Noelle Acheson is a veteran of company analysis and member of CoinDesk’s product team.
The following article originally appeared in Institutional Crypto by CoinDesk, a newsletter for the institutional market, with news and views on crypto infrastructure delivered every Tuesday. Sign up here.
You would be forgiven for thinking that the crypto winter seems to have passed the institutional crypto sector by.
Readers of CoinDesk will have noticed how the list of launches, funding rounds and affiliations is getting longer, and the number of links to news, profiles, papers and analysis of sector fundamentals is growing by the week.
Indeed, recent funding and M&A activity – not to mention the well-backed crypto platforms waiting in the wings – indicate a robust interest in laying the groundwork for broader attention from traditional institutions.
And last year we heard a lot about the “institutional wall of money” that was poised to flood the market as soon as custody got fixed, certain ETFs got listed, regulators got specific and I-forget-what-else was satisfied.
Yet, assuming that institutional investment is not driven by the same sentiment that is keeping this crypto winter cold would be a mistake.
Made of people
Underlying most institutional investors is an individual – a pensioner, fund holder, saver or insurance policy owner. In other words, institutional investors are largely driven by retail sentiment.
If their clients are not interested in crypto investment, it’s unlikely that they will be.
True, institutions march to a different set of rules than retail investors. And assurance from regulators that they will not be subject to punitive fines will perhaps encourage them to channel some discretionary funds into this new asset class.
It is also true that most retail investors look to the supposedly better-informed institutions for advice on where to get higher returns than the average. Professional investors have access to more detailed information plus the wisdom of experience, which in theory gives them an edge over individuals when it comes to recommending risky bets.
However, this overlooks social incentives. The public nature of their fund performance means that the risk is not just financial – notable or consistent underperformance will cause their clients to take their money elsewhere. Losses are painful for all, but retail investors can disguise them when chatting with friends, or even brag about them as a commiseration ploy. Institutional investors don’t have that luxury.
This tends to make most institutions even more risk-averse than their clients, which makes them even more sensitive to market moods.
So, expecting institutional investment to defy the prevailing chill and pour investment into the market as soon as the infrastructure is ready is unrealistic.
Laying the groundwork
On the other hand, fundamentals are improving.
Scalability is progressing, use cases are evolving, collective brain power is growing exponentially and regulators around the world are getting their heads around how to protect investors without killing innovation.
The crypto winter has been harsh for many, but it has given startups and incumbents a welcome respite from the market spotlight. Less pressure means more time to build.
While a more complete infrastructure may not be sufficient to get institutions involved, it is necessary, and its growth and increasing maturity will help many institutions to see crypto as less risky. Greater comfort and familiarity with the sector will encourage firms to listen when enough of their clients indicate a change in market mood by asking about crypto opportunities.
What’s more, overall market conditions – not just in crypto – could augur a shift in sentiment. Professional investors know the well-established theory called “Dogs of the Dow”: the worst-performing stocks of the previous period stand a good chance of shining in the next one.
While almost all asset classes performed badly in 2018, crypto’s rout was particularly spectacular. Does that qualify it for consideration under the “Dogs of the Dow” theory? Or does it mean that funds have an even wider range than usual of traditional dogs from which to choose?
Speaking of dogs, another factor to consider is that institutional investors, more so than retail users, tend to move as a pack (obviously with notable exceptions). While each thinks of itself as an outlier and (hopefully) smarter than the rest, the truth is that few are brave enough to go against market sentiment.
This means that the “wall of institutional money” that we hear about may actually be a thing, however elusive.
Nevertheless, the growing interest in crypto investment on the part of both traditional institutions and focused market participants – even in a bear market – is a sign that sentiment will turn at some stage.
What the trigger will be, nobody really knows – it could be new regulation, a liquid product or some comforting names adding their market heft to the trend. Or something else that we cannot yet foresee.
It could end up being something as simple as a change in the season. The cold cleanses the surface and hardens the strong, and as any gardening enthusiast knows, plants use the winter for cellular housekeeping. Many need a cold snap to activate the process that will bring spectacular flowers in the spring.
Which will come, eventually. As Hal Borland wrote: “No winter lasts forever; no spring skips its turn.”
Data Market Ocean Tries New Token Sale After CoinList Offering Misses Target
After a token sale on CoinList failed to reach its target, data marketplace Ocean is trying again on crypto exchange Bittrex International.
Ocean Protocol has a vision to become the ecosystem for “a new data economy,” its founder Bruce Pon told CoinDesk. With the release of Ocean’s version 1.0 beta network earlier in April, its tokens are ready to be used on the platform, but the company has not quite met its fundraising goal.
Through its initial exchange offering (IEO), Ocean aims to raise $6.77 million in bitcoin, following a previous round of over $24 million from Outlier Ventures, Block Asset, Fabric Ventures and Digital Currency Group, according to its listing on CoinList.
With its prior 2019 token sales via the Coinlist and Fractal platforms, the firm ultimately raised a total of just $1.8 million, according to a March blog post. If it succeeds with its IEO, it will meet its original goal announced in February for the CoinList sale.
“We had seen that an IEO was a good way to have more awareness and a broader distribution,” Pon said, while also granting they still needed to close that budget gap.
Its listing partner, Bittrex, has been caught up in a recent dispute with the New York Department of Financial Services over its decision not to grant the company a bitlicense. However, its presence in New York is not relevant to Ocean’s present efforts.
Reflecting on its disappointing token sale, Pon said the U.S. is not “the best environment” for this kind of fundraising right now, admitting:
“We misjudged. We went toward a highly regulated jurisdiction. We followed the rules. But the potential purchasers – or acquirers – they are also uncertain themselves.”
Its deal with Bittrex allows Ocean to focus on its core work for this next sale, while Bittrex will market the listing to its large base of users. “They are the ones who are leading the effort to reach out to their customer base,” Pon explained.
In particular, he’s optimistic about the company’s user base abroad. “We think there’s a lot more crypto enthusiasts coming out of Asia,” he said.
In light of market mood, Ocean has also halved the price of the token from that in the earlier sale, from $0.24 to $0.12.
Ocean noted to supporters in its Telegram channel that they should read the full IEO announcement before flipping out. That’s because participants in the original sale will still be able to opt-in to the better deal, Pon explained, and will get a distribution of tokens at the new price.
“It was just fair,” he said.
The initial circulating supply of OCEAN tokens will represent 22.3 percent of the total supply of 1.41 billion tokens. The greatest portion of future tokens, 51 percent, will be emitted through network rewards for validating transactions, though Ocean has not announced its consensus model yet.
The vision for Ocean is to serve as a place where those with large pools of data can share them securely, allowing data scientists to run analyses on them. The data holders will get the analysis they need and the scientists will both get to hone their tools and earn money as they do so.
The token will be the medium of exchange for these transactions, but Pon explained it will be also used to stake data sets as a way of signalling quality data.
Pon further articulated a much larger vision for the OCEAN token. “What we ideally see for the token is it becomes the reserve currency of the data economy,” he said.
For example, he described a future where companies generating large amounts of data (such as autonomous car sensor makers) could fund the development of their product by selling a security token against the future revenue of that data set – a kind of data IPO.
“What happens if the people who have bought shares in those data streams start to act on behalf of those data streams to get more channels of distribution?” Pon asked.
That’s the sort of future Pon believes could be feasible, provided Ocean is able to mobilize the resources it needs to develop the software today.
CoinList did not reply to a request for comment at press time.
WolfpackBOT: The Next Gen Crypto Trading Bot
Unlike the traditional stock markets, the cryptocurrency market never closes, which is a highly stressful scenario for even experienced traders and investors. Trading bots are solving this problem by managing the crypto traders’ portfolios even as they sleep. With crypto trading bots, traders can have control over their trading strategies at all times, and the volatility of the crypto market has made crypto trading bots even more popular. Bots allow trades to be executed with greater speed and efficiency than is possible with manual trading.
Now, Wolfpack is leading the pack of next generation crypto trading bots that will revolutionize the world of crypto trading and proof of work blockchain technology. WolpackBOT is a highly advanced crypto trading software that executes trades at lightning speed using proprietary trading algorithms, proprietary Werewolf Trading Analysis configurations, or user-customized settings based on the user’s personal trading style. The bot also allows for simultaneous trading access to all compatible crypto exchanges that are available to the WolfpackBOT and all trading pairs with the WerewolfBOT subscription package.
The most advanced crypto trading bot on the market, WolfpackBOT is enabled with limit, market, and Wolf Trade orders on all trading candles with the widest array of technical trading indicators available. Wolf Trade orders offer superior market orders. It is the only trading bot that offers live price scanning on trade positions and also handles partial fills with ease, which means the users will not miss out on orders.
As we have already told you, WolfpackBOT executes orders with lightning speed, and can execute up to thousands of trades per day depending on the conditions of the market and the user’s subscription package.
Features of WolfpackBOT
Some of the robust features that make WolfpackBOT such a promising venture are:
All trading pairs on all exchanges
WolfpackBOT allows the users to simultaneously trade on various crypto exchanges including Binance, BitMEX, Bittrex, KuCoin, and Poloniex. The trading pairs that are available on these exchanges are available for WolfpackBOT users. The company is also looking to add additional exchanges in the near future.
WolfpackBOT offers the widest array of technical analysis indicators, oscillators, configurations, and settings. Some of the technical indicators which WolfpackBOT provides are Bollinger Bands, Double EMA, Elliot Wave, Fibonacci Sequence, EMA, EMA Cross, KAMA, MA Cross, RSI, MACD, RSI, Stochastic RSI, Stochastic, SMA, Triple EMA, and many more.
Live Candle Scanning
Candlestick charts, which combine data for multiple time frames into individual price bars in order to make technical analysis more efficient, are considered one of the most effective technical analysis tools. WolfpackBOT scans candles in real-time to automatically detect patterns.
With the help of WolfpackBOT, users can short their positions and buy them back when the price is lower. This feature helps users to maximize their returns.
Crash protection is one of the most advanced features offered by WolfpackBOT. The feature enables the users to automatically scan and convert all their positions to a stable coin at the sign of Hidden Bear Divergence Indicator, and then buy back into base currency to resume trading at the sign of Hidden Bull Divergence Indicator.
Currently, most of the automated trading platforms allow a limited amount of coins per subscription while WolfpackBOT allows all trading pairs and coins to be traded on all availablecrypto exchanges with the WerewolfBOT subscription package. With WolfpackBOT’s built-in coin selector, users can select their favorite coins and tokens to trade, as well as blacklist specific coins or tokens. Users can also search for the best performing and highest volume coins and tokens with WolfpackBOT’s coin selector.
Werewolf Bull Market
Werewolf Bull Market is a preset setting that can be used when the base trading pair is in a Bull Run. This setting is specially optimized for the bull market.
Werewolf Bear Market
This setting is used when the base trading pair is in Bear Run. Werewolf Bear Market is specially designed for bear market conditions and must be used in such conditions only.
Werewolf Bear markets are preset settings and configurations that are usable when your Base Trading Pair is in a Bear Run. Werewolf Bear Market settings are optimized for such conditions and should only be used in a Bear Run Market.
Other than these, WolfpackBOT has various advanced features which make it one of the best trading bots on the market. The software is designed to execute trades with great speed by leveraging proprietary trading algorithms. The main object of the WolfpackBOT is to enhance the effectiveness, profitability, and versatility of the trades, helping its users increase the value of their portfolios and potentially gain greater financial independence through cryptocurrency trading.
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OKCoin Exchange Invests in Crypto Custody Firm Prime Trust
Cryptocurrency exchange OKCoin has invested an undisclosed amount in crypto custody provider Prime Trust.
In a note sent to customers on Wednesday, Prime Trust CEO and chief trust officer Scott Purcell said that the firm has closed a “nice” funding round that was led by the California-based exchange.
Other participants in the round included Gateway Blockchain Partners, Novablock Ventures and Xsquared Ventures, Purcell said, adding: “We aren’t disclosing details though.”
Notably, Prime Trust serves as OKCoin’s fiat gateway. The exchange announced last week that it has added a new payment channel allowing customers to deposit funds through Prime Trust with no fees. Withdrawals, however, are charged at $35 fee per transaction.
Last month, Prime Trust also said that, in partnership with OK Group, it plans to launch a compliant stablecoin, “OKUSD”, which will operate on the OKChain blockchain. Development of the network is at the “final” stage, OKEx said last month, adding that it plans a launch by June. A decentralized exchange (DEX) on OKChain is also on the horizon.
Prime Trust, a Nevada-based financial company, quietly entered the crypto custody business last July, first offering cold (offline) storage for bitcoin. A month later, it also started offering custody services for ether and any token issued on the ethereum blockchain under the ERC-20 standard.
Earlier this year, the firm announced that it wouldn’t charge clients for custody of digital assets any longer, in line with its custody services for stocks and bonds.
Purcell told CoinDesk at the time that Prime Trust has other sources of revenue to make up for the removal of custody fees, explaining:
“We make money just as Robinhood, Northern Trust and other traditional custodians do. The costs of custody are offset by other services.”