Daniel Loeb’s $17B Hedge Fund Is Keeping Crypto With Coinbase – And Maybe Even Staking It

Nasdaq

Billionaire investor Daniel Loeb’s “deep dive into crypto” last month led his $17.6 billion hedge fund to a familiar place: a custody deal with Coinbase.

Loeb’s Third Point LLC now holds cryptocurrency from five of its funds with Coinbase, according to regulatory documents obtained by CoinDesk. Some tout billions of dollars in underlying assets, but it is not clear how much of that is in crypto, which assets, or for how long they’ve invested.

How To Get Free Crypto  

With less than a week to go before Coinbase’s Nasdaq debut, the custody tie-up underscores how Brian Armstrong’s nine-year-old firm has transformed itself from a bitcoin-only digital wallet into a massive vault for Wall Street’s crypto bets.

Related: Communitas Capital’s ‘Infrastructure-First’ Investing Approach Is Paying Off With Coinbase and Others

Coinbase revealed it held $122 billion in institutional assets during this week’s voluntary earnings call. It expects “meaningful growth” driven in part by custody revenue in the year ahead.

CoinDesk reported earlier this week that fellow hedge fund titan Paul Tudor Jones is also a Coinbase client, offering a glimpse at the deep-pocketed investors behind the exchange’s institutional assets under management.

Third Point did not respond to CoinDesk by press time.

‘Deep dive’

The hedge fund’s true exposure to crypto assets remains more opaque. In a brochure accompanying the March 31 filings, Third Point said it can invest directly in cryptos or indirectly through derivatives contracts.  

Coinbase Banner  

Related: Market Wrap: Bitcoin Stuck Around $58K; Monthly Volatility Drops to 3-Month Low

Notably, it is open to staking and lending any cryptos as well, the documents say.

“This is the first big traditional hedge fund that I know of that is doing staking,” said Tim Ogilvie, who runs a company called Staked that provides staking services to institutional investors, after reviewing the documents.

“On the one hand I’m surprised. On the other hand I’m not surprised,” he added. “If you want to hold a crypto asset that is proof-of-stake I think you have a fiduciary responsibility to stake.”

Proof-of-stake blockchains like Tezos, Cosmos, Solana and others reward token holders with payouts akin to interest for securing the network with their contributed holdings. 

Institutional investors are slowly waking up to staking, Ogilvie said. With staking there are two gains generators: the token price and the staking payout. It’s a guaranteed reward on top of a speculative bet. Ogilvie said there are $4.5 billion in crypto assets on Staked.

FreeBitcoin Banner  

Third Point invests

Loeb has never publicly disclosed his crypto holdings. But he began to toy – at least publicly – with the asset class in an early-March tweet.

Third Point’s own foray into crypto likely started well before. In mid-March the asset manager revealed it is backing crypto exchange eToro, which, like Coinbase, is gearing up for a Nasdaq debut.

eToro’s SPAC deal (it is going public through a merger with FinTech Acquisition Corp. V, or FTCV) gave Third Point and Loeb an opportunity to invest. 

They did: Loeb now holds 3 million shares, or more than 10%, of FTCV, worth nearly $43 million on Friday, according to filings.

Related Stories

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Go to Source
Author: CoinDesk


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.