Is Binance's New Product the Best Option for HNWIs?
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Binance's latest move to court high net worth individuals and institutional investors with "Capital Connect" – a new self-service platform where institutional investors and high net worth individuals can browse crypto investment funds and connect with crypto investment managers – is just the latest sign that the cryptocurrency industry is trying to go mainstream.
But let's be honest, the idea that these wealthy investors need a "streamlined and cost-free platform" to connect with investment managers is laughable.
It's not like these investors don't already have access to top-tier investment firms that have been handling their money for decades. And it's not like they're going to trust their millions of dollars to some random investment manager they found on Binance's platform.
In fact, Binance's own announcement makes it clear that the platform doesn't filter or select investment managers or investors and won't be involved in any subsequent discussions. So what's the point of this platform, exactly?
Maybe it's just a way for Binance to get in on the action and earn some fees from these so-called VIPs who are looking to diversify their portfolios with cryptocurrencies. After all, Binance is one of the largest cryptocurrency exchanges in the world, and they've got to find new ways to make money.
So, while it's nice that Binance is trying to make it easier for high net worth individuals and institutional investors to invest in cryptocurrencies, let's not get carried away. As these investors clearly know, there are plenty of risks involved. Perhaps they're better off sticking with the traditional investment firms they already know and trust.
Elsewhere
- DBS Digital Exchange, the institutional crypto trading platform of Singapore's largest bank, DBS, reported significant growth in Bitcoin trading volumes and client holdings in 2022, according to CEO Lionel Lim. The bank believes the growth is due to the collapse of several crypto exchanges in 2022, which prompted a "flight to safety and quality."
- Remember QuadrigaCX? Yes, that bankrupt Canadian crypto exchange that was the subject of a recent Netflix documentary, and whose founder disappeared/died, taking all of its customer funds with him. Well, users may soon be compensated for their losses. The trustee for the firm’s estate, EY, will post the procedure for QuadrigaCX's users to make a claim for the distribution in the coming week. The exchange went bankrupt in 2019, owing customers some $200 million in crypto.
- Mike McGlone, Bloomberg's macro strategist, has predicted that crypto traders will begin moving their investments into gold, noting that it tends to increase in value during recessions. McGlone also said that the bear market in cryptocurrencies is likely not over yet, and investors are expected to turn bullish on Treasury bonds, which are experiencing increasing yields.
That's it for today - see you tomorrow!
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