First Mover Asia: What’s in HSBC’s Metaverse Fund for Hong Kong, Singapore Private Banking Clients?; Bitcoin Declines

The largest cryptocurrency by market capitalization ignored a brief Sunday surge to settle below $42,500 level where it ended Friday amid growing economic uncertainty tied to Russia’s unprovoked invasion of Ukraine and looming interest rate hikes by the U.S. central bank. The crypto had started the week trading near $47,000 after a late March jump, fueled by hopefulness about a sooner-than-later end to the Ukraine conflict.

Bitcoin was recently trading at about $42,300 down slightly over the past 24 hours. Ether, the second largest crypto by market cap, followed a similar weekend pattern and was also off a fraction at about $3,200. Other major cryptos were mixed. AXS and Terra’s luna token had recently fallen about 1.5% and 2%, respectively. But popular meme token DOGE was up about 5%. Trading was light.

Cryptos’ performance lately has largely dovetailed with major equity markets, which have also fallen. The tech-focused Nasdaq closed Friday trading down over a percentage point. The S&P 500 and Dow Jones Industrial Average were also off as investors continued to process an historic swirl of events that could send the global economy into recession.

Over the weekend, Ukraine simultaneously girded for a fresh Russian offensive on cities in the southeastern part of the country while attempting to evacuate civilians, whom Russian forces have been targeting. E.U. countries continued to discuss banning Russian oil and gas, although the continent’s largest economy, Germany, has opposed the measure, saying that it would send shockwaves through its economy. The price of Brent crude oil, a widely regarded measure of energy pricing trends, continued hovering well over $100 per barrel, up over 40% from the start of the year.

BitBull’s DiPasquale said that wider concerns could weigh down cryptos well below the $40,000 threshold. “We should see a reaction around $37K and $32K, but BTC is in need of a catalyst to sustain any bullish momentum ahead of macro concerns, such as more interest rate hikes and monetary policy changes.”

But what exactly is this fund? What does it hold? Does anyone know? The official response from HSBC is boilerplate and the company declined to go into specifics. “The portfolio is actively managed and focuses on investing in companies within the metaverse ecosystem, with five key segments, namely Infrastructure, Computing, Virtualization, Experience and Discovery, and Human Interface.”

The fund, which is said to be based in London, targets investors in Hong Kong and Singapore, but there doesn’t seem to be a registration with regulators yet (CoinDesk checked FCA, MAS, and SFC directories), which suggests the fund is still in development and hasn’t been officially listed. So we’re left guessing what’s inside it.

This isn’t necessarily a bad thing. Rather, it’s simply a product of what the metaverse is: gaming and tech. At its core, the metaverse is a gaming experience, so the question remains why you would need a specific fund for this.

Every few years investors and the tech industry must invent new terms, and metaverse seems to be one of them. It’s simply gaming, rebranded. The dream of an interoperable gaming world bound together by non-fungible tokens (NFT) and blockchain, such as in Ready Player One, isn’t going to happen as intellectual property (IP) rights holders like Nintendo would get nervous about what might happen if their characters crossed over to different gaming worlds and beyond their control .(It could be vulgar.)

If you want to find a real metaverse, it would be an online gaming service like Xbox Live or Steam, which have been around for 20 years. Your digital identity is portable between games; online peers can see your name and scorecard. But that’s it. Each game is a separate world – nothing is transposable.

Resistance at $48,000 and $50,000 have capped price rallies over the past four months, which means sellers are in control. Meanwhile, there has been a significant loss of downside momentum, suggesting that buyers could remain active at lower support levels.

“Almost immediately after it was unveiled outside the Miami Beach Convention Center on Monday, kicking off the first day of the global Bitcoin 2022 conference, observers noted the robotic totem with hooves and horns lacked that one crucial anatomical detail. Its creator, Furio Tedeschi, hadn’t intended for the bull to be a steer.” (CoinDesk Assistant Opinion Editor Daniel Kuhn) … “Credit where it’s due, the Journal does add some depth to the story, particularly by talking to meme coin traders directly. But the report reaches the same conclusion that we did last month: “Nearly all analysts agree that participation [in meme coin trading] is essentially a form of gambling.” (CoinDesk columnist David Z. Morris) … “The absence of produce from [Ukraine, under attack by Russia] is also lifting the prices of commodities produced elsewhere as countries and companies seek alternatives to their usual supplies. Higher grain prices in particular also threaten a knock-on impact on beef and other meat as producers rely heavily on grain to feed livestock and poultry. The higher costs mean some of the largest food companies in the U.S. will likely continue to raise prices on consumers for products from cereal to deli meat, analysts say.” (The Wall Street Journal) … “Yet any swift decisions on oil sanctions face major political obstacles. With EU member states split on the issue, Brussels officials say there will be no decisions on Monday and that even the presentation of specific proposals could be weeks away. Germany, Europe’s biggest economy, is leading the opposition to sanctioning imports of Russian oil or gas, and has so far resisted calls from Eastern European countries such as Poland for stronger energy sanctions.” (The Wall Street Journal)