DX.Exchange, a community-based exchange has now made it possible to trade stocks such as Tesla, Apple, Facebook among others via tokenization using ERC20 tokens on the Ethereum network. The exchange announced that these services will be launched on January 7, 2019, and this will be the first time securities can be purchased with Bitcoin [BTC] and other cryptocurrencies.
This will test the virtual stock market among the users that were previously unequipped to buy the US-based stocks and also test these new waters. Another upside to the tokenization of stocks is that users can trade these stocks even after the actual markets close, and also buy portions of stocks, which was previously not possible.
The exchange’s CEO, Daniel Skowronski, said:
“We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”
Moreover, MPS Market Place will hold these stocks in a 1:1 peg against these physical assets, which is similar to the functionality of stablecoins, but they use stocks instead of fiat money as a peg.
The exchange has offices in Estonia and Israel and claims that it is fully regulated by the Estonian Financial Intelligence Unit and that they have full authorization to operate in the European Union. In addition, the exchange is said to be Nasdaq’s Matching Engine technology as reported by Bloomberg.
The exchange also confirmed on Twitter that DigiByte [DGB] will be a cryptocurrency that can be used to purchase the above-mentioned stocks. The exchange has to confirm if other cryptocurrencies such as XRP and BTC can be used.
Stephen Palley, a well-known person in the crypto-community and a lawyer, tweeted about the exchange saying:
“Yeah, I’m going to send money to an Estonian and Cypriot regulated exchange and get ERC-20 tokens that represent stocks but are not stocks and sure they’re not CFDs also do you sell guppies sounds tots legit what could go wrong”
In a subsequent tweet, he stated:
“Look, even if it is totally legit — hey it might be, what do I know — good luck getting your disputes resolved in Estonia if you’re, y’know, not in Estonia.”
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Bitcoin: Would you rather HODL Bitcoin or trade? ex-CTO of Coinbase opines on investing in cryptos
With the inception of Bitcoin and the advent of altcoins, there has never been a good chance to make quick money by simply investing. The last time such an opportunity was seen during the DotCom bubble. However, scams are also a part of this opportunity which became more than evident during the ICO frenzy of 2017.
Millions, if not billions were lost to the ICO scams, which caused the regulatory bodies like SEC, CFTC, and others to step in to protect investors. As the space matured over time, so did the actual number of projects in the ecosystem; there are more than 3000 cryptocurrencies with different and implied use-cases, which is confusing to most of people in the crypto industry and to the people outside of this space as well.
The ex-CTO of Coinbase, Balaji Srinivasan tweeted in support of the above; how an investor who is not familiar with the crypto space should go about investing. Srinivasan said that there were a few people who can be profitable and can beat the market, however, he added that “buying BTC in crypto” was like “buying vanguard in traditional equities”.
Investing in traditional assets or Bitcoin, for people who are inexperienced should be a longterm investment, hence the best thing to do with Bitcoin is to stack and/or HODL.
The DotCom bubble pushed the innovation to its maximum which led to the birth of massive companies like Google, Amazon, Uber, etc. The same can be said for Bitcoin, which led to the development of Ethereum [ETH], which is the second largest cryptocurrency in terms of market cap. However, Ethereum brought smart contracts to the world, which has further led to the development of dApps and other use-cases.
1) ETH is/was also both a phenomenal investment and a major technological breakthrough.
2) Some other digital assets are very promising; I don’t believe innovation ends with BTC and ETH.
But for the person outside the space who wants exposure, just buy BTC.
— Balaji S. Srinivasan (@balajis) June 22, 2019
The bottom line with the Srinivasn’s tweet thread for the people who are inexperienced with crypto space was to just buy Bitcoins and hold it rather than trading it.
A Twitter user @mskvsk, reflected Srinivasn’s tweet as he replied:
“Buying BTC, dollar-cost averaging, forgetting about it for several years. This is the soundest strategy for most people. #stackingsats”
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