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Winklevoss Twins Shift Crypto Focus to Retail Investors, not Resentment

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If anyone in the world has good reason to feel resentment toward Wall Street regulators for rejecting their bitcoin ETF application, it’s Cameron and Tyler Winklevoss of the Gemini cryptocurrency exchange. Their bitcoin ETF product was rejected by the U.S. SEC not once, but twice, the most recent decision of which was responsible for igniting the crypto market meltdown that was exacerbated by the VanEck bitcoin ETF delay.

Instead of harboring feelings of resentment, however, the brothers only seem to be empowered by the development, as evidenced by their decision to focus on the one client group in which they can depend — retail investors, according to a Bloomberg report. If investors could adopt a similar big-picture perspective, perhaps we wouldn’t be in the current situation in which more than $20 billion has been shaved off the total value of the cryptocurrency market over 24 hours.

In fact, for Cameron and Tyler Winklevoss, it’s not only business as usual but it’s more business than usual by the retail segment.

“Wall Street is taking cryptocurrencies seriously, however, the vast majority of Wall Street firms are still not participating in the cryptocurrency market, which remains primarily a retail-driven market. This will change over time, but it will take time,” Tyler Winklevoss told Bloomberg.

Winklevoss isn’t the only one to feel this way. Adam White, vice president and general manager at Coinbase, a rival exchange to Gemini, recently told CNBC: “What’s so unique about cryptocurrencies, and in many ways this asset class, [is that it] was driven by retail investors — not institutions,” characterizing the interest among institutional investors as “profound.”

OTC Market

Meanwhile, a report by Tabb Group earlier this summer revealed that trading volume in bitcoin’s over-the-counter (OTC) market exceeded that of exchanges as much as threefold, which would attach a value of $12 billion in OTC bitcoin trades every day. Here’s the tweet by crypto industry engineer Eric Wall –

A report on Yahoo Finance concluded that the dramatic selling in the cryptocurrency markets on the heels of the Winklevoss bitcoin ETF rejection could have been the result of bitcoin whales selling not on exchanges like Gemini, where the adjusted trading volume over the last 24 hours hovers at $69 million, but instead the OTC market. This inserts a bit more uncertainty into the drivers of cryptocurrency prices.

Nonetheless, it appears clear that the market is placing a great deal of emphasis on a bitcoin ETF, or lack thereof currently. Such a product could open up the asset allocation of large pension funds, for instance, to crypto.

And as for the Winklevoss twins, they already have a “first” in this market. They were behind the maiden Bitcoin Futures Contract (XBT) on the CBOE last December. And if the CBOE has its way, it will be part of the inaugural bitcoin ETF, as well.

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 70 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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Analysis

Litecoin Price Analysis: Big Optimism Boost Following Litecoin Futures Update

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  • The Litecoin (LTC) price is looking to close in the green, after six consecutive sessions of losses.
  • New regulated cryptocurrency exchange, ErisX, may soon launch Litecoin futures and others.

Positive Litecoin Development

TD Ameritrade, a brokerage firm based in the U.S., have launched a new regulated cryptocurrency exchange, ErisX. This will facilitate spot and futures trading opened by Eris Exchange, a Chicago-based derivatives market.

ErisX, will provide traders access to cryptocurrency spot and futures contracts, within a single exchange. According to a spokesperson from the organization, it will allow investors to trade Bitcoin, Ether, Bitcoin Cash and Litecoin, in addition to futures contracts on cryptocurrencies.

Big Infrastructure Improvement In The Crypto Market

Over the past year now, there has been several encouraging developments, assisting in further market legitimization. The improvement of crypto market infrastructure is becoming more prominent. Liquidity of the cryptocurrencies is greatly increasing as well as market acknowledgement in categorizing digital assets as an emerging asset class.

The introduction of Bitcoin futures contracts by the Cboe Futures Exchange, Goldman Sachs planning to open a cryptocurrency trading desk and CFTC respecting that crypto has a future and is here to stay have all added legitimacy to the market. There’s more: a U.S. Federal Court declared digital currencies as commodities, the growing possibility of a Bitcoin ETF, which could seriously propel the market and introductions of regulated crypto custodians allowing more institutional buyers into the market are also a boon for optimism. As such, the likes of hedge and pension funds inclined to participate.

Technical review

The trend for Litecoin of late has been firmly bearish and a stubborn trend. It has nursed losses for six consecutive sessions, dropping as much as 13% over this period. For almost two months, the price has swung between a range of $70 down to a low of $47 territory. It appears to have formed a bottom, within this range. Currently the price is stuck in between two tough respective supply and demand zones.  Should the bulls manage to sustain the gains finally seen, a test over the coming days back towards $65-70 could be on the cards. Near-term resistance is eyed heading into the $60 area. Support can be observed at $55 and then the psychological $50 area.

LTC/USD daily chart

A breach of either zone, could see huge buying or selling pressure, depending on the direction. Given how long the price has been summoned to this mundane range, chunky moves could be seen. Bulls clearing the highlighted supply, have the potential at a very fast run back towards $90. On the other hand, a breach of the highlighted supply area, could see a catastrophic back towards $30.

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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4.5 stars on average, based on 50 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Vietnam ETFs: Growing Higher Than Planned

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By Dmitriy Gurkovsky, Chief Analyst at RoboMarkets

Quite recently, we’ve been speaking about TUR (NYSE: TUR), a Turkish ETF that declined severely because of US customs duties. This, in fact, allowed investors to enter the market a lower price, while TUR now is up and 15% away from its lows.

Still, investing opportunities appear not only after serious falls (in fact, this is risky, as such assets are quite volatile), but also in steadier instruments. As such, those who invested in the Chinese economy in the 1990s earned good profits, although the market was hardly ‘developing’ any longer.

Even now, there are ETF’s that have great earning potential. As always, you can choose a more simple and less risky path. Take a look at APAC: the growth potential is good, while some ETF’s corrected after the trade wars and are now available at attractive prices.

One of the options is the VanEck Vectors Vietnam (NYSE: VNM). This ETF follows the MVIS Vietnam index and consists of the publicly traded companies that are either based in Vietnam or have over 50% of their assets there. Since May 2018, VNM has added 13% to its value. As it is not 100% Vietnamese (only 73% belong to Vietnam), other shares belong to the following countries: South Korea (12%), Japan (5%), Taiwan (4%), UK (3%), Hong Kong (2%). This enables good diversification and makes this ETF quite conservative.

As for the sectors, 16% are represented by consumer and finance, while real estate and technology account for 11% and 8%, respectively. Over the last week, the capital inflow was $3.30M, bringing the yearly total to $44.40M. The major ETF’s shares are such Vietnamese companies as Vietnam Dairy Products JSC (HSX: VNM), which account for 8.15%, Vinhomes JSC (HSX: VHM), 8.01%, and Vingroup JSC (HSX: VIC), which accounts for 6.67%.

Since 1990, Vietnam has been implementing reforms, thus improving its investment climate year by year. After the the Vietnam war and the realization that the Communism regime wasn’t working, the Vietnamese Government enabled a privatization campaign; in 4 years, there were 50% less public companies in the country. Modernization played a very important role, while direct investments were attracted from abroad, and new industry techs were being implemented. In 1991-1995, there were $1.2B as overseas investments in Vietnam, while in 2017 there were over $35B.

The Vietnamese Ministry of Planning and Investments is working with the World Bank to improve the business climate further and create a new direct investment strategy that will focus on the ‘quality’ of the incoming money rather than the amount. Currently, high tech companies are in focus, as the government is doing everything to switch from a cheap work force economy to the one based on technologies and qualified specialists. Most investments into Vietnam are coming from Japan, Singapore, and South Korea. The country is now striving to expand the portfolio and conquer regions other than APAC, such as the US, the EU, and others.

As Vietnam joined various multilateral free trade agreements, such as the WTO, both import and export rose. By 2017, the turnover reached $400B, which is 4 times higher than 10 years ago.

The government is now planning to create free economic zones where the companies will get tax support. This influenced the overseas capital flow in other countries, which made the Vietnamese economists leverage this experience, also taking into account the negative sides other countries faced. As such, the company opening process will be much more simple, while the investment terms will be tighter, and the tax privileges, better.

Over the 9 months of 2018, Vietnamese GDP rose by 6.98%, which is the highest figure since 2011. The GDP change was mostly influenced by construction, and services, which strengthened as more tourists have been coming to Vietnam.

Technically, the price of the ETF in question is not at its highs on W1, which means it’s not overbought. When the price went below $16, the volume grew, which led to the support forming at $12, which has not been broken out by the price yet.

 

On D1, there is a clear support at 5$16. There are two possible scenarios: either the price will break out $17 and head towards $18, or it will correct to $16, but then find support there and, again, go further up.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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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4.7 stars on average, based on 17 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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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 115 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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