A Child poster for speculation
13 July 2017, bitcoin is the leading prima donna of the digital currency market. Anyhow, a big wall street bank does not impress by the crypto-storm.
James Faucette leads the Morgan Stanley’s team to hold up Bitcoin BTCUSD. +0.05% as a poster child for assumption although downplaying its potential as a valid currency.
In a report, analysts of the cryptocurrency note that online merchants’ percentage is low from last five years. This is the fact that price of the digital currency increases by 250%.
Faucette says, “The disparity between virtually no merchant acceptance and bitcoin’s rapid appreciation is striking.”
He has the responsibility for retailer’s quick appreciation in case of lack of bitcoin’s appeal, high cost with low transaction process. But unluckily, the main offender may be its rapidly growing worth.
Faucette says, “The ecosystem has focused more on value speculation rather than the foot-leather-eating work of increasing acceptance — way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”
In early June, Morgan warned the cryptocurrencies to join the traditional investment tools. In this context, they need to accept the government oversight. Accordingly, it didn’t persuasive what that would demand.
Meanwhile, until the bitcoin’s regulation introduces, the discussion is over that Bitcoin is an alternative formula of monopoly money. Or, a genuine currency is expected to continue without a definitive conclusion.
On Tuesday, “Grayscale Investments” (company behind the Bitcoin Investment Trust) announced that four new investment products had been opened by it, through which investors will be provided with exposure to cryptocurrencies in a more acquainted wrapper.
Four New Crypto-Funds
So, let’s enlighten you about the new funds!
After Bitcoin Investment Trust, four latest crypto-funds have been also launched which are; Litecoin Investment Trust, Ripple Investment Trust, Ethereum Investment Trust, and Bitcoin Cash Investment Trust, as each of them will hold positions in single cryptocurrency.
Managing director of Grayscale Investments, Michael Sonnenshein stated;
“We are thrilled to expand Grayscale’s offerings to meet rising investor demand. Our team is committed to bridging the gap between the global investment community and the digital currency asset class. We remain focused on product creation and will continue to launch more single-asset and diversified products to provide exposure where investors are looking for it.”
Just like other products of Grayscale investments, new trusts like these will be offered in a private placement to the investors, who buy at least $10,000 worth of shares and succumb to a one-year conferring period. Ultimately, it’s expected that the trust sponsor will possibly seek to list these shares on OTC (over-the-counter) platform. If these shares are publicly-quoted, they’ll definitely have a lot more liquidity and through retail brokerage accounts they could be purchased.
Due to its heavy premium on the secondary market, it’s an anathema to many financial analysts, however, the Bitcoin Investment Trust has turned out to be very popular among buyers, and especially among those, who are worried to hold crypto-assets directly and want to gain exposure to the top-cryptocurrency through tax-fortunate retirement accounts.
Preceding to recent stock split of GBTC, it was a move that made the trust even more tempting to retail investors and left the trust among the most-purchased assets on investing app Stockpile, allowing investors to buy small shares of expensive stocks.
Grayscale Trust Offers Eight Investment Products
Overall, different eight cryptocurrency investment products are being offered by Grayscale, including;
- Ethereum Classic Investment Trust
- Zcash Investment Trust
Digital Large Cap Fund was launched by Grayscale last month, which is a cryptocurrency index fund, holding market cap-weighted positions in the top five cryptocurrencies. All of these cryptocurrencies are now available in separate funds, which means that when they’d be publicly-quoted, and investors could easily invest in the huge cap fund but, short any of the individual-assets on which they were bearish. Apart from GBTC, these products are available exclusively now, through private placement.
CoinfloorEX is basically a London-based exchange, which was founded back in 2013. On Wednesday, it announced that from next month, it will be launching bitcoin futures contracts by merging with numerous other companies to propose such product to their consumers. This British cryptocurrency exchange’s main focus is to enter the bitcoin futures market.
Unlike its competitors, Coinfloor will be offering substantially firm futures contracts, and according to a wire service report, when the contract will come to an end, the actual asset that is being traded will be delivered and, in this case, it’s bitcoin. Cboe and CME are offering these bitcoin futures contracts and these contracts are cash settled, however, they don’t deliver bitcoin to the owner of the contract.
According to the co-founder of Coinfloor, Mark Lamb, the product was originated because of an extensive demand from some of the exchange’s customers.
Mark Lamb told Reuters (news agency company);
“When you talk to the liquidity providers, they all say the same thing, which is they want a physically delivered futures contract so they can hedge their exposure across exchanges.”
Coinfloor is probably the fifth one in the companies that offer bitcoin futures contracts by joining with following trading platforms;
- CME Group
Cash-settled contracts are being offered by the U.S.-based Cboe and CME, so does the CryptoFacilities, which is based in the UK. The main perception of bitcoin futures is still contentious, as the U.S. CFTC (Commodity Futures Trading Commission) is also announcing that after getting a pushback on the current products, for the futures contracts, it needs to work on a heightened-review-process.
Likewise, more information about the CFTC’s oversight of such products has been also requested by few representatives, as they also noted that the taxpayers have to be protected from manipulation, vicious activities and scams, for the better future of the market.
Looks like Bitcoin’s three-year civil war is finally nearing its end now that SegWit has locked-in. However, it won’t officially lock-in until tomorrow, once the signaling period has ended. The network will transition into a “buffer week” for a few weeks where users and miners will be given the opportunity to upgrade their software. Seemingly, after August 21, SegWit will activate and miners will begin to reject blocks that do not support this change.
Segregated Witness was first proposed in December 2015, by Bitcoin developer Pieter Wuille. SegWit is expected to fit in more number of transactions in each 1MB block thus reducing the congestion on the network. This has been a conflict within the bitcoin community for quite a long time but it appears to be finally resolved.
Also, other communities like Litecoin activated SegWit last spring.
News credit: coindesk.com
Image credits: gadgetsnow.com