Bitcoin has surpassed the all-time high this week and now has the undivided attention of investors around the world. With Winklevoss ETF coming up for approval next month, the price speculations are giving a good riff to the cryptocurrency. In the first version of this series of posts, I talked about two major ways to invest in Bitcoin, Long Term and Short Term through direct investments and algorithmic trading respectively. Now that we have considered two major ways to invest in Bitcoin directly, let’s look at a couple of indirect or alternate methods of investment.
Investing in Bitcoin Mining:
While Bitcoin market investments are all about speculation, investing in Bitcoin mining is bound to have assured returns. Though the returns would be small in comparison to what market might have on offer, it would be study and over a period of time, if well aggregated highly profitable. Investing in Bitcoin mining would be investing in the equipment and electricity that would be helping in validating the bitcoin transactions and reaping rewards.
When done in large scale, Bitcoin mining is indeed profitable and provides returns on a consistent basis. Investing in Bitcoin mining can be done by finding a reputable mining group and investing with them would be a good option to get sustained returns through Bitcoin mining.
Investing with Bitcoin based startups:
Well, what is more lucrative than investing in the applications of a disruptive technology that has the potential to change Fintech as we see it!! This is another form of indirect investment depends on the selection of a fertile start up that has the potential to transform existing legacy systems and revolutionize markets as we are seeing today. A vast variety of these startups include Bitcoin transfers, wallets, remittances, proxy credit and debit card payments and instant transfer startups. With more innovation Bitcoin is expected to find applications in advanced IoT involving bots and AI. A financial technology which complements the innovation the future holds.
With measured investments and adoption of bitcoin picking up, these startups would reap good business and you can become a stakeholder of a company that is minting good money. These are the indirect ways to invest in Bitcoin profitably. Follow this space for the next part that would cover about investment methods by directly investing in Bitcoin and also saving tax.
‘Borderless’, ‘Peer to Peer’ and ‘Low transactional charges’- prime attributes of Bitcoin that has made its adoption conceivable. Interestingly these are the factors that helped the cryptocurrency to find its place in Remittances Industry. The fact that transactions of high orders are executed within no time at very low transactional costs has caught the attention of many remittance providers. Banking on the same many cryptocurrency based remittance startups have popped up especially in Eastern part of the world. Let’s look into how Bitcoin is disrupting remittance industry:
Remittance Industry Overview:
A remittance is a transfer of money by a foreign worker to an individual in his or her home country. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers’ remittances are a significant part of international capital flows, especially with regard to labour-exporting countries. From the start of this decade India, China, Mexico and Philippines have been the top countries in terms of remittance inflows. Owing to this the remittance startup scenario in South East Asia and Mexico has improved significantly with a touch of cryptocurrencies.
Existing players in fiat currencies:
When it comes to cross border transfer of fiat currencies, there is a standard transaction fee which varies with different countries to carry out the transaction. Most notable companies in this space include Western Union, Money Gram, Ria, TransferWise and World Remit. These companies are pretty old and exist in more than 110 countries making Remittances easy with short processing hours. The volume of transfers of these companies is estimated to be around $750 million per month.
Upcoming Bitcoin based remittances startups:
To capture the remittances market, many Bitcoin startups have come into existence locally in these countries with varied services. FlexM, Fastacash, Sendah, Rebit, Bitspark and Toast are notable startups in South East Asia that have been actively facilitating Bitcoin remittances. Few of these startups also provide facilities of storage in the form of Gold tokens, precious metals and other assets. When it comes to Mexico, chunk of these remittances are estimated to come from US across the border. Bitso and Vogel are two mainstream Bitcoin exchanges in Mexico that offer wallet and merchant services in addition to Bitcoin Trading. They have reported a significant rise in Bitcoin transactions and cross border payments. How Mexican Government would react to the growing popularity of Bitcoin through remittances is to be seen.