JUNE 2021

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HIGHLIGHTS

Our fund, Algoz Digital Asset Fund, was recognized by BarclayHedge as a top earning fund in May 2021! This award comes in after just one month of being listed in the database.
More information on Algoz's Asset Management Solutions
El Salvador makes history with this monumental move
Banks and investment houses banking on crypto -- big time!

30 DAYS IN 1

BIGGEST INDUSTRY NEWS & MORE

A New Financial Ecosystem. With 62 out of 84 in favor, the Bitcoin law was passed, making Bitcoin a legal tender in El Salvador, alongside the US Dollar. What does this mean for the country? Bitcoin can be used for the purchase of goods or services. The cryptocurrency can be used for all trades, will be exempt from capital gains taxes and all monetary laws referencing US dollars will apply to BTC as well. The biggest motivation to use BTC will be for remittance due to the far-lower transaction costs when compared to USD remittance transactions. This will also ‘bank the unbanked’ as a large majority of the nationals don’t have traditional bank accounts and nationals heavily rely on remittance payments to support their livelihood. Starting on September 7th, every adult citizen will receive $30 worth of BTC when they download and register the government’s cryptocurrency app. Seeking assistance to facilitate the adoption of Bitcoin, the World Bank rejected El Salvador’s request. However, the country continues to move forward on its own and even has a ‘plan’ in place to tackle mining issues. El Salvador’s geothermal company, LaGeo, has been given the green-light to allow bitcoin miners to use 100% clean, 100% renewable, & 0 emissions energy from the nation’s volcanos.

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Alt. Investors are Super Bullish. Report of the Month. It looks like alts. are gearing up to tackle the emerging asset class as a recent report by the Intertrust Group revealed that 98% of the traditional hedge funds surveyed expect to allocate an average of 7.2% of assets into cryptocurrencies by 2026. In other news, venture capital giant, Andreessen Horowitz, just launched the largest crypto-fund to date, valued at $2.2 billion.

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What have the Banks Been Up-To? Standard Chartered is coming in strong! The bank’s recent joint venture with OSL exchange’s BT Technology Group aims to establish a cryptocurrency brokerage and exchange targeted toward the European institutional market. Citigroup and State Street have established dedicated Digital Assets units to assist its clients with investing in cryptocurrencies, stable coins, NFTs, and CBDCs. Following the re-launch of its crypto trading desk this year, Goldman Sachs is adding ether options and futures to its menu of crypto services. These banks have joined the likes of Morgan Stanley, BNY Mellon, JP Morgan, Signature Bank, and more to create a footing in this rapidly evolving market and industry.

State Street explores 'The Role of Cryptocurrencies'

Crypto Trading with your Broker. 1.39 million clients will soon be able to directly access and trade cryptocurrencies through their Interactive Brokers account, as the leading brokerage will enable crypto trading on its platform in the coming months. Additionally, the world’s largest interdealer broker, TP ICAP, is working on a crypto spot trading platform in collaboration with Fidelity, Standard Chartered, and Flow Traders.

Go Green or Be Shunned. After a month, Tesla decided to stop accepting Bitcoin as payment for the electric vehicle due to environmental concerns. But there seems to be some resolve. The automaker has set a benchmark for miners, stating that Tesla will resume accepting BTC as payment once, ”there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.” Following the positive sentiment, BTC prices shot up nearly 10%.

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Pro-Crypto Political Environment in the USA. Newly-elected Senator, Cynthia Lummis, is pushing for retirement funds to invest in cryptocurrencies. Texas Governor, Greg Abbott, has signed a law for a more clear and simpler legal environment to advance innovation and investments in the digital assets and blockchain industry, rather than to discourage. Moreover, Texas’s Department of Banking has given the go-ahead for state-chartered banks to custody cryptocurrencies. The pro-crypto environment and low energy prices has made Texas a top-choice for miners to set up shop after China’s crackdown on crypto mining and trading.

Saylor Continues to Sail (and Sell). MicroStrategy continues with its aggressive bets as the software company uses cash flow and has gone as far as selling debt to acquire more bitcoin. The firm has over 105,000 bitcoins, making its total holdings worth over $3 billion!

A Rare Asset for a Rare Object. NFTs were an appealing bet for leading US auction houses, Christie’s and Sotheby’s. It appears that, at least with respect to Sotheby’s, the bet was a successful one. Sotheby’s is set to auction off a +100 carat flawless D-color diamond and will be accepting fiat, bitcoin, or ethereum as payment. Paddles up!

Monthly Market Drop. While Q1 2021 saw astronomic capital infusion pushing the total market cap. of cryptocurrencies to +$2 trillion, Q2 seems to have a different sentiment. Regulatory crackdowns, environmental issues, lower institutional demand, and tighter regulations were key catalysts for massive sell-offs, causing drastic price plunges and market wipeouts. In June, Bitcoin selling was relatively stable, trading hands between $30,000 and $40,000. Ether was a far-more volatile bet with a +45% drawdown from its ATH price $4,337 (May 12, 2021). Despite a negative month, Bitcoin outperformed the top-20 cryptocurrencies (by market cap.) which were down by double-digit figures. The market is growing indefinitely but current market conditions are an important reminder that volatility is an inherent factor in a nascent market.

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