Cryptocurrencies have turned another Wall Street veteran after former Morgan Stanley executive Kevin Lepsoe launched a new decentralized finance (DeFi) platform. His new company Infinity Exchange, received a nice injection of seed funding in an attempt to drive DeFi adoption among institutions. In his promise to help build “DeFi 2.0,” Lepsoe outlined one of the biggest pain points of DeFi 1.0, which you probably haven’t heard of. It turns out that if you want institutions to adopt your products and services, you have to give them a product package that they are familiar with. Until then, DeFi offers a value proposition that is obscured by risk and inefficiency.
This week’s Crypto Biz newsletter explores Lepsoe’s solution to the dangers of DeFi. We also dissect the latest news related to MicroStrategy and Fireblocks.
Fixed Interest Rates Will Create a DeFi 2.0 for Institutions, Says Former Bank Executive
Lepsoe’s Infinity Exchange raised USD 4.2 million to continue building its institutional fixed income protocol, which introduces the concept of floating rate with zero supply. In other words, Infinity Exchange attempts to bring the mechanics of interest rates and risk management practices from traditional finance to DeFi. According to Lepsoe, providing institutional investors with access to a full suite of rate products, including fixed to floating rates, could be the key to driving DeFi adoption. While most of us are familiar with DeFi’s boom and bust cycles, Lepsoe said the biggest challenge in the industry is the disconnect between the floating and fixed rate markets. It’s not exactly intuitive, but it’s a compelling opinion nonetheless.
MicroStrategy to reinvest $500 million of its stock sales in Bitcoin: SEC filing
Michael Saylor’s business intelligence firm MicroStrategy is planning to buy a lot more Bitcoin (BTC), which, by now, should come as no surprise. In a recent filing with the United States Securities and Exchange Commission, MicroStrategy disclosed that it has partnered with brokers Cowen and Company and BTIG to raise $500 million through a stock sale, the proceeds of which will go toward the acquisition of more BTC. The business intelligence firm is doubling down on Bitcoin despite losing more than $1 billion on its current position. With BTC teetering around $20,000 and analysts expecting more short-term declines, will MicroStrategy really buy the dip this time, or will the price continue to fall after the buy?
MicroStrategy is set to reinvest to buy the dip as the company’s reserves suffer from an aggregated $1 billion in value loss. https://t.co/rr8eqW7Xen
— Cointelegraph (@Cointelegraph) September 10, 2022
Institutional Investors Heading for a Crypto Tipping Point: Apollo Capital
Remember when investing in cryptocurrencies was considered a “professional risk”? Now, it seems that not investing in digital assets carries the biggest reputational risk of all. What a difference a year can make. According to Apollo Capital’s chief information officer, Henrik Andersson, institutional investors may soon “shift” their conservative approach to digital assets. In an exclusive interview with Cointelegraph, the crypto fund manager said that institutional interest in digital assets is slowly increasing. Some of the main institutions, such as pension funds, may be waiting for others to make the first move because nobody wants to be the first and make a mistake. But, once the floodgates open, not being assigned will be considered a higher risk to the race.
Fireblocks records revenue of over $100M in subscriptions amid bear market
The cryptocurrency industry has crowned dozens of unicorns in the last two years, but how many of these companies have a viable business model? The blockchain infrastructure provider Fireblocks revealed that it generated over $100 million in annual recurring revenue this year, which is a huge milestone given the current state of the market.. Web3 startups, payment service providers, consumer brands, and gaming companies all contributed to the massive Fireblocks fundraiser, showing that the blockchain sector is attracting consistent interest despite of the bear market.
Do not miss it! Will the Ethereum merger change the history of cryptocurrencies?
The Ethereum merger has been described as a landmark event for the blockchain industry, as the largest smart contract platform embarks on a major change in its governance structure. While most traders look at the price of Ether (ETH), there is much more at stake. Will the merger alter the trajectory of the cryptocurrency industry that relies so heavily on Ethereum? Or will it turn out to have negligible long-term impact? In this week’s Market Report, analysts Marcel Pechman, Benton Yaun and Joe Hall discussed this very issue. You can watch the full replay below.
Crypto Biz is your weekly roundup of the business behind blockchain and cryptocurrencies, delivered straight to your inbox every Thursday.
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