If planning is key to building wealth, then cryptocurrency has a vital stake in the future of wealth management. To that end, the time has come to recognize cryptocurrency as a viable investment option.
Paradigm Shift in Finance
As bitcoin and its altcoin competitors have no doubt demonstrated, cryptocurrency is considered to both an asset class and paradigm shift in the global economy. The power lies in the blockchain, which has emerged as one of the most coveted technologies in the industry. The utility of blockchain has enabled more than 1,000 cryptocurrency projects spanning every corner of the economy. Recently, we crunched the numbers and found no less than 27 industries have been represented by ICOs. And that’s this year alone.
As the use cases of blockchain increase, so too will the acceptance of the digital tokens tied to them. This extends to both security tokens as well as their utility-driven counterparts.
Growth of Alternative Assets
The growth of alternative asset classes is nothing new. Investment in these markets has surged since the financial crisis and, according to PwC, will breach $13 trillion in 2020. The market today is by no means tiny, with roughly $3 trillion tied to alternative assets.
Alternative Asset Growth (Forecast)
Cryptocurrencies are well represented among alternative assets, but will see a bigger share of the pie as institutional capital enters the market. Based on recent developments, those days aren’t that far off.
World’s largest futures exchange CME Group Inc. has announced plans to introduce bitcoin futures by the end of this year. The announcement was made about a month after the exchange said it would not be entering the space. In doing so, it joins competitor CBOE Global Markets Inc., which has already announced plans for bitcoin futures to commence by early next year.
Futures are one of many ways investors can reap the benefits of cryptos. By joining one of the major exchanges, market participants can trade cryptocurrencies against one another and even against fiat money.
Then there’s the Bitcoin Investment Trust, which provides a traditional vehicle for entering cryptos by way of publicly-traded shares.
As the market for cryptocurrency matures, investors should look for the growing availability of passive investment channels tied to digital assets. These are the types of assets that can shield against volatility – something that has stricken the crypto market since its inception.
Institutions are Reluctant (For Now), but You Shouldn’t Be
For all the potential surrounding blockchain and cryptocurrency, hedge funds have embraced the former but not the latter. Though they may give an elaborate reason for not entering the market, the truth is they don’t know much about it. Then there’s those who listen to folks like Jamie Dimon, who bash cryptocurrency but embrace arbitrary money printing. As a reminder to all: one of the primary motivations for participating in cryptocurrency is to trade what is arbitrary for what is certain. Much like gold, something like bitcoin cannot be created out of thin air. It must be mined, regardless of whether you understand what that means or not.
That’s not to say hedge funds and institutions are completely baseless for avoiding cryptos. The author has covered this market since 2013, give or take, and has seen just how volatile it can be. One also cannot help but recall the day when bitcoin was intimately linked to the dark web in all its grotesque ways. Then there was the Mt. Gox implosion – an event that your younger author truly believed was possibly the death knell for bitcoin.
That being said, most of us who have joined Hacked have made it passed the superficial understanding of cryptocurrencies. Most of us know that the majority (probably vast majority) of altcoins are bullshit and that speculation is propping up large segments of the token market. But we also know that these downsides do not in themselves dictate the viability of cryptocurrency-as-an-investment class.
I’ve always said that the success of cryptocurrency is not necessarily tied to the success of bitcoin. After all, bitcoin is just one kind of digital asset. It’s probably not even the best one when measured in terms of scaleability and payment processing capability. There’s no doubt that the success of the global market cap depends on bitcoin, but the paradigm shift has already taken place for the community to survive even without the most pre-eminent digital token circulating at more than $6,000 a pop.
Bitcoin taught us to look at value differently (i.e., independently of what central banks tell us.) This legacy is only expanding as young men and women look to build their financial futures independently.
As far as reputation is concerned, cryptocurrencies are undergoing a major facelift. The perception crisis that once dogged bitcoin – Mt. Gox, Silk Road, theft of coins – is being replaced by value drivers like investability, political profile, price independence and risk reward profiles. Hacked.com will be covering these benefits in greater detail in the near future.
Cryptocurrency, as represented by bitcoin in the following chart, has clear benefits when compared with the traditional traits of money.
The benefits of cryptocurrency-as-an-investment stem from the underlying utility of the blockchain. The blockchain is not just the foundational tool for digital currency, but a major value driver for any industry that requires trust. We can think of at least a few industries that fit that bill.
Featured image courtesy of Shutterstock.
A Career in Crypto: How to Work in the World’s Fastest Growing Market
The cryptocurrency revolution is more than just a fad – it is creating real jobs in the economy. Recent data provided by LinkedIn showed that bitcoin-related job postings in the financial sector alone skyrocketed 900% over the last three years, a clear sign that enterprises were seeking cryptocurrency experts. This figure is 460% in the software industry alone.
Demand is also percolating in the freelance community, with the likes of Upwork and Freelancer seeing a surge in crypto-related job postings in the IT, marketing and content writing fields. Clearly, the crypto economy is multi-faceted, and is making people a lot of money in more ways than one.
So, what does it mean to work in the cryptocurrency economy, and what can you do to become a viable contender for one of these lucrative opportunities? Below we look at five high-growth areas you might want to consider.
Initial coin offerings (ICOs) are all the rage these days, and for good reason. The controversial, but highly lucrative crowdfunding model has emerged as the holy grail for startups wishing to fund their big ideas.
That being said, launching an ICO is no small feat. It requires complex technical, financial and marketing logistics to ensure a smooth and successful crowdraise. For professionals, this means plenty of rewarding opportunities to either join an ICO as a consultant or get hired directly by a consulting agency or ICO issuer that offers these services.
Currently, there are at least two dozen well known ICO service providers helping companies launch their token.
Join a Startup
Launching an ICO is only one aspect of the crypto economy. The businesses that develop the ICO must have a solid use case behind it. They also need to ensure they have a solid business model that will make the token raise successful in the long run.
The IT world is budding with blockchain euphoria at the moment, and there are literally hundreds of companies launching ICOs each week. If you have a background in IT, marketing, sales or business, joining a blockchain startup could just be the most exciting bet.
Keep in mind that many startups are low on cash, so it may be wise to join them on a part-time basis. If you’re looking to make a career move, it’s wise to apply to established IT companies that are jus now expanding into the blockchain.
Content Development and Marketing
Content development is one of the easiest ways to enter the crypto economy. Demand for solid writers who understand the ICO and cryptocurrency domains is absolutely huge. If you’re a good writer with a solid background in SEO, copy, journalism or analysis, the author strongly recommends that you simply email a crypto news site, blog or ICO service provider. There’s a really good chance they are searching for you.
If you’d prefer not to go the cold route, simply create a profile on Upwork and start applying for jobs. There are currently more crypto-related content jobs than you handle. Content development is one of the best ways to get your foot in the door.
If you have a background in IT, your opportunities are endless. Developers who can quickly Segway into blockchain are in high demand right now, which means there’s no shortage of exciting projects. Platforms such as TopTal usually provide the best opportunities for software developers and other IT professionals. Upwork also has plenty of opportunities in this field.
IT professionals can also offer their services directly to startups, ICO issuers and other service providers operating in the blockchain space. There are plenty of job openings on Wall Street as the big banks continue their exploration of blockchain. Governments and research labs are also expanding their footprint into blockchain. In each of these examples, you will probably spend less time working on cryptocurrencies and more time on the technology that underlies it.
Legal and Regulatory
As the crypto economy expands, governments are playing catch up to adequately define the space and bring forth meaningful regulations that can govern its use. Of course, governments typically do a poor job regulating technology, and this is duly the case for the blockchain.
That being said, the evolving legal and regulatory environment will impact the entire crypto economy. This is especially true considering that crypto regulations differ based on jurisdictions. This is placing considerable pressure on ICOs to identify a suitable jurisdiction in which to launch their token raise. It also means designing a cryptocurrency that avoids the SEC’s dreaded “securities” definition.
Against this backdrop, legal and policy professionals will see huge demand for their services. A growing number of law firms are now specializing in blockchain, and ICO issuers are also recruiting people in this field.
Like any field, entering the cryptocurrency economy as a professional requires lots of dedication. However, now is as good of a time as any to make your mark on the industry.
Featured image courtesy of Shutterstock.
A Beginner’s Guide to Ethereum: Buy Ether Now Or Wait?
When is it a good time to buy and sell a particular Cryptocurrency? That is the million-dollar question. Surely, the person who could know the answer would be a multi billionaire by now. There are, however, certain trends and signs one can look out for that may give a good indication of whether or not it is a good time to buy or sell a specific Cryptocurrency. We use Vitalik Buterin’s Ethereum as example.
What is Ethereum?
Ethereum is a very important crypto in the sense that competition is always good for business. Ethereum was introduced in 2013 by a crypto researcher and developer Vitalik Buterin. It is currently the second most popular Cryptocurrency, following Bitcoin and is said to be the next Bitcoin. Ethereum differs from Bitcoin in the sense that it introduced smart contracts to the industry. It has relatively the same qualities as Bitcoin – it is open-source and built on Blockchain, which defines its abilities and characteristics. Enabled by Ethereum, a smart contract is a computer algorithm that allows users to build or develop innovative tools and systems to perform various tasks. These smart contracts run on Blockchain and eliminate the need for third parties. It can save one a lot of time and money.
The market is very much split in two as the majority of investors put their money in both Bitcoin and Ethereum. Ethereum’s token that you can trade with on exchanges is called an “ether” and can be bought or sold not only for Bitcoin, but also for any popular fiat currency like USD or EUR. Some cryptocurrency exchanges even offer an option of converting ETH to GBP, which can now bring you around £340 per coin.
Ethereum was forked in 2016, and Ethereum Classic (ETC) was introduced to the market. There are currently talks of another fork for Ethereum Classic that is expected to happen sometime in December 2017.
The latest on Ethereum
In order to determine whether or not it is a good time to invest in a Cryptocurrency, one should keep an eye on the news. News greatly affects whether a coin’s price will spike or take a hike. Remember – buy the rumor, sell the news.
According to CryptoCoins News, Mike Novogratz, an investor, predicts that the price of Ether could skyrocket till the end of 2017. Currently, the price of Ether in USD is $437. This follows the Ethereum Foundation introducing new scaling solutions like Plasma and Casper. Ethereum can now allow for more transactions than the Bitcoin network. Bitcoin is a bit slow at the moment. Ethereum is said to have had an upgrade recently, and it will do away with unnecessary information “clogging” the system. It will also allow Ethereum’s blockchain to perform even faster while the productivity will increase to 550,000 transactions per day.
Should I buy Ethereum now or wait?
Various crypto analysts and experts give their opinion regarding the question at hand.
Novogratz was quoted in Fortune in May 2017 that he would consider buying more Ethereum if the price drops to $150 or $200. This means Ethereum would have a market cap of more or less than $20 billion. Novogratz told the news site that he believes the crypto market “has much further to run.”
On another note, when a particular coin’s price spikes, a lot of people want to jump in and buy immediately. This is not the right thing to do. Buy low, sell high, and repeat. Normally, when a coin has spiked, the market will take back 60%. By making use of some analytical tools, you can determine where this point will be. This is generally a good entry point. Despite of these and other trading tools, there is no guarantee in this industry. Majority of the time it is better to invest in a coin for a long term rather than for a short term.
One can also opt for dollar-cost averaging. It is a clever investment strategy when one buys a particular coin every month on a specific date. You may buy $100 Ethereum every 15th of a month and, over the long run, you will see your investment grow. The truth is that no one can really predict what the market will do, and sometimes it is better to buy now. It may happen that the price will never go down again.
The one thing that is great about cryptos is that you can buy a part of an Ethereum. For example, you can have a fifth of a Bitcoin or Ethereum, and if you do some day trading, you can easily grow this into one or even two coins.
It is really up to you if you want to buy Ethereum today or wait for the price to get lower. Before you invest, ask yourself this question: How much are you ready to lose?
Ethereum price predictions for 2018
According to Coin Spectator, an automated news aggregation service, Ethereum could reach $1,000. This is due to its increasing popularity and innovative technology. It is interesting to see that Ethereum spiked with more than 3,995% during 2017 whilst Bitcoin increased by more than 377%.
According to the website Investing Haven, it agrees with the $1,000 price prediction, adding that if it does not reach this price in 2018, it will surely do so by 2020. The website gives the following three factors as the reason for this prediction:
- Considering the future supply of Ether, developers may want to ensure that the number of coins remains constant. It may increase now but will stabilize after a while.
- The increasing demand and use of Ethereum’s smart contracts. The need for decentralized systems is growing on a daily basis. Investing Haven predicts that 5 – 7 years from now there will be a 20 – 30-fold increase in the smart contract apps being used.
- If the price of Ether continues growing in the same way it is now, it will attract more investors.
Where do I buy Ethereum?
There are hundreds of exchanges where you can buy Ethereum. Here is a list of reputable exchanges for you to consider. Be sure to pick the one that perfectly suits your particular needs and offers a reliable and transparent service.
In conclusion, some are saying that there is a strong possibility that Ether could eventually be worth more than Bitcoin. Investors are constantly looking out for the next best investment – maybe this is one of those?
Featured image courtesy of Shutterstock.
Understanding Cryptocurrency Price Factors
By now everyone is well aware of the incredible run that the cryptocurrency market has had this year, with bitcoin recently smashing past the $10,000 mark. Despite this however, the price journey of cryptocurrencies such as bitcoin is not simply just a vertical path upwards. The price of bitcoin experienced both major lows and highs, which were caused by a variety of factors. This article will take an in-depth look at how these factors can affect the price of bitcoin and other cryptocurrencies alike.
It is first important to make a clear distinction between the price and value of a cryptocurrency. The price of any cryptocurrency is simply the monetary cost of purchasing it, whereas the value of a cryptocurrency is its perceived benefits and usefulness. The price of a cryptocurrency is not tied to its value but instead, its perceived value. It is from this perception of value that many of the factors determining the price of a cryptocurrency usually operates.
Supply & Demand
Starting from the basics, the supply and demand of any cryptocurrency will undoubtedly influence its price. A cryptocurrency that has a lot of supply, but little demand will see very little price movement. Whereas, a cryptocurrency with a limited supply, but is very sought after will see significant price movement upwards. To some extent, this particular factor is the driving force of bitcoin’s upward trajectory. The circulating supply of bitcoin is approximately 16.7 million,this is relatively low compared to the sheer amount of bitcoin that buyers are demanding. Because of the higher levels of demand relative to its supply, the price of bitcoin increases to reflect this relationship.
Ultimately, many people will buy and sell a cryptocurrency based on its utility. In this context, utility simply means the usefulness of something. In general, the more useful a cryptocurrency is in solving a problem, the more likely that it will be bought, because a cryptocurrency that is seen as useful will also be perceived as being valuable. Take Ethereum for example, Ethereum is an open platform technology that allows developers to build and launch their very own decentralized applications (dapps).
Many people see the Ethereum project as being useful, because the project has produced some very interesting dapps that try and solve certain problems, such as TenX with cryptocurrency spending, or EtherTweet with a censorship resistant social media platform. This in turn presents Ethereum as being a much more valuable project, because not only does Ethereum make these dapps possible, but these dapps will require the purchasing of ETH (Ethereum’s cryptocurrency) to build them in the first place, causing an upward pressure in its price.
Utility is one of the most important factors to look for when deciding to invest in a cryptocurrency. If a cryptocurrency solves an issue i.e. it is extremely useful, but that is not reflected in its price, then that cryptocurrency is undervalued. This is a good indicator that, regardless of its undervalued price now, once the market begins to realize just how important the coin is, then it is likely that the cryptocurrency will see an eventual increase in its price.
Positive or negative market news can also be a deciding factor as to if a coin’s price moves up or down. The reason for this is that, depending on the market news, sentiment as to the perceived value of a coin can change. A good illustration of this point is Mt. Gox. For those that do not know, Mt. Gox was a bitcoin exchange that was based in Japan. Mt. Gox played an integral part of the bitcoin ecosystem, handling around 70% of all bitcoin transactions worldwide. However, following a security breach that resulted in about 850,000 bitcoins either being lost or stolen, Mt. Gox suspended trading and went into liquidation. During the tumultuous period face by Mt. Gox, bitcoin prices fell by 36%, reflecting negative market sentiment surrounding bitcoin at that time. In sum, the perceived value of bitcoin was negatively impacted as a direct result of the Mt. Gox incident.
Despite the sell-off that occurred during and following the aftermath of Mt. Gox, bitcoin was obviously able to recover. This scenario demonstrates the power of the utility factor. Despite the sell-off that bitcoin experienced, bitcoin’s utility remained the same. bitcoin still solved an important problem, it was a borderless payment system that could facilitate instantaneous transactions worldwide, at a very low cost. The market again gradually realized the usefulness of this, and subsequently bought back into bitcoin. The utility of a cryptocurrency has one of the most important long-term impacts on the price of a cryptocurrency. It will only be the cryptocurrencies that solve an important problem well that will remain competitive in the marketplace.
For proof-of-work (PoW) blockchains such as bitcoin, the mining difficulty of a coin can have an effect on its price. In brief, mining difficulty is simply the measure of how difficult it is to find a hash value below a given target hash. A thorough explanation of proof-of-work and mining difficulty can be found here. Initially, a low mining difficulty indicates that a cryptocurrency is easy to mine, which means that it is easier to increase the supply of that cryptocurrency, which would place a down pressure on its price. However, increased mining difficulty means that it is harder to increase the supply of the cryptocurrency, which, when compared to rising demand, may cause an upward movement in the price of the cryptocurrency. This factor requires that you have technical knowledge of the cryptocurrency that you may choose to invest in, as it may play a vital role in its price movements in the future.
In conclusion, these are just some of the core factors that can influence a cryptocurrency’s price movement. What is important to take away from this article, is that price movements are, to a considerable extent, tied to the perceived value of the coin in the marketplace. Any event that may occur, either good or bad, will affect the perceived value of a cryptocurrency, which will subsequently affect its price. This is an important principle that the cryptocurrency market largely currently operates on.
Featured image courtesy of Shutterstock.
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