Billionaire Bitcoiners: Kevin O’Leary and Carl Icahn Embrace the Crypto Ecosystem

While uncertainty flooded the global financial markets over the course of 2020 and 2021, one thing rang true: crypto is a force to be reckoned with. Now, boomers and billionaires alike are finally waking to crypto’s place in the future of our world. The past year has seen a number of previously bearish Wall Street oligarchs and renowned investors changing their minds on the utility of the asset class. Most recently, Shark Tank’s Kevin O’Leary and billionaire investor Carl Icahn are the latest to join the fun.

Crypto evangelist Anthony Pompliano recently hosted O’Leary on The Pomp Podcast, where they discussed O’Leary’s strategy to generate yield on his Bitcoin and DeFi holdings. O’Leary, who once called Bitcoin “garbage” spoke to his plan to allocate up to 5% of his portfolio’s fiat into a DeFi strategy. When asked if he would ever want to revert back to fiat after his crypto allocation, O’Leary confidently stated, “I don’t want to go back, why would I?” Coming back on his prior denial of crypto’s viability, O’Leary’s change of heart is telling of many traditional investors’ newfound revelation toward crypto’s utility and potential as a store of value asset. Like O’Leary, we expect to see further divestment from fiat in traditional portfolios as inflation sets in, followed by a redistribution into crypto assets to offer better opportunities for yield.

Billionaire investor and once crypto-skeptic Carl Icahn joined the masses this past week as he also expressed interest in the crypto market as a whole, indicating that he could allocate up to $1.5 billion dollars into crypto as the ecosystem develops. Once comparing the rise of crypto to the 18th Mississippi land bubble that crashed the European stock market, Icahn stated in his interview with Coindesk that crypto is here to stay in one way or another, a promising statement from the traditionally conservative investor.

The rising interest of billionaire investors and famed opinion leaders is the validation that crypto needs to be adopted at scale. With Elon Musk, Michael Saylor, Mark Cuban, Kevin O’Leary and Carl Icahn now in support of crypto as an asset class, the list of supporters will continue to grow exponentially. At Sarson Funds, we are here to educate and update our audience on all things crypto in order to provide the most relevant, up to date information on the industry for financial advisors, accredited investors, and Wall Street professionals. For more on us, please visit www.sarsonfunds.com and follow us on LinkedIn and Twitter.

By Liam McDonald

Wall Street Embraces Crypto: JP Morgan Announces Upcoming Launch of Bitcoin Fund

JP Morgan Announces Bitcoin Find Launch

JP Morgan Announces Bitcoin Find Launch

April 26, 2021 – Big news arrived from CoinDesk this morning regarding JP Morgan’s preparation to launch its first actively managed Bitcoin fund for its private wealth clients by this summer.  

Why is this important?

1)      JP Morgan’s CEO, Jamie Dimon, had previously declared his disinterest in cryptocurrencies due to them being a “dangerous fraud” back in 2017. A few years have gone by and now, in 2021, JP Morgan is moving towards embracing cryptocurrencies.

2)     This is not the first exposure to crypto-related public companies that JP Morgan clients have seen. Last month in March, JP Morgan filed a prospectus to enable investors to receive exposure to companies such as Square and MicroStrategy through a structured note, a debt instrument which was tied to the performance of Bitcoin, according to CoinDesk.

3)     This one is different because it will be the first Bitcoin product offered to clients with direct exposure to the cryptocurrency.

JP Morgan is not the first Financial Firm that has been embracing digital currencies. PayPal and Mastercard have already taken those first steps.

Other institutions have also been moving towards embracing the cryptocurrency revolution. Goldman Sachs shared plans of being close to offering bitcoin and other digital assets to their wealth management clients late March this year while earlier in March, Morgan Stanley became the first U.S. Bank to offer access to bitcoin funds.

As the volatility of the asset decreases over time, Wall Street giants such as JP Morgan continue to show increasing interest, including deploying their own blockchain and stablecoins.

By Jenell McLaughlin

Dollars Gone Digital: Visa Leads Fintech Integration with Crypto.com

Visa allows crypto payments for Crypto.com

Visa allows crypto payments for Crypto.com

Major news outlets started this week off with headlines reporting Visa’s new pilot program with Crypto.com. According to Yahoo Finance, Crypto.com has traditionally sold crypto assets to settle its obligations with Visa. Instead, the 10m+ user exchange will now be able to pay directly with USDC. In yet another milestone bridging the old world of finance with blockchain protocols, Visa told Reuters that it “plans to offer the option to more partners later this year.”

Known as a “stablecoin”, USDC (USD Coin) is redeemable at a 1:1 rate for US dollars. Built on standards governed by Centre, a “membership-based consortium that sets technical, policy and financial standards for stablecoins,” USDC is fully backed by reserve assets and is issued by a variety of regulated financial institutions. By digitizing the dollar through blockchain technology, USDC offers greater transactability and smart contract functionality than its cash predecessor.

Meanwhile, China, Japan, and numerous other countries are piloting their own “stablecoins,” called central bank digital currencies, or CBDCs. According to Josiah Hernandez, head of the CBDC Group, “What has spurred interest in CBDC issuance is the realization that it offers a holistic solution for updating financial infrastructure and enables instantly settled payments at no cost to customers.” With fintech giants and central banks alike working toward greater blockchain adoption, we are excited to see what’s next.

By Nathan Frankovitz

Smart Contracts: A Future of Frictionless Commerce

Smart Contracts: The future of financial operations - Sarson Funds Cryptocurrency Financial Advisor

Smart Contracts: The future of financial operations - Sarson Funds Cryptocurrency Financial Advisor

As finance becomes more digitized, it is important to consider the different ways our preexisting financial infrastructure can be more decentralized. One of the major shifts in peer to peer, business to business, and global commerce is the movement toward smart contracts as the mediation between transactions. Smart contracts are an application of blockchain technology that automatically facilitate transactions between two parties, removing the need for banks or middle institutions to be the intermediary in a transaction, and record the history of the transaction on the blockchain. The purpose of this blog is to inform the finance community on one of the most lucrative trends in the crypto industry to help them prepare for the changing landscape of fintech innovation.

Removal Of Counterparty Risk

In the current financial framework, interactions between people and businesses have always required some sort of intermediary to approve and execute a transaction. While the traditional system works, it is inefficient. The costs of involving a third party intermediary to approve a transaction are not only steep but unnecessary. Depending on the distance a transaction must travel, these transactions take several days to fully execute, changing hands multiple times and accruing more and more unnecessary costs. As each transaction passes through different banks, the risk of loss and hack grow higher. Smart contracts simplify transactions by removing unnecessary steps, creating a smoother pathway for transactions to occur, removing counter party risk, cost and time inefficiency for both of the involved parties.

Enabling the Future of Commerce

P2P Use Cases

One of the most prominent use cases for smart contracts in the current financial landscape is between individuals engaging with decentralized exchanges like Aave, Compound, and Uniswap where users can lend and borrow crypto for high yields. In these exchanges, users join lending pools where they can lend and borrow crypto with other users at agreed upon interest rates, agreements that are executed by smart contract deployment on the platform. These smart contracts, which are written code on the blockchain, execute these lending and yield agreements automatically to ensure both parties meet their agreed upon contract terms.

B2B and B2C Use Cases

Another critical use of smart contracts are in supply chains. Supply chains are using smart contracts to confirm and track shipments and deliveries as they take place, creating an instantaneous way of payment, transaction validation, and record keeping throughout the processing and delivery of consumer goods. Smart contracts are making supply chains more efficient by digitizing the payment, validation, and record keeping of the processes that goods go through from production to consumer, creating quicker and more cost efficient ways of running a supply chain.

Use cases for financial institutions

While banks are slow to adopt blockchain, the use cases for the finance community will shape the future of financial operations. Banks like JPMorgan are pioneering the future of smart contract deployment in banking as they recently launched their own blockchain, Liink, and stablecoin, the JPM coin. JPMorgan uses the JPM coin with smart contract mediation to perform risky interbank transfers and international payments instantly and without the need for an intermediary, removing the inefficiencies described above from their affairs. JPMorgan is blueprinting a lucrative landscape for other banks to follow suit with blockchain and smart contract deployment.

At Sarson Funds, we believe the financial community must keep a close eye on the development of smart contract capabilities as these automated systems enable greater, frictionless financial freedom. We believe that as the ecosystem develops, smart contracts will become the future of P2P, B2B, and B2C commerce.

By Liam McDonald

Why Bitcoin? Narratives Driving Past & Present Adoption, Explained.

Looking back on last decade’s best-performing asset.

More than a decade after Bitcoin’s inception, the world’s first cryptocurrency remains poorly understood. No matter your success investing in other asset classes, it can be overwhelming to continually hear news about Bitcoin when conversations between its proponents and skeptics remain veiled in technobabble. Even worse, mainstream coverage gravitates toward sensationalism, rather than allowing proper in-depth analysis of the world’s first cryptocurrency. This article offers an antidote to today’s noisy headlines by instead investigating the fundamental ideas driving Bitcoin’s past and present adoption. Our mission is to bring transparency to crypto education to help you decide for yourself on whether Bitcoin is an opportunity worth pursuing.

First, let’s examine how Bitcoin (BTC) serves as money. 

Simply put, Bitcoin has taken the characteristics of legacy monies and improved upon them: First, it is durable, since each Bitcoin’s record is saved on the blockchain; second, it is mobile, as Bitcoin can be sent anywhere on earth in hours, 24/7; third, it is uniform (no single Bitcoin is more valuable than another); fourth, it is scarce, as there is a hard cap of 21 million Bitcoin that can ever be created; fifth, Bitcoin is divisible up to 8 decimal places, making it scalable; lastly, it is identifiable, as the Bitcoin network automatically verifies each transaction’s legitimacy. While it is clear that each of these properties is essential to Bitcoin’s usefulness as a currency, some may be bigger strengths than others. Accordingly, narratives surrounding Bitcoin’s fit within the global economy have changed over time.

Now, let’s go back to when it all began.

On January 3rd, 2009, Bitcoin’s pseudonymous creator Satoshi Nakamoto mined the “genesis block”, or the first public transaction record on the Bitcoin network blockchain. As Bitcoin’s network rose from the ashes of the 2007-2008 financial crisis, Satoshi etched a timeless commentary in this first block’s code; “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” In congruence with today’s zeitgeist for the decentralization of finance, we interpret Satoshi’s message as a rebuke to central bank monetary manipulation, since Bitcoin’s vision for “A Peer-to-Peer Electronic Cash System” could make such actions obsolete over time. As mentioned, however, Bitcoin’s role in the emergent decentralized financial system may not manifest as originally imagined. In 2021, is Bitcoin truly peer-to-peer electronic cash, as asserted in the Bitcoin Whitepaper? If not, then what forces continue to drive Bitcoin’s price upwards, in addition to burgeoning markets for thousands of other cryptocurrencies? 

Think gold, not cash.

From January 2020 to January 2021, the US Federal Reserve increased the dollar’s monetary base from $3.44T to $5.25T (52.5%); in other words, about a third of all circulating US dollars were printed after 2019. In contrast, Bitcoin’s supply increased from 18.19B to 18.61B (2.3%) in the same time frame. By virtue of its supply’s predictable, decentralized, and deflationary production, Bitcoin became a popular safe-haven asset for investors hedging against fiat inflation. Accordingly, Bitcoin outperformed virtually every other asset class in 2020—including the millennia-old incumbent store of value, gold. While it’s true that gold has real-world industrial and cosmetic applications, these account only for a fraction of its market cap. As institutional and retail investors continue to realize Bitcoin’s superior qualities as a store of value, we believe Bitcoin will garner more acceptance as “Gold 2.0.”

But what about peer-to-peer electronic cash?

In 2017, it became clear that Bitcoin’s usefulness as peer-to-peer electronic cash was impractical in its current form. Simply put, Bitcoin was bottle-necked by limitations in its code that capped the network at roughly 7 transactions per second. However, debates about whether to or how to address these concerns were controversial among Bitcoin developers, ultimately leading to the creation of “forks.” These forks, such as Bitcoin Cash (BCH) and Bitcoin Satoshi Vision (BSV) are essentially new blockchains independent from Bitcoin’s original network. However, these projects struggle with concerns about network decentralization and security

While transactability is important for utility as peer-to-peer electronic cash, network security is paramount—without it, Bitcoin would have no underlying value. Is the vision for peer-to-peer electronic cash dead, then? Will Bitcoin always be too slow and expensive to transact for coffee? We think not, long-term. At Sarson Funds, we continue to monitor the market for technologies promising scalability for Bitcoin payments without compromising the security of its core network. With institutional players like Visa, Paypal, and Square stepping into the space, payment solutions seem like only a matter of time. In the meantime, however, Bitcoin investors may have to be content with the world’s first cryptocurrency serving only as the ultimate decentralized digital store of value. That’s a pretty good start if you ask me.

By Nathan Frankovitz

Defi Demystified: The Investor Guide to Decentralized Finance

Investor Guide to DeFi: Sarson Funds Cryptocurrency Financial Advisor

Investor Guide to DeFi: Sarson Funds Cryptocurrency Financial Advisor

Over the past few months, Sarson Funds has focused much of our analyst efforts on exploring the capabilities of decentralized financial protocols, commonly known as DeFi. DeFi has become the hottest trend in crypto over the last year, with new protocols being built every day in an effort to tokenize and decentralize traditional financial services. As of February 23rd, the total value locked in DeFi was $37.5 billion, marking an incredible uptick in investment and innovation since this time last year, when DeFi’s total value locked was under $1 billion.

As the DeFi ecosystem develops, we see it as our fiduciary responsibility to provide our community with the information they need to best understand and harness this emerging frontier of decentralized financial capabilities, so we unveil the highly anticipated Defi Demystified: The Investor Guide to Decentralized Finance.

Crafted by CIO Daniyal Inamullah, CFA and Sr. Blockchain Analyst Jacob Stelter, DeFi Demystified presents an in-depth overview of DeFi, its capabilities, and the future of the ecosystem. Our aim is to provide the financial advising community with a credible source to better understand the power of crypto from both Wall Street and crypto experts.

As news and inquiries about this emerging ecosystem arise, please do not hesitate to reach out to us for the best-in-class DeFi education and investment strategies.

For more on us, please visit www.sarsonfunds.com, or schedule an appointment with one of our teammates, here.

Sarson Funds’ Crypto & Income Strategy is Best Performing Fund in Q4 2020

Sarson Funds Crypto Strategy Award

Sarson Funds Crypto Strategy Award

Key Takeaways:

  • Crypto fund managers saw record performance numbers in 2020, according to CryptoFund Performance.
  • Sarson Funds’ Crypto & Income Strategy received top performance honors for Q4 2020.
  • Financial advisors are seeking new strategies for investors as the blockchain ecosystem grows and regulatory clarity is enhanced.

According to Crypto Fund Research, Sarson Funds’ Crypto & Income Strategy (Ax Momentum, LP) was the best performing crypto fund and best performing crypto quant fund of Q4 2020, recording a 315.9% return for the quarter and a 365.7% return for the year. This award was picked up by Yahoo in a recent release, here.

The Crypto & Income Strategy is the first in the cryptocurrency space to turn one of the biggest complaints about investing in cryptocurrency – volatility – into a useful feature: current income. The strategy does this through a covered call writing program on some of the largest cryptocurrencies trading on established US-based exchanges as well as staking and masternodes. As financial advisors look to fill the void for client yield, the Crypto & Income Strategy has seen a surging amount of interest from investment managers.

“Part of our responsibility is to provide investors with both unbiased education and diverse transparent strategies to compliment the developing cryptocurrency regulatory and market landscape. With this comes new opportunities, and we expect other top performing crypto fund managers to look at expanding digital asset investment options as the asset class continues to mature,” Sarson Funds CEO John Sarson said in a statement.

For more information about us and cryptocurrency investor education, please visit www.sarsonfunds.com, or schedule an appointment with one of our teammates, here.

By Liam McDonald

Ethereum: Pioneering the Future of Financial Services

Ethereum: The Future of Financial Services

Ethereum: The Future of Financial Services

Congratulations—you’ve made it down the Bitcoin rabbit hole, and now you’re asking the tougher questions. If Bitcoin is the ultimate digital store of value, then what are all these other cryptocurrencies up to? What is Ethereum, how does it differ from Bitcoin, and why are prominent investors suddenly talking about it? Perhaps you’ve seen Ethereum’s (ETH’s) impressive price appreciation and are curious about future price movement. In this article, we will uncover Ethereum’s present use cases, recent price appreciation, and remaining upside potential.

Native to the Ethereum network, Ether (ETH) is a cryptocurrency like Bitcoin. However, Bitcoin’s value is commonly understood as a function of its adoption as a decentralized and deflationary store of value. In contrast, Ether’s value is derived from user demand for smart contract execution on the Ethereum network. In essence, smart contracts execute decentralized applications (dApps) automatically, creating value in part by eliminating the need for central authority. Because Ethereum’s bandwidth is limited, users pay transaction fees with Ether to incentivize miners (network transaction validators) to process smart contract execution. Since anyone can create a dApp, the Ethereum network has become a vibrant and competitive ecosystem for technological innovation. With promising opportunities to decentralize and automate (read: disrupt) some of the world’s most valuable markets in finance, logistics, real estate, and more, exposure to Ethereum and its dApps may be a critical component to the modern investor’s successful portfolio.

So, what dApps exist today that contribute to Ethereum’s soaring values? Lending protocols such as Aave (AAVE) and Compound (COMP) enable users to earn interest or borrow crypto instantly. Synthetix (SNX) enables users to issue and trade synthetic assets that track the price of external assets, such as US dollars or exchange-traded stocks, making derivatives more accessible and liquid. Decentralized exchange (DEX) protocols like Uniswap (UNI) facilitate automated trading of Ethereum tokens through liquidity pools, allowing users to maintain custody of their assets as opposed to being held by centralized exchanges. Though these are only several examples, these rapidly growing dApps demonstrate real adoption and represent a broader wave of change which echoes Bitcoin’s ethos of decentralization: the decentralization of finance, or “DeFi.” Observing this trend begs the question: How much higher can ETH’s valuation go?

At the time of writing, Ethereum’s market cap is hovering around $200B USD; one year ago, today, that figure was $13B. Still, Ethereum accounts for only a miniscule share of wealth when compared to the stock markets. Globally, stock markets have an estimated value approaching $90T. But the financial markets don’t end there. Low-end estimates of global derivatives markets are $560 trillion. High-end estimates reach as high as $1.2 quadrillion. Considering the recent advent of dApps like Synthetix, it seems that Ethereum may just be getting started tapping into these markets.

When faced with Ethereum’s exploding levels of innovation and adoption, it is easy to get carried away with such numbers. In truth, nobody can precisely predict the extent to which Blockchains such as Ethereum will continue to replace legacy financial systems. Nevertheless, it is crucial to understand the enormity of Ethereum’s upside potential and consider the risk of not being exposed to its growth. At Sarson Funds, we believe the trend of decentralization will continue to manifest itself through Ethereum and other blockchain-based technologies like DeFi. For education and news updates on other emerging cryptocurrency sectors like NFTs, DAOs, stablecoins, internet-of-things, data sovereignty, and more, follow us on Twitter, LinkedIn, and check out our newsroom.

By Nathan Frankovitz