Started: Nov 16, 2017

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ASX jumps on board the blockchain train

Dec-13-2017 06:54:56 AM

It’s not just Bitcoin making waves with its phenomenal price surges and futures contracts. Blockchain, which is actually the underlying technology for Bitcoin and other cryptocurrencies, has taken another step on its road to global adoption.

Australian Securities Exchange (ASX), the country’s main stock exchange, announced on Thursday that they will be using blockchain technology to process equity transactions.

This is a groundbreaking move, a sentiment echoed by ASX deputy chief executive, Peter Hiom:

“We're the first exchange to consider taking this step.”

Blockchain has become one of the major buzz words in range of industries, not just in crypto. This distributed ledger offers users a secure and cost-effective way to store records and transactions. These records cannot be changed or deleted.

Because of this, it is seen as a great tool for banks and financial institutions. However, it can be used in many different industries.

In the case of ASX, Digital Asset Holdings will provide the technology. The latter is a start-up run by Blythe Masters, a banker who previously worked for JPMorgan Chase & Co.

ASX has invested at least $14.9 million in the start-up. With additional investments from CME and JPMorgan, Digital Asset Holdings has raised more than $152 million.

As blockchain’s potential becomes more widely recognized, companies will have to investigate if it is a viable option for them in order to stay ahead in the game.

Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors, had this to say on the latest adoption of this technology:

“It surprises me that ASX is doing it ahead of other big exchanges.” He added that, “when the technology becomes available, you have to embrace it.”

ASX had previous plans to upgrade their existing Clearing House Electronic Subregister System, known as Chess, which they have been using since the 1990s. However, according to Hiom, blockchain would be able to offer lower costs to clients and would allow for the launch of innovative services from the real-time post-trade data.

This new blockchain-based system would offer no access barriers to non-affiliated market operators and clearing and settlement facilities.

Even though this is something completely new for ASX, switching to blockchain won’t break their budget.

“The costs in rolling out this system I don't think are too dissimilar to us having rolled out a traditional system,” said ASX chief executive, Dominic Stevens.

Masters shared her excitement for the partnership:

“After so much hype surrounding distributed ledger technology, today's announcement delivers the first meaningful proof that the technology can live up to its potential.”

No launch date has been provided for this new venture, but it could be as soon as March next year.

$40k may be on the horizon for next year, but Bitcoin investors still need to act with caution

Dec-6-2017 12:27:55 PM

Crypto enthusiasts couldn’t contain their excitement when their favorite virtual currency reached, and passed, the $10k mark. This is just another record-breaking highlight in Bitcoin’s phenomenal year, which saw the price of the currency increase by over 900%.

From it’s humble beginnings at just $1k at the start of 2017, it continues to grow, even exceeding the $11k mark at times. This level of growth is a temptation that investors around the world cannot ignore. Google Trend shows that the term ‘buy bitcoin with credit card’ has become increasingly popular on the search engine. In fact, on an interest scale of 1 to 100, the term is nearing the end mark.

On the 26th of November, as Bitcoin was within touching distance of $10k, popular trading platform Coinbase, had a total of 13.3 million users. Just two months ago, they had 10.6 million.

Bitcoin fans are optimistic that this is only the beginning. Hedge fund superstar, Mike Novogratz, firmly believes that the currency will reach $40k at the end of next year.

“Bitcoin could be at $40,000 at the end of 2018,” he said to CNBC.

However, don’t put all of your money in one Bitcoin basket just yet. Novogratz went on to say that smaller investors should put between 1% and 3% into the currency, while high net worth investors can go as high as between 5% and 10%.

Even though these investors are eager, willing and ready, they could be in for a bit of a letdown according to Hesham Rehman, CEO and Co-Founder at Bitxoxo.

Rehman believes that even with this growth, there won’t be a massive return in the short-term future.

Co-founder of Zebpay, Sandeep Goenka, also had some words of caution.

“We advise investors to invest in Bitcoin in a systematic manner,” he said.

Crypto cynics are on the flip side of the virtual coin, offering their usual bubble arguments. They’re saying that that it could be even bigger than the dotcom bubble of the 1990s.

Even though Bitcoin has gained some support in the financial industry thanks to CME and Nasdaq, banking institutions are still not convinced.

“I would simply not recommend this to the everyday investor,” Reuters quoted Ulrich Stephan, chief strategist at Deutsche Bank, which is Germany’s largest lender, as saying.

However you may choose to view cryptocurrencies in general, they cannot be ignored. Bitcoin in particular has managed to exceed expectations, and seems set to continue to do so.