Masttro Launches a New Wealth Management Platform

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Masttro announced on Monday the launch of its next-generation platform, establishing a new benchmark for more streamlined and robust wealth data management.

“The platform update arrives at a time of rising global asset valuations and increased complexity in wealth portfolios, as more asset owners are acquiring illiquid alternative investments,” states the press release accessed by Funds Society.

Family offices and wealth managers tasked with record-keeping and reporting often have limited visibility into asset management and performance unless they undertake significant manual data aggregation efforts, the firm noted.

This challenge is “further compounded by the need to support the massive generational wealth transfer—estimated at $84 trillion over the next two decades—to more tech-savvy owners who expect interactive, real-time views of their total wealth at the push of a button,” Masttro added.

“Masttro is committed to continuous innovation and to delivering first-class technology that enables our clients to better serve their UHNW clients. Our AI-driven platform is saving family offices and wealth management institutions enormous time and effort by providing asset owners with a comprehensive understanding of their portfolios and total net worth,” said Padman Perumal, CEO of Masttro.

Masttro’s next-generation platform introduces a component-based architecture that combines AI-driven automation with user-centered design to meet the demands of modern wealth management.

Key features of the new platform include:

  • Aggregation of liquid and illiquid assets, liabilities, and passion investments into a single interactive dashboard.
  • Advanced document extraction and data aggregation that eliminate manual processes, saving time and effort.
  • An API that allows Masttro’s datasets to integrate seamlessly with other systems, creating an optimized wealth management ecosystem.
  • Intuitive controls that enable firms to customize the platform, strengthening client relationships with tailored experiences.

As the platform continues to roll out, additional enhancements and new modules are expected to launch in early 2025, the firm concluded in its statement.

BlackRock Launches Europe’s First Actively Managed Regulated Money Market ETF

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BlackRock has introduced the iShares € Cash UCITS ETF (YCSH), a new actively managed ETF offering investors a way to manage their cash investments through a product designed to deliver money market-like returns.

According to BlackRock, the ETF combines the quality and liquidity of regulated money market funds (MMFs) with the convenience of the ETF format. Leveraging the expertise of its global cash management team, the fund actively manages cash in varying interest rate environments within a robust risk management framework.

As a key portfolio component, the fund provides access to highly rated short-term money market instruments, adhering to the stringent guidelines of the European Money Market Fund Regulation (MMFR), while offering clients the flexibility to meet their liquidity needs.

BlackRock highlights that extending MMF regulatory standards to the ETF ecosystem should enable a broader range of investors to actively manage their cash. “This product can be used to maximize the return on cash held in savings accounts, ETFs, or trading accounts, as well as by investors seeking a diversified cash investment tool as a complement or alternative to a standard bank account,” the firm stated.

The ETF allows individual investors, including those using digital investment platforms, to earn income through high credit-quality securities without minimum holding periods, and with investments starting from as little as €1.

“The YCSH combines the flexibility and accessibility of the ETF format, including continuous pricing and the ability to trade throughout the day, with the security of money market fund regulation. It’s an innovative solution for investors looking to get more out of their cash. This year, Europeans have shown significant interest in income investments, and YCSH expands the available options without requiring a fixed investment period,” said Jane Sloan, Head of Global Product Solutions for EMEA at BlackRock.

A dedicated team of money market portfolio managers will actively adjust the fund’s duration, credit exposures, and liquidity profiles to minimize volatility and ensure issuer diversification.

Beccy Milchem, Global Head of Cash Distribution and Head of International Cash Management, added: “Cash plays a critical role in a balanced investment strategy. We are pleased to bring BlackRock’s extensive expertise in active cash management to a wider range of investors through the convenience of ETFs. The demand for money market funds has grown in today’s high-interest-rate environment as investors look to actively manage their cash positions.”

With $849 billion in global assets under management in money market strategies, BlackRock International Cash Management ranks among the top three providers of MMFs. For nearly 50 years, BlackRock has delivered a variety of liquidity solutions tailored to the unique needs of each client across multiple interest rate cycles and market conditions.

This launch combines BlackRock’s leading expertise in cash management with the breadth and scale of the global leader in ETFs. The fund will be listed on Xetra with a total expense ratio (TER) of 0.10%.

Restructuring and Refinancing Opportunities in Commercial Real Estate

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Pixabay CC0 Public Domain

“Stay alive until ’26!” The current commercial real estate market mantra is popular for good reason. Higher-for-longer interest rates remain a dominant force and have had a significant effect on real estate valuations. At the same time, an estimated $1.5 trillion of commercial real estate debt is maturing over the next two years and more than $3 trillion is maturing through 2029, which could be the catalyst for stress turning into distress.

CMBS issuance is increasing. As of August 2024, U.S. private-label CMBS issuance for the year surpassed $69 billion, much higher than the full-year issuance in 2023 of $46 billion. The CMBS distress rate eased 11 basis points (bps) in August from July to 4.98%, but the delinquency rate climbed to 8.36%, an increase of 32 bps.

Spreads on fixed rate CMBS are tight relative to 2022 and 2023, driven by demand for fixed rate bonds from insurance company investors and institutions who view current rates favorably for asset/liability matching and long-term portfolios. Spreads on floating rate debt are wider, and more than half of this year’s SASB CMBS issuance was floating rate.

All-in rates on private senior CMBS are in the 6.40% to 6.85% range while benchmark rates are in the mid-3% range. The SOFR overnight rate currently sits at 4.59%, with the one-year SOFR SWAP rate at 4.32%.

If interest rates stay higher for longer, some owners needing to refinance over the next two years may turn the keys over to their lenders. Other sponsors may need to seek creative solutions to plug holes in the capital stack by issuing mezzanine debt or preferred equity. This additional capital is generally most available to owners that operate high-quality properties with good locations and desirable tenants.

In some cases, lenders are willing to relax original debt covenants (such as loan-to-value ratio), extend loan repayment schedules, assume equity, and participate in restructurings. According to the Mortgage Bankers Association, $270 billion in expected 2023 maturities were pushed back to 2024. However, because many bank lenders are constrained by capital adequacy ratios and overexposure to real estate, we’re finding that many capital stack restructurings involving additional equity, preferred equity, mezzanine financing, and CMBS issuance are becoming more common.

Recent high-profile transactions serve as examples of the restructuring activity happening across certain asset classes and markets.

Office: Liquidity Exists for the Right Assets Despite Significant Market Overhang

In its mid-2024 report, Cushman Wakefield predicted negative net absorption of 63 million square feet in the office sector in 2024 and 7 million square feet in 2025. As such, landlords face a long road ahead before the office market reaches stabilization in the latter part of the decade, at which time demand for new office space is expected to stabilize at about 20-25 million square feet per year. This suggests an overhang in the market for the next few years, during which some space will become obsolete, while some higher-tier property will require capital restructuring and refinancing.

277 Park Avenue Refinancing
$600 million refinancing of Manhattan office building at 277 Park Avenue

The sponsor had a $750 million CMBS loan on the property that was issued in 2014 and came due in August 2024. The building is nearly fully leased and situated near Grand Central station, a commuter hub. The new debt includes a $379 million A tranche, $109 million B tranche, $74 million C tranche, and $37 million junior bond. Investors insisted that $180 million of the funds go into a leasing reserve and $20 million into a debt service reserve. Additionally, the refinancing required a $250 million equity injection.

Importantly, 47.7% of the net rentable area is leased to a large national financial tenant, with 361,802 square feet expiring in 2026 and 536,319 square feet expiring in 2028. The tenant is not planning to renew its lease, so the fact that the deal got done shows there is still liquidity in the market for the right assets if well-structured.

Multifamily: Sponsors Plug the Gap with Preferred Equity

Multifamily performance varies by market, with the national vacancy rate sitting at 5.6% and rents increasing by 2% thus far in 2024, helped by lower new starts in 2024 than in 2023. However, the delinquency rate has increased from 1.91% at the beginning of the year to 3.30% in August. Furthermore, a significant amount of new supply is being delivered in 2024 and 2025.

Most multifamily construction loans are floating rate and offer a three-year initial term with optional extensions if the property meets minimum debt service ratio coverage and maximum LTV covenants, which may not be met in the current interest rate and leasing environment. Many of these properties will require an extension from their current lender, a refinance, or a restructuring of the capital stack.

Multifamily Financing
Preferred equity plugging the gap in multifamily project capital stacks across the US

In January 2024, a new multifamily development project in Florida raised approximately $15 million of preferred equity to plug the gap between common equity and the senior construction loan to complete the project. Another sponsor recently raised a preferred equity sleeve totaling 15% of the original mortgage balance to complete the acquisition of a two-property portfolio because loan proceeds and common equity were insufficient. In the Midwest, a multifamily development project tapped the preferred equity market to fund 14% of total project costs to plug the gap created by insufficient debt and common equity proceeds.

Capitalizing on Commercial Real Estate Market Turbulence

So, where are the current opportunities in commercial real estate, given high rates, expensive labor and supplies, and lower demand in some sectors? Looking across public and private markets and across all asset classes, we believe there are some interesting opportunities for discerning investors. Many of these are arising out of the need for developers and owners to restructure and refinance their capital stacks or cover shortages of capital needed for business plan completion.

For investors looking for opportunistic returns, we believe equity-like returns are possible while taking less risk at lower levels of the capital stack. We see compelling opportunities in the preferred equity space, with higher yields than debt and greater downside protection than pure equity. For those looking for consistent income with lower risk appetite, we believe there are interesting opportunities in the senior and mezzanine loan space, with ample opportunities readily available in the CMBS market.

For illustrative purposes only; does not represent specific investments.

 

Across all opportunities, a thorough review of the sponsor, market conditions, and deal structure remain paramount; a thoughtful and disciplined approach can help in navigating this challenging, volatile environment. With pockets of the real estate market beginning to improve and capital stacks continuing to require refinancing or restructuring, the timing may be right to take a measured approach towards investment opportunities in the real estate sector across both private and publicly traded markets.

 

 

Opinion piece by David Bennett, director of Real Estate Investments at Thornburg Investment Management; Chris Battistini, senior fixed income analyst; Daniel Quinn, real estate investment associate, and Patrick Dempsey, fixed income analyst. 

Trump Nominates Paul Atkins as New SEC Chair, Advocating for “Common-Sense Regulations”

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Wikimedia CommonsPaul Atkins

U.S. President-elect Donald Trump has nominated Paul Atkins to serve as the new Chair of the Securities and Exchange Commission (SEC), effective January 20, 2025.

“Paul is a proven leader who advocates for common-sense regulations. He believes in the promise of strong and innovative capital markets that address the needs of investors while providing the capital necessary to make our economy the best in the world,” Trump said in a statement on Wednesday.

The president-elect, set to take office on January 20, also emphasized that the incoming SEC Chair “recognizes that digital assets and other innovations are crucial to making America greater than ever.”

Atkins previously served as one of the SEC commissioners, appointed by George W. Bush in 2002, a role he held until 2008.

He is currently the CEO of Patomak Global Partners, a strategic consulting firm for major financial clients that he founded in 2008 after leaving the SEC. At Patomak, he advises banks, trading firms, and fintech companies, among others.

Industry insiders anticipate that Atkins’ tenure will focus on deregulation, contrasting with the years under Gary Gensler, who was known for his rigorous enforcement of regulations.

The nominated SEC Chair has expressed support for digital assets, a stance that aligns with the immediate rise in Bitcoin’s value following Trump’s announcement. Within just an hour of the news, the cryptocurrency rose 1.25%, surpassing the $97,000 mark.

Itaú and Gama Investimentos Launch U.S. Small-Cap Fund in Brazil

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Photo courtesyBernardo Queima, CEO of Gama Investimentos

Itaú Unibanco and Gama Investimentos announced a new partnership to introduce a U.S. small-cap equity fund to the Brazilian market, in collaboration with Portolan Capital Management.

Initially, the fund will be exclusively available to Itaú Private Bank clients, offering access to a unique and complementary investment strategy to the S&P 500.

The Portolan Equity Strategy Selection fund is hedged, protecting Brazilian investors from currency fluctuations. It focuses on companies with market values between $100 million and $3 billion, providing a diversified portfolio of approximately 100 companies. About two-thirds of the investments are directed toward high-conviction positions, while the remainder is allocated to new opportunities and capital recycling.

Bernardo Queima, CEO of Gama Investimentos, highlighted the strategy’s timely launch, given the attractive valuations of companies in the Russell 2000 index. “The current valuation differential is one of the largest in recent decades, comparable to periods like the Nifty Fifty and the dot-com bubble,” he stated.

The Portolan fund has achieved an accumulated return of 32.8% this year, outperforming the Russell 2000 benchmark, which posted a 20.5% gain, the firm added. The portfolio features standout sectors such as healthcare, communication, consumer goods, and technology.

In Europe, From January to October, ETFs Attracted $207.79 Billion, Surpassing the 2021 Record

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According to the latest report from ETFGI, an independent research firm, the ETF market is on track to break all records, as demonstrated by October’s flows. During the first ten months of the year, ETFs captured $207.79 billion, surpassing the record set in 2021 with inflows of $193.46 billion. In terms of leadership, the Xtrackers S&P 500 Equal Weight UCITS ETF (DR) – 1C (XDEW GY) gathered $1.73 billion, the largest individual net inflow.

“The S&P 500 index fell by 0.91% in October but rose by 20.97% in 2024. The developed markets index, excluding the U.S., dropped by 5.22% in October but rose by 6.65% year-to-date in 2024. The Netherlands (-10.20%) and Portugal (-8.24%) recorded the largest declines among developed markets in October. The emerging markets index fell by 3.78% in October but rose by 14.93% year-over-year in 2024. Greece (-8.66%) and Poland (-8.18%) experienced the largest declines among emerging markets in October,” highlighted Deborah Fuhr, managing partner, founder, and owner of ETFGI.

Regarding the behavior of flows in October alone, the report indicates that $31.55 billion in inflows were recorded. By asset type, equity ETFs attracted $22.42 billion, bringing year-to-date inflows to $144.69 billion, significantly above the same figure for 2023. In the case of fixed income, ETFs attracted $6.18 billion in October, with year-to-date net inflows reaching $53.12 billion, “slightly above the $51.63 billion in year-to-date net inflows in 2023,” according to the report.

In the case of commodity ETFs, these recorded inflows of $385.46 million in October, bringing year-to-date net outflows to $4.51 billion, below the $4.79 billion in year-to-date net outflows in 2023. “Active ETFs attracted net inflows of $2.68 billion during the month, bringing year-to-date net inflows to $14.66 billion, above the $6.19 billion in year-to-date net inflows in 2023,” it highlights.

A significant fact is that, by the end of October, the European ETF sector comprised 3,109 products, 12,744 listings, and $2.22 trillion in assets. These $2.22 trillion came from 105 providers listed on 29 exchanges in 24 countries.

 

2024: The Year of Gold

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As 2024 enters its final stretch, the international price of gold has risen by approximately 24% year-to-date (YTD), primarily driven by sustained demand from a specific group of central banks, according to a report by Credicorp Research authored by Daniel Velandia, CFA, and Diego Camacho Álvarez.

Record High Prices

By the end of October 2024, the international price of a troy ounce of gold temporarily surpassed $2,750, marking around nine months of sustained growth and a 30% YTD increase.

While this dynamic suggested an uninterrupted trend of new highs, experts pointed out that a more appropriate analysis would consider prices adjusted for inflation via the Consumer Price Index (CPI). Gold’s advocates as an investment and diversification asset emphasize its principal virtue as a true hedge against the monetary exuberance of the global economy.

When accounting for the inflation effect, the rise in gold prices throughout the year is significant but still falls short of a new historical high. Instead, in real terms, the price has recently reached a critical resistance level last observed in 1980 and 2011. Considering the international turmoil tied to persistent geopolitical tensions and, more recently, the results of the U.S. elections, this distinction is valuable for making portfolio diversification decisions.

The 2008 Crisis, Basel III, and Gold Demand

The implementation of the Basel III agreements has had a notable but often overlooked impact on gold prices. While the initiative aims to strengthen regulatory standards and curb risk-taking in the banking sector, it also seeks to limit speculation in derivative markets where gold serves as the underlying asset.

The 2008 financial crisis exposed vulnerabilities in the fractional banking system. In response, Basel III identified that investment funds, futures contracts, ETFs, and other instruments linked to gold—but not necessarily backed by physical gold—essentially replicate the speculative model based on fiat money. The new regulations aim to restrict or eliminate this practice.

Under Basel III, physical gold has been reclassified as a Tier 1 asset, reserved for the safest and most liquid assets, such as cash and high-quality government bonds. This represents a significant shift in how banks consider and manage gold on their balance sheets. Prior to Basel III, gold was classified as a Tier 3 asset, characterized by higher risk and lower liquidity. The new regulations also mandate financial institutions to maintain 85% capital buffers—up from 0%—to ensure the financing and clearing operations for precious metals.

The Net Stable Funding Ratio (NSFR), another key component of Basel III reforms, requires banks to maintain a balance between long-term assets and liabilities to ensure financial stability. Regarding gold, the NSFR makes a critical distinction between physical gold and gold-backed instruments like paper gold. According to these rules, derivative-based assets can only be weighted at 85% of their market value for NSFR purposes. This classification deems these instruments less secure and less liquid than physical gold, encouraging banks to reduce exposure to derivatives and increase reliance on physical gold to strengthen their balance sheets.

This differentiation between physical gold and gold derivatives has profound implications for the market, fostering a shift toward greater use of gold as a secure and liquid asset in financial systems.

Geopolitics and Reserve Assets

According to data from the World Gold Council (WGC), central bank demand is a key driver of the strong advance in gold prices. While some central banks seek alternatives to minimize the impact of U.S. economic sanctions, others argue that, amid the fiscal and monetary challenges faced by developed economies, gold remains one of the world’s most important reserve assets.

In both cases, the war in Ukraine has played a decisive role. Between 2010 and 2021, annual central bank demand averaged 470 tons. In 2022, this figure rose to 1,082 tons, followed by 1,030 tons in 2023. In the first nine months of 2024, demand reached 694 tons. Analyzing this dynamic requires precision regarding the data structure and consideration of the varied motivations among central banks.

Russia and China Lead the BRICs

Central banks in Russia and China, along with authorities in Saudi Arabia and several sovereign wealth funds (SWFs), top the list of institutional buyers involved in undisclosed gold purchases. According to WGC data, by Q3 2024, Russia held 2,335 tons of gold, an increase of 1,913 tons since Q3 2000. Relative to the size of its economy, Russia has the largest gold reserves. China, meanwhile, is estimated to hold 2,264 tons, up from 395 tons in 2000. Given their strategic competition with the U.S., both nations are expected to remain regular gold buyers, albeit without disclosing full information.

The Visegrad Group and Central Europe

The Visegrad Group, comprising Czech Republic, Hungary, Poland, and Slovakia, collaborates on shared interests within European integration. Specifically, Poland, Hungary, and the Czech Republic have been increasing their gold reserves. This accumulation is seen as a strategic measure against economic uncertainty, for value preservation, diversification, and to address rising geopolitical risks.

Among these, Poland stands out for its expanded production capacity and emergence as a strategic regional player. Polish authorities have significantly increased defense spending, with analysts suggesting that Poland is poised to develop one of Europe’s most dynamic economies, robust military forces, and strong gold-centered international reserves. Poland now holds 377 tons of gold, surpassing Saudi Arabia (323 tons) and the United Kingdom (310 tons).

Other Players

While major European economies have been net sellers of gold this century, nations like Turkey, India, and several Central Asian countries (former Soviet states) have publicly announced intentions to increase their gold holdings. Turkey holds 595 tons, while India’s reserves are estimated at 854 tons.

Central Bank Survey and Final Considerations

The latest central bank survey conducted by the WGC indicates growing recognition of gold’s monetary characteristics in discussions on international reserve consolidation. While respondents expect moderate increases in gold reserves over the next five years, this is not seen as a complete replacement of the U.S. dollar as the global system’s anchor.

In conclusion, the complexity of today’s international landscape and the emergence of new economic blocs will sustain demand for gold as a reserve asset. However, investors should be cautious of market risks following this year’s significant appreciation. For those with suitable risk profiles, potential price corrections could provide opportunities for portfolio diversification.

The SEC Announces the Departure of Its Chair Gary Gensler

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The Securities and Exchange Commission (SEC) announced that its Chair, Gary Gensler, will step down on January 20, 2025. Gensler began his term on April 17, 2021, immediately following the GameStop market events, and “led the agency through a robust regulatory agenda to enhance the efficiency, resilience, and integrity of U.S. capital markets,” the SEC stated in its announcement.

During his tenure, Gensler oversaw high-profile cases to hold violators accountable and return billions to harmed investors, the regulator added. “The SEC is an extraordinary agency. Its staff and the Commission are singularly focused on protecting investors, facilitating capital formation, and ensuring markets work for both investors and issuers. The staff are true public servants. It has been an honor to work with them on behalf of everyday Americans to ensure that our capital markets remain the best in the world,” said Gensler.

Treasury Markets

The SEC highlighted key achievements during Gensler’s leadership, including fundamental improvements in the $28 trillion U.S. Treasury markets. To reduce costs and risks, the SEC implemented rules to promote central clearing and limit exemptions for intermediaries from registering with the national securities association. These reforms aim to lower risk and increase efficiency across U.S. capital markets.

Equity Markets

Under Gensler, the SEC introduced the first significant updates to the $55 trillion U.S. equity markets in nearly 20 years. These updates included modernizing the National Market System, enabling tighter spreads and lower fees for more efficient trading. Other improvements included reducing the settlement cycle to one day, benefiting investors by reducing market risk. Additionally, the SEC updated intermediary execution quality reporting requirements, making equity markets more efficient for investors.

Resilience

The SEC adopted changes to Form PF, the confidential reporting form for certain private fund investment advisers registered with the SEC. The revised rules require large hedge fund and private equity fund advisers to file timely updates on specific events.

In collaboration with the Commodity Futures Trading Commission (CFTC), the SEC also amended Form PF to enhance the quality of information received from all filers. These changes, effective next year, aim to improve regulatory oversight. The SEC also reformed money market fund regulations, making these funds more resilient, liquid, and transparent, even during periods of stress.

Corporate Governance

To boost trust in capital markets, the SEC introduced corporate governance reforms under Gensler’s leadership. These included updates on insider trading rules, executive clawback provisions tied to erroneous financial statements, and enhanced disclosure of executive compensation relative to performance.

The agency also adopted rules enabling shareholders to vote for their preferred board candidates using universal proxy cards in contested director elections. Additionally, the SEC implemented rules requiring timely disclosures from entities acquiring more than a 5% stake in a company.

Enforcement and Compliance

The SEC’s Divisions of Enforcement and Examinations, comprising about half the agency, remained active during Gensler’s tenure. The SEC received over 145,000 tips, complaints, and referrals and awarded approximately $1.5 billion to whistleblowers. It initiated more than 2,700 enforcement actions, resulting in $21 billion in penalties and disgorgement orders. Between fiscal years 2021 and 2024, the agency returned more than $2.7 billion to harmed investors.

Through inspections of investment advisers, funds, and broker-dealers, the SEC recovered over $250 million for investors. The Division of Examinations also improved communication with registrants, sharing timely priorities and observations while collaborating proactively with industry participants and other regulators.

Under Gensler, the SEC continued Jay Clayton’s work to protect cryptocurrency investors. During his term, the agency took action against crypto intermediaries for fraud, wash trading, registration violations, and other misconduct. In its most recent fiscal year, 18% of SEC tips, complaints, and referrals were related to cryptocurrencies, even though these markets represent less than 1% of U.S. capital markets. Courts consistently upheld the SEC’s authority to enforce securities laws, regardless of the form of the securities being offered, the statement concluded.

Bitcoin’s Highs Highlight Investors’ Main Concern: Crypto Asset Custody

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Cryptocurrency investors are ending the year with euphoria. Bitcoin began the week surpassing $98,000, edging closer to the pivotal $100,000 mark. According to experts, the decisive election of Donald Trump as the 47th president of the United States has reduced uncertainty, eliminating a major source of instability.

“As a result, one of the largest economies in the world, the United States, is now poised to implement liberal and crypto-friendly regulation, representing a significant step forward,” says Mireya Fernández, Country Lead for Bitpanda in Southern Europe and CEE.

Fernández highlights positive developments in recent years, including increased adoption of digital assets by retail investors, crypto market regulation in Europe, central bank interest rate cuts, and the integration of cryptocurrencies into traditional financial systems and banking portfolios. “The market is eager, and prices continue to trend upward. Bitcoin reaching $100,000 is not just a number but a genuine turning point for the crypto sector,” she adds.

Market Fundamentals

Manuel Villegas, Digital Asset Analyst at Julius Baer, notes that Bitcoin’s strong prices, currently hovering near $90,000, are backed by solid fundamentals. “Demand for spot products, positions in derivatives, and corporate intentions to add Bitcoin to treasury reserves are key factors shaping this scenario. While volatility is likely in the future, the current demand base is solid, suggesting this trend could persist. We see few significant short-term obstacles for Bitcoin,” says Villegas.

Custody Concerns

Bitcoin’s impressive performance underscores a key concern for investors, particularly institutional ones: custody. A survey by Nickel Digital Asset Management of institutional investors and wealth managers from the U.S., UK, Germany, Switzerland, Singapore, Brazil, and the UAE, managing a combined $800 billion in assets, found custody to be a bigger issue than volatility.

The survey asked participants to rank six barriers to investing in digital assets. The lack of centralized authority ranked as the second-largest barrier, followed by ESG issues and market manipulation risks. Regulatory uncertainty was ranked sixth and considered the least significant.

A notable 97% of respondents stated that backing from a major traditional financial institution is essential before considering investments in any digital asset fund or vehicle. Recent volatility has also encouraged skeptics: 19% strongly agree that price dislocations have presented solid opportunities for initial investments or increased allocations, with another 76% somewhat agreeing.

Anatoly Crachilov, CEO and Co-Founder of Nickel Digital, notes: “The industry has made significant progress in mitigating custody and counterparty risks through the adoption of off-exchange settlement solutions—an advanced form of digital asset custody—in recent years. However, this knowledge seems limited outside the native digital community. The close involvement and broad support of major traditional financial institutions are crucial for many investors, making the increased participation of BlackRock and Fidelity a very welcome development.”

New Developments

Investors are witnessing fresh advancements. According to Villegas, beyond expectations of regulatory and legislative improvements in the U.S., optimism has been fueled by Trump’s recent appointments, announcements of new agencies like the Department of Government Efficiency (DOGE), and corporate reserves. These factors, he says, have driven markets to “put their money where their mouth is,” with prices well-supported by spot demand.

On November 15, the Commodity Futures Trading Commission (CFTC) approved asset managers’ applications for options on some spot Bitcoin ETFs in the U.S., granting investors enhanced tools to hedge against directional risks or speculate further on Bitcoin’s price performance. “These derivatives should begin trading soon. Looking ahead, volatility is likely. Prices are high, and the market is relatively overextended, but with a strong demand base, this trend could continue. We see few significant short-term obstacles for Bitcoin,” concludes the Julius Baer analyst.

WisdomTree Launches a Physically-Backed XRP Cryptocurrency ETP

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WisdomTree, a global provider of financial products, has announced the launch of its latest cryptocurrency exchange-traded product (ETP). The WisdomTree Physical XRP ETP (XRPW) is listed on Deutsche Börse Xetra, the Swiss SIX Exchange, and the Euronext exchanges in Paris and Amsterdam with a management expense ratio of 0.50%, making it the lowest-cost ETP in Europe offering exposure to XRP.

The fund is designed to provide investors with a “simple, secure, and cost-efficient” way to gain exposure to the price of XRP. It is fully backed by XRP, “offering exposure to the spot price of XRP through an institutional-grade, physically backed structure.” Investors will also benefit from a dual custody model with regulated custodians and the underlying assets professionally secured in “cold storage.”

Regarding this cryptocurrency, the fund manager explains: “XRP is a native digital asset of the XRP Ledger (XRPL), a decentralized, permissionless, and open-source blockchain. XRPL uses a Proof-of-Association (PoA) consensus mechanism operated by universities, exchanges, businesses, and individuals to validate transactions. This system is more efficient than Proof-of-Work (PoW), as it requires less hardware resources and consumes less energy.

Created in 2012 specifically for payments, XRP can settle transactions on the ledger in 3-5 seconds and was designed to be a faster and more sustainable alternative to Bitcoin. XRP can be sent directly without a central intermediary, making it a convenient tool for bridging two different currencies quickly and efficiently. It is freely traded on the open market and is used in real-world applications to enable cross-border payments and microtransactions.”

Following this launch, Dovile Silenskyte, Head of Digital Asset Analysis at WisdomTree, suggests that with increasing risk appetite, exposure to altcoins like XRP could outperform a standard Bitcoin and Ether allocation. In her view, XRP can be considered alongside these megacaps in a multi-asset portfolio to reduce exposure to a single token. “Cryptocurrencies represent more than 1% of the market portfolio and should therefore be part of a comprehensive investment strategy. As an asset class with low correlation to traditional asset classes, cryptocurrencies can help increase diversification and potentially improve risk-adjusted returns in a multi-asset portfolio,” Silenskyte adds.

Meanwhile, Alexis Marinof, Head of Europe at WisdomTree, highlighted: “This new launch complements our existing range of physically backed cryptocurrency ETPs, offering investors another solution to enhance their multi-asset portfolios. Cryptocurrency ETPs are an effective way to keep investors within a regulated framework and are becoming the preferred vehicle for accessing cryptocurrencies. WisdomTree has 20 years of experience in providing and managing physically backed ETPs for institutional investors. With over $100 billion in assets under management globally across ETFs and ETPs, investors in our cryptocurrency ETPs can benefit from our global reach, scale, and resources.”