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Ben Lawsky, the former New York Superintendent of Financial Services who spearheaded the BitLicense regulatory framework while in office, has joined startup Ripple's board of directors.

• The FTC is investigating TripAdvisor after the website reportedly removed user accounts of rape and assault.
• TripAdvisor has since introduced a measure that allows a committee of employees to flag resorts that are deemed unsafe.

Travel recommendation website TripAdvisor drew the ire of users and observers after it was accused of removing claims of assault and rape users made in reviews of resorts listed on the site.

TripAdvisor has tried to prevent further controversy by introducing measures to flag resorts that are deemed unsafe, but it wasn't enough to avoid attention from the Federal Trade Commission, which is reportedly investigating the company, the Milwaukee Journal-Sentinel reported.

The investigation was revealed in a letter from the FTC to Wisconsin Sen. Tammy Baldwin. 

"The Commission has a strong interest in protecting consumer confidence in the online marketplace, including the robust online market for hotel and travel," FTC Chairwoman Maureen Ohlhausen wrote, according to the Journal-Sentinel.

"When consumers are unable to post honest reviews about a business, it can harm other consumers whose abilities to make well-informed purchase decisions are hindered and harm businesses that work hard to earn positive reviews."

Published in November, the Journal-Sentinel's investigative report revealed a trend of users reporting being raped and assaulted at resorts around the world, only for TripAdvisor to mark their reviews as hearsay or unsuitable for the site and remove them. Since then, the site has formed a committee of employees who will have the ability to flag resorts where users report safety concerns. 

TripAdvisor did not immediately respond to Business Insider's request for comment.

SEE ALSO: TripAdvisor has unveiled a new badge that warns users about hotels where sexual assault has been reported

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NOW WATCH: Why this New York City preschool accepts bitcoin but doesn't accept credit cards

• Shares of GameStop spiked as much as 15% after the video game retailer beat expectations. Shares have given up the majority of their gains and are now up 4%. 
• GameStop reported adjusted earnings of $0.54 cents per share, well above Wall Street's expected $0.44 that Wall Street was expecting.
• The Texas-based company reported revenue rose 1.5% versus a year ago to $1.99 billion thanks to high demand for the Nintendo Switch. 
• "Our third quarter sales results were driven by strong software demand and continued momentum for Nintendo Switch and collectibles,” Interim Chief Executive Officer Dan DeMatteo said in the earnings release. 
• Same store sales were up 1.9%, compared to the expected drop of 2.4%. 
• GameStop expects full-year 2017 earnings per share of between $3.10 to $3.40. Wall Street was anticipating 2017 EPS of $3.31. 
• Shares are down 30.56% this year. 

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NOW WATCH: $6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble

• JPMorgan is considering whether or not to help clients tap into a potential market for bitcoin futures, according to The Wall Street Journal. 
• CEO Jamie Dimon has derided the digital currency as a "fraud" and said he'd fire employees for trading bitcoin. 

JPMorgan CEO Jamie Dimon's opposition to bitcoin, the red-hot cryptocurrency up more than 700% this year, is no secret. 

The billionaire has derided the cryptocurrency as a "fraud," useful for only criminals and murderers. He also said he would fire employees of the bank trading bitcoin for being stupid.

Dimon has since pledged that he will keep quiet about bitcoin. 

Still, the US bank is considering whether it will help its clients tap into a potential bitcoin futures market being prepared by the exchange giant Chicago Mercantile Exchange, according to a report by The Wall Street Journal. 

"JPMorgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit," The Journal's Alexander Osipovich reported, citing one person familiar with the matter.

The company, according to The Journal, is "assessing whether there is demand among JPMorgan's customers for the proposed CME bitcoin contract."

CME is set to launch a market for bitcoin futures by the end of this year, which would allow investors to bet on the future price of the whipsawing digital currency. Cboe, another exchange, is also preparing a bitcoin futures market. 

Bank of America Merrill Lynch noted recently that bitcoin futures could help dampen the coin's volatility. Here's the bank:

"We would not overstate this, as a material reduction in volatility would require there to be a large community of speculators prepared to provide liquidity to the natural owners of the various coins, but given the volatility of the coin markets, maybe there already exists a cadre of participants who would look to short coins on strong days and vice versa, which could overall reduce volatility."

Still, not everyone is convinced that bitcoin futures would be positive for the markets. 

In the open letter addressed to J. Christopher Giancarlo, the chairman of the Commodity Futures Trading Commission, Thomas Peterffy, the chairman of Interactive Brokers, one of the largest derivatives traders and a provider of clearing services for hundreds of brokers, said such a product could ultimately "destabilize the real economy."

JPMorgan did not immediately respond to a request for comment.

Read the full Journal report>>

SEE ALSO: We just got a glimpse of how bitcoin futures will work

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NOW WATCH: Gary Shilling: Here's how I'd fix the Fed

US stocks rose early on the second day of a holiday-shortened week and held onto those gains for the rest of the sessoion.

The S&P 500 rose about 0.6%, the Dow Jones industrial average was up about 0.7%, and the tech-heavy Nasdaq was gained 1.0%.

First up, the scoreboard:

• Dow: 23,584.83, +154.50, (+0.66%)
• S&P 500: 2,598.11, +15.97, (+0.62%)
• Nasdaq: 6,856.90, +66.18, (+0.97%)
• US 10-year yield: 2.363, -0.009
• WTI crude oil: $56.93, +0.51, (+0.90%)

1. There's a cheap way for traders to protect against tax reform failure. Goldman Sachs' derivatives strategy team pointed out that a trade hedging against a moderate decline in the S&P 500 is reasonably priced.

2. Americans are having trouble paying off their credit cards — and it could spell trouble for the economy. US credit card delinquencies are rising, which could be a red flag for consumer spending going forward.

3. The three best ways to trade Amazon's retail dominance. There are a couple investment strategies that can take advantage of the Amazon-induced retail apocalypse: Buy Amazon stock outright, buy stock in companies that support Amazon, and buy companies in "Amazon-proof" sectors.

4. Robinhood is going after established brokers with a brand-new feature. The zero-commission brokerage popular with millennials is rolling out a feature allowing users to transfer stock from their accounts with other brokers.

5. Cryptocurrency ICOs are the tech bubble we've been waiting for. People are pouring money into cryptocurrency-based initial coin offerings, even though there are often no underlying assets with real value.

6. Three maps show why NAFTA is so important to the US. Trade with Mexico and Canada is a big deal for several state and regional economies.

ADDITIONALLY:

Hedge funds loaded up on these 10 stocks last quarter

Chinese tech giant Tencent has surpassed Facebook in market value

Lowe's beats across the board, boosted by lower costs and strong demand for emergency supplies

Bitcoin soars to new high above $8,300 after $30 million crypto hack

Tesla's new vehicles didn't send the stock soaring — and that could signal a new reality for the company

Signet Jewelers craters 25% after issuing a warning for 2018

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NOW WATCH: $6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble

• President Donald Trump told White House reporters on Tuesday that AT&T's proposed acquisition of Time Warner is "not good for the country."
• The comments echo those made by Trump on the campaign trail in October 2016.
• Trump has been a staunch opponent of the deal for over a year, and has repeatedly voiced his displeasure with CNN, which is owned by Time Warner.

The hits keep coming for AT&T's proposed acquisition of Time Warner.

President Donald Trump spoke to reporters on the White House lawn on Tuesday afternoon, saying, "Personally, I always felt that was a deal that's not good for the country. He also said, "I'm not going to get involved — it's litigation."

His comments come one day after the US Department of Justice sued to block AT&T's $84.5 billion takeover of Time Warner.

The statements echo comments Trump made on the campaign trail back in October 2016, when he said a successful deal would result in "too much concentration of power in the hands of too few," and also said "deals like this destroy democracy."

Trump's Justice Department — most notably Makan Delrahim, the antitrust chief he nominated — would seem to agree. In a complaint filed on Monday, the regulatory body focused on what it sees as potentially anti-competitive behavior that could result from a completed deal. AT&T already owns DirecTV, which is mentioned throughout the complaint as a particular cause for concern.

The news of the antitrust lawsuit followed recent reports that the Justice Department demanded AT&T and Time Warner sell Turner Broadcasting, the group of channels that includes CNN, to receive approval for the deal. The entire ordeal comes amid Trump's repeated insistence that CNN is "fake news."

Regulatory concerns about the merger have ramped up since Delrahim started in his new role. After assuming duties in September, he pushed for the divestiture of either Turner Broadcasting or DirecTV during negotiations, according to a Bloomberg report.

Trump's concerns echo those expressed by many critics of the deal who think that too much consolidation in the media and telecom industries is ultimately bad for both. Still, antitrust experts have said that on a strictly legal basis, fighting the deal might be difficult for the DOJ.

Whether the deal can proceed will be up to a federal judge. It's also possible the two sides will negotiate a settlement that would allow it to continue.

AT&T's stock slid 0.9% for Tuesday's session, while Time Warner shares were little changed.

SEE ALSO: AT&T will face an antitrust lawsuit over its $84.5 billion Time Warner deal

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NOW WATCH: $6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble

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• Tourbillon Capital is a $3.4 billion New York hedge fund led by Jason Karp.
• Karp has been warning of "frothy speculation," in the markets and has been preaching patience.
• The firm's flagship fund is down more than 10% for the year to November 17.

Tourbillon Capital, a $3.4 billion hedge fund firm led by Jason Karp, is suffering.

The firm's flagship Global Master fund is down 3.5% for the first 17 days of November, bringing performance for the year to November 17 to a loss of 10.6%, according to a note to investors seen by Business Insider. Its long-only fund was up about 10% through October, Business Insider previously reported.

In an October letter to investors, Karp preached patience, saying the fund saw "a number of warning signs that point to the middle innings of frothy speculation." Those comments echo earlier letters, which have discussed the challenges of managing money in the current bull market. 

In the October letter, Karp added that despite this, there are investment opportunities for those willing to look "ugly" for some period of time.

Tourbillon currently manages about $3.4 billion firmwide, including long-only investments. 

Before launching Tourbillon, Karp was a portfolio manager at Steve Cohen's SAC Capital and a co-chief investment officer at Carlson Capital.

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NOW WATCH: I spent a day trying to pay for things with bitcoin and a bar of gold

• Ilana Weinstein is the founder of The IDW Group, which focuses on recruiting investment talent for all kinds of investment strategies.
• We asked Weinstein about the biggest trends in the hedge-fund business and how to get a senior-level job today.
• Here’s her best advice for recent college graduates looking to land jobs at a hedge fund.

llana Weinstein, founder of the The IDW Group, is a tour de force within the hedge-fund industry.

She recruits top-level talent for the world’s most prestigious investment firms including hedge funds, family offices and private equity funds.

Weinstein recently sat down with Business Insider’s hedge fund reporter Rachael Level for a wide-ranging interview about the industry. She says your college major isn’t actually that important when it comes to landing a dream hedge fund job after graduation. Instead, it all comes down to passion. Here’s more from the interview:

Rachael Levy: What advice would you give to a young person coming out of school who wants to join a hedge fund? What kind of educational background are funds looking for now?

Ilana Weinstein: Focus on what lights you up – not the dollar signs.  There are thousands of hedge funds and most won’t make it.

There are thousands of hedge funds and most won’t make it. It’s kind of like the dot-com bubble when I was coming out of school. Unless you live and breathe investing and everything that goes on in your area of interest, this is not for you.  What I am most inspired by is passion.  This manifests itself through someone who is on fire about what is evolving in his industry, sector, how committed he is. I know it when I see it.

I wouldn’t worry much about majors.  School is a time to expand your horizons and learn how to think.  That skill set and flexibility will serve you better as an investor than any individual class.  I have had a few Founders disparage the value of an MBA.  They would rather the person spent those two years in an investing seat going through different markets.  As an MBA myself I am mixed on that but I understand the point.

You can read the full interview with Ilana Weinstein here. 

SEE ALSO: We asked a top hedge-fund recruiter what it takes to get a senior-level job these days

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NOW WATCH: I spent a day trying to pay for things with bitcoin and a bar of gold

The individual or group behind the alleged Tether attack may have been involved in a previous well-known hack in the bitcoin space.

• Robinhood, the Palo Alto brokerage known for offering commission-free stock trading, is letting folks transfer stock from their accounts with other brokers.
• The firm has said it will roll-out new features to meet the need of more sophisticated stock traders. 

Robinhood, the zero-commission brokerage, is making good on its promise to deliver more features to meet the needs of sophisticated stock traders. 

The Palo Alto-based company alerted users in an email Tuesday that it would enable users to transfer their stock from other brokerages to their Robinhood account. 

"You can now bring all of your stock to Robinhood, making it even easier to manage your account," the company said. 

The firm said it would cover any fees clients might incur from moving their stock over to Robinhood. The process takes five to seven trading days, according to Robinhood's website. 

The news was well-received by folks in the Twitter-verse. Here's one Robinhood user:

Earlier this month, Robinhood unveiled a new web platform. It also announced it has amassed more than 3 million accounts. 

Robinhood, which launched in 2012, has been a darling of younger, less experienced stock traders, but it has been recently vying for more experienced traders, who are more likely to use a legacy broker.

In August, cofounder Baiju Bhatt told Business Insider the company would continue to roll out new features to meet the need of its users as they mature as investors. Here's Bhatt:

"In time, as our users become more and more sophisticated, we will continue to add features that match them. But we hope to never lose sight of those first timers as well. Fundamentally, that should be the most important thing for financial-services companies. Making the entire industry something that serves the broader market, not just the people who make them a lot of money."

The company is valued at $1.3 billion, according to the company, and has raised over $170 million. The firm has declined to comment on its profitability. 

This post has been updated to reflect Robinhood's most up-to-date valuation. 

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NOW WATCH: We just got a super smart and simple explanation of what a bitcoin fork actually is

The post Zen Protocol’s Mission for Decentralized Finance appeared first on Bitcoin Magazine.

[…]

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The post Hacker Allegedly Siphons $31 Million Out of Tether, Driving Further Speculations About the Cryptocurrency appeared first on Bitcoin Magazine.

[…]

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Welcome to Finance Insider, Business Insider's summary of the top stories of the past 24 hours. Sign up here to get the best of Business Insider delivered direct to your inbox.

Charlie Rose, the television news icon, is facing accusations of lewd and inappropriate behavior leveled in eight accounts provided to the Washington Post.

Business Insider has other stories to report. 

Three women have told Business Insider of their experiences while interning for Rose, or seeking to work for him, in 2005, 2008 and 2010. You can read our story here.  

Back on Wall Street, it's not looking good for Wall Street bond traders. Wall Street has had a dismal year — and the latest business-by-business report card confirms it. And hedge-fund manager Barry Rosenstein put his Hamptons beach house on the market for $70 million.

Federal Reserve Chair Janet Yellen will be stepping down from the central bank's powerful board of governors after President Donald Trump refused to reappoint her to a second term.

And AT&T CEO Randall Stephenson responded to the US government's attempt to block it's acquisition of Time Warner, citing giants like Amazon, Google, Facebook and Netflix as examples of companies with expanding clout.

In news and views:

• There's a cheap way for traders to protect against tax reform failure
• RBC: CVS’ Aetna deal is more than just a defense against Amazon
• The 3 best ways to trade Amazon's retail dominance
• Amazon could supercharge its biggest weapon by getting into healthcare
• Chinese tech giant Tencent has surpassed Facebook in market value
• Starbucks is using the oldest trick in the book to boost its stock price
• Square is taking on the big cryptocurrency exchanges — and it represents a $30 million opportunity
• BUCKLE UP: Tesla is going to face extreme volatility in 2018, Morgan Stanley warns

Lastly, the Ford GT is a spectacular supercar that left us wanting more.

Join the conversation about this story »

NOW WATCH: We just got a super smart and simple explanation of what a bitcoin fork actually is

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The post Most Young Americans Will Hodl their Bitcoin Until it Reaches $190,000: Survey appeared first on CryptoCoinsNews.

This summer, a hacker went after HBO and obtained scripts and unreleased episodes of Game of Thrones, Curb Your Enthusiasm, Ballers and The Deuce. The hacker demanded $6 million in bitcoin from the media company and threatened to release more confide...

• Goldman Sachs and other Wall Street firms are bullish on US stocks for 2018, estimating that the index will continue to rise.
• A big part of that optimism centers around tax reform, for which expectations are being priced into forecasts.
• Goldman says that it's wise to hedge against tax reform failure, especially since one specific options trade is so inexpensive right now.

Strategists up and down Wall Street are bullish on stocks through the end of next year, and a big part of that stems from optimism around tax reform. But by that same token, if policy progress fails to materialize, that could spark a considerable sell off in equities.

Luckily, market conditions are shaping up to give traders an inexpensive way to hedge against this potential loss, says Goldman Sachs.

The firm's derivatives strategy team has concocted a trade known as a put spread: Buy a specific number of S&P 500 contracts expiring in February with a strike price of 2,525, while selling the same number of February puts with a strike price of 2,400.

For reference, bearish put spreads are used when a moderate decline in the underlying asset is expected — in this case, Goldman's trade will be "in the money" about 5% below the S&P 500's current level.

"Failure of tax reform is enough of a short-term possibility that it is worth hedging," Rocky Fishman, an equity derivatives strategist at Goldman Sachs, said in a client note. "With the S&P 500 within 1% of its high, we believe prudent investors should take advantage of low option prices to hedge."

So what makes this particular trade so attractively priced? Goldman attributes it to historically low volatility and high skew, the latter of which reflects the willingness of investors to pay a premium for calls. The combination of the two factors "gives put spreads materially higher payout multiples than they usually have," says Fishman.

Lastly, Goldman stresses that buying the put spread is the best way to hedge against tax reform downside, rather than simply holding money on the sidelines. This is both because the options are cheap right now, and because it provides better outcomes in a wider range of market scenarios.

"Prudent investors should own stocks and hedge with put spreads instead of running high cash balances," said Fishman.

SEE ALSO: America's investing giants have a major problem with the GOP tax plan

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NOW WATCH: $6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble

• Bitcoin soared to a new all-time high Tuesday above $8,300 per coin.
• The coin recovered losses it incurred after a different cryptocurrency announced a $30.9 million hack. 

Bitcoin's upward climbed continued unabated Monday morning. 

The cryptocurrency blew past Monday's record high of $8,285 to $8,368 Tuesday morning, trading up 1.24%. It gave up some of those gains and was trading at $8,289 just before noon ET. 

The coin was sent in a tailspin after news broke that cryptocurrency firm, Tether, was hacked. 

Tether, which created a cryptocurrency called USDT that is pegged to the dollar, said in a blog post on Tuesday that "funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker."

The US-based company said $30,950,010 was taken Sunday.

Th news dragged the price of bitcoin down by nearly $450 early Tuesday, according to CoinDesk data.

SEE ALSO: Bitcoin just hit an all-time high — here's how you buy and sell it

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NOW WATCH: Why Nintendo is dominating like the old days

The post NAGA Flourishes at the Epicenter of Blockchain’s Digital Disruption appeared first on Bitcoin Magazine.

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• Hundreds of victims of the Las Vegas shooting are filing lawsuits against the operator of the hotel where the shooter was staying. 
• The lawsuits argue that the hotel and its parent company should have taken greater security measures. 
• If the victims win in court, it could completely change how hotels handle security. 

Hundreds of victims of the Las Vegas shooting have filed lawsuits against Mandalay Bay Hotel and Resort and parent company MGM Resorts International.

Several lawsuits — the largest of which was filed on behalf of 450 people — attempt to hold MGM legally liable for the shooting, which killed 58 people and injured hundreds more. Victims are additionally suing shooter Stephen Paddock's estate and concert organizer Live Nation Entertainment Inc., as well as the bump stock manufacturer, in some cases.

The crux of the lawsuits' arguments is that MGM and Mandalay Bay failed to take preventative measures to stop the attack from happening. Plaintiffs argue that staff should have been better trained to spot red flags and monitored Paddock more closely.

In the three days between when Paddock checked into the hotel and when he carried out the shooting, he brought at least 10 suitcases filled with firearms into his room. Police officials said Paddock also constructed an elaborate surveillance system in the hotel, placing two cameras in the hallway outside his suite — one on a service cart — as well as a camera in his door's peephole.

A new decision makes it more likely Mandalay Bay will be held liable

In October, the Nevada Supreme Court found that MGM could be held liable in a 2010 assault on a California couple at one of the company's hotels, the Las Vegas Review-Journal reported. The court ruled that, because there had been similar cases of violence the hotel, the attack was "foreseeable." 

The question of if the Las Vegas shooting was foreseeable is at the center of the Mandalay Bay lawsuits. 

As more mass shootings take place in the US, attorneys may argue that hotels and other venues should see the potential for such a crime and make changes to prevent it, legal experts told Business Insider before any cases were filed. 

"Foreseeability is one of the key components of liability," said Dick Hudak, a managing partner of Resort Security Consulting. 

Heidi Li Feldman, a professor at Georgetown Law School, says it's "entirely feasible" that an attorney would make this argument based on the fact that mass shootings have taken place at other entertainment venues.

"If Congress isn't regulating gun ownership, it is going to be private parties ... who end up regulating their own premises," Feldman said.

The hotel industry currently has no national standards for security, and hotels aren't typically held accountable for guests' behavior. However, if one of the hundreds of victims suing Mandalay Bay wins their case, it could set a new precedent that completely changes how hotels handle security. 

SEE ALSO: The Las Vegas shooting could completely change how hotels think about security

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• B2C2, a UK-based bitcoin trading firm, appointed three finance veterans to its board. 
• The firm hopes the appointments will help "bridge the gap" between the crypto-world and traditional finance. 

UK-based bitcoin trading shop B2C2 thinks of itself first and foremost as a capital markets firm, not a crypto-company. 

And the firm's board appointments Tuesday represent that identity with which they want to be associated.

B2C2, an over-the-counter trading firm for cryptocurrency markets, announced three finance veterans, including Citigroup's global head of regulatory, market and innovation strategy, were joining its advisory board to help "bridge the gap" between traditional finance and the nascent world of cryptocurrencies. 

“I am delighted to welcome Peter Nielsen, Ruth Wandhöfer and Phil Weisberg to the B2C2 advisory board," Max Boonen, B2C2 founder, said. "Leaders in their field, their expertise and extensive network of industry contacts will be of immense value to B2C2 as we rapidly expand our business."

Boonen, a former interest rate swaps trader at Goldman Sachs who founded B2C2 in 2015, told Business Insider over-the-counter bitcoin trade sizes have increased this year as interest in cryptocurrencies from institutional clients has increased.

As such, larger million-dollar trades are more common at B2C2 than they were when the company was founded, according to Boonen. Kevin Beardsley, a managing director at the firm, previously told Business Insider that the firm had gotten a call for a $50 million trade.

“I look forward to working with B2C2 at a time of intense innovation and evolving regulation in both traditional and new financial markets," Ruth Wandhöfer, one of the board appointees, said. "Robust infrastructure is essential to the smooth functioning of these markets and I think that B2C2’s ability to provide seamless execution and settlement is a game changer."

Wandhöfer heads up regulatory, market and innovation strategy for Citigroup in the UK. 

Peter Nielsen, a former CEO of markets at Royal Bank of Scotland, is also joining the board along with Phil Weisberg, the founder of FXall, a foreign exchange platform.

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After the strong growth of the robo advisory approach in recent years, promoted by numerous start-ups worldwide as well as sizeable number of early adopting wealth managers, a new ‘sub-species’ has emerged: the hybrid robo/personal contact service, which adds a substantial software component to human interaction in the client advisory process.

This is a key finding of MyPrivateBanking's latest report "Hybrid Robos: how combining human and automated wealth advice delivers superior results and gains market share".

Robo Advisors vs. Human Financial Advisors

Robo-advisors have begun to distinguish themselves into three  models, but they each have the same goal. Standalone companies such as Betterment (the most popular U.S. robo-advisor) use algorithms to recommend stocks and manage portfolios. Hybrid robo-advisors combine computerized recommendations with on-demand advice from a human being. And advanced standalone companies leverage more complex algorithms to create and actively manage portfolios.

Robo Advisors for Advisors

In MyPrivateBanking's view, hybrid robo advisory strategies represent a paradigm shift in the pace and path of change in the wealth management industry. MyPrivateBanking estimates that hybrid robo services will by 2020 grow to a size of USD 3,700 billion assets worldwide; by 2025 the total market size will further increase to USD 16,300 billion. This number constitutes just over 10% of the total investable wealth in 2025.

By comparison,“pure” robo advisors (completely automated without personal service added on) will have a market share of 1.6% of the total global wealth at that stage. The report includes a projection for the market size and growth globally of Hybrid Robo Advisor and pure play robo advisor, including a breakdown between North America and the rest of the world, and a split by the retail and affluent wealth and the HNWI/UHNWI segments.

Hybrid robo solutions are a dynamic and also unstable new phase in the wealth management industry’s transformation. MyPrivateBanking expects 2016 to be a year of significant developments – several major players have announced that they will reveal their hybrid offerings in the course of the year and many more wealth managers are currently working through the issues of hybrid robo adoption. The institutional players entering the robo advisors markets and their offerings are analyzed in detail in the report.

Hybrid Solutions will impact many financial services sectors

The drivers for hybrid robo innovation will come from several different sources within the global financial industry. For a start there is is the inspiration derived from the original robo advisor services. To this must be added the new opportunities that have arisen following the launch of a substantial range of new B2B technology providers, some focused only on the banking and wealth management industries and others with a broader scope.

The next 12 to 18 months will provide numerous demonstrations of the impact of the new (white label) technology providers and robo/conventional partnering on wealth management. In particular, as this report’s case studies show, the resulting hybrid wealth management solutions will spring up in a number of different parts of the global finance industry. Furthermore, with the help of robo technology, MyPrivateBanking expects to see a significant increase in quasi-wealth management services from sections of the industry that have been considered as distinct from wealth management, such as pension providers, fund managers and retail banks.

The robo model of investment portfolio management will be good enough in the eyes of a larger proportion of investors than the wealth management industry itself yet seems ready to recognize. Moreover, hybrid robo advisory services will increase the efficiency of advisors, in terms of numbers of clients served per professional, and the increasing numbers of hybrid solutions will also have a significant downwards effect on the client charges the market will bear.

Wealth managers should implement robo advisors solution fast, but thoughtful

The report highlights 20 different recommendations for consideration by wealth managers in weighing up hybrid robo opportunities, among them:

• Wealth Managers should be wary of assuming that one or more robo advisory elements can be just ‘added on’ to an existing service.
• Especially in the retail and affluent segments, tie-ups with non-financial retail services of various kinds will be of increasing importance for the success of robo advisory client recruitment.
• For most wealth managers the path to a hybrid solution will have several stages; this is fine but clients’ awareness of the capabilities of automation will be increasing rapidly in the next few years.
• In the higher wealth segments, wealth managers who automate ‘behind the scenes’ processes will be best placed to introduce client facing robo elements when they’ve established their client-base is ready. 

This rigorous and detailed report tells you all you need to know for assessing this new stage in the evolution of robo advisors, the strengths and weaknesses and lessons to be learned from of a selection of existing hybrid robo advisor innovators and the implications for conventional wealth managers. This report makes a deep analysis of what constitutes ‘hybrid robo’ and draws out the important characteristics of this developing field. This is complemented by the MyPrivateBanking’s market projections exercise and together both give readers a clear idea of the scale of change that is underway.

In addition, in order to illustrate different types of hybrid robo solutions, five case studies of hybrid robo innovators are included that provide insights into different ‘pathways’ to hybrid solutions. The report’s recommendations chapter provides five outline strategic goals for hybrid solutions together with a larger number of detailed considerations for wealth managers preparing to implement a hybrid strategy.

For the report, the MyPrivateBanking analyst team covering the robo advisor development from its beginnings (see previous reports here) has further researched the leading trends (and providers) and engaged in discussions with service and technology providers as well as industry experts and wealth managers.

The report gives wealth managers, robo advisors, banks, IT-vendors and consultants answers to the following questions:

• What constitutes a ‘hybrid robo’ and which are the most important characteristics? What are the different ‘pathways’ to hybrid solutions?

• What is the status of the robo advisor market (full robo advisors and hybrid robo advisors) and how will it develop over the next 10 years?

• How will the growth of the Hybrid robo advisor be differentiated by the retail and affluent wealth segments and the HNWI/UHNWI segments.
  

• What are the learning points for wealth management from the hybrid solutions of five different institutions?“

• Which features and functions should hybrid robo advisor solutions have to satisfy the needs of clients? 

• What are the implications of the hybrid robo advisor model to traditional wealth managers? How can they counter the threats? How can they benefit?

Main Content

• Institutional players entering the robo advisors markets and analysis of their offerings

• Hybrid Robo Advisor and pure play robo advisor market size and growth globally, including a breakdown between North America and the rest of the world

• Hybrid Robo Advisor market size and growth split between the retail and affluent wealth segments and the HNWI/UHNWI segments.

• Five detailed case studies of hybrid robo solutions incl. Schwab Institutional Intelligent Portfolios, Investec and Jemstep, and Hedgeable

• Recommendations on elements of human interaction that can enhance robo advisors so as to win more clients 

• 20 recommendations for conventional wealth managers (for all wealth segments) to benefit from the opportunities that hybrid robo advisors present

>>Click here for Report Summary and Table of Contents<<

Here's how you get this exclusive Robo Advisor research:

To provide you with this exclusive report, MyPrivateBanking has partnered with BI Intelligence, Business Insider's premium research service, to create The Complete Robo Advisor Research Collection.

If you’re involved in the financial services industry at any level, you simply must understand the paradigm shift caused by robo advisors.

Investors frustrated by mediocre investment performance, high wealth manager fees and deceptive sales techniques are signing up for automated investment accounts at a record pace.

And the robo advisor field is evolving right before our eyes. Firms are figuring out on the fly how to best attract, service and upsell their customers. What lessons are they learning? Who’s doing it best? What threats are traditional wealth managers facing? Where are the opportunities for exponential growth for firms with robo advisor products or models?

The Complete Robo Advisor Research Collection is the ONLY resource that answers all of these questions and more. Click here to learn more about everything that's included in this exclusive research bundle. 

Join the conversation about this story »

NOW WATCH: I spent a day trying to pay for things with bitcoin and a bar of gold

• CVS Health has reportedly been in talks to buy health insurer Aetna for $66 billion.
• The move is seen as defense against Amazon's potential entry to the pharmacy space.
• RBC Capital Markets said Tuesday the deal is more than just defense and could benefit both companies as well as their shareholders. 

Pharmacy giant CVS Health’s proposed $66 billion buyout of health insurer Aetna could be finalized “by the end of November,” the Wall Street Journal reported Monday.

In the roughly three weeks since the merger was first reported, the deal was largely seen as a way for CVS to fend off Amazon’s potential foray into the pharmacy business. Analysts at RBC Capital Markets, however, think the move could have benefits beyond defending against the giant online retailer.

"Investors should view this deal as an offensive move by both companies,” analyst George Hill said in a note Tuesday. "U.S. healthcare costs approach 20% of GDP, and continue to grow at a rate that exceeds the CPI, serving as a drag on most other industries. Also, with about 90% beneficiary coverage in the U.S., we continue to expect coverage gains to skew towards lower margin government pay books of business while cost pressures drive erosion of commercial benefit coverage."

"From that perspective, a vertically-integrated, consumer-centric value-based care model makes strong strategic sense and is not a short-sighted response to fears of Amazon entering the pharmacy space," Hill said.

The bank maintains its outperform rating for shares of CVS, with a price target of $95 — about 33% higher than the stock’s opening price Tuesday of $70.65. Wall Street's consensus target for CVS is $83, according to Bloomberg data. 

Still, there are plenty of unknowns surrounding the deal, with any new clarification coming at an investor event scheduled for December 12.

“The only way this deal can get done is if both management teams are focused on a transaction structure that is value creating for AET and CVS shareholders as opposed to a value exploitative deal to the benefit of AET," according to RBC. "In our opinion, the news today is another data point in support of the willingness of the management teams on both sides to do this deal."

CVS stock is up roughly 1.08% in trading Tuesday morning and down 11.57% so far this year. 

Get the latest CVS Health stock price here >>

SEE ALSO: CVS may have a secret weapon against Amazon's move into healthcare

Join the conversation about this story »

NOW WATCH: I spent a day trying to pay for things with bitcoin and a bar of gold

• CVS Health has reportedly been in talks to buy health insurer Aetna for $66 billion.
• The move is seen as defense against Amazon's potential entry to the pharmacy space.
• RBC Capital Markets said Tuesday the deal is more than just defense and could benefit both companies as well as their shareholders. 

Pharmacy giant CVS Health’s proposed $66 billion buyout of health insurer Aetna could be finalized “by the end of November,” the Wall Street Journal reported Monday.

In the roughly three weeks since the merger was first reported, the deal was largely seen as a way for CVS to fend off Amazon’s potential foray into the pharmacy business. Analysts at RBC Capital Markets, however, think the move could have benefits beyond defending against the giant online retailer.

"Investors should view this deal as an offensive move by both companies,” analyst George Hill said in a note Tuesday. "U.S. healthcare costs approach 20% of GDP, and continue to grow at a rate that exceeds the CPI, serving as a drag on most other industries. Also, with about 90% beneficiary coverage in the U.S., we continue to expect coverage gains to skew towards lower margin government pay books of business while cost pressures drive erosion of commercial benefit coverage."

"From that perspective, a vertically-integrated, consumer-centric value-based care model makes strong strategic sense and is not a short-sighted response to fears of Amazon entering the pharmacy space," Hill said.

The bank maintains its outperform rating for shares of CVS, with a price target of $95 — about 33% higher than the stock’s opening price Tuesday of $70.65. Wall Street's consensus target for CVS is $83, according to Bloomberg data. 

Still, there are plenty of unknowns surrounding the deal, with any new clarification coming at an investor event scheduled for December 12.

“The only way this deal can get done is if both management teams are focused on a transaction structure that is value creating for AET and CVS shareholders as opposed to a value exploitative deal to the benefit of AET," according to RBC. "In our opinion, the news today is another data point in support of the willingness of the management teams on both sides to do this deal."

CVS stock is up roughly 1.08% in trading Tuesday morning and down 11.57% so far this year. 

Get the latest CVS Health stock price here >>

SEE ALSO: CVS may have a secret weapon against Amazon's move into healthcare

Join the conversation about this story »

NOW WATCH: We just got a super smart and simple explanation of what a bitcoin fork actually is

[…]

The post Local Bitcoin ATMs in Violation of Law, Warns Russian Prosecutor appeared first on CryptoCoinsNews.

This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.

UK-based fintech, Glint, has launched its debit card and current account, which will allow users to purchase gold and use it as a payment option.

The company was founded in 2015 and has since then secured funding worth $6.1 million in two separate rounds earlier this year, although until now its product had remained under wraps.

Users can load fiat currencies onto their Glint account to buy portions of gold bars, which are located in a vault in Switzerland. When making a payment with the debit card a user can then choose whether to pay in particular fiat currency, or with gold. If the latter, Glint claims it can sell the amount of gold that equates to the price of the purchase instantly. As of now the app is available in the UK and Europe, with only Sterling and gold being supported, but with further roll out in Asia and the US in the next year more fiat currencies will be added.

Gold is seen by many as more stable than fiat currencies, which could boost Glint's appeal. The value of fiat currencies is highly susceptible to change based on political events. For example, the pound has fallen to an almost 80-year low since the Brexit announcements in 2016, while the value of the dollar has also fluctuated heavily on the back of President Trump's decisions.

This is a major driver for people turning to alternative assets — such as Bitcoin — recently to ensure their money does not lose value as political uncertainty continues. Glint argues that gold "cannot be devalued" by political events, and is therefore in a similar category. The reason its popularity has not soared in the same way as Bitcoin's among retail investors is due to how inaccessible the asset has been historically. Glint aims to solve that by enabling people to buy and sell part bars quickly and easily, and hence likely hopes to capitalize on this demand for alternatives to fiat.

However, the ease of using gold for everyday purchases remains questionable.Switching between a fiat currency and gold for small payments is a process that will introduce extra steps into the payment journey, meaning people are unlikely to do it on a daily basis and for small amounts.

That could hinder Glint's ability to acquire customers in the short term. In order to overcome this obstacle, it would be wise of Glint to roll out other products that enable users to benefit from holding gold, for example a savings account. That would enable them to hold gold more like an asset, turning to it as and when they need it, and would also help overcome any potential liquidity issues that might arise from people trying to sell small amounts of gold, frequently.

To receive stories like this one directly to your inbox every morning, sign up for the Fintech Briefing newsletter. Click here to learn more about how you can gain risk-free access today.

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• There are three main ways to profit from Amazon's rapid growth and increasing dominance of the retail sector, according to Brian Belski of BMO Capital Markets.
• Many of the best opportunities are in companies and industries peripherally related to Amazon, while others can be found in areas insulated from its influence.

What's the best way to trade the rapid ascendance of Amazon into a global juggernaut?

The answer is not as simple as it may seem. After all, anyone with even a passing interest in business and markets knows that Amazon is muscling into new areas and expanding its reach on a daily basis. Entire portfolios have been kept afloat by the company's stock, which is up 50% this year.

With that in mind, the question is perhaps most accurately posed as: What's the best way to invest in a company that's viewed by nearly everyone as completely unstoppable?

Brian Belski, the chief investment officer of BMO Capital Markets, sees three main avenues:

1. Buy the stock outright — but with a catch

On the surface, this recommendation couldn't be more obvious. Buy Amazon's stock, and ride it higher. Simple as that.

But Belski says it's not that simple, and that's because of how expensive Amazon shares are right now. Sure, you can pay an arm and a leg for Amazon shares, but even if it churns out healthy gains, you're still paying a lot to enter the trade in the first place.

Belski points out that Amazon's price-to-earnings ratio — the most commonly used stock valuation metric — has been above 100 for most of the past five years, on a forward 12-month basis. "At some point the party will be over," says Belski, who says that the stock will eventually adjust lower to more closely match earnings.

Applying that outlook, he recommends paring Amazon holdings on big stock spikes, and only adding to positions on "sharp price dislocations."

2. Buy stock in companies involved in Amazon's logistics

Belski's next suggestion is one step removed: betting on stocks that make up one small piece of Amazon's massive ecosystem.

That's right — while Amazon has repeatedly shown itself capable of creating or erasing billions of dollars of market value in other companies with a single action, it can also provide a major boost. Belski highlights the following areas as possible investment fodder: "Technology, telecom, container board, tape, conveyor belts, retail REITs, rails, truckers, aerospace — you get the drift."

3. Buy stock in "anti-Amazon" companies and themes

While it's impossible to know at this point which industries and companies are "Amazon-proof," since the company has already proven itself capable of reaching far-flung corners of the global marketplace, Belski has a few in mind.

One such group is "common sense retail," which includes the likes of Costco and Home Depot — companies whose product offerings will make it difficult for Amazon to chip away at market share.

Belski, working for a Canadian firm and all, says that four companies north of the border are some of the "best anti-Amazon companies of all." He's referring to Canadian Tire (already so deeply embedded in the country's retail fabric), Dollarama (increasingly inelastic), Loblaws (a destination) and Restaurant Brands (offers a wide range of fast food).

Capital-intensive areas that require expertise and infrastructure will also be relatively Amazon-proof going forward, says Belski. He specifically means companies like Marriott, Waste Management and Lockheed Martin, as well as sectors including energy, materials and utilities.

SEE ALSO: There's a new biggest bull on Wall Street

Join the conversation about this story »

NOW WATCH: $6 TRILLION INVESTMENT CHIEF: Bitcoin is a bubble

[…]

The post Bitcoin Price Recovers to $8,200 as Tether Hack Makes Markets Volatile appeared first on CryptoCoinsNews.

The Russian minister of communications and mass media said yesterday that the country will not consider the legalization of digital currencies.

[…]

The post Bitcoin Isn’t Legal, Says Zimbabwean Central Bank Official as Price Nears $15,000 appeared first on CryptoCoinsNews.

Bitcoin infrastructure company Blockstream has expanded its partnership with IT firm Digital Garage to boost blockchain development in Japan.

• Smart people like VC Bill Gurley are beginning to worry that cryptocurrency ICOs are a bubble.
• People are investing in Bitcoin and other digital coins even though they hold no equity value and offer no claims on any kind of underlying asset.
• On that definition, ICOs are actually worse than dot-com stocks in 1999 — at least back then investors owned a piece of a company with a revenue stream.
• Crypto bulls keep saying that Bitcoin is "an established 'store of value.'"
• The problem is that the value being stored is simply everyone else's agreement that there must be value here. There is no other asset. And that is what a bubble looks like.

The venture capitalist Bill Gurley was recently asked whether he thought cryptocurrency "initial coin offerings" (ICOs) were in a bubble. Billions of dollars have been poured into over 1,000 new digital coins issued by startups so far this year. These coins mimic the construction of bitcoin, meaning they can be freely traded on digital exchanges and have no central bank standing behind them.

Gurley had an interesting answer. Yes, he said, ICOs look speculative, because interest rates are so low and "there is nowhere [else] to put money."

"As long as those interest rates stay as low as they are, I think you'll continue to see some form of speculative behaviour and tech is a great place for speculation. Look at what is going on in the ICO market, in cryptocurrencies, and you see that no one is afraid to speculate in this market," he told CNBC.

The ICO sector today has one big thing in common with the dot-com bubble of 1999: People are "investing" vast sums of money into "assets" that have no history of producing revenue, and those assets are rising in price only because other people are also pouring money into them.

Ethereum, the second-biggest cryptocurrency after Bitcoin, was itself launched through an ICO in 2014. Ethereum has risen over 3,000% against the dollar in 2017 and its success is one of the reasons people are feeling good about crypto right now. But many of the other coins that have sprung up in its wake look a lot more risky.

$200 billion invested in something that cannot be described as an 'asset'

The amount of money being poured into ICOs is vast. As these charts from Goldman Sachs show, ICO investment is now a larger source of new investment money than traditional early-stage VC tech startup investment:

The total market, including Bitcoin, is now worth more than $200 billion (£151 billion), according to CoinMarketCap.com:

The chart below from Shane Oliver, chief economist and chief investment officer at AMP Capital, puts Bitcoin in historic perspective with other major asset bubbles. The lines on the chart are indexed to make them comparable to each other and show that the rush into bitcoin is roughly comparable to the dot-com bubble in 1999/2000.

Investing in poker chips, hookers, and a really big fish tank

In an ICO, a company offers to sell digital tokens to fund its business. The tokens (or "coins") may allow the buyer to get a product or service from the new company at a later date. Like Bitcoin, their value can go up and down, and they can be bought and sold in an open market. The ownership of the coins is recorded on blockchains: secure, open-source ledgers that underpin the currencies and are protected by cryptography.

The bet with an ICO is that a token will rise in value. There are two sources of demand for tokens: From people who need them to redeem services from the company who issued them, and from other investors who think the token will rise in price like a stock or a currency.

There is an argument that many ICOs should not be described as "investments" because they do not give buyers actual equity in the companies that offer them, only credit that can be redeemed at a later date. At Ethereum's launch, for instance, founder Vitalik Buterin made it explicit that Ethereum was not the same as an equity investment:

"Ether is a product, NOT a security or investment offering. Ether is simply a token useful for paying transaction fees or building or purchasing decentralized application services on the Ethereum platform; it does not give you voting rights over anything, and we make no guarantees of its future value."

My favourite example of this phenomenon is the cryptocurrency casino that wants to give buyers non-negotiable coins that can be gambled inside a hotel that will float in the sea off Macau. The company, Dragon Corp, is literally asking you to "invest" in poker chips.

That isn't even the wildest ICO so far. We have also seen:

• An ICO to build the world's largest aquarium.
• An ICO for prostitutes.
• An ICO for avocado growers.
• An ICO for dentists.

Worse than the dot-com bubble of 1999

In some ways, ICOs are worse than dot-com stocks in 1999. At least with a dot-com stock you owned an actual piece of equity in the underlying company (even if, like TheGlobe.com, a failed social media network, it only had revenues of $780,000 per quarter).

The assets being offered in an ICO aren't backed by an existing stream of revenues. Rather, it is a speculative bet on the success of some future product, and you must make that bet before the company has created the product you're buying.

On that measure, dot-com companies actually looked more solid than ICOs. Pets.com actually sold pet food. Boo.com actually sold clothes. There was something there, even if it didn't make profits as a business.

With ICOs you don't even have that. It's a bit like Mark Zuckerberg funding the early days of Facebook by offering you credit for free likes instead of common stock.

Bitcoin and ethereum are Google and Amazon ... ICOs are Pets.com and Boo.com

It's perhaps worth drawing a distinction here between bitcoin and ethereum, and the thousands of "altcoins" that have been issued so far this year. Unlike most ICO coins, bitcoin and ethereum aren't geared towards specific projects. Bitcoin is an all-purpose digital asset and ethereum's ether is meant to underpin an all-purpose application platform, which multiple bluechip companies are looking at using. Bitcoin and ethereum are useful because they are widely used, like cash. Altcoins, however, are credits for a limited, defined service. 

It is obviously not the case that because much of the crypto sphere is a bubble, that it is all a bubble. The dot-com bust of 2000 didn't prove that the entire internet was useless, just that it was inflated with immature ideas. Bitcoin and ethereum may turn out to be the Google and Amazon of crypto, but there will be plenty of altcoin equivalents of Pets.com and Boo.com, too. 

Gurley was also asked whether Bitcoin was a bubble. He said no. Bitcoin is different, he said.

I don't think it's a fraud.

"I think of it as an incredible store of value in the rest of the world," he said, and "I don't think it's a fraud."

At the massive Web Summit tech conference in Lisbon this year, I heard that a version of that phrase a lot: "Bitcoin is an established store of value." It was like a mantra. People said it as if merely repeating it made it truer.

But there is a real problem with that formulation. 

A "store of value" is a term used to refer to an asset that can be saved and reliably sold at a later date because it predictably maintains its value over time. Traditional stores of value include money (pounds, euros, and dollars), stocks, bonds, gold, and property. There are many others. These assets "store value" because when you want to exchange them they have likely retained most of their value or increased it. They achieve this by giving the owner a claim on an underlying asset that has its own use: Money is backed by a central bank guaranteeing its value with actual assets on a balance sheet; stocks offer dividends and future earnings per share; bonds pay interest; gold can be used for jewelry or manufacturing; and you can live in or rent property until it can be sold.

When the property bubble collapsed in 2008, at least people still owned houses

The problem with Bitcoin is that it isn't backed by a useful asset. Its price is set only by supply and demand. That means Bitcoin can go to zero, because there are zero assets behind it, if people suddenly agree that Bitcoin on its own is worthless.

Stocks, bonds, and houses can collapse in value too, of course. But even when they do, you still own a stock, or a bond, or a house.

In terms of underlying assets, there is no fundamental difference between Bitcoin and any of the other cryptocurrency ICOs on the market right now. Sure, Bitcoin has a years-long history, and its price has generally gone up over time. If you bought Bitcoin years ago, then it really does feel like you stored value. 

But Bitcoin has no houses or stock certificates or interest coupons, and there is no company behind it generating revenue whose profits you might share. And neither do any of the other crypto coins. If these coins go to zero — including Bitcoin — then you own nothing.

This is why the crypto space has so many similar characteristics to 1999. (Take it from me, I lived through 1999, including the worthless stock certificates and the unemployment payments that came after it).

With cryptocurrencies, the value being stored is simply everyone else's agreement that there must be value here. There is no other asset.

And that is what a bubble looks like.

Join the conversation about this story »

NOW WATCH: Why airlines ask you to raise the window shades for takeoffs and landings

• Smart people like VC Bill Gurley are beginning to worry that cryptocurrency ICOs are a bubble.
• People are investing in Bitcoin and other digital coins even though they hold no equity value and offer no claims on any kind of underlying asset.
• On that definition, ICOs are actually worse than dot-com stocks in 1999 — at least back then investors owned a piece of a company with a revenue stream.
• Crypto bulls keep saying that Bitcoin is "an established 'store of value.'"
• The problem is that the value being stored is simply everyone else's agreement that there must be value here. There is no other asset. And that is what a bubble looks like.

The venture capitalist Bill Gurley was recently asked whether he thought cryptocurrency "initial coin offerings" (ICOs) were in a bubble. Billions of dollars have been poured into over 1,000 new digital coins issued by startups so far this year. These coins mimic the construction of bitcoin, meaning they can be freely traded on digital exchanges and have no central bank standing behind them.

Gurley had an interesting answer. Yes, he said, ICOs look speculative, because interest rates are so low and "there is nowhere [else] to put money."

"As long as those interest rates stay as low as they are, I think you'll continue to see some form of speculative behaviour and tech is a great place for speculation. Look at what is going on in the ICO market, in cryptocurrencies, and you see that no one is afraid to speculate in this market," he told CNBC.

The ICO sector today has one big thing in common with the dot-com bubble of 1999: People are "investing" vast sums of money into "assets" that have no history of producing revenue, and those assets are rising in price only because other people are also pouring money into them.

Ethereum, the second-biggest cryptocurrency after Bitcoin, was itself launched through an ICO in 2014. Ethereum has risen over 3,000% against the dollar in 2017 and its success is one of the reasons people are feeling good about crypto right now. But many of the other coins that have sprung up in its wake look a lot more risky.

$200 billion invested in something that cannot be described as an 'asset'

The amount of money being poured into ICOs is vast. As these charts from Goldman Sachs show, ICO investment is now a larger source of new investment money than traditional early-stage VC tech startup investment:

The total market, including Bitcoin, is now worth more than $200 billion (£151 billion), according to CoinMarketCap.com:

The chart below from Shane Oliver, chief economist and chief investment officer at AMP Capital, puts Bitcoin in historic perspective with other major asset bubbles. The lines on the chart are indexed to make them comparable to each other and show that the rush into bitcoin is roughly comparable to the dot-com bubble in 1999/2000.

Investing in poker chips, hookers, and a really big fish tank

In an ICO, a company offers to sell digital tokens to fund its business. The tokens (or "coins") may allow the buyer to get a product or service from the new company at a later date. Like Bitcoin, their value can go up and down, and they can be bought and sold in an open market. The ownership of the coins is recorded on blockchains: secure, open-source ledgers that underpin the currencies and are protected by cryptography.

The bet with an ICO is that a token will rise in value. There are two sources of demand for tokens: From people who need them to redeem services from the company who issued them, and from other investors who think the token will rise in price like a stock or a currency.

There is an argument that many ICOs should not be described as "investments" because they do not give buyers actual equity in the companies that offer them, only credit that can be redeemed at a later date. At Ethereum's launch, for instance, founder Vitalik Buterin made it explicit that Ethereum was not the same as an equity investment:

"Ether is a product, NOT a security or investment offering. Ether is simply a token useful for paying transaction fees or building or purchasing decentralized application services on the Ethereum platform; it does not give you voting rights over anything, and we make no guarantees of its future value."

My favourite example of this phenomenon is the cryptocurrency casino that wants to give buyers non-negotiable coins that can be gambled inside a hotel that will float in the sea off Macau. The company, Dragon Corp, is literally asking you to "invest" in poker chips.

That isn't even the wildest ICO so far. We have also seen:

• An ICO to build the world's largest aquarium.
• An ICO for prostitutes.
• An ICO for avocado growers.
• An ICO for dentists.

Worse than the dot-com bubble of 1999

In some ways, ICOs are worse than dot-com stocks in 1999. At least with a dot-com stock you owned an actual piece of equity in the underlying company (even if, like TheGlobe.com, a failed social media network, it only had revenues of $780,000 per quarter).

The assets being offered in an ICO aren't backed by an existing stream of revenues. Rather, it is a speculative bet on the success of some future product, and you must make that bet before the company has created the product you're buying.

On that measure, dot-com companies actually looked more solid than ICOs. Pets.com actually sold pet food. Boo.com actually sold clothes. There was something there, even if it didn't make profits as a business.

With ICOs you don't even have that. It's a bit like Mark Zuckerberg funding the early days of Facebook by offering you credit for free likes instead of common stock.

Bitcoin and ethereum are Google and Amazon ... ICOs are Pets.com and Boo.com

It's perhaps worth drawing a distinction here between bitcoin and ethereum, and the thousands of "altcoins" that have been issued so far this year. Unlike most ICO coins, bitcoin and ethereum aren't geared towards specific projects. Bitcoin is an all-purpose digital asset and ethereum's ether is meant to underpin an all-purpose application platform, which multiple bluechip companies are looking at using. Bitcoin and ethereum are useful because they are widely used, like cash. Altcoins, however, are credits for a limited, defined service. 

It is obviously not the case that because much of the crypto sphere is a bubble, that it is all a bubble. The dot-com bust of 2000 didn't prove that the entire internet was useless, just that it was inflated with immature ideas. Bitcoin and ethereum may turn out to be the Google and Amazon of crypto, but there will be plenty of altcoin equivalents of Pets.com and Boo.com, too. 

Gurley was also asked whether Bitcoin was a bubble. He said no. Bitcoin is different, he said.

I don't think it's a fraud.

"I think of it as an incredible store of value in the rest of the world," he said, and "I don't think it's a fraud."

At the massive Web Summit tech conference in Lisbon this year, I heard that a version of that phrase a lot: "Bitcoin is an established store of value." It was like a mantra. People said it as if merely repeating it made it truer.

But there is a real problem with that formulation. 

A "store of value" is a term used to refer to an asset that can be saved and reliably sold at a later date because it predictably maintains its value over time. Traditional stores of value include money (pounds, euros, and dollars), stocks, bonds, gold, and property. There are many others. These assets "store value" because when you want to exchange them they have likely retained most of their value or increased it. They achieve this by giving the owner a claim on an underlying asset that has its own use: Money is backed by a central bank guaranteeing its value with actual assets on a balance sheet; stocks offer dividends and future earnings per share; bonds pay interest; gold can be used for jewelry or manufacturing; and you can live in or rent property until it can be sold.

When the property bubble collapsed in 2008, at least people still owned houses

The problem with Bitcoin is that it isn't backed by a useful asset. Its price is set only by supply and demand. That means Bitcoin can go to zero, because there are zero assets behind it, if people suddenly agree that Bitcoin on its own is worthless.

Stocks, bonds, and houses can collapse in value too, of course. But even when they do, you still own a stock, or a bond, or a house.

In terms of underlying assets, there is no fundamental difference between Bitcoin and any of the other cryptocurrency ICOs on the market right now. Sure, Bitcoin has a years-long history, and its price has generally gone up over time. If you bought Bitcoin years ago, then it really does feel like you stored value. 

But Bitcoin has no houses or stock certificates or interest coupons, and there is no company behind it generating revenue whose profits you might share. And neither do any of the other crypto coins. If these coins go to zero — including Bitcoin — then you own nothing.

This is why the crypto space has so many similar characteristics to 1999. (Take it from me, I lived through 1999, including the worthless stock certificates and the unemployment payments that came after it).

With cryptocurrencies, the value being stored is simply everyone else's agreement that there must be value here. There is no other asset.

And that is what a bubble looks like.

Join the conversation about this story »

NOW WATCH: Why airlines ask you to raise the window shades for takeoffs and landings

• Mike Warriner joining HSBC as chief information officer for retail banking and digital wealth management.
• Warriner spent 5 years at Google in London as engineering director.
• His appointment is part of a $2.1 billion digital push at HSBC.

LONDON — HSBC has appointed a former Google executive as its new chief information officer for retail banking and digital wealth management.

Mike Warriner spent five years at Google in London, serving as engineering director and the European chairman of Google Payments. As engineering director, he led the Google Engineering site and AdSense Engineering.

Cambridge educated Warriner was chief technology officer of British tech company Intelligent Environments before joining Google, where he led the development of secure online banking applications.

Warriner said in a statement: "HSBC is an amazing brand, has great products and a highly capable global technology team. But even the strongest can’t sit still and the market is moving rapidly with new entrants taking advantage of mobile, artificial intelligence, chat bots and agile development.

"I am confident that together we can build the best products in the market – relevant, innovative, and exciting and a great experience for our customers."

HSBC said Warriner's appointment is part of a $2.1 billion digital push at the bank, which includes recent innovations in retail and wealth products. The bank has announced HSBC Beta, an app that allows people to see all their accounts in one place and find the best deals, and has announced plans for an online investment advice service.

Warriner started at HSBC on November 6 and will be based in London. He reports to Ganesh Balasubramanian, Global Retail Banking and Wealth Management CIO.

Balasubramanian said in a statement: "As we continue to adapt to evolving customer needs, we need the right people to bring new thinking to HSBC, ensuring we are able to offer the best possible banking experience.

"Mike brings a unique mix of deep technical knowledge, past experience of the banking world and Google scale, plus expertise in building and leading global technology teams."

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Fears over a cryptocurrency hack revealed yesterday saw a brief crash in prices, but bitcoin soon bounced back.

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• Aston Martin unveiled the new Vantage sports car on Tuesday.
• It will be powered by a 503 horsepower, twin-turbocharged V8.
• The new Vantage will arrive in 2018 with a price tag of $149,995. 

After more than a decade of faithful service, it has come time for Aston Martin to retire the venerable Vantage sports car. To replace the most successful model in company history is no small feat. But that's exactly what Aston Martin has done with the unveiling of its next-generation Vantage on Tuesday.

"I’m enormously excited by what we’ve created: a new Vantage that’s more explicit in looks and intent, wrapping heart-pounding performance and dazzling dynamics into an everyday usable package," Aston Martin CEO, Dr. Andy Palmer said in a statement. "A true sports car with a sharper look and a keener dynamic edge, the new Vantage is the Aston Martin pure driving machine enthusiasts have been waiting for."

With a long hood, fastback tail, sleek greenhouse, and perfect proportions, the Vantage is undeniably an Aston Martin. It's the latest work of Aston design boss Marek Reichman and draws heavily from the DB10 movie car created for James Bond's 24th adventure in 2015's "Spectre."

Under the Aston's stylish hood lives a 4.0 liter, twin-turbocharged V8 that's shared with the company's pricier DB11 V8 Coupe and Volante convertible. Here, it produces 503 horsepower. Mated to a rear-mounted, ZF eight-speed automatic transmission, Aston claims the Vantage can hit 60mph from a standstill in just 3.6 seconds.

The 3,373-pounds sports car is good for a manufacturer-claimed top speed of 195 mph.

Roughly 70% of the Vantage's rigid and lightweight bonded aluminum structure is brand new. With the engine set low and as far back in the chassis as possible, Aston has managed to achieve perfect 50:50, front to rear weight distribution.

In addition, the Vantage will be loaded with the latest high tech goodies in Aston Martin's arsenal. This includes dynamic stability control, dynamic torque vectoring, active dampers, and electronic rear differential, a company first.

Inside, the Vantage's cabin comes in several flavors with more luxury-minded versions getting Aston's traditional leather and wood treatment, while more sporting interiors will receive a heavier dose of Alcantara and carbon fiber. The Vantage will also get an 8-inch LCD screen running a Mercedes-Benz-sourced infotainment system. 

The new Aston Martin Vantage is expected to arrive in US showrooms sometime during the second quarter of 2018 with a price tag of $149,995.

SEE ALSO: The Porsche Panamera is Business Insider's 2017 Car of the Year

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Here is what you need to know. 

Yellen to resign from Fed board. Fed Chair Janet Yellen will resign from the central bank's board of governors once Jerome Powell is sworn in, leaving four seats on the central bank's seven-member board for Trump to appoint. 

There's a new biggest bull on Wall Street. Brian Belski of Bank of Montreal Capital Markets sees the S&P 500 finishing 2018 at 2,950, the highest on Wall Street. 

The FCC is reportedly planning a total repeal of net neutrality rules. Politico reports the Federal Communications Commission will today reveal a plan to remove net neutrality regulations, with a vote planned in December.

Bitcoin and Ethereum are slipping after a $31 million crypto heist. Tether, the company behind a cryptocurrency pegged to the US dollar, said $31 million was stolen from its main wallet on Sunday. Both bitcoin and Ethereum are down less than 1%. 

AT&T will face an antitrust lawsuit over its $84.5 billion Time Warner deal. "This merger would greatly harm American consumers," Makan Delrahim, the head of the Justice Department’s antitrust division, said announcing the suit. "It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy."

Tencent passes Facebook in market value. The Chinese tech giant became the first Asian company to surpass a market value of $500 billion.  

Starbucks is using the oldest trick in the book to boost its stock price. The coffee giant plans to sell $1 billion of debt, and then use the proceeds to buy back its own stock, expand its business, pay cash dividends or finance acquisitions, according to a regulatory filing.

Stock markets around the world are higher. Hong Kong's Hang Seng (+1.91%) led the advance in Asia and Germany's DAX (+0.48%) paces the gains in Europe. The S&P 500 is set to open up 0.22% near 2,588.

Earnings reports keep coming. Dollar Tree and Lowe's report ahead of the opening bell while GameStop and HP release their quarterly results after markets close.

US economic data trickles out. Existing home sales will be released at 10 a.m. ET. The US 10-year yield is down 1 basis point at 2.35%.

Join the conversation about this story »

Here is what you need to know.

Yellen to resign from Fed board. Federal Reserve Chair Janet Yellen will resign from the central bank's board of governors once Jerome Powell is sworn in as the new chair, leaving four seats on the central bank's seven-member board for Trump to appoint.

There's a new biggest bull on Wall Street. Brian Belski of Bank of Montreal Capital Markets sees the S&P 500 finishing 2018 at 2,950, the highest forecast on Wall Street.

The FCC is reportedly planning a total repeal of net-neutrality rules. Politico reports that the Federal Communications Commission on Tuesday will reveal a plan to remove net-neutrality regulations, with a vote planned for December.

Bitcoin and Ethereum are slipping after a $31 million crypto heist. Tether, the company behind a cryptocurrency pegged to the US dollar, said $31 million was stolen from its main wallet on Sunday. Both bitcoin and Ethereum are down less than 1%.

AT&T to face an antitrust lawsuit over its $84.5 billion Time Warner deal. "This merger would greatly harm American consumers," Makan Delrahim, the head of the Justice Department's antitrust division, said announcing the suit. "It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy."

Tencent passes Facebook in market value. The Chinese tech giant became the first Asian company to surpass a market value of $500 billion.

Starbucks is using the oldest trick in the book to boost its stock price. The coffee giant plans to sell $1 billion of debt and then use the proceeds to buy back its own stock, expand its business, pay cash dividends, or finance acquisitions, according to a regulatory filing.

Stock markets around the world are higher. Hong Kong's Hang Seng (+1.91%) led the advance in Asia, and Germany's DAX (+0.48%) paces the gains in Europe. The S&P 500 is set to open up 0.22% near 2,588.

Earnings reports keep coming. Dollar Tree and Lowe's report ahead of the opening bell, while GameStop and HP release their quarterly results after markets close.

US economic data trickles out. Existing-home sales will be released at 10 a.m. ET. The US 10-year yield is down 1 basis point at 2.35%.

Join the conversation about this story »

[…]

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The post Newsflash: Bitcoin Price Loses $500 after Tether Hack, Recovers Above $8,200 appeared first on CryptoCoinsNews.

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The post Freewallet Releases the First Bitcoin Gold Wallet appeared first on CryptoCoinsNews.

Often trumpeted as the future of bitcoin, the success of the Lightning Network may come down to economic forces, say researchers.

• Headline profits down 17% as easyJet suffers £101 million currency hit.
• Revenue up 8% to £5 billion as it takes advantage of rivals' bankruptcies and operational problems.
• Shares rise as easyJet says it has had a good start to the new financial year.

LONDON — EasyJet's profits slipped in the year to September 30, the budget airline announced on Tuesday.

Headline profits fell 17.3% to £408 million after easyJet took a £101 million hit from adverse currency movements. The pound collapsed to a 31-year low against the dollar and a 7-year low against the euro last June in the wake of the Brexit vote.

CEO Carolyn McCall, presenting her last set of easyJet results, said it had been "a difficult year for the aviation industry." Major airlines Air Berlin, Alitalia, and Monarch have all gone bust in the last year amid fierce competition and volatile costs.

EasyJet is taking over part of Air Berlin after its bankruptcy and warned it expects to take a £60 million hit from the integration next year.

Despite a fall in profits, easyJet reported an 8.1% rise in revenue to £5 billion. McCall said: "Friendly and efficient customer service and a continuous focus on sustainable cost control has put easyJet at a strategic advantage during a period when there have been bankruptcies and some airlines have struggled operationally." Ryanair was hit by a cancellation crisis in September.

"Revenue trends in the first quarter have been encouraging, primarily as a result of some capacity leaving the market," easyJet said.

EasyJet's currency woes were well flagged to the market and Tuesday's full-year results are slightly ahead of expectations. As a result, the airline's share price has jumped over 6% as of 8.45 a.m. GMT (3.45 a.m. ET).

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• Consumer watchdog the Competition and Markets Authority (CMA) has provisionally found drug company Concordia overcharged the NHS by millions for an essential thyroid drug.
• The findings are pending further investigation, and the CMA has not yet ruled Concordia broke competition law.
• Concordia denies wrongdoing and said it is cooperating with the investigation.

LONDON — Consumer watchdog the Competition and Markets Authority (CMA) has provisionally found that drug company Concordia abused its dominant position to overcharge the NHS by millions for an essential thyroid drug.

In an investigation into pricing, the CMA found the NHS spent more than £34 million last year on liothyronine tablets, an increase from around £600,000 in 2006. The amount Concordia charged per pack rose from around £4.45 before it was de-branded in 2007, to £258.19 in July this year. This increase of almost 6,000% came despite the fact that production costs remained "broadly stable," the CMA found.

"Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS — and the UK taxpayer — to pay over the odds for important medical treatments," said Andrea Coscelli, CMA chief executive.

"We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that," she said.

The CMA's findings are provisional, pending further investigation, and the watchdog has not yet ruled Concordia breached competition law.

Liothyronine tablets are used to treat hypothyroidism, or an underactive thyroid, a condition that affects at least two in every 100 people and can lead to depression, tiredness and weight gain. The tablets are not the primary treatment for the condition but are the only available option for many patients. Until earlier this year, Concordia was the only supplier.

Concordia said in a statement, "We do not believe that competition law has been infringed. The pricing of liothyronine has been conducted openly and transparently with the Department of Health in the UK over a period of ten years. Over that time, significant investment has been made in this medicine to ensure its continued availability for patients in the UK, to the specifications required by the Medicines and Healthcare products Regulatory Agency in the UK."

"We will review the CMA's preliminary position, as set out in its Statement of Objections, and we will be responding to it in detail. We continue to work co-operatively with the CMA as it proceeds with its investigation," the company said.

In December last year, the CMA fined Pfizer and Flynn Pharma nearly £90 million for charging excessive and unfair prices for an anti-epilepsy treatment, a judgment the companies are currently appealing.

The CMA also fined a number of pharmaceutical companies, including GlaxoSmithKline, a total of £45 million for breaching competition law in the sale of anti-depressant drug paroxetine. This decision is also being appealed.

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• Tether, the company behind a cryptocurrency pegged to the US dollar, said $31 million stolen from its main wallet on Sunday.
• Heist appears to have shaken markets, with bitcoin, ethereum, and bitcoin cash all falling.

LONDON — Major cryptocurrencies bitcoin and ethereum are falling against the dollar on Tuesday morning after a $31 million heist elsewhere in the digital currency world.

Tether, which created a cryptocurrency called USDT that is pegged to the dollar, said in a blog post on Tuesday that "funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker."

$30,950,010 was taken in total on Sunday, the US company said.

"As Tether is the issuer of the USDT managed asset, we will not redeem any of the stolen tokens, and we are in the process of attempting token recovery to prevent them from entering the broader ecosystem," Tether said.

Tether is down 0.3% against the dollar on the back of the news, according to CoinMarketCap.com.

The theft appears to have shaken wider confidence in crypto markets. Bitcoin is down almost 1% against the dollar at 7.45 a.m. BST (2.45 a.m. ET):

Ethereum, the second biggest cryptocurrency by market capitalization, is down by 1.5% against the dollar at the same time:

Meanwhile, bitcoin cash, the third largest cryptocurrency by market capitalization, is down over 5%:

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• The Brexit vote has "massively exacerbated" a farm labour crisis which has been growing for several years, according to the National Farmers' Union.
• "People are feeling less welcome, coming here for less money, and they're less certain about what the future holds. That's why you're seeing fewer people," said NFU deputy president Minette Batters.

LONDON — The Brexit vote has "massively exacerbated" a farm labour crisis which has been growing for several years, according to the National Farmers' Union.

NFU deputy president Minette Batters said the group's September survey revealed a 29% shortfall in seasonal workers who are required to pick Britain's fruit and vegetable crops, a shortage which has left fields of rotting food first reported earlier in November.

"Uncertainty and the weaker exchange rate are driving it," Batters told Business Insider.

"[Migrants] are feeling less welcome, coming here for less money, and they're less certain about what the future holds. That's why we're seeing less people," she said.

She said the problem began in 2013, when the government formally scrapped the Seasonal Agricultural Workers Scheme (SAWS), which allowed predominantly European workers to work in Britain on six-month visas.

The referendum has massively exacerbated an already existing problem

"When we lost the SAWS scheme back in 2011, we knew there would be a shortfall," she said. "Then you had the referendum and the situation of the exchange rate and people feeling less welcome. That's massively exacerbated an already existing problem."

A post-Brexit solution?

Batters called on the government to end the "uncertainty" surrounding its position on Brexit and commit to reintroducing SAWS after Brexit — something the Labour party has already done.

"The Labour party have now committed to reintroducing the SAWS scheme," she said.

"We really need some certainty. This is not an immigration problem. It concerns people who come here, fully-regulated, on the national living wage, receiving a pension, and contribute through national insurance."

'We just want to know. We want the certainty for people coming here, we want certainty for the growers, and we want certainty for retailers and consumers," she said.

Britain's growers are heavily reliant on seasonal migrant labour. According to government agency Defra, there were 67,000 seasonal agricultural workers in 2015 from a total farming workforce of 476,000. Three-quarters of seasonal labour in the horticulture sector comes from Romania and Bulgaria.

"Growers are coming under enormous pressure and they want to know what the future holds," Batters said.

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Good morning! Here's what you need to know.

1. The European Union is relocating two of its key agencies from London to Amsterdam and Paris post-Brexit. On Monday, the EU announced following votes that the European Medicines Agency (EMA) will be moved to Amsterdam, Netherlands — an early sign of the potential costs for the United Kingdom of leaving the political and economic union.

2. Kingdom Holding's plan to borrow money to fund new investments has stalled because owner Prince Alwaleed bin Talal has been detained in Saudi Arabia's anti-corruption crackdown, Reuters said. Kingdom had approached banks to obtain the loan, but the financing plan has been held up because the lenders are worried about potential repercussions if they lend to the prince's company.

3. China's biggest social network and gaming firm Tencent is close to making Malaysia the first foreign country to roll out its WeChat ecosystem. Tencent has made a "breakthrough" in gaining an e-payment license in Malaysia for local transactions, and plans a launch early next year.

4. Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50% climb in just eight days. The new high came after leading US payments company Square said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

5. Uber plans to buy up to 24,000 self-driving cars from Volvo, marking the transition of the US firm from an app used to summon a taxi to the owner and operator of a fleet of cars. The non-binding framework deal could offer San Francisco-based Uber a way to overcome setbacks at its autonomous driving division in Silicon Valley's race to perfect self-driving systems.

6. The head of the Democratic Unionist Party said Northern Ireland would leave the European Union on the same terms as the rest of the United Kingdom, rebuffing an Irish suggestion that the region remain subject to some EU rules. Dublin is demanding commitments from the British government that there be no hard border between Ireland and Northern Ireland and has suggested one way of doing this would be to maintain "regulatory equivalence" on both sides of the border.

7. BlackRock, which oversees nearly $6 trillion, has plans for a set of exchange-traded funds that would let a computer program choose and classify stocks. The actively managed "iShares Evolved" funds will target major industry groupings: financials, healthcare, media, consumer staples, consumer discretionary and, of course, technology.

8. Chile's peso currency and benchmark IPSA stock index fell after market-friendly presidential candidate Sebastian Pinera garnered less support than expected in the country's election. The IPSA stock index closed down 5.86% at 5076.02 points, its sharpest single-session fall since 2011. 

9. The US Department of Justice will file a lawsuit later to block AT&T Inc's $85.4 billion acquisition of Time Warner. The legal challenge was expected after AT&T rejected a demand by the Justice Department earlier this month to divest its DirecTV unit or Time Warner's Turner Broadcasting – which contains news network CNN – in order to win antitrust approval.

10. Asian stocks edged higher on Tuesday as investors took heart from further evidence of strength in the global economy. The dollar hovered near a one-week high against its peers thanks to higher US yields and a floundering euro.

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 Bitcoin cruised past $8,000 for the first time this week, but it hasn’t been smooth sailing for all after Tether — a company that helps exchanges convert fiat currency to token — said today that a hacker snatched nearly $31 million. Tether operates USDT, a cryptocurrency asset that it backs via the U.S. dollar. The company said that $30,950,010-worth of USDT was taken… Read More

• Square is running a trial that allows some users of its CashApp to buy and sell bitcoin.
• That could translate into $30 million in revenues for the company, according to Credit Suisse.
• It could also cut into the market share of existing cryptocurrency exchanges such as Coinbase. 

Square, the online payments company founded by Twitter's Jack Dorsey, has been running a trial that allows users of its CashApp to buy and sell bitcoin. 

And both Wall Street and the crypto world thinks the company stands a good chance at breaking into the nascent digital coin market. 

Square added the feature to Cash, a rival to Venmo, because users asked for it, the company said in a statement. It said it is still trying to figure out how to make it "faster and easier" and is only offering it to a "small number" of Cash users. A full roll-out of the feature would put Square up against cryptocurrency exchanges such as Coinbase and Gemini.

Crypto-fanatics took to Twitter over the weekend to praise the new product, adding that it poses a big threat to existing bitcoin trading platforms. 

Jack Mallers, one user of the app, said on Twitter he deposited $20 from his debit card into his CashApp and was able to buy bitcoin in 30 seconds. Josh Olszewicz, a bitcoin trader, told Business Insider Square stands to "eat Coinbase's lunch."

"The big theme is being frictionless as much as possible," he said. "With Square on-boarding [takes] seconds."

Coinbase has allowed users to buy bitcoin instantly with their debits since August 2016, but they charge 3.99% for the service. Square, on the other hand, hasn't been charging users in the trial. Of course, it is still early days, with at least one Wall Street forecasting fees of 1.5% in the future. 

Square's brand name could also give it a leg up over existing cryptocurrency exchanges, according to Kirsten Morin, senior investment manager of global venture capital at Aberdeen Standard Investments. 

"The industry needs a more visible way to trade," she said. "Square has a brand name that people can trust."

Coinbase has been working hard to get folks to trust its brand. In addition to already storing $9 billion worth of digital assets, the company announced Thursday a new security platform to woo big hedge fund money into crypto. 

Still, many crypto-fanatics, including one who goes by the name of "I am Nomad" on Twitter, are more bullish on Square's future in bitcoin. 

"Crystal ball prediction - @Square steals 40% of Coinbase's bitcoin business [before end of] second quarter 2018," he said on Twitter.

Wall Street analysts are bullish as well. In a note out Monday, clients of Credit Suisse said Square's venture in crypto could be a tailwind translating into $30 million in revenues. Here's the bank (emphasis ours):

"See ~$30m revenue opportunity in two years: We estimate that if SQ can accumulate 10m bitcoin buyers over two years (tracking Coinbase’s growth), this could drive an incremental $30m in revenue (~2% additional growth to our current forecast). This assumes average bitcoin purchases of $200/yr and fees of 1.5%."

As such, the bank has raised its price target for Square by more than 19% from $31 to $37. That's still below its current market price of $45 per share.

Coinbase and Square did not return request for comment by the time of publication.

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