S&P's New Bitcoin, Ether Indexes Could Help Banks Move into the Crypto Market | NYDIG: Bitcoin Is Coming To Hundreds of U.S. Banks This Year
Top stories and news you should know in the bitcoin, crypto, and decentralized markets
The firm with the well-known S&P 500 index, S&P Dow Jones Indicies, announced this week that they will launch three new crypto indexes: S&P Bitcoin Index, S&P Ethereum Index, and S&P Cryptocurrency MegaCap Index
Running hundreds of thousands of indexes spanning major asset classes, S&P Dow Jones Indicies plans to rollout indexes tied to other top cryptocurrencies in the coming months with a broader set of indicies on the way
Drilling Down Deeper
Slowly, then all at once…
In a bold new move, one of the most recognizable and trustworthy names in capital markets is stepping into the world of bitcoin and crypto assets. Starting with the most liquid and recognized names in the space, S&P wants to launch these products ideally ahead of any approval for a bitcoin ETF for asset managers to track and monitor in a convenient as well as familiar way as they do with stocks, et cetera. Its intentions are to launch these cryptocurrency indexes in December through a partnership with institutional data provider Lukka.
BTC and ETH have the largest institutional following, so it makes sense to start with those two. The “MegaCap Index” is a market capitalization weighted index that blends the two respective indexes with exposure to both bitcoin and ether. They have been clear that while it’s early still, they are only just getting started and that S&P plans to roll out more indexes in the crypto asset space in the near future.
Banks could leverage these indexes to build over-the-counter derivatives or structured products of all different flavors. Indexes are an important component of Wall Street’s market structure because they power tradeable products like ETFs as well as serve as a benchmark for investors making allocations in a given asset or asset class. Having a firm of this stature coming to the market may indicate that the road to a bitcoin ETF is not that far away and others like it in the crypto asset space may be coming soon too.
A bitcoin ETF getting passed is now more likely and would initiate a flood of institutional money of biblical proportions, don’t say you were not warned!
TL;DR The firm formed by S&P Global in 2012 is moving forward to begin providing indicies that track bitcoin, ethereum, a mix of the two, and others by the end of year.
News You Should Know
“Do not be beguiled by the siren song of nominal price appreciation. At all times, you must deflate nominal returns by the amount of new money in the domestic system. Only then will winners and losers be as clear as a double-boiled abalone, fish maw, and chicken soup.”
— Arthur Hayes, Grow Up or Blow Up
Grow Up or Blow Up by Arthur Hayes
The American entrepreneur, trader, and CEO of the peer-to-peer crypto exchange and derivatives trading website, BitMex, gives his latest views on the markets from a macroeconomic point of view. His main point in the latest edition of his crypto trader digest is the Fed’s balance sheet expansion, and Hayes looks at how it has outpaced many assets and indexes. Spoiler alert, Bitcoin (BTC) and Taiwan Semiconductor (TSMC) were the only two that have performed better than their Global Financial Crisis top’s in terms of the Federal Reserve’s own balance sheet…
NYDIG: Bitcoin Is Coming To Hundreds of U.S. Banks This Year
According to institutional bitcoin solutions provider, NYDIG, customers of U.S. banks will soon be able to buy, hold, and sell bitcoin through existing accounts. This comes after years of banks seeing deposits being sent off to Coinbase, Galaxy Digtial, Kraken, and other crypto venues around the world by their customers. Now, they want in on the action and drive fee income as well as attract and retain new customers…
Uncovering the Hidden Costs of the Petrodollar by Alex Gladstein
Galaxy Digital’s new Head of Research worked hard to get this piece out before assuming his new position, and it discusses how our world reserve currency (USD) relies on oil, dictators, inequality and the military-industrial complex. Bitcoin becoming the standard is the only thing standing in the way of the dollar’s hegemony over the world’s current financial system. It may be a bit long, but this article is very comprehensive and worth the investment of time to read for an understanding of the history and nature of the U.S. Petrodollar…
TOTAL CRYPTO ASSET MARKET CAPITALIZATION = $2.371T
Bitcoin Dominance = 44.4%
Ethereum Dominance = 17%
(over 9,600 cryptocurrencies)
Last Close = $56,400 (as of May 6, 2021)
Market Capitalization = $1.054T
YTD Performance = +94%
Last Close = $3,500 (as of May 6, 2021)
Market Capitalization = $404B
YTD Performance = +374%
*NEW ALL-TIME-HIGH @ $3,598 on May 6, 2021!
Bitcoin is still trading relatively sideways while consolidating in the medium term as the rest of the market is taking advantage of it as they are sucking up its market share. Ethereum has been on an absolute tear as it has been getting institutional players looking at it as viable asset that has been validated by smart contract capabilities and creator economy realization in NFTs. Crypto Assets, in general, are back in “DeFi SZN” with the bitcoin dominance falling as Cardano, DOGE, and other “ethereum killers” seeing huge inflows and daily moves to their upside. Exchange data shows there is A LOT going on in this industry as ETH 2.0 creeps closer and many players are starting to take profits into the classic names like BTC and ETH. The broad crypto asset market hit a new all-time-high yesterday just shy of $2.5T that is leaving many wondering if that marks a micro-top or indicates a higher low before shooting back up towards $3T. In the current market, altcoins have taken the spotlight away from BTC while it has quietly been waiting for another round of “price discovery” with another rally that tests $65K in the coming days or weeks ahead. With bitcoin looking as if it is nowhere near a broad top, the market participants playing with “shitcoins” just may have to learn the hard way what another wave higher in bitcoin means for the rest of the market when it rips and the whales trim their other bags to rotate back into the King of Crypto, Bitcoin.
Pictures Say 1,000 Words, Memes Say 10,000
Blockworks @Blockworks_Evolution of money: 1) Gold 2) Metal coins 3) Paper money 4) Plastic cards 5) Electronic money 6) Cryptocurrency
Positive Vibes Only
Bitcoin Magazine @BitcoinMagazineBREAKING: Bitcoin is coming to hundreds of U.S. banks this year allowing customers to buy, hold, and sell bitcoin, says bitcoin custody firm NYDIG - CNBC
Thought Provoking Tweets
*Walter Bloomberg @DeItaoneUS FED ACCEPTS $173.469 BLN IN DAILY REVERSE REPO OPERATION, AWARDS AT 0.00 PCT TO 38 BIDDERS - NY FED
Lyn Alden @LynAldenContactThe third round of stimulus checks will go out when the income spike from the second round of checks is still pushing personal income above-trend.🔥 In contrast, the second round of checks didn't go out until the first round of checks and unemployment benefits wore off. https://t.co/ZDHukd0lgi
Alex Gladstein @gladstein1/ While doing research for my essay on the negative externalities of the petrodollar, I learned a huge amount. Much of it was shocking or surprising. Here's a thread with a few of my favorite bits of insight, with links for further reading 🧵 https://t.co/w3KQvmBQk3
Other Investment News
Cardano Staking Goes Live on Kraken Exchange — CoinDesk
Dogecoin: The Most Honest Sh*tcoin — Galaxy Digital Research
How Much Energy Does Bitcoin Actually Consume — Harvard Business Review
Proof of Reserves - Establishing Best Practices to Build Trust in the Digital Assets Industry (REPORT) — Chamber of Digital Commerce
Square Reports $3.51B in Bitcoin Revenue via Its CashApp for First Quarter of 2021 — The Block (Double the Coinbase’s revenue!)