Despite the dramatic plunge it has experienced since late 2013, the peer-to-peer decentralized digital currency bitcoin is still attracting big money from major players on Wall Street and in the overall financial markets, says the Wall Street Journal.
Who are some of these investors? Well, Citadel Securities, KCG Holdings and Wedbush Securities, just to name a few. These companies, for instance, offered bids to purchase shares of the Bitcoin Investment Trust (BIT), a fund in which bitcoin is held in trust where accredited investors can acquire shares.
The digital currency, which was launched in 2009, has garnered a cult-like following from the technology-savvy crowd, but most consumers have been wary because of its volatility and paucity of security. However, since Wall Street is still embracing bitcoin, experts say it could help further legitimize the virtual currency and improve its seepage into the rest of the economy.
Nevertheless, there are some concerns over the BIT. For instance, the fund charges two percent each year for administration and safeguarding, which is more than what most exchange-traded funds (ETFs) charge investors. Moreover, some experts say BIT investors could very well fork over five percent more for shares than if they simply purchased bitcoin on an exchange.
“People who read tabloids deserved to get lied to, and that’s how I feel about someone buying a bitcoin ETF,” Eric Mustin, vice president of ETF Trading Solutions at WallachBeth Capital, told CNBC. “If you’re confident in this currency that you want to buy it, but you can’t take the 30 seconds to set up a wallet, which is incredibly easy, then you deserve to pay the 5 percent or whatever. I’m not cynical about bitcoin, but I just think it’s a goofy way to trade it.”
This report comes as Buttercoin, a bitcoin exchange startup supported by Google Ventures and Y Combinator, announced that it is shutting down its doors at the end of the month. “With the dip in bitcoin interest among Silicon Valley investors, we weren’t able to generate enough venture capital interest to continue funding Buttercoin,” Buttercoin founder and CEO Cedric Dahl told CoinDesk.
Meanwhile, Bitpay confirmed that it’s laying off nine employees and that it would not be sponsoring the Bitpay Bowl.
At the time of this writing, bitcoin is trading at around the $250 mark.
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