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Bitcoin comes of age

Cryptocurrencies are attracting professional and high-net-worth investors, and they need reliable service provision

Buying bitcoin is almost as easy as booking a train ticket these days. Just register with one of the growing number of cryptocurrency exchanges, go through a few standard compliance checks, load a cash balance and away you go.

This ease of accessibility is no accident. The mainstay of demand for bitcoin so far has been from retail investors and day traders keen to dabble in this new market, so the priority has been to make it as easy as possible for them to access the currency without excessive layers of paperwork and screening.

As the cryptocurrency market matures, however, it is attracting interest from a wider spectrum of investors, including professionals and high-net-worth individuals. This is to be welcomed as bitcoin has been on a rollercoaster ride of volatility in recent months and, with the increasing participation of institutional traders, it offers tangible opportunities to sophisticated investors.

Transitioning from fringe currency to an investment asset class will be a major change for bitcoin and other crypto assets. Market participants will need confidence in the regulation and security of the market, while also developing an understanding of the changeable nature and technical factors that drive currencies.

At CoinCorner, we have been conscious of the need to address security concerns, something that has been a priority since we first launched in July 2014. Our clients can access their assets at any time and can be assured that these are kept securely in cold storage while not required.

We are based in the Isle of Man, which is one of the safest places to live in the world, and take every necessary step to assuage concerns over fraud and security. The Isle of Man has become an active centre for bitcoin trading and one of the first jurisdictions in the world to introduce legislation
for cryptocurrencies.

While there was no legislation in place when we launched, we fully expected that this would change at some point and carried out robust anti-money laundering, counter-terrorist financing and know-your-customer procedures from day one. We worked closely with the Isle of Man government to develop the local crypto legislation that came into force in 2016 and have been
registered with the Isle of Man Financial Services Authority for the past two years.

Proportionate regulation of the cryptocurrency space is to be welcomed and should help to facilitate its transition into a professional-grade product, giving investors greater confidence that this is not the wild west of financial markets, but rather an emerging asset class in its own right.

Volatility will also play its part in supporting this transition and the fluctuating price of bitcoin over the past six months has certainly helped to bring in new participants. There is a natural tendency across financial markets to focus on intraday price fluctuations, but it is the broader trajectory of bitcoin over the last nine years that should be of greater relevance in showing its growth.

The steady appreciation in the value of bitcoin, coupled with the rapid development of other digital currencies, highlights the rising maturity of the market as it begins to attract a new breed of longer-term professional.

While it is the risk and volatility of bitcoin, and the potential for high returns, that will draw professional investors in, they still need reliable service providers as they experiment in trading the product. That might range from technical support to advice on security and regulation, and this will be just as important for high-net-worth individuals as for day traders.

Our new service, CoinCorner Concierge, will be aimed specifically at a more sophisticated class of investor

Our new service, CoinCorner Concierge, will be aimed specifically at a more sophisticated class of investor, recognising that even if buying £100,000 of bitcoin rather than just £10, reliable and innovative exchanges will be no less important.

The cryptocurrency world is evolving fast and we are excited to be on the cusp of its next phase of growth.

For more information please visit coincorner.com/concierge

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