Various financial institutions are looking for ways to make Bitcoin investing accessible to mainstream investors. That is difficult due to [the lack of] regulatory measures. Vontobel, a Swiss institution, introduced their Bitcoin tracker certificate in July of 2016. Let’s take look at what this product is all about and how it can affect the future value of Bitcoin.
Mainstream investors will not buy cryptocurrency from an exchange or a Bitcoin ATM. Instead, they will look for OTC trading opportunities, or even use dark pools to place large orders not linked to a public order book. The one downside to doing so is how investors are directly exposed to price volatility, which is something most people prefer to avoid for obvious reasons.
Several initiatives have been launched to introduce Bitcoin to mainstream investors through traditional investment vehicles. The Bitcoin ETFs are by far the best-known examples, although none of them have a good chance to succeed right now. The SEC will likely not approve an official Bitcoin ETF. There is a huge lack of regulation, and it will take months, if not years until that situation changes.
Vontobel, a Swiss company, has tried doing things a bit differently. In July of 2016, they became the first Swiss issuer to offer a tracker certificate on Bitcoin. Any investor who this Bitcoin’s future is bullish can participate in investing through a traditional financial vehicle. Vontobel’s Bitcoin certificate is publicly traded on the SIX Swiss Exchange. The world will need more offerings like these, as there is a lot of capital waiting to venture into cryptocurrency through traditional solutions.
The Vontobel certificate on Bitcoin is denominated in US Dollar and keeps track of the Bitcoin price in USD. Investors can purchase this investment certificate to invest in Bitcoin indirectly. Not being exposed to price volatility directly and still being able to reap all of the potential profits makes the Vontobel Bitcoin certificate an intriguing investment. Every certificate is valid for two full years, which means it is a longer term investment.
Given Bitcoin’s price surge throughout late 2016 and early 2017, the Vontobel Bitcoin certificate has helped Swiss investors profit nicely. Bitcoin’s momentum is far from over, and the price may even hit $5,000 in the next year or so. The prospects of the future Bitcoin price are looking good. This also means investment opportunities such as Vontobel’s Bitcoin certificate will become more appealing to mainstream traders and investors.
At the time of writing, the VONCERT on Bitcoin was valued at $2,677, which is around $120 above the actual Bitcoin market price. It is not uncommon for these traditional investments linked to Bitcoin to include a slight premium to the global market average. In all markets, investors have to pay a premium for the convenience.
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