How Bitcoin is turning from a safe haven to a safe reserve
Stone Ridge Asset, one of the most prominent and reputed asset management companies of the world found itself in troubled waters some three years back. It was speculated that the company and its employees are too harshly investing in Bitcoin and cryptocurrency that the firm’s auditors have to come and check the processes.
When the problem was made public, it was found out that the company instead of putting its client’s money in custom funds is saved in the form of Crypto assets. Yes, it is true, they wanted to put that money in Crypto and then save all of that through offline wallets to keep it safe. The vision was great and that lead to the birth of the New York Digital Investment in 2017, the first-ever subsidiary.
The decision turned out to be pretty great and the huge investment of $50 million they raised was proof of the same. This created a separate customer base that was deeply inclined in keeping their money with the company. In another surprising turn of events, the company raised yet another $50 million through equity stocks. With this, the company became an acting as custodian of 10,000 bitcoins the value of which will be around $115 million.
One major reason for this big push is the Covid-19 pandemic. With businesses shut, people facing steep unemployment, and the economy facing its worst slowdown, there has to be something that could come as a savior in these tough times.
It’s working well for the company and the customers who have trusted it with their hard-earned money. The New York-based subsidiary is carefully using the raised money to build an efficient system so that they can easily manage and operate the huge funds they have accumulated over time. It is spending a part of the investment in building a system that will bring the ease of planning, investing, and executing the custom Bitcoin funds they will put the money into and later to acquire the Crypto licenses to transact that funds.
So, primarily they will be needing two Bitcoin licenses. One will be issued in New York, which will be used to convert dollars into cryptocurrency and back again. Then, there will be another New York State limited-purpose trust license which will be used to buy, hold, and sell bitcoin and other cryptocurrencies for trading purposes. To know more about Bitcoin visit this website.
Once that will be done, the Bitcoin money will be put into the wallet and those will be secured offline in a safe manner. It is important to ensure the complete security and safety of these wallets as that is where all the money will be put. The firm has a huge clientele which includes major banks, big shot companies, high-net-worth investors, and big businessmen.
It is very crucial to build and design all these services in a manner that they function seamlessly without creating any trouble and interruption because even the smallest glitch could lead to big trouble. That’s why the company has invested so much in building a system to operate and efficiently manage all these. These systems have been kept under safe and secure customer protection laws. The Company primarily manages two large funds which it operates under its gambit of services. One is the $190 million Institutional Bitcoin Fund where it keeps the money of its high net individuals and the second one is the $140 million in which it processes the money of all its small and large clients.
With this, the company is dealing in all sorts of Cryptocurrencies including bitcoin, Ethereum, XRP, Litecoin, and bitcoin cash. With a total of these funds, the company has become a custodian of Cryptocurrency worth more than $1 billion. This is good news plus its number of clients keeps increasing and so is the money invested in these Crypto assets.
Another thing that worked well for the company is the fact that the government department of the treasury issued a letter to the banks and financial institutions saying that they will be allowed to hold reserves of their client’s money in the form of Bitcoin and other crypto-assets. So, now these companies are making the best of this decision and have put their money in stable coins backed by US dollars. This has opened the way for major assets management companies and pushed them towards keeping their reserves with Crypto.
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