A Startling Development in the Cryptocurrency Market

| May 24, 2018 | Firm News

In a previous post (Getting Started With Cryptocurrency: 4 Things To Know), we discussed the importance of familiarizing yourself with the regulatory issues and uncertainty surrounding cryptocurrency prior to adding it to your investment portfolio or including it in offerings to your clients. 

A development in the bitcoin market this week brings the issues of regulatory uncertainty back to the forefront. 

According to HIBUSINESS (Source: Citing Regulatory And Tax Issues, Bullish ETF Provider Quits Bitcoin Holdings), a major player in the world of bitcoin has liquidated its holdings, citing regulatory and tax issues. 

The decision by ARK Innovation ETF (ARKK) to divest itself of bitcoin has the potential to rock the market, as the fund has been well known for their advocacy of disruptive technology, including placing bitcoin in many of its most prominent funds. 

As we have previously pointed out, many of the legal and regulatory issues surrounding bitcoin in the United States and around the globe have not been fully ironed out. Depending on your aversion or attraction to risk, this is either an exciting or terrifying prospect. 

As reported by CCN, (Source: Bullish ETF Provider Liquidates Bitcoin Holdings, Citing Regulatory And Tax Issues) ARK Innovation ETF decided to divest itself of bitcoin despite benefiting mightily from bitcoin prior to the cryptocurrency’s recent decline. Some of their funds gained as much as 87 percent in 2017. 

 

It remains a volatile environment for bitcoin and other cryptocurrencies. As with any potential investment it is crucial to arm yourself with the information you need to make an educated decision about what is best for your business and your clients.