We have a saying in Jamaica that says “When America coughs we catch a cold”, it should track them that us having a strong business relationship that runs across many industries and Caribbean people investing in US-based stocks, especially in the Tech, Consumer, and Financial sectors is nothing new. So this landmark approval of spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) in the United States is a significant development with potential implications for both consumers and businesses in that market as well as the Caribbean.
Before we get into what this approval means for US and Caribbean consumers and businesses, let me tell you what the hell an ETF is anyway. It’s an exchange-traded fund (EFT) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars.
That said, here’s what it means for Consumers:
- Greater Access: Consumers, including retail/individual investors, now have an easier way to invest in Bitcoin through ETFs. This provides a more familiar and regulated investment vehicle compared to buying Bitcoin directly from cryptocurrency exchanges.
- Reduced Risk: ETFs often come with regulatory oversight and investor protections, which can reduce some of the risks associated with investing in cryptocurrencies. This increased regulatory scrutiny may provide consumers with more confidence in the market.
- Portfolio Diversification: The availability of Bitcoin ETFs allows investors to include cryptocurrency exposure as part of their diversified investment portfolios, potentially enhancing their overall risk-adjusted returns.
- Liquidity: ETFs are typically more liquid than directly trading cryptocurrencies on exchanges. This means investors can buy and sell Bitcoin ETF shares more easily, potentially reducing the cost and complexity of trading.
Here’s what it means for Businesses:
- New Investment Products: The approval of Bitcoin ETFs creates opportunities for asset management companies to create and offer these products to investors. This could lead to the development of more cryptocurrency-focused investment options and strategies.
- Institutional Participation: Institutional investors, such as hedge funds and pension funds, may be more inclined to invest in Bitcoin through regulated ETFs. This could attract more institutional capital into the cryptocurrency market, potentially increasing its overall size and legitimacy.
- Market Growth: The approval of Bitcoin ETFs could drive more interest and participation in the cryptocurrency market, leading to increased trading volumes and potentially higher prices for Bitcoin and related assets.
- Regulatory Scrutiny: With the approval of Bitcoin ETFs, the cryptocurrency market may face increased regulatory scrutiny as regulators monitor the activities of these funds and assess their impact on the broader financial system.
In summary, the approval of spot Bitcoin ETFs by America’s SEC represents a significant step toward mainstream acceptance of cryptocurrencies as an asset class.
It provides consumers with more accessible and regulated ways to invest in Bitcoin while creating new opportunities and challenges for businesses operating in the cryptocurrency and traditional finance sectors.
What Does it Mean for Caribbean Bitcoin Consumers and Users?
Two years ago I wrote an article Top 8 Caribbean Crypto Countries and the #1 industry that’s being disrupted. Back then the Caribbean had over 214,000 Caribbean Crypto owners and users and 8 particular Caribbean countries were leading the Bitcoin adoption of this fast-emerging industry.
The top 8 Crypto using Caribbean countries are:
107,752 Crypto users in Haiti – 1% of population
39,214 Crypto users in Jamaica – 1% of population
35,851 Crypto users in Puerto Rico- 1% of population
16,377 Crypto users in Trinidad & Tobago – 1% of population
5,474 Crypto users in Suriname- 1% of population
3,576 Crypto users in The Bahamas- 1% of population
3,569 Crypto users in Belizeans – 1% of population
3,022 Crypto users in Barbados- 1% of population
What it means is that it validates Caribbean users’ early adopter mentality and innovative spirit in accepting Bitcoin as a form of payment for tech/digital jobs from 10 years ago; it means Caribbean users can, via various channels invest in Bitcoin ETFs as well.
I keep telling people wherever I travel, the Caribbean is not just a place where you come to get a tan on and your groove back, we have innovators, early adopters, and entrepreneurs doing some thangs!! Our market may seem small to some, but when it comes to remittances, online shopping etc, we are right there with everyone else. Our numbers may be small but our markets our Diaspora markets and the industries we impact are – significant.
Ever heard of Crypto Caribbean the Region’s largest Crypto Currency Community?
Additionally, it is not a secret, as Cryptocurrency adoption is growing around the world, and the 2021 Triple A reports I looked at showed that we now have an estimated 300 million crypto users globally and over 18,000 businesses already accepting cryptocurrency payments. It was one of these financial tools/products that was created about 14 years ago and seeks to provide an alternative to the efficiencies and biases in the global mainstream financial system.
Top Cryptocurrency-Using Countries
- India (100 million)
- USA (27 million)
- Nigeria (13 million)
- Vietnam (5.9 million)
- United Kingdom (3.3 million)
- Source: The Triple A Report
It allows money to be transferred across borders faster and cheaper than what prevails – payments, remittance, and buying and selling of goods and the social and economic shifts and impact that these changes usually create.
And if one thing that Politicians can’t deny or push back against for long – huge numbers! Have you read about how Caribbean Governments have been dealing with Bitcoin and cryptocurrency culture – legislatively? Read it here in my recent Silicon Caribe Insider newsletter issue here:
Bitcoin is a technology-driven disruptor to the global financial system so of course it creates a lot of resistance in government and Industries. I urge you to Google your way to greater knowledge about it all.
As with anything you are investing in, it’s your responsibility to do your due diligence. And of course, even as the US SEC has given this approval, they also said this “ “While we approved the listing and trading of certain spot bitcoin ETF shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
On a Personal Note
I kick myself at least once a month because I didn’t believe in or buy Bitcoin back when it was just US$100 when of of my tech nerd friends told me about it, today it now trades for US$45k for a single Bitcoin. And I also have traded in other cryptocurrencies that had real utility based on my research and I have industry friends who are in the Bitcoin mining side of the business as well. It’s a vast and beautiful new financial technology landscape to learn about.
I’ve also been watching this Consumer-level Bitcoin business called Lolli. In short – Lolli is a rewards application that gives you Bitcoin and cash-back rewards when you shop at your favorite stores. You Earn free rewards at 25,000+ top stores and get up to 30% back in cash or bitcoin via a browser extension & mobile app. The shitty thing is that you have to have a US or Canadian Bank based Card to participate right now.
What I like too, is that one of the people in the Tech Industry game that I have mad respect for Alexis Ohanian, Co-founder of Reddit and Founder of the 776 Fund, and his Tennis Legend wife Serena Williams are invested in this company.
Let the Caribbean in on this already!!
And if you read this far….then amazing. Read this too: The 15 American Brands present in the Caribbean now accept Crypto Payments, could that speed up adoption and legislation rollout here?
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Also check out this upcoming event that SiliconCaribe is a Sponsor for: OasisChain It’s a consumer crypto, blockchain, and games event happening in the Bahamas this week.