Pension fund giant CalPERs (California Public Employees’ Retirement System) is an investor in TOBAM, which has recently launched the TOBAM Bitcoin Fund. Investment banks including Goldman Sachs and Man Group plan to invest in this fund and clear bitcoin futures for clients.
The launch of bitcoin futures by the CME Group and CBOE opens the door to direct investment by providing a regulated trading platform. The futures instruments enable investors firstly to hedge price fluctuations in cryptocurrencies, and, secondly, actively manage bitcoin price risk. As large financial institutions enter the cryptocurrency market, the market capitalization will grow from billions to trillions, says cryptocurrency portfolio risk management solutions provider X8Currency.
No Longer a Speculative Bet
When the institutional investors arrive, the shift from speculative trading to long-term investment in cryptocurrencies will accelerate. Most of the current trading activity in cryptocurrencies is speculative. X8C estimates that 10 percent of the crypto market capitalization will transition from speculative to long-only investments in the 2018-2019 time frame, and within two-five years long-term investment will equal to that of speculative one.
Initial coin offerings (ICOs) are making this transition inevitable as they push cryptocurrencies into the mainstream economy. Over 800 tokens have been issued and many are already being used in daily business activities, including payment systems, supply chain management, travel booking, financial asset trading and many other areas of the economy.
Institutional investors are starting to lament missing crypto investment opportunities. Many financial institutions and, importantly, the regulatory bodies that govern them are not yet comfortable with the risk cryptocurrencies come with. Lessening volatility is a key to stabilizing cryptocurrencies and attracting more long-term investors.
A major impediment to institutional investors entering the cryptocurrency market is the lack of risk management tools to meet regulatory standards. X8Currency plans to fill this gap with a cryptocurrency portfolio risk management solution engineered according to Swiss financial standards. The currency is 100 percent backed by a reserve basket of eight major fiat currencies (EUR, USD, JPY, GBP, CAD, AUD, CHF, NZD) and gold. The currencies are deposited in regulated Swiss banks and reinsured bySwissRE AG. To avoid the risk of bank failure, the portfolio is invested across up to eight brokers and banks.
Both the currency and gold portfolio are optimized by a scientifically based artificial intelligence system to preserve their value. ARM AI optimizes exchange rate efficiency among the major currencies while gold trading is automated through an e-Gold ARM-AI.
The cryptocurrency portfolio risk management platform is being launched after 10 years of development and several years of use in real-time asset portfolio risk management by professional investors and portfolio managers. The parent of X8Currency, ioNectar, has been working on professional-grade B2B connectivity with banks based on the FIX protocol since 2012. ioNectar has developed its own multi-broker and multi-bank protocol to function on a trading platform. Connections are already set up with several major financial trading and clearing centers and are operated out of a secure TIER-4 datacenter.
The ARM Portfolio risk management system has already proven its mettle in the traditional currency market, successfuly managing $1 billion in transactions since 2015. During the Brexit crisis in 2015 whilst the Pound sterling fell almost 20 percent, the ioNectar platform basket only dipped two percent before regaining its value. The ioNectar performance index has outpaced inflation-adjusted performance by between 2-4 percent in 2017.
Accelerating the Crypto Economy
X8C operates as a bridge between the cryptocurrency and fiat worlds. Stable cryptocurrencies are key to the growth of the crypto economy and investment. Companies, which raise money through token generating events for development and operating expenses, are less likely to experience operating funds losing value owing to volatility before they reach the commercial readiness stage. Many businesses cannot decide on whether to accept cryptocurrencies. Volatility in cryptos could introduce unsustainable volatility in profitability. Businesses must enter into expensive currency hedging contracts to minimize losses due to currency fluctuations. Converting crypto into X8C at no fee solves this problem.
Many investors have accumulated cryptocurrency through various avenues. Even non-active participants in the crypto economy are likely to be rewarded tokens as they go about their daily business. The volatility and convertibility risks associated with cryptocurrencies creates uncertainty. Optionally, investors can convert some of their cryptocurrency into X8C and reduce the risk of future loss.
The X8 Currency Crowdfunding
Professional and non-professional investors can gain access to the X8C professional portfolio risk management and trading tools by obtaining the X8X token. Longer term, X8C expects institutional investors to use its safe heaven to manage cryptocurrency investing while complying with regulatory standards. X8 is issuing two tokens based on the Ethereum EC20 standard. The X8Currency can be purchased with the X8X Utility Token – the key to exchanging currencies to and from X8C. No fee is charged for exchanging any of the eight fiat currencies with X8X tokens.