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Circle Crypto Research – Institutional Cryptoassets Holdings Increased 40% In 1Q19

According to a Circle Research Report, cryptoassets under management (cAUM) increased by over 40% q/q in 1Q19 vs. the 22% q/q increase in 4Q18. This is the greatest quarterly rise in cAUM from 1Q18 to date.

Reuters recently pointed out that venture capital firms and corporates invested some $850 million into crypto and blockchain startups. According to Reuters, this number suggests large companies see promise in the nascent technology, even as it struggles for acceptance. The Circle report highlights that the traditional and corporate VC investment into the crypto space year-to-date (YTD) is $1.2 billion and $0.8 billion, respectively.

Crypto Lending

Another interesting development in the cryptoassets space according to the Circle report is the rise of crypto lending which evidently became increasingly popular among retail and institutional crypto holders during the bear market.

  • Borrowers can deposit their cryptos as collateral and receive a cash loan without having to undergo a credit check. This allows them to stay invested during a down market and avoid taxes, while accessing liquidity. Traders can take out cash loans to trade on margin and create short positions.
  • Holders that do not need immediate liquidity can put their crypto to work by lending it out on, for example, decentralized peer-to-peer lending platforms like Dharma or Compound, or placing it in a depository account like BlockFi’s BIA (which now has$53 million in its interest-earning accounts).

Reading the Circle Research Report reinforces the general impression that the crypto market prepares for another bull cycle.

The market appears to have strengthened and is reasonably resilient to bad news. The announced $850M scandal around Bitfinex and Tether did not shock the Bitcoin (BTC) price too much. After the New York Attorney General announced their allegations last Thursday, the BTC share price crashed from $5,500 to 5,152, but then consolidated again above $5,200. This is quite remarkable as the Tether is the by far leading stablecoin and thus a heart of the cryptoscene. This beautifully exemplifies how resistant the crypto market is by the end of April 2019.

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