On Tuesday, Bitcoin reportedly hit $57000 to surpass a two-year high, setting a record in rand terms.
Bitcoin Recently Hit $57,000
Due to strong institutional buying, Bitcoin reached a record high of over $57,000 in Asia trade on Tuesday, marking a two-year high. Meanwhile, smaller rival ether crossed $3,200 for the first time in the previous two years.
The report on Monday from software company MicroStrategy, a cryptocurrency investor, that it had just spent $155 million on purchasing roughly 3,000 bitcoins has contributed to the cryptocurrency’s 10% gain in just two sessions.
The approval of bitcoin-owning exchange-traded funds in the US has also helped the original and largest cryptocurrency by market value. Contrary to apprehensive larger markets, trading volumes in several of the funds jumped on Monday, and companies tied to cryptocurrencies also saw a rise in value.
A new record high in local currency terms was reached when bitcoin was trading for just under R1.1 million per coin in the early hours of Tuesday morning.
Bitcoin Was Initially Designed to be a Peer-to-Peer Payment Method
Bitcoin initially was intended to be a peer-to-peer payment method, but it has since seen a dramatic change in direction and is now primarily held as an investment asset. The necessity for a regulatory framework arose as a result of this evolution, which forced the integration of these blockchain-based assets into the conventional financial services sector.
Commercial banks are, however, subject to strict rules about customer asset segregation, liquidity and capital requirements, and deposit guarantee schemes to safeguard customers and depositors. This is in contrast to these exchanges.
How ETFs Manage Asset Custody
However, investors making this comparison must understand that the AUM fee is important since it pays for the overhead required to keep the fund operating in a regulated environment and makes it easier to produce audited financial statements.
ETFs differ from other custodians whose financial concerns are kept secret because of their corporate structure in that these financial statements are made publicly available to both current and prospective investors.
It’s also important to think about how ETFs manage asset custody. They frequently rely on already established hybrid and dedicated custodians, like as Coinbase, which presently acts as a custodian for 80% of the US’s authorized bitcoin spot ETFs.
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