30% of Institutions Have Invested in Crypto; Microsoft ID System Launches Beta on Bitcoin Network; US Sets New Record for P2P Bitcoin Trading

Last week (8-13 June) in the Blockchain & Crypto world was another interesting one - a Fidelity survey of 774 institutional investors found that more than one-third of firms worldwide have invested in digital assets or derivatives; The Intercontinental Exchange’s digital asset custody and derivatives platform Bakkt has partnered with crypto asset manager Galaxy Digital to launch a white glove service for institutions seeking Bitcoin exposure; Microsoft’s decentralized identity network ION, first announced in May is moving to beta testing on the Bitcoin network; blockchain payments provider BitPay has launched a Mastercard prepaid card for crypto users in the United States, and much more!

About this and more, in the newest issue of Weekly Blockchain & Crypto Digest. Enjoy!

One-Third of Institutions Have Invested in Crypto, According to Fidelity

A Fidelity survey of 774 institutional investors found that more than one-third of firms worldwide have invested in digital assets or derivatives.

While 36% of institutions own crypto globally, multinational financial services company Fidelity found that only 27% of the 441 U.S. institutions surveyed are exposed to crypto — although that’s up from 22% last year. Close to half of European institutions are long on virtual assets.

Bitcoin is the most popular cryptocurrency investment, with more than a quarter of respondents holding BTC, while 11% of firms own Ether (ETH).

Fidelity commissioned Greenwich Associates to conduct the survey from November until early March — with the data reflecting the crypto positions of firms as of before the violent ‘Black Thursday’ crash that saw crypto prices drop by 50% or more.

More than 60% of institutions who are exposed to crypto have purchased on the spot markets, with the other 40% opting for derivatives. While many institutions are yet to pull the trigger on crypto, six in 10 respondents now “believe digital assets have a place in their investment portfolio”. Only 20% of participants indicated that they do not find anything about the crypto asset class appealing.

Fidelity’s Tom Jessop stated: “These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class.” 

Looking five years into the future, 91% of respondents indicated that they expect at least 0.5% of their portfolio to comprise crypto assets.

Bakkt and Galaxy Digital Partner Up on New Institutional Offering

The Intercontinental Exchange’s digital asset custody and derivatives platform Bakkt has partnered with crypto asset manager Galaxy Digital to launch a ‘white glove’ service for institutions seeking Bitcoin exposure.

The collaboration will see Galaxy Digital Trading’s (GDT) matching engine and trading platform offered alongside Bakkt’s digital asset custody services. 

“We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical Bitcoin,” said Galaxy Digital’s Tim Plakas.

“Together, Galaxy Digital and Bakkt offer a safe, efficient, and well-regulated route into physical bitcoin access,” Plakas added.

In an interview with Bloomberg, Bakkt’s custody head John Conneely said the partnership was established in response to strong institutional demand for crypto asset exposure

The partnership will see GDT source liquidity from over 30 market makers, with trading taking place 24 hours a day, 365 days per year. GDT generated over $1 billion in digital asset volume during the first quarter of 2020 spanning its spot, lending, derivatives, and structured crypto products.

“Asset managers and hedge funds considering this service can be assured by the high standards we hold as a publicly-traded company with audited, public financial statements and an institutional-sized balance sheet,” noted Plakas.

Since launching its ‘Bakkt Warehouse’ last year, the ICE subsidiary has on boarded over 70 clients for its custody services.

Bakkt uses a combination of warm and cold storage to secure funds, with the majority of capital stored offline. Funds stored in the Bakkt warehouse are covered by a $125 million insurance policy, with customers able to purchase more than $500 million in additional coverage.

Microsoft ID System Launches Beta on Bitcoin Network

Microsoft’s decentralized identity network ION, first announced in May is moving to beta testing on the Bitcoin network.

In a June 10 blog post, Daniel Buchner, a program manager for the Microsoft Identity team, said the open-sourced, layer 2 Identity Overlay Network (ION) had launched. The aim is to provide users with a decentralized identifier (DID) that could replace the need for usernames.

Developed in conjunction with the Decentralized Identity Foundation, ION was developed as a decentralized network to operate independently and doesn’t rely on “special utility tokens, trusted validator nodes, or additional consensus mechanisms”. 

“The core promise of DID technology is to empower all individuals and entities with ownership and control over their identities, which aligns well with our mission of empowering every person to work, play, and achieve more,” said Buchner. “To deliver on that promise, we have chosen a different path from some of the more centralized approaches to DID technologies—and we believe ION exemplifies that choice.”

Microsoft has not yet set a release date for the final version, but said it would be working on hardening the protocol and improving the ION reference implementation over the coming months. 

United States Sets New Record for P2P Bitcoin Trading

Peer-to-peer Bitcoin trading activity in the United States surged to a new all-time high during the week of June 7, according to data published by UsefulTulips.

Over the past seven days, nearly $29 million worth of Bitcoin has changed hands for U.S. dollars on leading P2P marketplaces Localbitcoins and Paxful. The past week saw only North America and Middle Eastern/North African trade increase, with all other regions posting slight declines in seven-day volume.

Over $24 million in Bitcoin changed hands on Paxful in the United States alongside $4.6 million traded on Localbitcoins. 

With roughly $1 million trading on Canada’s P2P markets as well, the past week comprised the second-strongest on record for North American trade with $29.8 million in weekly activity — trailing behind the week of May 20, 2018, which posted $30.2 million in North American trade.

North American trade produced double the volume of the second-strongest region for P2P activity, with Sub-Saharan Africa generating $13.6 million in weekly trade.

BitPay’s Launches Prepaid Mastercard in US

Blockchain payments provider BitPay has launched a Mastercard prepaid card for crypto users in the United States. The BitPay Card enables customers to convert their cryptocurrency into fiat, which can then be loaded onto the card and spent anywhere Mastercard debit is accepted.

Card holders can also withdraw U.S. dollars from ATMs and make online purchases. BitPay CEO Stephen Pair said that the BitPay Card is specifically targeted at crypto holders, serving as a tool to provide a convenient way to access spending power:

The real goal of the BitPay Card is to provide users with a convenient way to convert their crypto onto a prepaid card. BitPay is a payments company, therefore we are focused on giving people and companies an easy way to conduct commerce using crypto.

Prepaid cards are hoping to tap into a whole new market, as recent findings show that 36.5 million people in the U.S. own some sort of cryptocurrency. BitPay’s statistics page also highlights that an average of 98,000 Bitcoin transactions were processed per month during this year.

Mastercard’s vice president of digital partnerships, Tim Montgomery, said that Mastercard is particularly focused on providing consumers with flexibility and choice when it comes to finances. He said that working with companies like BitPay enables this:

We’re enabling people to transact in the ways that work best for their individual needs. We will continue to work with fintechs across the globe to accommodate and empower consumer choice, flexibility, and evolving preferences.

Gaming Giant Atari to Use Its ‘Atari’ Token for Betting, Gaming and Shopping

Gaming behemoth Atari announced that holders of its Atari token will be able to spend it on betting, gaming and shopping. According to an announcement on June 12, the new offerings for Atari token holders follow a partnership with esports firm Unikrn.

With the partnership, Unikrn will get access to Atari’s classic games such as Centipede, Pong and Asteroids. Atari — on the other hand — will get access to the firm’s esports betting platform and will see its token added to its ecosystem.

Per the announcement, Atari’s token will be available for use on Unikrn’s shopping, betting and gaming services. Unikrn co-founder and former CEO of Microsoft Ventures Rahul Sood explained that he believes betting will be an important part of the future of esports:

We know the wagering will be an increasingly driving force in the game industry's future development, and we can't wait to get the benefits of this partnership to Unikrn's community.

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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