The rollercoaster ride of Bitcoin continues after the cryptocurrency hit another milestone with the launch of the ProShares Bitcoin Strategy Exchange Traded Fund on the New York Stock Exchange on Tuesday, which allows investors to invest in the digital coin through futures contracts rather than owning it outright.
Some financial analysts believe this is going to be a big deal that will drive the price higher – to $100,000 and beyond – by giving institutional investors the confidence and security to invest in Bitcoin.
So far, the optimists are feeling vindicated.
The ProShares Bitcoin Strategy ETF, which started trading on the New York Stock Exchange under the ticker Bito, drew trades estimated at nearly $1 billion, putting it on track to be the third-biggest ETF launch of all time. By the end of the day, the ETF had jumped 4.8 per cent to $41.94.
It is not the first Bitcoin ETF but it is a first for the US. In Europe, the XBT Bitcoin Tracker was launched way back in 2015 on Nasdaq’s Nordic exchange, while the Purpose Bitcoin ETF began trading on the Toronto Stock Exchange in February. Some US investors have used these to gain exposure to Bitcoin, instead of waiting on the Securities and Exchange Commission's approval.
By listing in the US, the ProShares Bitcoin Strategy ETF has exposure to the biggest investment market in the world.
First-year inflows could exceed $50 billion, according to Tom Lee at Fundstrat, who says it could drive the Bitcoin price to $168,000.
The SEC has yet to formally approve Bitcoin futures ETFs, which track the price of futures contracts, but it is not shooting them down either. SEC chair Gary Gensler believes they offer investors greater protection than ETFs that trade the spot Bitcoin price.
Marcus de Maria, chief executive of Investment Mastery, reckons Bito will drive Bitcoin's price even higher than today’s $64,760 by making it simple and safe for institutions to invest without worrying about their exchange being hacked or forgetting the keys to their digital wallets and losing access to their holdings forever.
“This has opened the gates for some of the world's biggest investors to get into cryptos safely and more are likely to follow,” Mr de Maria says.
This is a less risky way for investors to jump on board the Bitcoin rollercoaster, Nigel Frith, lead analyst at Bitcoinmoney.net, says. “It offers exposure to Bitcoin while avoiding the risks of hacking and unregulated exchanges altogether. It is a great next step for mass adoption of cryptocurrency.”
Mr Frith expects more funds to follow. “There has already been a rush for new futures ETFs and I only see that continuing in the short term.”
Invesco has abandoned plans to launch its own US Bitcoin futures ETF – possibly unhappy at coming in second – but will still try to launch a physical ETF.
VanEck has been fighting to bring a Bitcoin ETF to market since 2017 and is not giving up yet.
The ProShares Bitcoin Strategy ETF will be just as risky as buying Bitcoin, but with the added rollover costs and spreads of futures contracts, Vijay Valecha, chief investment officer at Century Financial in Dubai, says.
“The ETF is likely to be more volatile as a result, especially during settlement expiry and monthly open or close periods.”
Correlation of existing Bitcoin ETFs has been mixed, he says. The Grayscale Bitcoin Trust has lagged spot Bitcoin by 160 per cent over the past year.
Investors will sit on the sidelines for now to see how the new launch performs, Mr Valecha says. “To succeed, it needs sizeable participation from traders and prominent institutional players such as market makers and mutual fund managers. The ETF with the most volume will have an advantage over the rest of the pack.”
This has opened the gates for some of the world's biggest investors to get into cryptos safely and more are likely to follow
Marcus de Maria,
chief executive of Investment Mastery
The ProShares Bitcoin Strategy ETF will appeal to short-term intraday traders rather than long-term investors, who can safely ignore it, he says.
Investors no longer need to worry about custody and securing their digital wallets, Ross Thompson, finance and accountancy lecturer at Arden University, says.
“The ETF should attract those who are wary of the lack of crypto regulation and its inherent security, but are still eager to get a piece of the action.”
They must still proceed with caution as it could further inflate the Bitcoin bubble, he warns. “Bubbles have a habit of bursting.”
The ETF is based on futures and will not directly increase the demand for Bitcoin itself, Antony Portno, founder of Traders of Crypto, says. Instead, it could surprise everyone by proving bearish.
When Bitcoin futures were listed on the Chicago Mercantile Exchange in 2017, allowing investors to short sell the cryptocurrency, the price quickly crashed.
Bitcoin will remain volatile and investors should aim to buy low and sell high, Mr Portno says. “If Bitcoin traded closer to $50,000 than $60,000 by the end of the week, it would be no surprise to me. A few weeks from now, the next speculative event will have taken over and it may have surpassed its record high.”
Traditional ETFs allow retail investors access to hand over investment decisions to an expert with insight into market data and research, Katharine Wooller, UK managing director at cryptocurrency wealth platform Dacxi, says. In this case, there is a catch. “With Bitcoin, no fund manager performance data exists.”
By trading future price movements, she says the ETF is essentially betting on price volatility. “Trying to predict the ups and downs of Bitcoin is like playing a game of ‘pin the tail on the donkey’.”
It may help that most Bitcoin is now locked-up in long-term holdings. “With few sellers, prices naturally go up. In these circumstances, it would be a poor futures trader who couldn’t make money,” she says.
Investors who believe the Bitcoin price is on a long-term upwards curve to $100,000 and beyond would be better off simply buying and holding Bitcoin itself, she says.
Futures trading does nothing to support the global vision of decentralised finance, or DeFi, Ms Wooller adds. “It is all about ‘gaming the market’ rather than having any real commitment to crypto as the catalyst for a more viable global economy.”
The Bitcoin futures ETF may stray from Bitcoin's price, warns Roman Matkovskyy, an expert in cryptocurrencies at Rennes School of Business.
Given that Bitcoin is a speculative and volatile asset, betting on price movements will be not an easy task.
Nobody can be sure how Bitcoin futures ETFs will trade, Mr Matkovskyy says, but investors will have to pay a premium while they wait to find out. “ProShares will charge 0.95 per cent a year for the Bito fund while the average equity ETF charges 0.71 per cent.”
Bitcoin futures ETFs will be sold through broker accounts, Mr Matkovskyy says. “They can be traded like a stock and do not require an account at a cryptocurrency exchange. This will allow investors to keep all their holdings under one roof, simplifying tax and performance reporting.”
However, he says Bitcoin futures ETFs are best left to more sophisticated institutions, rather than private investors.
The new offering is “starting out on the fringes of the investing world”, says Chris Muller, director of audience growth at money website DoughRoller.net.
“It is better than nothing but, for now, it will be traded without formal approval from the SEC.”
Although it is legal to trade the ETF, its future “lies in the world of the unknown”, Mr Muller says.
“Predicting the ups and downs of Bitcoin is a challenge in itself, so there might be more inherent risk when investing in Bito, for little additional reward.”
He also advises against buying cryptocurrency exposure at a premium through stocks such as Bitcoin miners Riot Blockchain ($Riot) and Marathon Digital Holdings ($Mara), Bitcoin investor MicroStrategy ($MSTR) and the Grayscale Bitcoin Trust ($GBTC).
Stocks and cryptocurrency trading are two inherently different entities. “Achieving exposure to one entity through another feels like trying to build a proverbial bridge between an apple and a tomato,” Mr Muller says.
“For investors who are serious about exposure to Bitcoin, buy Bitcoin.”
Aston martin DBX specs
Engine: 4.0-litre twin-turbo V8
Transmission: nine-speed automatic
Power: 542bhp
Torque: 700Nm
Top speed: 291kph
Price: Dh848,000
On sale: Q2, 2020
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
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KILLING OF QASSEM SULEIMANI
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
The Gandhi Murder
- 71 - Years since the death of MK Gandhi, also christened India's Father of the Nation
- 34 - Nationalities featured in the film The Gandhi Murder
- 7 - million dollars, the film's budget
Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
* JP Morgan Private Bank
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Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
The drill
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
'Cheb%20Khaled'
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
2.0
Director: S Shankar
Producer: Lyca Productions; presented by Dharma Films
Cast: Rajnikanth, Akshay Kumar, Amy Jackson, Sudhanshu Pandey
Rating: 3.5/5 stars
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
