MGT Capital Investments announced a planned merger with Tera Group, which runs the very first managed U.S. Bitcoin derivatives exchange. The merger will produce the first openly traded U.S. Bitcoin derivatives exchange.
As observed by The Wall Street Journal, this is a reverse merger where Tera will certainly take a managing stake in MGT. Tera doesn't appear too interested in MGT's video gaming operations, so the operation is mostly a way for Tera to go public. Simply puts, Tera is purchasing a public listing on the stock market for its Bitcoin operations.
Tera has played a leading duty in the development of Bitcoin derivatives. In September 2014, Tera launched TeraExchange, the very first managed U.S. Bitcoin derivatives exchange, and TeraBit, a spot Bitcoin price index based on real-time information from a number of Bitcoin exchanges. The TeraBit price index is made use of as the settlement rate for USD/Bitcoin derivatives transactions.
Tera is active in the Bitcoin space, which is expanding. Forget the extremely volatile dollar currency exchange rate of Bitcoin, the essential specifications are the number/volume of Bitcoin transactions and the equity capital investments in the emerging Bitcoin industry, both which are escalating. Customers invest bitcoin online, and investors bank on the innovative capacity of Bitcoin and its underlying blockchain technology. Innovation expert Peter Diamandis said Bitcoin is going from deceptive to disruptive, and listed Bitcoin among his top tech picks for 2015.
That need to be interesting for investors, however currently just a couple of publicly traded companies and funds– including Overstock, Bitcoin Store and the forthcoming Winklevoss Bitcoin Trust ETF– are active in the Bitcoin area. With this announcement, the new Tera-controlled MGT signs up with the choose Bitcoin club.
Derivatives such as Tera's forwards are the most basic way to expose investors to Bitcoin, particularly those investors who prefer not to trade the digital currency itself– and are the easiest method to profit from the ups and downs of the bitcoin-dollar exchange rate.
In relevant news, previous Goldman Sachs Executive Director Timo Schlaefer announced the launch of Crypto Facilities, a U.K. Bitcoin derivatives broker. This confirms the growing interest of institutional investors in the Bitcoin economy.
“The recommended merger with Tera gives instant and future value to our investors, while creating a robust platform for the growth of the industry's initially publicly noted bitcoin derivatives exchange,” stated H. Robert Holmes, Chairman of MGT's board of directors. “The Bitcoin market drew in over $ 400 million of financial investment capital from a few of the world's most prominent investors over the previous 12 months; we see our move today as additional development in the wider adoption of the industry.”
“Growing consumer and merchant adoption of bitcoin is driving need for regulated capital markets solutions,” said Christian D. Martin, chairman, CEO and co-founder of Tera Group.
“By combining with MGT, Tera will produce a special public providing to support the important facilities required for a dynamic international bitcoin ecosystem,” Martin said.
In an interview with CoinDesk, Martin added:
“Bitcoin eats most of our mindshare here in our firm. It's our bitcoin listing and subsequent accreditation that has the most commercial possibilities for us right now, and it's a business we're extremely eager to cultivate and nurture along.”
MGT and Tera strategy to finalize and carry out a conclusive contract by March 16, 2015.
Images via Tera and MGT.
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