Bitcoin Declined by 30% Five Times in 2017, Recent Correction is Tolerable

As CNBC Africa’s CryptoTrader host and producer Ran Neuner noted, bitcoin declined by 30 percent on five different occasions in 2017. This month’s 20 percent correction in bitcoin is tolerable, given the major corrections it had experienced in the past 12 months.

Major Correction

Other major cryptocurrencies such as Ethereum and Bitcoin Cash also recorded corrections in the 50 percent range last year, with the price of Ether, the native cryptocurrency of Ethereum, dropping from $360 to $130. Since then, Ether has surpassed $1,000, and surpassed $2,000 in the South Korean cryptocurrency exchange market.

Ethereum co-founders Vitalik Buterin and Charles Hoskinson expected a major correction to occur in the cryptocurrency market, because the market has grown at such a rapid rate within a short period of time. Blockchain projects with no products and users, solely with whitepapers with technobabble reached multi-billion dollar market caps.

Major corrections prevent short-term bubbles within the cryptocurrency market from occuring by shaking off weak hands and speculators. After major corrections, the market tends to solidify and strengthen, and initiate stronger rallies, as shown in the chart provided by prominent finance analyst Max Keiser below.

With initial coin offerings (ICOs) without products, users, and legitimate business models dominating the cryptocurrency sector, a major correction was long overdue. When the cryptocurrency market surpassed $500 billion in valuation for the first in history, Buterin questioned the justification of that valuation, and whether blockchains have done enough to support the billions of dollars invested in the market.

Hence, while the recent correction led to a $200 billion drop in the market cap of cryptocurrencies, it was necessary to ensure that the market remains stable and strong. Already, in the past 24 hours, the market valuation of cryptocurrencies increased from $450 billion to $520 billion, by over $70 billion.

Where Does the Market Go Next?

The bitcoin market in particular is expected to have a strong year in 2018, given the entrance of institutional investors and retail traders. Several markets including India are also expected to regulate their bitcoin markets, introducing many millions of new users to the digital currency.

Constantin Papadimitriou, president of Pundi X, told QZ in an interview that approximately 10 percent of all bitcoin transactions take place in India. According to Pundi X, which focuses on offline cryptocurrency sales, surveyed 3,000 respondents across India, Indonesia, Japan, Russia, the UK, and the US, the demand for bitcoin India is stronger than ever, despite the government’s strong warnings against the cryptocurrency.

While it is unlikely the government of India will legalize and regulate its cryptocurrency market in the short-term, given that a task force has already been established, there is a higher probability than before that the government will regulate its bitcoin market.

With China, the world’s largest remittance market, having banned bitcoin, the next big market in terms of remittance and e-payments is India. The penetration of bitcoin into the Indian market would lead to a surge in the user activity of the digital currency.

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Kentucky Fried Chicken (KFC), the beloved US-based fried chicken chain, has started to accept bitcoin from its customers.

KFC’s Bitcoin Campaign

For a limited period of time, KFC is selling a bucket of fried chicken for $20 presented in a bitcoin-themed container demonstrating the price of the fried chicken bucket at the time of the sale. For instance, at the time of reporting, $20 is equivalent to $0.0011204, and upon the request of a delivery, KFC embeds the amount of bitcoin equivalent to the price of the bucket of fried chicken onto the container.

While KFC Canada does not intend to integrate bitcoin as a permanent and long-term payment method as of current, the company has introduced its bitcoin campaign to address the rapidly increasing demand for bitcoin and the cryptocurrency market in general.

The strategy of KFC Canada to implement a unique campaign involving one of the fastest evolving technologies and forms of money in bitcoin has been massively successful, as the company obtained significant mainstream exposure from the media and social media platforms such as Facebook and Twitter.

Throughout the limited offering of bitcoin-themed fried chicken buckets, KFC consumers can utilize BitPay’s payment processing service to purchase the signature KFC fried chicken with bitcoin.

In total, the bitcoin-themed bucket of fried chicken costs just over $27, including the $20 price of the bucket itself, taxes, and shipping fee. Inclusive of bitcoin transaction fees, which are averaging at around $5 on major blockchain wallet platforms like Blockchain and Trezor, the KFC bitcoin-themed fried chicken bucket costs over $30.

Given the current state of the Bitcoin network and its underlying scalability issues, it will be difficult for any large-scale commercial fast food chain to accept bitcoin as a payment method. But, in the future, the integration of second-layer solutions could allow restaurants to enable bitcoin payments, if transaction fees can drop below $1.

Second-layer and off-chain scaling solutions including Lightning and Ethereum’s Plasma are capable of processing near-instant payments with significantly low fees. As such, in the long-term, fast food conglomerates like KFC accepting cryptocurrencies as major payment methods is a possibility.

McDonald’s and OmiseGo

In late 2017, McDonald’s Thailand partnered with OmiseGo, the Ethereum blockchain-based payment processing platform, to process payments of McDonald’s online orders using the immutable blockchain network of Ethereum.

Already, McDonald’s Thailand is processing large volumes of credit card payments on the OmiseGo blockchain network. The integration of McDonald’s Thailand of OmiseGo enables the company to seamlessly integrate cryptocurrency payment methods, if the company decides to address the growing adoption of bitcoin, Ethereum, and other digital currencies.

“The consumer’s experience begins right when they place the order online, and payments is a critical component of that experience. Offering highly secure, seamless payment options across all platforms and devices is key to delivering a seamless experience for McDonald’s customers.” said Jun Hasegawa, CEO & Founder of Omise.

The adoption and integration of blockchain technology by fast food chains like KFC and McDonald’s will drastically increase the awareness of millennials in bitcoin and cryptocurrencies, which have evolved into a major asset class.

Ted Rogers, the president at Xapo, one of the most widely utilized bitcoin wallet platforms in the global cryptocurrency market, firmly emphasized that bitcoin is still the most sound money in the market.

Bitcoin is the Reserve Currency of Cryptocurrency Market

Over the past few months, the alternative cryptocurrency (altcoin) market has overtaken bitcoin, based on its dominance over the global market. While bitcoin remains as the most dominant cryptocurrency in the global market, it is no longer more valuable than all of the other cryptocurrencies in the market combined.

The decrease in the dominance index of bitcoin has been triggered by the rapid rise in popularity of cryptocurrencies such as Ethereum, Ripple, Bitcoin Cash, Cardano, along with digital tokens from initial coin offering (ICO) projects.

But, Rogers stated that bitcoin is still one of the only forms of sound money in the market that is currently being dominated by digital tokens and altcoins. He wrote:

“The altcoin/ICO mania of recent months is a circus of intellectual laziness, gambling and greed. Just hold to one central truth: bitcoin is the most sound money – the best money – human civilization has ever known.

Folks, I do think the ICO is important innovation, ETH has value as platform (not sure fair to call it ‘altcoin’) & we are headed for tokenized future. But ‘overvalued’ is trading at P/E of 20 instead of 15, worthless tokens with market caps of billions is Bosch and Bruegel madness. Period.”

Investors and analysts including Rogers firmly believe that bitcoin is the reserve currency of the highly volatile cryptocurrency market, as it is one of the few cryptocurrencies that is being utilized at a large and commercial scale internationally, apart from Ethereum which is processing more than 1.2 million transactions per day.

The market valuation of Ethereum can be justified, as Rogers suggested, given the value of decentralized applications launched on top of its protocol. But, the valuation of the rest of the cryptocurrencies in the market, remains questionable.

What Happens With Bitcoin?

Bitcoin and other major cryptocurrencies like Ethereum, Litecoin, and Bitcoin Cash tend to move together in a similar trend while digital tokens or ICO tokens move differently. If a massive sell-off from highly overvalued ICO projects and digital asset occurs, the money will not flow into fiat currencies. Rather, it will likely flow back into bitcoin and other legitimate cryptocurrencies.

If so, when bitcoin regains dominance over the global market, its market valuation will be able to surpass the trillion dollar mark, as analysts including billionaire investor Mike Novogratz stated earlier this month.

“Bitcoin could be at $40,000 at the end of 2018. It easily could. There’s a big wave of money coming, not just here but all around the world.”

Blockchain Capital, a cryptocurrency-focused hedge fund and venture capital firm, has revealed in survey that 30 percent of millennials would rather invest in bitcoin and the cryptocurrency market than government bonds or stocks.

Millennials Prefer Bitcoin Over Stocks

In an interview with Forbes, Timothy Tam, the founder of CoinFi and former hedge fund trader, emphasized that millennials and investors from the traditional finance industry have become more intrigued by bitcoin due to its fixed supply and its exponential growth rate.

“There’s limited supply because, aside the fact that there will only ever be 21 million Bitcoins in circulation, most of the holders of Bitcoin are long terms holders. The demand on the other hand keeps soaring,” said Tam.

In December 2017, billionaire investor Mike Novogratz described bitcoin as a speculator’s dream, because of its fixed supply and rising demand for the asset class.

But, for millennials and the vast majority of investors, bitcoin’s presence is more significant than a speculator’s asset. It is a robust store of value and a decentralized currency, which is unalterable and consequently, resistant to censorship. It serves the $40 trillion offshore banking industry better than the banks that dominate the space, as BlockTower’s Ari Paul previously noted.

Hence, given that bitcoin is still in its early stage in development and adoption, the fact that the relatively large portion of millennials are willing to and prefer to invest in the cryptocurrency market instead of the traditional finance sector is noteworthy. Bitcoin has already begun to evolve into a major asset class, as JPMorgan global markets strategist Nikolaos Panigirtzoglou said:

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class. The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

Where Does Bitcoin Go in 2018?

Panigirtzoglou explained that bitcoin has started to evolve into a major asset class with the listing of bitcoin futures by leading markets like the Chicago Board Options Exchange (Cboe) and CME Group.

But, the truth is, the global cryptocurrency market and exchanges within it have become multi-billion dollar companies of their own, and have started to process more volumes that stock markets. Bithumb for instance, the world’s second largest cryptocurrency exchange based in South Korea, has started to process more volumes on a daily basis than the KOSDAQ, the country’s main stock market.

In 2018, with the entrance of millennials and young investors, analysts expect the price of bitcoin to reach the $50,000 mark, and become the first cryptocurrency to reach a $1 trillion market cap. The introduction of bitcoin exchange-traded funds (ETFs) by the New York Stock Exchange (NYSE) and Cboe could bring the price of bitcoin to $50,000 much quicker than the expectations of investors.

Merrill Lynch, a major US-based bank that was acquired by Bank of America in 2011, has reportedly banned its clients from investing in bitcoin.

An internal memo released by Merrill Lynch obtained by The Wall Street Journal read:

“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product.”

Bitcoin Investment Trust (GBTC) Banned

Specifically, Merrill Lynch prohibited its clients from purchasing shares of the Bitcoin Investment Trust (GBTC), the only regulated bitcoin investment vehicle in the US market operated by Grayscale Investments, a brokerage arm of Digital Currency Group.

The forbidding of GBTC trading by Merrill Lynch is noteworthy because GBTC remains as the only regulated channel with which bank clients can trade bitcoin. Outside of that, there are bitcoin futures exchanges operated by the Chicago Board Options Exchange (CBOE) and CME Group but those two platforms target institutional and retail investors.

Merrill Lynch advisor also told WSJ:

“I think it’s a very good idea. [The company] made an assessment that there’s too much risk. [When you buy a currency, you buy that country [based on its underlying economy and monetary supply.] When you buy bitcoin, you just buy bitcoin.”

However, given that the value of any asset, currency, and commodity is subjective, and their performance depends on the market, the definition of risk involved in cryptocurrency trading remains unclear. Investment in any asset class or market can be risky. Every year, individual investors lose billions of dollars in the global stock market. Still, banks enable investors to invest in the stock market.

It is not for the banks to decide which assets can be classified as risky or safe, considering that solid criteria to segregate assets based on their risk cannot be formed. More to that, in a free market, the market and investors within it have the authority and the right to invest in whichever asset or currency, as the market decides the value of an asset.

In a business standpoint, or the viewpoint of Merrill Lynch, it is not the best decision to disallow bitcoin and cryptocurrency trading because other leading financial institutions in the global market including the $96 billion Goldman Sachs and $360 JPMorgan Chase are providing an efficient platform for investors in the traditional finance market to engage in cryptocurrency trading.

Clients of Merrill Lynch are not obligated to remain with Merrill Lynch. If they are dissatisfied with the decision of the company to outright ban bitcoin trading, clients will inevitably move to other major banks, that are larger than Merrill Lynch, to invest in the cryptocurrency market.

Vietnam’s Bitcoin Ban

The global cryptocurrency market and finance industry reacted similarly to the imposition of a nationwide ban on bitcoin trading by Vietnam. The entire community was taken aback by the fact that major economies like Japan, the US, and South Korea have regulated bitcoin as a legitimate currency and an asset while a minor economy like Vietnam prohibited the usage of bitcoin.

As with any other asset and technology, the failure to address the demand for a rising asset like bitcoin could isolate businesses such as Merrill Lynch from the global market.

Subsequent to a major correction that occurred on December 17, the bitcoin price has struggled to recover to $15,000, remaining stable in the $13,000 region.

Analysts Optimistic

From December 22 to January 2, with the exception of December 27, the price of bitcoin has remained below $14,000 for nearly two weeks, sparking concerns from long-time investors and analysts.

Some cryptocurrency researchers and investors have predicted the price of bitcoin to fall below $10,000, prior to regaining momentum and surging towards $20,000 and establishing a new all-time high. While many investors have predicted the price of bitcoin to surpass $40,000 in 2018 by achieving a trillion dollar market valuation, analysts have claimed that the price of bitcoin would likely suffer a big correction before initiating a rally.

“Bitcoin could be at $40,000 at the end of 2018. It easily could. There’s a big wave of money coming, not just here but all around the world. What’s different about these coins than other commodities … there is no supply response here. So it’s a speculator’s dream in that as buying happens there’s no new supply response that comes up,” said Novogratz.

In late December however, Novogratz stated that he has halted his cryptocurrency hedge fund because of the market conditions. He stated that the price of bitcoin could drop to $8,000 in the short-term as a result of a major correction.

“We didn’t like market conditions and we wanted to re-evaluate what we’re doing. I look pretty smart pressing the pause button right now,” Novogratz added.

Fast forward two weeks, a major correction has not occurred and the momentum of bitcoin has started to build up with a staggering 15 percent increase in value within the past 24 hours.

Given the recent rally of bitcoin, analysts have started to express optimism towards the mid to long-term price trend of bitcoin throughout 2018. The integration of bitcoin by some of the largest financial institutions in the global market including the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (Cboe) have also triggered the demand for bitcoin from investors in the traditional market.

Most recently, billionaire entrepreneur and investor Peter Thiel invested a massive amount of money in bitcoin, demonstrating his confidence over the entire market entering 2018.

Potential Factors For Surge

Analysts are particularly optimistic in regard to the filing for six bitcoin exchange-traded funds (ETFs) by NYSE and Cboe, as the introduction of ETFs will further increase the liquidity of Bitcoin especially for accredited investors in the traditional finance sector.

Despite its recent price slump, investment in bitcoin by key players within the finance sector such as Peter Thiel demonstrate that the cryptocurrency has the potential to increase by large margins throughout 2018, especially if it can improve in terms of scalability and market infrastructure.

The European Central Bank (ECB) has stated that blockchain technology has the potential to improve existing infrastructures of banks and financial institutions, hinting the possibility of creating a central bank-backed bitcoin inspired digital currency.

ECB executive board member Benoît Cœuré noted:

“In that respect, I would make a clear distinction between wholesale and retail applications. Starting with wholesale markets, we see that distributed ledger technology (DLT) has a lot of potential for market infrastructures. All major central banks are looking into it.

The question will arise as to whether central banks could at some point provide central bank money to financial market infrastructures in a digital form. We are still in the early stages of that discussion, but it is a relevant one”

Blockchain Not Bitcoin

The blockchain-not-bitcoin narrative has been pursued by major banks and financial institutions since early 2015, as consortia and companies like R3CEV and Hyperledger raised many billions of dollars to integrate permissioned ledgers or centralized blockchain networks onto existing bank infrastructures.

Fast forward two years, by 2018, none of the blockchain consortia, multi-billion dollar banks, and central banks have demonstrated any commercial success and utilized blockchain technology on a large scale.

Over the past few months, analysts have started to question the viability of permissioned ledger implementation and whether blockchain technology can be extracted from public blockchain networks like bitcoin and be used as its own as a settlement network.

Last year, highly respected bitcoin and security expert Andreas Antonopoulos explained at the Blockchain Africa Conference held in South Africa that the blockchain is one of many technologies that is used to support cryptocurrencies like bitcoin and Ethereum.

“Blockchain is the technology behind bitcoin. Which is incorrect. The blockchain is one of the four foundational technologies behind bitcoin and it can’t stand alone. But that hasn’t stopped people from trying to sell it. The blockchain is bitcoin with a haircut and a suit you parade in front of your board,” said Antonopoulos.

He added that bitcoin is based on four major fundamental technologies in Schnorr signatures, advanced elliptic curve applications, ring signatures, and blockchain technology. The blockchain operates simply as a database to record the settlement of transactions. Hence, merely taking out blockchain technology from bitcoin and using it as a settlement network is no different than using a centralized database to process transactions.

Exposed

Recently, American Banker reported that BankThink does not believe in the blockchain hype and that there are good applications of blockchain technology.

“Each purported use case — from payments to legal documents, from escrow to voting systems — amounts to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed. What if there isn’t actually any use for a distributed ledger at all? What if, 10 years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it?,” wrote True Link Financial co-founder and CEO Kai Stinchcombe.

Evidently, the potential of public blockchain networks like bitcoin and Ethereum are truly massive, given that bitcoin has been operating as a robust settlement network and digital currency, while Ethereum has been operating as a decentralized computer, supporting decentralized applications.

But, because of security issues and centralization problems, permissioned ledgers of centralized blockchains are limited in what they can achieve and applications they can target.

According to Business Insider, Ari Paul, the chief information officer and co-founder of cryptocurrency hedge fund Blocktower, has purchased $1 million worth of options that offers a 30-fold payout if the bitcoin price hits $50,000 by the end of 2018, on behalf of Blocktower.

“On Wednesday, an unidentified entity made a $1 million bet on bitcoin trading above $50,000 by next December. The cryptocurrency hedge fund BlockTower Capital was behind the bet, people familiar with the matter told Business Insider.”

Blocktower’s $1 Million Bet

Immediately after the initial report on the $1 million bet placed on LedgerX by the Wall Street Journal, Paul tweeted:

At the time, prior to the disclosure of the investors behind the call, LedgerX CEO Paul Chou hinted that an institution has made the call, not an individual.

“Without a doubt, there are institutions out there that are looking at these types of trades or have done these types of trades. It’s not an individual, let’s put it that way.”

In an interview with CNBC’s Fast Money, Paul explained that the option contracts Blocktower has purchased expire if the price of bitcoin fails to reach $50,000 by the end of 2018. But, if it does, it pays out the firm on a 30 to 1 odds. Hence, a $1 million bet on the LedgerX options platform on the price of bitcoin achieving $50,000 would generate Blocktower a $29 million in profit.

The option contracts Blocktower purchased expire by the end of 2018, but are available for cash in anytime throughout the year. If the price of bitcoin surpasses $50,000 earlier than December, the contracts can be cashed in.

“This call costs $3,600. If bitcoin settles anywhere below $50,000 next year, it will expire worthless. But if bitcoin goes to $100,000, it pays 30 to 1 [30-fold]. Bitcoin is volatile. This is a hyper volatile asset. Bitcoin is up more than 1,400 percent this year. It also falls 30 percent almost every other month. These calls are a bet that if its volatile to the upside we can easily see over $50,000 next year,” Paul explained.

Why are Investors so Optimistic?

If the price of bitcoin reaches $50,000, it would place its market valuation at over $1 trillion. Given that the market cap of gold is at around $8 trillion, it would elevate bitcoin to an optimal position to challenge gold to evolve into the world’s premier store of value and currency.

Investors are highly optimistic in the price trend of bitcoin because of the exponential increase in its adoption. In 2017 alone, some of the global market’s largest financial institutions including the New York Stock Exchange (NYSE), Chicago Board Options Exchange (Cboe), Nasdaq, Cantor Fitzgerald, Goldman Sachs, and JPMorgan have publicly expressed their support for bitcoin.

Governments of leading bitcoin markets such as Japan, the US, and South Korea have implemented practical regulations to facilitate the growth of bitcoin businesses, instead of restricting it.

Until the end of 2017, the price of bitcoin has been able to reach $15,000 without the entrance of institutional investors. With tens of billions of dollars in institutional money expected to flow into the bitcoin market, investors have become extremely confident in the growth trend of bitcoin in the long-term.

Over the past 24 hours, the bitcoin price has regained momentum after two major corrections, recovering to $15,000 across all major bitcoin markets including the US and Japan.

In South Korea, the demand for bitcoin still remains significantly high, as it is being traded with a $4,000 premium at a price of $19,000.

$60,000 Mid-Term Target

Julian Hosp, the founder of TenX, a popular cryptocurrency visa debit card service provider and cryptocurrency analyst, stated that the price of bitcoin will likely surpass $60,000 by the end of 2018, achieving a multi-trillion dollar market. A $60,000 price per bitcoin would place the market valuation of the cryptocurrency at $1.26 trillion.

“I think we’re going to see bitcoin hitting the $60,000 dollar mark, but I also think we’re going to see bitcoin hitting the $5,000 dollar mark. The question is though, ‘Which one is it going to hit first?'” said Hosp.

The prediction of a major correction of over 50 percent is exaggerated, and the price of bitcoin will likely not plunge to $5,000 given that it already has experienced and recovered from large price corrections.

Contrary to the claims of many analysts, corrections are beneficial to bitcoin and the rest of the cryptocurrency market because they prevent the occurence or formation of short-term bubbles. Through corrections, the bitcoin market stabilizes and strengthens, as weak hands and speculators fall off.

Hosp added:

“For experts that have been in the market, this was actually a welcome dip. This dip for us was very, very healthy, and some of us have used it to buy a little bit more because suddenly we had 40-45 percent discount to all-time highs. I don’t think right now, but I think in the long run, we will always see a little bit of an up move, and then a dip down.”

A correction of 66 percent at this phase of adoption, development, and market growth is not likely, considering that leading multi-billion financial institutions such as the Nasdaq and New York Stock Exchange (NYSE), two of the world’s largest stock markets by trading volume and market capitalization of listed companies, have started to embrace and provide support around the cryptocurrency.

NYSE Focuses on Bitcoin

As of June 2017, the market capitalization of companies listed on NYSE amount to a staggering $21.7 trillion. Despite that, NYSE chairman publicly expressed his regret for not listing bitcoin futures ahead of the Chicago Board Options Exchange (Cboe) and CME Group.

“We may be stupid for not being first on that. I don’t have the answers, I wish I knew. I don’t know what to make of cryptocurrencies,” said NYSE Chairman Jeff Sprecher at an investor conference sponsored by Goldman Sachs.

Given that NYSE has fallen behind other options and stock markets in facilitating the demand for cryptocurrencies from investors in the traditional finance market, the company has focused on introducing investment instruments and regulated platforms for cryptocurrency trading.

This month, NYSE filed two bitcoin exchange-traded fund (ETF) applications to the US Securities and Exchange Commission (SEC), which are expected to improve the accessibility of bitcoin on regulated exchanges.

Many analysts expect the bitcoin price to surge rapidly throughout 2018, in consideration of the increasing adoption of the cryptocurrency by major financial institutions, service providers, and individual investors across the world.

Cboe, NYSE, and Goldman Sachs Bitcoin ETF / Trading

By early 2018, the global finance market’s largest futures exchange, stock market, and investment banks the Chicago Board Options Exchange (Cboe), New York Stock Exchange (NYSE), and Goldman Sachs plan to introduce bitcoin exchange-traded funds (ETFs) and cryptocurrency exchanges.

This week, after demonstrating a successful launch of bitcoin futures, Cboe filed to list six major bitcoin ETFs in major US stock markets:

  1. First Trust Bitcoin Strategy ETF
  2. First Trust Inverse Bitcoin Strategy ETF
  3. REX Bitcoin Strategy ETF
  4. REX Short Bitcoin Strategy ETF
  5. GraniteShares Bitcoin ETF
  6. GraniteShares Short Bitcoin ETF

NYSE, the largest stock market in the world, also filed two bitcoin ETF applications to the US Securities and Exchange Commission (SEC) named ProShares.

Cboe spokesperson stated that the organization has come to a decision to provide more efficient and accessible investment tools for investors to utilize in trading bitcoin, given the increase in demand for bitcoin on both Cboe and CME Group futures exchanges.

“Given the success of the launch of our bitcoin futures, several partners are very interested in moving forward with the development of an exchange-traded product,” said the Cboe spokesperson.

Jeff Sprecher, the chairman of NYSE, publicly expressed his regret in not listing bitcoin futures ahead of Cboe and CME Group at an investor conference sponsored by the Goldman Sachs.

Seeing the exponential increase in the demand for cryptocurrencies by institutional, retail, and individual investors in the traditional finance market, Sprecher stated:

“We may be stupid for not being first on that… I don’t have the answers, I wish I knew… I don’t know what to make of cryptocurrencies.”

In the near future, based on the high trading volumes of the Cboe and CME bitcoin futures, NYSE will likely launch a bitcoin futures trading platform on its own, subsequent to launching its ProShares bitcoin ETFs.

Unlike futures, which are aimed for large-scale institutional investors and retail traders, ETFs provide a more efficient and seamless channel for individual investors. Earlier this year, billionaire investor Mark Cuban revealed that he has invested in bitcoin through an exchange-traded note (ETN) in the Nordic Nasdaq, a stock market based in Sweden, because it was the only regulated bitcoin investment instrument apart from Digital Currency Group’s Bitcoin Investment Trust.

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply demand. I have bought some through an ETN based on a Swedish exchange,” said Cuban at the Vanity Fair New Establishment Summit in Los Angeles, as reported by LiveBitcoinNews.

Bitcoin $40,000

Billionaire investors and highly respected analysts including hedge fund investor Mike Novogratz, prominent financial analyst Max Keiser, and Fundstrat’s Tom Lee stated that the price of bitcoin will likely surpass the $40,000 margin by the end of 2018, and achieve a $1 trillion market cap.