Technology developed by Vespene Energy that converts waste methane into electricity will be used to power on-site Bitcoin mining at multiple US landfills enabled by a US$4.3 million financing round announced this week.
Investment firm Polychain Capital led the funding, which will initially see Vespene Energy install its solution – off-grid micro turbines that turn methane into energy – at a pilot site in California, where the company is based.
Co-founder and CEO Adam Wright said that helping governing authorities make money from landfill methane through bitcoin mining supported the broader goal of prompting a transition to renewable energy to mitigate greenhouse gas emissions.
And because our sites require no connection to the grid or pipeline buildout, we can rapidly turn otherwise harmful and wasted landfill methane into a clean power source for carbon-negative bitcoin mining. This partnership with Polychain will empower us to scale and seize this tremendous opportunity to help solve the climate crisis.
Adam Wright, CEO, Vespene Energy
Greening Bitcoin Mining with Otherwise ‘Wasted’ Energy
The potential for Vespene Energy’s approach to help transition bitcoin mining towards carbon-neutral energy sources was appealing to investors, as noted by Polychain Capital founder and CEO Olaf Carlson-Wee:
The continued adoption of Bitcoin will benefit from solutions that make the energy mix for mining more focused on clean energy. We are excited to partner with Vespene as they build a creative solution to use mining to eliminate a potent greenhouse gas source, while making its energy mix greener.
Olaf Carlson-Wee, founder and CEO, Polychain Capital
While Vespene claims to be the first company to mine bitcoin using methane from landfill waste, it’s not the first to repurpose gas to gain revenue from bitcoin mining.
Rumours circulated some six months ago that BlackRock, one of the world’s most influential fund managers, was moving to offer its institutional clients access to crypto trading. Now, it’s become official:
BlackRock is partnering with Coinbase to increase the institutional adoption of bitcoin.
It is not often that you live through the birth and scaling of a new multi-trillion dollar asset class.
The news broke on August 4 when Coinbase announced it had partnered with the US$10 trillion financial heavyweight to offer crypto trading to its institutional clients, starting with bitcoin.
Following the alliance, BlackRock’s proprietary wealth management platform, Aladdin, will integrate directly with Coinbase Prime, such that clients will have access to trading, custody, prime brokerage and reporting capabilities. Aladdin is the gold standard of institutional fund manager platforms, suggesting that the partnership is likely to have far-reaching consequences:
In the true spirit of Bitcoin, it’s worth noting that BlackRock’s move to offer bitcoin arose from the bottom-up, rather than top-down:
Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets. This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.
Joseph Chalom, global head of strategic ecosystem partnerships, BlackRock
This represents a dramatic change of tone from years gone by, a fact that didn’t escape Bitcoin Twitter:
Blackrock changes its tune. Source: Bitcoin Archive
Coinbase Soars on the News
Shortly after the partnership announcement, Coinbase stock, which recently suffered a 20 percent drop amid an unregistered securities probe, rose by close to 40 percent.
Unsurprisingly, the company has not been spared from this year’s bear market of “historic proportions“, impacting both digital assets and related firms alike. For the year to date, Coinbase stock remains down over 63 percent, even after this most recent rally:
Coinbase stock YTD. Source: Google Finance
While bitcoin’s price remains supressed against a challenging macro backdrop, it’s telling that financial giants such as BlackRock continue with plans to move forward, proving that this asset class is here to stay.
The cryptocurrency market has been rocked in the past couple of months due to several key factors within the industry but also by events at a macroeconomic level.
And according to on-chain data from blockchain intelligence firm Glassnode, the current bear market could last longer than others:
Bullish Weeks Not Strong Enough
As per the Glassnode report, Bitcoin and other cryptocurrencies failed to reaffirm a bullish retracement last week, and the market is instead heading towards a harsher downturn that could last several months or even years.
Bitcoin, for example, last week hit a high above US$24,000 shortly after the US Federal Reserve increased interest rates by 75 basis points. However, the father of all cryptos lost momentum entering the new week, falling below the US$23k level.
Glassnode’s report notes that BTC’s on-chain demand remains “lacklustre at best”.
Source: Glassnode
With the exception of a few activity spikes higher during major capitulation events, the current network activity suggests that there remains little influx of new demand as yet.
Glassnode report
The report also observed certain similarities between the current network demand and those from 2018 to 2019. After BTC hit its all-time high in April 2021, the asset has been in a macro-decline despite regaining momentum throughout that year:
#Bitcoin balance on exchanges continues its macro decline, reaching 12.6% of the Circulating Supply (2.4M $BTC).
Exchange balances have now seen a macro outflow of over 4.6% of the circulating supply since the March 2020 ATH.
Bitcoin’s volatility is the most frequently cited criticism of El Salvador’s adoption of bitcoin as legal tender. To address this legitimate concern, Bitcoin Beach wallet developer Galoy has released a new feature called “Stablesats”, enabling users to send synthetic US dollars over the Lightning Network.
Game-Changer for Developing Nations
Developing nations are often argued to be those that stand to benefit most from bitcoin adoption. The harsh reality, however, is that the asset’s volatility presents a material obstruction to adoption as a medium of exchange, simply because the majority of potential users don’t have the financial legroom to withstand its unpredictable price moves.
In response, Galoy has created “Stablesats” to enable users to save in BTC and spend in USD, all through the Lightning Network:
With Stablesats-enabled Lightning wallets, users are able to send from, receive to and hold money in a USD account in addition to their default BTC account. While the dollar value of their BTC account fluctuates, $1 in their USD account remains $1 regardless of the bitcoin exchange rate.
Nicolas Burtey, chief executive officer, Galoy
Importantly, what makes it different from other stablecoins such as Tether (USDT) is that there is no token; it is simply bitcoin stabilised into a dollar balance:
See how users send and receive to the USD Account and convert sats to (synthetic) USD. pic.twitter.com/TzBB8SyABc
The company also announced that it had raised US$4 million to develop GaloyMoney, an open-source Bitcoin banking platform, a versatile application programming interface (API) and an enterprise-ready Lightning gateway offering organisations access to Lightning payments.
Mechanics and Risks
Stablesats is able to offer a US dollar balance underpinned by bitcoin through a mechanism know as inverse perpetual swaps. It works by pledging the user’s bitcoin as collateral to an exchange to purchase derivative contracts that are used to hedge the BTC underlying the US dollar value.
Inverse perpetual swaps are denominated in fiat, with any gain or profit priced in bitcoin. Accordingly, the user’s dollar account incurs unrealised BTC gains if the bitcoin price drops, or unrealised BTC losses if the bitcoin price increases. At a high-level, this is what enables Stablesats to retain a stable dollar balance without interfacing with the traditional banking sector.
Galoy provides a basic video to outline the mechanics behind its synthetic USD:
The current Stablesats implementation uses the bitcoin derivatives market, specifically an instrument called perpetual inverse swap to create synthetic USD.
From a risk perspective, the main concern is naturally a counterparty risk, since the derivatives trade necessarily takes place with a centralised exchange, which also retains custody of the bitcoin. In recent times, it’s become all too familiar to see exchanges hacked, or otherwise freeze user withdrawals.
Assuming the risks can be properly contained, this exciting innovation by Galoy has the possibility to facilitate widespread bitcoin adoption. Simple, user-friendly consumer applications drove the adoption of mobile applications, and there’s no reason to believe it will be different in the case of bitcoin.
Bitcoin permabull Michael Saylor has stepped down from his role as chief executive at MicroStrategy, a business intelligence firm he founded 23 years ago, to focus on his work in Bitcoin.
He joins Jack Dorsey, another tech billionaire who, since leaving Twitter, has shifted focus almost exclusively to Bitcoin:
Hmm….billionaire CEOs stepping down to work exclusively on #Bitcoin. Bullish much… 🔥
In MicroStrategy’s Q2 results presentation, the company announced that Saylor would step down from his role as CEO but would assume a new role as executive chairman. The presentation made reference to the company’s bold treasury strategy, and identified the key role that Saylor would play going forward:
MicroStrategy became the first publicly traded company to adopt bitcoin, a revolutionary financial technology, as its primary treasury reserve asset. As Executive Chairman, Mr Saylor will focus primarily on innovation and long-term corporate strategy, while continuing to provide oversight of the company’s bitcoin acquisition strategy as head of the Board’s Investments Committee.
MicroStrategy presentation
Saylor commented that splitting the roles of chairman and CEO would enable the company to better pursue its two corporate strategies, namely acquiring and holding bitcoin, and growing its enterprise analytics software business:
As Executive Chairman I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives, while [current president] Phong [Le] will be empowered as CEO to manage overall corporate operations.
Michael Saylor, MicroStrategy, executive chairman
Company Continues to Make Positive Strides
Given that 2022 has been a bear market of “historic proportions”, it was inevitable that much of the focus would be on MicroStrategy’s macro strategy – to buy and hold bitcoin.
It’s little surprise then that one of the more notable elements of the Q2 results was a US$917.8 digital asset impairment charge, up significantly since US$170.1 million in Q1.
Since first purchasing bitcoin in August 2020, the company has acquired a total of 129,699 BTC at an average price of US$30,664 per coin, and has continued at an unrelenting pace, recently buying up another 421 BTC at just over US$20,000 apiece.
Naturally, mainstream financial media have been quick to criticise the strategy, particularly in relation to its leveraged position. Chief financial officer Andrew Kang, however, confirmed that 85,000 BTC were unpledged or unencumbered. “We have more than sufficient collateral for any price volatility,” he said.
Despite the company’s position being underwater, Saylor remains undeterred in his commitment, saying: “MicroStrategy is in a category of one; we are the largest corporate holder of bitcoin in the world. Our strategy is buy and hold for the long term, and that’s it.”
For those paying attention, this shouldn’t be a surprise. He made it clear in his interview with Laura Shin last year:
Dr Craig Wright, the self-proclaimed inventor of Bitcoin, has claimed victory in a defamation lawsuit against popular British Bitcoin podcaster Peter McCormack. “Faketoshi”, as he is known in Bitcoin circles, was awarded £1 for advancing “deliberately false evidence”:
"[The Court] found Dr. Wright not to be a witness of truth." Is that just a polite English judge's way of calling him a liar? Asking for a #Faketoshi. pic.twitter.com/ArruvWiHen
The host of the What Bitcoin Did podcast was sued for his comments in which he described Wright as a “fraud” and “liar” in relation to persistent claims that he was indeed the founder of Bitcoin.
UK High Court Judge Martin Chamberlain ruled against McCormack, finding that the podcaster had caused “serious harm” to Wright’s reputation since he was apparently disinvited to speak at various events and conferences.
The judge, however, determined that since Wright had “advanced a deliberately false case and put forward deliberately false evidence until days before trial, he [would] recover only nominal damages”. On that basis, the court found that there would be “no injustice” in awarding the paltry sum of sum of £1:
In a statement distributed by his lawyers, Wright said: “I intend to appeal the adverse findings of the judgment in which my evidence was clearly misunderstood.”
Australian-born Wright remains a constant source of derision and controversy within the Bitcoin community. Last year, he won a copyright lawsuit over the Bitcoin whitepaper and later sued a former partner over claims he was entitled to Satoshi’s 1.1 million bitcoins.
McCormack took to Twitter to celebrate the result, saying:
As some of you will now have seen, the judgment in my trial v Dr Craig Wright has now been handed down. I want to thank my lawyers for their diligent work on the case. I also want to thank Justice Chamberlain for this result. We are very pleased with his findings. Please do note that the process is not complete and therefore I will not be commenting further on this. Once the entire process is complete, there will be others I will be thanking.
Peter McCormack, host, What Bitcoin Did podcast
The Bitcoin community celebrated the favourable result, pointing to Wright’s history of plagiarism, forgery and false evidence:
I'll never refer to Craig Wright as "Dr." because he spent many years falsely claiming to have earned a PhD and given his lengthy history of proven plagiarism and fraud I find the likelihood that he earned his eventual PhD honestly to be near 0.
This comes at a time where his hard forked token BSV has less than 2 percent of bitcoin’s market capitalisation and has been delisted from most exchanges due to a lack of security:
Less than 20 nodes run BSV, and only 60% are synchronised, 8 nodes are still trying to catch up with "BiG blOcKs"
Bitcoin has experienced a massive surge in value over the last couple of years, reaching an all-time high of 90,000 AUD in 2021 and catapulting cryptocurrency into the mainstream media. Despite this dramatic increase in popularity and adoption rates, there are still many issues left unresolved with the Bitcoin network.
While Bitcoin may be the undisputed champion of the cryptocurrency arena, there are more than 1,300 different digital currencies, crypto coins and tokens that are currently being traded on the cryptocurrency markets. While most of these altcoins are either redundant or highly niche-specific, there are few key cryptos that present cryptocurrency investors with viable and potentially promising Bitcoin alternatives.
What’s Going Wrong With Bitcoin?
Satoshi Nakamoto, the mysterious creator of Bitcoin, originally devised the cryptocurrency as a “peer-to-peer electronic cash system” that would revolutionise, democratise, and decentralise the current international financial paradigm. The massive increase in popularity and value that Bitcoin has experienced over the past year, however, has left the Bitcoin network slow, unwieldy, and far from this original objective.
The core issue with the Bitcoin network at this point in time is a specific parameter called “block size limit”. The “block” in “blockchain” refers to a cryptographically encoded list of all transactions that have occurred over the network in the previous 10 minutes. In 2010, the size of each block was limited to 1 megabyte in order to prevent hacking attacks, but with the massive increase in transaction frequency that has occurred recently, this block size limit is now crippling the Bitcoin network.
The 1 megabyte block size limit means the Bitcoin network can only support a potential maximum of seven transactions per second, which means transactions can sometimes take as long as 24 hours in average transaction times or longer to complete during peak periods.
Bitcoin network participants that help process transactions will treat transactions with higher fees as high priority, resulting in transaction fees as high as $55 USD in January 2017. There are a number of solutions that aim to solve these issues, such as the Lightning Network layer, but these developments present their own unique issues.
The birth of the Lightning mainnet can be viewed live as a new layer grows organically on top of the Bitcoin network. For comparison, it’s possible to view a 3D live visualisation of the current Bitcoin Network on Bitnodes. The nature of the Lightning Network solution, however, means that the network will be centralised around major hubs as illustrated in the visualisation below:
Lightning Network Testnet Visualisation Courtesy of Steven Roose.
Centralisation is antithetical to the core tenets of blockchain technology, so there is an understandable amount of controversy within the Bitcoin and blockchain community as to whether the Lightning Network will solve the issues that plague the Bitcoin network at this point in time.
The high value of Bitcoin has also led many investors to “HODL”, a humorous acronym derived from a typo in a Bitcointalk Forum post in 2014 that refers to “holding on for dear life”. Many investors purchase Bitcoin in order to use it as a method of storing value, not for use as currency, promoting hoarding.
Lastly, the extreme surge in Bitcoin popularity has captured the attention of regulatory bodies around the world. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has recently been provided with new powers to investigate Bitcoin traders, while new legislative amendments force crypto exchanges to disclose user information. As a result, more Australian crypto traders are seeking privacy-focused cryptocurrencies.
Fortunately, there are many highly innovative high market cap cryptocurrencies that have the potential to challenge Bitcoin as the de facto king of cryptocurrency. We’ll now proceed to examine the best Bitcoin alternatives for 2018 and find out what makes them prime competitors:
Litecoin is a rising star in the cryptocurrency ecosystem and is focused heavily on facilitating seamless day-to-day payments. Created by Charlie Lee, a former Google thought leader, Litecoin has dramatically increased in popularity since the third quarter of 2017.
Litecoin has maintained a position in the top 10 highest market cap cryptocurrencies for several months now, and is designed with practicality in mind. Lee, speaking at a Coinbase talk in March 2017, elaborated on his vision for Litecoin:
“Bitcoin can be used for like moving millions of dollars between banks, buying houses, buying cars. It’s really secure … Litecoin can be used for cheaper things.”
The technological architecture behind Litecoin allows it to offer significantly faster transaction times than Bitcoin – more than 400% faster. Litecoin also offers a total cap of 84 million individual coins, which makes it more viable as a daily payment system.
One of the most important differences between Litecoin and Bitcoin is the hardware required to participate in mining. Litecoin implements the Scrypt algorithm for cryptographic encryption, which requires less specialised hardware than Bitcoin’s SHA-256 algorithm. This difference could draw more network participants in assisting with network maintenance, speeding up overall growth.
Why buy Litecoin?
With a lower barrier to entry for mining, faster transaction speeds, and a lower per-unit cost, Litecoin is a solid alternative to Bitcoin. With Charlie Lee announcing an upcoming marketing campaign, now could be the ideal time to get on board the Litecoin hype train.
Where to Buy Litecoin:
Swyftx makes it possible to purchase Litecoin via POLi, BPAY and Cash.
Bitcoin Cash is a “fork” of the original Bitcoin blockchain ledger. Launched in July 2017, Bitcoin Cash was created when a team of developers decided they would improve upon the Bitcoin core by increasing block size and implementing a number of other changes. This split is referred to as a fork in the blockchain ecosystem.
The primary goal of Bitcoin Cash is to improve transaction times and lower transaction fees by increasing the size of each block to 8 megabytes instead of just 1. Bitcoin Cash, or BCH, has been a highly successful cryptocurrency since launch. The price of BCH jumped dramatically to around $2,000 in November 2017 when a proposed fix called “SegWit2x” that was intended to resolves issues in the core Bitcoin blockchain failed.
The value of Bitcoin Cash almost doubled to $4,000 in December 2017 when highly popular platform Coinbase announced its support of the coin. Vinny Lingham, who is referred to as the “Bitcoin Oracle”, has stated that he believes Bitcoin Cash will surpass Bitcoin as the number one cryptocurrency:
“The one need is global fast cheap payments … When I look at it from a products standpoint I think the greater demand is for peer-to-peer cash than for digital gold.”
The higher block size of Bitcoin Cash allows the network to resolve more than 50 transactions per second, which dominates the 7 transaction per second limit in place with Bitcoin. Bitcoin Cash transaction fees are also significantly lower, with fees averaging around $0.001. Transactions on the Bitcoin Cash network are currently taking just 10 minutes to resolve.
Why Bitcoin Cash?
Bitcoin’s Lightning Network layer may claim to provide faster transaction times and lower fees, but Bitcoin Cash is already delivering on these promises. If the Lightning Network layer fails to succeed in addressing the issues that plague Bitcoin, then it’s likely Bitcoin Cash could depose Bitcoin as king of the digital currency world.
Where to Buy Bitcoin Cash:
Swyftx allows Australian traders to purchase Bitcoin Cash with credit and debit cards.
Ethereum is the second-largest cryptocurrency by market capitalization, and is vastly different to Bitcoin in many ways. Created by Vitalik Buterin in 2013, Ethereum has exploded over the past year, increasing in value by more than 12,500 percent.
While both Bitcoin and Ethereum are based on blockchain technology, Ethereum is far from a simple cryptocurrency. Ethereum is a blockchain platform, using “Ether” as a currency token. Ethereum is designed to function as a blockchain platform that enables the creation and execution of “smart contracts”, which are immutable programs executed on Ethereums blockchain networks that control the transfer of cryptocurrency or other digital assets.
Ethereum is often described as the “World Computer” – it can be used to create decentralised applications that manage energy distribution, decentralise digital marketing, or even allow users to share their computer’s processing power in a vastly distributed supercomputer.
Ethereum creator Vitalik Buterin has elaborated on the highly flexible and scalable nature of the Ethereum blockchain:
“You could run StarCraft on the blockchain. Those kinds of things are possible. High level of security and scalability allows all these various other things to be built on top.”
The Ethereum network is currently able to handle around 15 transactions per second, or TPS. Recent comments made by Buterin, however, reveal that the Ethereum blockchain will soon rival Visa, at around 2,000 TPS.
Ethereum is a highly flexible, dynamic and intelligent blockchain platform that is far more functional than Bitcoin, and is currently the driving force behind the most disruptive blockchain-based projects currently under way.
Why Ethereum?
Bitcoin may be the highest-value cryptocurrency, but Ethereum is most definitely here to stay. Ethereum-standardised tokens, or “ERC20” tokens, are used in most initial coin offerings – a technique used by blockchain startups to generate seed capital outside of traditional VC sources.
Ethereum is also set to switch from the energy-intensive “proof of work” consensus method that is currently used in Ether mining to a faster, cheaper and more accessible “proof of stake” method.
Stellar Lumens is a blockchain network that is specifically about “cross-asset transfers of value”. Simply put, Stellar is focused on lowering the cost of transferring assets, such as currency, between individuals.
While Bitcoin has the same fundamental purpose, Stellar is a decentralised, hybrid blockchain that is geared towards streamlining monetary transactions. Stellar Lumens, or XLM, make transactions cheaper, faster and more reliable. However, XLM offers less functionality as a method of storing value when compared to Bitcoin.
Stellar Lumens addresses three primary issues with the current asset transfer paradigm – high transaction costs, slow settlement times, and a lack of liquidity in lesser-used currencies. Stellar Lumens solves these issues by charging a fee of 0.00001 XLM for each transaction. At current market rates, it would be possible to process 100,000 transactions for just under $0.50 USD.
Stellar network transactions are processed within less than 4 seconds, which makes it the fastest network online. As XLM can be used as a bridging currency, it dramatically increases liquidity and makes exchanging lesser-known currencies cost-effective and easy.
Why Stellar Lumens?
Stellar has recently announced partnerships with IBM, Deloitte, and Stripe, making it a highly attractive cryptocurrency to those interested in tokens that integrate with existing financial systems.
Where to Buy Stellar Lumens:
Buying XLM can be a little trickier than purchasing other cryptos in this list. You’ll need to obtain some cryptocurrency to trade for XLM, or get started with an exchange that supports fiat deposits.
Swyftx is one of Australia’s top crypto exchanges with over 300 available cryptocurrencies including XLM. Check out our Australian Exchange Guide to learn more about Swyftx and other Australian exchanges.
Dash is another top ten market cap cryptocurrency and, like Litecoin, is focused on addressing the issues of scalability that are currently troubling the blockchain network. Dash is the brainchild of Evan Duffield and is a Bitcoin fork, but unlike Bitcoin Dash it is heavily focused on protecting the privacy of users.
Since launch in 2014, Dash has experienced a dramatic increase in value. If you invested just $1,000 in Dash at the 2014 price of $0.03, you’d now be sitting on a wallet holding more than $25 million USD worth of the privacy-focused cryptocurrency.
On the Bitcoin blockchain, it’s possible for anybody to see which wallets are sending how much Bitcoin and where. Dash uses a complicated anonymisation strategy called coinjoin mixing that obfuscates transaction ownership by processing the transactions of multiple parties as one single transaction. This process makes it impossible to determine who received funds, who sent them, or the amount transferred.
This anonymisation technique does slow down transactions per second rates somewhat but still allows Dash to process around 48 TPS, which is 7 times faster than Bitcoin. Dash also offers a much more attractive transaction fee, with an average of $0.10 per transaction.
Why Dash?
The highly secure, private and anonymous nature of Dash could make it a major competitor to Bitcoin as regulatory authorities around the world and within Australia tighten their grip on the explosive cryptocurrency market.
Where to Buy DASH:
You can use Swyftx Crypto Exchange to purchase Dash by funding your trading account with AUD via bank transfer, and credit/debit card payments.
Final Thoughts
Bitcoin may be struggling through some growing pains as the network matures, but it’s still the most valuable and widely used cryptocurrency in the world. The upcoming Lightning Network implementation may provide Bitcoin users with a solution to Bitcoin’s scalability issue.
However, it is always important to diversify your portfolio when cryptocurrency investing to increase your exposure in the crypto market. That is why it is important to gain an understanding of other alternatives to bitcoin.
Bitcoin has experienced a massive surge in value over the last couple of years, breaking the $20,000 AUD threshold and catapulting cryptocurrency into the mainstream media. Despite this dramatic increase in popularity and adoption rates, there are still many issues left unresolved with the Bitcoin network.
While Bitcoin may be the undisputed champion of the cryptocurrency arena, there are more than 1,300 different digital currencies, crypto coins and tokens that are currently being traded on the cryptocurrency markets. While most of these altcoins are either redundant or highly niche-specific, there are few key cryptos that present cryptocurrency investors with viable and potentially promising alternatives to Bitcoin.
What’s Going Wrong With Bitcoin?
Satoshi Nakamoto, the mysterious creator of Bitcoin, originally devised the cryptocurrency as a “peer-to-peer electronic cash system” that would revolutionise, democratise, and decentralise the current international financial paradigm. The massive increase in popularity and value that Bitcoin has experienced over the past year, however, has left the Bitcoin network slow, unwieldy, and far from this original objective.
The core issue with the Bitcoin network at this point in time is a specific parameter called “block size limit”. The “block” in “blockchain” refers to a cryptographically encoded list of all transactions that have occurred over the network in the previous 10 minutes. In 2010, the size of each block was limited to 1 megabyte in order to prevent hacking attacks, but with the massive increase in transaction frequency that has occurred recently, this block size limit is now crippling the Bitcoin network.
The 1 megabyte block size limit means the Bitcoin network can only support a potential maximum of seven transactions per second, which means transactions can sometimes take as long as 24 hours in average transaction times or longer to complete during peak periods.
Bitcoin network participants that help process transactions will treat transactions with higher fees as high priority, resulting in transaction fees as high as $55 USD in January 2017. There are a number of solutions that aim to solve these issues, such as the Lightning Network layer, but these developments present their own unique issues.
The birth of the Lightning mainnet can be viewed live as a new layer grows organically on top of the Bitcoin network. For comparison, it’s possible to view a 3D live visualisation of the current Bitcoin Network on Bitnodes. The nature of the Lightning Network solution, however, means that the network will be centralised around major hubs as illustrated in the visualisation below:
Lightning Network Testnet Visualisation Courtesy of Steven Roose.
Centralisation is antithetical to the core tenets of blockchain technology, so there is an understandable amount of controversy within the Bitcoin and blockchain community as to whether the Lightning Network will solve the issues that plague the Bitcoin network at this point in time.
The high value of Bitcoin has also led many investors to “HODL”, a humorous acronym derived from a typo in a Bitcointalk Forum post in 2014 that refers to “holding on for dear life”. Many investors purchase Bitcoin in order to use it as a method of storing value, not for use as currency, promoting hoarding.
Lastly, the extreme surge in Bitcoin popularity has captured the attention of regulatory bodies around the world. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has recently been provided with new powers to investigate Bitcoin traders, while new legislative amendments force crypto exchanges to disclose user information. As a result, more Australian crypto traders are seeking privacy-focused cryptocurrencies.
Fortunately, there are many highly innovative high market cap cryptocurrencies that have the potential to challenge Bitcoin as the de facto king of cryptocurrency. We’ll now proceed to examine the best Bitcoin alternatives for 2018 and find out what makes them prime competitors:
Litecoin is a rising star in the cryptocurrency ecosystem and is focused heavily on facilitating seamless day-to-day payments. Created by Charlie Lee, a former Google thought leader, Litecoin has dramatically increased in popularity since the third quarter of 2017.
Litecoin has maintained a position in the top 10 highest market cap cryptocurrencies for several months now, and is designed with practicality in mind. Lee, speaking at a Coinbase talk in March 2017, elaborated on his vision for Litecoin:
“Bitcoin can be used for like moving millions of dollars between banks, buying houses, buying cars. It’s really secure … Litecoin can be used for cheaper things.”
Litecoin performance over 2017 courtesy of CoinMarketCap.com
Litecoin Features: The technological architecture behind Litecoin allows it to offer significantly faster transaction times than Bitcoin – more than 400% faster. Litecoin also offers a total cap of 84 million individual coins, which makes it more viable as a daily payment method.
One of the most important differences between Litecoin and Bitcoin is the hardware required to participate in mining. Litecoin implements the Scrypt algorithm for cryptographic encryption, which requires less specialised hardware than Bitcoin’s SHA-256 algorithm. This difference could draw more network participants in assisting with network maintenance, speeding up overall growth.
Why Litecoin? With a lower barrier to entry for mining, faster transaction speeds, and a lower per-unit cost, Litecoin is a solid alternative to Bitcoin. With Charlie Lee announcing an upcoming marketing campaign, now could be the ideal time to get on board the Litecoin hype train.
Bitcoin Cash is a “fork” of the original Bitcoin blockchain ledger. Launched in July 2017, Bitcoin Cash was created when a team of developers decided they would improve upon the Bitcoin core by increasing block size and implementing a number of other changes. This split is referred to as a fork in the blockchain ecosystem.
The primary goal of Bitcoin Cash is to improve transaction times and decrease transaction fees by increasing the size of each block to 8 megabytes instead of just 1. Bitcoin Cash, or BCH, has been a highly successful cryptocurrency since launch. The price of BCH jumped dramatically to around $2,000 in November 2017 when a proposed fix called “SegWit2x” that was intended to resolves issues in the core Bitcoin blockchain failed.
The value of Bitcoin Cash almost doubled to $4,000 in December 2017 when highly popular platform Coinbase announced its support of the coin. Vinny Lingham, who is referred to as the “Bitcoin Oracle”, has stated that he believes Bitcoin Cash will surpass Bitcoin as the number one cryptocurrency:
“The one need is global fast cheap payments … When I look at it from a products standpoint I think the greater demand is for peer-to-peer cash than for digital gold.”
Bitcoin cash performance over 2017 courtesy of CoinMarketCap.com
Bitcoin Cash Features: The higher block size of Bitcoin Cash allows the network to resolve more than 50 transactions per second, which dominates the 7 transaction per second limit in place with Bitcoin. Bitcoin Cash transaction fees are also significantly lower, with fees averaging around $0.001. Transactions on the Bitcoin Cash network are currently taking just 10 minutes to resolve.
Why Bitcoin Cash? Bitcoin’s Lightning Network layer may claim to provide faster transaction times and lower fees, but Bitcoin Cash is already delivering on these promises. If the Lightning Network layer fails to succeed in addressing the issues that plague Bitcoin, then it’s likely Bitcoin Cash could depose Bitcoin as king of the crypto world.
Ethereum is the second-largest cryptocurrency by market cap, and is vastly different to Bitcoin in many ways. Created by Vitalik Buterin in 2013, Ethereum has exploded over the past year, increasing in value by more than 12,500 percent.
While both Bitcoin and Ethereum are based on blockchain technology, Ethereum is far from a simple cryptocurrency. Ethereum is a blockchain platform, using “Ether” as a currency token. Ethereum is designed to function as a blockchain platform that enables the creation and execution of “smart contracts”, which are immutable programs executed on the Ethereum blockchain that control the transfer of cryptocurrency or other crypto-assets.
Ethereum is often described as the “World Computer” – it can be used to create decentralised applications that manage energy distribution, decentralise digital marketing, or even allow users to share their computer’s processing power in a vastly distributed supercomputer.
Ethereum creator Vitalik Buterin has elaborated on the highly flexible and scalable nature of the Ethereum blockchain:
“You could run StarCraft on the blockchain. Those kinds of things are possible. High level of security and scalability allows all these various other things to be built on top.”
Ethereum performance over 2017 courtesy of CoinMarketCap.com
Ethereum Features: The Ethereum network is currently able to handle around 15 transactions per second, or TPS. Recent comments made by Buterin, however, reveal that the Ethereum blockchain will soon rival Visa, at around 2,000 TPS.
Ethereum is a highly flexible, dynamic and intelligent blockchain platform that is far more functional than Bitcoin, and is currently the driving force behind the most disruptive blockchain-based projects currently under way.
Why Ethereum? Bitcoin may be the highest-value cryptocurrency, but Ethereum is most definitely here to stay. Ethereum-standardised tokens, or “ERC20” tokens, are used in most initial coin offerings – a technique used by blockchain startups to generate seed capital outside of traditional VC sources.
Ethereum is also set to switch from the energy-intensive “proof of work” consensus method that is currently used in Ether mining to a faster, cheaper and more accessible “proof of stake” method.
Stellar Lumens is a blockchain network that is specifically about “cross asset transfers of value”. Simply put, Stellar is focused on lowering the cost of transferring assets, such as currency, between individuals.
While Bitcoin has the same fundamental purpose, Stellar is a decentralised, hybrid blockchain that is geared towards streamlining monetary transactions. Stellar Lumens, or XLM, make transactions cheaper, faster and more reliable. However, XLM offers less functionality as a method of storing value when compared to Bitcoin.
Stellar performance over 2017 courtesy of CoinMarketCap.com
Stellar Features: Stellar Lumens addresses three primary issues with the current asset transfer paradigm – high transaction costs, slow settlement times, and a lack of liquidity in lesser-used currencies. Stellar Lumens solves these issues by charging a fee of 0.00001 XLM for each transaction. At current market rates, it would be possible to process 100,000 transactions for just under $0.50 USD.
Stellar network transactions are processed within less than 4 seconds, which makes it the fastest network online. As XLM can be used as a bridging currency, it dramatically increases liquidity and makes exchanging lesser-known currencies cost-effective and easy.
Why Stellar Lumens? Stellar has recently announced partnerships with IBM, Deloitte, and Stripe, making it a highly attractive cryptocurrency to those interested in tokens that integrate with existing financial systems.
Where to Buy Stellar Lumens: Buying XLM can be a little trickier than purchasing other cryptos in this list. You’ll need to obtain some cryptocurrency to trade for XLM, or get started with an exchange that supports fiat deposits.
Swyftx is one of Australia’s top crypto exchanges with over 300 available cryptocurrencies including XLM. Check out our Australian Exchange Guide to learn more about Swyftx and other Australian exchanges. If you’re looking for some pointers on how to purchase other cryptocurrencies that can be traded for Stellar Lumens, take a look at our Australian Bitcoin Buying Guide.
Dash is another top ten market cap cryptocurrency and, like Litecoin, is focused on addressing the issues of scalability that are currently troubling the blockchain network. Dash is the brainchild of Evan Duffield and is a Bitcoin fork, but unlike Bitcoin Dash it is heavily focused on protecting the privacy of users.
Since launch in 2014, Dash has experienced a dramatic increase in value. If you invested just $1,000 in Dash at the 2014 price of $0.03, you’d now be sitting on a wallet holding more than $25 million USD worth of the privacy-focused cryptocurrency.
Dash performance over 2017 courtesy of CoinMarketCap.com
Dash Features: On the Bitcoin blockchain, it’s possible for anybody to see which wallets are sending how much Bitcoin and where. Dash uses a complicated anonymisation strategy called coinjoin mixing that obfuscates transaction ownership by processing the transactions of multiple parties as one single transaction. This process makes it impossible to determine who received funds, who sent them, or the amount transferred.
This anonymisation technique does slow down transactions per second rates somewhat, but still allows Dash to process around 48 TPS, which is 7 times faster than Bitcoin. Dash also offers a much more attractive transaction fee, with an average of $0.10 per transaction.
Why Dash? The highly secure, private and anonymous nature of Dash could make it a major competitor to Bitcoin as regulatory authorities around the world and within Australia tighten their grip on the explosive cryptocurrency market.
Where to Buy DASH:
CEX.IO makes it possible to purchase Dash by funding your trading account with AUD via bank transfer, and credit/debit card payments.
Final Thoughts
Bitcoin may be struggling through some growing pains as the network matures, but it’s still the most valuable and widely used cryptocurrency in the world. The upcoming Lightning Network implementation may provide Bitcoin users with a solution to Bitcoin’s scalability issue, but the alternative cryptocurrencies listed above are all worth careful consideration.
The rapidly growing cryptocurrency market has exploded in value and popularity over the last year. With Bitcoin prices fluctuating heavily, some are now saying it is a great time to buy in ahead of the inevitable bull market.
If you’re ready to get started with cryptocurrency investing, you’ll need to start by purchasing some Bitcoin. It’s the most popular and most trusted coin. This can be difficult and confusing for newer investors, as there are many different ways in which Bitcoin can be purchased.
Recent regulatory crackdowns and geopolitical issues around the world have placed Bitcoin under intense scrutiny, which has made it more difficult in some cases for investors to purchase cryptocurrency with fiat currency (such as Australian dollars).
While these events have made it slightly more difficult to buy bitcoin in Australia it’s still relatively easy to buy with the right method. In this guide, we’ll break down the five safest, simplest, and most reliable Australian Bitcoin exchanges.
What to Know Before Getting Started
Before jumping in and buying Bitcoin from any of these platforms, it’s important to ensure you understand how a Bitcoin wallet works. In order to receive your Bitcoin, you’ll need to provide your chosen Bitcoin broker with a valid wallet address.
You may also want to learn how to keep your coins safe and consider investing in a hardware wallet such as the Trezor or Ledger Nano S if you intend to purchase a large amount of Bitcoin.
There are a number of factors to consider when selecting a Bitcoin broker:
Payment methods: It’s possible to purchase Bitcoin with payment methods such as BPAY. Some platforms allow users to buy Bitcoin in person at a local news agent. Due to recent disruption from the big four banks both POLi and credit/debit card purchases are generally unavailable in Australia, although some highly compliant platforms still provide POLi payments.
Fees: A Bitcoin broker will charge a fee for their service, which will vary from broker to broker.
ID verification requirements: All Bitcoin brokers operating in Australia are required to comply with Know Your Customer and Anti-Money Laundering laws, which means you’ll need to verify your identity before buying. The sole exception to this rule is LocalBitcoins, which makes it possible to purchase Bitcoin completely anonymously with cash in person.
Swyftx is one of Australia’s top-rated exchanges, boasting high TrustPilot scores and offering over 300+ tradeable crypto assets including Bitcoin, Ethereum and Solana. The exchange is highly secure being AUSTRAC registered and ISO27001:2013 certified giving its users peace of mind that their data and investments are safe.
Swyftx is a feature-rich trading platform, one of its stand-out features is its ‘demo mode. This feature lets beginner crypto investors practice trading with US$10,000 in a risk-free simulated environment. Other notable features include recurring orders, trigger orders and price alerts.
Swyftx users can also earn interest on their Bitcoin investments with the exchange’s new Earn feature. This feature lets investors daily rewards on their Bitcoin and other cryptocurrencies when they add it to their Earn wallet. There are no associated fees with Earn and the funds can be pulled out of Earn at any time with no cost.
Swyftx is also great for any investors looking to purchase large amounts of Bitcoin (BTC). The exchange has one of Australia’s top-rated OTC desks, where investors can speak with an industry-leading expert about making high-volume trades over $100,000 AUD.
Payment method
There are numerous deposit methods on Swyftx’s exchange including; PayID, Bank Transfer, OSK, POLi and credit/debit card. Many of these payment methods allow for near-instant transactions.
Fees
Swyftx charges a trading fee of 0.6% which is lower than the Australian average. No fees for charged for deposits or withdrawals.
Independent Reserve is one of the most popular options for purchasing Bitcoin and other cryptocurrencies in Australia and operates as a fully-functional exchange. This means that you don’t need to set up a separate wallet to buy Bitcoin from Independent Reserve as they offer a hosted wallet solution.
Independent Reserve is the first Australian crypto exchange to be insured by a leading global insurer and the first crypto exchange to have an integrated KPMG tax tool.
The identity verification process for Independent Reserve involves uploading both a standard photo ID and proof of address documents as well as an extra step in which new users are required to confirm their account with a security code sent in the mail.
Independent Reserve also provides an easy-to-use exchange that can be used to sell or buy Bitcoin for fiat currencies. Capital generated from the sale of Bitcoin on Independent Reserve can be withdrawn directly to your bank account.
Independent Reserve also supports 13 popular cryptocurrencies including ETH, LTC, BCH, XRP, XLM, EOS, REP, GNT, BAT, OMG, ZRX and PLA, and allows users to trade in USD, AUD and NZD.
Payment Methods:
For AUD deposits, Independent Reserve offers Electronic Fund Transfer (EFT), Osko (PayID), and POLi. SWIFT payments are available for USD and NZD deposits and withdrawals.
Fees:
EFT deposits under $100 AUD are subject to a $0.99 processing fee, while larger deposits are free. SWIFT deposits over $5,000 are free, while smaller deposits are charged a $15 fee. Withdrawals from Bitcoin wallets hosted by Independent Reserve cost 0.0003 BTC. Bitcoin deposits are free, and AUD withdrawals are free. ‘Premium Account’ holders benefit directly from this insurance, the highest levels of support, reduced trading fees, and the very best of the platform.
CoinJar was the first Australian cryptocurrency platform to launch with support from venture capital funding and, like Independent Reserve, offers exchange and hosted wallet services. CoinJar stands out from the crowd with a slew of features that include a dedicated smartphone app and even a “CoinJar Swipe” debit card that allows users to spend cryptocurrency directly in fiat currency.
It’s possible to use CoinJar as a simple hosted cryptocurrency wallet anonymously, but in order to purchase Bitcoin you’ll need to verify your identity by providing proof of identity and proof of address documents.
Payment Methods:
CoinJar supports Blueshyft (which makes it possible to fund your Bitcoin purchases with cash in person), BPAY & PayID (instant deposits via NPP/Osko). As of Oct 2018, they no longer support POLi deposits.
Fees:
BPAY transfers are free from fees on the CoinJar platform while Blueshyft payments are subject to a processing fee of 1.5%. Although the fees are lower than Coinbase, we have found the price of Bitcoin on CoinJar to be slightly more expensive.
Coinbase is the undisputed king of cryptocurrency brokerage, and boasts almost 8 million users around the world. Based in San Francisco, Coinbase is available in 32 countries internationally and supports a selection of cryptocurrencies that includes Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
The Coinbase platform is not an exchange, and thus doesn’t make it possible to actually trade Bitcoin, but does offer hosted wallet solutions for all of the aforementioned cryptocurrencies. The Coinbase identity verification process involves both ID and phone number verification, but due to a massive surge in users the verification process is delayed at the moment – some new users are reporting verification times of more than one week.
The biggest drawcard of Coinbase is the simplicity and ease of use the platform offers. Instead of confusing new users with order books and trading screens, Coinbase delivers a straightforward buying process that doesn’t leave much to interpretation. Another drawback is that they restrict how much you can buy per week, with limits increasing with use.
Payment Methods:
As Coinbase is based internationally, it doesn’t support POLi payments. The only way to purchase Bitcoin via Coinbase in Australia is via credit or debit card, which requires identity verification. All Bitcoin purchases made via this method are instant, however.
Fees:
Coinbase charges a rate of 3.99% for all credit and debit card purchases in Australia.
Caleb and Brown is an award-winning digital currency brokerage registered with AUSTRAC. Founded in 2016 with a vision to become the conduit between cryptocurrency and the financial services industry, Caleb & Brown gives clients a sensible means to legally and safely engage in the cryptocurrency market with an experienced brokerage team providing an unparalleled service for both new investors and seasoned traders.
List of services includes: Retail Brokerage – access to over 1600 cryptocurrencies; OTC Trading desk; Cryptocurrency Education; Crypto Security and Wallet Set Up services; Crypto Tax Assessment services; ICO liquidations.
Caleb and Brown specialise in high-volume trading of digital currencies from $5,000 up to $100 million. They are Australia’s only brokerage service that enables same-day trading up to $2 million in purchases prior to banking deposit clearance for verified clients. Caleb & Brown was named FinTech start-up of the year at the 2018 Stockbroker and Financial Advisers Association (SAFAA) conference.
Payment Methods:
Simple bank-to-bank transfer from any local and international banks with KCY/AML verifications. Accepts all major international currencies.
Fees:
Caleb & Brown charges a commission varying between 2%-4% depending on the volume of the trade. NOTE: Caleb & Brown quotes a spot price derived as an average of international exchanges. No further spread is added to the spot price quoted.
BTC Markets is a slightly more complicated cryptocurrency platform geared towards experienced investors and traders. Based in Melbourne, BTC Markets is a full-service exchange and offers hosted wallet solutions.
Purchasing Bitcoin on BTC Markets is slightly more complicated than the other platforms in this guide. In order to buy Bitcoin with BTC Markets, users need to deposit AUD into their account and then trade on the BTC Market BTC/AUD exchange. This process may be somewhat intimidating to newer investors, but does present a range of different order types for experienced investors.
Payment Methods:
BTC Markets supports both POLi payments and BPAY. POLi payments under $500 typically clear within minutes, while BPAY payments can take up to two business days.
Fees:
Depositing AUD into a BTC Markets account with BPAY is free, while POLi payments incur a $3.30 fee.
Digital Surge is a crypto exchange based out of Brisbane, Australia. The exchange is focused on making crypto trading easy for beginners with a simple sign-up and verification process. Digital Surge users can easily track their portfolio and trade Bitcoin thanks to the crypto exchanges’ intuitive and minimalistic interface.
Digital Surge is also one of the cheapest Australian exchanges, offering customers trading fees as low as 0.1%. The exchange also has numerous trading features like price alerts, recurring orders and trigger orders. Users can also earn daily interest on 12+ cryptocurrencies thanks to Digital Surges’ new staking feature.
Payment Methods:
Digital Surge accepts payments via BPAY, POLi and PayID. The exchange currently does not accept credit card payments or bank transfers.
Fees:
All purchases made through Digital Surge come with a transaction fee that ranges from 0.1 to 0.5% depending on trade volume.
CoinTree is an Australian cryptocurrency exchange that allows users to purchase Bitcoin as well as trade a variety of different altcoins. Like Coinbase, CoinTree is designed with ease of use in mind and is geared towards newer cryptocurrency investors.
CoinTree has been in operation since 2013, and has gathered a significant amount of support in the Australian cryptocurrency community. The CoinTree platform also provides users with hosted wallet solutions.
Interestingly, CoinTree also makes it possible to pay bills using Bitcoin. Users are able to pay any common Australian bill by entering the biller code and customer reference number into the platform. CoinTree then provides the total converted rate into Bitcoin and pays the bill, fee-free.
Payment Methods:
CoinTree allows users to deposit cash directly into their account at any Australian bank, as well as POLi payments. Credit card or debit card purchases are not currently supported.
Fees
CoinTree offers extremely simple fees – all Bitcoin transactions are charged a 3% rate, while all other transfers are free.
CoinSpot is an Australian FinTech company founded in 2013 with a well-regarded reputation and customer service. CoinSpot also provides a competitive affiliate program receiving 25% of the commission fees they take on anyone you refer to them.
In terms of use, its website is clean and is fairly easy to use and buy Coins, with Bitcoin and more than 20 coins listed. But like most other exchanges here you cannot trade coins, only buy and sell. If you want to trade other coins, you’ll have to transfer your Bitcoin to an exchange such as Binance.
Payment Methods:
POLi, BPAY and Cash.
Fees:
For Bitcoin and Litecoin, the fee is 0.9% and for other coins it’s 2%-3% depending on the coin.
LocalBitcoins is wildly different from the other platforms presented in this guide. Using LocalBitcoins it’s possible to purchase Bitcoin completely anonymously with cash in person, but it can be somewhat riskier.
LocalBitcoins is essentially a marketplace that allows individuals to either buy or sell Bitcoin in person with cash or via bank transfer, PayPal, and many other payment methods. To buy Bitcoin on LocalBitcoins you’ll need to search for sellers in your local area and select your payment method.
LocalBitcoins provides users with a hosted wallet. When purchasing Bitcoin, a seller will place Bitcoin in escrow with the LocalBitcoins platform. When payment is complete the seller will release the escrow to the buyer’s wallet. If you decide to use LocalBitcoins to purchase Bitcoin anonymously, always be sure to check the seller’s profile page for positive feedback.
Payment Methods:
Cash, Paypal, Bank Transfer, Western Union, BPAY and more.
Fees:
The price of Bitcoin on LocalBitcoins is determined by the seller and varies wildly. You may find that purchasing Bitcoin anonymously is more expensive than using a more reputable broker platform. LocalBitcoins also charges a fee when Bitcoin is transferred to another wallet from their hosted wallet. An explanation of LocalBitcoins’ outgoing Bitcoin transfer fees can be found here.
Final Thoughts
Despite heavy resistance from incumbent financial institutions and major price fluctuations, Bitcoin is here to stay. Whether you choose to purchase Bitcoin from an exchange, a broker, or from an anonymous stranger, always be sure to remain cautious and keep your cryptocurrency details highly secure.
Following recently approved Australian crypto exchange-traded funds (ETFs), Sydney-based Holon Global Investments (Holon) has just launched three crypto funds of its own, partnering with Gemini as its custodian:
We're continuing our funds solution domination. @Gemini now serves as the custodian partner for Holon Global Investments, Australia's leading fund manager, and custodies their unlisted retail Bitcoin $BTC, Ethereum $ETH, and Filecoin $FIL funds. 👍🚀https://t.co/dYj8gpojxJ
Holon, an asset manager which identifies itself as a Web3 investor, has launched three unlisted funds that provide access to bitcoin, ethereum and filecoin respectively.
According to the investment firm, the funds are currently the only managed investment schemes for digital assets available to retail investors that are registered with the Australian Securities and Investments Commission (ASIC).
We are huge believers in the potential for blockchain and cryptocurrency to revolutionise key areas of the global and Australian economy, including finance and data storage. But Australian investors, financial investors, and financial advisers have struggled to find regulated ways to invest.
Heath Behncke, managing director, Holon
The funds have a A$5,000 minimum investment, or A$2,000 with a A$200 per month savings plan. Furthermore, Holon has suggested that all three funds hold long positions only, as there is no gearing or trading.
Notably, the funds will incur a management fee of 0.4 percent, significantly less than the 1.25 percent fee charges by the initial group of approved Australian crypto ETFs.
Holon’s head of asset management highlighted the thought process behind this decision in a recent interview with the Australian Financial Review:
We don’t think we’re adding an enormous amount of value here, and so we shouldn’t be charging an enormous fee.
Rory Scott, head of asset management, Holon
Holon Strengthens Ties with Gemini
According to a statement by Gemini, it will act as custodian for all three funds, given its credentials and experience in operating within challenging regulatory environments. But this isn’t the first time Holon has teamed up with Gemini. Last year, it partnered with the Winklevoss-led outfit after launching its Filecoin wholesale fund.
Holon’s managing director Heath Behncke was excited about the launch, commenting:
The Holon funds have been carefully structured to include Gemini’s institutional grade custody to provide investors and financial advisors with attractive exposure to some of the most credible and exciting cryptocurrencies – Bitcoin, Ethereum and Filecoin.
Heath Behncke, managing director, Holon
It’s interesting to note that when Commonwealth Bank of Australia announced its foray into crypto, which has since been postponed, it too leaned on Gemini for custodial services. At present, it isn’t clear whether there is simply a lack of credible local institutional-grade custodians, or whether other factors, such as regulations, are at play.
