OKLink Industry Observation | Institutional Landscape of Investing in Digital Assets: Stone Ridge and New York Digital Investment Group
If you own a giant asset management company with a management fund of 10 billion US dollars, which exceeds the total market value of Weilai Automobile and 58.com, would you choose to "take risks" and invest in Bitcoin?
Stone Ridge does that, and it does so much more.
It is a "Bitcoin giant". StoneRidge has purchased 40,000 bitcoins, with a current total value of more than 316 million U.S. dollars-"We will quietly buy bitcoins and surprise everyone."
Its founder, Ross Stevens, is stealthy and powerful. Does not appear in public, does not have a twitter account, and rarely speaks, but every time he speaks, it will arouse the follow and echo of the CEO of MicroStrategy.
It is not satisfied with being an investor, but also a fashionista. In 2017, Stone Ridge founded its subsidiary New York Digital Investment Group (NYDIG), "rehired" the head of the New York Financial Services Bureau into the company, and began to provide digital asset custody, lending and other services.
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Stone Ridge and mysterious founder Ross Stevens
Stone Ridge was established in 2012. Its full name is Stone Ridge Asset Management LLC. It mainly provides alternative asset management services. The founder, Ross Stevens, is headquartered in New York.
In the 9 years since its establishment, Stone Ridge’s management funds have grown rapidly, reaching 10 billion US dollars. It mainly provides investment portfolio management and consulting for users in the United States and China. “Customers” include not only individual investors, but also institutions, trusts, and private investors. Foundations and Charities.
Such a traditional asset management giant is now devouring Bitcoin. According to Stone Ridge’s 2020 shareholder letter, “Stone Ridge’s shareholders have collectively held 40,000 bitcoins,” representing 0.19% of all bitcoins in circulation.
As an asset management company, Stone Ridge is relatively low-key, but from its assets and personnel arrangements, we can find that they turned to an important figure in Bitcoin-Ross Stevens.
Ross Stevens seldom makes public appearances, does not have a twitter account, and rarely speaks, but every time he speaks out, it will arouse the follow and echo of top figures such as the CEO of MicroStrategy. In 2012, he founded Stone Ridge and has served as the company's CEO since then. After the establishment of the subsidiary New York Digital Investment Group (NYDIG), Ross Stevens also served as CEO, coordinating the digital asset strategies of Stone Ridge and NYDIG.
On December 13 last year, Ross Stevens made a rare public statement, explaining his views on Bitcoin and the group’s digital asset strategy.
“We started NYDIG in 2017 because Bitcoin was an enabler for Stone Ridge to provide financial security for all. I see Bitcoin as a boundary agnostic that will always rally. Bitcoin can drive global Citizens choose to enter a brighter and fairer financial future. From an investment perspective, we have always believed that Bitcoin is superior to cash. Now, with global paper money printing and real yields continuing to decline, 10,000 BTC at Stone Ridge is A major component of our fiscal reserve strategy. NYDIG's corporate funding solution will be invaluable to other companies as they too emulate the Bitcoin standard and incorporate some or most of their fiscal strategy. Since early 2019 Since then, the Fed’s balance sheet has increased by $3 trillion, and the dollar has lost 70% of its value against BTC.”
On the day the news was released, we were"Institutional Map of Investing in Digital Assets (2): Micro-Strategy"secondary title
New York Digital Investment Group, "rehired" officials licensed?
New York Digital Investment Group (NYDIG) is located in New York City. Ross Stevens established this subsidiary in 2017 as an extension of StoneRidge's digital asset business and serves as the executive chairman himself.
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(Data source: Crunchbase)
On December 14, 2018, one year after the company was established, it announced that it had obtained the Bitlicense (digital asset operating license) of NYSDFS (New York Department of Financial Services), and currently a total of 25 entities have obtained the license.
Through this license, NYDIG Execution, a subsidiary of NYDIG, can operate digital asset-related services in New York State, and provide custody services for five types of assets including BTC, BCH, ETH, XRP and LTC, including self-custody, third-party contract custody, NYDIG Trust or NYDIG Execution Contract Escrow.
Another subsidiary, NYDIG Trust Company LLC, is also authorized to provide digital asset trust services as a limited purpose trust company.
However, NYDIG was able to obtain the Bitlicense digital asset business license so smoothly, and it was suspected that it might be "legally going through the back door" and opened up a key figure, Benjamin Lawsky.
From 2011 to 2015, Benjamin served as the director of the New York Financial Services Agency, and during his tenure, the BitLicense was launched (yes, he invented the Bitlicense). After leaving the Financial Services Agency, Benjamin established the Lawsky Group, an advisory firm, to provide financial compliance advice. The problem came later. In December 2017, Benjamin was suddenly hired and became the "elected manager" of NYDIG's executives. In November 2018, NYDIG was approved by the New York Financial Services Agency and obtained a BitLicense license.
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NYDIG's "Digital Asset Marching Plan"
NYDIG's "Digital Assets Entry Plan" is advancing in an orderly manner.
Currently, NYDIG has supported 5 assets including BTC, BCH, ETH, XRP and LTC, and provided services such as digital asset funds, custody, lending, and digital asset solutions.
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(Data source: formds)
According to SEC public documents, the 7 funds are Pooled Investment Funds (collection funds), and the sales commission and intermediary fee are 0 US dollars. According to the document, the total issuance amount and the remaining total amount for sale of these 7 funds are "undetermined", so it is still possible to raise funds in the future.
At the same time, NYDIG’s custody business is also developing rapidly. As of January 28, the digital assets under its custody reached 3 billion US dollars. Among them, there are several notable large custody customers:
First of all, the $490 million digital asset fund mentioned above is self-hosted by NYDIG, "self-produced and sold".
In August 2020, the parent company StoneRidge also came to help, announcing that it had purchased 10,000 bitcoins as the company's asset reserve strategy, and NYDIG was in charge of custody.
In addition, on December 10, 2020, the insurance giant MassMutual purchased $100 million worth of Bitcoin through NYDIG, which was then managed by NYDIG.
New York City's Quontic Bank (total assets of $1.4 billion) has also reached a partnership with NYDIG, which custodians the bitcoin assets deposited by customers.
In the lending business segment, NYDIG has developed a digital asset mortgage lending business relying on its own assets and banking partners. Users can mortgage digital assets for loans, and can also lend digital assets to obtain interest income, but no more details of the lending business have been disclosed yet.
It is worth noting that in terms of digital asset solutions, NYDIG has "smoothly exited the circle".
For bank customers and corporate customers, NYDIG provides a set of fully integrated digital asset solutions, and provides white label solutions for companies interested in digital asset business, which made a breakthrough at the end of last year.
On December 15, 2020, Quontic Bank announced a partnership with NYDIG to launch a bitcoin rewards checking account program.
There is also an "ambiguous" leader behind this cooperation-Patrick Sells. Patrick Sells is the former chief innovation officer of Quontic Bank. Shortly before the cooperation was concluded, he transferred to NYDIG as their director of banking solutions, which shows that NYDIG is really good at "personnel arrangements".
Under this "Bitcoin Rewards Checking Account Program," Quontic Bank users can open a Bitcoin Rewards checking account with Quontic Bank. At the same time, NYDIG will open a mapped bitcoin wallet on the balance sheet. If a user spends $200, they are rewarded with 1.5% ($3) in bitcoin. At this time, Quontic Bank will transfer 3 dollars to NYDIG, entrusting the latter to buy 3 dollars of Bitcoin and take custody.
The purchased bitcoins are owned by the user - "consumption means depositing coins". Users can hold bitcoins (hosted by NYDIG, and the value of bitcoins will fluctuate with market conditions), and can cash out bitcoins, but cannot transfer bitcoins to external wallets.
Currently, this "bitcoin reward program" is applicable to more than a dozen states in the United States, including New York State, including: Alabama, Arkansas, California, Maryland, Massachusetts, Missouri, Montana , New York, Pennsylvania, Utah, Wisconsin and Wyoming.
NYDIG's "digital asset entry plan" is obviously not over. As a traditional asset management company, Stone Ridge and NYDIG have explored some innovative digital asset industry models. As the market continues in 2021, institutional investors will accelerate their entry into the market, and NYDIG will "retire and form a network", which may open up some new tracks for more imaginative industries.
