Investors now have a new way to purchase cryptocurrencies using U.S. dollars.
Bittrex, a Seattle-based cryptocurrency exchange, has struck an agreement that allows investors to buy digital coins with American dollars. In the past, only coins traded on Coinbase, a digital currency exchange in California, could be bought with dollars. That is a fraction of the approximately 1500 digital coins floating around the universe of cryptocurrenices.
To buy any of the other coins, investors had to convert their money to bitcoin first. Now they have Bittrex.
Founder and CEO Bill Shihara told CNBC that the goal is to “expand out to as many markets as possible on Bittrex,” he said on “Fast Money” Friday.
“As well as expand it so that every customer on Bittrex will be able to have access to U.S. dollar trading,” he said.
The exchange might even help move the market. Since so many alt coins could only be purchased by way of bitcoin, the value of bitcoin and many other digital currencies were closely correlated. The value of those crypto units may now begin to decouple from bitcoin, Shihara said, as more investors transact in dollars.
Currently, nearly 200 different digital coins can be traded on Bittrex. The CEO said that a “small, select number of launch partners” are working with the exchange to pay in dollars.
“In this phase, we’re stress-testing our system,” he said. “We’re working with the banks very closely to ensure that they can process the FIAT deposits and withdrawals. Also, the engine itself that we use to trade, is going to be able to properly handle the load.”
Cryptocurrency is still largely unregulated in the United States, which has led many financial institutions and investors to be cautious of the coins, amid a landscape of widespread fraud and fake ICOs. Other traders have sought out foreign markets to invest in digital assets like bitcoin.
But Shihara said working with U.S. regulatory agencies on better ways to use cryptocurrency will add value to the space.
“We think that solving the regulatory puzzle in the United States really unlocks a lot of capital that really can’t trade on a foreign exchange that doesn’t have proper [anti-money laundering] controls or proper compliance,” Shihara said.