SEC Archives

Bitcoin and the State of Retirement Reports Today

Posted on June 28, 2018 | by [email protected]

After looking through many studies showing the state of retirement in America today, there seems to be much room for improvement.

The National Institute on Retirement Security came out with some rather concerning statistics in their report released earlier this year, specifically that two-thirds of working millennials have nothing saved for retirement. Meanwhile, according to a Vanguard retirement study, the average account balance of nearly $104,000 was misleading because of a small number of large accounts skewing the average higher, while the median is much lower, at $26,000. And the 18th annual Transamerica Retirement Survey revealed that while 62% of workers are confident that they will be able to retire with a comfortable lifestyle, as many as 56% believe that they have not yet fully recovered financially from the Great Recession and as many as a third expect that they will see a decrease in their standard of living during retirement.

It’s time to expand the retirement savings toolkit and look at additional options, with a focus on portfolio diversification.

national-institute-retirement-security — Millennials and Retirement: Already Falling Short. From the National Institute on Retirement Security.

Benefits of Portfolio Diversification

Many experts in the financial sector advocate for portfolio diversification as a means of boosting return on investment while also minimizing risk. “For a variety of reasons, people do not understand the value of having a broadly diversified portfolio,” said Barry Ritholtz. “Perhaps they think it shows a lack of corporate loyalty to their employer…But every worker who gets company stock also gets a salary from that same employer. That is a very intense concentration of financial risk. For those workers, diversifying their company stock into broad indexes is a prudent approach.”Furthermore, decentralized assets such as Bitcoin and gold, which are removed from the stock market or any particular currency, act as a hedge against inflation, as well as any political, social, or economic unrest. And according to research done by Ark Invest and Coinbase, Bitcoin is “the only asset that maintains consistently low correlations with every other asset,” making it a strong choice as an alternative asset in a diversified retirement portfolio.

How Bitcoin IRA Works

BitcoinIRA.com, the world’s first and largest cryptocurrency platform, allows customers to purchase Bitcoin and other cryptocurrencies for their retirement accounts and store them in a BitGo digital wallet, the leader in multi-signature encryption technology. In 2017 alone, the company processed over $300 million in investments. To learn more about how to diversify your retirement portfolio with Bitcoin or other cryptocurrencies, give one of our IRA specialists a call today at 877-936-7175.

Solar-Paneled Mining: The Future of Bitcoin?

Posted on June 26, 2018 | by [email protected]

In recent months, the crypto space has gone through a lot of interesting changes and defied expectations.

For starters, the regulatory sector and the decentralized technology sector, once viewed as at odds with each other, have been in fact been working together cooperatively to create a more compliant and transparent financial landscape. This has has been demonstrated by CFTC Chairman J. Cristopher Giancarlo’s “do no harm” approach towards regulating crypto, Nasdaq and Gemini’s SMARTS market surveillance technology partnership, among other announcements.

And, on a separate crypto news front, there’s another unlikely partnership between two sectors that appears to be thriving: the solar industry and the world of bitcoin mining.

William Shatner Works With Solar Alliance to tackle Crypto Mining Sustainability

Solar Alliance, a Canadian solar energy company, announced that it acquired a 165,000 square-foot warehouse in Illinois to build a solar paneled array and rent space to bitcoin miners.

“Blockchain technologies, and cryptocurrencies specifically, are at the cutting edge of a new distributed technology infrastructure,” said actor William Shatner, also a spokesperson for Solar Alliance. “Utilizing solar arrays to power [mining operations] makes social and economic sense.”

The World of Bitcoin Mining Today

New research into energy consumption reveals that, by the end of the year, cryptocurrency could account for 0.5 percent of the world’s energy demand, roughly the same amount consumed by Austria. For crypto enthusiasts concerned about climate change, the massive energy consumption behind Bitcoin mining has been a difficult concept to reconcile with. However, this recent news from Solar Alliance may indicate that Bitcoin mining, as we know it, will change.

“The acquisition of the Murphysboro warehouse facility and the Memorandum of Understanding (MOU) represent Solar Alliance’s strategic entry into tenanting and supplying low-cost power to the cryptocurrency mining sector,” said Chairman and CEO Jason Bak. “The demand from cryptocurrency mining operations for competitively priced power is immense and we are perfectly positioned to take advantage of that demand.”

A Maturing Crypto Landscape

While 2017 was the year that Bitcoin experienced unprecedented growth, 2018 is shaping up to be the year that the crypto space is officially growing up. While crypto used to be a largely unregulated space, 2018 has focused heavily on crypto compliance, between the SEC’s increased regulation of crypto trading platforms to companies like Chainalysis raising impressive funding to help Bitcoin-based businesses protect themselves against fraud.

In addition to increased regulation, 2018 has also marked a year devoted to deepening understanding around blockchain technology, from the NYCEDC announcing big plans to expand educational efforts in this sector to Facebook launching a new team dedicated to blockchain research.

In my opinion, the advancement in solar-paneled bitcoin mining is another example of progress and maturation in the crypto industry. Just as the regulatory sector is making an extensive effort to weed out the bad actors in the crypto world, solar-paneled mining is addressing the the industry’s inherent environmental concerns. It’s encouraging to see different organizations and sectors tackling crypto’s issues as it scales from an industry with growing pains into an industry all grown up, with an emphasis on being more compliant, transparent, and environmentally conscious than ever before.

Bitcoin and Ether are Not Securities

Posted on June 21, 2018 | by [email protected]

At Yahoo Finance’s All Market Summit: Crypto on June 14, U.S. Securities and Exchange Commission Director William Hinman announced that Bitcoin and Ether would not be considered securities. “Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers of sales of ether are not securities transactions,” Hinman said. “And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.”

In turn, innovators in the decentralized technology space are committed to working with regulators to promote a more compliant crypto landscape than ever before. Joe Lubin, co-founder of Ethereum and founder of ConsenSys, a major Ethereum application company, expressed gratitude for the SEC’s decision and said “Ether and other next generation consumer utility tokens will continue evolving the web towards networks that are more fair, secure, and evenly distributed.”

Ultimately, I believe that the SEC’s announcement is a big win for the crypto industry as a whole, as it helps resolve some of the regulatory uncertainty that many experts, such as Tom Lee, believe is contributing to market stagnation.

Many crypto enthusiasts, who were initially drawn to the formerly unregulated sector because of its decentralization and anonymity, feared that the increase in regulatory measures would infringe upon all they valued about crypto in the first place. But with time, it’s becoming clearer that the regulators and the decentralized technology sector in fact have a respectful, productive, and cooperative relationship, and are committed to working together to make the financial landscape more compliant than before. Let’s take a closer look.

CFTC “Do No Harm” Approach Set a Positive Precedent

Back in February of this year, Chairman of the CFTC J. Christopher Giancarlo set a precedent for a productive relationship between regulators and the decentralized technology sector when he advocated for a “do no harm” approach. “I believe that ‘do no harm’ is the right overarching approach for distributed ledger technology…With the proper balance of sound, regulatory oversight, and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity,” Giancarlo said.

While this balanced sentiment may have seemed unrealistic to skeptics in the crypto space when it was first announced, I believe there has been continual cooperation between regulators and many crypto-based businesses and decentralized technology companies ever since.

Gemini Launches Nasdaq’s Market Surveillance Technology

In April, Nasdaq and cryptocurrency exchange Gemini announced that Gemini would be leveraging Nasdaq’s SMARTS market surveillance technology to monitor its marketplace. “Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole,” said CEO of Gemini Tyler Winklevoss.

In fact, Nasdaq has proven to be just one of many financial institutions that has demonstrated interest in working alongside the crypto space.

BitcoinIRA.com Hires General Counsel and Senior Compliance Officer

BitcoinIRA.com, the world’s largest and most secure cryptocurrency IRA platform that allows customers to purchase Bitcoins and other cryptocurrencies, appointed by Maryann Bullion as its General Counsel and Senior Compliance Officer in March. “We are focused on providing unparalleled products for our clients that not only adhere to the most secure measures, but also uphold the most stringent compliance guidelines,” said Camilo Concha, BitcoinIRA.com CEO and co-founder.

“I strongly believe in the future of cryptocurrencies and blockchain technology and the opportunity it presents for investors within a retirement account,” said Bullion. “I am excited to work with the executive team to streamline the compliance framework and to provide the safest and most efficient products and processes for its customers.”

To learn more about how you can diversify your retirement portfolio with Bitcoin, Ethereum, and other cryptocurrencies, give BitcoinIRA.com a call today at 877-936-7175.

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SEC Denies SolidX for Bitcoin ETF Listing, Bitcoin Prices Unaffected

Posted on March 28, 2017 | by [email protected]

The second week of March witnessed heavy drama in terms of Bitcoin price, swaying fundamentals thanks to the pending approval of Winklevoss ETF. The SEC set the date of verdict on 10th March, before Bitcoin prices rallied anticipating the ETF approval. Nevertheless, Securities and Exchanges Commission decided to reject the proposal, causing a drop in prices and heavy market volatility. Last week of March has seen another Bitcoin ETF proposal being rejected but the markets remained unscathed due to this decision. SolidX was planning to launch their Bitcoin ETF(Electronic Traded Fund) on the New York Stock Exchange. Let’s look into the reasons SEC gave for the rejection of the proposed ETF:

Reasons for Rejection

With SEC ruling out the Winklevoss ETF, speculators were sure that since Bitcoin is relatively new and not well regulated, SEC would cite the same reason for rejecting SolidX’s ETF listing. This turned out to be true and as in the case of Winklevoss ETF, SEC listed the following reasons for rejecting Solidx’s claim:

“The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.”

What this means to Bitcoin

The main reason why SEC cited for the rejection was that Bitcoin markets are unregulated. With Bitcoin transfers being instant and decentralized, monitoring and regulating the Bitcoin markets is a herculean task. Very recently Node40 has launched software to monitor Bitcoin transactions and calculate the taxes for Bitcoin gains and losses. With good time, we can surely expect methods to regulate Bitcoin markets to effectively come up with a regulatory framework that is easy to operate. An ETF would surely take Bitcoin towards mainstream adoption on par with different investable asset classes. But by the SEC’s standards Bitcoin is not ready for an ETF yet as it would require a well-regulated ecosystem.

Price goes unaffected

After the much hyped Winklevoss ETF decision affected the Bitcoin markets, with a lot of wagering over the Bitcoin prices, people have chosen to ignore the effects of SolidX EFT decision. The Bitcoin market prices were steady and went up by $35 after the decision was made public. This shows the growing immunity Bitcoin has been amassing to mainstream cryptocurrency fundamentals. Such character has been displayed even while Chinese Exchanges decided to ban withdrawals which had a very acceptable impact on prices.

Post ETF rejection, Bitcoin price bounces back; Winklevoss brothers to remain persistent

Posted on March 13, 2017 | by [email protected]

Whenever Bitcoin has set out to breach the market highs from the start of 2017, negative fundamentals surface that stagger the price. It first happened with Chinese authorities looking into Bitcoin exchanges in January, when the market took the first run at the prices. Later when the Bitcoin was stuck sideways between $1000-$1,100, Chinese exchanges stopped withdrawals from the exchange, the prize crashed back to $900 and sprung back up again. Just when the market has consistently traded over $1,100 and was building up organically, the speculation regarding the Winklevoss ETF pushed the prices higher and the speculative volumes pulled out immediately once the ETF was rejected. Let’s dive deep into the dynamics of the ETF rejection and the after effects:

The bets that raged the market:

Market players were betting heavily on the possibility of the approval of the ETF as it would be the first of its kind in USA. With Needham’s report estimating a 25% chance of approval, people were even more interested in the wager. On the off chance that the ETF gets approved, it would attract good investments in the cryptocurrency and push the prices higher. The market was lined up for the chance as we see good amount of investments flowing into the currency and pushing it over the all-time high just before the judgement day.

SEC’s decision and reasons for rejection:

On Friday, March 10^th the Securities and Exchange Commission rejected the Bats BZX Exchange’s proposed rule change to list and trade Coin ETF. The SEC explained that the proposed rule change was disapproved because it was not consistent with “Section 6(b)(5) of the Exchange Act. The Act stipulates that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

This would mean in order to be consistent with the Exchange Act, the Batz BZX exchange should have surveillance sharing agreements with related markets for Bitcoin or its derivatives trading. Additionally the Bitcoin markets have to be regulated consistently for the ETF to qualify.

Winklevoss brothers will keep trying:

After having a rough day on Friday, Bitcoin did bounce back over the weekend by touching $1,243, a solid 18% increase post the ETF rejection. On a positive side, Winklevoss brothers have announced that they wouldn’t stop pursuing the ETF. They are hopeful that the SEC would come around to working with them in bringing the ETF to the market. They feel that the SEC’s oversight and regulation are critical to the health of the marketplace and hope that the commission would accommodate the ETF in a convenient manner. There are operational Bitcoin ETFs in Gibraltar and Europe that have been profitable for the profile of the currency. An ETF on American soil would tip the scales in the favor of mainstream adoption and give the boost the currency requires for healthy sustenance.

What is happening with the Winklevoss’s Bitcoin ETF?

Posted on October 28, 2016 | by [email protected]

Winklevoss brothers are successful American rowers and Internet entrepreneurs. After their networking site ConnectU, they went to become venture capitalists for digital currencies. They raised the seed funding for bitcoin payment processor ‘BitInstant’ and claim to own 1% of Bitcoin in existence. Right from the onset, the brothers have always regarded Bitcoin as an equivalent to Gold. They have made conscious attempts to level Bitcoin Trading grounds by launching features that are prevalent in general asset trading. One such attempt recently is the launch of an ETF that has been doing rounds. Let’s look into the details of how this journey progressed and how is the ETF being handled.

Launch of Gemini Exchange:

The twins launched Gemini Exchange with safety and legality as flagship selling points. It was the world’s first fully regulated exchange based out of New York operating throughout North America, Asia and Europe. The exchange was few of the first to receive BitLicencse from city of New York making it completely legal. It later expanded the operations to Asia and Europe making it a successful venture across the globe.

Launch of Daily Auctions:

In an attempt to level the playing ground for Bitcoin and get it closer to adoption, they have planned to launch Bitcoin Auctions. Beginning at 5pm ET every day, Gemini will begin accepting two-sided bids in BTC/USD for the next day’s auction. After 22 hours and 50 minutes of bidding, Gemini will begin publishing “indicative auction prices” every minute. This gives the bidders a chance to pull out their bids until 3:59pm ET, after which the final bid closes. The closing price is the price at which the greatest aggregate buy and sell demand meets.

This methodology is generally present in currency and commodities market to determine closing and bidding prices. This is a conscious effort to bring Bitcoin to mainstream adoption.

Launch of the ETF:

The Brothers had moved for the request to launch an ETF and list it on Nasdaq in 2013. After number of trials, the US Securities and Exchange Commission (SEC) has put the request for review. SEC is seeking additional public feedback as it weighs whether to approve the bid to launch the bitcoin ETF. The brothers have later moved to make amends their proposed ETF. They are now backing ‘State Street’ as administrator, according to a filing with the Securities and Exchange Commission. Gemini’s daily auction price at 4 p.m. EDT will be the price the NAV of the ETF. While investors are backing the ETF, how SEC would approve this game changing move is yet to be seen.

Why to Think Twice About Investing in Bitcoin ETFs

Posted on September 14, 2016 | by [email protected]

What are ETFs?

An ETF is a type of fund, traded on stock exchanges, that hold assets tracking the value of an index. Authorized participants, which are generally large financial institutions, buy and sell large creation units of the ETF to break up and distribute in smaller quantities. ETFs were created in 1993 as a tool for investors to track the value of market sectors, niches, and trading strategies.

Why ETFs? Why Bitcoin?

ETFs can help reduce costs, improve liquidity, strategize against capital gains taxes, diversify portfolios, and improve transparency for investors.

Financial professionals are racing to be first to market with an ETF for emerging market sectors. Bitcoin has grown to the point of receiving this attention. Leading the charge are the Winklevoss brothers, who introduced Bitcoin ETFs to the SEC in 2014. If readers are interested in the prospectus, it’s available on the SEC website.

Drawbacks of a Bitcoin ETF

Although the benefits of ETFs have contributed to their rising popularity, ETFs have drawbacks that can be exaggerated in their developmental stages. In 2011, Fidelity published a piece on the drawbacks of ETFs. Of those that Fidelity listed, buying high and selling low, management fee creep, and tracking error seem as though they could be particularly pronounced when evaluating a Bitcoin ETF.

Buying high and selling low describes the spread between bid and asking prices for ETFs. If this spread is
high, the cost of purchasing (or the benefit of selling) may not accurately reflect the value of the ETF. In an ETF with few transactions, it’s likely that the spread will be greater than in an ETF with regular, or practically constant transactions as the curve of people’s willingness to sell/buy will be smoother.

Management fee creep describes the administrative costs of ETFs. In a developing fund, the costs of marketing could be reflected in the management fees. Given the uncertainty and slow adoption of Bitcoin across traditional financial markets, marketing costs could be higher for a Bitcoin fund.

Tracking error describes the deviations in a fund’s investment performance from the index that it tracks. Given the volatility of Bitcoin, it could prove difficult to accurately align with the indexes of choice. This can be a cost to investors.

Broader Implications for Bitcoin

If the Winklevoss Bitcoin ETF is approved, it would signal faith in Bitcoin from the U.S. federal government. This faith could improve investor confidence and the value of Bitcoin itself. As a byproduct of a legitimizing a cryptocurrency investment vehicle, Bitcoin investment would likely be subject to a greater degree of scrutiny from the federal government and regulatory agencies. This could incentivize greater transparency for other methods of Bitcoin investment, improving access to the Bitcoin market.