Wednesday, 08 March 2017 09:26

Bitcoin Is Reaching the Point of No Return - Buy Side Should Take Note Featured

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Many bitcoin aficionados are waiting with baited breath as the SEC is to announce by this Friday whether they will approve the first registered bitcoin ETF. This is not the make or break event that many think it is, though. As a matter of fact, if the ETF is denied and the bitcoin drops, I'll consider it an opportunity.

European Bitcoin Acceptance

An ETF will allow institutions to flood into Bitcoin through registered vehicles. Whether the SEC approves the Winkelvoss twins ETF is besides the point, institutions interest is already sparked and the money will come in anyway. Btstamp, one of the world's largest bitcoin exchanges, is partnering with one of the largest French banks, Crédit Agricole, to facilitate bitcoin acceptance at investment funds. According to Coindesk:

...launch a new service aimed to allow bitcoin to be accepted by investment funds.

For its side of the deal, CACEIS, the asset servicing branch of the bank, will provide services covering clearing, depositary and custody of bitcoin bought in through the exchange.

The goal of the partnership is to increase capital inflows to new investment funds by providing an alternative funding method in the form of the digital currency. Fund promoters, working with CACEIS as a transfer agent, can start accepting bitcoin for fund subscriptions as soon as Q2 2017, the firms indicated.

Bitstamp CEO, Nejc Kodrič, sees the partnership as a foothold for bitcoin to be used for mainstream, legitimate investment opportunities, 

“Bitstamp’s first partnership with a market-leading, asset-servicing bank like CACEIS means bitcoin investments can now be made within fully licensed and regulated framework,” he said.

As bitcoin gains traction, it's easy to see why some investors are picking up interest. In jurisdictions with capital controls, using bitcoin circumnavigates regulatory headaches and streamlines cross-border payments.

Joe Saliba, CACEIS deputy chief executive officer, said:

“Fund promoters are constantly seeking new sources of investment capital and by interfacing them with a regulated bitcoin exchange we are supporting their business development objectives. “

Japanese Adoption

Japan has recently overtaken the US and China as the highest-volume country for bitcoin trading in the world. The reason is due to increased regulation in Japan, and the recognition of bitocin as legal tender, which allows banking instituions to deal with it directly as of April 2017. Japan is the world's 3rd largest economy and has one of the world's largest banking systems. 

Chinese regulation 

The PBOC advised Chinese bitcoin exchanges to prevent withdrawals until they updated their systems to comply with KYC/AML rules. This was easy to see coming since Chinese were using (or at least media reported they were using) bitcoin to circumvent China's capital controls.

Coindesk reports: Chinese Bitcoin Exchanges to Resume Bitcoin Withdrawals Pending Regulator Approval. China's 'Big Three' bitcoin exchanges have announced their intent to resume withdrawals in new statements issued today. This clears the way for Chinese banks to enter the industy.

While many pundits took the drop in volume from the PBOC crackdown as a negatie or even the end of Bitcoin, a more macro look hinted otherwise...

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After reading what is essentially Fake News about Bitcoin from Financial Times, London Business School and Credit Suisse, I have created an easy to understand metric that allows anyone to compare the risks and rewards of Bitcoin to basically any currency, commodity, stock or asset class.

BTC vs Eur risk vs reward

There is no such thing as a trustworthy trusted party

Credit Suisse has been posting cryptocurrency advisories over the last few weeks. They are quite one-sided, although couched in the appearance of objectivity. To explain why it's couched in the appearance of objectivity, and not actually objective, let me give you some background. 

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I will teach novices and experts alike how to fit Bitcoin into an investment portfolio safely and with the optimum risk-adjusted potential - along with step-by-step guides, instructions and tutorials. This first part of the series starts with the basics, obtaining and managing your bitcoin.

 

Censorship, Autonomy and Risk Management When Dealing With Digital Assets: How to Minimize Risk of Loss

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This is a video on the topic of the qualities of Bitcoin blockchain's censorship-proof attributes and how they apply in the world we live in today. It is imperative that you look at this as an dispassionate investor and steward of your assets, and not as a partisan or political supporter of XYZ.

Last modified on Wednesday, 08 March 2017 11:23

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