Ratings agency Fitch has downgraded El Salvador’s long-term foreign currency issuer rating to ‘CCC’ from ‘B-‘ weeks ahead of the issuance of the country’s bitcoin bond. The country currently faces close to $1.2 billion in external debt amortizations in 2023, with $800 million due in January.

The world’s largest asset manager, BlackRock, is preparing to offer a cryptocurrency trading service to its investor clients.

A new note from Bank of America suggests investors shouldn’t look at bitcoin as an inflation hedge because it no longer resembles “digital gold” the way it did at the start of the pandemic.

Sponsored: The Invictus suite of funds offered commendable performance in a quarter marked by heightened volatility in the Bitcoin and broader cryptoasset market. All five of the Invictus funds registered positive returns for the quarter, with the vast majority outperforming their benchmarks. 

Top stories in the Crypto Roundup today:

• Fitch Downgrades El Salvador to ‘CCC’ Ahead of Bitcoin Bond Issuance
• BlackRock Plans Crypto Trading Service
• Bitcoin’s Correlation With Gold Is Near Zero: Bank of America
• What is a Gold-Backed Cryptocurrency?
• Sponsored: Invictus Capital continues to deliver an uninterrupted path of growth across all its funds

Fitch Downgrades El Salvador to ‘CCC’ Ahead of Bitcoin Bond Issuance

Ratings agency Fitch has downgraded El Salvador’s long-term foreign currency issuer rating to ‘CCC’ from ‘B-‘ weeks ahead of the issuance of the country’s bitcoin bond. The country currently faces close to $1.2 billion in external debt amortizations in 2023, with $800 million due in January.

According to Fitch the downgrade reflects “heightened risk stemming from increased reliance on short-term debt, limited scope for additional local market financing, uncertain access to additional multilateral funding and external market financing given high borrowing costs.”

Fitch added there is a “high degree of uncertainty surrounding other sources of external financing, such as additional multilateral funding, given doubts surrounding an IMF program” and the capacity to issue its bitcoin bond.

El Salvador’s bitcoin-denominated Volcano Bonds offer a 6.5% coupon compared to the 13% offered on its 10-year government bonds.

BlackRock Plans Crypto Trading Service

The world’s largest asset manager, BlackRock, is preparing to offer a cryptocurrency trading service to its investor clients.

The New York-based company manages over $10 trillion in assets for institutions and is planning to enter the cryptocurrency space with “client support trading and then their own credit facility.”

People familiar with the matter have reportedly said BlackRock is planning to allow clients to trade cryptocurrency through its integrated investment management platform Aladdin, short for ““Asset, Liability, Debt and Derivative Investment Network”

BlackRock’s intentions were shown as early as June when it started hiring a blockchain strategy lead for Aladdin. The firm has sent some positive signals to the market regarding crypto, including trading CME bitcoin futures and owning 16.3% of MicroStrategy, whose CEO, Michael Saylor, is one of the most popular bitcoin proponents out there.

Bitcoin’s Correlation With Gold Is Near Zero: Bank of America

A new note from Bank of America suggests investors shouldn’t look at bitcoin as an inflation hedge because it no longer resembles “digital gold” the way it did at the start of the pandemic.

Bitcoin’s correlation with gold, the note says, increased dramatically in March 2020 as the Federal Reserve’s stimulus moves and inflation fears boosted demand for it. That correlation has since dropped to near zero.

Analysts led by Alkesh Shah noted that instead, the correlation between bitcoin and both the S&P 500 and Nasdaq 100 increased significantly since July 2021 and hit a new high at the end of January.

BofA’s analysts added they expect tokens to “trade as risk assets until price volatility decreases for deflationary tokens like bitcoin.”

What Is a Gold-Backed Cryptocurrency?

Gold has historically always held value. The precious metal isn’t just used as a component of decorative jewelry: it has often been used as a currency and as an investment. Gold-backed cryptocurrencies essentially bring gold to the blockchain.

Bringing gold onto the blockchain makes it easier to transact with gold and could even allow it to become an efficient medium of exchange. Nevertheless, gold-backed cryptocurrencies have historically struggled to gain widespread adoption.

In this guide, we looked into why investors with exposure to cryptocurrencies would want a gold-backed cryptocurrency and the pros and cons of such a digital asset. We will also mention some of the top gold-backed cryptocurrencies in circulation.

 

Invictus Capital continues to deliver an uninterrupted path of growth across all its funds

The Invictus suite of funds offered commendable performance in a quarter marked by heightened volatility in the Bitcoin and broader cryptoasset market. All five of the Invictus funds registered positive returns for the quarter, with the vast majority outperforming their benchmarks. The simple average return across our suite of funds was 10.7% for the quarter, which is equivalent to an annualized return of 50%.

• The Crypto10 Hedged (C10) fund offered the greatest returns over the quarter at 23.91%, far outstripping its benchmark of 1.66% and Bitcoin at 12.36%. 

• Crypto20, the flagship fund, had a stellar year registering a return of 334.98%, it significantly outperformed its Top 20 equally weighted benchmark, which rose 261.92%.

• The Invictus Bitcoin Alpha (IBA) fund  managed to outperform Bitcoin throughout the fourth quarter, marking a total return of 14.56%, accompanied by significantly less volatility.

• The Hyperion venture capital fund continued on its impressive run, appreciating a further 5.05% off the back of a Quantfury dividend and Syntropy revaluation. The large dividend received by Quantfury will allow for a healthy level of buy-and-burn activity on the IHF token over the coming months.

• Invictus Margin Lending (IML) Fund registered a 2.48% net return for the quarter against its 1.48% benchmark hurdle.

Invictus Capital is now on the cusp of a historic migration into a fully-regulated fund structure that will place us at the forefront of innovation within the asset management space. It should also bring our investors the peace of mind that comes with additional, 3rd-party oversight of our operations.

Disclaimer:

Cryptocurrency trading involves high risk, and is not suitable for all investors. Before deciding to trade cryptocurrencies, tokens or any other digital asset you should carefully consider your investment objectives, level of experience, and risk appetite.

Its content does not constitute financial advice. Please remember that the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. If you are unsure of the suitability of your investment please seek advice.

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