We’ve discussed the possibility of a Bitcoin ETF in the past and the doors such a tool could open (and close) for the crypto space.
An ETF is an Exchange Traded Fund and essentially allows traders to get in on the price action of Bitcoin without actually owning any and without having to deal with cryptocurrency exchange KYC and signup, cryptocurrency wallets, and all of the niche elements of crypto trading that cause concern and confusion among regular stock traders.
Not everyone wants to use Bitcoin as some kind of world currency – as a commodity, it trades billions of dollars every day, and many traders want to get in on the action but don’t want to have to trust sketchy exchanges or risk losing their private keys with no insurance or recourse in recovering their funds.
All The Price Action, None of The Fraud
Exchange Traded Funds introduce the traditional safety protocols that are already in place for stock trading, and indeed, a Bitcoin ETF would be traded on the stock market as opposed to crypto or mutual fund exchanges.
The ETF is a security representing the price of Bitcoin which is actually bought and held by the fund and professionally managed. Users won’t have Bitcoin, but they won’t have to worry about the inherent risks of the space either and it’s estimated that a huge amount of new money could enter the space if an ETF is released. While the securities bought by ETF investors aren’t Bitcoin, the Bitcoin the fund will buy certainly is.
Why VanEck?
VanEck is an investment management firm headquartered in New York and founded in the mid-fifties.
If you’ve followed the Bitcoin ETF efforts of the past you probably know that the Winklevoss twins of the Gemini exchange have tried many times to secure a Bitcoin ETF license and have been rejected by the SEC every time on grounds such as concern over the legality of overseas BTC handling.
Why would VanEck succeed where the twins have failed?
Well, as the director of Digital Asset Strategy at VanEck/MVIS, Gabor Gurbacs, pointed out, Van Eck has done this before. Not with cryptocurrency, mind you – with gold.
“VanEck has a history of building international stock and gold investing, in the U.S. and abroad,” Gurbacs said in an interview with Bitcoin Magazine.
VanEck was behind the first ever gold equity mutual fund which, the VanEck International Investors Fund which was launched in 1968 and is still in operation. At the time, the gold market cap was $200 million and the price of gold was $35 an ounce. Now it’s over $1,200 an ounce and the market cap is well over $7 trillion, something Gurbacs believes VanEck’s investment vehicle is partially responsible for.
While not everyone in Bitcoin even agrees with the idea of an ETF, with crypto-godfather Andreas Antonopoulos among the critics, there’s no doubt about it – a Bitcoin ETF would significantly increase the chances of a bull run and a far greater market cap than has been seen to date in crypto. While the true believers may not like it, the traders are all for it, and wherever you stand on the subject, there’s no little doubt in anyone’s mind that a Bitcoin ETF is inevitable.
The “tokenization of everything” hits a speed bump
“TOKENIZE THE WORLD” was the ICO battle cry of 2017 and the subsequent drive to democratize art, real estate, cars, securities, and more, has enabled people to buy a token representing the value of any asset you can care to imagine.
So why are we talking about detokenization? The Digipulse CEO recently announced that 98% of all tokens connected to the project would be burned because the issued tokens are being used for speculative investment and not the built in platform. This is an issue for MANY tokenized projects. Will other companies follow suit? Read our entire piece Is Mass Detokenization On The Way.
The overall cryptocurrency market was rather stable this week floating between $205bln to $207bln representing a 1% increase, with an obvious pump and dump yesterday. Fun times ya’ll. But look closer and you will note the top 5 struggled, being held up by the King, Bitcoin.
Bitcoin (BTC): Crypto twitter was all over the place this week. $3k Targets, $11 targets, people capitulating, etc. Very entertaining. Week to week price action found a channel between $6,300 and $6,500, then pumped to $6,680 and subsequently dumped back to $6,400. Not taking into account the PnD Bitcoin experienced 1.5% growth.
Ethereum (ETH): There’s been little love for Ethereum this month. Down 45% since July 24th, there doesn’t seem to be any reprieve in sight for Vitalik’s love child. ETH currently sits at $274 as of this post experiencing a decline of 6% week to week. Curse you ICOs!!
Project of the week QUIZANDO (QUIZ): Social platforms have provided creative people with a soapbox in which to spread their views, opinions, likes and dislikes across the world. To make any revenue from the audiences they need to work hard at getting endorsement deals, look for related affiliates and constantly promote products.
This is where Quizando comes in. The Quizando project is a state-of-the-art quiz delivery system enabling players to participate in a gaming ecosystem that rewards them with cash prizes. Quizando wants to help influencers monitize their influence easily and without the need to be a business expert or turning their channels into a constant adverts.
Want to learn more? Check out our feature on What is Quizando, and learn how you can put your Quiz knowledge to work for you. Intelligence Pays! Sponsored Content.
WHAT’S NEW AT CRYPTO IS COMING
What Is Quizando? – The Quizando project is a state-of-the-art quiz delivery system enabling players to participate in a gaming ecosystem that rewards them with cash prizes. Are you a quiz master?
Is Mass Detokenization On The Way? – For the last while, the “tokenization of everything” has been a constant theme in crpytocurrency, and it’s had people justifiably excited. So why are projects bruning their tokens?
What is Neon Exchange (NEX) – NEX is a platform for payment services and decentralized crypto trade. NEX aims to combine the performance of centralized exchanges with the trust and security features of decentralized exchanges
Blockchain Law Study group Formed in South Korea – In South Korea, lawmakers, industrial experts and judges are teaming up to form a fresh working group which will endeavor to discuss and propose solutions for issues surrounding the blockchain technology.
SEC Denies Nine More Bitcoin ETFs – Please, we all knew this was gonna happen. The U.S. Securities and Exchange Commission (SEC) on Wednesday rejected applications for nine bitcoin-based exchange-traded funds (ETF) from three separate companies.
AppleJeus: macOS users targeted in new Lazarus attacks– Researchers have uncovered a new campaign by the infamous Lazarus group which targets cryptocurrency exchanges in order to spread malware to Windows and macOS users.
SoftBank Denies Reports of Bitmain Deal; Bitmain Still Silent– Hmmm this is not looking good for Bitmain. Japanese telecom giant SoftBank has denied media reports of its involvement in a pre-IPO funding round of bitcoin mining rig manufacturer Bitmain.
Here’s How You Can Validate An ICO Using Your Chrome Browser – Cryptocurrency and blockchain is a world filled with excitement and new technology, but like your Mother always warned, if something seems too good to be true then it probably is.
Thanks for joining us this week. If you have something interesting you would like to submit reach out to us at info@cryptoiscoming.com. And don’t forget, Crypto is Coming!
Winklevoss Bitcoin ETF Petition Rejected by SEC – Crypto world curses the suits
You might be asking, “What’s all this ‘ETF’ business about and why is it so important”? Well you’re in luck because we posted a full article last week on how ‘Bitcoin ETF Approval Could Be Huge For Crypto‘.Tl;DR Exchange Traded Funds could be a HUGE deal for Bitcoin and cryptocurrency in general if and when they get approved.
But what is an ETF, exactly? Well an ETF is defined as a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. This means that the fund can be traded like a common stock and the ETF also experiences price changes throughout the day as they are bought and sold. Nifty, and a great investment vehicle for the masses. Unfortunately the door was slammed shut by some dudes wearing suits at the SEC. On to The Dispatch!
The overall cryptocurrency market had steady decline in the past week moving from $292bln to $286bln representing a 2% decline since the last Dispatch. As you can see below, the pretenders suffered most from BTCs decline.
Livecoinwatch.com
Bitcoin (BTC): BTC had a chaotic week shaking out the weak and timid (hahaha thats me) surging to $8k then dropping to $7,800 before finally settling on $8,000. Week to week that represents a near 0% change. Never a dull week in the crypto world, huh fam?
Ethereum (ETH): Was holding on until today when it suffered a daily drop of 5% adding to it’s weekly loss of 7%. ETH has struggled to return to the $500 mark over the past month, and we don’t expect that to change all too soon. ETH is currently sitting at $436 as of this post.
OMISEGo (OMG): OMG is the token attributed to the OmiseGO platform, an offshoot of the well-established Omise e-commerce payment company based in Thailand.
Omise is kind of like the PayPal of SE Asia. The company acts as a payment gateway allowing people to transfer money to third party bank accounts, and the underlying service is simply value exchange. That’s a lot of features including a decentralized exchange, a white label SDK (software developer kit for making apps), and a clearinghouse technology product..to name a few. It’s a promising project with strong fundamentals.
As you can see in the graph below OMG had it’s parabolic phase at the start of 2018 but has slowly retraced to December 2017 support. OMG reached an ATH of $24.71 in January and is now finding support at $6.81. That’s a 75% retrace! Hope you didn’t buy the top.
Lightning Network: How far away is it?– We’ve talked about the Lightning network before, but now we are seeing significant progress into the second layer scaling solution made by Lightning Labs that we had to revisit it.
The Ox Ecosystem Visualized – The 0x protocol is a favorite DApp for many cryptocurrency enthusiasts. Decentralized exchanges have the potential to fundamentally change how people interact with market places and drastically minimize counter-party risk. the 0x protocol is being used for much more than decentralized exchanges (DEXs) and has the potential to impact a wide variety of industries.
Millennials will love Cryptocurrencies – Really interesting presentation from Fundstrat on the economics of Cryptocurrencies. Millennials will lead the way. Millennials constitute people that are born between 1981 and 2000. That’s 96 million people, the largest generation in history, dwarfing baby boomers (80 million) and GenX (65.8 million).
Cryptocurrency App Checklist for 2018: Take your Game to the Next Level– In this cryptocurrency app roundup, we take you on a journey through the information platforms keeping traders, enthusiasts, developers, speculators and casual observers alike clued into the world of virtual currencies.
Exclusive: IOST Opens Up About Its Recently Launched Referral Program – A week ago IOST launched what’s been called ‘the largest referral program in the history of cryptocurrencies.’ Some Reddit users have claimed the company is making a play for increased market share and visibility, in a similar manner to what Tron did not so long ago.
Ernst and Young Acquires Crypto Asset Accounting Tool – Ernst & Young has recently acquired a number of technological assets and their respective patents from Elevated Consciousness Inc., a startup actively working on developing new solutions for the crypto asset industry.
Institutions Are Coming! But What Does It Mean? – Institutional money coming to crypto has become almost a kind of prayer, touted by Twitter influencers and news outlets alike. Make no mistake – all the signs point to a major influx of institutional investment in the crypto space, with CBOE applying for ETF approval and Goldman Sachs greenlighting Bitcoin futures.
Top DAPPs by users and volume – One of the major innovations that blockchain technology has brought to the table, besides the public ledger and cryptocurrency, is the creation of Decentralized Applications (DAPPs).
Canadian Bitcoin ATM Company Hits $2M in Daily Volume– Vancouver-based Bitcoin ATM software provider Netcoins has today announced its daily transactional revenue across Canada, Europe and Australia has reached $2M USD (approximately $2.6M CAD) in a single day.
AMD Sees Q2 Drop in GPU Sales to Crypto Miners – Chip maker Advanced Micro Devices (AMD) said Wednesday that sales of graphics cards (GPUs) to cryptocurrency miners fell during the second quarter.
Google bans cryptocurrency mining apps from the Play Store – Google has updated its Play Store developer policies to ban several more categories of apps, including cryptocurrency mining ones and apps with disruptive ads, as reported by Android Police.
Thank you for joining us for this weeks The Raven’s Dispatch! Don’t forget to sign up for our newsletter so you can receive notifications via email that a new Dispatch was released! Also if you have any interesting news you would like to submit contact us at info@cryptoiscoming.com
The Winklevoss Bitcoin ETF was rejected….again. The decision made was referring to an appeal from the two year old initial application of the same ETF proposed by the Winklevoss in 2016. Initially denied in 2017, it seems the that proposal had been modified only slightly to include text explaining the difficulty in manipulating the price of Bitcoin. The SEC is apparently still unconvinced.
All is not lost as The Van Eck SolidX CBOE Bitcoin ETF is not related at all with the Winklevoss application and represents the best chance we have of seeing a Bitcoin ETC anytime soon. The SolidX proposal anticipated the “manipulation” issue by adding that the market is now global with exchanges all around the world and stating that they would be purchasing their Bitcoin OTC from regulated institutions.
The pricing mechanism they will use for Bitcoin will be from those OTC regulated entities. This pricing mechanism will be publicly available. Again, another great point. (4/N)
The ETF will be subject to the same regulations that the CBOE uses to regulate the other commodities and derivatives traded on their platform as well as include insurance to protect traders from counter-party/security risks. The Van Eck Bitcoin ETF also includes a much higher minimum than previous proposals at 25 BTC which could help reduce the SEC’s concerns over retail consumer protections. It’s designed for hedge funds, private wealth managers and family offices.
With regards to the Winklevoss ETF, Hester M. Pierce, the SEC Commissioner, publicly voiced her disagreement with the decision handed down today. She mentions in her statement that she believes Bitcoin to be ready for ETF approval and the importance of institutional participation in Bitcoin to help reduce the commissions concerns.
The SEC seems to be finding itself with an old chicken and egg issue. Bitcoin needs the ETF to help stabilise the markets and the SEC deems the markets too unstable to approve the ETF. What remains clear is that the a BTC ETF will eventually be approved, just a matter of time.
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Institutional money coming to crypto has become almost a kind of prayer, touted by Twitter influencers and news outlets alike.
Make no mistake – all the signs point to a major influx of institutional investment in the crypto space, with CBOE applying for ETF approval and Goldman Sachs greenlighting Bitcoin futures. It’s happening – the real question is not if, but when, and it’s far less straightforward to answer.
The market has once again taken an upturn over the last week after a recent bearish trend saw prices decline across all currencies. Before the slump, the announcement that Coinbase was launching a custodial service catered towards institutional investors directly preceded an average of 11% price bump on average across all crypto assets, indicating the pivotal role the ability for institutions to invest now plays in the market.
After another decline, the announcement that ETFs may be approved saw another bullish surge. In this article we’ll take a look at some of the major ways institutions will be able to enter the market and what that means for the more casual retail investors.
Coinbase
Coinbase’s custodial service could be a pretty big deal, and it’s already live offering cold storage, an institutional-grade broker-dealer and reporting services, and a client coverage program. Coinbase is also in the process of onboarding hedge funds.
Beyond that, the exchange announced earlier this month that it has the green light to go ahead with three key acquisitions aimed at enabling the exchange to become a federally regulated platform through which investors can trade cryptocurrencies classified as securities. This is huge, as it could help save those currencies from total damnation by enabling them to exist and be traded legally under SEC jurisdiction.
The Financial Industry Regulatory Authority approved Coinbase’s purchase of Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC in July 2018. Cryptos classed as security tokens may now soon be offered through the exchange and help place the exchange under more direct federal oversight which may further attract institutions.
Coinbase can now operate as a broker dealer, an alternative trading system and a registered investment adviser, greatly expanding the current business model.
“Being approved to take ownership of these licensed entities is one more step toward our ultimate goal of allowing our customers to trade securities tokens on our platform,” said a Coinbase spokesperson. “There are many more steps and conversations needed with regulators before this journey’s complete.”
Coinbase rival Circle Internet Financial Ltd., said last month that it will apply for registration as a brokerage and trading venue with the SEC so it can help investors buy and sell tokens deemed to be securities as well. The firm also plans to seek a federal banking license to provide more services to customers.
BlackRock Explores Crypto
Bitcoin prices climbed 5% after asset management giant BlackRock announced that it was setting up an assessment group to investigate cryptocurrencies and blockchain technology. This news is somewhat at odds with previous statements made by the company, such as when CEO Larry Fink stated that Bitcoin was an index of money laundering.
The news follows a report by Fortune magazine that hedge-fund billionaire Steve Cohen’s VC firm Cohen Private Ventures invested in Autonomous Partners, a cryptocurrency-focused investment fund.
Mati Greenspan, senior market analyst at eToro, said ““It definitely is causing some excitement. The idea of big financial firms moving into crypto certainly isn’t new, and this is a trend we’ve been noticing gaining strength since November.”
Japan’s SBI Launches Crypto Exchange
Japanese financial giant SBI Holdings announced that it now has a live in-house crypto exchange despite months of delays following security issues.
VCTRADE is the name of the exchange which is is currently only open for users who have pre-registered with the platform in October 2017, the company announced – it is expected to be available for a wider public in July of this year.
SBI will focus on trading XRP through VCTRADE at first and then add support for Bitcoin and Bitcoin Cash at a later stage.
SBI Holdings currently deals in remittance technology which may explain the focus on Ripple at the moment. The firm’s first wholly-oowned subsidiary – SBI Virtual Currencies -was started in 2016 and was the country’s first crypto exchange that is fully backed by a major financial institution.
The platform later completed business registration with Japan’s Financial Services Agency (FSA) in September 2017 but announced in February of this year that the opening would be delayed due to security concerns amid the Coincheck hack.
Goldman Sachs
Though at first GS was reluctant to enter the crpyto space, customer demand turned the tide and turned the banking giant towards crypto. The investment bank is now looking to expand its recently established Bitcoin futures trading desk into services for direct cryptocurrency trades.
On June 20, Goldman Sachs COO David Solomon told Bloomberg:
“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too.”
Solomon also told Bloomberg that the firm must “evolve its business and adapt to the environment.”
Andreessen Horowitz
Major Silicon Valley investor Andreessen Horowitz has launched a new $300 million fund focused on cryptocurrencies.
The fund will be caled a16z and will feature former federal prosecutor and Assistant U.S. Attorney Kathryn Haun as one of its co-leads. Haun has also been named as the firm’s latest general partner.
Andreessen Horowitz is a well-known crypto investor and provided early capital funding for Coinbase in the early days.
General partner Chris Dixon indicated in the post that the crypto-fund would take a decidedly long-term tack in its investments.
“We’ve been investing in crypto assets for 5+ years,” he wrote. “We’ve never sold any of those investments, and don’t plan to any time soon. We structured the a16z crypto fund to be able to hold investments for 10+ years.”
“We plan to invest consistently over time, regardless of market conditions. If there is another ‘crypto winter,’ we’ll keep investing aggressively.”
Dixon went on to say that the firm would focus on assets with a real, non-speculative use case.
“We want services powered by crypto protocols to be used by hundreds of millions and eventually billions of people. Crypto tokens are the native asset class of digital networks, but their value is driven by the underlying, practical uses cases.”
When Will Things Change?
Here’s the thing – while this all sounds like such drastic change, the reality is that it may take years for institutional investment to make a difference. Things happen very quickly in the crypto space, but the world of traditional finance moves at a slower pace.
In the below interview, BlockTower CEO Ari Paul estimates that it will be around 5 years before major firms change the crypto landscape forever, stating that the majority of crypto investors are still retail investors who don’t necessarily know what they’re doing.
Paul also states that there are only around 15 major firms currently involved in cryptocurrency, and that the rest are only testing the waters. This, however, can be seen as a good thing – as the investing expert points out, major traders will make competition even fiercer for retail traders.
For casual crypto traders, now may be the best time ever to be involved in the space, before trained experts with unlimited resources really up the standards. For investors, on the other hand, the advice is the same as always – wait it out, and hope that the influx of institutional money will create a long-term sustainable bull run in the nascent crypto market.
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