This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
By Augustin Eden, Analyst
Bitcoin Tracker One (BTO), an instrument that allows investors to expose themselves to Bitcoin without actually owning the coins themselves, began trading on the NASDAQ Nordic exchange in May 2015.
But if you thought NASDAQ’s Nordic exchange was simply a testing ground, or the only stock exchange mad enough to launch a Bitcoin based security, then you’d be wrong. At the same time the New York Stock exchange has launched its own Bitcoin Price Index (NYXBT) that will represent the daily dollar denominated value of 1 Bitcoin at market close, and with blockchain technology (the interesting bit about Bitcoin, and the only bit the markets are really interested in) already having paved the way for a revolution in secure, low cost funds transfer, NASDAQ OMX is planning to start using blockchain-derived solutions to facilitate the trading of equities on its US exchange in the near future.
Will you be trading Bitcoin within a year? Well, if you have an account at Accendo Markets you can trade it right now! But the
issue isn’t whether or not it can be traded. Surely what matters is whether or not it’s a credible asset – whether or not Bitcoin should be traded. I don’t think it is personally, but it’s hard to argue with the NYSE! The fact is, Bitcoin is an instrument that has a value that changes, which means you can make money buying and selling it in exactly the same way as you would, say, gold. Or chocolate bars or antiques. But also mud and artificially aged ‘shabby chic’ pine furniture.
The cryptocurrency has had a tumultuous few years since its inception that saw the price explode to just shy of $1150 per coin in late 2013 and then steadily pull back to trade around $230 today, not to mention the issues with Bitcoin as currency of choice for black marketeers . While there’s the legitimate, serious side to bitcoin (blockchain) that could prove revolutionary in years to come, there is also a seedier, more puerile side to it – the side that is home to the ‘Bitcoin Foundation’ and notoriously secretive ‘father of Bitcoin’ Satoshi Nakamoto. (Who the hell are these people?!)
Looking into the future, the bit of Bitcoin that is practically useful for the world will survive – think blockchain-like things, but not blockchain itself. I believe the name ‘Bitcoin’ will, however, forever be linked with its darker side. The world’s financial institutions will welcome the underlying technology and, while there is demand from crazies to trade Bitcoin, they’ll be happy to relieve them of their funds in the form of trading costs. But one day the only Bitcoin that will exist will be the one that was there at the beginning – a loose bunch of self-styled ‘revolutionaries’ immersed their very own real-world role play game.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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