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Overview

This document applies to all releases of Eagle software. Version-dependent functionality is noted with the initial release(s) it became available.

A Cryptocurrency is a digital currency that use cryptography to prevent counterfeiting and other exploits. They are most commonly based on blockchain technology, which provides a distributed (and in many cases public) ledger for participants and market observers to monitor transactions. Some of the most popular Cryptocurrencies are Bitcoin (XBT/BTC), Bitcoin Cash (XBC/BCH), Ripple (XRP), Ethereum (ETH), and Litecoin (LTC).

The market for Cryptocurrencies has matured to the point where institutional and other more traditional investors are getting involved. The Eagle software suite has flexibility to model Cryptocurrencies in Accounting, Data Management, and Performance, regardless of your preferred coin(s). There are two models available that serve different business requirements and operational goals.

  • Securitization: set up a security representing each coin and book trades like an equity, using the exchange rate between the purchase currency and the Cryptocurrency as the price. This allows you to track tax lots, calculate unrealized gain/loss, use different lot relief methods, and generate richer performance returns.
  • Cash: set up each Cryptocurrency as cash and book trades using contributions/withdrawals and spots/forwards.
Content on this page:

Pay special attention to underlined sections, as these highlight the most frequently encountered issues. Bold is used for navigation, modules, and screens. Italics are used for fields, tables, and errors. Fixed width indicates values for fields or code/text that should be entered. Tags are shown in parentheses (#) after field names.

Example reference data screens, trade screens, and reports are attached:

Entity Setup

Entities trading Cryptocurrencies do not require any special setup, but pricing and exchange rate sources must be considered.

  • If you are using the securitization model, ensure your Long Price Source (1282) and Short Price Source (5422) reflect your desired Cryptocurrency pricing sources, as you will be loading the exchange rates as prices
  • If you are using the cash model, ensure your FX Source (1344) and Valuation FX Source (11652) reflect your desired Cryptocurrency exchange rate sources

Reference Data

Storage & Configuration

Each Cryptocurrency security master file (SMF) is modeled as its own equity security (securitization model) or cash security (cash model).

The cash model involves adding a new currency to Eagle Accounting. The engines must be restarted by an administrator after a new currency is added, as described in this knowledge base article.

Market Data

Exchange rates to various physical currencies are readily available for most major Cryptocurrencies. These rates must be loaded either as prices (securitization model) or FX rates (cash model) in Eagle Accounting.

Security Data

Cryptocurrency SMFs can be set up and maintained in Issue Viewer, Security Reference Manager (SRM), or Reference Data Center (RDC). The lists below captures all required fields.

Securitization Model

  • Issue Name (961)
  • Primary Asset ID (14) & Type (1432)
  • Processing Security Type (3931) = EQCSCS (Common stock)
  • Price Multiplier (18) = 1.00
  • Quantity Scale (19) = 1.00
  • Issue Country (1418)
  • Asset Currency (85)
  • Primary Exchange (17)

Cash Model

  • Issue Name (961)
  • Ticker (13): enter Cryptocurrency symbol, such as XBT for Bitcoin, XRP for Ripple, etc.
  • Primary Asset ID (14): locked and concatenated to CASH + Ticker, such as CASHXBT or CASHXRP
  • Primary Asset ID Type (1432) = CASH
  • Processing Security Type (3931) = CRCRCR (Currency)
  • Price Multiplier (18) = 1.00
  • Quantity Scale (19) = 1.00
  • Security Type (82) = CRNY (Cash)
  • Issue Country (1418)
  • ISO Currency Number (1442): enter a large, unique value such as 9999 because Cryptocurrencies are not official ISO currencies
    • You will receive an error on submission if the value is already in use, in which case you step it up or down one digit
  • Currency Precision (1451): an unofficial list of Cryptocurrency precisions is available on Wikipedia

Trade Processing

Trades are entered using the Book Trade module once the entity and reference data have been configured. Enter the appropriate entity, security identifier, and trade (35)/settle dates (37) and click Submit to query for the security.

Securitization Model

Open

Right-click the Cryptocurrency security and select Open > Buy or ShortSell. The lists below captures all required fields to book a trade.

  • Shares (40): quantity of the Cryptocurrency being purchased
  • Price Per Share (45): exchange rate between Cryptocurrency and transaction currency at time of trade
  • The following fields are available to capture trade fees and taxes:
    • Commission (47)
    • SEC Fee (48)
    • Tax Amount (46)
    • Stamp Duty Tax (51)
    • Other Fee (3752)
  • Broker (88)

Close

Right-click the Cryptocurrency security and select Close > Sell or BuytoCover. The lists below captures all required fields to book a trade.

All fields on the close are the same as the open, except Lot Selection Method (27). This defaults to the entity-level election, but can be overridden.

Cash Model

Open & Close

Right-click the Cryptocurrency cash and select Book Foreign Exchange > Buy Currency - Spot Contract or Sell Currency - Spot Contract. The table below capture all required fields to book both a buy and sell of Cryptocurrency.

FieldBuy CryptocurrencySell Cryptocurrency
Sell Currency Symbol (363)Sale currency symbolCryptocurrency symbol
Sell Quantity (366)Sale currency amountCryptocurrency amount
Buy Currency Symbol (313)Cryptocurrency symbolPurchase currency symbol
Buy Quantity (316)Cryptocurrency amountPurchase currency amount
Broker (88)

Cancel & Rebook

Faulty Cryptocurrency transactions can be cancelled and rebooked using the Cancel & Rebook Trade module. Alternatively, trades can be cancelled using Cancel Trade, with the transaction rebooked using the Book Trade module.

Accounting

Once a Cryptocurrency trade is booked it will be picked up in Eagle’s global workflow. Accounting valuation is calculated when posting unrealized gain/loss, and Data Management valuation is calculated in the STAR to PACE push.

  • These can be scheduled or triggered manually
    • Global Processes (V17)
      • Accounting Valuation: Unrealized Gain Loss Entries > Post Daily Fund Unrealized Gain Loss-Position
      • Data Management Valuation: Eagle STAR to Eagle PACE Direct Processing > Transfer Data - Batch
    • Global Process Center (prior to V17)
      • Accounting Valuation: Unrealized Gain Loss Entries > Post Daily Fund Unrealized Gain Loss-Position
      • Data Management Valuation: STAR to PACE Direct Processing > Transfer Data - Batch

Valuation

Cryptocurrencies are valued at their prevailing FX rates.

Securitization Model

The prevailing FX rates must be loaded as prices to the appropriate source for each Cryptocurrency security. Valuation is calculated using the formula below.

  • Market Value = # of Units of Cryptocurrency * Quantity Scale * Price * Price Multiplier
    • Price is actually an FX rate in this case
    • Quantity Scale and Price Multiplier should both be set to 1.00

An example is shown in the attached spreadsheet.

Cash Model

The prevailing FX rates must be loaded to the appropriate source for each currency pair that will be used to hold Cryptocurrencies. If you trade Bitcoin in both USD and GBP funds, for example, you must load rates for both XBT->USD and XBT→GBP. These rates are used automatically in the calculation of base market value and unrealized gain/loss.

An example is shown in the attached spreadsheet. Due to the high prices of bitcoin and the use of "divide by" FX rates in Eagle Accounting, you may see slight rounding differences when comparing valuations between the securitization and cash models.

Reporting

STAR to PACE (S2P)

Almost all reports in Eagle leverage data from the Warehouse, which is populated by the S2P process. This will be scheduled as part of the daily workflow, but can also be triggered manually as described in the Accounting section.

The S2P process creates a single row for each Cryptocurrency in the POSITION, POSITION_DETAIL, TRADE, and CASH_ACTIVITY tables. The MARKET_VALUE_INCOME column captures the total market value, inclusive of price fluctuations and period-to-date accruals payable or receivable. Spot transactions used for the cash model are not posted to the TRADE table.

Accounting Reports

Eagle has a core set of accounting reports that can be used to review Cryptocurrency information. These are designed to support the daily operational workflow for business users, allowing Grid Reports to be easily exported to Excel and customized to provide additional details as needed. Advanced Reports are intended to be client-facing and do not provide the same level of customization.

Data Management Reporting

General Reporting (Eagle OLAP)

OLAP reports provide the maximum level of customization, allowing any column in Data Management to be pulled into a report. These go beyond the Eagle Accounting Grid Reports because they are not limited by core queries, can support multiple sources and various types of calculations, and provide drill-down functionality based on user-defined groupings.

Performance

The performance toolkit has full functionality to calculate market value-based performance for Cryptocurrencies using data supplied by the S2P process. Risk and performance attribution features are available to analyze Cryptocurrency performance.

Automation

Cryptocurrency security master files (SMFs) and trades can be loaded through the standard Message Center streams. The SMF must be loaded prior to the trade (trades do not spawn SMFs). Refer to Supported Generic Interfaces V17 for more information.

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