From High Street To Screen To Wallet – Cryptos Are Coming

Cryptos are making their way onto our screens and into our wallets…

Our friends at Altfi report two developments. The first is an infrastructure fund, which does not invest directly into cryptos but in the companies that service the industry (exchanges and the like). The second is a more sophisticated play directly into Bitcoin and Ethereum (between them accounting for some 70 per cent of all crypto transactions worldwide).

After shaking up its subscriptions last month, Chip is now expanding its offer crypto exposure to its customers.

It comes in the form of a Crypto Companies fund, managed by Invesco, which has been added to Chip’s platform today and is available for ChipX customers who pay £3/month.

“With the addition of the Crypto Companies fund, we want to enable users to dip their toes into the world of cryptocurrencies without risking the volatility that comes with directly investing into crypto assets,” said Chip’s CEO and founder Simon Rabin.

The underlying fund is Invesco’s CoinShares Global Blockchain UCITS ETF, which invests in 51 companies that are involved in the technology and infrastructure behind cryptocurrencies.

Crucially the Global Blockchain ETF doesn’t invest in crypto directly, but rather targets those companies which are operating in the sector.

Some of its constituent companies include microchip manufacturer TSMC and markets operator CME Group which also offers Bitcoin and Ether derivatives.

Since the fund was created in March 2019 it’s returned an average annual return of 42.7 per cent to its investors, with volatility limited by the diversification of many of its constituents.”

After raising a phenomenal $450m Series D round in August, US fractional investing provider DriveWealth revealed a huge addition to its offering today pushing into crypto.

The Softbank-backed firm recently acquired trading firm Crypto-Systems, and is now relaunching the business as two wholly-owned subsidiaries.

Called DriveLiquidity and DriveDigital, the firms will offer crypto liquidity and crypto exchange all through an API for DriveWealth’s existing customers, like Revolut, Stake and Bux, to use.

“Creating DriveWealth’s crypto vertical strengthens our ability to empower retail investors to enter these markets, while also equipping our partners with the end-to-end technology they need to power the investing experience as we move into the virtual asset space,” said Bob Cortright, founder and CEO of DriveWealth.

Cortright described the launch as “the next stage of growth” for DriveWealth’s core business.

To start DriveDigital’s exchange will only offer Bitcoin and Ethereum as part of its “initial launch”, two cryptocurrencies that it says account for 70 per cent of the market on an annual basis.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.