CoinShares sees increasing corporate uptake in bitcoin
Crypto asset management firm CoinShares, with over USD1 billion in assets under management, is to use Compass Financial Technologies to calculate and publish the official prices of the XBT Provider range of ETPs on Bloomberg and Reuters.
The move is just another step in the increasing institutionalisation of CoinShares which has been offering a regulated bitcoin investment fund since 2014. And the developments come just in time for the cryptocurrency market, which recently week saw record weekly inflows into cryptoasset investment products totalling USD255 million, pushing the total inflow over the last four weeks to over USD720 million.
In its own research, CoinShares cites recent evidence which suggests there is increasing corporate participation in bitcoin. The firm writes: “Corporate treasury departments are beginning to wake up to the reality of negative yields/quantitative easing and are looking for viable alternative reserve assets.”
Meanwhile, outsized investments were seen in Ethereum investment products, making up 24 per cent of inflows compared to its market capitalisation across products of 13 per cent.
In other steps to firm up the support network under the XBT product, September saw CoinShares announce that they would be using the Armanino LLP's Real Time Assurance application, which allows on-demand, real-time reports on collateral holdings that follow top industry standards backed by a top 25 independent public accounting firm.
In August, the company also announced that the digital assets held to physically back the XBT Provider range of products would be safeguarded by Komainu, the first hybrid custodian for institutional digital asset investors created by the Japanese investment bank, Nomura, digital asset manager, CoinShares and digital asset security company, Ledger.
The firm has also hired ETF veterans, Frank Spiteri, as Chief Revenue Officer, and Townsend Lansing as Head of Product. The pair were previously at ETF Securities and Spiteri was most recently managing director and head of European distribution at WisdomTree.
Spiteri says the team have implemented significant changes in terms of bringing their experience of investor expectations to bear on the CoinShares business.
“We have made many improvements to XBT in particular around disclosing in real-time the value of the underlying assets of the product through top 25 audit firm Armanino LLP. Via the CoinShares’ website clients are able to view this third party report and request verification of the holdings at the click of a button. Previously, we would take large investors on a vault visit so they could see and touch the gold that backed their gold ETCs. Now we can bring the equivalent to all investors in real time - a huge benefit unique to digital assets.”
The pair agrees that there is lots to do but it is an exciting time for cryptocurrencies. Lansing says: “Bitcoin has seen dramatic highs and lows and the trend and the direction is going the right way for us.”
Spiteri says that he never imagined he would start working for a crypto focused firm. “If a few years ago you told me that I would be working at a digital assets firm, I would have raised my eyebrows” Spiteri says. “But I was in a fortunate position of seeing first hand the types of individuals and firms entering this space and it really caught my attention.
“Having been at CoinShares now for eight months my decision has clearly been justified with the levels of engagement that we are seeing from institutional clients across Europe who clearly share the same view. In the last four months we’ve seen huge demand from clients who value our position as Europe’s largest digital asset manager and are partnering with us on their crypto journey. The expertise we have in this space is key and sets us aside from other product providers”