Australian-born Michael Dunworth, CEO of Silicon Valley-based blockchain Wyre, has said that financial advisors should invest in Bitcoin to understand the currency better in the decentralized economy.
In a report from the Financial Standard, Dunworth said:
“You don’t have to break the bank. You could invest $10, $100 or $1,000 worth of bitcoin.”
What better way, after all, to fully understand the inner workings of a decentralized economy than by investing in it?
Of course, such a task for the average person on the street may be easier said than done. Many people may be put off by the idea of investing their hard-earned money, let alone what they should invest in. Add to the confusion digital currencies such as Bitcoin and Ethereum and countless people may consider it too much of a task to undertake.
Yet, it doesn’t have to be that way. As digital currencies and the use of the blockchain technology continues its upward trajectory, new opportunities are coming on the market for people to invest. But, with past and current initial coin offerings (ICOs) delivering over 500 digital currencies, which are being traded daily, how can someone searching for a way to diversify their investment portfolio, with the right tokens and digital currencies, enter the crypto space? And when is it the right time to do so?
According to Sydney-based billionaire Mike Cannon-Brookes, who is the co-founder and co-CEO of software firm Atlassian, who has invested in Bitcoin, he tweeted data that indicated $10,000 worth of bitcoins in July 2010 would be worth nearly $150 million with today’s exchange rate.
Unfortunately, unless one is gifted with the sight to see into the future, knowing what to invest in and when can be an uphill struggle for some.
However, whether someone is turning to the decentralized economy for the first time or they are a seasoned investor who wants to acquire and invest in assets without any hassle, The Token Fund provides an avenue for potential investors to break into the crypto space.
What is the Token Fund?
The Token Fund – also be known as a Coin Traded Fund (CTF), which is analogous to exchange traded-funds (ETFs) where you buy shares of a portfolio that tracks the yield and return of its native index – aims to achieve a straightforward process for an investor to invest in the decentralized economy. By doing so, it enables even those with little digital currency knowledge to jump on board and invest in digital assets.
With cryptocurrencies such as Bitcoin and Ether having a correlation close to zero with the real economy, they present a viable alternative hedge against financial crises. However, while ETFs hold over $2.6 trillion of assets globally, are being utilized by a growing number of investors in various markets, and is expected to account for $5 trillion of assets by 2020, according to PricewaterhouseCoopers (PwC), digital currencies still remain outside of ETFs.
At present, there is no digital currency market index in existence. The Securities and Exchange Commissions (SEC) rejection of the Winklevoss twins Bitcoin exchange traded-fund (ETF) in March dashed those hopes. However, while the SEC reconsiders its previous rejection decision, investors require another source of direction to turn to where they can gain optimal exposure in the cryptocurrency space.
As such, The Token Fund’s CTF has been developed that will act as an index with fund managers Viktor Shpakovsky and Vladimir Smerkis responsible for making investment decisions, providing efficient, transparent and provable operations, and ensuring security and taking contingency measures.
Once users sign up, they can deposit Bitcoin or Ether into the project wallet, upon which they will receive a specific number of TKN tokens, depending on the deposit amount and the fund’s capital each day. Investors also have the option of selling their TKN tokens back to The Token Fund before cashing out. TKNs are based on the Ethereum blockchain, which ensures the development of a complex system with low costs compared to Bitcoin.
In practice, though, the use of an index is only applicable depending on the market capitalization of known currencies. The Token Fund is structured primarily on market capitalization; however, it also focuses on trading volume too. Therefore, digital currencies with an average daily turnover of less than $100,000 for the past six months are automatically excluded from the portfolio. Bitcoin and Ethereum make up just under 60 percent of the portfolio. However, in order to represent a constantly adjusted cross-section of the decentralized economy with the most potential, The Token Fund also focuses on other tokens such as Ethereum Classic, Monero, Storjcoin X, Zcash and Dash to name a few.
In order to account for any changes in the market, The Token Fund portfolio will rebalance based on set rules to ensure the continued growth of the fund.
Strong Performance from The Token Fund
Since the arrival of the fund on 24 March, the TKN price has risen from $10 to just over $23 on 18 May. As can be seen from this graph, which is available to anyone and updated daily, the funds portfolio volume in TKN tokens rose from 131 at the end of April to 394 on 17 May. This data is available to view here, which is updated every 12 hours.
The Rise of Digital Currencies
The year 2017 has, so far, been a great year for digital assets. While Bitcoin has continued to reach new all-time highs, achieving $2100+ this May, other currencies too have attained new heights.
For the first time in May, Ethereum scaled to above $100. For a digital currency that was trading around $8 in January, Ether has progressed in leaps and bounds, illustrating that it has what it takes to push barriers. Litecoin has also pushed ahead to reach new heights after remaining stagnant within the $3-5 price range for a few years to now trade around $26. The news of San Francisco-based Bitcoin exchange Coinbase announcing that it was adding support to the currency on its wallet platform also helped bump Litecoin’s price up. Whereas, Ripple, which recently overtook Ethereum to claim the number two spot before Bitcoin, saw its market cap value soar to over $14.5 billion after the XRP token climbed to as much as $0.33, representing a roughly 40 percent increase in 24 hours, according to CoinMarketCap.
The world of cryptocurrencies and the blockchain is helping to reshape the global economy with more money flowing into digital assets. As such, this is proving a good time to invest and diversify into digital assets, giving an ideal avenue for people interested in removing themselves away from the traditional financial system.
As The Token Funds whitepaper states:
“Growing interest in such assets may be promising something big, perhaps a revolution similar to the one the Internet provided in the early 90s.”
Featured image from Shutterstock. Story image from The Token Fund.
Notable Bitcoin Price Growth Events in October
October has been an interesting month for Bitcoin, with growth of about 40% so far, breaking a market cap of over $101,881,681,652.
But if you are looking at Bitcoin long-term, this is more than just numbers now. Yes, Bitcoin did experience some explosive growth this month (and has been this entire year), but we shouldn’t let that distract us from some of the main components that will fuel Bitcoin’s growth in the long-term.
- Not only did the price break $6,000 per Bitcoin for the first time ever, we started to see Bitcoin’s market cap rate surpass that of big banks such as Goldman Sachs ($93 billion) and Morgan Stanley ($89 billion). While comparing the market capitalization of a cryptocurrency with that of publicly traded companies doesn’t make much financial sense, it’s entertaining to watch financial institutions stress out about Bitcoin.
For example, the CEO of JPMorgan Chase Jamie Dimon can’t stop talking about Bitcoin and venting his frustration with the topic by calling Bitcoin a “fraud” and threatening to fire any employee trading it for the simple reason of “being stupid”.
We also saw Goldman Sachs state that Bitcoin is not the “new gold” in terms of currency, calling it volatile and the methods of storage vulnerable. Goldman Sachs also stated that precious metals like gold are still the best way to store value-long term. While this may be historically accurate, the world hasn’t seen anything like Bitcoin before. Understanding Bitcoin’s growth a matter of equipping yourself with the perspective and ideology that Bitcoin (or if/when whatever cryptocurrency evolves to take its place) can play a substantial long-term role in how society views money.
Traditional financial institutions such as investment banks are at an interesting point. Cryptocurrencies such as Bitcoin and Ripple are inherent threats to the very foundation that these multi-hundred-billion dollar companies operate on, and they can’t be defeated because of their decentralized nature. Additionally, many of the same banks that are threatened are also investors looking to reap the rewards of Bitcoin’s explosive growth, and also are incubating similar blockchain concepts to not get left in the dust.
- People are starting to look at Bitcoin as an oasis of solidity in an otherwise tumultuous alt-coin market.
In September, we saw an unprecedented crackdown on ICOs and alt-coins by government entities. China and South Korea outright banned the sales of ICOs, and the United States warned investors to be skeptical. While there are hundreds (soon to be thousands) of dubious ICOs, this crackdown did have effects on how investors view legitimate alt-coins. For this reason, many investors flocked to Bitcoin and were able to enjoy some solid growth in October.
So, that brings up the question of whether Bitcoin will be a source of stability in the future. Although the price has gone up a lot this month, that doesn’t make it any less volatile.
- Bitcoin still has a long way to go. One of the key pieces of news in October that influenced the writing of this piece was the prediction that Bitcoin will hit $27,000 in four months by an avid cryptocurrency investor and enthusiast called Trace Mayer. While Twitter is filled with all kinds of Bitcoin hooplah, Mayer’s prediction was based on a simple 200 day moving average. This 200 day moving average would put Bitcoin well over $27,000.
Four months is close enough in the future to anticipate, so I’m really interested to see where BTC ends up between then and now. The counter-argument against this would be that Bitcoin may just be experience a state of exponential growth and will cool off, but that’s what people have been saying for years.
It’s also important to note that Bitcoin’s main competitors for value storage and a medium of exchange are the US Dollar and gold. Bitcoin was able to earn a market capitalization of over $100 billion in just a few short years, but this hardly holds a candle to its competitors. The US Dollar money supply circles around $12,500 billion. All the gold that has ever been mined is worth around $8,000 billion.
This means that Bitcoin, this innovative new technology with exponential growth is only around 1% of its two main competitors. This leaves Bitcoin a long way to grow, and I personally don’t think it’s going to slow down anytime soon.
By all means, this isn’t a conclusive argument for where Bitcoin’s price will end up. These are just a few points I want to bring up regardless of whatever you choose to do with your money.
There are a handful good of arguments on both sides of the Bitcoin growth discussion, but it all comes down to how well you can either respond to short-term events, or how cemented you are in your long-term beliefs.
Personally, I don’t recommend day-trading or trying to “game” exchanges for the simple fact that losing money sucks, and this is an easy way to lose money.
However, what I can advocate is the thorough research of the fundamental factors influencing the growth of particular cryptocurrencies and how the world responds to it. For example, in October we saw investment banks start commenting more about Bitcoin (which at the very least hints at more media coverage), how many users decided to stick with Bitcoin instead of liquidating for fiat during rough alt-coin times, and some explosive growth that backs up the lofty price goal assumptions by crypto enthusiasts.
We Have to Talk About Bitcoin Again
It hasn’t been a day since our last bitcoin article, but the world’s leading cryptocurrency has soared to fresh all-time highs yet again. This time, prices approached $6,200 for the first time ever.
Bitcoin’s Bull Market
BTC/USD touched a session high of $6,180.00, bringing its total market cap to $103 billion. Prices were last seen hovering around $6,100, according to Bitstamp.
The rally on Saturday came less than 24 hours after the bulls tested the waters near $6,000. Analysts are almost certain that prices can still go higher, making a compelling case for investors who are still on the sidelines of the crypto rally. FundStrat Global Advisor’s Tom Lee believes prices could top $25,000 over the next five years. In fact, he says this is a conservative estimate.
Bitcoin’s epic run has dwarfed Wall Street’s post-election rally, and has defied repeated warnings from big banks and policymakers.
Bitcoin Gold’s Private Fork
Coinbase made a startling revelation Friday in its FAQ section, where it claimed that Bitcoin Gold (BTG) has already privately forked. The private fork occurred “at a point known only to the Bitcoin Gold development team.” The newly minted digital currency will be made publicly available when the Bitcoin blockchain reaches block no. 491,407. That’s estimated to occur Wednesday.
Bitcoin Gold isn’t your typical fork in the traditional sense of the term. The Wednesday fork date is when the first Genesis block will be mined. The Bitcoin network will have no part in this process whatsoever.
Market participants are still skeptical whether BTG is legitimate. The code has not been made available, and its developers have already mined tens of thousands of blocks.
BTG’s reluctance to release its code publicly is a “major security risk,” according to Coinbase. As such, the U.S.-based exchange will not support the new coin. The broker remains committed to adding support for the Segwit2x hard fork in November.
“After the fork, we will enable access when we have determined each blockchain is secure and stable,” Coinbase Dan Romero said in a blog post earlier this month. “We expect this to happen within a few days after the fork, but it may take longer if additional risks emerge.”
Featured image courtesy of Shutterstock.
Long-Term Cryptocurrency Analysis: Bitcoin Outshines Altcoins Again
The most valuable coin had another encouraging week, as it emerged from a brief but violent correction, just to reach new highs towards the end of the week, draining capital from altcoins. The total value of the market is stagnating near the all-time high, but BTC crossed the $100 billion mark as it surged past the $6000 price level, controlling 58% of the market.
With the long-term MACD clearly being overbought, and as the long-term target has been hit, investors should now be looking for exit points, even as the short-term uptrend is intact. The range projection target of the recent correction is found at $7000, but correction risks are already high, and only small positions should be kept in the current setup.
BTC/USD, Daily Chart Analysis
Most of the major altcoins are trading in narrow ranges this weekend after a slightly bearish week, as the optimism surrounding Ethereum’s major update faded and the second largest coin re-entered its previous range.
Litecoin, Dash, and Monero are still looking encouraging despite the lengthy correction, while the recently, while the relatively weak Ethereum Classic IOTA continue to show worrying signs. As the Bitcoin long trade is getting stretched, let’s see the how the daily charts of the altcoins are shaping up.
- Trade Recommendation: Stellar October 23, 2017
- Crypto-Friendly Japan Mulling ICO Ban? October 23, 2017
- Trade Recommendation: Lisk October 23, 2017
- More Powerful than an Emperor October 23, 2017
- Small Cap Trading Frenzy Drives Penny Stocks In October October 23, 2017
- Asian Market Update – Monday: Tokyo Gains after Election Landslide, Minor Losses in China, S. Korea October 23, 2017
- Ether Prices Fall Below $300 Amid Technical Breakdown October 23, 2017
- Buy FDS, PPC, BERY, and IIVI for the short-term October 22, 2017
- Notable Bitcoin Price Growth Events in October October 22, 2017
- Trade Recommendation: Monero October 22, 2017
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