A US-based global provider of online trading services is introducing its bitcoin offering to Australian retail and institutional investors.
The GAIN Capital service will allow investors to trade bitcoin as either an over-the-counter (OTC) derivative or as a future, allowing speculation on the value of the cryptocurrency without owning the asset itself. GAIN also said that if regulation permits, investors can trade bitcoin on a margin.
GAIN chief executive Glenn Stevens explained: “For those who want exposure to bitcoin, trading the cryptocurrency as a derivative with a regulated brokerage firm offers several key advantages over a Bitcoin exchange.”
“We view these benefits as: competitive fees and margin rates, the ability to go long or short, enhanced price discovery via aggregated liquidity from multiple bitcoin market makers and exchanges, and fast trade execution,” Stevens said.
The launch in Australia accompanies a similar rollout in Singapore, both of which follow the service being made available to investors in the UK and Europe last month.
GAIN said it also intends to expand its service to another cryptocurrency, ethereum, in early 2018.
Via its regular spot poll, Financial Standard found in November that the majority of respondents (63%) have no plans to trade in cryptocurrency such as bitcoin and ethereum. A small number (17%) however, are curious about digital currency and plan to transact in some form of cryptocurrency in the future.
One-in-five (20%) are investing in cryptocurrency itself, but it remains to be seen if people will open their digital wallets to purchase goods and services, or transfer to family and friends.
ASIC warns the exchange platforms where virtual currencies are bought and sold are generally not regulated; users are not protected and have no statutory recourse. Some countries are moving toward regulating the sector, however virtual currencies are yet to be recognised as legal tender.