Small City hedgies used bitcoin to surpass Rokos and Howard

Chris Roko’s and Alan Howard’s hedge funds faltered amid the recent banking crisis – but crypto’s resurgence gave smaller firms the chance to outperform them.

Nickel Digital Asset Management saw nearly two-thirds gains in one of its funds in the first quarter after bitcoin rallied amid Silicon Valley Bank and Credit Suisse’s falls.

The crypto market has jumped 60% so far in 2023, a potential signal of a gradual thaw in digital assets. Bitcoin, currently at $29,870, hit $28,400 on March 31, up more than 70% year-to-date as investors took refuge in the cryptocurrency during the banking crisis.

Nickel’s DeFi Liquid Venture Fund was up 62% through March 31, while the firm’s non-directional fund Nickel Diversified Alpha rose 4.6%.

The shift comes as a result of large funds making losses in the first quarter. Rokos’ £15.5bn macro hedge fund fell more than 11% in the year to March 24 after bets on US Treasuries went awry, a source familiar with the matter said. Financial news.

Read the whole story here.

Stablecoins may face early limits, Bank of England says

Stablecoin users may initially face restrictions on the extent to which they can be used for payments, Bank of England Deputy Governor Sir Jon Cunliffe said on April 17.

Speaking at Innovate Finance’s annual summit in London, Sir Jon said the bank had decided the risks from stablecoins to the wider economy should be “manageable”, reportedThe Wall Street Journal.

“However, we cannot know with certainty the extent and speed at which stablecoins can be adopted, and we may well need limits, at least initially, to ensure we avoid disruptive changes that could threaten financial stability.”

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Stablecoins are cryptoassets that make it easier to buy or sell other cryptocurrencies. Each coin is meant to be linked to a government-issued currency one-to-one. Tether, the largest stablecoin, should always be worth $1.

Last year, the bank launched a consultation on monitoring collapsing stablecoins, following the collapse of the Terra stablecoin network.

Regulators elsewhere have also shut down the web for stablecoins recently.

In February, the US Securities and Exchange Commission told Paxos, the firm that produces the binanceUSD stablecoin for Binance, that it could no longer mint the cryptocurrency.

Ethereum’s latest upgrade… Another one?!

It feels like the Ethereum network is doing a major software update every two months at the moment. (Remember The Merge?)

But the latest improvement has former executives at Jupiter Fund Management and Citigroup excited because the so-called Shanghai upgrade — completed on April 12 — means investors who bet on the ether can now “play” it.

This opens the door for a much larger group of institutions to get involved in staking ether, said Itay Tuchman, former global head of foreign exchange at Citi and now CEO of fintech consultancy Consello Digital.

He told United Nations: “Being able to liquidate with confidence allows ether to be considered liquid and more importantly, yield-bearing security.”

Sebastian Widmann, head of strategy at Nomura-backed digital asset firm Komainu, added that the upgrade was important for traditional investors who “are not very crypto-native” and typically have stricter due diligence processes.

“You’ll see more assets being invested over time, because now there’s the assurance that it’s not a one-way street anymore.”

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Further reading

New York’s financial regulator will bill crypto firms for annual oversight

LSE Group joins the battle between exchanges for crypto derivatives (Financial Times)

Crypto exchange Bittrex under fire from the SEC

The US cracked a $3.4 billion crypto heist – and bitcoin’s anonymity (WSJ)

Why Ethereum’s Merger Matters to Institutional Investors

Is the bitcoin rally marking another crypto bull run? (Bloomberg)

To contact the author of this story with feedback or news, email Alex Daniel

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