Based on a recent announcement, global investors can now use Abra wallet as a way to invest in exchange-traded funds (ETFs) and shares by using Bitcoin. The company, based in the United States, announced an early registration period for the platform.
Using Abra gives investors from 155 countries the ability to invest in 50 new investment types. They’ll also enjoy no trading fees throughout the remainder of the year if they use Bitcoin for their transactions.
Already included in the asset types are stocks such as Amazon, Apple, Google, Facebook, and Netflix, along with commodities like SPDR Gold Trust. Additionally, ETFs like the S&P 500 and Vanguard Growth are also available.
ETFs and Stocks with Crypto Collateralized Contracts
According to the announcement, ETFs and stocks investment options on the Abra platform use a new investing method. Abra refers to it as Crypto Collateralized Contracts. This creates a way for investors to use smart contracts and Bitcoin to make investments.
With this method, Abra makes its money by charging a spread when digital currencies are transacted. It’s essentially a charge against the difference between the currency’s highest and lowest prices at the time the trade takes place. Some skeptics point out that Abra could be similar to Plus500 and BUX, trading apps investors are hesitant to use due to losing significant amounts of money.
Similar to how you can own a fraction of a cryptocurrency, Abra users expect to have the ability to purchase pieces of highly priced ETFs and stocks. A customer’s investment is converted into Bitcoin, but they’ll still see it displayed as dollars in the Abra app.
Abra adds to your Bitcoin to regulate your balance if the BTC price changes. When a user decides to make an investment, changes in the share price will determine how much of the crypto is subtracted or added to the user’s investments.
Security Tokens on the Rise
In January of 2019, the state of Wyoming in the United States introduced a bill which would allow issuing tokens based on the blockchain which represent stocks. If this bill is passed, the legislation would go into effect July of 2019.
Similarly, a subsidiary of Overstock.com, tZERO, recently launched a market for secondary trading of its tZERO tokens. This type of token gives investors the ability to trade them for digital securities, which would be done through Dinosaur Financial Group’s brokerage firm.
Prior to their token launch, tZERO filed a patent which would allow for establishing a platform which integrates crypto into trading items from broker-dealers. Then, the order would be translated into cryptocurrency on a digital exchange. This type of platform would include tokens, securities, cash equivalents, digital assets, and digital shares.
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