Boom Time:
Ethereum Price Surpasses
$400 in All-Time High

    

Ethereum price surged Monday to $407.10,

a record high, largely on the growing investment in cryptocurrency driven in large measure by bitcoin. Monday’s record high marked more than a 5,000 percent gain this year for Ethereum, which was trading at under $8.00 in January.Posting close to a 14-point gain in the last 24 hours, Ethereum was closing in on bitcoin, which suffered nearly a 10-point drop in the last 24-hour period, according to coinmarketcap.com. By the end of the day Monday, Ethereum’s market cap was $36.447 billion, compared to $43.997 billion for bitcoin.Ethereum’s long-term rise has followed bitcoin’s, which traded above $3,000 on Sunday, also a record.Pavel Matveev, co-founder of Wirex, told CNBC the strong interest in bitcoin has boosted investor interest in alternative cryptocurrencies that are delivering better gains. The expansion of ICOs has also raised awareness of altcoins.

Ethereum’s Unique Qualities

While bitcoin’s rise boosts altcoins, there is also fundamental demand for Ethereum, Matveev said, adding that bitcoin and Ethereum serve different needs. Ethereum supports smart contracts, which has attracted significant interest among financial institutions and other companies.The Enterprise Ethereum Alliance formed to connect large enterprises to blockchain technology. The alliance includes Intel, JPMorgan, Microsoft, Toyota, Samsung, the Depository Trust & Clearing Corporation (DTCC), the San Francisco Stock Exchange and others.

Ethereum has also attracted significant investor interest, based on the variety of currencies used to purchase Ethers. More than 83% of Ether buying was purchased using bitcoin a year ago, according to CryptoCompare. As of last week, bitcoin only accounted for 32% of the buying. Fiat currencies like the U.S. dollar and the Korean won have contributed a growing portion. Charles Hayter, CEO of CryptoCompare, said fiat options are fleshing out of the Ethereum ecosystem, showing its broad appeal. Ethereum’s transaction volumes reached 50% of bitcoin’s in late May for the first time, suggesting Ethereum is being widely used. Google searches for Ethereum reached an all-time high in early May. Ethereum also made history recently by becoming the most secure public blockchain out of all in existence, overcoming bitcoin for the first time ever since its inception, as measured by what is called a Köppelmann Constant.

National Governments Embrace Ethereum

Some countries appear to be using ETH as a hedge against national currencies. Switzerland, where the Ethereum Foundation is based, showed the strongest interest, followed by Venezuela, which is suffering triple-digit inflation. South Korea seems to have fallen in love with the currency. Its three largest exchanges handle twice the ETH/fiat volume of Coinbase’s GDAX and Kraken combined. South Korea is also big into fantasy sports, an area where ETH’s smart contracts can be used to make the game more transparent and reduce cheating. The government of Singapore recently conducted a test to digitize a national currency using the Ethereum blockchain. Ethereum’s founder, Vitalik Buterin, recently met with Russian President Vladimir Putin, a high profile development that lends more credibility to Ethereum.

Next Challenge: $467 Level

Nicola Duke, a Forex Analytix technical analyst, said breaking through the $377 price point was key for Ethereum. That price point, according to Duke, was the “resistance level,” the point that traders reach but don’t surpass. Ethereum’s next challenge is to reach $467. Duke uses historical price data to determine future price movements. Ethereum has not yet experienced the price correction Duke predicted at the end of May. Matveev of Wirex said if Ethereum his $600 by year’s end, it would mark a 47 percent gain over Monday’s high. While many factors are fueling Ethereum’s rise, much of the interest is based on the cryptocurrency’s ability to support smart contracts and enterprising applications.

Chuck Reynolds
Contributor
Please click either Link to Learn more about -Bitcoin.

Billionaire Investor Sets Example Investing in Altcoin ICO

    

A billionaire investor best known for buying roughly 30,000 Bitcoins

as part of the first government auction of the digital currency in 2014, is setting precedent as he stands behind a crypto token to be launched by a new startup. Tim Draper told Reuters in an interview that his participation in the initial coin offering (ICO) of Tezos slated later this month will be his first. The new Blockchain platform launched by a husband-and-wife team with extensive Wall Street and hedge fund backgrounds will launch the ICO on May 22.

Tezos incentive

According to information on its website, Tezos takes a fundamentally different approach by creating governance rules for stakeholders to approve of protocol upgrades. They are then deployed on the network automatically. When a developer proposes a protocol upgrade, they can attach an invoice to be paid out to their address upon approval and inclusion of their upgrade. This approach provides a strong incentive for participation in the Tezos core development and further decentralizes the maintenance of the network. It compensates developers with tokens that have immediate value rather than forcing them to seek corporate sponsorships, foundation salaries or work for Internet fame alone.

Draper’s confidence

As a new way of moving and storing money, Draper had told Fox Business in an interview in 2015 that Bitcoin is going to hit $10,000 in the following three years (by 2018). While the Bitcoin ecosystem looks forward to the feasibility of the prediction considering what is probable within the timeframe, it would seem that Draper’s confidence in the unfolding reality around him of what the top digital currency could bring to the table is still sound. This makes his disclosed interest in another aspect of the digital currency sphere – his plan to participate in a token offering and his choice of Tezos as a particular startup to invest in considering it’s a formation of a “husband and wife” team – a point to note.

With its family makeup, the success of the startup’s ICO will be a sheer example of the opportunities the crypto economy could offer the smallest unit of a society – after all, there are businesses owned and run by couples or a family. It would also show that the potential for Bitcoin, as a growing digital currency in various households, is huge in this kind of a business setup. Hence, Draper’s support for the adaptation of the cryptocurrency concept into the family-based business world could be precedential.

"The best thing I can do is lead by example," Draper said in his interview.

"Over time, I actually feel that some of these tokens are going to improve the world and I want to make sure those tokens get promoted as well. I think Tezos is one of those tokens."

Unlike most traditional venture capital firms which are prohibited by agreements with investors from deploying cash into such high-risk assets as digital currencies, Draper said his firm is doing this with Tezos because there is money for such non-traditional investments. In addition, they had anticipated “that certain things are going to happen and finance is going to be transformed."

Chuck Reynolds
Contributor
Please click either Link to Learn more about -Bitcoin.

 

BTCChina, Huobi, OKCoin Face Administrative Punishment in China

    

Flagship Chinese Bitcoin exchanges

are set to face “administrative punishments” over flouting regulatory norms in the past. A report by local resource Caixin, summarized by cnLedger, states the People’s Bank of China (PBoC) will shortly issue the document to BTCChina, OKCoin and Huobi. Details of what the so-called Notice of Administrative Punishment will require remain “unknown” cnLedger says. The report added that the long-awaited hard-and-fast regulations governing cryptocurrency exchanges in China are due next month. “Official regulation details on bitcoin trading platforms and bitcoin AML standards still under work, may be released in June,” cnLedger explained on Twitter on Wednesday.

Last month, Chinese exchanges were expected to resume withdrawals after a freeze which has extended since February. The PBoC had previously highlighted aspects of the market it deemed contrary to best practices but said it would adopt a “forgiving attitude” to extant exchanges. This decision is reflected in the handing down of an administrative, rather than criminal, penalty. “An ‘Administrative Punishment Notice’ is issued by Gov depts to those who did not break laws, but violated certain rules or regulations,” cnLedger clarified in a further tweet. Meanwhile, despite the continued withdrawal freeze, the price of Bitcoin in China has surpassed 10,000 yuan.

Chuck Reynolds
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Please click either Link to Learn more about -Bitcoin.

Litecoin, Silver to Bitcoin’s Gold,
Now Aims at $50 Goal

    

Now that the Litecoin price is hovering at around $30

– as the Lightning Network, expected to make transactions faster on the network, is set to kick off in about two days – is it time for the digital currency, dubbed as the silver to Bitcoin’s gold, to aim for the $50 goal? As it stands, its market cap has crossed the $1 bln mark to join the three other major networks – Bitcoin, Ethereum and Ripple –

In the category.

"This is a huge plus for the currency which just got listed on top Korean cryptocurrency exchange, Bithumb. This comes in the wake of its addition on the Coinbase platform also last week."

If Litecoin succeeds with the SegWit activation and LN implementation – considering that Bitcoin has not been able to reach this far in terms of its scalability issue – it would definitely reflect in LTC price in the coming days. As such, wallet providers and other major users are expected to deploy SegWit-enabled apps.

"Litecoin’s Charlie Lee also confirms that Bitcoin Core developers have been working with his network on Confidential Transactions (CT) and Merkelized Abstract Syntax Trees (MAST)."

As it is expected to take the first mover advantage as one of the first to activate SegWit, all eyes would be on Litecoin and what it has to offer in terms of making transaction confirmation quicker. This will continue to be the case for as long as Litecoin serves as a relief to any transaction issues that are usually associated with Bitcoin. This will make it easier to send money from a point to another instantly and for less.

Upgrade important

The current issue of transaction delays on the Bitcoin network and rising transaction fees now seem stuck at the moment and some say it is no longer seen as an incentive to encourage new users to switch from fiat. Though not the first and only network to be working on activating SegWit, the upgrade is important for Litecoin because it is one of those networks with the oldest Blockchain beside Bitcoin. It also has an identical code to that of Bitcoin. However, despite the forward-looking consideration of how Litecoin is going to benefit users, we are yet to see it proven that people in the market really need what it has to offer. The debate on whether there is demand for its use continues.

Chuck Reynolds
Contributor
Please click either Link to Learn more about -Bitcoin.

Bitcoin? Ethereum? Ripple?
Three Reasons to Consider Investing in Cryptocurrency

    

Bitcoin is beginning to seem like a viable currency,

especially since reaching the $2,000 mark. Major setbacks, such as the loss of $480 mln due to Mt. Gox’s neglectful management of Bitcoins, have caused the cryptocurrency to plummet in the past. Slowly but surely, the first-ever Blockchain currency has climbed back.

Presently, Bitcoin is performing better than it ever has. Early in 2017, Bitcoin price hit historic highs, surpassing the value of gold. Nearly a decade after Bitcoin’s quiet release, dozens of copycat currencies have arisen. Utilizing Blockchain, a public database or ledger that records transactions involving encrypted keys, developers are vying to improve the original digital currency. A few, namely Ripple and Ethereum, have proved to be exceptional competitors. Indeed, the Ethereum Enterprise Alliance was formed by “Fortune 500 enterprises, startups, academics, and technology vendors” to establish standard practices for the use of the platform/currency hybrid

“at the speed of business.”

You may shy away from joining speculators on the ups and downs of the cryptocurrency markets. However, there are a few strong cases for investment.

Here are three reasons to consider investing in cryptocurrency:

Bitcoin is experiencing massive growth

By far the most popular digital currency is the progenitor of Blockchain technology. Bitcoin owns the lion’s share of the emerging market. Its trading volume is much larger than any other competing currency and its valuation is many times more than the second cryptocurrency of choice, Ethereum. Wider adoption and regular mainstream coverage have elevated Bitcoin from an intriguing security experiment to a possible real-world asset. Additionally, Bitcoin’s exponential growth may portend good things for Blockchain currency in general. After a few major cases of theft for both Bitcoin and Ethereum, trust in the currency seems to be rebounding. Some believe the cryptocurrency is a bubble about to burst, but contentious political and economic conditions could push the price up even further.

Ethereum is gaining traction

Ethereum is the silver to Bitcoin’s gold.

Although it currently sits at under $100 a unit, it’s the most viable alternative to the dominant cryptocurrency. In fact, the competing form of cash was crafted by one of Bitcoin’s co-founders.

Ethereum is both a platform that allows for the creation of decentralized applications and a currency. The currency, Ether, fuels the platform. Its incorporation of smart contracts, which allow for anonymous agreements on the Blockchain, spawned the DAO (decentralized autonomous organization). The currency is more flexible for developers and has attracted major tech players, such as Intel and Microsoft.

It may see friendly regulation

The anonymity and lack of oversight concomitant with decentralized currency create opportunities for abuse. Certain alternative cryptocurrencies (altcoins), ones that enforce private transactions and anonymous transfers, such as Zcash and Monero, have been used extensively by criminal organizations. Although altcoins like Monero have increased in value due to acceptance from darknet users, this illicit usage of cryptocurrency has dealt damage to overall adoption rates.

Thankfully, we may see tighter regulations. Ethereum famously experienced a massive theft of $53 mln in Ether due to an exploit in a smart contract. Theoretically, the Ethereum Blockchain is immutable. The community voted to override this “immutability” in order to return stolen funds. Further, in 2013, a representative for the Bitcoin Foundation told US regulators that they would be open to transparent rulemaking. According to MarketWatch, digital currency advocates are pushing for

more regulation.

With recent interests from Japan and Russia to legitimize Bitcoin, these rules and regulations could help further cryptocurrency as a legitimate finance asset.

Diversify

Blockchain technology has the capability to change everything. The currencies running on the distributed ledger model could revolutionize how we interact with all forms of liquidity. While it is unlikely that fiat currency will be subsumed or overtaken by the digital mint, it’s quite possible that these currencies will see greater integration with our current systems.

At the very least, cryptocurrency is seeing a meteoric rise in the short-term. What the future holds for digital currency is uncertain. Currently, there is a cautious sort of endorsement for Bitcoin and Ethereum. Some speculators are pouring their cash into speedier alternatives, such as Litecoin and Dash. Still, most remain hesitant about moving their assets into an unbacked,

unregulated currency.

Although the Bitcoin ETF was recently shot down by the SEC, there is still plenty of reason to diversify your portfolio with a small investment in decentralized digital currency. As time has worn on, cryptocurrency has steadily risen in price and has experienced wider adoption.

To be sure, there has also been a great deal of volatility concomitant with Bitcoin’s rise. Valuation specialists continue to have trouble pinpointing the exact value of the currency itself and sentiment can vary wildly. Still, market capitalizations continue to grow. If you are able to steel yourself against booms and busts, you may profit from cautious investment. Continue to do your due diligence. If you remain uncertain, consider consulting a financial analyst. Remember to monitor updates, vigilantly investigating changes in sentiment. As always, be prepared to lose any amount you put into a speculative investment. Dedicating yourself to mindful investing will undoubtedly lead to the best result – especially in a market as volatile as the cryptocurrency market.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

Bitcoin Leads Cryptocurrencies
All-Time Highs Across Board, Scaling Remains Issue

    

Cryptocurrencies across the board have surged

in the past 24 hours to see many reach new all-time highs. The unprecedented rise, which will like fuel speculation of bubble-like behavior, saw Bitcoin $2,400, Ethereum breaks $200 and Litecoin challenge previous highs. The top 10 cryptocurrencies all posted gains in the run-up to press time Wednesday according to data from Coinmarketcap. Further down the charts, other huge movers came out, including a 54 percent rise for Stratis and 68 percent for the Lisk Foundation’s LSK token. At the same time, it is becoming more and more difficult to determine the underlying cause for the continued market buoyancy in both Bitcoin and altcoins.

Talk of a final SegWit deal for Bitcoin may have fueled its rise, yet with details have yet to be ironed out, talk is turning to U-turns from certain members of a group originally plugged by Barry Silbert as agreeing to implement SegWit by September. SegWit is the major preoccupation of the Bitcoin community on social media meanwhile, with price celebrations eschewed in favor of debate about the strength of Silbert’s plan and likely saboteurs. Price-wise, even commentators such as Vinny Lingham have implied the next significant barrier will not be until Bitcoin is within striking distance of $5,000.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

As Bitcoin, Altcoins Fall, Coinbase Bows Out Due to Technical Problems

    

Degraded performance by Coinbase

Coinbase, the San-Francisco based digital asset exchange suffered an outage on May 25, 2017, and was still unavailable at the time of writing of this article. The popular digital exchange displayed a message of ‘Service Unavailable’ and informed users that the site was down for maintenance.

Degraded performance by Coinbase

Coinbase informed users on its status page that their website was suffering from a degraded performance. In a tweet, the company revealed, “Coinbase has experienced unprecedented traffic and trading volume this week. As a result, Coinbase.com has suffered a few outages and downgraded performance for some users this week. Our engineering and support teams are working around the clock to restore our site to normal performance.”

Meanwhile Bitcoin and Alt currencies in a sea of red

It should be mentioned that while Coinbase is busy repairing their broken website, Bitcoin was trading lower by 3.37 percent at $2,297 on the Poloniex exchange. Ethereum was lower by 6.69 percent at $171.27 and with the exception of Ethereum Classic, which was up by 4.64 percent at $17, every other major altcoin was in red.

Users lament disappearance during crucial market moments

The lack of a trading platform has left many users in the lurch and they have been complaining on Twitter. @callux tweeted, “You have money. Your fees are astronomical. Buy better infrastructure.” While @ed_baker tweeted, “So let's see: price tanks, Coinbase goes offline. This is at least the third time I've seen this happen since March.” Adding to the complaints @StoicFrog tweets, “ETH dropped to $164 and your crap site failed to allow me to buy. Odd how your site crashes at the most opportune time for sellers & buyers.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

Billy Draper’s Investment Tips – Cryptocurrencies, ICOs,
Bubbles: CT Exclusive

    

The Draper family is well-known to the Bitcoin community.

Tim Draper is one of the most active investors in the Bitcoin ecosystem: back in 2014, he bought 30,000 BTC as part of the government auction and up until now he is said to keep purchasing Bitcoin and to own Ether. Besides, he used his reserve of Bitcoin to fund the startups of Boost VC (with 300 BTC each), his son Adam Draper’s Virtual Reality, Blockchain and Bitcoin venture capital firm.

However, Tim has recently announced his readiness to take one step further in his relationship with the crypto world and participate in ICO – of a company called Tezos, a “new Blockchain platform launched by a husband and wife team with extensive Wall Street and in hedge fund backgrounds.” Not so long ago Boost VC also followed into his footsteps and wrote in a blog post that they were willing to invest directly in ICOs. In an exclusive interview to the Cointelegraph at Arctic15 in Helsinki, Billy notes that for the Drapers ICO is a new opportunity. “In the last month and a half, we have seen a lot of ICOs,” explains Billy Draper, Tim’s son and currently a Partner at Draper Associates. “Since Gnosis, in the last month we have seen six or seven opportunities either asking us to participate, or to market, or do something, but we’ve been still sorting it out.”

Addressing to the crypto community, Billy notes:

“You have changed the whole dynamic of funding. You have taken the best parts of Kickstarter, the best parts of Venture Capital, the best parts of tech community, and you said: Hey, we are going to release a new token, this token is going to be used specifically for making predictions, and all the engineers who are interested in that come buy those tokens, and then you can increase the value of those tokens by building applications on our token.”

Billy Draper is the one responsible for seed-stage investments in companies such as Robinhood, Laurel & Wolf, Tempo Automation and LawTrades. He is in charge of sourcing and driving investments across all sectors, with some slant towards financial technologies, marketplaces and logistics. Prior to DA, he worked in Operations at Facebook and Product Design at ApartmentList. He was named to the 2016 Forbes '30 Under 30' List for Venture Capital. “And because you bought that application, the price or the value of that currency goes up,” he continues. “And there is something so beautiful about that – that is why we are excited about crypto in general and now we are actually starting to think about ICOs.”

Is it going to be Bitcoin and Ethereum forever?

Billy admits that cryptocurrencies are probably relatively small and it’s not the focal point of the fund yet even though they do look for deals in crypto – Bitcoin, Blockchain and ‘whatever the next token is’. “We know that there will be a sort of cryptocurrency revolution, it has already started, this is no longer a science project,” he says. “This is now huge multibillion dollar industry if you take a look at the the market cap of Bitcoin, Ethereum, and now Ethereum is worth a few billion dollars, and people are building token on top of Ethereum.” However, the question that comes – Is this going to be driven, is this sort of the revolution in crypto going to be driven by 25 different cryptocurrencies or a hundred different currencies? Or is it going to be the winner takes it all?

“The reasons why new tokens pop up is because they find problems with the old ones or perhaps not problems, but opportunities to build a currency more focused on solving one problem – governance, or smart contracts, or anonymity,” Billy continues. “Another thing I like about other currencies popping up is that now Bitcoin is the gold standard to buy into the other cryptocurrencies.” The Drapers do believe that there is something behind Bitcoin and Blockchain tech in general. On the one hand, they have inherited connections and wealth from their father and grandfather. But on the other hand, they have been raised with “anything-is-possible” mentality, the Silicon Valley’s spirit of individualism and relentless optimism.

Billy shares his optimism about cryptocurrencies:

“It is not because cryptocurrency is a cool new thing – it is because of there is an incentive structure, it’s because you are taking some of the smartest engineers in the world. The coins that fail are going to be those that don’t have real world applications, the ones that are going to be successful are the ones that fulfill the promise.”

For venture funds, it would be better if cryptocurrencies and ICOs were regulated because that would make investors feel safer. Right now there is no legal ground, so you can’t ask for your money back. “We would definitely be worried about the bubble, but there is also a fear of missing out, and you have to believe in the promise,” Billy notes. “Not necessarily in the whole market of crypto but you have to believe in the promise just like people now believe in the promise of Bitcoin and Ethereum. So yes we would be worried about the bubble but just like everyone. But I don’t think we could live our lives worrying about that.”

How to invest in ICOs and cryptocurrencies, what to consider

In the early 1980s, Tim Draper was exploring the opportunities of Silicon Valley – he had an engineering degree from Stanford and a diploma from Harvard Business School and so he was trying to figure out what to do next. He started his own firm, which later became the founding investor in Baidu and Tesla Motors and backed the likes of Hotmail and Skype. They say it is the ‘Draper luck’.

“If you talk to all the great venture capitalists in the history, all of their failures have been failures to act,” explains Billy. “It is not like I invested into something and It went to zero. Because you can invest in something that goes to zero, but then you can invest in something that goes to thousands, so one X downside, thousand X upside.” He points out that we could always talk ourselves out the investment, just like we are going to talk ourselves out of an ICO, or investing money directly into cryptocurrency, or a platform built around the cryptocurrency, but the potential opportunity we would miss is what would drive us crazy.

Right now ICOs are small projects with sometimes not very experienced teams who are doing mostly marketing, raising up millions of dollars without having a product. You can get the interest really high in the ICO: you do the offering, you limit the number of tokens, you create a supply on the marketplace and then you could drive up the price because of who is involved and who is building but eventually the apps have to be built. What is important is that the promise has to be fulfilled.

“When it comes to ICOs, the criteria would be if you are an investor interested it is not hard to reach out to these people, if they have a white paper, they usually have contact, if they want questions, they want to be challenged,” says Billy. “You need to believe in the team and the team should be aware of that and the team shouldn’t try to hide behind wherever and more people do that. This is very encouraging, they publish a whitepaper saying hey contact us, this is how we are going to do this, how we are going to implement this, this is the background that we have.”

Billy also recommends investors to diversify and participate in several ICOs to make sure their crypto portfolio has some exposure to some other currencies. They should understand how the market is going to function, that this crypto could go to zero, it could fail, it could be dead, or there is a bigger risk, which we don’t typically have to deal with which is it could be stolen. “What I would do is probably work with the crypto expert, who I trust and ask him if he would consult me and make sure I do it in the right way,” he says. “You look at what applications could be developed for it, so why does this exist, what is the specific use for this that can’t be done elsewhere and if those applications were to be built, what is the market size of that, based on the market cap, then you would approach it the way we approach startups.”

Billy concludes by saying that team and real world application are the two criteria for a success, the real world applications that people need to connect. Previously, in the Cointelegraph we have covered several examples of how real world economy can benefit from the crypto economy. The latest case of such type of a project is Primalbase, which claims to transform traditional office rental into a new-generation community-based ecosystem where one can share, sell or rent out high-quality office spaces using Ethereum and Waves-based digital tokens. In other words, it’s distributed workspace for the tech community in the manner of WeWork but in crypto tokens.

Billy Draper says about it:

“That’s cool, they found a real world application, and that’s what we want to see – we don’t want to see more coins in the world. That is a game-changing thinking, the same with real estate. Renting out these tokens? That is how you start the real revolution, that’s how things will go from Bitcoin sort of still crypto community which is getting bigger.”

We end our conversation with Billy with asking for a general advice about cryptocurrency investment. And he tells us that the best way to start with is to learn about cryptocurrencies that you think are the most interesting, the specific ones. Then you should start trading them, in some small way – you don’t have to start with a huge million dollar investment in a cryptocurrency. You should start to feel and understand the volatility of the market, to understand what drives the market and how you can play into that.

He concludes:

“I would suggest just like with anything – make sure you know what you are getting into, so there are no surprises, and if the token goes to zero, that’s the risk to take. And on the upside make sure you are investing in a token you believe in. If you are trying to pick winners, make sure you pick winners that you feel very comfortable about what they are going to develop.The key is user education, just make sure you understand what you get into, there is a certain risk.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

Will Bitcoin ETF Ever Be Accepted by US Regulators?

    

One of the biggest questions most Bitcoin enthusiasts would have about the cryptocurrency

is whether or not Bitcoin exchange traded funds will be regulated by the US or other authorities abroad. While Bitcoin and other cryptocurrencies have already gained a lot of attraction from investors all over the world, many institutions such as government agencies, banks and other entities have yet to accept the digital currency. According to Ryan Radloff, head of investor relations at XBT Provider, it is really just a stalemate between banks and regulators, wherein banks will only start accepting the cryptocurrencies when the regulators do. Though this is the case for most countries, there are several countries such as Sweden whose Nasdaq has already included cryptocurrencies in their public exchange.

Bitcoin status in the US

Bitcoin’s status and classification as per the US regulators have still not been decided as of yet. The SEC has not made any comment in classifying Bitcoin yet and it seems like it will not happen anytime soon. The SEC has already rejected two entities that aim to provide Bitcoin ETFs to potential investors. From the legal side, it seems as though Bitcoin is not doing very well due to this hurdle. According to Radloff, it doesn’t look like Bitcoin will be accepted anytime soon following the two rejections that the SEC made, though this may all change in the future if the SEC becomes convinced by the cryptocurrency.

Bitcoin in other countries

Although the US is very stern with their decision on the Bitcoin issue, there are other countries that seem to be more open to the cryptocurrency. Other countries such as Sweden, Switzerland, Japan and Italy have accepted Bitcoin in their public exchange and already have regulations regarding it. Radloff also stated that in the future, he is expecting more countries to accept cryptocurrencies.

Notably, there are exchange-traded Bitcoin products in Europe, but they aren't ETFs, they are exchange-traded notes, which are similar to ETFs but carry different risks. However, European investors and regulators are more accustomed to ETNs, said Radloff. The COINXBE and COINXBT ETNs are listed on the Nasdaq Nordic. Another ETN-style Bitcoin product was recently delisted from the Gibraltar Stock Exchange. Nick Cowan, managing director of the latter exchange, said he's expecting two similar Bitcoin products to be listed soon, as well as a third based on a basket of several cryptocurrencies.

Convincing the US

While the market is still relatively new, it has already gotten a lot of attention from investors who have drawn a lot of data from it. However, the only problem would be the government regulations and licenses. A report by the University of Cambridge’s Center for Alternative Finance stated that 46 percent of exchanges are not government regulated. This means that the other 54 percent are not operating with licenses.

While it may be difficult to convince US regulators to accept the digital currency, it is still possible as the US is looking for transparency and stability before they consider allowing it. The reason is that it involves a lot of money and it is quite a risk on their end. Nevertheless, it would seem as though the US will not be one of the next countries to accept the cryptocurrency. However, it will only be a matter of time before this event happens. When the US sees a lot of other countries doing it, they will most likely join in the fray.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.