Last Updated on April 14, 2021 by Jason
Daniel Loeb, billionaire investor and new to the scene of cryptocurrency, has led his hedge fund worth $17.6 billion to a custody deal with Coinbase. Third Point LLC now has custody of cryptocurrency from five of its funds with Coinbase. Some claim that there are billions of dollars’ worth of assets underlying, however, it’s not clear how much of this is cryptocurrency, or how long it’s been invested for.
Coinbase is about to debut on Nasdaq, but with this current custody tie-up, we’re seeing how examples like Brian Armstrong’s nine-year-old business was able to transform itself completely from being exclusively Bitcoin, to a huge vault on Wall Street for crypto trades.
Coinbase says that during the week of voluntary earnings call, it held $122 billion in assets. Naturally, it expects serious growth, in part thanks to the custody revenue it has acclaimed.
CoinDesk said earlier this week that Paul Tudor Jones, a hedge fund titan, is also a client of Coinbase, offering an insight into the type of investors currently putting it all on the table.
True exposure of the hedge fund to cryptocurrency assets is a bit more transparent. Third Point has said recently that is can directly invest in crypto, as well as indirectly through other means, like derivatives contracts. It is also open to the idea of lending and staking cryptos.
Tim Ogilvie, who operates a company named Staked, says that according to what he knows, this is the first bit of conventional hedge funding that is doing staking. He said that he is surprised, but at the same time he also isn’t.
Proof-of-stake blockchains including Solana, Cosmos and Tezos reward coin holders with payouts according to interest for securing the network with their holdings. Institutional investors are gradually waking up to the idea of staking, Tim continued to explain. There are two gains generators when it comes to staking: the staking payout and the token price. This means that there is a guaranteed reward on a speculative bet. Tim says that there are more than $4.5 billion crypto assets in Staked.
Third Point is Investing
Loeb has never publicly revealed his crypto holdings. However, he began to toy with the idea of an asset class in his tweets in March.
I’ve been doing a deep dive into crypto lately. It is a real test of being intellectually open to new and controversial ideas. Culturally I compare bridging the crypto world with the old as akin to finding a portal @chbetween two distinct worlds in the multiverse. https://t.co/LqWwfIxOyd
— Daniel S. Loeb (@DanielSLoeb1) March 1, 2021
Third Point’s own delve into crypto likely began a while ago. Back in March, it was revealed that Third Point is backing eToro, a crypto exchange, which is also getting ready for a debut on Nasdaq.