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Abra , a blockchain startup from the United States, is now offering a new product for its users besides its famous wallet services. Acco...

Abra Wallet App Lets Investors Buy Stocks And ETFs Using Bitcoin And Crypto Assets

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Abra, a blockchain startup from the United States, is now offering a new product for its users besides its famous wallet services. According to an announcement that the company made today, February 6, the new app will let the users buy portions of traditional investments using cryptocurrencies.
By using the Bitcoin blockchain and smart contracts, the company is set to make the lives of the people who want to invest in stocks and exchange-traded funds (ETFs) easier and it already has more than 50 options for people who want to invest right now.
The company affirms that as consumers are able to buy Bitcoin in different quantities and that they can own small pieces of BTC, they can now do the same with other assets from the financial industry. Investors from over 155 countries will use the products of the company and the minimum investment for them is only $5 USD, so retail investors can use the app freely.
Right off the bat, Abra is already offering stocks from major tech companies like Amazon, Google, Facebook and Apple and commodities like SPDR Gold Trust, as well as some indexes and ETFs.

Not A Custodial App

The most interesting aspect of the new application is that this is not a custodial app at all. Abra never takes custody of the funds, instead, it stored them on the Bitcoin blockchain, so they are there forever and the blockchain shows that the owners really own these assets.
According to Bill Barhydt, the CEO of Abra Wallet, they are actually trying to democratize the access to investment opportunities, as generally only the rich people were able to invest and now anyone with at least $5 USD can do it using the app.
The solution is actually far from simple, though, as the Next Web’s Hard Fork tried to explain on its site. When you put USD in the app, it is converted to BTC and the app will continue to display in USD, but in fact, your money has been converted. How does your money remain stable, though? The company borrows the Bitcoin equivalent of the dollars with brokers and have it in escrows, this will always match the amount of money you have.
This means that even if the price of Bitcoin ever goes down, your balance remains largely the same. If you want to withdraw, you will have to buy back the required amount to ensure that you can do it.
According to the reports, the actual process of investing in stocks using Abra is very similar. You invest with USD, which is turned to BTC and then used to buy the stocks and carve this information on the blockchain. When you decide to sell your assets, the value of the shares will be reflected in your wallet the same way that it happened before.
Abra makes money because it charges a spread every time that cryptos are exchanged, so the service is not free from fees.
This way, there is a whole complex mechanism that makes it all happen, but what really tells whether you get more or less money is the price of stocks because the company does all the rest without you ever seeing this complicated process.
However, you should remember that investing in stocks and similar assets is a very risky move. Why? Because they can be largely volatile and this means that you may lose a lot of money if you are not 100% sure of what you are doing. Investing $5 USD is largely safe but investing big amounts of money without knowledge is often a costly mistake.

About Abra

Abra Wallet was launched in 2014 and has the backing of several important companies like American Express Ventures, Arbor Ventures, and the Foxconn Technology Group.
Since its creation, the company is constantly trying to find new solutions that will help users to invest in the best possible businesses with the help of the company.