Wall Street institutions are entering the digital currency markets
People know that financial institutions think of cryptocurrencies as arch enemies. But with the increase of opinions from financial advisors that the world is on the brink of another financial collapse because of inflation, maybe digital currency are the solution to some of the problems. Although not perfect, digital currency are still developing and will have a far bigger impact that most people give them. So it wouldn’t come as a surprise when financial institutions end up adopting the technology they are so actievly against. For investors, adapting to circumstances has always been the correct way. Different people use cryptocurrencies for different reasons: some want to get rich quick, others want independent control over their financial assets and some idealists desire an entirely new and efficient global economy built on blockchain technology and digital currency.
Whatever a person’s reasons for using crypto and blockchain are, there will always be a huge cultural clash when cryptocurrency holders and Wall Street ideals meet. A huge influx of institutional money would be extremely beneficial for cryptocurreny prices in the short term, but in the long term this will cause extreme volatility. Recently the sixth-biggest fund manager in the world, Fidelity started to offer digital trading services and it shook the landscape even more. The announcement of this project was aimed at the trading demands of large institutional investors. These demands will in turn provide services like “institutional-grade custody”, large scale leverage trading and more, all of which should pump cryptocurrency prices, but will basically just bring more whales to the digital currency free market.
Institutional money will spike Digital Currency prices
People who believe or want to be financially independent from banks will not like this. In fact, most supporters and users of Bitcoin stand firmly behind Bitcoin’s philosophy that you can be your own bank. Developers and investors with insight however, knew that this day would eventually come. Risk management will see those institutions passing off the risk of holding the said assets to...
Financial institutions including Morgan Stanley and Citibank are creating digital currency investment products
So far, this year has been marked by bad news for institutional investors interested in pursuing cryptocurrencies.
One of the most lauded and most highly anticipated crypto investment instruments, the crypto Exchange Traded Fund (ETF), has faced steady regulatory headwinds as the SEC continually rejects attempts to bring ETFs to market.
Since many crypto enthusiasts see institutional investment as the next frontier for crypto adoption, these setbacks are frustrating. However, that doesn’t mean that all opportunities for institutional investors are impossible.
In that regard, it’s been a big week for Bitcoin as a series of leaks reveal that major financial institutions, including Morgan Stanley and Citibank, are creating or developing investment products intended to provide their substantial customer base with access to digital assets.
Morgan Stanley is preparing a crypto product
This week, Bloomberg reported that Morgan Stanley is preparing an investment product that will provide their customers access to Bitcoin derivatives. Citing an anonymous source, Bloomberg contends that Morgan Stanley will provide customers with “synthetic exposure” to Bitcoin markets by enabling investors to take long or short positions on the digital currency.
In this way, Morgan Stanley is joining several other mainstream financial institutions striving to produce mechanisms for their clients to trade in Bitcoin without providing direct access to digital currencies. Bloomberg’s source notes that Morgan Stanley will charge spread fees to accommodate the inherent risks in brokering Bitcoin products.
Although...
Blockchain Technology And The Disruptions It Is Causing In The Financial Industry [infographic]
The cryptocurrency industry has given birth to a whole host of interesting and useful technologies. One such technology that is making a huge difference in many industries is the blockchain technology.
This type of technology facilitates online transactions and it could potentially revolutionize the way that the financial industry operates. This article and infographic look at what the blockchain technology is and how it is causing disruptions in various industries.
What Is The Blockchain Technology?
Blockchain technology can be used as an online transaction facilitation. This technology uses a public ledger to record transactional data, and the process is sent through a peer-to-peer network. The transactions are encrypted and there are no centralized control or middlemen.
Basically, a blockchain transaction is conducted in the following way. The instigating party sends a transaction request through the peer-to-peer network. This transaction request is authenticated on the blockchain public ledger and added to it as a new block of data. This data is then passed through the peer-to-peer network to the recipient and finalized.
The following facts are some of the benefits of blockchain based transactions:
- The decentralized nature means no central control
- The lack of a middleman means lower transaction fees
- Encryption means greater security
- The peer-to-peer network means faster transactions
As you can see, blockchain offers many benefits. Generally, blockchain based transactions are faster, cheaper, and more secure than traditional online transaction methods.
What Industries Are Already Using The Blockchain Technology?
Currently, the most widespread use of blockchain technology is the authentication of cryptocurrency transactions. This is essentially what makes cryptocurrencies possible, so any person that participates in crypto coin trades, gambles at an online Bitcoin casino or even uses Bitcoin to pay products and services is directly dependent on blockchain tech. Whilst this technology is still in its infancy, it has already progressed hugely and many industries are actually experimenting with it in some interesting ways.
Possibly one of the most interesting implementations of the technology is what the government of Sierra Leone has actually this year. It held a blockchain based elections, which created the first-ever public vote that couldn’t be refuted or disputed. Due to the blockchain public ledger, each vote is recorded and there is irrefutable proof of its creation and content.
Blockchain technology is also being used in the energy supply industry, charitable organizations, cloud technologies, and even supply chain management, to name a few examples. As this type of technology develops and becomes widely accepted, we should only see an increase in its usage.
Furthermore, we should see a greater variety of different uses for the blockchain technology. It is clear that the financial industry must pay heed to it, as it could supersede traditional online payment methods in the future.
The infographic below provides additional information about this type of technology:
