoin and other cryptos might be more dangerous than cash in terms of money laundering. In July 2019, Treasury Secretary Steven Mnuchin voiced an extremely sceptical opinion of Bitcoin, arguing that cash is not laundered in the same way as Bitcoin. Meanwhile, other countries over the world do not appear so concerned about taking profits from hodling Bitcoin.

On Feb. 18, the United States Marshals Service sold another batch of Bitcoin confiscated during its enforcement operations. According to data compiled by well-known crypto industry figure Jameson Lopp, the U.S. Marshals has missed out on over $1.7 billion by selling seized Bitcoin too early. The agency has confiscated and sold 185,230 bitcoins, according to Lopp’s data.

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Bitcoin Gold May Be Held Captive by Whale With Almost Half The Supply

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Bitcoin Gold (BTG)’s price is being manipulated by a whale controlling close to half of the circulating supply. These are the findings of an analysis conducted by an independent trader and analyst, who preferred to remain anonymous. He published his findings in a blog post, where he explained why he believes a single group of people accumulated their way into a huge Bitcoin Gold position, and are now using that supply to control the market.

The events started in August 2018, when Bitfinex margin long positions began its sharp ascent to include almost two million BTG. The exchange makes its margin data publicly available, which can help gauge the general trader sentiment in a particular coin — for example by comparing the ratio of short and long positions.

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In Bitcoin Gold’s case, the strong increase in margin positions was accompanied by lackluster price action. While the coin generally followed the broader crypto market, the price eventually spiraled downward.

The analyst estimated that the 1.9 million BTG held at some point in Bitfinex represents between 38% and 48% of its total circulating supply. Bitcoin Gold was born in 2017 after a network fork from Bitcoin (BTC), thus maintaining its original history up until that point. This means that Bitcoin Gold contains at least as many inactive coins as its parent, including Satoshi’s cache. He further elaborated how he reached that figure:

“Over 11 million Bitcoins (BTC) haven’t moved in the last year. Considering big wallets’ unwillingness to claim their coins due to fear of private key leak for a minimal return, it can be argued that a number even larger than 11 million BTGs are inactive or lost forever.”

He then estimated a figure of 4 to 5 million active BTG. When asked by Cointelegraph why he is so certain that this is the work of one whale, he explained:

“The accumulation was very consistent and systematic over the course of almost a year, it would be almost impossible for it to be a coincidence that multiple entities were using the exact same system to accumulate.”

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DeCurret Partners with KDDI So They Can Test A Digital Currency

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DeCurret Partners with KDDI So They Can Test A Digital Currency
DeCurret Partners with KDDI So They Can Test A Digital Currency

As the origin of cryptocurrency, Japan often leads the way when it comes to joint projects between companies in different fields, united by their desire to lead the pack in innovation. E-commerce giant Rakuten partnered with the East Japan Railway Company on June 5 to promote a cashless payment system. 

A new collaboration is in progress between the Japanese telecom giant KDDI and crypto exchange DeCurret. According to a Feb. 18 press release, the two companies — in collaboration with au Financial Holdings and WebMoney — will conduct a joint-project to test digital currency issued on a blockchain for real-world transactions.

As part of the implementation for this test, KDDI will make requests to WebMoney to issue and distribute digital currency, while the latter’s parent company au Financial Holdings manages the joint project. DeCurret will take a lead role by providing the platform for both the issuance and management of the digital currency. 

The joint-project, which runs from Feb. 18 to Feb. 28, is part of DeCurret’s efforts to increase the range of services on their platform. In this case, the platform will be tested using cryptocurrency for real-world transactions like those at cafes. DeCurrent has come a long way since its launch in April 2019. The crypto exchange has already gotten regulatory approval from Japan’s Financial Services Agency to allow its users to refill the country’s Suica transportation cards by using cryptocurrency.

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