What makes Susquehanna International Group to invest quietly in Crypto assets?

There may be any number of views on cryptocurrency and the clamor on bitcoin, which is a leading coin in value table, among the financial institutions. However, Susquehanna International Group (SIG) is not worried about the pessimism expressed by either Warren Buffett or Jamie Dimon of JPMorgan. As a result, the company is making investments in the crypto assets quietly through its operations included other financial instruments too like stocks or exchange-traded funds or options. The company might obviously think that the virtual currency provides a wider allocation of their funds.

No Stranger

According to report, the company is already engaged in bitcoin trading. On top of this, the company disclosed that since 2015, it has a separate desk known as digital asset desk to take care of the operations of virtual currency. This apart, the desk is also credited for conducting millions of dollars of private deals of digital coins. The company appears to be in the advanced stage of its footprint in the space since it is planning to extend its virtual currency offerings to more than 500 clients around the world.

Earlier, there were reports that suggested that Barclays and Goldman Sachs Group were planning to provide cryptocurrency trading desk to their clients. However, it was subject to the sufficient interest from its customers. These two companies might have probably been waiting for the regulators to come out with their final regulations so that they could plan. That also suggested that there was no unanimity among the financial services provider on the question of launching trade desk for digital coins. That is primarily because only recently JPMorgan CEO, Jamie Dimon, advised traders to be “beware” of virtual currencies and bitcoin in particular.

Bitcoin was shunned once in the past, and the digital coin is shaking up every segment, be it trading institutions or regulators or banks or governments. Obviously, traders were lured by the surge in prices of bitcoin over a period of time. The virtual currency has witnessed 21,900 percent increase in value since 2015.

Though Goldman Sachs is planning to launch its own bitcoin trading desk, Susquehanna is already in the game. Therefore, the company is not worried about the new entrant since its trading desk is backed up with a lot more money. The early entrants stand to gain in the space that is gaining traction despite initial hiccups.

Speculative Vehicle

The volatility in the prices of bitcoin did attract traders and investors as they are hoping to make massive profits in the process. However, there are also supporters who are not keen on the move. That is because they consider the peer-to-peer payment model as a speculative vehicle.

Susquehanna head for cryptocurrencies, Bart Smith, said, “The firm believes that Bitcoin and other cryptocurrencies inspired by it are likely to have a wide array of uses, but for now, he said, Bitcoin’s best bet is to challenge gold as a scarce commodity that can be moved around more easily.” In any case, space is set to attract more players.…

Russian rating agency thinks that Digital Coin is to gain traction like money

Russian Analytic Credit Rating Agency (ARCA) has come out with its conclusion that the country is yet to see the traction of digital currency like that of money. That meant that digital coin could not be used as a means of payment. Naysayers of digital currency will cheer this news and the importance given to it currently. This could also come in handy for pessimists to point out the reality of the virtual currency even as the regulators are tightening their noose around the market.

Does Not Perform Fully

The Russian rating agency pointed out that the digital currency does not perform fully any of the functions of money currently. One of the primary reasons for its failure is the too high exchange rate volatility that is comparable with the food prices volatility. Therefore, the agency has concluded that it would be tough to enable the virtual currency to be as efficient as money for payment means, cointelegraph reported. However, this cannot be taken at the end of the road. That is because of the hopes that once the regulatory tightening process is over, there would be resetting of the market.

Another key factor brought by the report is the costs involved in the use of cryptocurrency. The agency is categorical that the usage of any virtual currency does not reduce the costs of the transaction in the economy. This was mainly due to its inefficiency in energy and the lack of economies of scale in the cybersecurity provision. Aside from these, the low speed of entries in the register also increases the cost of transactions. As a result, the value of any possible advantage in the intermediaries in settlements gets reduced.

The report also brought out another key factor of comparing digital coins with that of fiat currencies that has its own intrinsic value. As far as the cryptocurrency is concerned, its market value is established mainly on investors’ expectations to sell the virtual coins at a higher price in future. On factors to boost the digital coin usage, the report wanted “toughening of sanctions against the backdrop of growing foreign policy and external economic tensions.”

Interestingly, during a live question and answer with the public yesterday, the Russian President Vladimir Putin, spoke about the negative side of the virtual currency though ambiguously. However, he promised to see as to how cryptocurrency could be used to escape sanctions in the international financial activity. This is an obvious reference to the Western sanctions that are currently in place.

Unlike To Be Widespread

The rating agency expressed its doubt on the widespread use of digital currency in Russia. Its contention is that it involves high investment risks apart from the tough approach to regulation by the regulator and the lack of readiness among the companies to accept the virtual currency as payment means in return for the services and goods.…