Abra, which initially launched in 2015 as a cryptocurrency-based remittance platform, has developed a platform to allow investors to buy stocks with cryptocurrencies like Bitcoin.
The platform is set to operate as an all-in-one application on which investors can invest in fiat, stocks, exchange-traded funds (ETFs), and cryptocurrencies.
Bill Barhydt, the CEO of Abra, said:
“We’re going to start with popular US stocks and ETFs and add more global assets in the coming months. Of course, all of the great features for investing in cryptocurrencies and fiat currencies remain fully integrated as well.”
How is Abra Able Allow Users to Buy Stocks With Bitcoin?
In a way, investors are putting up Bitcoin as collateral to invest in a single stock or an ETF.
If the value of the stock of the ETF rises, more BTC will be added to the account. If the value of the asset declines, then BTC will be subtracted from the account.
Abra takes the risk in all of the contracts on the platform. According to Barhydt, the risk is carefully hedged and the system has been tested on many contracts.
“Abra has already successfully processed hundreds of millions of dollars worth of these investment contracts and has never lost money on them,” the Abra CEO explained.
The platform may not be as useful for investors in the U.S. that have easy access to the U.S. stock market.
But, for investors in regions with large unbanked populations wherein it is challenging for individuals to obtain stable financial or brokerage services, the platform could be a game changer.
This is HUGE!!!!!!!!!!!!!!!! All #bitcoin-based!!!!!! Kudos to @billbarhydt & team for lassoing traditional financial assets into Bitcoin, instead of trying to pigeonhole Bitcoin into the status quo—as so many other #crypto companies are doing. Best wishes for tremendous success! https://t.co/ZXs0lhqs8Z
— Caitlin Long 🔑 (@CaitlinLong_) February 6, 2019
Barhydt stated that the platform was designed to provide investment opportunities to investors that were previously unable to invest in the global stock market.
“However, many people (billions actually) are shut out of these investment opportunities due to their geography, financial status or lack of accredited investor status, income level, or lack of trust for their local financial institutions.”
More Investment Vehicles are Coming
The all-in-one investing platform of Abra significantly improves the ability of Bitcoin holders and cryptocurrency investors to spend digital assets.
Previously, for cryptocurrency users to do anything with the asset, conversion to fiat was a necessary first step whether it is to pay merchants or invest in an alternative market.
Apps like Abra and Coins.ph that enable users to utilize cryptocurrencies to invest in stocks, pay bills, send and receive money, and purchase products on online e-commerce platforms could increase the adoption of cryptocurrencies in the long-term.
“Having a single app for stocks, cryptocurrencies, fiat currencies and even ETFs is really compelling and something I know I will be using for the rest of my life,” Barhydt added, emphasizing that the objective of the team was to create an app that is needed by the community.
As exchanges and businesses in the cryptocurrency sector continue to roll out products that improves the liquidity and accessibility of digital assets, the asset class could become more compelling for users in both the traditional financial sector and fintech market.