The US bank BNY Mellon assured in a document filed with the SEC that one of its funds underperformed the market because it was not exposed to companies that invest in the leading crypto, Bitcoin.
If we had invested, the return would have been higher
Bear in mind that, since the second quarter of 2020, BNY Mellon becomes the largest custodian bank and asset manager in the world.
In this way, BNY Mellon explained that one of its exchange-traded funds, or ETFs, was significantly affected by its lack of exposure to companies that invest in Bitcoin.
The fund to which it refers is known as the BNY Mellon Opportunistic Small Cap Fund (DSCVX). Therefore, the DSCVX gained 35% from September 1, 2020 to February 28, 2021. This figure is below its benchmark, the Russell 2000 Index, which produced approximately 41.7% during the same period.
Therefore, BNY Mellon explained that this happened by not getting on the cryptocurrency train in time, especially in Bitcoin.
Recall that these publicly traded ETFs basically have an investment basket of company stocks. So the only way this ETF could have exposure to Bitcoin and the crypto market was through companies that had invested in crypto; for example, MicroStrategy.
Thus, in the presentation to the SEC, the bank regrets not having bought MicroStrategy shares. «The fund’s performance was also affected by the decision not to own MicroStrategy, whose shares rose when it announced that it had invested in Bitcoin …“Said the statement.
However, it does not end there. In addition, BNY Mellon regrets not reducing its exposure to gold. In this way they explained that the fund’s position in the gold mining company, Alamos Gold, “hampered performance, as shares were affected by weak gold prices.”
ICE diverts shares of crypto exchange Coinbase
Yesterday the Intercontinental Exchange (ICE) published its financial results for the first quarter of 2021 where they revealed that they had sold the shares on the crypto exchange Coinbase.
According to the statement, ICE CFO Scott Hill explained that the company sold its stake in the crypto exchange for $ 1.2 billion. Thus, the sale translated into a net profit of USD 900 million after taxes.
Why? Well, ICE explained that the proceeds from the sale were used to reduce the company’s leverage to 3.6; the ICE target is 3.25.
MicroStrategy sees revenue surge, thanks to crypto?
BNY Mellon is probably not the only one who regrets not having invested in MicroStrategy, but will it be too late to correct?
Today Michael Saylor, CEO of MicroStrategy, revealed that the company, in addition to earning thanks to Bitcoin, has experienced a significant increase in revenue during the first quarter.
“Subscription product and service license revenue for the first quarter of 2021 was $ 31.3 million,…. an increase of 52.3% or an increase of 49.8% on a non-GAAP constant currency basis, compared to the first quarter of 2020 …»States the press release.
Thus, total revenue during the first quarter was just over $ 122 million, observing an increase of 10.3% over the same period in 2020.
And, of course, Saylor concluded the statement by assuring the following: “We will continue to acquire and hold additional bitcoins as we seek to create additional value for shareholders. ”
In a few lines …
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- BanFin warns that Binance could face significant fines.
- Coinbase is to acquire the institutional-grade blockchain data analytics platform Skew.