Dispatch #137: The State of Institutional & Family Office Money

Apr 28, 2023 3 min read

Dispatch

In this patch of your weekly Dispatch:

Smart money coming in hot ☕
Nexo Private launches 🔏
Record inflows for staked ETH 📥

The Big Idea

The Institutions Are Coming!

Or wait, maybe they just didn’t leave since the last bull run? Fascinatingly, this bear market is seeing them start to shift and build more quietly. This week has a slew of those examples.

On Wednesday, $1.4 trillion asset manager Franklin Templeton announced that it would be putting its Nasdaq-listed OnChain U.S. Government Money Fund (FOBXX) on chain via Polygon, thus becoming the first US-listed fund to use blockchain for recording ownership and processing transactions.
Another example is Deloitte. They listed 331 available crypto jobs last week.
Meanwhile, Standard Chartered Bank has just released a report suggesting that Bitcoin could reach $100,000 by the end of the year, driven by factors including the recent banking crisis.

Another telltale sign that big money is interested in the space is a recent KPMG survey which found that over 90% of family offices and high-net-worth individuals expressed interest in digital assets, with 58% already investing in this emerging asset class.

In response to the demand for white-glove services that these sophisticated investors are after, this week we introduced Nexo Private – an exclusive suite of digital asset wealth management solutions designed specifically for high-value private customers. Nexo Private aims to maximize financial outcomes and secure long-term success for its clients through an exclusive layer of perks, including personalized onboarding, custom rates, dedicated relationship management, and superior OTC services.

All in all, it seems like the “smart money” is swarming back in…if they ever left at all.

The Latest In…

Regulations

Friends, we know these newsletter have been regulation-heavy of late, but it’s just been such a big part of this cycle. This week, big news on this front included Binance US pulling out of its deal to acquire Voyager Digital’s assets after intense opposition from various parts of the US government and the UK’s Financial Conduct Authority heartily changing its tone from the last few years and saying they want to work with the crypto industry on sensible regulations. 🤷

The Latest In…

Ethereum

Lots of actions in the Ethereum space.

In L2 land, scaling solution Arbitrum this week distributed more than $120M of its ARB tokens to projects that were built on its network. These projects were eligible for a distribution proportionate to factors including users, trading volume, number of smart contract deployments, and more.
Meanwhile, a few weeks out from Ethereum’s Shapella upgrade, the bull case is coming to pass. Last week saw a record inflow of staked ETH, with investors locking up 71,950 ETH worth more than $1B. Bullish unlocks, indeed.

The Week’s Most Interesting Data Story

Welcome to Unrealized Profitsville

Over the last few months, the dynamics of Bitcoin holders have changed significantly. In short, we’ve moved from the dominant paradigm being one of Bitcoin holders having unrealized losses to Bitcoin holders having unrealized gains. On the one hand, this reflects a strengthening market. On the other hand, it means there are growing incentives for hodlers to take profits (which can be a part of the reasons why there are so many corrections at the beginning of a bull run).