US-based crypto firm Abra shared a press release with Cointelegraph on February 6 regarding the addition of new features to the blockchain-based app. Global investors can now invest in shares and exchange-traded funds (ETFs) using Bitcoin (BTC). Abra plans to utilize the Bitcoin blockchain and smart contracts technologies in order to support fractional investments in stocks, exchange-traded funds (ETFs).
Abra announced early access registration to the platform, through which investors in more than 155 countries would be able to invest in 50 new traditional investment assets with zero trading fees through the rest of 2019 using the leading cryptocurrency, the minimum investment being $5.
Major stocks such as Apple, Google, Amazon, Facebook, Netflix, commodities including SPDR Gold Trust, ETFs such as Vanguard Growth and the S&P 500, and indexes like the Russell 2000, among others are reportedly included.
This is in addition to the app’s existing feature of offering investment in 50 fiat currencies and over 30 cryptocurrencies.
The press release states that investors can make investments in any asset by using Bitcoin (BTC) and smart contracts. Thanks to the stocks and ETFs investment features are based on a new investing model called Crypto Collateralized Contracts (C3s). By this, Abra can fix the value of “anything with a reliable price feed” to the price of Bitcoin.
We are building Bitcoin-backed investing products because, for the first time, we can truly democratize access to investment opportunities at global scale. It shouldn’t matter where you live or how much you earn to be able to make investments and participate in capital markets. - Bill Barhydt, Abra’s CEO
Tech publication Hard Fork is of the opinion that Abra’s newest feature would rake in money by charging a spread when the cryptocurrencies are exchanged - This charge is essentially based on the difference between an asset’s lowest and highest prices at the time of the trade. It compares Abra’s offering to trading apps such as BUX and Plus500 which haven’t met with success while using similar trading systems.
The press release states that the firm expects Abra customers to be able to purchase fractions of high-priced stocks and ETFs, which can be compared to owning a fraction of a Bitcoin.
“Just as consumers can own a fraction of a Bitcoin, they can soon use Abra to own fractions of high-priced stocks and ETFs,” the firm said.
Abra is non-custodial, which means that the app does not store or have access to user funds. Instead, user funds are stored on the Bitcoin blockchain that would make transactions “more secure and private than centralized databases used by most crypto exchanges and wallets.”
When a user makes an investment, the share price changes will indicate the amount of Bitcoin that would be added and subtracted from the user’s holdings. According to Hard Fork, owing to the user’s investment being immediately converted into Bitcoin - although displayed in dollars in the app - Abra would add BTC to maintain the user’s balance in case of a price change in Bitcoin.