Crypto investments gaining currency – The Hindu BusinessLine

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With cryptocurrency trading booming in the country, the average investment by individual investors is on the rise. Despite concerns around the legality of cryptocurrencies and regulatory uncertainties , the average investment per individual has gone up to ₹10,000 from ₹6,000-8,000 a year or two back.

Targeting next-gen

Sathvik Vishwanath, co-founder of cryptocurrency exchange Unocoin, said the average investment on an industry basis has increased by about 25 per cent within the last two years. This despite, “for most investors, their disposable income not increasing significantly,” he pointed out.

Similarly, CrossTower, which launched operations on September 7, said the average per person investment is ₹6,000 per month. There have been over 1 lakh downloads of its app, it claimed. It also reported a more than 3,000 per cent increase in customers since September 30.

Most players say that crypto trading continues to be dominated by those in the 25-35 age group with limited disposable income. Many are experimenting with investments in this category and prefer to stay cautious. According to crypto industry sources, Indian investors continue to maintain discipline towards crypto investments as they understand that there is some amount of risk associated.

SIP option, too

But some platforms are reporting much higher investments. “At Bitbns, we offer a SIP option to our customers called Bitdroplets. Currently, we have over 2.5 lakh active SIP folios with an average ticket size of investment of ₹22,000. In the last one year, the exchange has seen the average investment ticket-size increase by 120 per cent,” said CEO and Co-founder Gaurav Dahake.

More bourses lining up

With investor interest on the rise, many more exchanges are setting up shop in India even as the government is still undecided on regulating or banning cryptocurrencies.

“Based on our previous operations, the average size ranged above ₹1 lakh but the new investors are in the range of ₹50,000,” said Praveen Kumar, Founder, and CEO, Belfrics Group, which recently relaunched its cryptocurrency exchange in India.

It plans to offer a total of 25 coins for its traders and expects more than 30 per cent of its monthly volume to come from India. It also plans to open over 200 physical crypto centres in the next six months.

Crypto exchange WazirX reported a trading volume of over $36 billion in the year-to-date 2021, marking an average of 44 per cent month-on-month growth. Sign-ups on its platform from Tier-2 and -3 cities grew 2,648 per cent.

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Millennials on the fence about cryptocurrency. Is the risk worth it? Here’s what they think, BFSI News, ET BFSI

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– Anushka Sengupta

Swapnil Ganguly, a 24-year-old software development engineer at Amazon, said he will not invest in cryptocurrency.

“I would rather invest in the share market. No action can be taken as well because cryptocurrency is not regulated in India. It’s too risky,” Ganguly said.

Swapnil Ganguly

Contrary to popular belief of millennials having a larger risk appetite, ETBFSI has found that they seek security in their investments.

“My friend was recently scammed by a crypto trader. These people steal our money by giving false crypto tokens at a cheaper rate. You realise they are fake only when you sell those tokens for cash,” Ganguly said, soured by the incident.

This holds true even for the risk-takers. These millennials also want cryptocurrency to be regulated, and expect it to be one of the most-opted investment options.

Shreyashi Haldar
Shreyashi Haldar

“I think all investments carry some risks, crypto leading the list, but we have a larger risk appetite. I have also invested in cryptocurrency, but I would prefer it if the government regulates it, so that the privacy concerns are addressed. With talks of a central bank digital currency, I feel crypto can become very significant,” said Shreyashi Haldar, a final year MBA student at NIBM Pune.

Apart from security, some also expressed concerns about the affordability of crypto tokens. Some risk-taker millennials, who want to invest in cryptocurrency, said that they fall short of funds to invest in the secure ones, like Bitcoin, which use the proof of work or proof of stake validation techniques.

Shiba Inu
Shiba Inu

“Popular and secure cryptos like Bitcoin, Shiba Inu, Dogecoin, Ethereum, etc come with less risk at a very high price. Those who are looking for short term investments like me can’t afford these. I invested in XRP through Ripple, which is a cheaper option, but I did not gain much out of it,” said Mahesh Vishnoi, a customer associate at Tech Mahindra.

Cheaper cryptocurrencies do not use such systems, leading to the possibility of theft and fraudulent transactions.

Cryptocurrency is not regulated in India yet. As recently as Wednesday, Shaktikanta Das, governor of Reserve Bank of India, reiterated the risks of cryptocurrency, and said that the numbers, in terms of adoption rate and investments, were exaggerated. The government is also expected to table a Bill on cryptocurrency in the Winter Session of the Parliament, starting Nov 29.

For more stories on cryptocurrency, click here.



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All banks will soon consider offering crypto trade, says former Citi CEO Vikram Pandit, BFSI News, ET BFSI

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Vikram Pandit, the Indian-born former CEO of Citigroup Inc and co-founder of Orogen Group, has said that banks and traditional financial institutions will soon start thinking of offering cryptocurrencies.

Pandit aired his view on the future of cryptocurrencies in an interview at a Singapore Fintech Festival. Vikram Pandit noted that in a few years to come large banks and other financial institutions will start offering crypto services directly to their customers.

“In one to three years, every large bank and, or securities firm is going to actively think about ‘shouldn’t I also be trading and selling cryptocurrency assets?”, he asked.

Vikram Pandit is a popular investor and a long-time admirer of cryptocurrencies, he has previously largely invested in one of the leading cryptocurrency exchanges, Coinbase.

The investor expects the introduction of digital assets to be an upgrade to the paper-based banking system to make the exchange process more suitable.

Banks bet on crypto

Meanwhile, banks and other financial institutions are already taking steps and seeking ways to enter the crypto industry.

As per a recent report, banks are now paying a 50% premium to employ crypto talents. The banks are making this move because they risk losing their customers to other banks or financial institutions that offer these crypto services.

According to data collected by Revelio Labs, a workforce intelligence company, Wells Fargo, Goldman Sachs, Citibank, and Morgan Stanley are among the companies hiring these crypto talents.

Coinfomania reported last week that Australia’s Commonwealth Bank (CBA) is set to become the first banking institution in the country to offer crypto services to its clients.

The bank noted that it will allow its customers the ability to buy, sell and hold digital assets, directly via the CommBank app.

With the country’s financial watchdog looking into the regulatory implications of the bank’s move, CBA has said it would welcome clear regulatory guidelines for crypto assets.

However, while these traditional financial systems are offering clients exposure to crypto assets, none of them has decided to trade crypto directly to their clients, and that is about to change soon, according to Pandit.



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Bitcoin, ether scale new peaks as flows pour in to crypto, BFSI News, ET BFSI

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SYDNEY – Bitcoin and ether made record peaks in Asia trade on Tuesday, with enthusiasm for cryptocurrency adoption and worry about inflation driving momentum and flows into the asset class.

Bitcoin rose as high as $68,564 in Asian afternoon trade and ether, the second-biggest cryptocurrency by market value, earlier hit $4,825.

Both have more than doubled since June and added nearly 70% against the dollar since the start of October.

“We’re getting the feeling that the market has shifted,” said Matthew Dibb, chief operating officer at Singapore-based crypto asset manager Stack Funds, pointing to a sharp pick up in demand from large investors and even pension funds.

“People are now figuring out that not having any exposure, even a small amount, is probably not a good thing moving forward, so they’re having to allocate at this price,” he said.

Market momentum has been gathering since last month’s launch of a futures-based bitcoin exchange-traded fund in the United States raised expectations of flow-driven gains.

Inflows into bitcoin products and funds have hit a record $6.4 billion so far this year, data from digital asset manager CoinShares showed, and totaled $95 million last week.

Other pieces of positive news have also helped, including plans by Grayscale, the world’s largest digital currency manager, to convert its flagship bitcoin trust into a spot-bitcoin exchange traded fund. Last week Grayscale also applied to list a “future of finance” fund that would track companies involved in the growing digital economy.

“Crypto is where the fast money is at,” said Chris Weston, head of research at brokerage Pepperstone. “(Ether) is trending like a dream and I’d be long and strong here,” he added.

“Clients are net long, with 79% of open positions held long, and I can sense the $5k party could get going soon.”

Others flagged cause for some near-term caution on bitcoin, however, as the cost of funding long positions has crept higher in recent days, according to trading platform BitMEX – sometimes a precursor to a pullback.

Still, the moves so far have carried the token more than 1680% higher from its March 2020 lows and helped lift the total market capitalisation of cryptocurrencies above $3 trillion, according to crypto price and data aggregator CoinGecko.

CoinMarketCap put it slightly lower at $2.94 trillion. Either way true believers, or “hodlers” in crypto markets terminology, have felt vindicated and remain bullish.

“They threw everything at the beast and still it moves,” said payments strategist and sometimes host of the Around the Coin podcast, Brian Roemmele, on Twitter. “Next stop: #Bitcoin $72000.”

(This story corrects spelling to Roemmele in final paragraph)



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Coin ATM Radar, BFSI News, ET BFSI

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NEW DELHI: According to data released in October by Coin ATM Radar, a major cryptocurrency data compiling site, crypto ATMs have increased astronomically this year, Bitcoin.com reports.

Over 30,000 Bitcoin ATMs are currently functional around the world. The number of bitcoin ATMs have just doubled since January and nearly 80 countries now have crypto ATMs for exchanging cryptocurrencies with fiat money.

The growth of Bitcoin ATMs tracked by Coin ATM Radar in some of the countries is as follows:

* There were 14,016 registered locations supporting automated teller services for leading cryptocurrencies on January 1.

* The total Bitcoin ATMs have increased to a good 30,011 by October 2021.

* Both Bitcoin ATMs and other crypto teller machines are spread across 76 countries and run by 628 operators.

* The United States of America(US) leads with crypto ATMs in 26,000 locations.

* Canada has a little less than 2,000, and the entire European Union hosts only 1,353 units.

* Colombia has the highest number of crypto ATMs in Latin America. It has 46 machines and accounts for 0.7 per cent of the world’s crypto ATMs.

* The number of crypto teller devices have increased to 155 in Spain.

* Crypto ATMs have expanded in Switzerland as well to 130.

* However, few other countries saw a decline in crypto ATMs since last year.
– In Austria, the number of teller machines decreased from this year’s high of 156 in June to 140 now.

– The number of ATMs in UK fell from 229 on January 1 to 98 on October 27, 2021.

These ATM machines may support different cryptocurrencies but most of them have the facility for purchasing Bitcoin (BTC). The other services offered by crypto ATMs are :

* Some crypto ATMs sell one or more of the other major coins such as bitcoin cash (BCH), ether (ETH), and litecoin (LTC).

* Other crypto ATMs offer stablecoins like tether (USDT) or popular altcoins like dogecoin (DOGE).

* The two-way teller machines, where one can bothe buy and sell cryptocurrencies, are also growing

Among the Crypto ATM operators, Bitcoin Depot, which has been expanding its network in the US, is the largest and accounts for 17.7 per cent of ATMs which means 5,314 units.

Bitcoin Depot is followed by Coincloud with 4,028 units and Coinflip has the third largest share of less than 10 per cent with 2,953 devices.

(For the latest crypto news and investment tips, follow our Cryptocurrency page and for live cryptocurrency price updates, click here.)



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Understanding forks and Bitcoin variants, BFSI News, ET BFSI

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NEW DELHI: Bitcoin enjoys incomparable popularity, with a market capital of $1.24 trillion on October 21 after the all-time high value of $66,000, according to CoinMarketCap.

But there are also cryptocurrencies such as Bitcoin Cash and Bitcoin SV, which belong to the same Bitcoin family, with some fundamental similarities and differences.

What led to the emergence of these newer versions? How are they different from each other? We start by first trying to understand Bitcoin forks that are responsible for the creation of Bitcoin variants.

Forks and their types:

A blockchain fork is simply an upgrade in the network initiated either by developers or the crypto community.

* A soft fork has a minor upgrade and needs only a majority of nodes to upgrade to the latest version.

– It is ‘backwards-compatible’, which means that the upgraded chain can successfully share and use data from earlier versions of the network.

– Soft forks bring small changes and do not separate from their parent chain.

* Hard forks bring major changes and require all the nodes to upgrade to the new rules.

* Mostly they lead to permanent separation from the old chain, making newer versions incompatible to the older version like in Bitcoin Cash.

A Bitcoin fork was created through a hard fork, as a result of disagreement within the Bitcoin community over speed, transaction fees and block size or to add more features to the existing Bitcoin. So far, there have been 100 BTC forks, out of which 74 versions have survived and are still functional.

Bitcoin variants: Bitcoin Cash and Bitcoin SV:

Bitcoin Cash (BCH)

Origin:

* It emerged as a result of a hard fork in August 2017.

* The upgrade Segwit2x was proposed by a fraction of the Bitcoin community to scale up the blockchain by increasing the block size and lowering transaction fees.

* However, Segwit2x would also burden the miners and full-node operators to store excessive data.

* The proposal led to the creation of a hard fork, Bitcoin Cash (BCH).

* BCH is the second largest fork of the network and considered electronic cash.

* Its block size is 32 MB while BTC has a block size of just 1 MB.

* The transaction cost is substantially lower and a faster transaction rate of 200 TPS than 5-7 TPS of BTC.

* Bitcoin Cash further forked and bifurcated into Bitcoin Cash ABC and Bitcoin Cash Node (BCN).

Bitcoin Satoshi Vision (BSV)

Origin:

* In November 2018, BSV was created by the efforts of the Australian Computer scientist Craig Wright who persuaded the community to increase the block size of BCH to 128 MB.

* Bitcoin SV expanded its block size to 1 TB, obviously much larger than Bitcoin.

* BSV’s transaction cost is the lowest among the three variants of Bitcoin, and is at a high transaction speed of 9000 TPS due to its large block size.

* BSV uses the scaling platform Bitcoin Scaling Test Network (STN) to achieve the desired scalability.

* Educational platforms such as Bitcoin SV Academy and banking application Gravity give the biggest use cases for the adoption of BSV.

* BSV’s supporters hail it as the genuine peer-to-peer financial infrastructure, true to the vision of Satoshi Nakamoto (the famed pseudonymous person who created Bitcoin).

* It is priced at $170.80 on October 27, according to CoinmarketCap.

Other leading Bitcoin hard forks include Bitcoin Gold, Bitcoin Cloud, Bitcoin Classic and Bitcoin Private.

Key similarities in BTC, BCH and BSV

* All three Bitcoin variants have the same stock supply of 21 million coins, and the total supply of the three coins is expected to be exhausted by 2140.

* Both BCH and BTC work on the PoW (Proof-of-Work) model.

* Just like Bitcoin, the BCH blockchain ensures transparency, is publicly accessible and cannot be modified by a single entity.

(For the latest crypto news and investment tips, follow our Cryptocurrency page and for live cryptocurrency price updates, click here.)



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Mastercard expands cryptocurrency services with wallets, loyalty rewards, BFSI News, ET BFSI

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Mastercard Inc said on Monday it would allow partners on its network to enable their consumers to buy, sell and hold cryptocurrency using a digital wallet, as well as reward them with digital currencies under loyalty programs.

The credit card giant said it would offer these services in partnership with Bakkt Holdings Inc, the digital assets platform founded by NYSE-owner Intercontinental Exchange.

Founded in 2018, Bakkt went public earlier this year through a $2.1 billion merger with a blank-check company. Shares of the company were up 77% at $16.19 on Monday.

Mastercard said its partners can also allow customers earn and spend rewards in cryptocurrency instead of loyalty points.

The company had said in February https://www.reuters.com/article/us-crypto-currency-mastercard-idUSKBN2AA2WF it would begin offering support for some cryptocurrencies on its network this year.

Last year, rival Visa Inc had partnered https://www.reuters.com/article/us-blockfi-crypto-currency-visa-idUSKBN28B603 with cryptocurrency startup BlockFi to offer a credit card that lets users earn bitcoin on purchases.

Bitcoin, the world’s largest cryptocurrency, touched a record high of $67,016 last week after the debut of the first U.S. bitcoin futures-based exchange traded fund. It has more than doubled in value this year.



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Shiba Inu crypto falls from record after Musk damps speculation

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Elon Musk helped Shiba Inu vault up the ranks of the largest cryptocurrencies by market value by tweeting a photo of his puppy. Now the meme token is down after he said he doesn’t own any.

Musk, who has repeatedly touted Dogecoin on social media and frequently commented on cryptocurrencies more broadly, responded to a query from a Twitter user asking how much Shiba Inu he holds with, “None.” In a follow-up tweet, he said he has bought Bitcoin, Ether and Dogecoin, and “that’s it.”

As of 9.30 a.m. on Monday, SHIB, as the crypto is known, was down 15 per cent from its all-time high reached on Sunday Hong Kong time, according to pricing from CoinGecko.com. The token – centered around a breed of Japanese hunting dogs – has risen more than 400 per cent in the past 30 days to be the 11th-largest by value.

Also read: Bitcoin and why its value has rocketed once again

Dogecoin has climbed about 10 per cent in the past 24 hours, according to CoinGecko. Shiba Inu has rallied amid factors including a push to get it listed on Robinhood, its ecosystem’s foray into non-fungible tokens and general enthusiasm for meme assets.

However, many market observers say there’s often little reason for its movements and caution that the token may struggle to maintain its current momentum. It was founded in 2020 by an anonymous person going by the name Ryoshi.

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Many Indian expats turn to crypto to remit money, BFSI News, ET BFSI

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Abir Roychaudhary, a 39-year-old engineer working in Qatar, has transferred around ₹2 lakh to his family based in Mumbai every month using traditional cross-border, cross-currency players.

In October for the first time, Roychaudhary bought cryptocurrencies worth half that amount – ₹1 lakh – and his wife who has access to his wallet could use the sum when needed.

Roychaudhary like many Indian, Pakistani, Bangladeshi and Filipino expats are increasingly experimenting with cryptocurrencies to remit money to their families back home and save on commissions charged by wire transfer companies and other middlemen.

Industry trackers say that the sudden growth in the crypto investments even in smaller towns across India has also led to people exploring various uses.

“The process of remittances through cryptocurrencies into India is a lot more efficient and faster than the conventional process, and all transactions are visible on the blockchain network from a regulatory point of view,” said Edul Patel, CEO of Mudrex, a Global Crypto Investing Platform.

“Looking at current hype in crypto assets like Bitcoin, Ethereum, Binance Coin, United Farmers Finance and Grain, it should be easy to remit money to India and anywhere in the world, more over you can earn more from this crypto by staking or by providing liquidity in our ecosystem,” said Santhosh Bhhandarii, co-founder, United Farmers Finance, a crypto farming platform.

Remittances in India are pegged at about $80 billion which are mainly transferred through banking or other financial channels.

Industry trackers say that the way Indians are warming up to crypto assets as well as decentralised finance, remittances through crypto assets is only set to grow, especially because transferring smaller amounts can be expensive through the traditional services.

Globally, several blockchain startups like Satoshi Citadel in the Philippines have started offering services to facilitate bitcoin remittances in a user-friendly way.

There are close to 1.5 crore crypto investors in India holding digital assets worth ₹15,000 crore. All the large cryptocurrency exchanges saw at least 100% increase in their trading and investment in the last few months.

Experts say that though Bitcoin was the preferred choice for remittances but its transaction costs are rising, currencies like Ripple and Dash are good replacements due to substantially lower fees.

Cryptocurrency remittances became a lifeline for Afghans after Western Union ceased operations for some time after the US withdrew from Afghanistan.

Experts also say that crypto is becoming popular in places with high inflation like Lebanon, Turkey and Venezuela.

Experts point out that remittances in crypto are finding favour because people want to protect themselves against hyperinflation.

Most of those looking to remit money are doing so through some of the less volatile crypto assets such as Stablecoins, say industry trackers. “While remitting money, users would want the value to remain as intended, unhindered by market volatility. Stablecoins pegged to the US dollar are the preferred choice for doing such transactions. Users mostly use stable currencies like USDT/USDC to do these transfers,” said Patel.

The RBI has had a faceoff with cryptocurrency exchanges in the past. It had asked banks to stop dealing with cryptocurrency exchanges, but had to back off following a Supreme Court order.

The government is planning to define cryptocurrencies in the new draft bill and could treat it as an asset/commodity for all purposes, including taxation.
Many Indian expats turn to crypto to remit money



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Bitcoin and why its value has rocketed once again

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Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price.

The cryptocurrency was trading at $66,975 (₹50,22,689) following the launch of an exchange traded fund (ETF) in the US which has dramatically increased bitcoin’s exposure to investors.

ETF fund

The fund, which opened on October 19, allows investors to speculate on the future value of bitcoin without actually owning it. It is the first time investors have been able to trade an asset related to bitcoin on the New York Stock Exchange, and was preceded by much media attention and hype in financial markets.

It began trading at $40 (₹3,000) a share and finished the day up 5 per cent with some $570 million (₹4274.62 crore or ₹42.7462 billion) of assets, making it the second most heavily traded new ETF on record (the first was set up by BlackRock, the world’s biggest asset management company).

Also see: Bitcoin edges off all-time high

And the impact on the price of bitcoin has been extraordinary. It soared past its all-time high of $64,895 to the new record of $66,975 and at the time of writing, was hovering around $65,000. This is a big change from mid-July 2021, when bitcoin hit a 2021 low of under $30,000, reflecting its huge volatility.

Crypto trading on a regulated market

Many financial institutions have previously tried to get approval for bitcoin ETFs without success. Until now, the Securities and Exchange Commission (SEC), the US government agency which protects investors, has been reluctant to approve any. This was partly due to the intense volatility of bitcoin, as well as broader concerns about the unregulated industry of cryptocurrencies.

But Gary Gensler, Chair of the SEC, said the commission would be more comfortable with “future-based” ETFs because they trade on a regulated market. This is a significant change of direction for the SEC which has happened since Gensler arrived at the helm in April 2021.

ETFs trade like any normal stock, are regulated, and anyone with a brokerage account can trade them. This new fund, named the ProShares Bitcoin Strategy ETF (or BITO for short), is the first to expose mainstream investors to the highs and lows of bitcoin’s value, without them having to go through the complex process of purchasing the coins themselves.

Also see: CoinDCX launches crypto trading facility for institutional investors

Although US investors could already buy bitcoin futures directly from the regulated Chicago Mercantile Exchange and unregulated exchanges such as BitMEX (as well as bitcoin directly from unregulated exchanges), the launch of an ETF opens up the market to a wider variety of investors, including pension funds — and adds to the growing acceptance of bitcoin in the financial markets.

Diverse opinions

Some are still sceptical of bitcoin due to its link with criminal activity, although a recent report suggests this seems to be diminishing. And Jamie Dimon, the CEO of investment bank JP Morgan, claims bitcoin is “worthless” and that regulators will “regulate the hell out of it”. Nevertheless, JP Morgan gave its wealth-management clients access to cryptocurrency funds in July 2021.

Banking blockbuster Eric Balchunas, a senior analyst at Bloomberg, is not surprised by the price appreciation and described the ETF launch as “a blockbuster, smash, home run debut (which) brings a lot of legitimacy and eyeballs into the crypto space”.

BITO and cryptocurrency

But what impact will BITO have on the cryptocurrency space? As a new product, it has already exposed more investors to the ups and downs of bitcoin’s value in a regulated market. Many of these are likely to have previously felt uncomfortable buying cryptocurrencies from unregulated exchanges and having to store the asset themselves.

Also see: Crypto users see the light at the end of the tunnel

Other investment funds with an interest in cryptocurrencies will be no doubt be encouraged by BITO’s success, and keen to list ETFs of their own which are exposed to bitcoin and its rivals. Several other ETF providers are likely to launch their bitcoin ETFs in the days following ProShares’ debut, including Invesco, VanEck, Valkyrie and Galaxy Digital.

It is a development which is bound to make investing in cryptocurrencies easier and more common — and an important stepping stone for their adoption into mainstream finance.

Author Credit: Andrew Urquhart, Professor of Finance & Financial Technology, ICMA Centre, Henley Business School, University of Reading, London

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