March 6, 2022
Cryptocurrency's breakthrough from the financial fringes to the mainstream has been characterized by major investors like Paul Tudor Jones — and some companies like Microstrategy and Tesla — dipping their toes into Bitcoin (BTC-USD). Even Apple CEO Tim Cook is getting in on the action.
Yet some financial advisors and wealth managers appear to be struggling over how to adapt to the new era, in a sector defined by head-spinning price action, still-evolving regulation, and rising fraud.
A recent survey from fintech company eMoney Advisor found about 38% of U.S. respondents say their investments are managed by a financial advisor, and that 43% said they invest in cryptocurrencies. The data underscore how less than half are handling out digital token advice, even as the sector becomes an increasingly hot topic in retail and institutional investing.
Separately, a January survey by crypto investment manager Bitwise found a staggering 94% of advisors surveyed have gotten crypto-related questions from clients. Yet a slim 15% actually allocated money to digital tokens.
Nevertheless, Bitwise CIO Matt Hougan said the sector was:
“approaching the tipping point for the widespread adoption of crypto by financial advisors. Two years ago, just 6% of advisors were allocating to crypto in client accounts; today it’s 15% and our survey suggests it will be nearly 30% by year-end."
Crypto's notorious volatility, in addition to the lack of a Bitcoin exchange traded fund (ETF) specifically tied to its spot price, may have something to do with it.
A spot ETF has yet to be approved by the Securities and Exchange Commission, even though a few new futures-linked funds have found a receptive audience. Several financial advisors Yahoo Finance spoke with recently all suggested a spot ETF would be the ideal vehicle for clients.
Yet Ric Edelman, founder of The Digital Asset Council of Financial Professionals (DACFP) thinks some advisors are making a mistake waiting for a spot Bitcoin fund. Having first discovered Bitcoin in 2012, Edelman argues that advisors can easily allocate 1-3% of their client portfolios to cryptocurrency-linked assets.
“Obviously, crypto is huge but we’re just not at all trained in this space," Maize told Yahoo Finance. "Even if you don’t want to recommend it as an investment, we should at least know enough to be able to discuss it," she added.
“There’s so much hype around cryptocurrency. I have no problem if people want to trade their funny money but before that many of them need to cover basic financial planning bases like allocating their 401Ks, and other retirement accounts,” Valega told Yahoo Finance.
“For our clients who want cryptocurrency and whose risk profiles suggest that it could be appropriate for their portfolios, I want to see a spot Bitcoin ETF approved by the SEC before we make anything happen,” Von dem Bussche insisted.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Forbes | Jack Kelly | March 2, 2022
It's been steadily building up for years. Many people didn’t notice, but now everything has been accelerated. Right now—and for the foreseeable future—we are in a new, fast-changing digital era. You will need to have basic tech skills just to keep up with all of the changes. If you don’t, there’s a high probability that you’ll fall further behind.
Udacity is an edtech company offering massive, open online courses to help people learn tech, cybersecurity, artificial intelligence, data analysts and software development. These are the skills needed for the future of work.
In an interview with Udacity’s CEO Gabriel Dalporto about the acceleration of tech advancements and its influence over the workplace:
"The talent shortage has reached a crisis pitch." He added, "If companies do not invest in talent transformation, they are destined to fail. The lack of job-ready digital talent has become an existential threat to businesses around the world."
To gain a better understanding of the mismatch between available talent and the needs of fast-growing businesses, Udacity conducted a Talent Transformation Global Impact Report study with leading independent market research company Ipsos, focusing on the digital divide.
The edtech company surveyed over 2,000 managers and more than 4,000 employees across four countries, including the United States, United Kingdom, France and Germany. The report highlights the urgent need to address this skill gap. For many companies, their survival is at stake.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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McCarthy Tetrault | Ana Badour, , | Feb 10, 2022
On January 19, 2022, the Organisation for Economic Co-operation and Development (the “OECD”), an intergovernmental organization founded to stimulate economic progress and world trade, published “Why Decentralised Finance (Defi) Matters and the Policy Implications” (the “Report”), a report on the growing application of decentralised finance (“DeFi”), and its increasing interconnectedness with traditional financial markets. The Report outlines some potential benefits of DeFi and describes why, in the OECD’s view, DeFi presents an “urgent challenge for policy makers”.
The Report defines DeFi as a development in the crypto-asset space seeking to replicate the traditional financial system in an “open, decentralised, permissionless and autonomous way” based on the use of blockchains, typically built on the Ethereum blockchain network. The key defining features of DeFi projects include:
The Report observes that collateralised lending, which accounts for more than half of the value of crypto-assets locked in DeFi applications, is the fastest growing DeFi product. The Report finds that DeFi lending activities try to mirror market-based lending, such as securities lending and repurchase agreements, rather than traditional retail bank lending. While most DeFi market activity involves collateralised lending, the Report notes that uncollateralised lending is possible in DeFi through flash loans, through which borrowers make and repay a loan in the same single transaction.
A significant driver of lending activity in the DeFi space is yield farming, by which users lock their crypto-assets in a lending protocol (i.e. the system that enables lending and borrowing through smart contracts) to provide applications with liquidity in exchange for crypto rewards in the form of transaction fees. The Report identifies this as a key difference of DeFi as compared with traditional lending activity, as it allows the borrowing of assets leveraged by other DeFi users.
Other prominent DeFi applications identified by the Report include decentralised exchanges (DEX), derivatives and synthetics, asset management, insurance, payments and prediction markets.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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IRSG UK | Feb 21, 2022
ESG and sustainability are becoming increasingly central to investment decisions around the world. COP26 in particular provided a big boost to sustainable finance and the shift in capital toward sustainable activities. ESG ratings are a vital component of this capital re-allocation so both demand for and reliance on these products is only expected to grow. It is therefore crucial that market users and investors have confidence in ESG ratings when making investment decisions.
However, with the ESG Ratings market still in its infancy and demand increasing at a rapid rate, it is unsurprising that significant challenges are emerging. These include transparency of methodology, ratings varying widely between different providers, clarity of purpose behind different products, availability of data disclosure, and potential conduct risks. As demand is set only to accelerate, it is paramount that these challenges are addressed to ensure the market is fit for purpose and can properly support market practitioners in assessing the risks and opportunities of potential ESG investments.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Platformable | Jan 2022
Our open banking/open finance ecosystem maps the way that APIs can help generate new products and create financial health for end users, and indirect benefits for society, local economies and the environment.
Governments direct regulators to expand digital financial services infrastructure through open banking and open finance (in some locations, markets themselves encourage greater action).
API providers (including banks and fintech platforms, like payment gateways) make APIs available, drawing on industry standards and internal API governance. These APIs are used by API consumers (such as fintech, API aggregators and marketplaces) to build new products and services.
The utility of these APIs depend on value enablers including the level of developer experience, security and privacy provisions, and are influenced by demand for digital services from end users. End users including individuals, businesses, and enterprises make use of API-enabled fintech to generate financial health and wellbeing.
The broader ecosystem could also generate indirect impacts on society including impacts on levels of participation and inclusion, support for local economies through increased employment opportunities, and the environment through more optimised use of resources and creation of sustainability products.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Economist | Feb 23, 2022
Dealmaking is at record levels. The global value of disclosed leveraged buy-outs reached $1.2trn in 2021, far above the previous record of $800bn in 2006 made up a fifth of all mergers and acquisitions, its highest share for at least a decade.
Besides buying assets from corporate owners and founders, private funds buy from each other. Some firms have been through three or four PE funds’ hands. In America, secondary buy-outs can exceed the volume of initial public offerings, the usual route for investors to cash out, says the Bank for International Settlements (bis), the central bankers’ bank.
The boom is part of a broader expansion of private markets. Top-tier firms that once focused on leveraged buy-outs, such as Blackstone, KKR and Carlyle, now look just as keenly for opportunities in private debt, real assets such as property and infrastructure, and “growth equity”, which sits between venture capital and buy-outs. More than two-thirds of the industry’s dry powder is earmarked for investments other than buy-outs. Since 2010 buy-outs have gone from 80% of KKR's business to less than half.
These market leaders are now “one-stop capital providers” for firms less able to tap traditional sources such as banks and public markets, says the BIS.
Such diversification (along with stratospheric pay) has cemented their reputation as the new kings of Wall Street. Today’s business-school graduates may now be more likely to seek a career in private markets than in investment banking. Last year Blackstone had 29,000 applicants for just over 100 analyst jobs.
The financial crisis hit pe, but it bounced back, fuelled by cheap debt as interest rates fell. Even the arrival of covid-19 in 2020 did not knock it for long. Dealmaking froze briefly, but pe firms moved to shore up portfolio firms that needed help or as an opportunity to buy cheap assets. m&a activity took off again later that year.
Private markets have been propelled by push and pull factors, says Mohamed El-Erian, chief economic adviser at Allianz, an insurer, and a former boss of pimco, a bond-fund manager. The main push factor was ultra-loose monetary policy, which drove investors towards illiquid markets that offered higher yields. Another was the retreat of banks in response to tougher capital requirements and post-crisis laws (such as Dodd-Frank in America) that discouraged or prohibited them from betting with their own balance-sheets. Private funds gleefully took up the slack.
As private markets have grown, more young firms have chosen to delay going public. The average age of companies doing an IPO in America was eight years in the 1980s and 1990s. The average since 2001 has been 11 years.
As companies stay private longer, “more investors are looking to get in at that pre-IPO stage, as that’s when most of the wealth creation happens,” says Ben Meng of Franklin Templeton, a fund manager.
Some firms opt not to go public at all, confident of raising enough capital privately, says Byron Trott, head of BDT Capital Partners, a merchant bank for family firms. Of the 40 companies BDT has invested in since 2009, only three have gone public.
Not that the public markets are down and out. Last year was a record one for ipo listings. Firms going public also have other routes, such as direct listings or mergers with special-purpose acquisition companies (spacs), which landed with a bump after a boom in 2020-21 but are unlikely to disappear.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Logic via FP | Catherine McIntyre | Feb 17, 2022
The firms that make up Canada’s private capital markets are slowly diversifying, according to a new report, with more women, people of colour, LGBTQ2+ and folks with disabilities than ever across all ranks of venture capital and private equity firms.
The Canadian Venture Capital & Private Equity Association’s State of Diversity and Inclusion report—sponsored by BDC Capital, CIBC and The51, and to be released Thursday afternoon—gathered data on metrics like gender, race and sexual orientation from 413 employees across 122 firms in the country to get a clear picture of the demographic makeup of an industry that’s traditionally been overwhelmingly white and male.
Canada’s private capital markets are slowly diversifying their workforces, according to the latest diversity and inclusion report from the Canadian Venture Capital & Private Equity Association. Greater representation of women, racial minorities and LGBTQ2+ employees in VC firms’ junior ranks shows potential for a demographic shift at the partner level. But concerns about inclusion could threaten that progress.
The results show an improvement over the CVCA’s last diversity report, released in 2019, but president and CEO Kim Furlong said diversifying the industry is still a work in progress. Here’s what you need to know:
Women overtake men in non-management roles: Women accounted for 61.3 per cent of all non-partner employees at venture capital firms in 2021. (The report does not include data on non-binary employees.) That’s more than in the broader financial industry, which the CVCA used as a benchmark; industry-wide, 52 per cent of non-partner employees are women. In 2019, less than a quarter of VC firms that responded to the CVCA survey had women in over half of all junior-level positions, and about 14 per cent of firms had women in more than half of non-partner management roles.
Diversity overall decreases with seniority: At the partner level, the number of women dropped to just 19 per cent. For racial and ethnic minorities, representation fell from 20.6 per cent among non-partners to 18 per cent among partners, while LGBTQ2+ people accounted for 11 per cent of all non-management employees and 10.3 per cent of partners. People with disabilities—a category that includes physical, cognitive and learning disabilities, as well as mental health conditions—were the only group whose representation consistently increased with seniority, from 12 per cent of junior employees to 17.6 per cent of staff excluding partners and 19 per cent of partners.
Black and Indigenous underrepresentation: Most of the gains in racial and ethnic diversity at the VC partner level—up 5.2 per cent from 2019—came from people with East and South Asian backgrounds, while partners from Black, Indigenous, Middle Eastern and Latin backgrounds “remain few and far between,” the report notes. The CVCA identified the same pattern in the private equity sector. “Notably Black and Indigenous remain significantly underrepresented,” it reads.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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