Most cryptocurrency prices dropped sharply in the beginning of September.
The rest of the month has been spent consolidating the initial loss, which leaves traders arguing where prices should go next.
While the market looks vulnerable to lower prices it’s not hard to argue a bottom is being made.
The market continues to wait for news from the Securities and Exchange Commission (SEC), which had said it would announce by September 30th whether or not there would be approval of the first exchange traded fund (ETF).
I say don’t hold your breath.
The SEC recently requested additional public comments and many are now guessing we won’t see any SEC-approved ETFs until early 2019.
But Bakkt is the firm that many are now pinning their hopes on, and its fund is still scheduled for release in November.
Bakkt is a collaboration between the Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE), Microsoft, Starbucks, BCG, and others.
Their goal is to provide a way for investors to buy, sell, store, and spend digital assets. It is expected they’ll introduce an ETF but the first thing they’ll offer is Bitcoin (BTC) futures with a slight twist.
Unlike the current BTC futures market, the futures offered through Bakkt will settle in actual Bitcoin. Bakkt will offer custodial services and they’ll back all futures contracts with Bitcoin holdings.
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There will be no leveraging or trading on margin since Bakkt does not want to “create a paper claim on a real asset.”
Bakkt thus will offer an avenue for both retail and institutional investors to more easily get involved in Bitcoin since they won’t need to open up their own exchanges.
Bakkt intends to start BTC futures trading against three fiat currencies: the U.S. dollar, the British pound sterling, and the euro.
The significant difference between what Bakkt will be offering and a SEC-approved ETF is that traders in ETFs will not be taking delivery of Bitcoins.
Trading a Bitcoin ETF would be similar to trading a gold ETF. With the gold ETF you hold a piece of (digital) paper that says you own shares that are backed (hopefully) by gold.
The criticism of many ETFs trading the same asset, gold in this case, is that they all lay claim to the same gold.
Bakkt’s solution does away with that concern by settling in Bitcoin, not shares of an ETF or in fiat currencies.
Wave of the future
Cryptocurrencies are the wave of the future for individuals, businesses, and governments. This continues to be an opportunity for those who appreciate and invest in the future of currencies.
Even Google is getting back into the game.
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Google has decided to lift its ban on crypto-related advertising, which will take effect in October.
The ban had gone into effect in March 2018 but will now allow regulated cryptocurrency exchanges to advertise in the United States and Japan.
Google will require certification of advertisers that serve the United States and Japan.
While allowing cryptocurrency exchanges to advertise, there is no mention yet of advertising being allowed from crypto-related products, such as wallets, initial coin offerings (ICOs), and trading advice.