Abra, a crypto investment app with its headquarters in San Francisco, USA, is allowing its non-US users to invest in exchange-traded funds (ETFs) and stocks with Bitcoin as collateral.
In a tweet, Abra said:
“It’s finally here! Abra is offering (non-US users) the ability to invest in stocks ETFs, and commodities in over 150 countries. Starting today, investors can use Bitcoin to make fractional investments in stocks and ETFs with $0 trading fees for 2019.”
Solving Access and Affordability
Notably, Abra is the first company in the United States to unveil such services. The app’s founder and CEO, Bill Barhydt, noted that although people in the US are exposed to investments in the financial sector, the world’s population outside the US “is not invested in financial assets or markets.” For Barhydt, this is caused by not having access to these assets and or affordability.
As of the time of writing, Abra was allowing users to invest in several high profile companies such as Uber, Tesla, Google, and Amazon. Additionally, with Bitcoin, the app enables investments in gold and oil trusts. Luckily, it does not end there. Abra has a reward system in place where users earn $25 for bringing their friends on board. To help more users to take advantage of the new revolutionary service, trading on Abra will be free till the end of this year.
It’s Already in Use
Abra is already in use outside the United States. On May 27, the Abra founder tweeted:
“Venezuelans are using Abra Global to buy Bitcoin and other cryptos as well as invest in US stocks and ETFs via Bitcoin.”
However, Venezuela-being among the first countries to embrace Abra, does not come as a surprise. The country’s government issued fiat currency, Bolivar, is suffering from massive inflation which has already spiraled out of control. Therefore, Bitcoin and other virtual currencies come as a savior for Venezuelans.
The crypto investing app expanded its offering in February this year, where it added 50 new investment opportunities. But, since things like stocks are not on the same platform as Bitcoin or crypto – blockchain- Abra brings in cryptocurrency collateralized contracts. This means that Abra isn’t tokenizing stocks and other traditional investments.
How Does The Collateralized Contract Work?
Instead, according to the Abra CEO:
“If you use Abra right now to hold euros, or Monero, or ZCash in the Abra app, what you’re actually getting is what we call a crypto collateralized contract. It basically takes Bitcoin and pegs it to the value of whatever asset you want investment exposure to[…]. Meaning if you buy $1,000 worth of Apple [shares] and you’re using Bitcoin to actually make the contract, if the price of Apple [shares] goes up you end up with more Bitcoin, if the price of Apple [shares] goes down you end up with less Bitcoin.”
Financial markets are believed to be a critical pillar to those seeking to build personal wealth. However, apart from only helping its users along this path, Abra is also helping interface crypto with traditional markets, thus driving crypto adoption and expanding use cases.