



Last week, we attended the Crypto Hedge Fund Summit hosted by our friends at



📦 Custody Solutions Hey everyone 👋,Last week, we attended the Crypto Hedge Fund Summit hosted by our friends at Liaoyuan and Trade Terminal here in New York. This conference was really interesting, especially for those of us focused on the institutional side of crypto. Here's what we learned topic by topic! There are lots of legal risks around custodianship. When it comes to their assets, institutions don't specifically care about decentralized custodial solutions. They just need to know that they can trust their assets with their custodians.

While institutional investors really want to hand off custodianship, current solutions prove to be very amateur.

Another missing link in the chain of custodianship is insurance. Recently, a $125mm block of BTC was insured. More insurance companies will enter this space.

At the end of 2018, more custody solutions will be in place for institutional investors for crypto. 💰 The OTC Market and Family Offices Family offices come to OTC desks asking for 6% discounts, but no one is willing to give them that. They are realizing they have to pay a premium (~20%) to purchase large blocks of Bitcoin.

There's chatter among developers about using state channels to trade and settle large blocks of BTC. 🌉 Where Infrastructure Is and Where Things Are Headed Funds currently spend a lot of capital on back office, particularly around regulatory expenses. 80% of back office fund expenses are regulatory related. In 10-20 years, this will become 5%.

"Asset managers will be like Uber drivers." As Uber transferred wealth from the medallion Taxi market to individual drivers, there is a budding view that yesterday's asset managers will begin to lose share to a platform of decentralized new-asset managers.

Where 2017 was the year of crypto only funds opening up shop, 2018 has seen more traditional asset managers open up crypto desks. 📚 The Law The utility token period of 2017 had a lot of bad actors enter the market.

To get around current custody rules, blockchain and crypto technology will have to prove itself so regulators can get comfortable with it. We learned a lot at the conference, and are really interested to see how custody and infrastructure solutions look a year from now.



🎧 Our Podcast



This week we published podcast #8, "Short Selling Explained, Tesla and How Controversial Shorts Work, and Nvidia and Bitmain." We cover: Short selling: The 🌰 and 🔩 of shorting, the psychology of the 👿 short, and when shorting can go horribly wrong. We also cover the controversy around Tesla stock and how controversy can drive the psychology of shorters.

We take a deep dive on Nvidia's IPO from a couple decades ago and how it relates to recent chatter about a Bitmain IPO (pricing and margins matter!).

The recent browser wars as they relate to crypto and some general thoughts around 2nd layer solutions. You can listen to the podcast here: iTunes

Google Play

Stitcher

Libsyn Until next time,

Vikram