The incoming SEC chairman Gary Gensler clearly stated that both Ethereum and XRP were non-compliant securities

In a recent seminar with Court Judge Sarah Netburn, Dugan Bliss, a senior adjudicator at the US Securities and Exchange Commission, argued that the agency has not yet made a formal position on the regulatory status of Bitcoin and Ethereum. Bitcoin looks more certain, however, the status of ETH is being disputed as is the case with XRP.

Ethereum could still be classified as a security

Bliss stated:

“So I want to make clear that this is my understanding of the current situation and I don’t want to be overly technical, but the SEC, itself, my understanding, it has not taken an official position. There is no action that it took to say Bitcoin is not a security, Ether is not a security.”

While former SEC chairman Jay Clayton has repeatedly stated that Bitcoin is not a security, there is less regulatory certainty over Ethereum.

Bill Hinman, former head of the SEC’s Corporate Finance Division, issued a statement of approval on the sale of Ether and non-securities offers just months before the end of his term in 2018.

Bliss stated that Hinman’s speech does not necessarily reflect the regulator’s stance on Ethereum:

“Now, there was a speech by a high-ranking person who said that to him that’s what it looked like but there has been no action letter, no enforcement action, none of the official ways in which the SEC takes a position on that matter that has occurred.”

However, the upcoming SEC chairman Gary Gensler has made it clear that both Ether and XRP are non-compliant securities in an interview with the New York Times:

“There is a strong case for both of them — but particularly Ripple — that they are non-compliant securities.”

Notably, Gensler confirmed that he sees Bitcoin as a commodity during his recent congressional hearing:

“So I think at the SEC it’s really to the extent somebody is offering an investment contract and security that’s under the SEC’s remit and exchanges that operate there. […] If not, it’s a commodity as Bitcoin has been deemed.”

Unlike Bitcoin, Ethereum pre-mined a significant portion of the money prior to holding the initial coin offering (ICO).

Hong Kong-based app-maker Meitu bought another 175 BTC to reach the $100 million in its Cryptocurrency Investment Plan
hong-kong-based-app-maker-meitu-bought-another-100-million-in-btc-and-eth-to-its-treasury

According to the announcement today, the beauty application Meitu purchased another 175 BTC to reach the $100 million mark it set for itself in its Cryptocurrency Investment Plan.

Meitu buys another $10 million in Bitcoin

Therefore, the goal to invest $100 million in the cryptocurrency of Meitu has been achieved. The plan called for Meitu to add $100 million in BTC and ETH to its treasury, both as an investment and preparation for future initiatives. Meitu intends to use some of the ETH to launch decentralized apps in the future.

The publicly traded firm first acquired $40 million in BTC and ETH in early March of this year, when it unveiled its intention to make further purchases. A week later, it purchased another $49 million. Today’s announcement is the final $10 million of the acquisition.

In total, Meitu holds 31,000 ETH (valued at $50.5 million) and 940 BTC (valued at $49.5 million).

Coinbase disclosed in late March that its institutional business facilitated the past purchases, a service it has provided for other public companies such as Tesla. It’s unclear if the latest purchases were also handled by Coinbase.

Meitu is one of the first China-based publicly listed companies to add crypto to their treasury. Other tech firms like Square, Tesla, and MicroStrategy made headlines in the past year for making similar acquisitions.

USD 3 Trillion Corporation State Street Goes Crypto
USD 3 Trillion Corporation State Street Goes Crypto 101
Source: Adobe/Lubo Ivanko

US-based financial giant State Street aims to enter the crypto trading market in the middle of this year.

State Street’s trading platform Currenex, that was reportedly put for sale last year, partnered with London-based Puremarkets Ltd (Pure Digital) in order to develop a wholesale, multi-custodial digital currency trading platform, Puremarkets said today, adding that the partners “intend to further explore the digital currency trading space.”

“Pure Digital will be a fully automated, high throughput [over-the-counter] market for digital assets and cryptocurrencies with physical delivery and bank custody,” the company said.

According to them, institutional participants will trade on the platform utilizing bilateral credit enabling efficient capital utilization and control for all trading participants.

“The Pure Digital trading platform will be the first of its kind, offering a wholesale interbank market for Tier 1 investment banks to trade bitcoin and other digital assets. Pure Digital is in discussions with several other Tier 1 investment banks to use the platform, which will provide a high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody,” Norway’s digital asset-focused company Arcane Cryptosaid in a separate announcement. They indirectly own a 37.5% stake in Puremarkets.

At the end of 2020, State Street had USD 3.47trn in assets under management or 11% more than a year ago. However, their revenue dropped by 4%, to 2.9bn, and net income decreased by 5%, to USD 537m.

“While State Street rose to the challenges in 2020, we are laser-focused on fee revenue growth and expense management to continue to make progress in 2021 towards our medium-term targets. We are confident in the trajectory of our business and will continue to drive innovation, automation and productivity to achieve these goals,” Ron O’Hanley, Chairman and CEO of State Street, said.

Bitcoin Price Analysis: Losing $4K in 24 Hours, Can BTC Hold the Critical Support Area?

Bitcoin fell by a sharp 4% so far today as it dropped as low as $55,600. The cryptocurrency had started the month with another attempt to breach the $60,000 benchmark level. Unfortunately, it was unable to overcome this resistance through the week as it set a range between $60,000 and $57,000.

Today’s price drop caused bitcoin to break beneath this range as mentioned above. As of writing these lines, and as seen on the following 4-hour chart, it is currently holding the critical support around $56,200 – $56,100, provided by a short-term .382 Fib and a 4-HR 200 moving average line.

BTC Price Support and Resistance Levels to Watch

Key Support Levels: $56,200, $55,600, $55,000, $54,675, $54,200.

Key Resistance Levels: $58,355, $60,000, $60,750, $61,781, $62,400.

Moving forward, if the bears push back beneath the current support at $56,200 (MA-200 on the 4-hour chart), the first support lies at today’s low around $55,500 (which is also a descending trend-line started forming towards the end of January).

This is followed by $55,000, $54,675 (.382 Fib), and the critical level of $54,200 (50-days MA). This last support is further strengthened by an ascending trend line that has been in play since early March 2021.

On the other side, if BTC price will hold here, the first resistance now lies at the daily MA-20 around $56,800. This is followed by $58,355 (February highs), and the crucial area of $60,000. The latter had been rejected at least 5 times over the past month.

The daily RSI has now crossed beneath the midline, indicating bearish momentum has taken control within the market, in the short term. This comes after the RSI produced a bearish divergence signal earlier in the week as we mentioned here in the previous price analysis.

Tech has dominated the economy – but the real world is about to strike back

Even money itself has gone digital. Only about 3% of money globally is now in physical form. Bitcoin is now (measured by market cap, at least), the 13th largest currency in the world. It didn’t exist 15 years ago.

The key to this rapid growth is scalability. A digital product can be endlessly and instantly copied. I can design a fantastic app once, upload it to the app store once, and it can be downloaded a million or a billion times. If Google can get some new groovy feature in its search engine, then once implemented it’s almost infinitely scalable.

But let’s say I design a fantastic washing machine. It takes much longer to get this washing machine to the world – the fabrication and distribution are all tricky, but perhaps most difficult is the burden of regulation in the physical economy, particularly as it attempts to cross the national borders.

By contrast, the economy of the internet is (almost) borderless. The digital space, or certainly the areas where the innovation is, is largely unregulated – how do you regulate something that hasn’t been invented? So digital escapes the ties of regulation that curb the growth of the tangible.

Then, because of the extraordinary speed of growth in digital, there is the potential for investors to make far quicker returns on their investment. And so the digital economy attracts the most capital, the most talent and so on.

With this in mind, let us turn our attention to metals.

The physical world is treacherous and time-consuming

You don’t get much more tangible than metal. Mining is in many ways the most analogue industry there is; it is the very opposite of the dynamic digital world. A geologist is studying rock formations that took thousands of years to take shape, and will take decades to mine.

Allfunds kept an eye on the Euronext Amsterdam IPO in an effort to secure diverse funding sources

An application will be made for admission to Euronext and the company’s IPO will consist of a private placement of existing shares offered to institutional investors.

LHC3, BNP Paribas Securities Services and Credit Suisse intend to sell a minimum of 25% of the company’s shares, with an over-allotment option for “stabilisation purposes”.

A bitter aftertaste? Deliveroo IPO flop could deter growth stocks from listing in London

Allfunds, which will be renamed Allfunds Group, will not receive any proceeds from the offering but the listing will create access to capital markets, diversified sources of funding and an increase in brand awareness.

It will also build a wider base of long-term shareholders with increased liquidity.

Following admission, the company is targeting a dividend payout ratio of 20% to 40% of adjusted annual profit/loss after tax, with expectations that the 2021 payout will track close to the bottom end of this range.

It is intended that excess cash will either feed M&A opportunities, or special dividends and buybacks.

As of 31 December 2020, the platform had grown to administer €1.2trn in assets while offering roughly 100,000 funds from 1,960 fund houses.

Over the coming years, the group also plans to expand further into regions it currently has a small foothold, with a particular focus on Asia and North America.

BNP Paribas, Credit Suisse Securities, Citigroup Global Markets and Morgan Stanley Europe will act as joint global coordinators while Rothschild & Co is set to act as independent IPO advisor to the firm.

Chrysalis’ Williamson on crossroads that led to new share issuance

Juan Alcraz, founder and CEO of Allfunds, said: “With over €1.2trn in assets under administration, we have grown into what I believe is the largest network of fund houses and distributors accessing a marketplace that operates in 59 countries.

“We have built an ecosystem that covers the entire fund distribution value chain and investment cycle, integrated into a simple one-stop-shop for our clients.

“Allfunds has been gathering momentum over a 20-year journey since I founded the business, but there is still an enormous opportunity to be realised. This listing provides us with the flexibility to accelerate the digital transformation of the wealth management industry and the growth of our best-in-class global platform.

“With the support of leading institutional investors – many of whom are trusted clients, access to global capital markets, and the continued dedication of our employees, we will continue offering our clients unparalleled service and support in a more connected and digital world.”

Amundi participates in exclusive negotiations for the acquisition of Lyxor in a € 825 million deal

The acquisition, which could also cost the French asset manager €755m excluding excess capital, would turn Amundi into Europe’s largest ETF provider with combines AUM of €142bn and a 14% market share.

Amundi expands ESG ETF range with double launch

Amundi said the acquisition of Lyxor, which with €77bn in AUM is the third largest player in Europe’s ETF market with a 7.4% market share, would provide the combined business with “a diversified profile in terms of client base and geography”.

The French asset manager also noted that the acquisition would allow Amundi to “accelerate its development” within the ETF market and complement its active offering, particularly within liquid alternative assets as well as advisory solutions.

Based on a €755m figure, the deal would create an estimated enterprise value representing a price-to-earnings 2021 multiple of around 10x, including run-rate cost synergies.

Amundi said it would see a return on investment worth more than 10% in year three after completion, including run-rate cost synergies.

The transaction is expected to be completed by February 2022 at the latest, subject to receiving the required regulatory and anti-trust approvals.

Yves Perrier, CEO of Amundi, said the acquisition of Lyxor “will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management, and allows us to welcome highly recognised teams of people”.

“This acquisition is fully in line with the Crédit Agricole group’s reinforcement strategy in the asset gathering business,” he added. “It will also further reinforce the business relationships with our historical partner Société Générale.

“Finally, by creating in France the European leader in passive asset management, it will contribute to the post-Brexit positioning of the Paris financial centre”.

Amundi CEO Perrier steps down as firm reports highest-ever profit in Q4

Deputy CEO of Amundi Valérie Baudson said: “The combinations of our strengths will allow us to accelerate our development in the ETF, alternative asset management and the investments solutions segments.”

BP looks set to return more money to shareholders as it beats expectations

Oil major BP has said that it expects to start buying back its own shares again, after hitting its targets for reducing its debt load earlier than anticipated.

“We are pleased to announce that we now expect to have reached our $35bn net debt target during the first quarter 2021,” said BP’s chief executive, Bernard Looney. “This is a result of earlier than anticipated delivery of disposal proceeds combined with very strong business performance.”

Net debt at the end of 2020 was $38.9bn, meaning that BP has sliced nearly $4bn off its debt pile in the past three months.

The group will update with more detail when it reports on its first quarter results at the end of this month (27 April). For now, BP noted that it is committed to “returning at least 60% of surplus cash flow to shareholders by way of share buybacks, subject to maintaining a strong investment grade credit rating.”

So why has net debt declined so rapidly? BP made more money from selling assets than it had expected. Deals included the sale of a petrochemicals business to global chemical giant Ineos, the sale of a stake in software group Palantir, and the raising of more than $2.4bn from the sale of an Omani gas development. As a result, the group now expects sales proceeds to hit the upper range of its earlier $4bn to$6bn estimate.

The group also benefited from the strong rebound in the oil price earlier this year.

What does this mean for your portfolio?

BP’s share price cheered the unexpectedly positive announcement, gaining around 3% to trade at around 300p a share.

As Mark Nelson of Killik notes, the shares still look reasonably priced “on a price to December 2021 earnings ratio of 11.3 times” plus “a prospective dividend yield of 5.3%”. Meanwhile AJ Bell analyst Danni Hewson reckons that the share buybacks raise the “prospect of more generous returns to shareholders”.

Long story short, if you hold BP already – and we’ve been pretty positive on oil stocks so a lot of you probably do – this is another reason to hang on. And even if BP isn’t your preferred play, we’d suggest having some exposure to the sector – fossil fuels will be around for a while longer and the market still doesn’t look to have priced in all of the rebound potential from the Covid-19 lockdowns.

Investment Week digital edition – 5 April 2021

Why ESG issues matter a lot to investors

Proceed with caution: Is economic bounce-back being over-promoted?

How not to get carried away with post-Covid outlook

The Big Interview: Somerset Capital’s Dominic Johnson

Why the firm became ‘a nicer place to work during the crisis’

Is this seat taken? Plenty of smart thinking needed to create the office of the future

Picton’s Michael Morris on why better facilities and flexibility will win over workers