NASDAQ ENTERS INTO COLLABORATION AGREEMENT WITH R3 TO BUILD VIRTUAL ASSETS MARKETPLACES
Nasdaq, the world’s second-largest stock exchange and capital markets technology company, has partnered with blockchain solutions platform, R3, to build virtual assets marketplaces. As part of this partnership, Nasdaq will integrate R3’s software, Corda Enterprise, into its financial framework.
The goal of this partnership is to bridge the gap between financial institutions and blockchain-based virtual asset solutions by building full lifecycle solutions and supporting institutional-grade virtual assets.
Corda Enterprise provides a scalable, highly regulated and encrypted environment, which offers an optimized solution for business cases that require institutional-grade controls in reliability and availability. This integration will allow Nasdaq to enhance its broader platform and partnership strategy by building solutions for virtual assets marketplaces.
Learn more about this partnership or how the Head of Digital Assets at Nasdaq, Johan Toll, describes some of the key elements for digital asset adoption in the capital markets and beyond.
THE CAYMAN ISLANDS ANNOUNCES A VIRTUAL ASSET REGULATORY FRAMEWORK TO PROMOTE INNOVATE FINANCIAL SERVICES
On 28 April 2020, a proposed set of bills was published in the Cayman Islands to form a regulatory framework pertaining to virtual asset service providers in order to promote the development and use of innovative financial services.
This framework will help ensure that the Cayman Islands remains at the forefront of financial innovation by attracting legitimate business, protecting consumers and comply with global standards for new financial technologies.
“The Ministry [of Financial Services] has practised a robust strategy of local engagement with industry and regulatory stakeholders, having carried out extensive consultations as a part of the legislative development process. The legislative enhancements being put forward are designed to increase the jurisdiction’s attractiveness as a domicile for virtual assets business while ensuring Cayman meets international obligations’, said Tara Rivers, the Minister of Financial Services.
Learn more about the Cayman Islands' virtual asset regulatory framework.
Learn more about the methodology and the key questions when allocating Bitcoin to an institutional portfolio.
BITWISE ASSET MANAGEMENT MAKES THE CASE FOR BITCOIN IN AN INSTITUTIONAL PORTFOLIO
Bitwise Asset Management issued a research paper to examine the impact of different allocations that Bitcoin would have on a traditional portfolio that consisted of 60% equities and 40% bonds under a multitude of different market regimes.
The findings were that in most scenarios, Bitcoin almost always increased the value of the entire portfolio. Although Bitcoin a highly volatile asset, these paradoxical results remain true because Bitcoin is largely uncorrelated to other assets.
For example, adding 2.5% Bitcoin allocation to the traditional portfolio with quarterly balancing would have improved cumulative returns of the portfolio from 26.2% to 44.9%. Interestingly, even beginning your Bitcoin allocation at the recent all-time high in December 2017 would have delivered a slight, but nonetheless positive, impact on both cumulative and risk-adjusted returns of a traditional portfolio.
To achieve this benefit, there are three simple requirements are simple.
- Reasonable Time Frame: As holding periods increase above two years, the historical record of positive contributions has quickly approached 100%
- Disciplined Rebalancing Strategy: Adding an asset with a significant degree of volatility in a portfolio makes rebalancing more critical than otherwise.
- Calculated Position Size: Maximum drawdowns are probably the main limiting factor for investors to have in mind when deciding how much bitcoin to add to their portfolio.
Learn more about the methodology and the key questions when allocating Bitcoin to an institutional portfolio.
