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Former JPMorgan energy trader Danny Masters, who is the chairman of CoinShares, a London-based crypto investment firm that launched the world’s first publicly traded Bitcoin and Ethereum fund, is finally seeing major traction for digital assets among legacy financial services firms.

Masters was ahead of the curve when he left JPMorgan Chase in the late 1990s to launch his own commodities fund, Global Advisors, which owns a 75% interest in CoinShares.

CoinShares now oversees more than $1 billion in crypto assets after making the pivot to Bitcoin and cryptocurrencies in 2014, long before his colleagues on Wall Street thought it was fashionable.

Speaking to Business Insider, Masters explained that CoinShares, which focuses on giving investors professional grade access to crypto, was hard to digest. “We’ve gone from a renegade character to a more confusing animal for people to view.” He added, “You needed to be a true believer and you needed to suck it up for 2014, ’15, and ’16. And then ’17 was just off the charts good.”

That was the year Bitcoin soared to an all-time high of nearly $20,000, compelling incumbents to explore the emerging asset class – although plenty of Wall Street titans continued to spend most of 2017 and the first half of 2018 deriding Bitcoin.

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“We heard [JPMorgan Chase CEO] Jamie Dimon call Bitcoin a fraud. There are some very, very high profile – but usually, deeply legacy entrenched – people who are just outright dismissive,” said Masters. He added, “The clock has lapsed. It is no longer acceptable to dismiss it.”

With the recent announcement of a new cryptocurrency offering from Fidelity, the fourth largest asset manager in the world, the appearance of a united front by the big banks and legacy firms against digital assets like Bitcoin, Ethereum and Litecoin has crumbled.

In a new interview with Bloomberg hosts Pimm Fox and Lisa Abramowicz, Masters outlines the next phase of cryptocurrencies in the wake of Fidelity Digital Assets and its goal of servicing custody and crypto trading for institutional investors. He says the move by Fidelity was “about time.”

Says Masters,

“I think they’re going to do very well with that.”

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“I think the narrative changes very rapidly in crypto. It is an evolutionary process, for sure, maybe a revolutionary process. And the way I’m currently thinking is, really, that what is happening now – and the timely entry of Fidelity and others – is really what I call the third wave of the crypto movement. First wave: Bitcoin arrives. It disrupts gold and money. The second wave: We see Ethereum, a new blockchain that has the ability to form capital. That happens very rapidly and in a very large way. The SEC doesn’t like that – initial coin offerings. The SEC doesn’t like that for obvious reasons and that comes to essentially a screeching halt.

The third wave, in my opinion, will be the so-called security token. So you cannot do an initial coin offering with these anymore but you can do a security token. What does that mean? That will be, in the first instance, one of the exemptions from the Securities Act, either a Reg A, an A+, a Reg D, Reg S whereby a token will represent equity in a private company, and it will exist in this space between what has traditionally been private companies and public companies. And it’ll be a hybrid, which is transparent and liquid and transferable.”

“There is potentially a tremendous value to be accrued to a smaller investor coming in on the lower end of that P/E spread because those assets are typically not available to the average person.”

Masters talks about XBT Provider, the controversial issuer of Bitcoin and Ether exchange-traded products from CoinShares.

“XBT Provider has been a wonderful journey for us. We started very small and we got – I think we peaked at around $1.7 billion when the prices were high last year, and we obviously receded with the price drop. It’s been an interesting episode and journey with Nasdaq themselves because it’s a controversial asset class. It has characteristics like security of the assets themselves which don’t exist in other asset classes. I think you’ve seen Nasdaq themselves now starting to talk about security token exchanges as well going forward. So, it was an embryonic and early adoption, and it got a lot of traction. And I think it is gong to be the first of not only trackers in other markets and other jurisdictions on Bitcoin and other cryptos, but I think it will prove to be the precursor to the larger exchanges actually looking at security token markets themselves.”

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“It’s not actually outside of the regulatory structure. It’s outside of the piping and infrastructure of the conventional marketplace. When you look at how the Chicago Merc or the New York Stock Exchange work, there is a bunch of electronic piping that goes around making the transfer and the trading of these shares happen, and that is a considerable infrastructure. And there has been talk about deploying distributed ledger technologies to these exchanges in order to get the advantages of distributed ledger technology. What are the advantages? They are real-time settlement, low latency, transferability, portability…”

“Rather than re-engineer the CME so that they re-pedal their old systems and put in distributed ledger databases and so on, what you do is you turn securities into cryptos, and you trade them on crypto exchanges.”

“You’ve seen Coinbase do this. The structure that they’re putting together is a registered broker-dealer, a registered investment advisor in all 50 states, and an automated channel zone to trading system, and once you put those three things together, plus their 12.5 million customers, they have their own stock market. And once they issue tokens on it, this is a competitor to NYSE and Nasdaq.”

You can listen to the full interview here.