Third Point is the latest institutional stalwart to be revealed as a client of Coinbase Custody.*
Billionaire investor Daniel Loeb’s “deep dive into crypto” last month led his $17.6 billion hedge fund to a familiar place: a custody deal with Coinbase.
Loeb’s Third Point LLC now holds cryptocurrency from five of its funds with Coinbase, according to regulatory documents obtained by CoinDesk. Some tout billions of dollars in underlying assets, but it is not clear how much of that is in crypto, which assets, or for how long they’ve invested.
With less than a week to go before Coinbase’s Nasdaq debut, the custody tie-up underscores how Brian Armstrong’s nine-year-old firm has transformed itself from a bitcoin-only digital wallet into a massive vault for Wall Street’s crypto bets.
Coinbase revealed it held $122 billion in institutional assets during this week’s voluntary earnings call. It expects “meaningful growth” driven in part by custody revenue in the year ahead.
CoinDesk reported earlier this week that fellow hedge fund titan Paul Tudor Jones is also a Coinbase client, offering a glimpse at the deep-pocketed investors behind the exchange’s institutional assets under management.
Third Point did not respond to CoinDesk by press time.
The hedge fund’s true exposure to crypto assets remains more opaque. In a brochure accompanying the March 31 filings, Third Point said it can invest directly in cryptos or indirectly through derivatives contracts.
Notably, it is open to staking and lending any cryptos as well, the documents say.
“This is the first big traditional hedge fund that I know of that is doing staking,” said Tim Ogilvie, who runs a company called Staked that provides staking services to institutional investors, after reviewing the documents.
“On the one hand I’m surprised. On the other hand I’m not surprised,” he added. “If you want to hold a crypto asset that is proof-of-stake I think you have a fiduciary responsibility to stake.”
Proof-of-stake blockchains like Tezos, Cosmos, Solana and others reward token holders with payouts akin to interest for securing the network with their contributed holdings.
Institutional investors are slowly waking up to staking, Ogilvie said. With staking there are two gains generators: the token price and the staking payout. It’s a guaranteed reward on top of a speculative bet. Ogilvie said there are $4.5 billion in crypto assets on Staked.
Nice job!, more and more people are starting to realize the benefits of crypto
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