Day: July 3, 2018

A recent study investigating the investments habits of Canadians found that 40% of Ontario’s resident investors have sold their cryptocurrency holdings.

40% of Ontario Investors Have Sold their Crypto Holdings

The study put out by the Ontario Securities Commission (OSC) was conducted to measure the habits of those invested in cryptocurrency as well the level of understanding those who invest have of the nascent market.

The study which focused on the 14 million person population of Ontario province (over 38% of the countrys overall population) found that just 5% of its residents or about a half of a million adults over the age of 18 are invested in the cryptocurrency market. While 4% in the province had once owned but have now sold off their crypto holdings.

The survey found that the demographic most likely to be invested in cryptocurrencies are males between the ages of 18 and 34 of which 14% currently own some type of digital asset.

Overall the study found that Canadians tend to be cautious in their investing habits when it comes to the crypto world. For instance, less than 9% or only about 50,000 people have invested more than CD$9,999 in their digital portfolio. While 90% spent less than $10,000 and 50% less than $1,000.

Though ICOs have had a record-breaking year in all respects Canadians, according to this study, have barely bought in. Only 1.5%, or 170,000 people have taken part in any initial coin offerings. This low-interest level may be explained by a general low level of knowledge regarding cryptocurrencies. Most of the participants were unable to describe the way in which cryptocurrency or the blockchain technology that powers them works.

Overall Canadians Showed Cautious Investment Habits

While 81% surveyed had heard of Bitcoin and 25% Bitcoin Cash only 13% knew of Litecoin and only 11% recognized the second largest cryptocurrency, Ethereum. Perhaps most interesting in the survey was the variety of ways in which the respondents had obtained their crypto holdings. Though 46% had acquired them in the traditional way from exchanges, 28% mined their own. 18% received their holdings free through air drops and another 18% got theirs in exchange for goods or services.

As most of the participants said that they had used cash savings to acquire their cryptocurrencies, a small group borrowed or used credit cards of whom two-thirds have already paid off that debt. The studies final conclusion reads:

“The results of this survey indicate that the vast majority of Ontarians are approaching cryptoassets with caution. Only a small percentage own cryptoassets, and those who do own them tend not to spend substantial sums of money acquiring them,” concluded the survey.”

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EY’s blockchain lead makes the case for enterprises to embrace tokenization and move away from simply treating blockchains like fancy notaries.

The development of Bitcoin and other cryptocurrencies can be viewed with some clarity using Darwinism and evolution as an explanation, writes Shanna McEachern in the Global Banking and Finance Review.

McEachern refers to the massive numbers generated by cryptocurrency, seemingly out of nothing, to predictions that the digital currency market will evolve to USD 2 trillion by the end of this year. She asks, “is this the natural step in the evolution of capital markets?”, or are they in danger of extinction following in the dinosaurs’ unfortunate demise in another era of giants.

As McEachern points out, evolution occurs through the survival of small, inheritable mutations that render a species better able to survive and flourish through slow change and impact of initial change makers. There is no “eureka” moment, she claims. This is true as, over time, careful research ideas are developed, considered, tested and finally released into the public domain. Such was the case with Newton, only releasing his theories on gravity 20 years after he commenced his research.

It was exactly in this way that Bitcoin was born, emerging from the technology of DLT behind it after years of development. Although official records will inform that Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and released as open-source software in 2009, it came from a much earlier seed. Some of the more colorful commentators even claim that it was created through rogue AI but if it was one person’s brainchild, it was the result of much time, thought and development before its exposure.

McEachern draws an interesting analogy to woodpeckers making holes in trees, later inhabited by another bird species, as an example of “ecosystem engineers”, as one species supporting one another without intent to do so; a kind of natural by-product. She draws this comparison to Bitcoin, fundamentally changing, in this case, a financial environment, which in turn benefits other aspects of it through DLT and blockchain, thus creating another evolving world.

“From Bitcoin, the ecosystem thus evolved to include a diversity of other species: from thousands of other cryptocurrencies to coin-based economies and blockchain technologies,” McEachern argues.

Where does this leave Bitcoin in the evolution of things? Returning to the dinosaur analogy, is there a financial cataclysmic event followed by its evolution facing dramatic closure or is it to evolve again into something even more innovative born from the original idea? McEachern indicates it could more than a beginning than an end, as social interaction and the desire for development and innovation perpetuates change:

“…just as molecular and organismal interactions bring novelty in the world of genetics, our media and social interactions (even when they feel redundant) bring innovation in modern ideas and technologies.”

McEachern concludes that it will be institutions that play the major role in cryptocurrency’s survival by investing in the “wealth” of concepts created by its evolution.

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The bullish falling channel breakout has opened the doors for a stronger rally towards the $7,000 mark.

The institutional environment around cryptocurrencies has continued its relentless development, with Coinbase recently launching their custody service.

Coinbase Custody Accepts 10 Institutional Investors

Since its creation in June 2012, Coinbase has continually cemented itself as one of the best consumer-centric cryptocurrency services. But with its recent launch of Coinbase Custody, the popular company intends to make a positive impact on incoming institutional investors. Coinbase Custody aims to secure the business of institutional investors, by providing reliable cold storage options for these customers.

Bloomberg reports that the cryptocurrency service provider has already accepted deposits from ten hedge funds and family offices, all within its first week of operation. Coinbase’s aspirations don’t end there, with the firm hoping to take on 100 institutional clients, managing a collective value of $5 billion in crypto assets come January.

Some were shocked that institutional clients would place such a large amount of trust on one firm, but a blog post from Sam Mcingvale, product lead at Coinbase Custody, shows that Coinbase is prepped for the incoming investment. The post read:

“Over the past six years, Coinbase has pioneered leading crypto storage techniques and is currently responsible for the custody of more than $20 billion in crypto assets. Coinbase Custody builds on this expertise to offer a brand new, independent solution for our institutional customers.”

This new service will only be accepting investors with a minimum balance of $10 million, charging a 0.1% fee on a monthly basis and $100,000 on set-up.

To ensure the security of funds, Coinbase will enlist a variety of unique security techniques. The aforementioned blog post gave four unique features which will help to secure funds, listing:

• On-chain segregation of crypto assets
• Split, offline private keys that require a quorum of geographically distributed agents to use cryptographic hardware to sign transactions
• Multiple layers of security
• Robust cold storage auditing and reporting

The features mentioned above provide new levels of security, mitigating a majority the risk of cryptocurrency loss, in the form of a computer hack. One feature which stands out is the “geographically distributed” multi-signature requirements for withdrawal, ensuring that there is not a single point of failure.

In its current state, the service only offers custodial support for the ‘Coinbase Four’, which are Bitcoin, Ethereum, Litecoin and Bitcoin Cash. However, Mcingvale noted that Coinbase plans to add support for more cryptocurrencies within the near future.

Institutional Investment Sub-Industry Grows At An Unprecedented Rate

Coinbase wasn’t the only firm taking up the institutional investment spotlight, as Blockchain has also announced its own institutional platform, affectionately named Blockchain Principal Strategies by the cryptocurrency infrastructure firm. Along with offering custodial services, BPS also intends on providing cryptocurrency analytics and research services that may be reminiscent of what Wall Street has to offer. Peter Smith, Blockchain’s CEO, hopes that BPS will fill the growing need for an all-in-one service for institutional investors, offering services which others can not.

Goldman-Sachs backed Circle recently announced a 30% monthly increase in investments made on its established ‘Trade’ platform, which is directed at offering OTC trading for institutional clients. This figure comes amidst the bearish state the market has been in, possibly signaling that institutions see these prices as a bottom before the impending bull run.

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Head Trader at Octagon Strategy, Ryan Rabaglia, acknowledges that the markets have been under pressure and are well off their highs, but that stepping back and looking at a long-term chart reveals Bitcoin is up over 100% in the past year.

Rabaglia says the cryptocurrency market is still in a growth phase, being only eight years old, and that there are numerous obstacles to overcome which explains the downward price movement this year. He told CNBC that Octagon Strategy was still bullish on Bitcoin, and was operating in the cryptocurrency space in a bullish manner.

The head trader says cryptocurrency regulation is a “double edged sword”. He says that regulation is applying downward pressure to the market due to the uncertainty surrounding regulation since cryptocurrency companies, traders, and investors don’t know what to expect from a day to day basis and try to avoid risk accordingly by pulling out of their cryptocurrency investments.

However, regulations will eventually mature and the situation will stabilize. Rabaglia says that once regulation is established, institutional investors will feel safe enough to enter the market and they will get the support they’ve been looking for from the regulatory environment. Essentially, he is saying that Bitcoin is experiencing growing pains but these pains will eventually end and growth will resume.

Rabaglia’s thoughts echo the views of other cryptocurrency experts. There is a general consensus that the playing field for institutional investment into cryptocurrency is being set up, and proper regulations are fundamental for this to occur. A combination of established regulations and cryptocurrency custodianship will facilitate institutional investment, which would bring more money into the cryptocurrency markets than ever before.

Ethereum co-founder Charles Hoskinson says tens of trillions of dollars will enter the market from institutional investment. Kyle Samani says proper cryptocurrency custodianship, like the services being offered by Coinbase and Xapo, have torn down the final barrier to institutional investment.

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An initial coin offering is selling a token that claims to be pegged to smartphone maker Xiaomi’s stock price in its IPO next week.