With this in mind, bitcoin can arguably be seen as the purest form of money, as its value is entirely predicated on trust in it, and nothing else. It can arguably also be seen as the most trustworthy of currencies, as it was bespoke made by intentional design to exhibit all the best elements of historically trustworthy currencies (e.g. gold), as well as to introduce for the first time a number of characteristics that make it even better than all previously extant currencies.
The difficulty is knowing when the trend has changed, as such, I hedge altcoins and BTC against each other and make changes in my portfolio when a change in the trend becomes more obvious. When BTC dominance is falling, altcoins tend to perform better and vice versa, but this is not always the case, when they rise together, my gut instinct tells me that significant volumes of new capital are entering the market.
Dan Morehead and Joey Krug of the blockchain investment fund Pantera Capital sit down with Michael Green of Thiel Macro. The group explores the current state of cryptocurrency, blockchain technology, and the current investment environment. In addition, Morehead and Krug look ahead to the future of distributed ledger technology to explore how smart contracts will create value for users and investors by reducing transaction costs and eliminating middlemen. Filmed on May 22, 2018 in San Francisco.
Generally, the strategy suggested to average out such short term volatility for something that one is investing in long term is to practice dollar cost averaging. This preaches that one should set an exact time at regular time intervals to buy an exact amount in fiat currency of the investment one is looking to purchase — e.g., $1,000 worth of bitcoin on the 1st of every week, or every month. This means that over time, you’ll be able to take advantage of bitcoin’s general trajectory upwards, but balance out the relative short term volatile price movements both high and low, such that you experience a more linear growth trajectory over time of your principal.
Government regulation is a looming threat for many in the world. It is quite easy for a government to ban centralised cryptocurrency exchanges. They will not be able to control decentralised exchanges. This means that cryptocurrency investors should be able to trade freely on a decentralised cryptocurrency exchange, even if there is negative regulation in their particular country.
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These are tokens built on one of the above mentioned platforms. They give access to a specific blockchain application, and are designed for a specific task. Utility tokens are not really my cup of tea yet, as they’re extremely risky due to two things. It’s still too early for mass adoption of these utilities because the technology is not ready yet (Ethereum’s scalability issues, for example), and because we don’t know what platforms will actually become the blockchain backbone of the digital world.
There were many reasons for the crypto community to eagerly anticipate Bitcoin futures’ introduction to regulated derivatives markets. Futures have long been seen as the first stepping stone on the path to reconciling the world of crypto finance with the system of traditional financial institutions. Existing within a well-defined legal and operational framework, futures contracts offer legitimacy and security that judicious Wall Street firms were waiting for in order to finally jump onto the crypto bandwagon.
For many investors, being able to invest in bitcoin through the Bitcoin Investment Trust is worth paying a fairly expensive fee. The trust sponsor deals with all of the mechanics of investing in bitcoin, including obtaining cryptocurrency tokens, holding them in safekeeping, and then making any future transactions as necessary. Investing in the trust is as easy as buying or selling shares when the stock market is open, and that has real advantages over the lengthening processing times involved in handling actual changes of ownership in bitcoin tokens themselves.
More recently, the approval or rejection of a bitcoin ETF was widely touted as being the contributing factor to a bitcoin bull run from under $1000 to over $1200. It was speculated that if the ETF were to be rejected, that naturally the price would fall to where it was before the bull run began. Indeed, the moment the ETF was announced as rejected, the price did momentarily fall to almost $1000. However, it just as quickly recovered, and began an inexorable climb all the way up to over $2700, where it stands to this day.
When buying altcoins, I always keep an eye on Bitcoin’s value, and over time I’ve made some important observations with regard to this. There are almost never three green days in row, and when the market is in the red, Bitcoin tends to decline less then altcoins. Once this happens, your order will be filled and you’ll get your 3% discount, since the altcoin tends to drop harder than Bitcoin.
Cryptocurrencies have attracted the attention of several investors all over the world. But in general, institutions did not participate in the market. Back in August, the Intercontinental Exchange (ICE), which operates an important number of regulated exchanges all over the world, announced its intention to launch a new institutional-grade crypto platform known as Bakkt.
Over the past six months, the cryptocurrency crash has brought out the skeptics. In fact, the ongoing “Crypto Winter” is a healthy cleansing of the ecosystem because the correction is effectively separating long-term value creators from short-term day traders. All in all, we believe that a “Crypto Spring” will arrive. And, institutional capital, a.k.a. the sticky, smart money, could possibly usher in this new season.