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Chinese Billionaire Claims Bitcoin Patience Will Reap Rewards

Chinese Billionaire Claims Bitcoin Patience Will Reap Rewards

As the much-discussed intuitional investment, hailed as cryptocurrencies jumpstart to a new crypto era, still awaits, a Chinese Bitcoin billionaire calls for patience.

Zhao Dong, one of the world’s largest over-the-counter traders of Bitcoin, made the plea to the industry suggesting that it could be well into the year before the market gets the boost it needs. The entrepreneur was talking on a WeChat group called “The Public Chain Alliance Crossing The Bulls And Bears Elite Team”, when he made the call for patience.

Zhao, another advocate of a USD 50,000 Bitcoin by 2021 not so long ago, said the “only thing you need is patience”, referring to a large investor surge into the market. He said that those who believed in the future of Bitcoin should hold “as much as possible when nobody cares”. He said also:

“In the bull market, I don’t persuade people to buy bitcoin, because it seems easy to make quick money but in fact, it is not. Now [in the bear market], I start to talk people into buying bitcoin.”

Zhao certainly is not alone, with other high flyers in the industry talking up the flagship cryptocurrency this year, with just Twitter’s CEO Jack Dorsey recently predicting that Bitcoin was to become the internet’s first “native currency”.

As Bitcoin investors and traders wait for the highly-anticipated Bakkt bitcoin platform and a US Bitcoin exchange-traded fund to boost the price, Mike Novogratz predicts Bitcoin is on the recovery after a bubble burst and that it is in a period of “handing off ownership from the people’s revolution“.

 

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Binance: ETFs Not Core to Crypto Growth

ETFs Are Not Core to Crypto Industry’s Growth, Binance CEO Weighs In

A popular trend as the cryptocurrency industry develops is the introduction of the analogous derivative instruments of the traditional financial market, aimed at luring in institutional investors into the crypto world. One such instrument is the exchange-traded fund (ETF).

CEO of leading cryptocurrency exchange Binance, Changpeng Zhao, has, however, downplayed the role of ETFs in the growth of the crypto industry. He said: “If it [a Bitcoin ETF] is listed on a big traditional exchange… that does bring in a lot of attention from people outside our industry.”

In a live stream via Periscope on 6 February, Zhao attempted to draw the attention of crypto enthusiasts to a very important piece in blockchain development – entrepreneurs building real, and usable products.

Blame it on the bear

The bear market which started at the cusp of the last all-time high of Bitcoin hasn’t made it easy for crypto projects. Many startups last year faced developmental challenges and were either forced to abandon their projects or get absorbed by another. Now, lots of players in the industry have become highly dependent on these market derivatives being introduced.

First, it was Bitcoin futures introduced by CME Group and CBOE in late 2017, which helped drive the price of Bitcoin to a new high of USD 20,000. However, it didn’t last long. Suffice to say, it was an opportunistic glitch in the price dynamics of Bitcoin.

Secondly, speculations about another bull-run propelled by ETFs run deep in the crypto community. Perhaps similar trends are bound to occur with more derivatives being introduced into the sphere, however, without an established value-based blockchain ecosystem in place, the market could get dire once more.

ETFs or no ETFs

As of the time of writing, the US securities regulator, Securities Exchange Commission (SEC) has rejected nine ETF applications. Each was laden with similar bull run expectations from the members of the crypto community as many have speculated on the prices increase should the SEC give the green light.

Recently,CBOE, along with investment firm VanEck and financial services company SolidX, reapplied for a rule change to list Bitcoin ETFs after withdrawing it a week earlier.

With the ongoing fuss about Bitcoin ETFs, Zhao seems to think that with or without the ETFs, the industry will grow. A sentiment probably sparsely shared as focus on the real development of blockchain and its applications are fairly the driving motif for latter blockchain adopters.

Other derivatives are coming

Bitcoin News recently reported a new class of derivative instrument being introduced by US-regulated derivative platform LedgerX, which is essentially a binary wager on the next Bitcoin’s block-reward halving.

While derivatives may be an economic milestone for the crypto industry, the overall utility of blockchain applications and their gradual adoption by legacy systems adequately offset the economic benefits of derivate crypto markets.

 

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Shrewdness in VanEck’s Bitcoin ETF Withdrawal?

Shrewdness in VanEck's Bitcoin ETF Withdrawal?

Investment management firm VanEck‘s withdrawal of its Bitcoin exchange-traded fund (ETF) application from the Securities and Exchange Commission (SEC) last week, allowing it to trade on the CBOE, may have been a good move according to some analysts.

As the industry still awaits the launch of a regulated Bitcoin ETF, VanEck’s withdrawal raised some eyebrows. The firm suggested that the government shutdown was looking to become a lengthy imposition on SEC activities being completed, although President Trump has since called a temporary halt to his plans for the construction of a Mexican wall. CEO Jan Van Eck explained that he had already been already in discussions with the SEC at the time he decided to withdraw the application, commenting, “…instead of trying to slip through or something, we just had the application pulled and we will re-file and re-engage in the discussions when the SEC gets going again.”

However, Jake Chervinsky, a securities laws expert in the US government, suggests that there was another strategy involved in the timing of the withdrawal; one that in the long term could result in VanEcks application being successful. Chervinsky believes that fear of rejection and subsequent bad PR for the company, as a result, was the more likely reason for VanEck pulling the application when it did.

Angling that PR-wise, a delay is always better than a rejection, Chervinsky feels that the firm must have realized how it couldn’t convince the regulator before the deadline, a view also shared by eToro’s senior analyst Mati Greenspan who argued:

“This proposal had a very slim chance of success… SEC Chairman Jay Clayton has been stressing that the Bitcoin market is not yet mature enough for an ETF.”

Greenspan goes on to argues that the VanEck temporary withdrawal was actually good for the market and shows by the muted industry response at the time that the cryptocurrency market is no longer “dependent on any government or financial institution and no single product or service has the power to make or break Bitcoin”.

 

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CBOE Scraps Bitcoin ETF Application

CBOE Scraps ETF Application For Now

The cryptocurrency community will have to wait a little longer for the first hotly-anticipated Bitcoin exchange-traded fund ETF as CBOE has officially withdrawn its application, albeit temporarily.

The US Securities and Exchange Commission (SEC) published a document on 23 January detailing the withdrawal from CBOE of the VanEck SolidX Bitcoin Trust application.

The ongoing US government shutdown, which has now surpassed the longest of its kind in history, is being attributed as the primary reason for the application being withdrawn. Working to a February deadline, it seemed very unlikely there would be enough staff at the SEC to process the application in time. It appears most likely that CBOE has chosen to refile the application in the future rather than suffer the repercussions associated with failing to gain approval by the deadline.

Bitcoin has not experienced any significant losses since the announcement and has managed to hold above USD 3,500.

VanEck was considered by many analysts to be the industry’s leading for hope for receiving ETF approval, with CBOE being the first firm to receive the SEC’s approval for Bitcoin futures trading.

Writing on Twitter, VanEck CEO Gabor Gurbacts assured spectators the ETF application had only been “temporarily withdrawn”.

The Bitcoin ETF filing has been temporarily withdrawn. We are actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general. Will keep you updated. pic.twitter.com/o9yiN47ZKe

— Gabor Gurbacs (@gaborgurbacs) January 23, 2019

 

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Trump’s Shutdown Puts Sec on Hold, ETF Delays Expected

Trump's Shutdown Puts SEC On Hold, ETF Delays Expected

President Trump’s shutdown of government services has affected the Securities and Exchange Commission, giving rise to concerns about the completion of current ETF filings in progress.

Since the commencement of the government shutdown, due to the inability of Congress to overcome irreconcilable differences for the funding of a southern border wall with Mexico, the SEC has revealed it had just 285 members out of 4,436 employees working, some who are responsible for investor protection and market integrity.

Those submitting ETFs have expressed concerns that their submissions may be delayed as a result of the staff shortages. A statement from the SEC has done little to allay these fears which confirmed that:

“The SEC has experienced a lapse in appropriations. Absent an appropriation, the staff of the Commission is prohibited from performing the ongoing, regular functions of government except in very limited circumstances.”

The statement went on to confirm that regular duties involving the Securities Act of 1933, Securities Exchange Act of 1934, Investment Advisers Act of 1940 and Investment Company Act of 1940 would also be affected by the shutdown.

Jake Chervinsky, a lawyer with Kobre & Kim disagrees that if the SEC misses its deadlines the ETFs should be automatically approved, so the risk of delays is unlikely, suggesting “In reality, that won’t happen. The SEC will handle it one way or another: a one-page denial, a request for withdrawal, or something else.”

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Wall Street, Institutional Investors Prime for Next Crypto Bull Run

Wall Street, Institutional Investors Prime for Next Crypto Bull Run

Analysts are looking ahead to the potential for a sustained bull run on cryptocurrency markets in 2019, and many are expressing an expectation this will be the signal for Wall Street and institutions to up investment.

Many see large-scale investment being re-examined in 2019 after being scared off by Bitcoin’s December dip. Wall Street notably stood back prior to the end of the year with Goldman Sachs’ much-publicized plans to open a crypto trading desk called “top-of-the-market-hype thinking” by one New York executive.

Travis Scher of New York’s venture capital firm Digital Currency Group sees a change in indirection from Wall Street and large investment as imminent suggesting that Wall St has lagged behind. He has been watching the industry, choosing to remain on the fringes waiting for signs of an upturn before making a move.

Canadian entrepreneur and activist Jeff Berwick (aka Dollar Vigilante) sees 2019 as the year that cryptocurrency prices will take off once institutions finally make their move. He suggests that trillions of dollars are waiting to be invested in the cryptocurrency market.

Despite Bakkt’s delay, the recent seed funding of over USD 182 million goes on to show that a lot of institution key players are supportive of a successful launch of the platform, after particularly after the New York-based platform acquired “certain assets” and employees of Rosenthal Collins Group (RCG) to expand the company.

With Nasdaq also waiting in the wings and the potential for non-fungible tokens (NFTs) and ETFs predicted to push blockchain adoption and kickstart a crypto bull run, 2019 already offers high expectations for both analysts and investors.

 

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Coinfloor to Launch Derivative Crypto Futures Amid Tough Market

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Top UK cryptocurrency exchange Coinfloor has told Bloomberg, that it is venturing into the derivatives market despite the seemingly poor market outlook and fierce competition in the futures market, with physically-delivered Bitcoin futures the new emerging derivatives for the asset class.

The CoinfloorEX spinoff of the Coinfloor cryptocurrency exchange will be offering the new physical Bitcoin futures services to sophisticated Asian traders. Meanwhile, it has been renamed to Coin Futures and Lending Exchange (CoinFLEX) for this purpose.

According to the CEO of CoinFLEX Mark Lamb, who is also a co-founder of Coinfloor, “bear cycles in crypto can go on a long time, but ultimately it’s an asset class which is one of the most fascinating, volatile, which is great for traders”. Lamb also downplayed the current market condition, confident that crypto will someday become globally accepted, saying that “it has the potential to be one of the major currencies in the world”.

CoinFLEX will have its base in Hong Kong. The proposed derivatives will include physical futures for Bitcoin, Bitcoin Cash, and Ethereum with leveraging of up to 20 times. Comparatively, top cryptocurrency exchange BitMex, also having a sizeable market in Hong Kong, will be a competitor as it also offers leverage of up to 100 times on some of its contracts. However, CoinFLEX has the advantage of physical delivery as against cash settlements that are prone to manipulation.

Prominent crypto movers have been named as members of a consortium owning the project, including Roger Ver, Mike Komaransky and Trading Technologies International Inc. Meanwhile, Coinfloor is also reported to be retaining an equity stake in the new venture.

It would seem that the market for institutional investors is constantly being expanded with multiple derivative options. “Crypto derivatives could become an order of magnitude larger than spot markets and the main thing that’s holding back that growth is the lack of physical delivery,” said Lamb.

Last year, talks about the proposed Bakkt platform – an Intercontinental Exchange (ICE) project – constantly drove up the expectations of cryptocurrency holders and investors. Its recent announcement included a successful seed round funding of over USD 182 million, and a scheduled launch early this year, however, the date “will be amended pursuant to the CFTC’s process and timeline”.

Another derivative platform, ErisX, recently reeled in USD 27.5 million from Fidelity Investments, Nasdaq Ventures, and other investors during a seed funding round. It is also waiting for approval from financial regulators before launching this year.

Recently, the Japanese financial regulator hinted on the possibility of the launch of exchange-traded funds (ETF) that will be based on the new asset class.

 

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Japan Talks Bitcoin ETF, Ignores Futures Package

Japan Talks About Bitcoin ETF Ignoring Futures Package

As reported by the news outlet Bloomberg today, the financial regulator in Japan has abandoned its plans to allow Bitcoin futures but will consider the possibility of an exchange-traded fund (ETF) based off the new asset class.

The source cited someone who was familiar with the development as saying that the Financial Service Agency (FSA) was “gauging industry interest in ETFs”. This comes after recent developments show that the regulator has decided against the decision to revise the nation’s security law that would have provided an opportunity for cryptocurrency futures and options to be listed on major financial exchanges. The report suggested that this change came “after concluding that such products would achieve little besides stoke speculation”.

This may have cut short the expectations of a few of those expecting Bitcoin futures to be in effect at the passing of the revised law.

Last month, the financial regulator was reported to have received as many as 190 cryptocurrency license applications from exchanges after granting the local crypto sector a self-regulatory status under the supervision of Japan Virtual Currency Exchange Association (JVCEA).

According to the news outlet, the new development, however, places Japan in contrast to the US, as the latter may permit the trading of physical Bitcoin futures, whereas Japan is leaning more in favor of ETFs. Many ETFs have been proposed to the financial regulator in the US, without any positive outcome till date.

The introduction of the different derivative instruments is aimed at introducing new players from the institutional class investors. However, this has proven to be a rather slow convention. Reports from exchange data suggest that the institutional demand from the pioneers of the asset class derivative market Cboe Global Markets Inc and CME Group Inc have fallen short of expectations and waver around USD 81 million after a year-long run.

2018 has been reckoned as the year of the bear, after the introduction of Bitcoin derivatives in late 2017 may have propelled the cryptocurrency markets to new highs. The year 2019 has been filled with enthusiasm as expectations of more institutional involvement to restore the performance of the market peaking.

 

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Expect ETFs Tomorrow… or in 20 Years Says SEC’s Crypto Mom

Expect ETFs Tomorrow... or in 20 Years Says SEC's Crypto Mom

Washington’s now named Crypto Mom, SEC Commissioner Hester Peirce, has spoken again on the possibility of Bitcoin Exchange-Traded Funds (ETFs) being given the go-ahead by the country’s financial legislators.

Peirce was meeting with representatives from the Digital Assets Investment Forum in Washington and was asked what the state of play looked like for ETF, seen as the long-awaited impetus for a regeneration of Bitcoin’s fortunes on the market.

“Don’t hold your breath” was the answer they received; perhaps not the one that they wanted to hear, but nonetheless both honest and concise in its delivery. A podcast two weeks ago had given some renewed hope to the market when Peirce assured the cryptocurrency community in Washington that a crypto ETF was “definitely possible”.

The commissioner pointed out then that she saw “significant intellectual capital” being invested by both institutional investors and exchanges towards the development of a Bitcoin ETF, perhaps leaving investors scratching their heads over a chicken or egg quandary. Investors see the issuance of an ETF as the impetus for change, not necessarily the other way round.

Peirce said at the meeting that a crypto EFT wasn’t necessarily imminent and gave some homely advice that people should “not live or die on when a crypto or Bitcoin ETF gets approved” referring to the SEC’s historical conservatism prone to being  “a little slow with innovations”.

Although her 20-year threat was clearly tongue in cheek, as were references to investors waking up to a complete change in stance by the SEC, the timbre of her comments were clear; a crypto ETF is not imminent. Another, more weighted and slightly cryptic, comment from the same meeting was sure to get news desks busy with their own interpretations:

“Be careful what you ask for. Never underestimate the ability of regulators to think up regulation requirements you have to follow that you never thought of.”

An ominous portent of the future from Crypto Mom, or is she simply teasing?

 

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As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

Jeff Sprecher, CEO of the NYSE’s parent company Intercontinental Exchange (ICE), has asserted that digital assets will survive, regardless of the market’s dips and dives as seen over the past weeks.

A firm backer of Bitcoin, Sprecher had announced that, with the help of technology partner Microsoft, ICE was planning to launch a new digital asset platform called Bakkt. Starbucks and Microsoft will be major partners of the much-anticipated platform Bakkt and are reportedly going to accept Bitcoin and other cryptocurrencies.

The excitement surrounding Bakkt is centered around its plans to launch physically-settled Bitcoin futures by January next year; recent market sentiment is thought to have postponed the launch, originally scheduled for late 2018.

Sprecher reflected on recent events in the market and Bitcoin’s current position: “Somehow Bitcoin has lived in a swamp and survived… There are thousands of other tokens that you could argue are better but yet Bitcoin continues to survive, thrive and attract attention… Often times in finance, it’s not about being the best — it turns out to be about being the broadest and the most commonly accepted and for whatever reason Bitcoin has become that.”

Despite SEC commissioner Hester Peirce declaring in a 24 November podcast that long-awaited ETF approvals are “definitely possible”, the SEC warns that these won’t be any time in the near future. Kelly Loeffer, Bakkt’s CEO and wife of the NYSE chairman, claims that Bakkt is creating its own opportunities for the future, stating:

“We’re creating that infrastructure that doesn’t exist today, which we think is a big opportunity for institutional investors to come in.”

As for the future, Nasdaq seems unfazed and retains a bullish optimism with its plans to launch Bitcoin futures in 2019 through its partnership with VanEck . Both Nasdaq and the NYSE forging ahead towards becoming cryptocurrency exchanges and Nasdaq’s CEO Adena Friedman asserted that over time the exchange giant could become a cryptocurrency exchange once “the sector matures”.

Clearly, major players are not simply waiting on the SEC for ETF game-changing thumbs up in 2019. New Year’s resolutions are already being made.

 

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