Titan mobile investment platform has launched its crypto offerings to give US investors additional avenues for accessing digital assets like Bitcoin and other cryptocurrencies.
The US-based company is expanding its investment offerings with the launch of crypto trading services to its clients. The company’s actively managed cryptocurrency offerings will involve a collection of five or ten cryptocurrencies that include Bitcoin, Ethereum, and altcoins such as Stellar’s XLM, and Cardano, and others.
Titan investment company, which helps investors gain exposure to hedge funds, stock markets, and other investment opportunities, currently manages about $500 million for more than 30,000 clients.
The company has made such a move because it wants to add tremendous value and significant returns for its customers by offering strategic investment and management of a concentrated basket of crypto assets that can outperform over a long time horizon.
Clay Gardner, co-founder and co-CEO at Titan, talked about the development. He said:
“The adoption of cryptocurrencies and blockchain protocols is exploding, and we expect this trend to prove structural and long-term in nature. We see the wrong debate being had – it’s not a matter of if crypto deserves a place in portfolios; it’s a matter of what percentage.”
Titan said the crypto investment team would make monthly adjustments to allocations and coins contained in the cryptocurrency portfolio based on performance.
In July, Titan conducted a $58 million Series B funding round led by Andreessen Horowitz and eventually raised total funding of $75 million. The company plans to use the funding to make important strides in developing its underlying investment mobile platform to enhance its suites of investment products, including Titan Crypto. Over time, Titan plans to expand its crypto offerings to include decentralised finance (DeFi) tokens and introduce more features such as lending and staking to customers.
Shifting the Retail Landscape
As crypto becomes more mainstream, retail investors are increasingly getting involved. But sometimes, users get overwhelmed in the process of setting up wallets and navigating the cryptocurrency ecosystem. User-friendly investing platforms such as PayPal, Robinhood, and now Titan have come up with solutions to offer friendly crypto exposure to retail investors.
This brings a level of legitimacy to cryptocurrencies as an asset class that also signals an evident demand for crypto among retail clients. Given that Bitcoin has been dubbed a ‘safe haven’ asset because of its historically frequent low correction with traditional markets, it is not surprising that some investment companies are trying to offer it as a method of storing value for more risk-tolerant clients, similar to the way they market other assets like equities, gold, and stocks.
Mark Cuban has been publicly bullish on Ethereum and DeFi. The billionaire has gone all-in on this sector. He believes dApps have great potential to build a new financial system. However, some protocols carry higher risk, sometimes that leads to a higher reward or a bigger loss, as Cuban himself just discovered.
The billionaire got into a protocol called Iron Finance (TITAN), an algorithmic stablecoin project. After a couple of days live, the protocol’s native token TITAN crashed to 0, as the team reported via their Twitter handle.
Since the price of titan has fallen to 0, the contract does not allow for redemptions.
We will need to wait for 12 hours for the timelock to pass before USDC redemptions are possible again.
— IRON Finance (@IronFinance) June 17, 2021
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Cuban wrote about TITAN in a blog post titled “The Brilliance of Yield Farming, Liquidity Providing, and Valuing Crypto Projects”, published on June 13, 2021. There in he claims to be the only liquidity provider for the trading pair DAI/TITAN on QuickSwap with an initial $75,000 investment.
Data from DappRadar indicates that Iron Finance has lost more than 60% of its users in the past week alone and, at the time of writing, the protocol records 0 transactions.
Source: Dapp Radar
Mark Cuban decided to participate by becoming a TITAN liquidity provider, but as he admitted in an interview with Bloomberg, he failed to see the shortcomings of the project:
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In any new industry, there are risk I take on with goal of not just trying to make money but also to learn. Even thought I got rugged on this, it’s really on me for being lazy. The thing about defi plays like this is that it’s all about revenue and math and I was too lazy to do the math to determine what the key metrics were.
Mark Cuban didn’t reveal the exact amount of his loss. However, since the incident, he has called for more regulations. The billionaire believes regulators should define what is a stablecoin and what level of collateralization it’s acceptable for these types of digital assets. He added:
(…) should the math of the risk have to be clearly defined for all users and approved before release? Probably given stable coins most likely need to get to hundreds of millions or more in value in order to be useful, they should have to register.
What Exactly Happen With Mark Cuban And TITAN?
The team behind Iron Finance has published a postmortem report on TITAN’s crashed. As the report claims, the chain of events that led to the crash begun at 10 am UTC on June 16th, 2021. At this moment, the team recorded activity from whales that started removing liquidity from the IRON/USDC trading pair.
The Whales later sold their TITAN holding for IRON and eventually sold them for USDC. This process caused IRON’s price, the stablecoin, to off-peg. As a consequence, TITAN’s price lost 50% of its value in less than 2 hours.
This process took place during the entire day. Eventually, users panicked, and the protocol began to operate with a negative feedback loop.
A classic definition of an irrational and panicked event also known as a bank run. At the time of writing this, the TITAN supply is 27,805 billion. The team claimed the following:
At some points, the price of TITAN became so low, close to 0 actually, which caused the redeem contract to revert the redeem transactions. We already queued the fix for this, so people can redeem again at 5pm UTC.
Despite the event, the team will work on new products (IronBank for lending and IronSwap for a pegged assets-focused swap solution). In addition, they disagree with Mark Cuban and don’t consider TITAN’s crash as a rug pull. A team member said:
There was no rug pull or exploits. What happened is just the worst thing that could possibly happen considering their tokenomics.
At the time of writing, ETH trades at $2,389 with minor losses in the daily chart.
ETH with small losses in the daily chart. Source: ETHUSD Tradingview
Like a hitchhiker taking to the American highways for the first time, anyone hoping to get a clear picture of the universe of bitcoin mining today might be perplexed at the seeming opaqueness, yet sheer size of the North American mining ecosystem.
As a miner recently advised new entrants into the space on Twitter:
New players in mining: the industry is massive, disorganized, fragmented, and built by people no smarter than you. There’s plenty of room to shake things up.
— Leo ⛏ (@Leorzhang) January 17, 2021
Distinct from China, which leads the world’s mining hash rate with an estimated 65 percent of the total coming from pools headquartered there, the North American mining environment is evolving its own culture.
As the North American bitcoin mining scene heats up with a higher hash rate, and an increase in mining revenues, more investors and interested mining companies are looking for a guide to the new mining Wild West that is the U.S. and Canada.
There are four basic parts that make up the North American bitcoin mining ecosystem: Mining pools, mining companies (collocation and self hosting), financial services firms and firmware (software) providers.
However, sometimes a financial services firm can also be a mining company (as with Galaxy Digital), and sometimes an energy provider can also be a mining company (Greenridge Generation). It’s complicated.
The Rise Of The (Demand For) Machines
Mining equipment shortages, not just in North America but around the world, including in China, is currently a big issue in the industry.
As the price of bitcoin continues to reach all-time highs, there is pressure on ASIC foundries and equipment manufacturers to try and meet the demand from both newly-interested customers and older mining companies that need to upgrade to remain competitive.
Estimated wait times for new mining equipment are at least six months, with leading manufacturers like Bitmain sold out until September 2021. There has also been a significant price increase in the secondary market for used ASICs.
We asked Samson Mow, CSO for Blockstream and Blockstream Mining, how things look for bitcoin miners going forward into 2021. Mow told Bitcoin Magazine that the defining issue going into 2021 is the lack of ASIC-based mining equipment:
“Bitcoin hash rate growth for the next year is likely to be constrained by ASIC chip production,” he said. “This could lead to some very interesting new financial products related to mining… With a shortage of equipment and a booming bitcoin price, a lot of older mining rigs are now profitable to run again for miners that have access to low-cost power.”
Mow confirmed what most experts say about mining equipment — at this point in time, there’s no new technology anywhere in sight to beat the mining power of an ASIC chip.
This is positive news for some established miners with access to cheap power, as the difficulty rate is more favorable without intense competition. There are some of these in North America, even though the region is also attracting new entrants.
“Mining profitability rose this year because the rate that new hardware is being deployed has significantly lagged the price increase of Bitcoin, which means that there has not been an increase in hashpower competition coinciding with the price rise,” Ryan Porter, head of business development for financial services firm BitOoda told Bitcoin Magazine.
Time For Your Own Pool, Kids
Most miners, including North American miners, use mining pools based in China. But this is changing as new mining pools are setting up in the U.S. and Canada to offer miners more regulatory-compliant options.
There are at least seven North American mining pools today, up from only three a year ago.
In the last six months, Luxor, Blockstream and Novablock have been joined by Titan, Blockware, DMG Blockseer and a Marathon/DMG co-op pool.
Luxor Pool is publicly listed and DMG Blockseer is in the process of going public, as is the Marathon/DMG co-op pool (more on this later).
Big Institutions And Energy Companies Are Getting Involved
As with investment into bitcoin the asset — which has enjoyed a price rise widely credited to involvement from major institutions like Square, MicroStrategy and Grayscale — mining has come into the sights of institutions looking to augment their portfolios with some financial hash power.
According to research conducted by Fidelity Digital Assets and Greenwich Associates, nearly 80 percent of institutional investors find something appealing about digital assets, and more than six in 10 institutions believe that digital assets have a place in their investment portfolios.
BitOoda, like other financial services firms in North America, is working with investment companies to help them get set up in mining ventures. Some prefer being directly involved with a specific mining operation while others are only looking for an investment stake for their portfolios.
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There are also power providers in the region that are putting the extra power they have in off-peak hours to use in mining bitcoin. Greenridge Generation in New York State is putting its extra power to work through the night and in other off-peak hours mining bitcoin. Crusoe Energy, a Denver-based power company captures waste gas from flaring to create power — much of which is used for mining bitcoin.
North American Mining Companies Want To Go Public
Like bitcoin miners globally, North American miners have preferred to remain relatively anonymous, but there’s a new breed of mining companies and mining pools that are trying to get out into the open, ahead of any government attempts to regulate the industry.
Some of the motivation for getting ahead of the regulators is to become qualified for a public listing on a stock exchange, an effective tool for raising capital.
“The appetite for mining firms to go public has never been greater, as publicly-traded mining companies Riot Blockchain, Marathon Patent Group and HIVE Blockchain have all passed a $1 billion valuation,” Porter said.
And a few regional players are already publicly listed. Canadian mining company Hut8 was one of the first mining companies to be listed on the Toronto Stock Exchange. Meanwhile, NASDAQ lists Riot Blockchain (NASDAQ:RIOT), Marathon Patent Group (NASDAQ:MARA) and HIVE Blockchain Technologies (OTC:HVBTF).
Regulators Enter The Room
Until recently, bitcoin mining was not an issue for government regulators, but increasing attention to regulating cryptocurrencies from government agencies like the U.S. Securities and Exchange Commission, Financial Crimes Enforcement Network and Commodity Futures Trading Commission may soon change that.
It seems inevitable that at some point, a regulatory eye will be cast over mining.
“We feel that companies will be willing to pay standard mining pool fees (i.e., 2 percent) for full transparency and ensuring their servers/miners are not involved in adding North Korean or Iranian or other blacklisted wallets from OFAC in moving Bitcoin,” Sheldon Bennett, the COO of DMG Blockchain Solutions, told Bitcoin Magazine recently.
When DMG teamed up with Marathon to form DCMNA, it pledged to only process transactions that complied with U.S. laws.
In its announcement, DCMNA said it will be audited by a third-party financial firm and will be using “clean block mining” that adheres to the Office of Foreign Asset Control’s (OFAC’s) compliance standards and reduces the risk of mining blocks that include transactions linked to questionable activities.
Profits from the DCMNA pool will go toward pro-miner lobbying efforts in Washington, D.C. and all of the miners participating in DCMNA will need to submit KYC information, including smaller companies renting space in DMG’s warehouses.
