Category "Τεχνική Ανάλυση"

Bloomberg report that Cryptocurrencies will replace gold
Altcoins, Bitcoin, Multimedia, Τεχνική Ανάλυση
04/06/2021
22

Bloomberg: Cryptocurrencies will replace gold

Despite rising metal prices, cryptocurrencies and, above all, Bitcoin are increasingly approaching its value.
With the capitalization of the most popular cryptocurrency exceeding 1.47 trillion dollars. and with inflationary pressures intensifying in the US, now hovering above 2%, both crypto and gold, as safe havens for investment, are likely to show further upward trends.

But despite the upward trend in precious metals in general, Bloomberg reports that the rise of gold is “indifferent”.
“At the moment I do not see any interest in the gold market.
It is stuck and I think it will soon be replaced by digital gold, Bitcoin.
“Every day that passes, everyone who knows and owns gold understands that little by little the yellow metal will be replaced.”

Source: https://www.bankingnews.gr/kriptonomismata/articles/560791/vloomberg-ta-kryptonomismata-tha-antikatastisoun-ton-xryso?fbclid=IwAR3PQ_uTJQ2Xyw6g3SDmQ5oIZTpGRW96zqENYRurZYf4K6CbtwjBDw-Nrtc

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It exceeded 2 trillion. the market value of cryptocurrencies
Altcoins, Bitcoin, Τεχνική Ανάλυση
21/04/2021
19

It exceeded 2 trillion. the market value of cryptocurrencies

The total capitalization for bitcoin amounted to 1.1 trillion. while the value of Ether exceeded $ 2,000.

The landmark of 2 trillion. The cryptocurrency market crashed, according to data from CoinGecko and Blockfolio, thanks to the recent rally in prices, according to data cited in a Reuters article on Monday, April 5, 2021.
The value of the cryptocurrency market reached 2.02 trillion. dollars, with the bitcoin equivalent jumping to $ 1.1 trillion.
The most famous cryptocurrency strengthened today by 1.4% to $ 59,025.

Over Google

At the beginning of February, the value of the cryptocurrency market had for the first time exceeded the corresponding value of Alphabet, Google’s parent group, climbing to 1.413 trillion. dollars.
On Friday, April 2, 2021, the second largest cryptocurrency, Ether, overcame the $ 2,000 psychological barrier for the first time.
Since the beginning of the year, Ether has increased by about 170%.

Source: https://www.bankingnews.gr/index.php?id=554894&fbclid=IwAR3AWVnnz3Wl19sYknSWgH5Wlf81h-QWVOcPrlD7hWODCCRYBjmgzPoh3-8#.YGtUjPrQAEw.twitter

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Mike Novogratz Says Crypto Will Receive $1 Trillion From Baby Boomers Starting in April
Altcoins, Bitcoin, Multimedia, Τεχνική Ανάλυση
01/04/2021
20

Mike Novogratz Says Crypto Will Receive $1 Trillion From Baby Boomers Starting in April

The founder of Galaxy Digital, Mike Novogratz, said $1 trillion would soon be injected into the crypto space. Novogratz said that the inflow would come from Baby Boomers, adults between 55 and 75 years of age. According to him, moves by traditional financial institutions to offer crypto products will trigger Baby Boomers’ involvement in the cryptocurrency market. Speaking further during an interview with Reuters Digital Assets Week, Novogratz added that “the money will start coming in early next month.”

As stated in a Reuters report, many of the Baby Boomers view Bitcoin as a hedge against inflation sparked by a rush in money printing. Novogratz added:

“If you’re worried that the US is printing too many dollars… you’re going to shift some of your savings into bitcoin.”

In October last year, digital assets manager Grayscale predicted that about $68.5 trillion in assets would be transferred from Baby Boomers to Gen X and Millennials in the next 25 years.

At press time, Bitcoin is up 1.91% to $58,758.71.

The leading cryptocurrency recently reached its all-time high of nearly $62,000. The spike can be attributed to several factors, including increasing institutional demand and Tesla’s $1.5 billion investment in the king coin.

Source: https://kryptomoney.com/mike-novogratz-says-crypto-will-receive-1-trillion-from-baby-boomers-starting-in-april/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20kryptomoney%20(Bitcoin%20%26%20Cryptocurrency%20News)&fbclid=IwAR0CESuL8g8fIU95AtfOeMrmrBy2KkAyvRjxw8uoojcTWMGGMQ4i4GEprU0

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Why do analysts see Bitcoin at $ 1 million soon?
Bitcoin, Multimedia, Τεχνική Ανάλυση
13/03/2021
18

Why do analysts see Bitcoin at $ 1 million soon?

The price of bitcoin could reach $ 1 million

The reasons why analysts “see” bitcoin at $ 1 million will soon be mentioned by coindesk.com columnist Nik Bhatia.

By the end of the previous mega-bull market in 2017 most people had learned about bitcoin.
However, when Tesla invested $ 1.5 billion, those who considered bitcoin… fashion simply denied it, proving that they were inadequately informed.
Tesla’s investment and its announcement of a gradual replacement of cash supports something even more dramatic.
These sudden inflows in demand, including recent purchases fueled by MicroStrategy bond issues, are affecting the price of bitcoin.
I think we will see the price of bitcoin rise above $ 1 million much sooner than most people expect.

Because $ 50,000 is not enough.

$ 50,000 per coin may seem like a lot, but it represents a market with a market capitalization of $ 1 trillion and hundreds of trillions of dollars being diverted to other assets.
For example, if the bitcoin market capitalizes on the US government bond market, the price of the cryptocurrency will reach $ 1.5 million.
So given the breadth of the horizon, bitcoin could potentially reach $ 1 million right away – given the rate at which cryptocurrencies are being adopted by industry.

The mathematics of demand

The mathematics of demand leads to impressive numbers.
In particular, demand for bitcoin reached $ 3.5 billion from Tesla and Microstrategy alone, which pushed up the price of the digital asset.
During the weeks that Saylor (Microstrategy) and Musk (Tesla) were buying bitcoin worth at least $ 1 billion, its price has risen by several thousand dollars.
We know that all price movements during these weeks can not be attributed solely to the aforementioned technology giants.
Analysts estimate that a $ 1 billion bitcoin market resulted in an increase of at least $ 25 billion in market capitalization – or about $ 1,300 per bitcoin.
As a result, $ 3.5 billion in purchases by MicroStrategy and Tesla over the past three months have boosted the price of bitcoin by $ 5,000, up from a total of $ 30,000 over the same period.

The price of Bitcoin is a minefield

A $ 3.5 billion purchase caused a $ 30,000 burst.
Imagine what a $ 10 billion purchase from Apple could do, as whispered.
True, what would happen in the case of chain reactions, with a $ 100 billion purchase of bitcoin from the Central Bank of Japan.
Finally, imagine investors flocking to stay out of the rally (FOMO).
A $ 20 trillion purchase does not seem unlikely – quite the opposite.

Source: https://www.bankingnews.gr/kriptonomismata/articles/549217/gia-poious-logous-oi-analytes-vlepoun-to-bitcoin-sto-1-ekat-dol-syntoma?fbclid=IwAR0Lh5a616oVoqWoPzQoWDU06DqaG1Yvj7pQ1alFl5_H7zkAOymYvqCMgb0#.YD0pkB_H5dY.facebook

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How common is crypto?
Altcoins, Bitcoin, Τεχνική Ανάλυση
04/03/2021
16

Which countries use more cryptocurrencies – At 11% the percentage in Greece

Of the 74 countries surveyed by the Statista Global Consumer Survey, Nigeria found that citizens had a higher rate of using or owning cryptocurrencies.
Specifically, 1/3 of the respondents answered positively.

According to Bitcoin.com it is the high cost of sending money across borders in the conventional way that has led many to turn to cryptocurrency trading.
Nigerians also often use their phones to send money to each other or to pay in stores.

Recently, many companies in the country are adding crypto plugins to their payment options.
The second and third highest percentages of citizens using and / or possessing cryptocurrencies are found in research in Vietnam and the Philippines, respectively.

Again, remittance payments are an important factor for citizens to choose cryptocurrencies.
According to bitcoin.com, the Central Bank of the Philippines has approved the operation of cryptocurrency transfer companies and the government has begun to engage in cryptocurrencies, in cooperation with Unionbank for the distribution of government bonds while Unionbank has also set up a Bitcoin ATM. in Makati, a city in Metropolitan Manila.

Aside from cryptocurrency users in Africa and Southeast Asia, another area that shows a fairly significant preference on them is Latin America.
Peru is the first among these countries with 16% of respondents stating that they use / possess cryptocurrencies while in Brazil, Colombia, Argentina, Mexico and Chile a double-digit percentage is also recorded.

Switzerland and Greece are among the European countries that also record a high percentage, 11%.

Japan again has one of the lowest rates along with Denmark.

Source: https://www.bankingnews.gr/kriptonomismata/articles/548208/poies-xores-xrisimopoioyn-perissotero-kryptonomismata-sto-11-to-pososto-stin-ellada?fbclid=IwAR38q3trycgC4pR5Kn9vbNdyTBi1LxFrzYwGNTeRQE9asX02DoMJc98KRAo

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cryptocurrency-taxation
Altcoins, Bitcoin, Τεχνική Ανάλυση
03/02/2021
19

Cryptocurrencies and taxation

Three years ago, we published an article on the taxation of cryptocurrencies (bitcoin, xrp, ethereum, etc.). At that time, cryptocurrencies (better known as bitcoin) had appeared. Already today, three years later, this issue has come to the fore, as more and more people are involved in the purchase and sale of cryptocurrencies, which makes it imperative for the Administration to provide clarifications on how to tax revenue from cryptocurrencies. As the number of questions we receive daily about cryptocurrencies increases, in this article we will record our estimate of how this income is taxed.

Basic features

Cryptocurrency is a digital currency without physical form. Today it is produced privately on a computer of modern technology and is distributed through an internet system of advanced technology, the so-called blockchain. In short, everyone can produce their own cryptocurrency, as long as they have the funds, know-how and what is required for the production process. It follows from the above that production is not controlled, is anonymous and independent of Governments and Banks, there are no legal rules and therefore there is no legal protection or guarantee and of course there is a high risk of fraud. In this context, the price of cryptocurrencies fluctuates widely.

As a digital currency, it was established to carry out transactions with simplified procedures in the circulation of money, with greater flexibility, greater speed, lower costs and anonymity in transactions. But in the process it turned out to be an investment product to make a profit from the goodwill (if positive) that is created between the purchase and sale of the currency.

Tax treatment

There are two categories of cryptocurrency income:

A) of this producer who does the mining and the income constitutes income from commercial enterprises and the profits that will arise after deducting the operating expenses will be taxed according to the general provisions and the applicable tax rates.

B) Holders of cryptocurrencies

B1) the holder (investor) of cryptocurrencies. Goodwill that may arise (positive difference between purchase and sale) will be taxed under the general provisions if the holders are legal entities.

B2) If the holders are natural persons, ordinary investors believe that according to article 42 of the CFA they will be taxed at a rate of 15% as income from capital gains. Potential loss can be offset by future gains from the same source within the next 5 years.

 

The taxable value of the cryptocurrency is the goodwill offered by its holder who sells it. Goodwill means the difference between the acquisition price paid by the taxpayer and the sale price received. According to article 42 par. 3, “… any expenses directly related to the purchase or sale of securities are included in the acquisition price and the sale price.”. The tax rate is 15% on the goodwill earned and it is worth mentioning that the income from it is subject to a solidarity contribution.

Taking into account the assumption we made above, that is, that the cryptocurrency is considered an investment-speculative product, the amount allocated for the purchase of cryptocurrencies should be declared in code 743 of table 5 of the tax return (expenditure paid for the purchase of companies, corporations shares and securities in general) of the tax return in order to be included in the calculation of the presumptions. Respectively, the capital from the sale of the cryptocurrencies should be listed in code 781 of table 6 (amounts coming from the disposal of assets and in particular as a return on capital).

In the event that goodwill arose during the sale of the cryptocurrencies, then it should be entered in code 865 of table 4 E (profit from transfer of foreign securities) in order to calculate a 15% tax.

Given the enormous size of the cryptocurrency transaction and its use as an investment derivative, we are confident that there will be a unified international approach to how this investment will be handled by the tax authorities, according to the latest statements of its President. European Central Bank.

Regarding VAT, there is an EU decision which exempts transactions from VAT and on the manner of occurrence of transactions with cryptocurrencies by companies, the 104 / 27.2.2018 opinion of SLOT has been issued for the accounting monitoring of cryptocurrencies to which they approach issue and give directions, but because its implementation is moving in uncharted waters it is logical and expected that many issues will arise for discussion and resolution, and the entire scientific community is waiting for the legislative interventions of the state.

Furthermore, we should point out that the payment of Greek and foreign suppliers in order to recognize the expenses should be paid exclusively through the banking system, therefore the payment in cryptocurrencies is not considered a recognized way of payment for the deduction of expenses.

Finally, due to the structural nature of cryptocurrencies which has been based on encryption, in combination with the anonymity it offers, it has been in several cases to date a transaction of persons associated with illegal-criminal activities and persons who wanted to evade taxes. Identifying the owner by the tax authorities is extremely difficult considering the means required and the know-how needed to detect such activities. Recently, on January 7, with Law 4734/20 on money laundering, the European Directive on the establishment of a register in the Hellenic Capital Market Commission, providers of services for virtual and digital wallets, was incorporated into Greek law.

In closing this article we would like to point out that what we have recorded is our own approach to which we hold every reservation until the issue is finally resolved and of course we should all be cautious until there is a regulatory framework that gives definitive answers to how everything is handled. issues around cryptocurrencies.

* Mr. George Dalianis is the CEO of Artion SA & founder of the Artion Group, Economist – Tax Specialist.

** Mr. Giannis Artsitas is a Senior Accountant – Taxation of Natural Persons of Artion.

The above text is informative and in no way replaces the specialized consulting services.

Source: https://www.capital.gr/arthra/3521757/kruptonomismata-kai-forologia?fbclid=IwAR3rUKT3O6VSLmEAdWDxSEZCM3V4Hce6vMH6CPOnNloQzxYulKYHRFsZNdw

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Why Nobody Can Hack a Blockchain
Bitcoin, Blockchain, Τεχνική Ανάλυση
20/01/2021
22

Why Nobody Can Hack a Blockchain

“Hacking” a blockchain is almost impossible — but what makes decentralized ledgers so inherently “unhackable”?

A common mistake that new cryptocurrency investors make is to confuse the hacking of a blockchain with that of a digital exchange. Whereas unfortunately centralized digital exchanges get hacked more than they should, decentralized blockchain hacks are very rare, as they are hard to achieve and provide little incentive to carry out.

‍In this post, we look at what makes blockchains — as applied in the cryptocurrency sector — impervious to security breaches.

‍What Makes a Blockchain Withstand Hacks?

Decentralized and Open-Source Protocols

The blockchains behind most cryptocurrencies are peer-to-peer (P2P), open-source and public, allowing everyone with the right equipment and knowledge to peek in under the hood. This is important to foster transparency and attract buyers.

A blockchain comprises different technological mechanisms working together towards a common goal. For instance, there are consensus mechanisms such as proof of work (PoW) and proof of stake (PoS) that protect the network by mitigating cyber-attacks from hackers.

‍A blockchain’s decentralized nature means that its network is distributed across multiple computers known as nodes. This eliminates a single point of failure. In other words, there is no way to “cut the head off the snake” — because there isn’t any head.

‍The architecture of a blockchain determines how the nodes cooperate in verifying a transaction before being committed to the protocol. In the case of Bitcoin and other PoW systems like Bitcoin Cash, a minimum of 51% of the nodes must agree to the transaction before commitment.

‍Hashing Algorithm

Each transaction is called a block, and the interconnection of several transactions becomes a blockchain. Notably, a block has cryptographic elements that make it unique. A network’s hashing algorithm determines the details. For example, the Bitcoin blockchain uses the double SHA-256 hash function, which takes transaction data and hashes/compresses it into a 256-bit hash.

Why Nobody Can Hack a Blockchain

By making it hard to reverse the hashed value, a transaction becomes inflexible. Each block in a chain contains a specific set of data from the previous block. Therefore, even if a malicious actor reverse-engineers the hash, the resultant block would be out of sync with the rest of the blocks since it will have a different hash output, thus causing the system to reject it.

‍51% Attacks Are Improbable

The longer a blockchain exists and the more new users it attracts, the less likely it is to suffer a 51% attack due to its growing hash power.

This becomes prohibitively expensive at a certain point. Therefore, considering the size of established blockchains like Ethereum and Bitcoin, such a scenario is nearly impossible.

What About Quantum Computing?

Another reason why it’s even harder to hack a blockchain is that in case the block being re-hashed is at the middle of the chain, the attacker would have to re-hash previous blocks to align their historical stamp with the new block.

‍For Bitcoin, this is only possible with the next generation of quantum computing, which currently doesn’t exist. And even when it does, who’s to say there won’t be a blockchain-based quantum defense mechanism to mitigate quantum attacks?

PoS-Based Hacks

In PoS-based systems, stakes determine the strength of the network. To elaborate, this means those users who have delegated or actively locked their native blockchain assets to participate in transaction processing and finding new blocks. On such systems, an attack occurs when a hacker controls a majority of the stake.

‍This is possible when the hacker accumulates over 51% of all coins in circulation. For reputable networks like the evolving Ethereum 2.0 platform, this is all but impossible. Imagine trying to find the funds to buy up 51% of ETH’s current $68 billion market cap!

Economics of a 51%

You can’t orchestrate a stealth 51% attack without creating too much scarcity, as your purchasing of coins will make the available ones skyrocket in value to incredibly high levels. Conversely, when the blockchain participants find out you own a majority of the coins, they will likely sell their holdings, thereby crashing the market with excess supply. So you’ll end up buying high, and selling low!

How Do Blockchains (Rarely) Get Hacked Then? Answer: Hash Rate

Good question. It boils down to the strength of a network. Notable 51% attack victims include Ethereum Classic, Bitcoin Gold, Electroneum, and most recently Grin. The Ethereum Classic network uses the PoW consensus algorithm. Although Bitcoin uses the same algorithm, ETC has a much lower number of nodes and miners securing the system. Thus, it has lesser processing power, making it easier for an attacker to take control.

Why Nobody Can Hack a Blockchain

ETC has a hash rate of 1.6 tera hash per second, while Bitcoin’s stands at 117.9 exa hashes per second.

‍The Future of Blockchain Hacks

So far, nobody has single-handedly hacked a blockchain. Instead, it’s usually a group of malicious actors or the core dev team that collaborate to breach a blockchain’s security. However, as blockchain platforms get stronger through an increase of nodes or stakers, the possibility of hacking a decentralized network is increasingly moving towards zero.

‍In addition, newer blockchain systems use academically-proven techniques that would need highly-specialized quantum computers to hack.

‍To sum it all up — if you ever hear someone saying that a “blockchain was hacked!” you now have the tools to (politely) correct them and send them on their way.

Source: https://coinmarketcap.com/alexandria/article/why-nobody-can-hack-a-blockchain?fbclid=IwAR3n0pKg_ABxR4eTyYzyvP-7mzq60JDw42PLQ1Xha24EWWxY6EWi4cpUEUw

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7M Americans Own BTC But Hold None In Retirement Accounts
Bitcoin, Τεχνική Ανάλυση
27/08/2020
19

Over 7M Americans Own BTC But Hold None In Retirement Accounts

Millions of U.S. citizens own both Bitcoin and a retirement account, but hold no Bitcoin in that retirement account.

Ryan Radloff, CEO of custody solution Kingdom Trust, recently explained a vast number of Americans do not hold Bitcoin (BTC) in their retirement accounts.

“There’s 7.1 million Americans that have already made the leap to buy Bitcoin or take the dive into our industry so to speak, and have a retirement account, but don’t have Bitcoin in their retirement account,” Radloff told Morgan Creek Digital co-founder Anthony Pompliano in a July 18 interview.

People have more to spend on Bitcoin in their retirement accounts

Retirement accounts allow the public to put money into a long-term investment fund, with the stipulation of only taking money from that account after a certain time period — usually totalling decades, depending on the participants age. Such a format comes with significant tax breaks and incentives.

Various solutions exist as gateways for Bitcoin retirement account purchases and investing, including an option from Kingdom Trust. According to Radloff, people have available capital in their retirement accounts for BTC, but have not pulled the trigger on buying.

“If you also look at people’s investible, discretionary money, they usually have three to four times more investible discretionary money in their retirement accounts than they do in their non-retirement accounts,” Radloff said.

Bitcoin means potential in retirement accounts

Bitcoin spells opportunity at present, given the number of people in the industry, matched with retirement account usage, Radloff noted.

He said:

“When I say this is the biggest opportunity for Bitcoin, especially in this kind of stock-to-flow model that we look at, I’m looking at 7.1 million Bitcoiners that have three times more investible money in their retirement accounts that aren’t using their retirement accounts to HODL.”

Mentioning the trillions of dollars at play in the retirement market, Radloff also noted a lack of workable structure around crypto and blockchain companies offering 401k options to their employees.

Radloff’s comment on opportunity comes with reference to Bitcoin’s stock-to-flow ratio, made by crypto Twitter analyst PlanB. The model essentially explains Bitcoin’s inevitable rising price due to its decreasing mining reward payout and limited maximum supply.

Source: https://cointelegraph.com/news/over-7m-americans-own-btc-but-hold-none-in-retirement-accounts

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Use DeFi Contracts for BTC Passive Income by Andreaw Antonopoulos
Altcoins, Bitcoin, Multimedia, Τεχνική Ανάλυση
20/07/2020
18

Andreas Antonopoulos: Use DeFi Contracts for BTC Passive Income

HODLing Bitcoin may pay off eventually, but it means one’s money isn’t working for them now, says Andreas Antonopoulos.

Bitcoin educator Andreas Antonopoulos says there are risks behind any current method of earning steady income with one’s Bitcoin holdings, but DeFi offers one of the few ways to do so without “giving your money to other people.”

In a livestream Q&A on Antonopoulos’ YouTube channel on June 27, he said decentralized finance (DeFi) contracts were one way for Bitcoin (BTC) owners to generate passive income without relinquishing custody of their coins. “Passive income” refers to money earned using methods that require little-to-no effort.

According to Antonopoulos, investors could convert their BTC into Ethereum (ETH) or a stablecoin like Dai (DAI), then lend it out on a platform where the token can earn interest. However, he said carrying out such trades on Ethereum-based platforms was “quite risky” in terms of security, smart contracts with bugs, and the platform itself:

“Ethereum may have problems. It may have bugs. The consensus algorithm may have failures. You may have increases in the gas price, which leads to other cascade problems. And all of those things can cause you to lose some or all of your invested capital.”

Lending and borrowing crypto can be a risky bet due to the high volatility of digital currencies, with a large number of crypto-backed loans used for margin trading. However, the volume of these loans reached $8 billion last year, and may continue to attract investors.

Use DeFi Contracts for BTC Passive Income by Andreaw Antonopoulos

HODLing not the only way to earn

Though Antonopoulos mentioned other methods for getting investors’ coins to work for them, nearly every way to do so meant relying on a custodial exchange. The Bitcoin educator said such investments carried the risk of theft or mismanagement.

Bitcoin HODLers, on the other hand, do not earn dividends or interest on their investments — or anything — until they finally decide to cash out. Antonopoulos says HODLers hope for appreciation, but “what goes up, can come down.”

The Bitcoin educator says the same is true for crypto day traders: “You can pull your Bitcoin out and convert it, buy 1,000 altcoins, and then watch them crash by 98%.”

Antonopoulos not the only DeFi advocate

Others in the crypto community have commented on creating passive income through DeFi lending. Cointelegraph reported in March that OKEx Director of Financial Markets Lennix Lai said: “The combination of cryptocurrency and DeFi creates an alternative way for users to earn passive interest that was not possible before.”

Source: https://cointelegraph.com/news/andreas-antonopoulos-use-defi-contracts-for-btc-passive-income

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Bitcoin and cryptocurrencies the perfect hedge in the Covid-19 crisis
Altcoins, Bitcoin, Multimedia, Τεχνική Ανάλυση
14/07/2020
18

Are Bitcoin and cryptocurrencies the perfect hedge in the Covid-19 crisis?

As the Covid-19 crisis continues to disrupt global markets, is it time to hedge Bitcoin, cryptocurrencies and other digital assets?

The economic effects of Covid-19 have sent investors in search of assets that can offer shelter during the storm and a hedge against macro events. Against a backdrop of shrinking GDP, economic slowdown, government bailouts, and fiscal stimulus aka money printing, bitcoin and cryptocurrencies have been touted as an inflation-resistant hedge.

Not beholden to the whims of any political leader or global superpower, crypto assets are defined by their fixed, knowable, and verifiable supply. They cannot be debased or flooded into the economy to prop up failing institutions, or used to enrich the 1% at the expense of the other 99. But are these qualities enough to make bitcoin and its sister assets capable of serving as a hedge? And if so, how can you increase your exposure to bitcoin while taking steps to mitigate any downside risk?

The case for investing in Bitcoin

The case for investing in bitcoin is the same as that of any asset: you believe that demand for it is likely to increase in the months and years to come, leading to a corresponding increase in price. This will enable you to sell the asset for more than you paid for it. But if this thesis holds true, what is it about bitcoin that’s likely to make its “number go up” as crypto traders jokingly refer to it?

There are many reasons why bitcoin is viewed as an attractive investment and hedge against traditional investments.

Renowned investor Paul Tudor Jones has called bitcoin “a great speculation,” and said it reminds him of gold in the 1970s. “Every day that goes by that Bitcoin survives, the trust in it will go up,” noted Jones, who now has around 2% of his wealth in bitcoin.

Former Goldman Sachs Fund Manager Raoul Pal, meanwhile, has moved 25% of his portfolio to Bitcoin following the Covid-19 crisis. Institutional interest in bitcoin is increasing and 80% of institutional investors now see the appeal of digital assets.

And then there’s the on-chain data that paints a rosy picture of bitcoin’s future, based on metrics such as holding patterns, transaction volume, and the amount of BTC withdrawn from exchanges for long-term storage. Respected bitcoin analyst Willy Woo estimates that BTC is less than a month away from embarking on its next bull run, based on market and on-chain data.

Finally, Bitcoin’s supply reduces over time because the number of new coins issued to miners is halved every four years. As a result, Bitcoin’s stock-to-flow, which denotes the number of years, at the current production rate, required to achieve the current supply, is increasing. Bitcoin’s stock-to-flow now stands at 50 (years), placing it close to gold.

The case for investing in other digital assets

Bitcoin isn’t the only cryptocurrency on the market of course. In fact there are thousands of digital assets, though only a handful of these warrant consideration as an investment and potential hedge. For example, if you believe that the future of finance lies in private transactions and fungible digital cash, you may see value in monero (XMR). If you believe that open finance enforced by smart contracts will be a major growth area, you may wish to invest in the Ethereum ecosystem.

The smaller the market capitalisation of the crypto asset you are investing in, the higher the risk is likely to be — but the higher the potential upside too. Thus, it is imperative that you understand the cryptocurrency you are considering, and its function within the blockchain network it powers.

For example, decentralised finance projects such as Compound and Balancer enable token-holders to earn yield for staking assets and providing liquidity. Yield-bearing crypto assets — in this case COMP and BAL — sound attractive, but they call for deep knowledge of how their respective protocols work, and are not for casual investors.

For investors seeking alpha within the crypto sector, there is no shortage of opportunities. Bear in mind, however, that crypto assets remain highly correlated to bitcoin, and are thus dependent in part on how it performs. When BTC is in a bull market, it typically pulls the rest of the market up with it, and vice-versa.

Bitcoin and cryptocurrencies the perfect hedge in the Covid-19 crisis

Where to buy Bitcoin

Buying bitcoin is a quick process these days, thanks to an array of consumer-friendly apps and websites that eliminate the complexity. Platforms like Skrill have soaked up a slice of the consumer buy-side action, enabling crypto to be bought with dozens of fiat currencies and deposit methods.

Skrill’s reputation as a trusted digital payment processor has aided its diversification into cryptocurrency, while the ability to place automated orders at particular price points enables buyers to enter the market if and when BTC reaches their desired price target.

While Skrill also allows BTC to be swapped for other cryptocurrencies such as bitcoin cash, EOS, ether, ethereum classic, and litecoin, investors seeking to actively trade digital assets should consider doing so on a dedicated exchange.

Many of the most popular exchanges, such as Binance and Coinbase have fiat on-ramps, allowing investors to purchase crypto using debit card or bank transfer, and then trade in and out of stablecoins and cryptos on the exchange.

No hedge is perfect

Bitcoin and other cryptos aren’t entirely disassociated from the broader financial market. In a cash crisis, for example, investors will sell off their most liquid assets and thus BTC may be one of the first candidates to be off-loaded.

What bitcoin does provide, however, is an investment option whose design, transparency, issuance, and transferability stand in stark contrast to the traditional financial system. Shrewd investors should consider allocating a portion of their portfolio to bitcoin, and then increasing it as BTC demonstrates its ability to serve as an economic hedge.

Source: https://www.information-age.com/bitcoin-cryptocurrencies-perfect-hedge-covid-19-crisis-123490086/

 

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