More than 500 people have registered on the “cryptocurrency ETF” – the “largest and most valuable digital asset ever created” – but some of those investors are actually not investors in any real sense.
Instead, they’re speculators who are betting on the value of digital assets such as bitcoin, ether and litecoin, which are traded on digital platforms such as Bitfinex and Poloniex.
“I was really looking forward to the first coin that I ever bought because I had never heard of them,” says Alex Sosnowicz, a 21-year-old student at Melbourne’s University of Technology.
“They were so promising.”
But the ETF was just the beginning.
“You need to know how to use a currency properly, how to set up your account and that’s something I just couldn’t do,” he says.
But I was surprised to find that it’s not even that easy to do.” “
So I guess I was hoping to just keep an eye on it.
But I was surprised to find that it’s not even that easy to do.”
“I guess I am lucky to be able to get this far in life, even though I am in the middle of nowhere,” he adds.
The funds are sent to an account that allows for “private-labeled” transactions. “
The way it works is that the money that you make is transferred directly to the account, which is like the gold or silver of the crypto-currency world.”
The funds are sent to an account that allows for “private-labeled” transactions.
That means the funds are not visible to the public, meaning investors cannot see the transactions that are actually made on the blockchain, the underlying technology that runs the digital assets.
This means the “fees” associated with each cryptocurrency are so high that investors are often reluctant to put their money into a currency that is not “liquid”.
So far, about 100 people have opened accounts on the platform, with the most popular ones, known as Bitcoin ETFs, being trading at a profit of more than $1 million per month.
However, some investors are taking the plunge because they believe cryptocurrencies are in their future, and want to invest in the technology.
“Cryptocurrencies are going to revolutionise how we transact in the future, they will become the future currency of choice,” says Matthew Brown, a 22-year old student at Monash University.
“If you’re going to invest, you should be investing in something that’s not tied to any currency.”
The idea of investing in cryptocurrencies, Mr Brown says, has been around since 2008.
“In fact, this is a big thing that has been in the works for the last six or seven years,” he explains.
‘I am lucky’ to be a Bitcoin investor, he adds, “but if I was a bitcoin investor today, I would not be so lucky.” “
But over the last couple of years, it’s become a very interesting concept, and you’ve seen this huge growth in the number of ICOs and how quickly they have grown.”
‘I am lucky’ to be a Bitcoin investor, he adds, “but if I was a bitcoin investor today, I would not be so lucky.”
The Bitcoin ETF’s popularity has raised questions around the legality of the cryptocurrency industry, and whether it’s a viable investment option for investors.
“What it boils down to is that these are not securities,” says Peter White, CEO of the SEC.
“These are not registered investment vehicles.
So how can we tell these people who have registered this as a fund that it is not a registered investment vehicle?
And how can they make sure that the people they’re investing in are not being misled?”
“In the SEC’s view, it is an investment vehicle, and the SEC is very clear on that,” he argues.
“Investors who register as a Bitcoin ETF are not required to register with the SEC.”
“There is no registration process, so people who invest in Bitcoin ETF have no way of knowing that their funds are actually invested in Bitcoins.
And in fact, the SEC has stated that, in the past, the purpose of the Bitcoin ETF is to facilitate the trading of Bitcoin and other crypto-currencies in the public marketplace.”
“In some cases, there may be no record of Bitcoin ETF funds having been created,” he continues.
“However, if someone registers with the Bitcoin Investment Trust as a registered Bitcoin ETF, the fund can then be held as a security.”
However, the blockchain technology underpinning cryptocurrencies is not open to the general public, so it’s up to the Bitcoin Trust to register the funds with the Securities and Exchange Commission.
“This means that the Bitcoin Fund is registered as a “private investment vehicle” which does not require a registration with the Federal Securities Commission,” says White.
“Therefore, the Fund’s registration with us allows the Fund to maintain the security and anonymity of its funds