SEC halts trading in two cryptocurrency products

On Sunday US Securities and Exchange Commision suspended trading in two investment products that track cryptocurrencies. The Markets were in confused state with rumors that the products are Exchange Traded Funds[ETFs]

The SEC said in a statement that trading in Bitcoin Tracker One CXBTF.PQ CXBTF.PK and Ether Tracker One CETHF.PQ CETHF.PK would be halted in the United States until at least Sept. 20. As per the notice issued by SEC, it says – It appears … that there is a lack of current, consistent and accurate information. Application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as ‘Exchange Traded Funds.

Read more at Yahoo Finance


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Three Hurdles Stopping Bitcoin ETF

Yesterday when three of the Bitcoin ETF proposals where rejected by SEC, the experts are brainstorming as what is stopping the BTC ETF to get approved by SEC. Here are the three hurdles pointed –

  1. Security
  2. Lack of liquidity, vulnerability to manipulation
  3. Valuation

To read more about the hurdles please read at marketwatch.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

BITCOIN ETF – EVERYTHING YOU NEED TO KNOW

Bitcoin ETF’s or BTC ETF are the talk of the town, while all wait for SEC decision, the delay has caused turbulence in the market. Funny it may sound, but its quite similar to childbirth, ‘to-be-parents’ wait for the right time for the announcement and are excited to hold him and nurture him and turn him/her to be the best human being on this earth. In cryptosphere, to-be-parents or traders are waiting for SEC announcement while they dream of holding the instrument and get the best returns. Alas, everything is THE BEST in dream world…

So while we wait for SEC to announce, let’s take a deep dive to know more about Bitcoin ETF’s.

What is a Bitcoin ETF?

If you are new to investment domain, first let’s understand what an ETF or Exchange Traded Fund is.

What is an ETF?

As Investopedia says – An ETF, or exchange-traded fund, is marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold.

In laymen terms think of a basket[FUND] with many single stocks or bonds[may be tens, hundreds, thousands] into it.  Now trade[TRADE] this basket throughout the day on the listed exchange[EXCHANGE]. So that’s what is an EXCHANGE TRADED FUND.

Owning an ETF would help you in diversifying an index fund and with an ability to sell short, purchase a minimum of one share and buy on margin. When compared to mutual funds, it also offers lower expense ratios than the average mutual funds.

If you are further inclined to know how it works, check Bloomberg interactive explanation.

Jumping to Bitcoin ETF, it’s a collaboration between the two most attractive and mystical world. ETF’s are one of the most popular instruments amongst investors, and so is the Bitcoin in the cryptocurrency community.

The Bitcoin ETF would be again a basket of stocks, but here the stock/bond could be replaced with either PHYSICAL BITCOIN or BITCOIN DERIVATIVES. So we would have two flavors –

  1. ETF’s that hold Bitcoin – Authorised Participants/AP could send a basket of cash [so that they are not under an obligation of holding Bitcoin]/ Bitcoin to the ETF provider. The provider trades the Bitcoin with the cash provided and returns ETF shares to AP of equal value and fewer transaction fees.
  2. ETF’s that purchase Bitcoin Derivatives – Here the basket does not hold the Bitcoin, in fact, they try to mimic the performance of the Bitcoin by trading Bitcoin swaps, Bitcoin options, Bitcoin futures and other pooled instruments.
ETF Flavour Benefits Cons/Risks/Concerns Examples
ETF’s that hold Bitcoin 1.       Low transaction costs to trade ETF’s on the market when compared to high fees applied by exchanges to trade between Bitcoin and fiat.

2.       As the underlying asset is Bitcoin the AP’s could track Bitcoin price movement and take advantage of arbitrage

1.       As the Bitcoin would be in possession of ETF provider and not AP, there is a counterparty risk

2.       While the exchange has a closing time, Bitcoin market id running all the time. Prices may fall or rise during the closed market time, and traders may not be able to mitigate losses during off hours.

3.       As the Bitcoin market is volatile the need to measure intraday NAV is required. But in exchanges, ETF’s NAV is calculated once per day. Hence an inaccurate NAV that’s is also the basis of redemption may break the arbitrage mechanism.

VANECK SOLIDX BITCOIN TRUST. To read more about it, click here.
ETF’s that purchase Bitcoin Derivatives 1.       With no custody of Bitcoin, no counterparty risk 1.       Following types of risk are associated with the ETF –

a.Margin Call Risk

b.Leveraged Trading Risk

c. Rollover Risk

d.Active Management Risk

 

 

1.      VanEck Vectors Bitcoin ETF. To know more about them, click here.

 

Are Bitcoin ETF’s a good thing?

Well, that’s the debate. Experts are divided and have their own set of arguments.

Andreas M. Antonopoulos, the author of The Internet of Money and the seminal Mastering Bitcoin, believes bitcoin exchange-traded funds (ETFs) are “a terrible idea.”

His first concern is over the price manipulation and second with centralization. While the commodity trading within the ETF mechanism is subjected to global price changes, and with bitcoin being part of it may affect its pricing as well. On Centralization, he says as fund manager now becomes the gatekeeper, a centralized office through which governance can be impacted disproportionately.

On the other hand, Hougan from Bitwise who believes the introduction of bitcoin ETFs is the prospect of institutional capital is a good thing. He says – “Better access means better price discovery and everything that gets us down that road, whether it’s the launch of futures of launch of an ETF, is a good thing.” Talking in similar lines was Joshua Gnaizda, founder at Crypto Fund Research, he stats – Bitcoin ETFs will purchase Bitcoin on exchanges, thereby directly increasing demand for bitcoin as long as the fund has net inflows. I would expect net inflows for short to medium term at least since there will be little competition and there is much unmet institutional demand.”

References

Hackernoon, News Bitcoin, Investopedia

SEC Rejects 9 Bitcoin ETF Proposals

The Securities and Exchange Commission (SEC) has issued rejections to bitcoin exchange-traded fund (ETFs) proposals from ProShares, Direxion, and GraniteShares.In all instances, the SEC stressed that it “emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally, has utility or value as an innovation or an investment.”

Read more at CNBC and Coindesk


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Bitcoin ETF Answers $1 Billion Question

VanEck has been the talk of the town, as one of a handful of investment firms vying for the creation of the first BTC ETF. On speaking with Coindesk about the possibility of crypto ETFs and the impact they will have on the market and industry. Gabor Gurbacs, director of digital asset strategy, says – “I wish I knew the answer to your $1 billion question. Seriously.”.

On asking Gurbacs how he felt about his company’s chance to be green-lighted for operating the fund, he explains – “Unfortunately, I don’t know the answer. I do know that we have addressed market structure issues and this is a chance for regulators to bring bitcoin under existing frameworks and protect investors.”

Read more at coindesk


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Canaccord – Approval for Bitcoin ETF likely in 2019

Canaccord the largest independent investment dealer in Canada, in its quarterly updates on cryptocurrencies, dives into a range of categories that includes security tokens and recent developments in cryptocurrency spot prices. It also provided insights to its favorite category Bitcoin ETF which the crypto-community has viewed with renewed fervor following a proposed rule change by CBOE, which is seeking to list such a product in conjunction with money manager VanEck and crypto startup SolidX.

While Canaccord acknowledges the interest of those backing up ETF, they have put forward the viewpoint that SEC may extend its decision as long as it can. In theory, the SEC could make a decision as early as Friday, August 10.

Read more at coindesk

Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Introducing Long Term ETH Loans

The bulls are roaring again. A regulated ETF might be on its way. Sensible ICOs are hitting the market and with more regulation and awareness the community is weeding out scams. As you hop on to this bull cycle, there is one important tool that you have been missing which can help grow your assets by providing additional liquidity. Introducing Long Term ETH loans.

Using Nuo Lend, users and institutional investors including crypto funds can raise debt in ETH against other ERC20 tokens without selling them and get additional liquidity for 6 months or even an year in a completely decentralised way.  This would give you enough time to make other investments, wait for investment tokens to list on an exchange and book your profits.

1. To get started, you would need to create a loan request by choosing a collateral token. This collateral will be with the smart contract till you repay your ETH loan. You can then choose a premium (2.5% for every 30 days is recommended) and the duration of the loan (90, 180 or 360 days recommended for long term). You can choose to repay back the loan in 1 instalment or upto 10 instalments.

2. Once you have fill this loan request form, you would need to pay gas (Ethereum Network fees) for creating a smart contract for this request. Once a smart contract is created successfully you would need to authorise and transfer the collateral token to the smart contract. We have over 50 tokens supported for transferring the collateral.

3. Once the loan request is created successfully it would be visible to all the lenders on the platform and will get funded soon. Since the entire Nuo Lend product is completely decentralised and runs on smart contracts you can keep a track of your collateral in the smart contract and ensure that you don’t default at any time. 3 days before the end of the loan tenure, you would get a notification for repayment and you would have to transfer the loan amount along with the interest rate you had promised failing which you would lose the collateral in the smart contract.

Oh and currently the gas price is quite low and your loan request would cost around $3-5 worth gas (network fees) and to compensate for that we are giving you $10 as a crypto cash-back in your account which will make you profitable from Day 1.

Now never miss an opportunity to invest in an ICO because of lack of liquidity. Happy Investing.


  • Borrower Tutorial: Asking for a Loan on Nuo Lend

  • Lender Tutorial: Earning Interest On Crypto by Lending

Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

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