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How to Invest in a Decentralized Economy?

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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.

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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.

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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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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2 Comments

2 Comments

  1. rdcglobal

    May 22, 2017 at 8:41 pm

    Cool i think this Token Fund is better than GBTC which is always way overpriced compared to its bitcoin holding value.

  2. carls4096

    May 23, 2017 at 2:30 am

    The idea and the product is quite good but the cost is a bit high IMO. As written in the white paper the deposit fee is 5% AND the exit fee is 5%. If you invest 20.000$ just 19.000$ are arriving in the fund. Let’s say after 6 month the 19.000$ become 25.000$ and you withdraw then 1250$ gets deducted. Total cost 2250$.

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Analysis

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 113 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 113 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 113 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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