Bitcoin ETFs are the intersection where cryptocurrencies meet the structured universe of traditional investing.
Bitcoin ETFs, or ‘exchange-traded funds’ that focus on Bitcoin, offer a unique way to participate in the exciting growth potential of cryptocurrencies without diving headfirst into the often complex crypto markets.
These ‘crypto ETFs’ blend the familiarity of conventional stock trading with the adventurous spirit of digital currencies, providing a gateway for both seasoned investors and curious newcomers.
As we explore this innovative investment vehicle, you’ll discover how it simplifies the process of adding digital assets to your portfolio, all while maintaining the ease and accessibility of traditional stock market trading. Let’s dive in and unravel the essentials of Bitcoin ETFs.
What are exchange-traded funds (ETFs)?
Imagine you want to invest in the stock market, but instead of picking individual stocks (like shares of Apple or Google), you decide to buy a little bit of lots of different stocks all at once. That’s essentially what an Exchange-Traded Fund (ETF) is.
An ETF is like a basket that contains a mix of various stocks, bonds, or other assets. When you buy a share of an ETF, you’re buying a small piece of all the things inside that basket. This mix can include all sorts of investments – from tech companies to government bonds. The beauty of ETFs is that with just one purchase, you can invest in a whole range of assets, which can reduce the risk compared to buying just one company’s stock.
What makes ETFs special is that they are traded on the stock exchange, just like regular stocks. This means you can buy and sell shares of an ETF throughout the day at different prices, just like you would with stocks of individual companies.
So, in a nutshell, ETFs offer a simple way to diversify your investments, spreading out your risk while still allowing you the flexibility to buy and sell as you would with traditional stocks.
Why is everyone talking about a spot Bitcoin ETFs?
The sudden importance of spot Bitcoin ETFs in the crypto world stems from their potential regulatory approval, a significant step forward in legitimizing Bitcoin as a mainstream investment.
Unlike previous ETFs tied to Bitcoin futures, spot Bitcoin ETFs would be directly linked to the current price of Bitcoin, offering a more direct and potentially more accurate reflection of Bitcoin’s market value. This direct connection attracts investors looking for a more straightforward way to invest in Bitcoin through traditional financial structures.
The anticipation of these ETFs has been heightened by the involvement of major asset management firms like BlackRock, Fidelity, and VanEck, signalling strong institutional interest.
The approval of spot Bitcoin ETFs by the SEC would not only increase Bitcoin’s accessibility to a broader range of investors but also potentially provide more stability and liquidity in the crypto market.
This move is seen as a critical milestone for the cryptocurrency industry, as it represents a significant endorsement from regulatory authorities and could lead to increased adoption and integration of Bitcoin into the traditional financial system.
The benefits of Bitcoin ETFs
Bitcoin ETFs are an exciting option for those interested in the buzz of the cryptocurrency world but looking for something a bit more familiar and potentially less risky. Let’s break down why someone might lean towards a Bitcoin ETF instead of buying Bitcoin directly.
Familiarity and Ease of Trading
Investing in a Bitcoin ETF feels much like investing in any other stock. You don’t need to learn the ins and outs of cryptocurrency exchanges or how to securely store digital coins. It’s as straightforward as trading regular stocks, making it a comfortable option for many traditional investors.
Diversification
Bitcoin ETFs often track not just the price of Bitcoin but can include other cryptocurrencies or related assets. This means you’re not putting all your eggs in one basket (Bitcoin) but spreading your risk across a range of assets. It’s like choosing a mixed fruit basket over just apples. This diversification can be a safer bet, especially in the volatile world of cryptocurrencies.
Regulatory oversight
ETFs are subject to regulatory oversight, which means there’s an added layer of security and transparency. When you buy Bitcoin directly, you’re stepping into a largely unregulated space, which can be riskier. With a Bitcoin ETF, you have the peace of mind that comes with regulated financial products.
Lower entry point
Investing in Bitcoin directly can be expensive, as you often have to buy whole units of the cryptocurrency. But with a Bitcoin ETF, you can invest with much smaller amounts, making it more accessible for the average investor.
No digital wallets are needed
Holding Bitcoin directly means dealing with digital wallets and the security concerns that come with them.
With a Bitcoin ETF, you don’t have to worry about digital wallet security or remembering complex passwords. Your investment is as safe as any other stock in your portfolio.
Top Bitcoin ETFs to invest in
When it comes to dipping your toes into the world of Bitcoin through ETFs, there are several key players you might want to consider. Here’s a list of some of the top Bitcoin ETFs, each offering a unique crypto-investing approach.
ProShares Bitcoin ETF
ProShares is a big name in the ETF world, and their Bitcoin ETF is a popular choice. It’s known for its reliability and is a go-to option for many investors looking to get involved in Bitcoin through a more traditional investment vehicle.
Grayscale Bitcoin Trust
While not a traditional ETF, Grayscale’s Bitcoin Trust is another major player. It offers exposure to Bitcoin’s price movements without the need to directly buy and store the cryptocurrency.
Valkyrie Bitcoin Strategy ETF
This ETF is relatively new but has quickly gained attention. It focuses on Bitcoin futures contracts, offering a different angle on Bitcoin investment.
VanEck Bitcoin Trust
VanEck is known for its innovative investment products, and its Bitcoin Trust is no exception. It aims to reflect the performance of Bitcoin, offering investors direct exposure to the cryptocurrency’s price changes.
Bitwise 10 Crypto Index Fund
For those who want broader exposure, the Bitwise 10 Crypto Index Fund covers the top 10 cryptocurrencies by market cap, not just Bitcoin. It’s a good option if you’re looking to diversify within the crypto space.
Each of these options has its unique features and approaches to Bitcoin investment. Whether you’re looking for something straightforward like the ProShares Bitcoin ETF or something more diverse like the Bitwise 10 Crypto Index Fund, there’s likely an ETF that fits your investment style and risk tolerance.
Remember, investing in Bitcoin, whether directly or through ETFs, carries risk. It’s always wise to do your own research and consider seeking advice from a financial advisor to find the best fit for your investment goals.
How to trade Bitcoin ETFs
Trading Bitcoin ETFs is like playing a video game where you need to know a few key moves. Let’s make sense of terms like ‘bitcoin tracking’ and ‘bitcoin exchange-traded note,’ and also explain how different platforms work for trading these crypto ETFs.
Bitcoin Tracking
Imagine Bitcoin’s price is like a rollercoaster at an amusement park. ‘Bitcoin tracking’ is like having a model of that rollercoaster in your backyard. The ETF follows the ups and downs of Bitcoin’s price, just like your model coaster follows the same path as the real one.
Think of ETNs as a promise note from your school friend. They promise to pay you back your lunch money with a little extra. In the financial world, an ETN is a promise by a company to pay you based on Bitcoin’s price performance.
But remember, if your friend moves away, you might not get your money back. Similarly, if the company behind the ETN has problems, your investment could be at risk.
Trading platforms for Bitcoin ETFs
Now, let’s talk about where you can trade these ETFs. You’ve got two main options: brokerage platforms and crypto exchange platforms.
Brokerage platforms: These are like your regular supermarkets where you can buy all sorts of things (stocks, bonds, ETFs). Trading Bitcoin ETFs here is like buying cereal from a supermarket. You use the same cart (platform) you use for other shopping. These platforms are user-friendly and regulated, offering a familiar environment for regular stock traders.
Crypto Exchange. These are specialized stores, like a shop that only sells video games. They mainly deal with cryptocurrencies. While you can’t directly buy Bitcoin ETFs here, these platforms are where the action happens for Bitcoin and other cryptocurrencies. They offer more crypto-specific features and can be a bit more complex to use.
The main difference between these platforms is what you can buy on them. Brokerage platforms offer a variety of investment products, including Bitcoin ETFs, while crypto exchanges focus on cryptocurrencies.
Also, brokerages are often seen as more beginner-friendly and regulated, while crypto exchanges offer more in-depth features for crypto trading.
Crypto vs crypto ETFs: comparing investment options
Let’s talk about the difference between buying cryptocurrencies directly and investing in crypto ETFs, and how these stack up against other investment options like mutual funds.
1. Direct crypto investment
Imagine buying cryptocurrencies like Bitcoin or Ethereum directly is like owning a specific type of exotic fruit. You have full control over it; you can eat it, save it, or sell it. However, you need to know where to buy it, how to store it safely and be ready for its price to jump up and down wildly.
2. Crypto ETFs
Now, investing in a crypto ETF is like buying a fruit basket that includes a bit of this exotic fruit along with other types. You don’t own the fruit directly, but you own a share of the basket. It’s simpler and safer in some ways because you’re not responsible for taking care of the individual fruits, and you also get a variety, which can balance out the risk.
3. Crypto ETFs vs traditional mutual funds
Traditional mutual funds are like a pre-packed lunch – you know what you’re getting, and it’s usually a well-balanced meal.
Mutual funds pool money from many investors to invest in stocks, bonds, or other assets and are managed by professionals. They’re not as volatile as cryptocurrencies but may offer lower returns.
4. Platforms for trading
The difference in platforms is like shopping at different types of stores.
Crypto exchanges are like speciality stores where you buy and manage individual types of fruit (cryptocurrencies). Some of the most popular centralized exchanges (CEXs) are Binance, KuCoin, WhiteBit, Kraken and Coinbase.
In contrast, brokerage platforms where you trade ETFs are like big supermarkets where you can buy fruit baskets (ETFs), along with other groceries (stocks, bonds).
As you see, there is more than one way to invest in crypto. Investing directly in cryptocurrencies is for those who want full control and are comfortable with high risk and volatility.
Crypto ETFs, on the other hand, offer a simpler, more diversified way to get into the crypto market, much like traditional mutual funds, but with a focus on digital assets.
And where you shop (trade) depends on whether you want to manage individual assets or prefer a more diverse, managed portfolio.
The cryptocurrency world was shaken by a significant security breach involving Ledger, a leading wallet provider, on December 14.
This incident, as explained by Ledger CEO Pascal Gauthier, not only highlights the vulnerabilities in the crypto ecosystem but also the importance of advanced security measures.
Let’s delve into the details of this event, its implications, and the responses from Ledger and the wider community.
The Incident
Pascal Gauthier, in a post on Ledger’s blog and a tweet on his X (former Twitter) account, described the hack as an “isolated incident.”
My personal commitment: Ledger will dedicate as much internal and external resources as possible to help the affected individuals recover their assets.
The hack was swift but impactful, affecting third-party decentralised applications (DApps) for less than two hours and was promptly deactivated within 40 minutes of its detection.
The breach occurred due to a phishing attack on a former employee whose identity was unintentionally left in the hacked code.
This vulnerability did not impact Ledger’s hardware wallets or the Ledger Live platform.
Mechanics of the Ledger Exploit
As explained in various public statements, including one on Ledger’s X account, the attacker inserted malicious code into several app interfaces.
🚨We have identified and removed a malicious version of the Ledger Connect Kit. 🚨
A genuine version is being pushed to replace the malicious file now. Do not interact with any dApps for the moment. We will keep you informed as the situation evolves.
This code tricked users into making unauthorised transactions, leading to the theft of at least $484,000.
The hacker accessed a former Ledger employee’s node package manager JavaScript (NPMJS) account and then uploaded a malicious update to Ledger Connect’s GitHub repository.
This led to the unwitting distribution of the harmful code among users of Web3 apps like Zapper, SushiSwap, Phantom, Balancer, and Revoke.cash.
Extent of the Damage
Initially estimated at $484,000, the damage was later updated to $504,000, as reported by Web3 security service Blockaid.
Here is a list of dapps that may be affected by the @ledger hack! Do not interact at all with DEFI at all today! No app is safe regardless of whether you use a Ledger. pic.twitter.com/2ihbasF3R7
The hacker manipulated transaction data, misleading users into approving transactions that directed funds to their own accounts.
This technique affected a wide range of Ethereum Virtual Machine users who interacted with the compromised DApps.
Ledger’s Response and Future Measures
Gauthier committed to implementing stronger security controls and enhancing software supply chain security.
He stressed that Ledger’s standard practice involves thorough internal reviews and multi-signature requirements for code deployment.
Ledger Connect Kit 1.1.8 was announced as safe, and gratitude was extended to WalletConnect, Tether, Chainalysis, and ZachXBT for their support.
FINAL TIMELINE AND UPDATE TO CUSTOMERS:
4:49pm CET:
Ledger Connect Kit genuine version 1.1.8 is being propagated now automatically. We recommend waiting 24 hours until using the Ledger Connect Kit again.
The investigation continues, here is the timeline of what we know about…
The breach has potential implications for the entire Ethereum Virtual Machine ecosystem.
It demonstrates the sophisticated methods employed by cybercriminals in the crypto space and the need for heightened security awareness.
The core of the Ledger hack revolved around the manipulation of transaction data in users’ wallets.
The attacker employed malicious code to display confusing and misleading transaction information. This deceitful data led users to unknowingly approve transactions that were actually in favour of the attacker.
Ledger hack token approval. Source Etherscan
The Role of Connect Kits in Web3 Applications
In the realm of Web3 applications, developers commonly use open-source “connect kits.”
These kits serve as a bridge, allowing apps to interface with users’ wallets.
They are essentially pre-written code packages that developers can integrate into their apps, saving time and resources that would otherwise be spent on writing this connection code from scratch.
Ledger’s Connect Kit is one such tool used for this purpose.
When a developer builds a Web3 app, they typically incorporate a connect kit through a node package manager.
After creating the app and uploading it to their website, the connect kit becomes part of the app’s codebase. This means that whenever a user visits the app’s site, the connect kit code is downloaded into their browser.
In the Ledger hack, the malicious code was cunningly inserted into the Ledger Connect Kit.
This allowed the attacker to modify the transactions that were being sent to users’ wallets.
For instance, during the normal operation of a Web3 app, users might need to grant approvals for token contracts, thereby allowing the app to move tokens from their wallets.
However, with the malicious code in place, the users’ wallets would display requests for token approval, but these requests were altered to benefit the attacker.
The user might see a request to confirm a transaction, but due to the confusingly presented data, they might unwittingly approve a transaction that sends their tokens to the attacker’s address.
Real-World Impact on Users
As a result of this deceptive tactic, users ended up granting extensive token approvals to the malevolent contract controlled by the hacker.
In some cases, large amounts of funds were siphoned off in single transactions. For example, over $10,000 was drained from one Ethereum address in a particular instance.
This exploit underscores a significant challenge in the crypto world: users often face difficulty in understanding and interpreting transaction confirmations, especially when they are presented in a technical or confusing manner.
It emphasises the need for vigilance and a careful evaluation of each transaction confirmation message.
The exploit demonstrates a critical vulnerability in the Web3 ecosystem and underlines the importance of robust security practices.
While tools and platforms are evolving to detect and thwart such attacks preemptively, the industry is still grappling with these challenges.
Ledger incident: A Call for Increased Security Vigilance
It’s essential for users and developers alike to remain alert and informed to mitigate the risks associated with such sophisticated cyber threats.
The Ledger hack serves as a stark reminder of the persistent threats in the crypto world.
It emphasises the need for robust security measures, constant vigilance, and collaborative efforts to safeguard digital assets.
As the crypto industry evolves, the security of transactions and the protection of user data must remain paramount.
In a landmark development for Europe’s financial landscape, France’s third-largest bank, Société Générale, has made a bold entry into the digital currency domain.
A French bank is launching its euro-pegged stablecoin
The bank has unveiled its native euro-pegged stablecoin, named EUR CoinVertible (EURCV), marking a significant stride in the European banking sector’s adaptation to the evolving world of cryptocurrency.
This groundbreaking stablecoin, set to debut on the Luxembourg-based Bitstamp crypto exchange as reported by the Financial Times, is fully backed by the euro.
This move allows Société Générale’s customers to seamlessly engage with the digital asset market, opening up new avenues for trading and investment.
Jean-Marc Stenger, CEO of Société Générale Forge, has emphasized the EURCV’s pivotal role in the bank’s ongoing journey within the crypto sphere, highlighting its potential utility in settling trades involving digital bonds, funds, and various assets.
The EURCV extends beyond the confines of Société Générale, promising widespread applicability across different financial service providers.
Société Générale is also launching a crypto bond
In a parallel yet equally innovative venture, Société Générale has issued its first digital green bond as a security token on the Ethereum public blockchain.
This bond, valued at 10 million euros, carries a three-year maturity and is earmarked for financing environmentally sustainable activities. The bank stated, “This enables issuers and investors to measure the carbon emissions of their securities on the financial infrastructure.”
The bond’s digital infrastructure offers around-the-clock access to data on its carbon footprint through a smart contract, pioneering transparency in green financing.
The first licenced crypto provider in France
Société Générale’s subsidiary, Forge, has recently earned the distinction of becoming the first fully licensed crypto service provider in France.
Forge, a part of Société Générale, which is France’s third-largest bank, has become the first company in the country to get the top license for offering cryptocurrency services. This license, known as PSAN, allows Forge to hold digital assets for customers, buy and sell them for real money, and trade them against other digital assets.
On July 19, 2023, the French stock market regulator, the Autorité des Marchés Financiers (AMF), added this information to their register. According to Société Générale, this license is the highest regulatory approval possible for handling digital asset transactions.
Already, about 90 companies are licensed by the AMF.
For example, Crédit Agricole, a major rival of Société Générale, got permission for holding digital assets in June 2023.
But Forge is the first to receive this top-level approval for many different services. Business FM, a French radio station, pointed out that these tough requirements for the license favour big, established banks over smaller crypto companies.
This accreditation by the French stock market regulator, the Autorité des Marchés Financiers (AMF), signifies a high level of regulatory endorsement for digital asset transactions, setting a precedent in the French financial sector.
Société Générale has been very active in the crypto world.
It has issued euro bonds on the Ethereum blockchain, created security tokens on the Tezos blockchain, and offered Dai stablecoin loans for bond tokens.
In April 2023, Forge introduced EUR CoinVertible, a stablecoin tied to the euro, for big, institutional clients. This new digital asset is available only to investors who have gone through Societe Generale’s standard customer verification and anti-money laundering checks.
As Europe gears up for the Markets in Crypto-Assets Regulation in 2024, Société Générale’s ventures into the euro-pegged stablecoin market and the issuance of a green bond on Ethereum signify major milestones.
While France is generally open to crypto, the French branch of Binance, a global crypto company, is currently under investigation by the French finance investigation service, directed by a specialized court in Paris.
In just six years, Changpeng “CZ” Zhao transformed Binance from a startup funded by a $15 million ICO into a $60 billion titan of the crypto world. His recent resignation as CEO, part of a deal with the U.S. Department of Justice, marks a significant moment not only for Binance but for the broader crypto industry.
This event is part of a larger scrutiny faced by key players in the crypto space, with Kraken and Coinbase also facing legal challenges from U.S. authorities for various regulatory issues.
The crypto landscape is clearly in a state of flux, with regulatory actions signaling a shift towards more stringent oversight.
This period of change is evident in the diverse developments across the industry, from Grayscale and BlackRock’s dealings with the SEC to Circle’s new initiatives, Bittrex Global’s closure, and CoinGecko’s latest acquisition.
What happened to Binance?
Binance, under its CEO Changpeng “CZ” Zhao, agreed to a $4.3 billion settlement with U.S. officials for failing to implement adequate safeguards against illicit activities.
U.S. authorities accused Binance of allowing criminals to transfer stolen funds through the exchange.
We’re pleased to share we’ve reached resolution with several US agencies related to their investigations.
This allows us to turn the page on a challenging yet transformative chapter of learning that has helped us become stronger, safer, and an even more secure platform.
As part of the settlement, Binance will pay significant penalties to various U.S. departments, including over $3.4 billion to the Financial Crimes Enforcement Network and around $1 billion to the Treasury’s Office of Foreign Assets Control.
Additionally, Binance and CZ will face stringent monitoring and reporting requirements moving forward. This settlement resolves many civil and criminal investigations into Binance, but a civil case with the SEC remains pending.
Following the settlement with U.S. officials, Changpeng “CZ” Zhao has decided to step down from his role as chair of the board for Binance.US, distancing himself from the exchange’s governance.
This move aligns with his earlier resignation as Binance CEO after pleading guilty to a felony charge related to anti-money laundering deficiencies.
Binance.US, led by Norman Reed, remains separate from these legal issues but is still involved in an SEC lawsuit. CZ’s future involvement in the crypto industry and his legal status, particularly his travel permissions while awaiting sentencing, are currently under consideration by the court.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
Binance’s mistakes may be reflected in the industry standards
The recent $4.3 billion settlement of a major cryptocurrency exchange with the U.S. Department of Justice is being viewed positively by industry experts.
This settlement is seen as a step towards reducing apprehensions about engaging with this global exchange, thereby potentially enhancing its trustworthiness in the eyes of investors and users.
Industry observers point out the significance of adhering to regulatory standards, emphasizing that even traditional financial institutions have faced similar challenges. The resolution of the exchange’s compliance issues, particularly around KYC protocols, is considered a positive move for its future operations and for the cryptocurrency industry at large.
Looking ahead, there is growing optimism about the future of Bitcoin.
Expectations are high for the approval of a Bitcoin exchange-traded fund (ETF) in the United States, and the anticipated Bitcoin halving in 2024 is also drawing attention.
These factors, combined with the potential for reduced interest rates by the Federal Reserve, are expected to positively influence Bitcoin’s value.
Furthermore, the forthcoming U.S. elections and ongoing fiscal challenges in major global economies are seen as factors that could increase Bitcoin’s attractiveness as an investment option.
Binance’s future plans
End support for BUSD
Binance has outlined its plan to phase out support for Binance USD (BUSD) products.
Beginning December 15, Binance will no longer support the minting of new BUSD coins, following a decision by Paxos to stop its production.
Users are advised to either withdraw or convert their BUSD into other assets on the exchange before this date.
After December 31, Binance will deactivate BUSD withdrawals, and any remaining BUSD balances will be automatically converted to First Digital USD (FDUSD) for certain users.
This decision is part of Binance’s broader strategy to gradually reduce its reliance on BUSD.
Initially, the exchange will discontinue borrowing and lending services for BUSD, with complete support cessation planned by February 2024.
This move follows regulatory challenges, including the U.S. Securities and Exchange Commission labeling BUSD as an unregistered security and the New York Department of Financial Services ordering a halt to its issuance.
The change in strategy coincides with significant shifts within Binance, including a $4.3 billion settlement with U.S. authorities and a leadership transition, with the former CEO stepping down and the head of regional markets assuming the role.
Once one of the largest stablecoins in terms of market capitalization, BUSD has seen a significant decrease in value over the past year.
Binance to end support for crypto card in Europe
Binance, facing increased regulatory scrutiny globally, is set to end its crypto card services in the European Economic Area (EEA).
The service, which allowed for the direct conversion of digital assets in Binance accounts to local fiat currency, will cease from midnight (UTC+0) on December 20, 2023, affecting all 27 EU member states and others like Iceland, Lichtenstein, and Norway.
Binance’s decision follows the discontinuation of the service by UAB “Finansines passages ‘Contis,’” the issuer of the Binance Visa Debit card.
This change will not affect the accounts of EEA residents but will end the Refugee Crypto Card service introduced for Ukrainian refugees.
The discontinuation in the EEA, alongside earlier service stoppages in Latin America and the Middle East, reflects the challenges Binance faces, including the loss of operating licenses in several countries and ongoing legal battles with regulatory bodies like the SEC.
Binance launches pilot program for bank custody of collateral
Binance has launched a pilot programallowing institutions to trade without depositing collateral directly on the exchange.
This innovative approach enables banks to keep trading collateral off-exchange, such as at a third-party bank, reducing counterparty risk.
The program, mirroring traditional financial market practices, offers flexibility for institutions to manage their crypto-asset allocation according to their risk tolerance. Institutions can hold collateral in cash or Treasury bonds, earning yields while trading.
This initiative, in development for over a year, aims to address institutional investors’ concerns about counterparty risk – the risk of a party defaulting on its contractual obligations.
By not requiring crypto or cash deposits on the exchange, the program lessens the risk of asset loss due to potential exchange issues.
Binance plans to expand this program, engaging with banking partners and institutional investors interested in participating. This move by Binance follows similar efforts by other exchanges to enhance security and trust in crypto trading.
Raiffeisen Bank’s Austrian branch and top Australian crypto exchanges, including Independent Reserve, BTC Markets, Swyftx, Kraken, and Binance Australia, are gearing up for an anticipated surge in the crypto market. The Austrian Bank is set to offer cryptocurrency trading, while Australian exchange leaders are bolstering their infrastructure and customer education initiatives.
Raiffeisen Bank’s Austrian branch is gearing up to introduce cryptocurrency trading for its customers. This means you will be able to trade Bitcoin directly on the bank’s platform. This move, first mentioned in April 2023, is now taking shape through a partnership with Austrian crypto company Bitpanda.
The plan is to launch these crypto trading services in Vienna, starting in the early months of 2024.
A bank spokesperson shared that they’ve teamed up with Bitpanda to create a user-friendly digital investment platform, responding to their clients’ growing interest in easy and accessible digital investments.
Raiffeisen wants to keep up with its customers’ investment desires
The bank is enthusiastic about this new venture, emphasizing its commitment to meeting customer needs and preferences.
“We have seen the demand from customers for easy, intuitive, digital investment platforms. Our main intention to take customer-centric decisions has triggered these efforts, which we are excited about bringing to market.”
As part of their new crypto initiative, customers of RLB NÖ-Wien, a branch of Raiffeisen Bank, will have access to a wide range of cryptocurrencies offered by Bitpanda, their partnering firm.
Bitpanda’s Deputy CEO, Lukas Enzersdorfer-Konrad, had mentioned that this collaboration would include Bitpanda’s extensive digital asset portfolio, which boasts over 2,500 cryptocurrencies, such as Bitcoin and Ether.
Furthermore, Enzersdorfer-Konrad highlighted that Raiffeisen aims to make these crypto trading services available to all types of clients, including those in retail, private banking, and the corporate sector.
“As we announced in April, the end goal is to make our offer available to all RLB NÖ-Wien customers. However, the rollout will begin with their customers in Vienna,” a spokesperson for Bitpanda noted.
Raiffeisen Bank’s venture into cryptocurrency trading is a further indication of the increasing acceptance of Bitcoin and other digital currencies.
Established as one of Europe’s oldest banks, Raiffeisen’s roots date back to its first branch opening in Mühldorf, Austria, in 1886.
As of June 30, 2023, the Raiffeisen Group managed assets totalling 247 billion Swiss francs (equivalent to about $280 billion) and had client loans amounting to 219 billion CHF (around $248 billion).
Banks are taking note of the increase in popularity of cryptocurrencies, just as the bull market is expected to start.
Australian Exchanges Anticipate Market Growth
Australia’s top crypto exchange leaders are preparing for an anticipated bull market, expecting a rapid increase in business. Adrian Przelozny of Independent Reserve is ensuring his exchange is ready with the necessary processes, people, and infrastructure to handle a potential tripling of business overnight. He optimistically predicts the next two years to be promising for the crypto market.
BTC Markets’ Caroline Bowler has observed more bullish market conditions since January, with notable growth in asset prices and technological applications in the industry. She cites the influx of new users and increased trading volumes as signs of an emerging bull market.
Tommy Honan from Swyftx reports a rise in buying activity and is enhancing direct debit functions, a recent challenge in Australia’s crypto sector. He attributes this increase to improved market fundamentals, not just investor FOMO, noting a return of customers who were inactive during the bear market.
Jonathon Miller of Kraken Australia urges caution, pointing out the grey area between bull and bear markets. However, he acknowledges reasons for optimism, such as the upcoming Bitcoin halving and Ethereum’s Dencun upgrade, which are attracting both institutional and retail investors. He highlights the growing institutional interest in crypto assets.
Ben Rose from Binance Australia observes an increase in new registrations and trading activity but refrains from confirming a bull market. Focusing on educating users, Rose aims to avoid FOMO-driven buying, emphasizing sustainable and responsible engagement with crypto as part of financial management rather than just price-driven interest.
In a significant move since the FTX collapse, former executives have collaborated to create a cutting-edge cryptocurrency exchange. This platform emphasises security, incorporating a self-custody approach with advanced multiparty computation techniques to ensure robust protection of customer funds.
A group of former employees from the cryptocurrency exchange FTX have joined forces to create a new crypto exchange in Dubai.
This new venture aims to address a key issue FTX struggled with – keeping customer funds safe.
Who is involved in this new crypto exchange?
Can Sun, previously a lawyer for FTX, is leading this initiative with a company called Trek Labs. Trek Labs, based in Dubai, recently got a license to provide crypto services in the region. They will operate under the name Backpack Exchange.
Supporting Sun in this endeavour is Armani Ferrante, another ex-FTX employee. Ferrante is the CEO of Trek’s parent company in the British Virgin Islands. He also oversees Backpack, a crypto wallet that’s part of Backpack Exchange. This collaboration was detailed in a report by The Wall Street Journal on November 11.
Claire Zhang, who worked closely with Sun at FTX and is Ferrante’s wife, is also a key member of Trek’s executive team. However, she plans to leave the company after an investment round is raised. The Wall Street Journal mentioned that Zhang has been contributing without a salary to support the early stages of the exchange’s development.
Will this new exchange be better than FTX?
Sun and Ferrante, both former FTX executives, are keen on applying the lessons they learned from the downfall of FTX, particularly in safeguarding customer assets.
They’re introducing a self-custody feature in their new venture, Backpack, which uses a multi-party computation (MPC) method. This approach requires multiple approvals for any transaction, enhancing security.
Additionally, Backpack will allow its customers to check their funds at any time. Sun highlighted to The Wall Street Journal the importance of trust and transparency in the current financial landscape, especially after the FTX collapse.
Backpack Exchange is currently undergoing beta testing, with plans for a broader rollout later in the month, as per the company’s announcement.
Sun was also involved in the recent fraud trial of Sam Bankman-Fried, FTX’s former CEO. He testified, revealing that Bankman-Fried had consulted him for legal advice regarding the use of FTX’s funds by Alameda Research. Bankman-Fried was found guilty on all seven charges related to fraud.
Disillusioned by the misuse of customer funds, Sun resigned from his role as FTX’s general counsel the day after learning about these practices. He expressed his disappointment, noting that this went against his principles and what he was led to believe by Bankman-Fried.
The collapse of Bankman-Fried’s empire was marked by the misuse of billions in customer funds through Alameda Research for investment purposes, resulting in approximately $9 billion in missing customer funds.
What happens when you deposit funds on a crypto exchange?
In simple terms, here’s what’s happening with your funds when you interact with a centralized crypto exchange.
Crypto exchanges are where you can buy, sell, or store your cryptocurrencies. However, not all exchanges operate the same way. Some might use your funds in ways you don’t expect, like investing them in other ventures, which can be risky.
The collapse of FTX is a key example. The CEO allegedly used customer funds for other investments, leading to huge losses. This shows that if the people running the exchange are not trustworthy, your funds could be at risk.
Exchanges use hot wallets (online) and cold wallets (offline) to store crypto. Cold wallets are safer from hacking but less convenient for quick transactions. Most exchanges keep a mix of both to balance safety and convenience.
Exchanges are now focusing more on self-custody options, meaning you have more control over your crypto. They are also using advanced security measures like multi-party computation to protect funds.
Exchanges with securities registration are held to higher standards, which include keeping comprehensive records and being subject to regulatory inspections. This is important for the safety of your funds.
What can you do to protect your funds?
Always research an exchange or broker before investing.
Understand their business model, how they store and use your funds, and what security measures they have in place.
It’s crucial to be aware of the risks and choose platforms that prioritise the safety of your funds.
