TBW Premium #3: The bank that could invest in Coinhouse

TBW Premium #3: The bank that could invest in Coinhouse

Read all about The Big Whale's third premium newsletter.

April 28, 2022

Hello Whales and welcome to the newbies who have joined us this week in the Web3 deep end.


Before we dive in, we'd like to thank you for your support. In less than three weeks, hundreds of you have already taken out a paid subscription (monthly, annual and for life).

It's thanks to you that we're able to carry out investigations and reports (we've got a big project in the pipeline) and, more generally, publish exclusive information. Many of you reacted to our interview with Emmanuel Macron last week. More interviews of this calibre are planned, so get used to it! 😎

In the meantime, we've got several big pieces of news for you this week, including one that's likely to provoke quite a few reactions from the banking community.


Our exclusive news

👉 Stripe is preparing new crypto features

After announcing, on Friday, the possibility for businesses to pay their customers in cryptos (with the stablecoin dollar USDC on the Polygon network to start with), the American-Irish unicorn wants to move up a gear. According to our information, Stripe will soon be offering its customers the option of accepting cryptos in addition to traditional bank cards. Any merchant site will thus be able to accept these digital currencies in exchange for goods and services, without actually receiving them at the end of the chain (they will be able to choose to get euros back). The arrival of a player as large as Stripe, which has millions of customers, could further accelerate the adoption of cryptos. 💸

👉 Unhosted wallet proposal under threat?

As you know, the European crypto sector is currently playing a part in its future with MiCA regulation. On 19 April, The Big Whale exclusively published a letter in which the Web3 lobby (46 bosses and organisations) alerted EU finance ministers to the texts being discussed in the European Parliament. What has happened since? "France's priority is to reach a balanced agreement that protects consumers, frames the risks of money laundering, while guaranteeing the attractiveness and innovation of the European Union", Bruno Le Maire's entourage whispered to us. According to our information, some of the issues raised by industry players are being taken very seriously by the authorities, in particular the way in which the rules on "unhosted wallets" would be applied. If the texts remain as they are, crypto service providers such as Coinhouse would in effect be obliged to check the compliance of all their customers' incoming and outgoing crypto flows... A system that would penalise the European industry.

👉 Sorare poaches Tech stars

To say that the French NFT star is doing well is an understatement. The fantasy football game, which has raised $680 million in 2021, already has 80 people on its payroll (up from 13 two years ago) and is recruiting in spades: 55 positions are currently open between Paris and New York (to launch popular new sports across the Atlantic). A sign that the company run by Nicolas Julia has the wind in its sails is the fact that a number of big names from the tech world have recently joined it. Sorare has notably poached Dan Sormaz from Spotify, where he had been in charge of design for a decade. Previously, Charles Ganansia (at Google for 15 years), David Byttow (Snap), Paige Cutlip (Meta), Hallie Lomax (Lyft) and Adrien Crestey (Ubisoft) have joined the venture. 🚀


Exclusive: Oddo BHF bank about to invest in Coinhouse 💥

👉 L'actu. The Franco-German institution could invest €8 million in France's largest crypto platform.

👉 Why it matters. Oddo BHF would be the first French bank to position itself clearly in cryptos.

👉 The context. Banks are increasingly being asked by their customers to access cryptos.

It's a deal that could make a lot of noise. According to our information, Franco-German private bank Oddo BHF is negotiating its entry into the capital of French cryptocurrency platform Coinhouse.

The amount of the investment is said to be around €8 million.

The tie-up between Coinhouse and Oddo BHF, which manages more than €100 billion in assets, began last February as part of an extension of the crypto start-up's latest fundraising (series B). Coinhouse had raised €15 million in December, but the bank's expressions of interest convinced its boss Nicolas Louvet to open the door to this prestigious investor. "

Oddo BHF is not the only candidate and other players are also in negotiations to invest in the French nugget. If an agreement is reached, certain shareholders such as the True Global Ventures fund (TGV), XAnge (already an investor in Ledger or Sorare), CF partners, Raise Venture as well as the founder of Coinhouse and Ledger, Éric Larchevêque, could also get back into the pot.

With this deal, the crypto platform created in 2014 under the name "La Maison du Bitcoin" could recoup several tens of millions of euros witha valuation in excess of €150 million. This new money would enable Coinhouse to continue developing its brand outside France in order to establish itself as the first "European crypto-bank", as Nicolas Louvet has been fond of reminding us in recent months.

Growing customer demand

Oddo is not the first French bank to take an interest in cryptos. Some institutions have been experimenting for several years, such as Société Générale and its Forge subsidiary or Delubac & Cie, which has just obtained its registration as a digital asset service provider (DASP), but no French bank has so far made a direct investment. Even in Europe, this type of operation is unheard of for a bank. At least officially.

Only American banks have already invested in players in the sector. Goldman Sachs has invested in Circle and Blockdaemon, while JP Morgan has taken a stake in Consensys, one of the leading Ethereum development studios.

For Oddo BHF, this investment would be much more than just a stake. Like many European banks, the institution 65% controlled by the French Oddo family is increasingly in demand from its wealthy clients who want to get a foothold in the crypto market, which has exploded since the start of the Covid crisis. It has grown from $200 billion to almost $2,000 billion in two years.

The demands of Oddo BHF's clients vary widely: they range from simple exposure to bitcoin, to more complex products to access the juicy returns of decentralised finance. However, it remains complicated for a bank to offer to invest in and hold crypto-assets on behalf of third parties. There is both a question of risk and... skills. Hence the tie-up with Coinhouse, which would handle the "plumbing" and custody of cryptos.

Since its creation in 2015, the French leader in the sector, which has 90 employees, has gradually expanded its offering. Today, as well as allowing individuals to buy and sell around 50 cryptocurrencies, the AMF-regulated broker also offers products such as crypto savings books, managed investment and crypto storage solutions for individuals and businesses.

The deal would enable Coinhouse, which claims 500,000 customers, to change scale. Both financially and geographically. Oddo has more than 60,000 individual and institutional customers (investment funds, insurers, etc.) in around ten countries. The bank, which has 2,500 employees, has a strong presence in Germany and Switzerland, where it has offices in Frankfurt and Zurich. These are markets that Coinhouse intends to capitalise on.


Who made the most gains in cryptos in 2021?

The US data analysis company Chainanalysis published last week his annual activity report on the crypto sector. The Big Whale takes stock with its director of research, Kim Grauer.

THE BIG WHALE: In 2021, Americans earned $47 billion from cryptocurrencies, almost a third of the global total ($163 billion). How do you explain such a situation?

Kim Grauer: It's actually quite simple. On the one hand, there is the demographic and social factor, i.e. there are more Americans overall and they are richer than in most other countries. And there is also an industrial factor, with many American players (platforms in particular) and traders. Finally, the US has benefited from the take-off of many DeFi (decentralised finance) projects, with greater growth than in most other countries.

Some countries such as Turkey, Vietnam and Ukraine seem to be emerging rapidly. Why?

The three countries you mention have always topped our cryptocurrency adoption index. The reasons differ, but each time it's due to factors that are either technological, social, cultural, economic or cyclical. Turks, for example, have become massively interested in crypto-currencies because of the recent collapse of the Turkish lira.

Why has Ethereum generated more gains than Bitcoin among users?

We are seeing traders making increasingly large gains on various blockchains, and Ethereum in particular. The second largest blockchain on the planet has benefited from the growth of DeFi, which mainly uses its cryptocurrency, ether, which has also seen a sharp rise in 2021.

This edition was prepared with ❤️ by Raphaël Bloch and Grégory Raymond.

The Big Whale is a free and independent media. By supporting us, you are contributing to its development.

PS: it's very nice to pass this edition around to your friends, but take the opportunity to tell them to subscribe 😘

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