No one seems to know what to do about bitcoin.
Since its genesis, regulators and courts around the world have struggled with whether to and how to regulate it. Depending on where you are in the United States, for instance, it either is or is not illegal to sell your bitcoin for cash without a state license. That’s because depending on where you are, bitcoin is either money or it isn’t, and selling bitcoin is either money transmission or it’s not.
And in some places, it may be, but no one has decided. So, you need a license to sell your bitcoin… unless you don’t.
As a first-generation member of the rapidly emerging crypto legal community, I have seen how regulatory inconsistencies increase the cost of innovation and drive businesses from jurisdictions that lack clear guidance or take a hostile view of the blockchain and virtual currency industry. Following the Third District Court of Appeal’s Florida v. Espinoza decision, Florida now does both.
As explained below, this is due to a widespread and fundamental misunderstanding of the very nature of bitcoin.
Espinoza says bitcoin is a payment instrument
The recent appellate opinion decided that selling bitcoin requires a Florida money service business license, overruling the trial court’s order that dismissed criminal charges against Mitchell Espinoza who was alleged to be operating an unlicensed money service business by selling bitcoin.
The trial court dismissed the charges, concluding that bitcoin was not a “payment instrument” under Florida law, and that selling bitcoin was not money transmission. The Third District disagreed with both of these conclusions, holding that bitcoin is a “payment instrument” because the Court had evidence that individuals were willing to accept bitcoin in exchange for goods and services.
The Court cited no technical authorities regarding the development, uses or structure of Bitcoin for non-financial purposes, but instead focused on the fact that Bitcoin could be used as a means to convey value.
The Court compared the language of Florida’s Money Transmitter Act (Ch. 560, Fla. Stat.) to that of the federal law and, based on its reading of the plain text of Florida’s law found that it did not expressly require that a third party be included in a transaction for that transaction to constitute money transmission.
Accordingly, the Court found, selling one’s own bitcoin constitutes “money transmission,” which requires a license, a written compliance protocol, and extensive record keeping. Not only is this decision at odds with the Federal view of what constitutes a money service business, it also contradicts guidance from the state regulator, Florida’s Office of Financial Regulation, which stated in a declaratory statement in re: Cryptobase that parties who buy and sell their own bitcoin do not need to obtain a money transmission license.
It also demonstrates a fundamental misunderstanding of what Bitcoin is and how it is developing into a robust network supporting a variety of use cases, including non-financial uses.
Bitcoin is not money. It does money
Bitcoin lacks several fundamental characteristics that we recognize as required for something to be “money.” It is not centrally backed or technically fungible. Despite this (and likely because the word “coin” appears in its name), it is often described as “digital money” or “digital gold.”
In actuality, Bitcoin is neither of these things. It is a worldwide global network of computers that allows participants to
authenticate data without first obtaining permission from a centralized authority. The first application of that network just happens to be something like money.
The global network is called Bitcoin with a capital “B” and the public ledger that records and validates data entries on the network is called the Bitcoin blockchain. Prior to Bitcoin, secure peer-to-peer electronic transactions of data were impossible because digital information is easy to copy; digital representations of value could be copied and spent twice. Bitcoin solves this issue by using cryptographic tools, in a game theory based system that incentivizes participants that invest computational energy to validate new data by paying a reward for this work.
That internal network reward mechanism is confusingly called bitcoin (with a lower-case “b.”) Without bitcoins to incentivize mining, Satoshi’s network could not work. First, because users who wish to add or change data tracked on Bitcoin’s blockchain need to pay fees in bitcoin, there is a cost to add new data and therefore the Bitcoin network is unlikely to be flooded with phony or low- value transactions (essentially preventing a denial of service type attack).
Second, because miners that invest their resources to validate changes to the blockchain must be trusted to act honestly, and not certify false data, the bitcoin reward provides a monetary incentive to participants to only accept valid transactions.
The Third District’s decision and what Florida should do about It
The Third District’s opinion focuses exclusively on bitcoin’s financial uses. However, their analysis ignores other uses of the Bitcoin network, including as a censorship-resistant publication network, a time-stamping tool, a document authenticator, a smart contract platform (using RSK Rootstock) with broad application across many industries, and the ability to facilitate forms of micro-communications (utilizing Bitcoin’s lightning network) that are not otherwise technologically possible.
Each of these non-financial uses requires a user to easily obtain bitcoin to participate in both the financial and non-financial activities facilitated by the Bitcoin network.
By ignoring the State’s existing policy of permitting individuals to sell their digital property without obtaining a money services business license, the Court has transformed Florida from one of the more innovation-friendly states for the blockchain and virtual currency industry into one of the least. By not recognizing the value and developing uses of the Bitcoin network, the Court essentially made it cost-preclusive to start a business that helps to grow or facilitate the still-developing uses of Bitcoin’s global decentralized network and created higher burdens for parties who wish to transact on the Bitcoin network.
The State’s desire to prevent unlawful behavior is well founded, but it should be overly cautious when endorsing overbroad or technologically restrictive policies. The Third District Court of Appeal’s decision is at odds with Florida’s Office of Financial Regulation and its proper understanding of the many aspects — both non-financial and financial — of the Bitcoin network. Fortunately, a new bill has been introduced before the Florida House that would form a working group to advise the State, among other things, of how to regulate bitcoin. However, a legislative solution may take months or years.
In the meantime, it is imperative that regulators and courts take the time to understand the Bitcoin network’s applications beyond its use as value so they do not let Florida fall behind.
Zhu Fa, co-founder of Poolin, a Chinese-based crypto mining pool, predicted that the Bitcoin (BTC) price could hit 5 million Chinese yuan ($738,000 (USD), crypto news outlet 8BTC reported on Feb.11.
While Zhu noted that “it now feels more like a bear market,” he reportedly predicted that in the next bull run, prices will be 10–20 times higher than previous ones. Zhu also noted that massive prices spikes like the one that resulted in the $20,000 per BTC high in 2017, will not always exist, adding that the next bull run could be the last.
Predictions from experts in various aspects of the crypto space have ranged from bullish to extremely bearish. During a blockchain event in April 2018, investment tycoon Tim Draper forecasted that by 2022 the price of Bitcoin could reach $250,000.
Earlier this week, Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments, said that the value of most digital tokens “will go to zero." He added that, "Almost every [initial coin offering] ICO was just an attempt to raise money but there was no use for the underlying token."
Zhu’s mining pool, Poolin, has 10.45 percent of global network share, according to BTC.com. The current bear market has hit cryptocurrency miners hard. Some mining companies in China have started selling off hardware by the kilogram.
Earlier today, United Kingdom-based cryptocurrency miner Argo Blockchain announced it was refocusing its business in order to cut costs. Argo is terminating its Mining-as-a-Service (MaaS) operations by April, which purportedly could cut costs by as much as 35 percent.
Bitcoin To Enter Its ‘Third Act’
In spite of Friday’s surge, the lethargic crawl of the Bitcoin price has continued. While the 8% rally seen not 72 hours ago was welcomed, the cryptocurrency remains in ‘no man’s land’, as no there are still evident lines of support and resistance putting a vise around BTC. Yet, in a recent podcast, a leading crypto ‘OG’ claims that eventually, the flagship digital asset will begin to run, and to new, jaw-dropping all-time highs at that.
Speaking to Mark Pesce’s “The Next Billion Seconds” just weeks ago, Mark Jeffrey, a cryptocurrency pioneer that authored 2013’s “Bitcoin Explained Simply,” expressed optimism towards this nascent space, currently embroiled in the midst of a so-called “nuclear winter.”
Jeffrey remarked that cryptocurrencies are much like the early Dotcom industry, echoing remarks made by a number of analysts, such as Meltem Demirors. Yet, he noted that this budding space is compressed time-wise in comparison to Dotcom, explaining that development in this space is four to five times faster than Internet-enabled digital technologies. Thus, crashes and rallies are only accentuated and amplified.
This aside, he remarked that this isn’t the end of the story for Bitcoin and other cryptocurrencies, adding that the current market conditions are just a byproduct of market cycles. In fact, he noted that the “third act” of this story, which he likened to Star Wars: The Return Of The Jedi is just around the corner. Jeffrey explained:
The third act is coming. And if it’s anything like the Dotcom boom and bust, we saw a little hump, then a dead period, and then an actual value ascension with Amazon, Google, Facebook, and LinkedIn and on. I think we’re going to see that same thing with cryptocurrencies.
And with all this in mind, he doubled-down on his price prediction that Bitcoin could eventually foray out of its quintuple-digit cell to finding a home at $250,000. Jeffrey was hesitant to give an explicit timeline, but, considering his aforementioned comments about the time compression in the cryptosphere, such a figure has the potential to be achieved in a few years’ time.
Jeffrey isn’t the only analysts making calls in this range. Speaking to CoinTelegraph, Tim Draper, a legendary venture capitalist based in the heart of Silicon Valley, explained that he believes that $250,000 for each BTC is possible… eventually.
Draper, who parents a crypto-friendly venture capitalist, explained that Bitcoin’s recent move lower could just be a byproduct of market cycles, potentially accentuated by external bearish pressures. Draper then noted that in any business, a disruptor — Bitcoin in finance’s case — often moves with immense volatility, even if the innovation holds immense value for the health of society.
Regardless, the staunch cryptocurrency optimist remarked that over time, U.S. dollars and other fiat currencies will depreciate rapidly, creating an environment that could see BTC gain notable levels of traction. Echoing comments made by Travis Kling, Draper even explained that cryptocurrencies aren’t tied to a central bank, which by extension, includes the whims of inflation and the flaws in human nature.
Yet, some have been even more optimistic. Through the use of a compilation of the Internet’s historical growth cycles, Bitcoin’s adoption curve, among other fundamentals factors and points of in-depth analysis, Filb Filb noted that $333,000 for each BTC could make sense eventually.
By CCN.com: In the last 48 hours, despite the withdrawal of the Chicago Board Options Exchange (CBOE) and VanEck Bitcoin exchange-traded fund (ETF), the Bitcoin price has increased from $3,511 to $3,657 by nearly two percent.
Although the lack of a major price movement following a highly anticipated event like the VanEck ETF withdrawal demonstrated a low level of trading activity in the global crypto market, traders expect the volatility in Bitcoin markets to increase in the upcoming weeks.
View image on Twitter
Will More Volatility be Beneficial to Bitcoin?
Since January 11, for more than two weeks, the Bitcoin price has remained stable in a low and tight price range between $3,500 to $4,000, unable to break out of key resistance levels nor fall below crucial support levels.
Currently, there are strong cases to be made for both bears and bulls in the cryptocurrency market. The consistent lower highs Bitcoin has recorded over the past several weeks show low momentum for the dominant cryptocurrency.
As one technical analyst put it:
15-day consolidation continues. Lower highs and equal lows do not inspire confidence for bulls. Gaps shown in the crosshairs are where I expect price to eventually move when a decisive move occurs below or above the red/green boxes. Volatility incoming.
Given the tendency of the Bitcoin price to demonstrate volatility following a period of extended stability, traders generally see the price of BTC experiencing wild price movements in the first half of February. But, it remains uncertain whether Bitcoin will be able to initiate a meaningful upside movement above key resistance levels like $4,000.
A prominent cryptocurrency trader with an online alias “Crypto Rand” stated that as of now, most technical and fundamental indicators of Bitcoin point toward a bearish short-term outlook.
However, depending on the performance of the asset by the week’s end, the trader emphasized that the asset may begin demonstrating a slightly bullish bias in the short-term.
“If BTC keeps moving in the horizontal range, it will find the falling wedge resistance in the next hours and there, we will see if we have a breakout or a drop down. If the 4-hour candles close with the current structure, I would lean slightly bullish in the short-term. But, we cannot forget that we are still on a full downtrend of volume and the daily structure remains bearish,” the trader explained.
Don’t Expect Bitcoin to Escape Bear Market Anytime Soon
Historically, following every major correction or a bear market, Bitcoin has tended to take a longer time to recover and achieve a new all-time high.
The 2017 bull run of crypto was primarily fueled by retail traders and individual investors, supported by an unprecedented amount of mainstream media coverage and demand for the asset class.
View image on Twitter
As large as the bull market was two years ago, investors including Vinny Lingham have suggested that the cryptocurrency market could require an extended recovery period to potential rebound to previous all-time high levels.
Earlier this week, Ethereum (ETH) co-creator and Cardano (ADA) founder Charles Hoskinson stated that the cryptocurrency market may take 11 years to fully recover and that both investors and businesses have to be ready for it.
At the Crypto Finance Conference, Hoskinson said:
It might take 11 years for us [the crypto industry] to recover back to where we were in 2017, but we will be a dramatically different ecosystem at that point. We’ll have millions, perhaps even billions of users. We will be in many consumer products, be easy to use, [even] grandma can use it. A lot of the hard stuff will have been figured out. Like if somebody dies, how do we get their private keys, how do we handle taxes, all of the regulation will be done.
While the expectations of the long-term performance of Bitcoin and major crypto assets vary, in the short-term, many investors expect Bitcoin to experience a high level of volatility.
Galaxy, a popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, drawing a striking parallel between the two markets.
“We’re approaching the…mark which ended the 2015 bear market and if history repeats itself, we’re moving towards several months of accumulation and a new bull cycle starting mid-late 2019,” he noted while referencing a chart that shows the 2014 bear market which lasted until 2015,” Galaxy told his followers, also noting that the “future lies in the study of the past.”
If this theory turns out to be even remotely accurate, Bitcoin could see a long bout of sideways trading before skyrocketing back towards, or possibly above, its previously established all-time-highs.
he past year has been long and difficult for everyone involved in the cryptocurrency industry, and the markets are now reaching a point that will mark the longest ever Bitcoin (BTC) price correction in the cryptocurrency’s wild, albeit brief, history.
For investors who have been riding the markets ever since Bitcoin hit nearly $20,000 in late-2017, they will soon be able to say that they survived the longest-ever crypto market correction, which may someday be seen as a badge of honor that separates the true believers in the technology from the speculators.
Bitcoin (BTC) To Break Correction Record in Early February
Currently, the longest ever crypto bear market was seen between November of 2013 and January of 2015, where Bitcoin’s price climbed to highs of over $1,100 before crashing to lows of $178.
Although this nearly 85% drop was significant, it’s no secret that Bitcoin quickly recovered from this and surged almost continually until December of 2017 when BTC reached highs of over $19,000.
The aforementioned drop between late-2013 and early-2015 lasted a total of approximately 410 days before Bitcoin finally established a long-term bottom and began to recover much of its losses. The current BTC bear market is just a matter of days away from becoming the longest in its history.
Josh Rager, a popular cryptocurrency analyst on Twitter, spoke about the current length of the bear market as compared to that which began in 2013, saying:
“$BTC correction record: On Feb 2nd, we are likely to break the record for longest Bitcoin correction: 410 days (from Nov 2013 to lowest price at Jan 2015)… Very soon, you will be able to say that you survived the longest crypto market correction in $BTC history.”
Bitcoin is currently trading sideways, which is leading the crypto markets to experience a mixed trading session following yesterday’s volatility. Ethereum is currently one of the worst performing altcoins as it has failed to post a strong recovery following yesterday’s drop that was caused by its highly-anticipated Constantinople hard fork being delayed.
Although the crypto markets are trading off of their recent lows, analysts still expect there to be further losses in the near future.
Bitcoin Drops Slightly
Bitcoin has dropped slightly today, and technical analysis may signal that further losses are right around the corner.
At the time of writing, Bitcoin is trading down less than 1% at its current price of $3,650. Yesterday, Bitcoin fell into the low $3,600 region, but did not drop into the $3,500 region where some buying support exists.
While speaking to MarketWatch, Jani Ziedens of the Cracked Market blog noted that the lack of a significant bounce in the mid-$3,000s signals that Bitcoin is not currently oversold, which means it could see lower lows before moving higher.
“Bitcoin continues to struggle and is in the mid-$3k’s. If prices were oversold, we would have bounced by now. This lethargic base tells us that demand is still incredibly weak and this selloff still hasn’t found a bottom,” he noted.
DonAlt, a popular cryptocurrency analyst on Twitter, echoed a similar sentiment to Ziedens, saying that he is not looking to trade Bitcoin within its current range, which is between approximately $3,300 and $4,400 according to a chart he references.
“$BTC not so daily update: Chilling in the lower part of the current trading range after having put in a few consecutive lower highs… As long as we stay below the POC I’ll most likely stay hedged… I’m personally not interested in trading this trading range,” he explained.
Crypto Market Drop Led by Ethereum
Ethereum is currently the worst performing altcoin today, as it failed to post a strong recovery after yesterday’s announcement that its highly anticipated Constantinople hard fork event had been delayed due to a security vulnerability that was discovered.
At the time of writing, Ethereum is trading down 2.3% at its current price of $124.73. Although Ethereum has not yet posted any major recovery from yesterday’s drop, it is still trading up from its 24-hour lows of $120.
Earlier today, Ethereum rose to highs of $127, but it failed to maintain its upwards momentum and has since settled back down towards its current price levels.
Today, XRP is trading up marginally at its current price of $0.331. Yesterday, XRP fell to lows of $0.324, from which it has recovered slightly. XRP is still currently down from its daily highs of $0.335.
EOS has risen slightly today and is currently trading up just under 2% at its current price of $2.46. EOS is up from its 24-hour lows of $2.38, which were set earlier this morning amidst a widespread market drop that most altcoins have since recovered from.
On January 13, the crypto market initiated an intense sell-off as the Bitcoin price fell below the $3,500 mark.
The weakness in the short-term price trend of BTC led the market to demonstrate volatility on the downside. More than $5 billion was wiped out of the crypto market and major assets like Ethereum recorded a six percent drop.
Where is Bitcoin Headed?
Generally, both analysts and traders expect Bitcoin to fall to the low $3,000 region in the days to come. Some have suggested that a strong buy wall below the $3,000 mark may allow the dominant cryptocurrency to recover, implying that a 10 percent fall remains a possibility.
Bitcoin Price Could Fall Toward $3,000
In the short-term, Cred, a cryptocurrency technical analyst, said that BTC could test the $3,430 support level first. Depending on the movement of the asset at $3,430, the asset could initiate a corrective rally or continue a steep drop to low $3,000.
“I am interested in the $3,430 level. It’s the HTF (M1/W1/D1) low that price blew through without a retest,” the analyst said.
Hsaka, a cryptocurrency trader, echoed the sentiment of Cred, adding:
“$3,430 is the next level of interest for me on the daily. Won’t be blindly punting a long there, but will watch for PA to develop on the LTFs.”
Will Growing Trading Volume Buttress Market?
In the last 12 hours, the daily volume of the cryptocurrency market has recovered from around $13 billion to $16 billion, by 23 percent.
The volume of Bitcoin has increased from $4 billion to $5.1 billion, demonstrating a fairly large jump in trading activity in a short period of time. The resistance in the $3,400 to $3,500 range may prevent an abrupt fall by a large margin in the upcoming days.
On January 13, when the volume of Bitcoin was hovering at just over $4 billion, analysts expressed concerns in regard to the lack of sell pressure on the market.
Often, if the price of an asset falls substantially on the day, the volume spikes as sell orders are filed across major exchanges. However, on Sunday, Bitcoin recorded a three percent drop with low volume, essentially free falling without high sell-pressure.
The growing volume of the cryptocurrency market could alleviate some of the pressure major crypto assets have faced on the day.
Crypto Forecast Still Gloomy
While cryptocurrencies are not likely to experience a large downward movement in the next 24 to 48 hours, the market still remains gloomy.
As Bitcoin failed to break out of $3,600, Hsaka said that previous lows are likely to be retested, in the $3,400 region.
“Clear rejection on LTFs. Confluent with a HTF S/R flip. Retest of the previous low (white level) seems likely to me,” the trader said.
Most of the worst performing cryptocurrencies in the past 24 hours have been tokens and low market cap cryptocurrencies, and small digital assets are expected to perform poorly in the short-term.
Cryptocurrencies had a wild 2018, tumbling well below some of the record highs seen toward the end of 2017.
Bitcoin, once worth almost $20,000, plunged last year, closing out 2018 at a price below $4,000. Other major virtual currencies, including XRP and ether, also fell steeply.
Analysts and executives in the industry are increasingly pointing to a fairly new development that could reinvigorate the space: putting securities like stocks and bonds on the blockchain.
So-called security tokens are becoming a new buzzword in crypto. The term is part of a phenomenon in the industry known as "tokenization" — turning real-world assets into digital tokens.
In the case of security tokens, tradable assets like equity and fixed income are transformed into digital assets that use blockchain technology, the virtual ledger of activity that underpins cryptocurrencies like bitcoin.
Security tokens had been talked about for some time, but now one firm is looking to put them to the test.
On Monday, DX.Exchange, an Estonia-based crypto firm, launched a trading platform that lets investors buy shares of popular Nasdaq-listed companies, including Apple, Tesla, Facebook and Netflix, indirectly through security tokens.
Each token is backed by one share of the company traders want to invest in and entitles them to the same cash dividends.
"The crypto community has been talking about security tokens for well over a year now without much progress, so we think the impact will be huge," Amedeo Moscato, DX's chief operating officer, told CNBC by email over the weekend.
"By tokenizing stocks of some of the biggest publicly-traded companies like Google, Amazon, Facebook and more, we are opening an untapped market of millions of old and new traders around the globe cutting out the middleman."
Investors will be able to trade the digital stocks round-the-clock, even after markets close, DX says.
"The ability to trade around the clock, with a range of currencies, offers investors both convenience and liquidity," Dan Doney, co-founder and chief executive of fintech firm Securrency told CNBC by email over the weekend.
But Doney questioned whether DX's exchange was sound on the regulatory front.
"We're unsure and even skeptical of DX.Exchange's model because we don't think that it's acceptable to list tokenized shares of a company without shareholder consent," he said.
"However, we do think that the model can meet regulatory standards if executed properly."
DX stressed that its digital stocks are classed as derivatives — with the underlying asset being equity of 10 Nasdaq-listed firms — and that its platform is regulated under the European Union's Mifid II directive. Mifid II, a set of reforms to EU investment services regulation, aims to protect investors and increase transparency and confidence in the industry post-crisis.
Cyprus-licensed firm MPS MarketPlace Securities is holding the stocks in a segregated account. DX built the platform on top of Nasdaq's Matching Engine technology, which is used across more than 70 international markets.
Experts are pointing to the model as one that could provide a solid form of investment for traders — versus cryptocurrencies like bitcoin, which have proven at times to be highly volatile — as well as a new potential source of fundraising for start-ups and large firms alike.
New security tokens can be issued and sold to investors, similar to how new digital tokens are sold through a crowdfunding method known as an initial coin offering (ICO). This is what's known as a security token offering (STO).
ICOs were a source of much controversy in the crypto sphere in both 2017 and 2018, with China and South Korea banning the practice and the U.S. Securities and Exchange Commission rapping a number of ventures and founders over alleged illegal activities.
One supposed cryptocurrency start-up called Giza made off with more than $2 million through a fake ICO scam, a CNBC investigation last year showed.
Dubious as the murky world of ICOs is, the funding method at one point eclipsed early-stage venture capital funding. ICO projects raked in almost $6.6 billion in 2017 and $21.5 billion in 2018, according to data provided by ICO listing site CoinSchedule.
The difference with STOs, experts say, is that security tokens are asset-backed and fall within regulatory parameters.
"Security tokens use blockchain to allow for efficient transactions like cryptocurrencies, but are different in all other ways," Securrency's Doney said.
"(They) emphasize regulatory compliance, automated regulatory reporting, and represent share interest in value-producing assets. This ultimately provides stable value versus the volatility of crypto."
Crowdfunding site Indiegogo delved into the world of STOs last year, hosting a platform that let investors indirectly own shares of a luxury ski resort by buying security tokens. That token sale brought in $18 million, according to VentureBeat.
Security tokens and STOs have been compared to "stablecoins," cryptocurrencies pegged 1:1 to government-backed currencies to avoid the volatility typically seen in the cryptocurrency market. Stablecoins are seen as another potential area for growth in the crypto industry.
Goldman Sachs-backed fintech start-up Circle launched a stablecoin pegged to the U.S. dollar last year, and Chief Executive Jeremy Allaire has told CNBC he thinks "all fiat currency will be crypto" one day.
"Cryptocurrencies and STOs will continue to evolve, and digital stocks are another step in that process," Daniel Skowronski, DX's chief executive, told CNBC by email.
STOs to 'ramp into the market' by mid-2019
Advocates also say that security tokens could reduce the cost of listing a company on the stock market and that they will make it easier to trade less liquid assets like private equity.
And though it may be early days, one expert thinks the trend of tokenizing securities will become a major theme by mid-2019.
"In terms of timing, we hear that mid-2019 is the time-frame when most STOs will be able to ramp into the market," Lex Soklin, partner and global director of fintech strategy at Autonomous Research, told CNBC by email.
"Given a longer regulatory approval process for these assets (rather than none for ICOs), entrepreneurs have a slower path to market. But perhaps a more stable one."
Some even believe that, eventually, everything from artwork to real estate will be transformed into digital tokens.
"Over the next decade, we could very well see the tokenization of the entire financial markets," Mati Greenspan, senior market analyst at eToro, said in a note last week.
"Essentially, anything that has value and can be traded can also be represented as a digital token and traded on a blockchain."
CoinfloorEX, a unit of the United Kingdom cryptocurrency exchange Coinfloor, has been reorganized to offer trading of physical Bitcoin futures on the Asian market. The CEO of the company has revealed this in an interview with Bloomberg on Monday, Jan. 7.
The rebranded CoinFLEX — short for Coin Futures and Lending Exchange — is reportedly owned by a consortium that includes Roger Ver, an early Bitcoin (BTC) entrepreneur and the supporter of the most recent controversial Bitcoin Cash (BCH) hard fork.
The consortium behind CoinFLEX also includes another early BTC investor Mike Komaransky, United States investment banking firm Dragonfly Capital, a parent company of U.K. crypto platform CoinShares and others.
According to Bloomberg, the new venture will be based in Hong Kong and headed by Mark Lamb, Coinfloor’s co-founder. It will offer Bitcoin, Bitcoin Cash and Ethereum futures contracts to retail investors based in Asia starting in February.
In the interview with Bloomberg, Lamb said that all of the company’s futures will be physically delivered. As soon as a contract expires, the customers will be given the underlying cryptocurrency instead of a cash payment. Bloomberg highlights this as an important distinction in the “largely unregulated crypto markets.”
In August 2018, the operator of the New York Stock Exchange (NYSE), the Intercontinental Exchange (ICE) announced the launch of Bakkt, it’s own platform for Bitcoin futures contracts trading.
The company has recently closed its first funding round, raising $182.5 million from 12 partners and investors, and is expected to launch its platform in early 2019, as soon as it gets approval from the U.S. Commodity Futures Trading Commission (CFTC).
In October 2018, reports emerged that Coinfloor has laid off the majority of its approximately 40 employees as part of an ongoing business restructuring. The exchange’s CEO Obi Nwosu then commented that the company was going through some "staff changes and redundancies."