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Soros’ Entry into Cryptocurrency Market Reignites Debate Over Institutional Trading

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After bashing cryptocurrencies earlier this year, billionaire George Soros is now planning to trade the virtual asset class, according to people familiar with his affairs. By entering the market, the Soros family office could spark renewed interest in crypto assets among institutions traditionally weary of them.

Soros to Trade Crypto

Bloomberg reported on Friday that Soros Fund Management is set to begin trading cryptocurrencies in the near future. Though no trades have been wagered, the company received internal approval to enter the market earlier this year. The fund currently manages $26 billion in assets.

It is not entirely clear how Soros intends to trade cryptocurrencies. He has referred to bitcoin as a “bubble” that cannot be considered actual currency due to extreme volatility and highly speculative nature. He also highlighted the potential role of dictatorships in propping up the digital asset class.

That said, Soros doesn’t have to be bullish on bitcoin to trade the digital asset class. The billionaire investor is widely known as the man who “broke the Bank of England” by successfully shorting the British pound in 1992. He netted $1 billion in profits for predicting that the BOE would be forced to exit the European Exchange Rate Mechanism.

Institutional Demand

Attracting institutional money is considered one of the next major obstacles for cryptocurrencies – a market that is struggling with regulatory uncertainty and liquidity constraints. The arrival of bitcoin futures in December was the first major sign that institutional cash would begin flowing into the market, although initial uptake has been weak.

With bitcoin futures in the mix, the next domino will likely be a crypto-backed exchange-traded fund (ETF). Crypto’s entry into the $5 trillion ETF market is “the only major project that remains,” according to Morningstar.

A bitcoin ETF is no easy feat, but there are signs that regulators are entertaining the discussion. The U.S. Securities and Exchange Commission (SEC) has launched formal proceedings on whether to change Section 19(b)(2)(B) of the 1934 Securities and Exchange Act. This doing would theoretically enable the likes of CBOE to start listing bitcoin-based ETFs.

With Soros set to trade cryptocurrency, the debate over institutional demand continues to be an important one. Despite his negative view of the market, his fund has a large stake in Overstock.com – the first publicly-traded company to not only accept bitcoin, but launch its own virtual currency through a subsidiary project called tZERO.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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 505 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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Expect to See Coinbase Ads on Facebook

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Cryptocurrency exchange Coinbase has confirmed that it has been whitelisted to display advertisements on Facebook, a sign that the social media giant was moving forward with reinstating marketing campaigns of legitimate blockchain companies.

Coinbase Ads to Appear on Facebook

The announcement was made by Brian Armstrong, CEO of Coinbase, who took to Twitter on Friday to share the news: “Facebook banned ads for crypto earlier this year. Proud to say we’ve now been whitelisted and are back introducing more people to an open financial system.”

Armstrong also shared what appears to be a demo advertisement that could make it to the social media network in the near future.

“Crypto curious but don’t know where to start? Buying cryptocurrency is simple,” the demo ad reads.

As Hacked reported June 26, Facebook is planning to reverse a blanket ban on crypto-related advertising, opting instead to evaluate individual companies on their own merit. The Menlo Park, California-based company said it would allow “licensed” parties to market their services on the social media platform, which boasts more than 2 billion monthly active users. However, Facebook said not every company that wants to advertise will be given that opportunity.

Facebook’s ad ban compelled Google and Twitter to issue similar edicts restricting blockchain companies from marketing their products and services. In all these cases, consumer protection was cited as the primary reason for the ban.

The Coinbase-Facebook Connection: Interesting Speculation

That Coinbase appears to be the first advertiser to be whitelisted by Facebook adds fuel to interesting speculation about a possible merger between the two companies.

On June 27, Hacked ran a story speculating whether Facebook’s ad-ban reversal was a precursor to launching its own blockchain or cryptocurrency venture. Namely, we cited a story from The Economist that hinted at a possible merger between Facebook and Coinbase.  Speculation about a potential Coinbase takeover later circulated through British media.

Interestingly, Facebook may have laid out its intention to enter the crypto space back in May when it initiated the biggest-ever management shuffle, under which a new blockchain group was created. The new group is said to report to Mike Schrepfer, Facebook’s chief technology officer.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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 505 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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World’s Largest Asset Manager BlackRock Is Exploring Bitcoin

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The floodgates could be about to open in the cryptocurrency market. BlackRock, the world’s largest asset management firm, with $6.3 trillion in assets under management, is exploring bitcoin. The firm reportedly has established a working group to determine opportunities surrounding cryptocurrencies and blockchain technology, according to Financial News London.

The reaction is twofold. If BlackRock can do for bitcoin what it did for exchange-traded funds (ETFs), as the firm is largely responsible for opening up nearly every American’s 401(k) plan to ETFs, this would be a complete game-changer for cryptocurrencies. On the other hand, BlackRock chief Larry Fink in 2017 characterized bitcoin as an “index of money laundering.” What a difference a year can make.

Bitcoin Futures

Based on the report in Financial News, BlackRock has tapped various individuals from the company to comprise the blockchain exploratory group. This group is being spearheaded by Terry Simpson, a multi-asset strategist for the firm. Simpson and the team are expected to research ways in which BlackRock could benefit from bitcoin — specifically bitcoin futures — and share those findings with the senior management team, which would include Mr. Fink.

Incidentally, now that Ethereum is clear of being designated as a security, reports suggest that  ETH futures could be on the horizon.

BlackRock is also interested in gauging the temperature of its rivals that are participating in the space. JPMorgan has an asset management arm and the firm has a blockchain business. Jamie Dimon, JPMorgan CEO, also previously dissed bitcoin, similar to BlackRock’s Fink. For BlackRock to jump into bitcoin futures could bolster liquidity in the market and invite other asset-management firms to enter the space.

We don’t want to get ahead of ourselves, as it’s early days for BlackRock’s crypto committee. But clearly, there is enough potential opportunity on the institutional investment side for the firm to take these next steps. With the rise of custody solutions from the likes of leading cryptocurrency exchange Coinbase, it’s only a matter of time before hedge funds and other big investors jump in.

The development comes in the midst of a mini-rally in the broader cryptocurrency market, one that has been led by the No. 5 cryptocurrency by market cap, EOS, which is currently advancing nearly 9%. The rally has also bolstered the Ethereum price to within reach of $500.

It’s unclear if the BlackRock development is what turned the markets around, but given the influential nature of the world’s largest asset manager, it’s certainly contributing to the positive sentiment among crypto market participants after last week’s disappointing showing.

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 24 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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South Korea’s Blockchain Association Draws Ire for Green Lighting Exchanges

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South Korea has the dubious distinction of allowing two of the major security breaches at cryptocurrency exchanges this year — Coinrail at around $40 million and Bithumb at $31 million.

But a self-regulatory agency in the country — the Korea Blockchain Association (KBA) — just gave its stamp of approval for the security of a dozen crypto exchanges operating there, including one of the companies that suffered a hack. The move is controversial at best and self-serving at worst at a crucial time in the industry when new and veteran crypto investors alike are awaiting market security.

The KBA is comprised of nearly two-dozen blockchain companies including Bithumb and about a dozen other local cryptocurrency exchanges such as Coinone and Korbit, as pointed out by The Korea Times. Here’s the rub.

Officials from these companies are the very individuals who performed in-house inspections of the safety and security of South Korea’s 12 leading cryptocurrency exchanges including recently hacked Bithumb, which despite apparent flaws were green-lighted at a Seoul press conference. According to CCN, the exchanges are: “Dexko, Hanbitco, OKCoin Korea, Huobi Korea, Bithumb, Upbit, Neoframe, Gopax, Cpdax, Coinzest, Korbit and Coinone.”

But the exchanges didn’t pass with flying colors, which taints the review and could give traders and investors a false sense of security for directing funds onto these platforms.

“This inspection does not guarantee the absolute safety of the 12 exchanges. The result indicates the 12 exchanges satisfy the minimum requirement for their operations. It is like a driver’s license. It is hard to tell whether they are good drivers or not” according to KBA Chairman Jeon Ha-jin.

The KBA appears to have kowtowed to the exchanges, doubling its review period in an attempt to give the trading companies more time to meet their seemingly loose standards.

South Korea’s Crypto Landscape

The Ministry of Strategy and Finance said today that the government will “ease requirements for new technology support, including the blockchain technology investment support.” This is expected to include expanded tax reductions “for new growth engine investment.”

Indeed, South Korea’s cryptocurrency regulatory landscape is evolving. Last month, the Financial Services Commission unveiled new guidelines to combat money laundering activity at financial institutions that transact in virtual currencies. Regulators also appear to have probed a trio of leading banks that have facilitated cryptocurrency accounts — Nonghyup, Hana Bank, and Kookmin.

The bottom line is that policymakers are requiring exchanges and banks alike to follow stricter know-your-customer standards, all of which is encouraging despite where the self-regulating KBA fell short and is a step toward the crafting of formal regulation of the cryptocurrency industry in South Korea.

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 24 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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