XBT Provider, known for their Bitcoin-backed tracker on the Nasdaq Nordic exchange, is very optimistic about the future of Bitcoin and its price as adoption of blockchain technology will bring more validity and legitimacy to the concept of Bitcoin in due time.
XBT Provider Sees Blockchain Adoption as a Success
Whereas hardly anybody gave the concept of blockchain technology any credit a few years ago, major banks and other financial institutions are competing to roll out their private distributed ledgers these days. Some Bitcoin enthusiasts see this as a way to discredit the concept of the blockchain, whereas XBT Provider thinks it is quite the beneficial move for the Bitcoin price in the long run.
Paying attention to what XBT Provider is thinking might be a good idea as the company has seen its fair share of success in the financial world. Not only have they launched the world’s first Bitcoin-backed ETF on Nasdaq Nordic, but they are also planning to expand their services on a global scale in the coming months.
Merging Bitcoin and its underlying technology with traditional finance can be seen as a success formula, assuming the implementation is done the right way. XBT Provider’s two ETF’s — Bitcoin Tracker One and Bitcoin Tracker Euro — have both been received warmly by traders on the Nasdaq Nordic exchange.
Bringing Bitcoin and the blockchain to everyday consumers in the financial sector is one of the biggest hurdles to overcome. Trading Bitcoin-backed instruments provides more legitimacy to the concept of digital currency, as well as the distributed ledger technology used to power this innovation.
XBT Provider Marketing Manager Christoffer De Geer stated:
External factors might have helped as well. The Chinese stock market crash, the devaluation of the [Chinese] renminbi, the standoff between the E.U. and Tsipras in June. All these events have led to increased press coverage for Bitcoin focusing on critical advantages with Bitcoin compared to fiat currencies. We do not believe that the ongoing blockchain craze has done much good for the Bitcoin price yet, but we believe the that the private blockchain hype will translate to higher Bitcoin prices at a later stage.
Now that some of the world’s biggest banks and financial institutions are focusing their attention on incorporating blockchain technology as well, the future’s looking bright for Bitcoin and its price, according to XBT Provider. There seems to be an increasing demand for exchange-traded Bitcoin instruments, especially from investors who have lost money in the traditional financial sector over the past year.
Not All Trading Instruments Are Alike
While the demand for Bitcoin-backed trading tools may start to grow, XBT Provider wants to warn traders not all of these offerings are alike. In fact, some instruments will offer trading digital currency at a premium to the actual Bitcoin price, rather forcing investors to use exchange platforms, which may or may not provide enough liquidity.
Different takes on bringing Bitcoin to established trading platforms as some form of financial instruments will help drive the Bitcoin price in the next few years. XBT Provider predicts how the number of investments from various institutions in Bitcoin will only increase in 2016. Slowly but surely, asset managers around the world are becoming acquainted and comfortable with the thought of trading Bitcoin-backed instruments on traditional exchanges.
What are your thoughts on the predictions by XBT Provider? Let us know in the comments below!
Images courtesy of XBT Provider, Shutterstock, en.wikipedia.org