Re:Institutional Investors Are Using Back Door for Crypto Pu...
by dgant on Monday October 01, 2018 @08:22PM
(#18117894)
It's telling that the risk premium is 20%.
Re:Institutional Investors Are Using Back Door for Crypto Pu...
by wmf on Monday October 01, 2018 @08:35PM
(#18117942)
This seems very high; have institutional investors ever had problems selling "tainted" coins?
Re:Institutional Investors Are Using Back Door for Crypto Pu...
by badge on Tuesday October 02, 2018 @03:08PM
(#18124710)
Do you have a source? Sounds like you just made that up.
Investors, especially large institutions will have teams of lawyers who would would have paperwork from the party they purchase from vetting the purchase. Their insurance is the law and an ability to hold the seller responsible for loss in any case where that risk might exist.
No one pays 20% markup on a car, or gold, or a diamond ring under normal circumstances.
Washing illicit money though paying miners for their new Bitcoins is an established method for money laundering.
It's called insurance, just like after you buy a house you immediately insure it by paying a premium of x% of it's value.
In this case, you insure against someone in the future claiming those coins were stolen from him.
The investors want exposure to the bitcoin price, but not to some of the risks, so they factor them out as much as possible.