BITCOIN FUNDS ARE COMING.... GET READY

 

In every decade we find new product ingestions either in Debt or equity. We have seen toxic debt products and hybrid bonds and how they have grown their size and then the collapse. The invention of the financial market is equally destructive as any new invention of weapon or biological weapon.  In the new decade, we should be ready to witness new financial products and integrated products being launched keeping the fascination of institutional investors. Well, retail products come into the market only after the institutional investors are filled up to the neck and can’t swallow any more.  Today many of you don’t understand Bitcoin but we also did not understand what is the android driven phone is all about.

 Bitcoin- Is this the new digital currency or the new terrorist funding way out? There is huge complexity behind the bitcoin recent surge and way forward where it is going to scale new record.   Bitcoin is yet to get an identity among the government agencies but prior to those institutional investors are backing the new digital currency. For example, BlackRock files to add Bitcoin Futures to Two of Its Funds. Yes the world’s largest asset manager BlackRock with $7.8 trillion AUM, may soon get exposure to Bitcoin futures, according to its Form 497 that was filed with the U.S. SEC as on 20th Jan 2020. Soon we will find Bitcoin AIF and then its mining companies getting listed across any country and coming up with offshore fund propositions along with  SDR basket of currency. Bitcoin will be asset class for the elite segment of the society for the time being before unfolding to other categories of the society.

 Bitcoin is favourite within the institutional investors – for example, Grayscale adds a further 8,762 bitcoin worth $305 million over the past 24 hours. Over the past 30 days, their total BTC holdings have increased by 64,874 BTC, worth $2.2 billion.  Well, the Assets under management (AUM) rose by more than 10 times to $20.2 billion last year, according to a recent digital asset investment report. Further according to the report investors ploughed an average of $217.1 million on a weekly basis into the Grayscale Bitcoin Trust (GBTC), an open-ended trust that provides indirect exposure to Bitcoin and trades on over-the-counter (OTC) markets. Bitcoin AUM will grow significantly as it gets into different product formations as investors are looking for a new product.

Bitcoin mint is also attracting inflows significantly and Community members and contributors are moving forward with a plan to build a treasury and better incentivize developers. Yes, that means we will find a new set of employment in the digital space and significant use of technological and Power consumption. Bitcoin is a new industry altogether and it has many ancillary industries to support.

 Nothing to get surprised as the helicopter money is enough to find opportunities in these products.  The world is not investing in asset formation products for the long term economic benefits but all into products looking for shorter investment return. Bitcoin's value is on another rollercoaster ride, soaring to a new record high of $40,000 for the first time earlier this month and is currently hovering around the $36,000 mark. The reason behind the institutional hunger is that Institutional investors are saying that the cryptocurrency offers a hedge against inflation and a weak US dollar, similar to gold. Very recently Bitcoin target was projected to be around $180000. Well, 4.5 times from the current mark of $40000. That significant jump up expected from the bitcoin in the coming years. 

Bitcoin will soar more as lending firms are linked now with the product. Like in the case of grayscale we find the top three holders of the fund's shares are crypto lending firm BlockFi, Three Arrows Capital, and Horizon Kinetics. Now for example BlockFi offers attractive interest rates in exchange to investors depositing Bitcoin and other cryptocurrencies on its platform. These cryptocurrencies are now deployed to greyscale Bitcoin trust.  Even the same is being used to hedge stocks and another portfolio. In short, now Bitcoin is becoming an integrated product.

 If tomorrow the Middle East back Bitcoin with Gold or with some other product then the value of the same is bound to increase. If tomorrow any country backs Bitcoin with liquidity and any asset class slowly by the end of 2030 we will see a major currency called Bitcoin. If bitcoin is backed by gold or any other currency of any country then it will have significant acceptance in society. Well, it’s a currency for the elite right now but sooner it will be for the retail too provided tweaking is included for acceptance. In these cases, bitcoin will surely cross the mark of $180000 and will become a leading digital currency.  Very soon we will find Bitcoin ratings coming up with a cluster of mining companies coming up to raise capital and debt.