BitCoin and Institutional Investment
A bitcoin is a decentralized cryptocurrency that was created in 2009. It is therefore an electronic peer to peer cash system which relies on the blockchain ledger. In the blockchain technology, information is logged into blocks that streams it from one block to another using cryptographic code hash. Originally, bitcoin used black market transactions such as gambling, money laundering, and silk roads which allowed users to anonymously buy and sell illegal goods using bitcoins. Moreover, bitcoins are valuable because of their scarcity, utility, transportability, and divisibility. There are some other features that make the bitcoin different from the other forms of investments. These features are; lower inflation risks, liquidity, minimalistic trading, and new opportunities. However, there are some disadvantages of investing in bitcoins which include, the threat of online hacking, volatility, the risk of wallets being stolen, little regulations, and limited use of the bitcoins.
There are also other forms of bitcoin investment one of which is the institutional bitcoin investment vehicles which are as follows:
Grayson Investment Trust Cons which has $2 billion of bitcoin and it allows users to buy shares and profits. The second investment vehicle is the CME (Chicago Mercantile Exchange). It offers some options to bitcoin features which include; wide strike range, European expiry, and cash payout. The third investment vehicle is the Bakkt coin features which entail the European expiry, cryptocurrency exchange inspired platform, bitcoin payout and it is insured against hacking. Another investment vehicle is the Exchange Traded Fund (ETF) innovation. It is an investment fund which groups shares of stocks of similar businesses. There are two types of ETFs which are Innovation Shares NextGenc protocol ETF and ARK innovation ETF.
Lastly, there is still no 100% pureplay bitcoin ETFs. The Securities and Exchange Commission (SEC) is a body that enforcing federal securities laws for regulating stocks and options exchange including other activities and organizations in the United States. It is therefore important for ETFs to have SEC approval. Pureplay ETFs also emphasize on ease of investment and exposure to larger investment groups. Furthermore, the government needs to allow deep pocket institutional investment in the form of ETFs so as to rise the prices from where they are in the market today. In conclusion, bitcoin has no physical value and that is why it is referred to as the digital gold or the digital wallet and also known as the digital currency or cryptocurrency.
