Connect with us

Bitcoin

Bitcoin ETF Proposals Possess Substantial Market Influence

Published

on

Bitcoin ETF

This article aims to ensure that all market participants understand the significance of a potential Bitcoin ETF, what exactly such an ETF entails, when the first ones are likely to be launched, and how they will impact the overall market.

ETFs Defined

Exchange-traded funds, commonly known as ETFs, are a traditional investment vehicle offered on all major stock exchanges around the globe. They allow exposure to an underlying asset or basket of assets offered in the form of a security that is proportionally represented by the fund’s shares. Most importantly, they allow exposure to a market without needing to physically hold or store the underlying asset. ETFs have become one of the most popular methods for passive investment by the masses in the capital markets.

As ETFs allow an individual to buy a basket of multiple assets, they mitigate strong price swings which individual stocks often suffer from, especially in the incredibly volatile cryptocurrency market. Any losses from assets which do not meet up to their promise are counterbalanced with assets which have performed particularly well and the growth of the overall industry during that period. Driving up the funds share price over time. The notorious investment tycoon Warren Buffett once proved the power of ETFs with a successful bet that the S&P 500 would outperform a collection of well-regarded Wall Street hedge funds over the period of a decade. His victorious bet displayed to the masses the power of such funds.

Bitcoin ETFs Market Impact

Bitcoin ETF ProposalsOne of the major barriers to mainstream investor fund inflows into the blockchain ecosystem has been the lack of institutional investors’ ability to purchase assets using traditional methods. Many do not understand that such market participants are simply not going to risk their capital on unfamiliar and unregulated cryptocurrency exchanges.

Instead, institutional money will enter the space once they can acquire cryptocurrencies without needing to hold the underlying asset, in a highly regulated and fully insured manner. Thus, for institutional investors crypto ETFs mitigate the risks of the industry whilst allowing them to profit from one of the greatest financial revolutions of our time. 

Although the impact of such institutional investors on the market will likely be of a speculatory nature in the first instance, this huge influx of money to the market will bring much-needed market exposure. The media love to shame the cryptocurrency ecosystem as much as feasibly possible, calling it a scam or a fad on a regular basis.

Institutional money would bring credibility to the entire industry and allow well-respected entities who have been quietly investing in the cryptocurrency space to come out of the woodwork and into the spotlight. Ultimately, this could lead to mainstream cryptocurrency adoption long term, as a result of the perceived integrity of the industry as a whole, and, potentially, a massive boost for the price of bitcoin.

Bitcoin ETF Calendar

Issuer Company Filing Date Status SEC Date
“Physically” Backed by Bitcoin Holdings
Winklevoss Bitcoin Shares Winklevoss Cap Mgmt 01/07/13 Denied 26/07/18
VanEck SolidX Bitcoin Trust VanEck & SolidX 05/06/18 Postponed 30/09/18
Bitwise HOLD 10 Cryptocurrency Index Fund Bitwise 24/07/18 Awaiting Approval Unknown
Derivatives Based
GraniteShares Bitcoin ETF GraniteShares 15/12/17 Denied 15/09/18
GraniteShares Short Bitcoin ETF GraniteShares 15/12/17 Denied 15/09/18
Direxion Daily Bitcoin 1.25X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 1.5X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 2X Bull Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 1X Bear Direxion 05/01/18 Denied 21/09/18
Direxion Daily Bitcoin 2X Bear Direxion 05/01/18 Denied 21/09/18
Evolve Bitcoin ETF Evolve Funds 21/09/17 Awaiting Approval Unknown

The table above displays cryptocurrency ETFs that are currently laying the foundations for their approval. Such firms are on a waiting list ready for their hearing with the U.S. Securities and Exchange Commission (SEC), who will ultimately determine their fate. The Winklevoss twins’ fund has already been turned down for the second time as of July, 26. Following this, the SEC has denied a following nine applications, predominantly from Derivatives based ETFs such as GraniteShares and Direxion. Such a decision results from their perceived inability to provide significant liquidity due to their market size, which could lead to significant market manipulation.  

BitcoinDespite such dismissals, the most important ETF which market participants should be fully aware of is the VanEck SolidX Bitcoin Trust who plans to release their ‘physically’ backed ETF on the Chicago Board of Options Exchange (CBOE). Recently, the SEC hearing date was postponed to the 30th of September. The CBOE has true industry influence as the largest options exchange in the world and has proven itself in the cryptocurrency market by introducing Bitcoin futures in December 2017. They have meticulously studied the failures of all previous ETF denials and reviewed their application accordingly. If an ETF is likely to get approved this year, this will most likely be the one.

Despite all the hype, some sceptics suggest that ETF delays are usual, with Copper being the last ETF to pass through the SEC. With their reasoning, the likelihood of an ETF being approved in 2018 is minimal. However, regardless of whether a decision happens in the next few months or not, the market has certainly been responding rapidly to both positive and negative news. The first Winklevoss twins ETF denial news caused a flash crash which quickly corrected, whilst the delay of the major CBOE proposal caused a more prolonged fall in bitcoin’s price. Ultimately, the market appears to be in a stalemate until a further delay, approval or disapproval occurs. The latter could cause a long-term downtrend, whilst an approval could see prices increase exponentially. As September, 30, looms, the market tension builds. Be sure to have a plan for all situations to ensure one maximises or minimises the ETF decisions’ impact on the market. 

This guest post was contributed by Adebayo Juwon, Country Manager (West Africa) at BBOD.io.

*Readers should do their own due diligence before taking any actions related to the company, product or service. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this guest post.*

Bitcoin

The Top 5 African Countries That Are Embracing Bitcoin

Published

on

African Countries

Bitcoin tends to polarise opinions between sceptics and believers, with almost no room for the middle ground. However, there’s a substantial demand for bitcoin and other cryptocurrencies in many Africa countries.

Do a quick search on Google Trends and you will see three African countries in the top ten of global search interest for the term “bitcoin.” This is a testament to the embrace of bitcoin in a number of leading African economies.

In this guide, you will discover the five leading bitcoin economies in Africa that have the most demand for digital currency as well as the most active local cryptocurrency communities.

South Africa

south africaBitcoin is popular among South Africans. According to their search interests on Google, they top the ranking for bitcoin. One particular group bitcoin appeals to is millennials. South Africa has a lot of them. Young people between the ages of 15 to 34 years old make up 20.6 million people – 35.7 percent of the total population, according to Statistics South Africa’s 2018 mid-year population estimate report. Combined with the fact that the country has one of the highest internet penetration rates in Africa, the country has become a sweet spot for many cryptocurrency exchanges.

The online multi-asset broker, eToro, reported a 671 percent increase in new users trading between January and November 2017, and a 574 percent increase a year before. LocalBitcoins, one of the largest peer-to-peer (P2P) bitcoin marketplaces in the world, saw over 600 percent increase in trading volume between January and December 2017, according to data from CoinDance.

The latest report by Ecobank on the state of cryptocurrency regulation in sub-Saharan Africa shows only two – South Africa and Swaziland – have a favourable stance on cryptocurrencies. The bank analysed 39 African countries.

The South African Reserve Bank has stated that virtual currencies pose no significant risk to financial stability, price stability or the National Payment System.

Africa’s second-largest economy has been struggling to stand on both feet for the past two years; the economy has refused to grow. In light of this, bitcoin has become a haven from the political and economic turmoil.

Nigeria

buy bitcoin in nigeriaIn Nigeria, many local traders and activists believe this is an opportunity to liberate themselves from a flailing economy using digital currencies and blockchain technology.

The main driving force for Nigeria’s strong bitcoin adoption could be tied to the prolonged dollar shortage in the country in 2016 and 2017. The government had devalued the currency and inflation was at rising rapidly. Bitcoin was a viable means for Nigerians to work around the lack of access to foreign exchange and also preserve their money from being eroded by inflation.

In the week of August 19, 2017, LocalBitcoins’ trading volume crossed the 1 billion naira mark (about $360 million) in Nigeria. The exchange’s weekly trading volume has not traded less than that amount since then. Local crypto exchanges have also been on the rise in the country giving more people access to a broader range of cryptocurrencies.

Zimbabwe

ZimbabweThe situation in Nigeria is not too dissimilar from Zimbabwe. A cash-strapped economy, failing currency and depleted foreign exchange markets saw locals turn to bitcoin as a store of value. Golix, the leading crypto exchange in Zimbabwe, says it processed bitcoin transactions worth around $1 million during October 2017. The price of bitcoin had once risen more than double the average price in other countries in 2017.

However, in 2018, the relationship between financial regulators and crypto businesses have been strained. The Reserve Bank of Zimbabwe (RBZ) decided to ban all local financial institutions from servicing cryptocurrency businesses. There have been court cases and more back and forth between the country’s leading crypto exchange, Golix and the RBZ, but as it stands it is difficult for local exchanges to operate within the country’s borders.

Young Zimbabweans – desperate to overcome the foreign currency and liquidity challenges plaguing the country – have found innovative ways around the ban though. Recently, Cryptogem Global defied the ban and opened a branch in Zimbabwe’s capital, Harare. Remitano and LocalBitcoins have also been servicing crypto fans in Zimbabweans.

Kenya

KenyaA Citibank research in December 2017 ranked Kenya among countries with the largest bitcoin holdings worth $1.63 billion, approximately 2.3 percent of the GDP.

The East African country has one of the highest bitcoin trading volumes in Africa. The weekly trading volume on LocalBitcoins jumped by almost 429 percent in 2017 and has only dipped by 19 percent this year despite bitcoin losing two-thirds of its value.

Also, local innovators have launched cryptocurrency systems to support payments and cross-border transactions, as embodied by initiatives like BitPesa.

Kenya is also one of the few countries in Africa with a Bitcoin ATM. Others are Zimbabwe, South Africa, and Djibouti.

Ghana

buy bitcoin in GhanaGhanaians began the year 2018 with a statement from the Bank of Ghana (BOG) cautioning the public about the use of bitcoins.

The central bank also expressed an interest in introducing cyber security guidelines to guide the use of digital currencies in the country. The central bank presented a bill referred to as Payment Systems and Services Bill to the Ghanian parliament. The BOG also hailed the potential of the technology behind bitcoin, blockchain.

A report earlier in 2018 shows Paxful, one of the prominent P2P exchange in Africa, monthly bitcoin volume in Africa is now around $40 million. The company’s most active locations are Nigeria and Ghana, the second and third largest markets respectively.

There are also several local bitcoin and blockchain startups, such as Bitland and BTCGhana.

Continue Reading

Bitcoin

South African Man Beaten And Tortured to Give Up Bitcoin Holdings

Published

on

A South African bitcoin trader was reportedly drugged, beaten, and tortured by assailants who wanted to gain access to his bitcoin holdings.

Facebook Invitation Led to Torture and Bitcoin Theft

According to local media, the incident happened on November 16 after the victim was invited by a man he met on Facebook to give a presentation on cryptocurrency. The same man who had invited him was present when the victim arrived with six other people in the room.

Identified only as Andrew, the victim trustingly entered the residence of his attackers in the afternoon. It was at this point that someone approached him from the back and covered his face with what is presumed to be a drug-stained cloth that knocked him out.

cryptocurrency tax regulationsAfter regaining consciousness he woke up in a different house and was surrounded by two women and three men. According to a report from the Meadowlands police, the victim was stripped of his clothing, tortured and assaulted.

Andrew also stated that the gang demanded his bitcoin password and his FNB (First National Bank) account details. All the while threatening to kill him and burning him with a hot iron if he failed to give up the information. He was at first reluctant to give up the information but gave in after they continuously tortured him.

After finally giving the details, he transferred R 800,000 ($57,789) worth of bitcoin to the account they provided him with. He also transferred a further R 100,000 ($7,224) from his bank account to their account. Apart from the bitcoin holdings and the money on the victim’s account, the robbers also got away with R 3,000 ($216.53) in cash, two laptops, and two Apple iPhones.

After the theft, the gang of robbers blindfolded Andrew and dumped him off at Kliprivier Road in Johannesburg. He is currently in the intensive care unit recovering after sustaining burn wounds on his body.

Crypto Related Crimes Are on the Rise

Unfortunately, the downside of cryptocurrencies gaining so much popularity means that people who trade in it are vulnerable to attacks. Cryptocurrency theft is a lucrative business for criminals especially since it is difficult to trace transactions.

This is not the first crime and will be a far cry from the last, as scams involving digital coin are being reported more often and violent attacks on known bitcoin holders have increased since 2017.

Continue Reading

Bitcoin

Middle Eastern Bitcoin Exchange BitOasis Launches in Egypt and Morocco

Published

on

BitOasis

Dubai-based digital asset exchange BitOasis has announced that it has now opened its doors in Egypt and Morocco, expanding its operation to North Africa.

BitOasis Expands Into North Africa

BitOasisBitOasis has been serving the Middle East as one of the first exchanges to offer cryptocurrency trading for local currency and has now decided to expand into North Africa to provide Morrocans and Egyptians with the opportunity to buy bitcoin (BTC) and other digital assets.

Despite the recent rise in interest of cryptocurrencies in Africa, Moroccan and Egyptian markets rarely make the news. While markets like South Africa, Nigeria, and Uganda have cryptocurrencies exchange services set up shop, the North African countries have largely remained underserved.

Part of the reason Morocco did not previously have any exchanges could be because transactions using digital currencies are considered de facto illegal. A year ago the Moroccan central bank, and the country’s Foreign Exchange Office, Office des Changes, declared that transactions using digital currencies such as bitcoin constitute a violation of the country’s exchange regulations.

Cryptocurrency enthusiasts in Egypt have been facing similar issues. From the Central Bank of Egypt asserting that no organisations have authority to trade bitcoin, to Dar Al Iftaa classifying cryptocurrencies forbidden by Islam, bitcoin has had no easy ride in the North African country. Still, there has been a growing interest in Egypt for blockchain technology as well as cryptocurrencies.

BitOasis is now an excellent alternative platform to peer-to-peer exchanges to buy bitcoin in Egpyt and Morrocco. Moreover, Egyptians and Moroccans are now also able to trade LTC, BCH, BSV, XRP, XLM, ETH, ETC, and ZEC.

Continue Reading

Popular Posts