Crypto Weekly: Acquisition and remarkable exposure

Crypto Weekly: Acquisition and remarkable exposure

Mads Eberhardt

Cryptocurrency Analyst

Summary:  PayPal acquires a European cryptocurrency custodian, most likely with the purpose to launch an institutional offering. A survey from Goldman Sachs concludes that 40% of their clients have crypto exposure. A highly anticipated update for the Ethereum-network is set to launch deriving big frustration to most miners.


PayPal acquires European custodian Curv

PayPal launched brokerage of cryptocurrencies in October 2020. From being solely retail-focused on its cryptocurrency offering, there is strong evidence that PayPal is doubling down on crypto, and slowly expanding its offering to institutional investors. Yesterday, the company announced they have acquired the European cryptocurrency custodian Curv for reportedly close to $200mn. The acquisition most likely marks a shift towards a custody offering for institutional investors. If that is the case, PayPal will be joining banks like JPMorgan, BNY Mellon, Deutsche Bank, and Goldman Sachs, which also have a custody offering in their pipeline. Additionally, the acquisition signals that PayPal wants to store the cryptocurrency held by its retail clients in its own custody solution, which could lift profit margins for its cryptocurrency business. Currently, the funds are allegedly stored by the US-based broker Paxos, who is also facilitating the brokerage for PayPal.

40% of Goldman Sachs clients have crypto exposure

Goldman Sachs released a cryptocurrency client survey last week consisting of interesting takeaways. Most interesting, the survey concluded that 40% of the respondents have exposure to cryptocurrencies. Out of this part, 41% hold cryptocurrencies physically. The rest is most likely holding futures or other financial instruments. 61% of the total respondents expect to increase their cryptocurrency holdings in the next 12-24 months. 24% believe lack of well-regulated, investible assets is the biggest hurdle in the crypto industry. The survey was conducted on only 280 respondents making it a small survey and the representativeness quite questionable. However, the respondents were a broad mix of hedge funds, pension funds, insurance companies, and asset managers.

Update coming to Ethereum – miners are not pleased

Ethereum developers made it public last week that the EIP 1559 update is expected to be rolled out in July this year. The update directly affects the way users are paying miners for transactions. Going from a solely bidding model to a fixed fee – with the option to tip miners, the idea is to make the fees more predictable and less expensive. Furthermore, some of the fees will automatically be burned. The burning mechanism of transaction fees will help keep inflation at a minimum. The update has been discussed in the community for years, and it is notably controversial. As miners are receiving the fees paid, they are not eager about the update as it will without question reduce their rewards. However, both Ethereum developers, users, and application creators on the network have been positive about the update being implemented as it reduces fees and makes applications easier to interact with. As a result, the update will be implemented in the “London” hard fork expected to take place in July this year. Our point of view is likewise that the update is good for the Ethereum-network as a whole – even though the miners are not delighted.
BTC against USD. Source: CoinMarketCap.
ETH against USD. Source: CoinMarketCap.

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.