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Former J.P. Morgan Trader Launches First Ever Ethereum ETN

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For the first time, an Ethereum-focused investment product is available to traders on the Nasdaq Stockhom exchange, a sign that cryptocurrency is slowly making its way to more conventionalasset circles.

The Launch of CoinShares Ethereum ETN

Beginning Wednesday, investors will be able to access two exchange traded notes (ETNs) with exposure to the Ethereum network. CoinShares, which is headed by former J.P. Morgan trader Daniel Masters, is offering ETNs that track the price of Ether Tracker One (COINETH:SS) and Ether Tracker Euro (COINETHE:SS).

The ETNs will differ from actively traded assets in that they will be completely passive.

The ether-based investments become the second major crypto asset CoinShares has listed on Nasdaq. It also gives Nasdaq Stockholm the distinction of being the only European exchange to offer exposure to two crypto-based assets (bitcoin and Ethereum).

CoinShares has been called the iShares equivalent for cryptocurrency investments, as it now has six professional grade crypto-based investment vehicles. Collectively, these assets are valued at more than $300 million.

CoinShares Issues Statement

Ryan Rudolf, Co-principal to CoinShares, has issued the following statement:

Today is a historical moment for Ethereum and ether as an asset; and for the future of crypto-assets. It was a little over two years ago that the bitcoin ETNs began trading – offering investors exposure to bitcoin via an established exchange for the first time. Today, we are able to bring ether to the market and mark another major first. It is important to remember how far and how fast the space has matured in the less than 8 years since this revolution ban.

Daniel Masters, the other principal at CoinShares, says the new investment vehicles represent a “hassle-free” way to enter the world’s fastest-growing asset class. Whereas bitcoin disrupts the function of analog money and analog gold, Ethereum disrupts the function of the stock market, according to Masters.

Ethereum continues to be the world’s second-largest cryptocurrency when measured in terms of market cap.

Featured image courtesy of Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 608 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

ETFs: What Is The SEC  Really Thinking?

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As a veteran Wall Street type, I was not surprised at Thursday’s SEC announcement on the VanEck-SolidX Bitcoin ETF.  Once again they gave a “no decision”. This pushes the deadline back to December 29, 2018. Don’t be surprised if New Year’s Eve comes and goes and nothing happens before the SEC is forced into a action by the end of February.

Back in August, when the first delay was announced, crypto investors’ reaction was swift and painful.  On Thursday, after a temporary hiccup, prices took a surprisingly positive turn. If we are to believe for just a moment that crypto prices act rationally (or just occasionally) then comes two obvious questions, are crypto ETFs good or bad? Secondly why can’t the SEC come up with an answer?

Never Say Yes

Let’s start with the easy question first: what’s up with the SEC?  Having dealt with this teflon organization for over 30 years, their actions with regard to VanEck-SolidX are the same pattern they have followed forever.  Practically never do they approve anything. Instead they provide two choices: reject or delay. By delaying the VanEck-SolidX application they are accepting the ETF concept in principle but laying out objections that must be corrected.

The result of this regulatory song and dance, don’t expect a decision until the last minute. The reason is that the main issues are not likely to be resolved in time. In fact, I doubt that the ETF proposal gets approval for perhaps as much as another year.  Here is why.

SEC Speak: Obfuscation

According to Jake Chervinsky, attorney for VanEck, the SEC asks “18 multiple part questions covering seven pages.” He adds: “It’s not encouraging to see the SEC ask if the bitcoin futures markets are “of significant size” despite having already concluded last month that they’re not.”

This is a tactic in obfuscation that the SEC loves when an applicant has not provided an adequate response.  In this case there is no objective answer to how liquid a market must be to meet the measure of significance.  Moreover, there is little or nothing that can be done in the short run to create greater liquidity.

The SEC is a political body as much as any agency of the Federal Government.  In raising the issue of liquidity, they can stand behind their role of protecting the public without at the same time hindering public access to a class of assets, even at current depressed levels, is worth $200 billion, more or less.

The SEC Is Right With Their Delays

Does the crypto world really benefit, as this stage of its evolution, by fostering a group of ETFs?  The argument in favor says that this is the way to simply and safely offer the individual investor a way to participate in a diversified portfolio of crypto.  That sounds noble – or is it just something that makes lots of money for those who create them?

But so far, at least from the viewpoint of the SEC, ETF applicants have not created a more secure domain.  More importantly, even if this were not the case, what does the investor gain from investing in a diversified list of crypto when Bitcoin overshadows about every other altcoin?

With nothing against those that believe in the benefits of ETFs, the benefits in current terms is far better for the ETF sponsor that it is for the investor.

Looking just at the math, an individual investor could be just as well off buying Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS. Admittedly, it is somewhat more complicated finding a place to buy and store Ripple, but with this small portfolio, you cover 75% of the entire crypto asset class. If security is an issue simply go to  blockgeeks.com/cryptocurrency-safe/ and select from a list of hardware wallets.

So whether the SEC gives their approval of VanEck-SolidX in December or February might make a difference if this were 2020 or sometime thereafter.  As for now, it really isn’t critical to the mass acceptance of crypto.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 106 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Bitcoin

Bitcoin Shrugs Off SEC’s Delay of VanEck/SolidX ETF

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The U.S. Securities and Exchange Commission (SEC) has issued an order to launch proceedings on whether or not to approve the widely anticipated VanEck/SolidX bitcoin ETF on the CBOE. The announcement comes just days before what was supposed to be a Sept. 30 deadline for the Wall Street regulator to make a call on a proposed rule change that would clear the way for the product, a date that was also postponed. The market seems to be getting used to it with traders shrugging off the latest delay.

Shortly after the SEC updated its progress, the bitcoin price dipped modestly. But since then, top cryptocurrencies are higher in unison on something that has been missing in past rallies – robust volume. In the last 24 hours, bitcoin’s volume is at nearly $5.6 billion while No. 2 crypto Ethereum is trading on volume of $2.2 billion.

Source: TradingView

ETF Comments

Some 1,400 comment letters surrounding the passive investment product have poured into the SEC’s office. Rather than make a decision based on those, the regulator is seeking more context:

“[The] Commission seeks and encourages interested persons to provide comments on the proposed rule change,” according to the SEC document.

Chief among the regulator’s concerns is manipulation of the bitcoin price, which the CBOE believes it has mechanisms in place to reduce the potential for. If the bitcoin ETF were to launch on the CBOE, the exchange anticipates that it will bolster both the liquidity and transparency of the bitcoin market as hedge funds and other big investors jump in.

Michael Novogratz, a former hedge fund trader who is now running Galaxy Digital, believes it’s only a matter of time before banks enter the market as they catch “fear of missing out.” He said at the Yahoo Finance All Markets Summit” at which he was the “lone crypto voice:”

“I think institutions are moving towards investing. Its shocking how much has happened.”

Meanwhile, individuals have 21 days to make their case to the SEC about the VanEck bitcoin ETF, while any rebuttals must be submitted within 35 days. Should a bitcoin ETF get approved before year-end, it could have a similar effect on the market as the bitcoin futures inspired rally of 2017.

The market is either interpreting the SEC’s update as a positive sign or has become more immune to the slow process. It used to be that traders waited on pins and needles for the bitcoin ETF decision, as evidenced by the bitcoin price’s weakness over the summer in response to the Gemini bitcoin ETF product denials. But clearly, that’s not the case today, with the bitcoin price trading above $6,700 and the combined market value headed toward $222 billion.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 61 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Bitcoin

Bitcoin ETF Issuer Must ‘Look, Feel and Smell’ the Part, Says Abra Chief

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With the bitcoin price perched above $7,300 and moving higher, traders have clearly shrugged off the uncertainty surrounding a bitcoin ETF for now. Nonetheless, the market has forgotten about it altogether as investors keep a potential VanEck/SolidX product within sight, despite the regulatory delays. Bill Barhydt, who is at the helm of Abra, a cryptocurrency wallet startup, is a Wall Street veteran who suggests the securities regulator has not evolved enough to embrace the crypto community.

“I think the issue with the SEC, quite frankly, is that the people who are doing the applications don’t fit [the] mold of who the SEC is used to approving,” Barhydt told CNBC.

For instance, Barhydt, who is a Goldman Sachs alum, suggests unless the issuer “looks, feels and smells” the part, it’s going to be an uphill battle for a bitcoin ETF approval. He uses himself as an example: “I probably, unfortunately, couldn’t go like I am here to a meeting at the SEC to say I’m applying for the ability to issue an ETF.”

Abra CEO Bill Barhydt
Source: CNBC

And while Tyler and Cameron Winklevoss might look the part, this logic places the odds more against a blockchain startup like Gemini exchange, which has so far had its bitcoin ETF application rebuffed twice, and more in the corner of traditional Wall Street firms, like a VanEck, which has been around since 1955.

Even if the SEC decides once again at the end of this month to postpone its decision on the VanEck product, Abra’s Barhydt belives a bitcoin ETF is in the cards. “It’s going to happen in the next year, I would actually make a bet on it. There is too much demand for it,” he told the business network. Institutional capital should follow alongside the rise of custody solutions. One caveat is the volatility that’s inherent in the bitcoin price, which could also be keeping institutional capital sidelined even though volatility has subsided of late.

In the interim, institutions can trade bitcoin futures, which they are doing. Jonathan Cheesman of crypto asset management firm Distributed Global pointed out that “bitcoin shorts remain persistent” and largely intact for the past week even as the bitcoin bulls have wrestled back control.  Meanwhile, it’s entirely possible that an ETH futures product could emerge before a bitcoin ETF.

Abra development

Meanwhile, the Abra crypto wallet, which supports more than two dozen digital currencies, just launched support for SEPA payments, which gives European customers the ability to purchase cryptocurrencies via bank transfers. Barhydt tweeted the development, which is specific to SEPA deposits. Fiat withdrawals via SEPA are next in the pipeline.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 61 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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