In today’s bitcoin and cryptocurrency news, read about ForUsAll Inc. launching its Alt401(k) with 50 companies on Thursday. The tool lets employees invest in Bitcoin and Ethereum in addition to regular equities. Fidelity Investments Inc. recently said it will allow bitcoin in the programs it administers. Meanwhile, the asset manager behind Australia’s first crypto ETFs wants to delist them barely months after launch. Finally, Coinbase (COIN) has struggled in a turbulent year for cryptocurrencies. The largest publicly traded crypto exchange failed to meet expectations as bitcoin values rebounded and stabilized.
To Complement Fidelity’s Cryptocurrency 401(K) Offerings, Forusall Has Entered the Market
Original Source: ForUsAll Joins Fidelity to Offer Cryptocurrency 401(k) Plans (1)
The company challenging the US Labor Department over recommendations it gave earlier this year warning retirement plans of the dangers of accepting bitcoin investments has established the nation’s first crypto 401(k) brokerage window.
ForUsAll Inc. brought their Alt401(k) plan live with 50 companies Thursday. The platform allows employees at those organizations to participate in risky growth assets such as Bitcoin and Etherium in addition to standard stocks.
Fidelity Investments Inc. said recently that it will allow programs it administers to invest in Bitcoin.
A Fidelity spokeswoman acknowledged Thursday that the company has actually gone live with consumers, but declined to reveal how many plans support crypto investing.
There are companies that provide Fidelity’s Digital Assets Account as part of their 401(k) selection, a representative said. “First plan sponsors went live this fall, as expected.”
Both ForUsAll and Fidelity are counting on crypto investments amid a market slump and as regulators and participant rights attorneys examine ways to punch holes in the crypto bubble. Traditionalists in the 401(k) industry argue digital currencies have no place in retirement savings.
Emerging Growth
Many of San Francisco-based ForUsAll’s clientele are fintech firms and digital startups that operate with crypto assets.
NuHire Group LLC is a staffing and recruiting agency for technology enterprises. Founding Partner Ashton Wood said the company considers cryptocurrency as a viable financial innovation.
“Our team has the distinction of assisting create some of the most cutting-edge blockchain firms in the world,” he said. “We observe firsthand the changes coming to the financial sector and owe it to our staff to offer seamless access to the future of finance.”
ForUsAll aims to roll out its new investment platform to more than 100 companies later this year.
The Alt401(k) levels the playing field for typical investors who wouldn’t otherwise have access to cryptocurrencies and their underlying blockchain technologies, said ForUsAll co-founder and CEO David Ramirez. Institutional investors and rich Americans have already attempted cornering the market, but middle-class investors access Wall Street mostly through their 401(k), so growth potential like crypto should be made available to them, he said.
“Precluding the average American from investing in what has been one of the highest performing asset classes in 100 years would put them at a structural disadvantage relative to giant institutions and high-net-worth individuals,” said Ramirez.
ForUsAll has been at the heart of a simmering controversy over crypto 401(k)s since it sued the Labor Department in June on subregulatory guidance the department’s employee benefits agency published this year threatening federal investigations against plans that opt into digital asset investing.
The caution warned plan sponsors that bitcoin investments are volatile and difficult to appraise. ForUsAll said in its lawsuit that the agency’s warnings amount to a prohibition on digital currency investing that subverts federal rulemaking.
It’s unclear whether the government will investigate any or all of ForUsAll or Fidelity’s clients. The department didn’t immediately reply to a request for comment Thursday.
Both companies are “daring” the department to examine their clients, said John Reed Stark, a former SEC enforcement attorney who supervised the agency’s Office of Internet Enforcement.
“Do they think the DOL will back down?” Stark operates a cybersecurity response consulting firm. “When they come in and say they’re going to do it anyway, it doesn’t make you step back, it makes you lean in.”
He said crypto-infused 401(k) plans may face danger from regulators seeking low-hanging enforcement fruit and possible plantiffs who perceive the space as a litigation jackpot due to high fees and aggressive sales.
Safety Guardrails
ForUsAll’s crypto plan offers digital investments through a brokerage window, which is outside the basic plan lineup and enables workers access to on- and off-market growth vehicles.
The brokerage window protects investors and their employment plan sponsors, said Ramirez. Until previously, regulators avoided holding anyone but investors accountable for window decisions. Bifurcating the ForUsAll 401(k) platforms between the core plan lineup and the brokerage window allows the company to add additional protections for participants to ensure they understand the risks.
Alt401(k) plans have an in-plan brokerage window that enables workers transfer up to 5% of their savings into more than 50 cryptocurrencies. ForUsAll says it regularly monitors crypto allocations and will warn employees when their allocation exceeds 5% of their portfolio.
The company says it offers its clients’ personnel risk-focused employee education, thorough risk disclosures, and a quiz they must complete to demonstrate their grasp of crypto investing risks.
After Only 6 Months, an Australian Asset Manager Has Decided to Delist Bitcoin and Ethereum ETFs
Original Source: Australian Asset Manager Delists Bitcoin, Ethereum ETFs After Just 6 Months
The asset manager behind two of Australia’s first crypto exchange-traded funds (ETFs) has sought to delist them just a few months after introduction.
The fund responsible for Cosmos Asset Management’s ETFs indicated in a letter to Cboe that it will move to revoke its Bitcoin and Ethereum products from the market.
The Cosmos Purpose Bitcoin Access ETF (CBTC) and the Cosmos Purpose Ethereum Access ETF (CPET) were both established in May, with two competing funds were listed the same day, marking the first funds to be listed on the Australian stock exchange.
Another fund that invested in crypto mining firms, DIGA, will be withdrawn from the market.
The procedure of launching the funds was sluggish, with delays until the last minute before listing.
By the time CBTC began trading on May 12, 2022, the crypto world was in meltdown after the collapse of the Terra environment.
The following bear market is likely to have added to Cosmos’s woes, with insiders telling the Australian Financial Review that the firm failed to afford the high costs of running the fund.
In six months, Cosmos’ CBTC ETF lost roughly 19%, while CPET was down 13.8%. Both stocks were stopped on Monday.
Cosmos was originally owned by Nasdaq-listed bitcoin miner Mawson Infrastructure, which operates sites in the U.S. and Australia.
Mawson’s opted to sell Cosmos because it didn’t want to be in the “long game” of ETFs, CEO James Manning told the AFR.
Decrypt has contacted Cosmos for comment.
Crypto ETFs Australia
Cosmos teamed with Canadian firm Purpose Investment and custody expert Gemini Trust to set up the funds. K2 Asset Management is responsible for CBTC and CPET, while One Investment Group is responsible for DIGA.
Despite the delistings, chief executive Dan Annan told the AFR that the firm still “strongly” believes in the asset class.
Meanwhile, two competing funds created by ETF specialist Graham Tuckwell on the same day as Cosmos’ vehicles are still running.
But they haven’t been immune to the market collapse.
At current pricing, the Global X 21Shares Bitcoin ETF (EBTC) was down 18% on its debut May trading price, while the Global X 21Shares Ethereum ETF (EETH) was only down 6.4%.
Today, Bitcoin is trading at $20,000 and Ethereum at $1,539.
Crypto Exchanges Miss Q3 as User Participation Drops
Original Source: Coinbase Earnings: Crypto Exchange Woes Continue With Q3 Miss As User Participation Plunges
Coinbase (COIN) has struggled in a turbulent year for cryptocurrencies. The largest publicly traded crypto exchange failed expectations as bitcoin values rebounded and stabilized.
Bitcoin and Ethereum both plunged 60% this year, while Coinbase stock fell 76%. Second-quarter retail participation on Coinbase decreased 70%.
Coinbase and Primer announced a strategic partnership in mid-October to give crypto payment solutions to retailers internationally to boost user trading volume.
Chase White of Compass Point dampened hopes for a retail trading volume revival. In his pre-earnings research report at the end of October, he dropped COIN stock’s price target from $95 to $75.
Still, increased institutional acceptance is great for the crypto industry.
Coinbase Revenue
Second-quarter Coinbase lost $4.98 per share on $808 million in sales. Compared to $6.42 on $2.2 billion last year.
Wall Street expected $2.38 per share losses vs. $1.62 last year. And halved to $641 million.
Coinbase lost $2.43 per share and made $576.4 million.
Retail transaction revenue plummeted 66% to $365.9 million throughout the year, driving the decline. Subscription income grew 44% to $210.5 million.
StockCOIN
After hours, COIN shares increased 3%. Thursday’s trading low was 55.80, down 8% from late July. Coinbase could see its seventh straight drop.
Bitcoin affects COIN stock. Late in October, Bitcoin climbed beyond $20,000. The digital currency has dipped somewhat, but is still holding.
Directly offering Coinbase stock in 2021. COIN stock has fallen since November 2021, when it touched a record 429.54 on its maiden day.
Coinbase’s return?
Coinbase has its supporters. Mid-September, JPMorgan analyst Kenneth Worthington said higher interest rates might boost Coinbase’s income. Due to “unique investments and quirks with crypto accounts,” Coinbase has more revenue potential than conventional banking institutions. Worthington anticipated Coinbase could keep nearly all of its interest income, unlike its peers.
The USDC stablecoin collaboration with Circle may be the most interesting. Worthington predicts it might be $700 million of Coinabse’s $1.2 billion in 2023 interest income.
Summary of today’s bitcoin and cryptocurrency news
To sum it up, with an in-plan brokerage window available through most alt401(k) plans, employees can invest up to 5% of their retirement funds in any one of more than 50 different cryptocurrencies. According to ForUsAll, if an employee’s crypto holdings rise above 5% of their portfolio, they will be notified immediately. The firm claims it provides its clients’ employees with risk-focused employee education, comprehensive risk disclosures, and an exam to prove they understand the dangers of cryptocurrency investment.
Meanwhile, comparatively, the Global X 21Shares Ethereum ETF (EETH) is down 6.4% from its May inception trading price, while the Global X 21Shares Bitcoin ETF (EBTC) is down 18%. Today, the price of one bitcoin is around $20,000, while the price of one Ethereum is at $1,539.
Finally, Circle, which is responsible for the USDC stablecoin, may have the greatest possibility of attracting new investors to the stablecoin endeavor. Worthington thinks that by 2023, Coinabse’s interest income stream might reach $1.2 billion, making this a $700 million opportunity.
