Bitcoin is trading in the form of an exchange-traded fund (ETF) for the first time in the US, after the Securities and Exchange Commission (SEC) approved the launch of the ProShares Futures Bitcoin Strategy ETF on October 18, 2021. This is a historic milestone for the cryptocurrency industry, as it opens the door for more mainstream investors to access Bitcoin without having to deal with the technical challenges of buying and storing it directly.

An ETF is a type of investment fund that tracks the performance of an underlying asset or index, such as stocks, bonds, commodities or currencies. Investors can buy and sell shares of an ETF on a stock exchange, just like any other security. The ETF provider is responsible for holding the actual assets and ensuring that the ETF price reflects the market value of the underlying asset.

A Bitcoin ETF is an ETF that tracks the price of Bitcoin, either by holding physical Bitcoins in a trust or by using derivatives contracts such as futures and swaps. The ProShares Bitcoin Strategy ETF is an example of the latter, as it does not hold any Bitcoins directly, but rather invests in Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME). The ETF aims to provide exposure to the daily changes in the price of Bitcoin, minus fees and expenses.

The main advantage of a Bitcoin ETF is that it lowers the barriers to entry for investors who want to gain exposure to Bitcoin without having to buy and store it themselves. Buying and storing Bitcoin requires a high level of technical expertise, security measures and regulatory compliance, which can be daunting and costly for many investors. A Bitcoin ETF simplifies this process by allowing investors to buy and sell shares of the ETF through their existing brokerage accounts, with no need to worry about wallets, keys, hacks or thefts.

Another benefit of a Bitcoin ETF is that it provides more liquidity and transparency to the Bitcoin market, as it increases the demand and supply of Bitcoin futures contracts, which are standardized and regulated by the CME. This can help reduce the volatility and price discrepancies of Bitcoin across different platforms and regions. Moreover, a Bitcoin ETF can attract more institutional investors, such as pension funds, hedge funds and mutual funds, who may have more stringent requirements for investing in Bitcoin than individual investors.

The launch of the ProShares Bitcoin Strategy ETF has been met with great enthusiasm by the cryptocurrency community, as it signals a growing acceptance and recognition of Bitcoin by regulators and traditional financial institutions. The ETF debuted with more than $1 billion in assets under management on its first day of trading, making it one of the most successful ETF launches in history. The ETF also sparked a rally in the price of Bitcoin, which reached a new all-time high of over $66,000 on October 20, 2021.

However, a Bitcoin ETF also comes with some risks and challenges that investors should be aware of before investing. One of the main risks is that a Bitcoin ETF does not provide direct exposure to Bitcoin, but rather to Bitcoin futures contracts, which may not always reflect the actual price of Bitcoin due to factors such as contango, backwardation, rollover costs and tracking errors.

Contango occurs when the futures price is higher than the spot price, which means that the ETF has to sell low and buy high when it rolls over its contracts every month, resulting in a negative return. Backwardation occurs when the futures price is lower than the spot price, which means that the ETF has to buy low and sell high when it rolls over its contracts every month, resulting in a positive return. Rollover costs are the fees and expenses associated with rolling over futures contracts. Tracking errors are the differences between the performance of the ETF and its underlying asset.

Another risk is that a Bitcoin ETF is subject to regulatory uncertainty and potential legal challenges, as the SEC has not yet approved any Bitcoin ETF that holds physical Bitcoins in a trust, which many investors consider to be a more direct and secure way to invest in Bitcoin. The SEC has expressed concerns about the lack of oversight and regulation of the Bitcoin spot market, as well as the potential for fraud, manipulation and cyberattacks. The SEC has also warned that investing in a Bitcoin ETF involves significant risks, including volatility, liquidity, valuation and operational issues.

A final risk is that a Bitcoin ETF may not fully capture the innovation and potential of Bitcoin as a decentralized peer-to-peer network that enables censorship-resistant transactions without intermediaries. By investing in a Bitcoin ETF, investors are essentially entrusting their money to a centralized entity that may not share their vision or values regarding Bitcoin. Some critics argue that a Bitcoin ETF goes against the ethos and spirit of Bitcoin, as it introduces more intermediation and dependence on traditional financial systems.

Bitcoin ETF is a novel and exciting way to invest in Bitcoin that offers many benefits but also some drawbacks. Investors should do their own research and due diligence before investing in a Bitcoin ETF, as they should with any other investment opportunity.

BlackRock bitcoin ETF raking in flows as GBTC continues to bleed assets

Meanwhile, BlackRock, the world’s largest asset manager, has seen a surge of inflows into its bitcoin exchange-traded fund (ETF) since its launch in October 2023. The fund, which tracks the performance of the CME bitcoin futures contracts, has amassed over $1 billion in assets under management (AUM) in less than four months, according to data from ETF.com.

Meanwhile, the Grayscale Bitcoin Trust (GBTC), the largest and oldest bitcoin investment product, has continued to lose market share and assets. GBTC, which holds physical bitcoins in a trust and issues shares that trade on the over-the-counter market, has seen its AUM drop from $40 billion in September 2023 to $28 billion in January 2024, according to Grayscale’s website.

One of the main reasons for the divergence between the two products is the difference in their pricing mechanisms. GBTC often trades at a premium or discount to its net asset value (NAV), which reflects the value of its underlying bitcoins. This means that investors may pay more or less than the actual value of the bitcoins they are buying or selling. The premium or discount can vary widely depending on the supply and demand of GBTC shares and the sentiment of the bitcoin market.

On the other hand, BlackRock’s bitcoin ETF trades at a much closer price to its NAV, as it is based on the futures contracts that are traded on a regulated exchange. The futures contracts also have their own premiums or discounts, but they tend to be smaller and more stable than those of GBTC. Moreover, the futures contracts have an expiration date, which means that they converge to the spot price of bitcoin as they approach maturity.

Another advantage of BlackRock’s bitcoin ETF is that it has lower fees than GBTC. The ETF charges an annual expense ratio of 0.95%, while GBTC charges 2%. This means that investors can save money by choosing the ETF over the trust. Additionally, the ETF offers more liquidity and accessibility than GBTC, as it can be bought and sold on any brokerage platform that supports ETFs, while GBTC is limited to the OTC market.

BlackRock’s bitcoin ETF is not the only one that has been attracting investors’ attention. Several other bitcoin ETFs have been launched or approved in the US and Canada, such as the VanEck Bitcoin Strategy ETF, the ProShares Bitcoin Strategy ETF, and the Purpose Bitcoin ETF. These products offer similar features and benefits as BlackRock’s ETF, but they may differ in their tracking methods, fees, and liquidity.

The rise of bitcoin ETFs has been a boon for investors who want to gain exposure to the leading cryptocurrency without having to deal with the hassles and risks of buying and storing it directly. However, there are also some drawbacks and challenges that investors should be aware of before investing in these products.

For instance, bitcoin ETFs may not fully capture the upside potential of bitcoin, as they are subject to futures contract rollover costs and tracking errors. Moreover, bitcoin ETFs may face regulatory uncertainty and volatility, as they are subject to the rules and decisions of the authorities and exchanges that oversee them.

BlackRock’s bitcoin ETF has been raking in flows as GBTC continues to bleed assets, thanks to its superior pricing mechanism, lower fees, higher liquidity, and wider accessibility. However, investors should also weigh the pros and cons of investing in bitcoin ETFs versus other alternatives, such as buying and holding bitcoin directly or using other investment products.

Access Holdings Plc, a leading provider of financial services and solutions, has successfully completed the acquisition of Megatech Insurance Brokers Limited, a reputable insurance brokerage company with a strong customer base and a wide range of products. This acquisition is part of its strategic vision to expand our presence and capabilities in the insurance sector, and to offer her clients more value-added services and solutions.

Megatech Insurance Brokers Limited has been operating since 2010 and has established itself as one of the most trusted and reliable insurance brokers in the market. They offer a variety of insurance products, such as life, health, property, motor, travel, and business insurance, as well as risk management and consultancy services. They have a team of experienced and qualified professionals who are committed to delivering excellent customer service and satisfaction.

By acquiring Megatech Insurance Brokers Limited, they are adding a valuable asset to our portfolio of businesses, and we are enhancing our ability to serve our clients better. We will leverage the expertise, network, and reputation of Megatech Insurance Brokers Limited to offer more comprehensive and competitive insurance solutions to our existing and potential customers.

We believe that this acquisition will create significant value for our shareholders, customers, employees, and partners. We look forward to working closely with the management and staff of Megatech Insurance Brokers Limited to ensure a smooth transition and a successful integration. We also welcome their customers to the Access Holdings Plc family, and we assure them that we will continue to provide them with the best service and support possible.

We would like to thank all the parties involved in this transaction for their cooperation and professionalism. We would also like to express our gratitude to the relevant regulatory authorities for their timely approval and guidance. We are confident that this acquisition will strengthen our position as a leading financial services provider in the region and will enable us to achieve our long-term goals and objectives.

Nigerian stocks surged last week. The All-Share Index gained 13.84% last week.

Nigerian stocks soared to new heights last week, as investors cheered the positive economic outlook and the easing of covid-19 restrictions. The All-Share Index, which tracks the performance of all listed equities on the Nigerian Stock Exchange, gained 13.84% last week, closing at 48,544.43 points on Friday. This was the highest weekly gain since April 2015, and the highest closing level since February 2018.

The rally was driven by strong demand for blue-chip stocks across various sectors, such as banking, consumer goods, oil and gas, and telecommunications. Some of the top gainers were Dangote Cement, MTN Nigeria, Zenith Bank, Nestle Nigeria, and Guaranty Trust Bank. Analysts attributed the bullish sentiment to several factors, including the recovery of oil prices, the stability of the naira exchange rate, the improvement of foreign exchange liquidity, and the optimism about the covid-19 vaccine rollout.

The Nigerian stock market has been one of the best performing in the world in 2020, despite the challenges posed by the pandemic and the recession. The All-Share Index ended the year with a whopping 50.03% return, outperforming other major indices such as the S&P 500 (16.26%), the FTSE 100 (-14.34%), and the MSCI Emerging Markets (18.31%). The market capitalization of listed equities also increased by 62.42% to N21.06 trillion in 2020.

Looking ahead, experts believe that the Nigerian stock market will continue to enjoy positive momentum in 2021, as the economy rebounds from the recession and the vaccination program accelerates. They also expect more corporate earnings growth, dividend announcements, and attractive valuations to support the market performance. However, they also cautioned that investors should be mindful of the potential risks, such as political uncertainty, security challenges, inflationary pressures, and external shocks.

In a move to combat the escalating environmental crisis in Lagos, the Lagos State Government, through the Commissioner for Environment and Water Resources, Tokunbo Wahab, has officially imposed a ban on the use and distribution of single-use plastics, with a particular focus on non-biodegradable Styrofoam.

The announcement, made on January 21, 2024, is seen as a signal of commitment to environmental sustainability in one of Africa’s most populous states.

Commission’s announcement came with a sense of urgency as he noted the detrimental impact of single-use plastics on the state’s environment.

“Following the menace which single-use plastics, especially non-biodegradable Styrofoam, are causing on the environment, the Lagos State government through the Ministry of the Environment and Water Resources is hereby announcing a ban on the usage and distribution of Styrofoam and other single-use plastics in the State with immediate effect,” he said.

To ensure the effective enforcement of the ban, the Lagos State government has ordered a swift crackdown on all production companies and distribution outlets within the state. This comprehensive measure aims to staunch the further proliferation of the banned products.

The commissioner said he has directed the Lagos State Waste Management Authority (LAWMA) and the Kick Against Indiscipline (KAI) to initiate immediate action in implementing the ban.

Wahab justified the government’s action by referencing existing laws and regulations, including the National Environmental (Sanitation and Waste Control) Regulation 2009. This regulation, established under the NESREA Act, had long prohibited single-use plastics in the country but had not been rigorously enforced.

Additionally, the commissioner cited the 2017 State Environmental Management and Protection Law, which grants the state authority to prevent activities likely to harm human health or the environment.

The commissioner issued a stern warning to producers, distributors, and end-users of Styrofoam packs, urging them to take the ban seriously or face severe consequences. Heavy fines, penalties, and the possibility of premises being sealed await those who fail to comply.

Wahab stated that these entities could also be held accountable for the costs of daily cleanup efforts, which amount to tens of millions of naira.

“Our state cannot be held hostage to the economic interests of a few wealthy business owners compared to the millions of Lagosians suffering the consequences of indiscriminate dumping of single-use plastics and other types of waste,” he stated.

The commissioner stressed the importance of public cooperation in the success of this initiative. He urged residents to boycott Styrofoam packs and single-use plastics, educating them about the well-known consequences of such materials, including climate change, flooding, and diseases like cholera.

In a bid to promote sustainable practices, he encouraged the adoption of reusable food containers and water bottles, emphasizing that the convenience of single-use plastic comes at a substantial cost to society.

“The convenience of single-use plastic comes at a huge cost to the society. We must all make small sacrifices for our collective well-being,” he said.

The Lagos State Government’s bold move to ban Styrofoam and single-use plastics is believed by many to be a reflection of a deep commitment to environmental sustainability and public health. With the ban now in effect, attention turns to its enforcement, public awareness campaigns, and the willingness of stakeholders to embrace eco-friendly alternatives.

This initiative marks a pivotal step in the ongoing battle against plastic pollution, setting a precedent for other states to follow suit in synergy with the global fight for a cleaner, greener future. However, with Styrofoam and single-use plastics worth millions of naira already pushed out in the markets, the ban is expected to bring about heavy economic losses.

Labour Party’s Gbadebo Rhodes-Vivour Criticizes Hasty Plastic Ban Implementation

In a press statement released on Monday, the governorship candidate of the Labour Party, Gbadebo Rhodes-Vivour, expressed strong criticism against the abrupt implementation of the plastic ban in Lagos State. Titled “Plastic Ban: Hasty Impulsive Decisions Are No Substitute For Critical Policy Making,” the statement highlights concerns regarding the lack of a well-thought-out alternative policy and potential economic ramifications.

Rhodes-Vivour acknowledged the importance of addressing environmental issues, particularly the impact of plastic pollution in Lagos. However, he voiced deep concern over the sudden enforcement of the ban, emphasizing the absence of a comprehensive alternative policy.

“While I acknowledge the importance of addressing environmental concerns and the impact of plastic pollution in Lagos, I find the sudden implementation of this ban without a well-thought-out alternative policy deeply troubling.

“This decision lacks consideration for the significant investments made by manufacturers, retailers, and wholesalers of these products, potentially causing severe economic implications,” he said.

The statement raised questions about the government’s consideration for the thousands of retailers and small business owners whose livelihoods are closely tied to the production and sale of plastic products. Rhodes-Vivour questioned whether the government had evaluated the potential loss of jobs and the overall devastation this swift ban could bring to manufacturers and the associated value chain.

“Did the government care to think about what would happen to the thousands of retailers and small business owners, from Idumota to Oshodi and Ojota, whose livelihoods are tied to this product? Did it think about the potential loss of jobs and the utter devastation it would bring to manufacturers?” he queried.

According to Rhodes-Vivour, the administration’s approach lacks the temperament to engage stakeholders and the discipline required to create meaningful policies that address critical issues without causing harm to citizens’ livelihoods.

Proposing a more sustainable and phased-out approach, Rhodes-Vivour suggested alternative policy measures to address the environmental challenges posed by single-use plastics:

Education and Awareness Programs: Launch comprehensive public awareness campaigns to educate citizens on the environmental impact of single-use plastics and encourage responsible consumption and disposal.

Incentives for Alternatives: Provide incentives and support for businesses to transition to environmentally friendly alternatives, such as biodegradable materials and reusable packaging.

Recycling Infrastructure: Invest in robust recycling infrastructure to facilitate the collection and proper disposal of plastic waste.

Regulate the Pricing of Plastic Bottles: Ensure that plastic bottles are priced (N5 – N10 per bottle) to provide citizens with the needed incentive for proper disposal while earning a tangible amount.

Extended Producer Responsibility (EPR): Implement EPR policies to hold producers accountable for the entire life cycle of their products, encouraging sustainable practices.

Collaboration with Stakeholders: Engage stakeholders, including manufacturers, retailers, environmental experts, and community representatives, to develop a holistic and inclusive strategy.

Rhodes-Vivour urged the Lagos State government and the commissioner of environment to reconsider the abrupt ban and collaborate with stakeholders to develop a more comprehensive and sustainable approach to address plastic pollution in the state.

Although the ban seems to be in synergy with global best practices on single-use plastics, the call for a measured and inclusive policy-making process aims to balance environmental concerns with the economic well-being of citizens and businesses in Lagos.

The Lagos State Government, in announcing the ban, said “Our state cannot be held hostage to the economic interests of a few wealthy business owners compared to the millions of Lagosians suffering the consequences of indiscriminate dumping of single-use plastics and other types of waste.”