The Crypto Roundup: 12 February 2021

Latest price and news from the crypto space

Latest price from our hand picked list of digital assets

The oldest bank of the United States, Bank of New York Mellon (NYSE: BK), has revealed it will start financing bitcoin and other digital currencies with the rollout of a new cryptocurrency custody service.

The first publicly traded bitcoin exchange-traded fund (ETF) in North America has been approved by Canada’s securities regulator, the Ontario Securities Commission (OSC), according to a decision document.

A new report published by Elwood Asset Management has revealed that publicly traded cryptocurrency mining firms are moving from being relatively small in the industry to become significant industry players.

The decentralized finance (DeFi) space is growing at an astounding pace, partly thanks to yield farmers. DeFi now has over $32 billion in total value locked, up from $1 billion a year ago. It's important to maximize security while using DeFi.

Top stories in the Crypto Roundup today:

World’s Largest Custodian Bank Moving Into Crypto, Considering Issuing Cryptoassets
Bitcoin ETF Approved by Canadian Securities Regulator
Publicly Traded Crypto Mining Firms Are Turning to Major Industry Players: Report
How to Maximize Security While Yield Farming on DeFi Protocols

World’s Largest Custodian Bank Moving Into Crypto, Considering Issuing Cryptoassets

The bank will start allowing cryptocurrencies to pass through the same financial network it is currently using for traditional holdings like U.S. Treasury bonds and equities. The move comes after months of analysis of its prototype digital asset framework, and a blog post shows BNY Mellon has been eyeing crypto custody for at least two years.

Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said:

“Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field.”

BNY Mellon is the world’s largest custodian bank, with some $41 trillion in assets in its safekeeping. The move lends legitimacy to the cryptocurrency space. Mike Demissie, head of advanced solutions at BNY Mellon, told CoinDesk the platform’s solution isn’t being built from scratch, and added clients may want to leverage tokens for lending purposes.

As such, BNY Mellon is also “looking at issuing digital assets, like tokenized securities, real assets.”

Bitcoin ETF Approved by Canadian Securities Regulator

The ETF seeks to replicate the performance of the price of bitcoin minus the product’s fees and expenses, according to a fact sheet published by Canada-based asset manager Purpose Investments. The ETF will not speculate on short-term changes to the price of bitcoin.

The fact sheet points to investors seeking long-term capital growth, attractive risk-adjusted rate of return, and those who can tolerate “high risk” as its target. Those looking for a “steady source of income” are advised against buying into the ETF.

The Toronto Stock Exchange is expected to list the fund in Canadian dollars. Its portfolio and fund will be managed by Purpose Investments. It will trade alongside other bitcoin-focused funds such as 3iQ’s bitcoin exchange-traded product.

Publicly Traded Crypto Mining Firms Are Turning to Major Industry Players: Report

The in-depth report details that publicly traded firms including Argo Blockchain, Hive Blockchain, Marathon Patent Group, Riot Blockchain, and Bit Digital have been able to raise around $800 million over the last two cryptocurrency boom and bust cycles, which allowed them to spend millions on new mining equipment and gain a larger foothold on BTC’s mining scene.

It details that Marathon Patent Group is likely going to “establish itself as the largest listed cryptocurrency mining company by mid-2021” based on an analysis of delivery timelines.

Elwood Asset Management also analyzed the capital expenditure of the listed cryptocurrency miners since 2019, used estimates for companies that did not publish deal amounts, such as Bitfarms and Hut8. In total, nearly $500 million were invested. The report reads:

“Using this methodology, we found out that the listed miners had spent over $488m on mining equipment between January 2019 and January 2021. Out of that, Marathon ranks first as the biggest spender, with $245.6m in deals.”

After breaking down investment by listing countries, it found companies in the U.S. came out on top, making up more than three-quarters of the total investment from listed companies, followed by those in Canada and the UK.

New Investors Are Buying Bitcoin

Livestreamed BTC transactions from the Flipside Data Cooperative show an increasing number of new investors buying Bitcoin.

How to Maximize Security While Yield Farming on DeFi Protocols

The decentralized finance (DeFi) space is growing at an astounding pace, partly thanks to yield farmers. DeFi now has over $32 billion in total value locked, up from $1 billion a year ago. While some farmers are making healthy profits on the market, others have lost thousands in DeFi, some through lax security.

The rewards in DeFi can be above-average to say the least, with annual percentage yields (APYs) often surpassing 1,000% for short periods of time. In a recent release , Defi Yield Protocol (DYP) revealed that since launch 2,575.63 ETH worth $4.2 million were paid out to liquidity providers.

Here are a few tips on maximizing security in this space while yield farming:

Avoiding liquidation - The crypto market can be rather volatile and unpredictable,and as such the best way to avoid liquidation is to set your own collateralization ratio rules, above those of the DeFi platform you are using.
Impermanent loss - Impermanent loss occurs when liquidity providers on Uniswap or other automated market markets can lose money by supplying the funds to the platform to earn interest, when compared to just holding the underlying assets.

Smart contract risks - Yield farming involves locking your assets on smart contracts, which often aren’t fail-proof. If a smart contract is attacked and your funds are locked in it, they may be at risk. Looking for projects using audited smart contracts with a good track record is the key here.