November Newsletter

While Wilshire Phoenix did not have any exposure to FTX or its affiliates, we deeply sympathize with the people and companies who may have experienced losses due to the gross negligence of FTX.

The markets for digital assets remain volatile in the wake of the recent sudden and shocking revelations at FTX. Unfortunately, the issues at FTX cannot be viewed in isolation, as there have been too many incidents in this space where companies abused the trust of their customers, partners, and investors. While trust is an unavoidable element for centralized entities within the digital asset space, it cannot, and should not, be the only foundation of proper operations and business practices. Therefore, we hope the events at and surrounding FTX will serve as a tipping point for a new type of behavior throughout the industry that will not only strengthen investor and customer protection but also foster innovation and development in a safe and regulated environment.

Wilshire Phoenix is built upon the beliefs of transparency and integrity. By actively championing applicable regulatory guidelines and policies, we strive to bring investor access to the digital asset space with a deep commitment to investor protection.

We look forward to working together with everyone in the space to build a bright future for digital assets.

Market Commentary

The Evolving Correlation of Digital Assets - Read the article?authored by Will Cai

The Cure Becomes the Poison - Read the article?authored by Wade Guenther

Digital Asset News

Axios: Crypto Exchanges Volunteer Partial Audits in Trust Exercise. Crypto exchanges are taking steps to be more transparent with their clients. In an effort to prove solvency in the wake of the FTX crisis, Binance, KuCoin, MEXC Global, and more are making promises to show proof of their reserves. While Proof of Reserve reports are not the pinnacle of transparency we would like to one day achieve, they are a step in the right direction and will lead to more positive change.

CoinDesk: How to Benefit from Tax-Loss Harvesting in Crypto. Since?the wash-sale rule does not apply to cryptocurrencies (that aren’t securities) in 2022, investors may be able to lower their capital gains tax liability. Cryptocurrency owners can sell their assets that have lost value in order to realize losses on the year to offset capital gains in other areas. They can then immediately buy back the same assets to retain the desired exposure level.

Kitco: Binance to Create Industry Recovery Fund as CZ Holds AMA to Calm Crypto Markets. The world’s largest crypto exchange is creating a fund to support liquidity in upcoming crypto projects. CEO Changpeng Zhao announced that “four or five” other firms have unofficially offered to contribute to the fund, with more details forthcoming. Zhao also revealed that Binance would be involved with Vitalik Buterin’s new “proof-of-reserves” protocol.

Cointelegraph: Blockchain and the World's Growing Plastic Problem. As the question of how to contain our waste plagues climate concerned individuals everywhere, projects are popping up that attempt to leverage blockchain and digital asset tech to help curb the issue. While many initiatives have different individual goals, many revolve around rewarding their userbase with tokens in exchange for works, such as cleaning up a beach or documenting illegal litter, that will benefit the environment.

What We're Reading

Fidelity Digital Assets: Applying Machine Learning Portfolio Modeling to Bitcoin. Using machine learning and cloud computing with proprietary portfolio managing technology from Fidelity, Chris Kuiper, Aaron Gao, and Yonatan Tekleab dive into new modeling techniques. Their paper’s observations detail the impact bitcoin may have on a portfolio’s risk-reward profile, bitcoin’s return patterns compared to other emerging assets, and more.

AP News:?Test Scores Show Historic COVID Setbacks for Kids Across U.S.?The true cost of the Covid-19 pandemic is just coming into focus as the National Assessment of Educational Progress released their first report since 2019. Math scores saw their largest decreases ever, with reading scores dropping to 1992 levels. Concerningly, racial inequities have been exacerbated, illustrating the continuation of systemic imbalances in our education system.

MIT Technology Review:?How Scientists Want to Make You Young Again.?Fifteen years ago, scientists added four proteins to an aged skin cell and saw it revert back to a stem cell found in a days-old embryo. Since then, many scientists and firms have worked to refine the nascent technology. Notably, Altos Labs was seeded with over three billion dollars to work on a technology called “rejuvenation programming.” Time will tell if their lofty goals will be met, but the potential here for human implementation is mouth watering for some scientists.

Wilshire Phoenix?develops innovative indexes, ETFs, and other financial products that seek to respond to the various challenges that investors face in today's increasingly complex global markets. Whether providing solutions for institutional or individual investors, Wilshire Phoenix delivers access to differentiated investment products and strategies.

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