fbpx
Connect with us

Cryptocurrency

As Bitcoin goes mainstream, Wall Street looks to cash in

Published

 on

Love cryptocurrencies or hate the very idea of them, they’re becoming more mainstream by the day.

Cryptocurrencies have surged so much that their total value has reached nearly $2.5 trillion, rivaling the world’s most valuable company, Apple, and have amassed more than 200 million users. At that size, it’s simply too big for the financial establishment to ignore.

Firms that cater to the world’s wealthiest families are increasingly putting some of their fortunes into crypto. Hedge funds are trading Bitcoin, which has big-name banks starting to offer them services around it. PayPal lets users buy crypto on its app, while Twitter helps people show appreciation for tweets by tipping their creators with Bitcoin.

And in the latest milestone for the industry, an easy-to-trade fund tied to Bitcoin began trading on Tuesday. Investors can buy the exchange-traded fund from ProShares through an old-school brokerage account, without having to learn what a hot or cold wallet is.

It’s all part of a movement across big businesses that see a chance to profit on the fervor around the world of crypto, as a new ecosystem further builds up around it, whether they believe in it or not.

“The one thing you can say for certain is that the advent of the era of the Bitcoin ETF opens up the opportunity for Wall Street to make money on Bitcoin in a way that it hadn’t been able to previously,” said Ben Johnson, director of global ETF research at Morningstar. “The winners in all of this are the exchanges and the asset managers and the custodians. Whether investors win or not is a big, bold question mark.”

Bitcoin has come a long way since someone or a group of someones under the name Satoshi Nakamoto wrote a paper in 2008 about how to harness computing power around the world to create a digital currency that can’t be double-spent. The price has more than doubled this year alone to roughly $62,000. It was at only $635 five years ago.

Supporters of cryptocurrencies say they offer an ultra-important benefit for any investor: something whose price moves independently of the economy, rather than tracking it like so many other investments do. More high-minded fans say digital assets are simply the future of finance, allowing transactions to sidestep middlemen and fees with a currency that’s not beholden to any government.

Critics, meanwhile, question whether crypto is just a fad, say it uses too much energy and point to all the stiff regulatory scrutiny shining on it. China last month declared Bitcoin transactions illegal, for example. The chair of the U.S. Securities and Exchange Commission, Gary Gensler, said in August that the world of crypto doesn’t have enough investor protection and “it’s more like the Wild West.”

That hasn’t been enough to halt the immense momentum for crypto, as it’s gone from an online curiosity to a bigger part of the cultural and corporate landscape.

U.S. Bank earlier this month said it has begun offering a cryptocurrency custody service for big investment managers. That means it essentially holds their Bitcoin in safekeeping for them, and it expects to offer support for other coins soon.

Other name-brand banks have also announced intentions to offer custodial services for crypto.

“It’s not just in the fringes and dark corners of the Web that it’s happening,” said Kashif Ahmed, president of American Private Wealth in Bedford, Massachusetts.

Ahmed doesn’t recommend his clients invest in crypto. Before then, he said he’ll need to be able to “go to my local supermarket and buy things for my family and offer crypto and not be laughed out of the store.”

But others are more willing to try it.

In a survey by Citi Private Bank of family offices around the world that manage money for wealthy people, roughly 23% said they have made some investments in crypto. Another 25% said they are researching it.

The growing acceptance of crypto on Wall Street has created a new crop of darlings that help people buy it. Crypto trading platform Coinbase has a market value of roughly $64 billion, for example, putting it on par with such established companies as Colgate-Palmolive, FedEx and Ford Motor.

At Robinhood Markets, meanwhile, the company that became famous for getting a new generation of investors into the stock market is increasingly becoming a place for crypto trading. This spring was the first time when new Robinhood customers were more likely to make their first trade in cryptocurrencies rather than in stocks.

In the end, what many on Wall Street see lasting may not be as much Bitcoin and other cryptocurrencies as the technology that underlies them.

Called the blockchain, it allows for a public ledger that everyone can check and trust, and many expect it to lead to a wealth of innovations. It’s akin to today’s Netflix, Facebook and other services that sprung out of the infrastructure built during the boom and bust of the dot-com bubble.

“The applications built on this new software architecture appear to be growing more quickly than past technologies,” Bank of America strategists Alkesh Shah and Andrew Moss wrote in a recent research report positing digital assets are only in their first inning of growth. “New companies are likely to emerge and poorly positioned companies will exit, creating significant upside potential for some and downside for others.”

JPMorgan Chase, for example, is already using blockchain technology to improve fund transfers between global banks. That’s the same JPMorgan Chase run by CEO Jamie Dimon, who said in an interview with Axios this month that bitcoin has “got no intrinsic value.”


NEW YORK (AP)

Cryptocurrency

Cryptocurrencies reach post record inflow, rise of the Omicron asset

Published

 on

CoinShares revealed Monday a heavy institutional investor flow into cryptocurrency products and funds despite a substantial drop in the past weeks, as a new digital asset emerges to the scene, carrying the same title after the new coronavirus variant, the Omicron.

Despite its rising record inflows in 2021’s first 11 months, cryptocurrency has marked a new all-time low with the arrival of a new COVID-19 variant.

As of November 26th, digital assets’ total incursions into the cryptocurrency sector reached a whopping $9.5 billion, compared to 2020’s Bitcoin inflow of $6.7 billion, with a matter of one week reaching $306 million.

According to data from digital asset manager CoinShares, Bitcoin witnessed its heftiest inflow of $247 million after releasing another investment asset in Europe. During that time, European Investment management firm Invesco issued its bitcoin exchange product in the continent, according to media reports.

Concurrently, asset manager WisdomTree also registered a trio of cryptocurrency basket exchange-traded products (ETP) into the Swiss Stock Exchange (SIX) and Frankfurt-based Börse Xetra, as stated by CoinDesk. 

In parallel, CoinShare also unveiled that cryptocurrency has attained global inflow tallying to $2.7 billion for 11 consecutive weeks. Last week, the world’s largest crypto asset, Bitcoin, endured a heavy price drop by 2.3 percent, following a 10.4 percent from a prior week.

Last Friday, Bitcoin endured another plunge of almost 9 percent as investors abandoned the decentralized currency with fear of heavy impact support by the emergence of a new COVID-19 variant, Omicron, with last value fluctuation rising to 2 percent, with Bitcoin value reaching $58.483.

However, the globally renowned asset quickly recovered from its demise, following global markets attaining a smoother and soother bearing in valuation on Monday.

“Inflation is skyrocketing, and people are searching for more alternatives for their money in the bank,” chief of cloud-based automated crypto trading bot Cryptohopper, Ruud Feltkamp, said in a statement.

“I don’t think it’ll take long until investors see this as a ‘cheap’ buying moment. We are still in the midst of the bull cycle, and I think rising inflation will lead to more money being allocated to stocks and crypto,” he further added. 

Shortly after presenting itself to the investor registry, the value of the newly risen digital asset hit $688 from Friday till Monday, before witnessing a plunge of approximately 75 percent, CoinGecko revealed.

Omicron, defined as “a decentralized treasury-backed cryptocurrency protocol,” initiated trading at around $371, and by Thursday, it marked an estimated value of $65.

Last week, the World Health Organization branded the latest coronavirus variant Omicron, with an expanded list of countries broadcasting the hazardous intensity of it carrying “very high” worldwide threats of waves, even though scientists revealed that would take weeks to fully comprehend the severity of the variant spread on a global scale.

While the ambiguity of Omicron’s launch date lingers, data from GoinGecko demonstrated that the token emerged on the scene on November 8th, with a Telegram channel labeled OmicDAO was launched a day before.

Currently, there is no official and direct representative of the Omicron token.

Continue Reading

Cryptocurrency

U.S. federal agencies aim to clarify crypto legality

Published

 on

U.S. regulators uncovered their future plan to address the rise of cryptocurrency for the upcoming year, with focus directed at the “greater clarity” concerning the legality of decentralized transactions, reported by Bloomberg.

The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) unveiled their future scheme to address the uprise of cryptocurrency, placing the digital asset with utmost priority for 2022.

The plan could potentially focus on stablecoin issuance via loan collateral and the manifestation of cryptocurrency on enterprise balance sheets. The three federal entities aim to examine the needed means to employ bank capital and liquidity standards to U.S.-based banking organizations.

The shared roadmap has yet to be finalized, given that the agencies are looking into different issues to accommodate the market’s changes. It will adhere to crypto policy “sprints” to assist in structuring regulatory priorities for the upcoming year.

The OCC, the Reserve, and the FDIC’s goals are to determine any potential threats and establish the efficacy of current rules. While there is no certainty that the roadmap will create fundamental changes, however, one thing is certain though, it will not work in favor of holders of decentralized assets.

The American regulatory move on cryptocurrency will proceed with caution, with crypto users having to proceed with cautions and hold back on specific activities to adhere to the word of law.

Continue Reading

Cryptocurrency

Consortium of Japanese firms assesses digital currency for 2022 launch

Published

 on

A consortium of almost 70 Japanese firms revealed on Wednesday in a conference its plan to initiate an experimental phase of testing a yen-based digital currency to be ready for launch in early 2022.

Three of the country’s mega-banks have always shown intentions of joining on the decentralized currency, which will mainly be supported by bank deposits, while utilizing a known platform to hasten a transfer of massive funds and settlement between companies, including cutting costs.

The consortium will incorporate Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc, and Sumitomo Mitsui Financial Group Inc. Tmizhuhese companies have had meetings regularly for the past year to examine the required measures to create a widespread infrastructure for digital payments.

In parallel, Japan’s three mega-banks also represented their private digital payment systems but have failed to mirror the same effort provided by financial technology entities, such as Softbank Group-backed PayPay – the multinational conglomerate is not a part of the consortium.

“A digital currency system built on a bank deposit-backed common platform will fit the Central Bank Digital Currency (CBDC) that could be planned and implemented in Japan,” special advisor to DeCurret and former head of Japan’s Financial Service Agency, Toshihide Endo, said during Wednesday conference.

The Japanese consortium will also incorporate a multitude of lenders, including Japan Post Bank Co Ltd, brokerages and insurers, and non-financial companies, such as Nippon Telegraph Corp, Kansai Electric Power Co Inc, and East Japan Railway Co.

In addition, other companies will also investigate options to gauge a currency such as this, all while experimenting with different uses for the digital currency in various industries, from energy to retail.

From another aspect, the consortium’s approach to releasing its own plan to digital currency will most likely trickle down the Bank of Japan’s scheme of launching its own CBDC, with regulators revealing they are working in synchronization with the BOJ if a digital currency is to be issued.

Continue Reading

Trending