Why billionaire investors remain positive on long-term trend of cryptocurrency
Mike Novogratz, Jim Breyer, and Tim Draper are some of many billionaire investors in the traditional financial market who remain optimistic towards the long-term trend of digital currencies.
How are these investors able to maintain their positive stance in regards to the growth of the cryptocurrency sector following an 85 percent decline in valuation across the board?
It’s About Cycles
For the most part, high profile individual investors are able to handle severe losses in emerging asset classes and high-risk assets like cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) because they account for a small part of their wealth and portfolios.
As is the same in real estate and other traditional markets, wealthy investors have the ability to hold onto assets and properties even during the event of an unexpected market crash or the occurrence of a bear market.
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But, normal retail investors and individual traders who need quick cash to cover day-to-day operations and expenses have no other option but to sell most of the high-risk assets they hold in their portfolios.
In bear markets, retail traders often suffer a significant loss because they are unable to handle an...
Napston digital currency launches fully automated cryptocurrency exchange
Tech
The Napston cryptocurrency exchange has the potential to turn the industry upside down, if it’s able to produce the results the company expects. The exchange is a fully automated platform that uses a proprietary technology, the “Distributed Artificial Neural Networks (DANN),” to make accurate market predictions. Company officials assert that the platform pools data from “thousands” of independent sources and makes trading possible for even the most inexperienced investor.
According to a press release by the company, “Napston entered the cryptocurrency space in 2013, long before it became mainstream. Over the last five years, the company has been through all the uncertainties and fluctuations of this evolving market. During this phase, Napston was serving only the larger corporate and high net worth individual customers, helping them properly structure and trade their cryptocurrency portfolios. They have spent a high percentage of profits to build the proprietary Distributed Artificial...
Wall Street institutions are entering the digital currency markets
People know that financial institutions think of cryptocurrencies as arch enemies. But with the increase of opinions from financial advisors that the world is on the brink of another financial collapse because of inflation, maybe digital currency are the solution to some of the problems. Although not perfect, digital currency are still developing and will have a far bigger impact that most people give them. So it wouldn’t come as a surprise when financial institutions end up adopting the technology they are so actievly against. For investors, adapting to circumstances has always been the correct way. Different people use cryptocurrencies for different reasons: some want to get rich quick, others want independent control over their financial assets and some idealists desire an entirely new and efficient global economy built on blockchain technology and digital currency.
Whatever a person’s reasons for using crypto and blockchain are, there will always be a huge cultural clash when cryptocurrency holders and Wall Street ideals meet. A huge influx of institutional money would be extremely beneficial for cryptocurreny prices in the short term, but in the long term this will cause extreme volatility. Recently the sixth-biggest fund manager in the world, Fidelity started to offer digital trading services and it shook the landscape even more. The announcement of this project was aimed at the trading demands of large institutional investors. These demands will in turn provide services like “institutional-grade custody”, large scale leverage trading and more, all of which should pump cryptocurrency prices, but will basically just bring more whales to the digital currency free market.
Institutional money will spike Digital Currency prices
People who believe or want to be financially independent from banks will not like this. In fact, most supporters and users of Bitcoin stand firmly behind Bitcoin’s philosophy that you can be your own bank. Developers and investors with insight however, knew that this day would eventually come. Risk management will see those institutions passing off the risk of holding the said assets to...
Financial institutions including Morgan Stanley and Citibank are creating digital currency investment products
So far, this year has been marked by bad news for institutional investors interested in pursuing cryptocurrencies.
One of the most lauded and most highly anticipated crypto investment instruments, the crypto Exchange Traded Fund (ETF), has faced steady regulatory headwinds as the SEC continually rejects attempts to bring ETFs to market.
Since many crypto enthusiasts see institutional investment as the next frontier for crypto adoption, these setbacks are frustrating. However, that doesn’t mean that all opportunities for institutional investors are impossible.
In that regard, it’s been a big week for Bitcoin as a series of leaks reveal that major financial institutions, including Morgan Stanley and Citibank, are creating or developing investment products intended to provide their substantial customer base with access to digital assets.
Morgan Stanley is preparing a crypto product
This week, Bloomberg reported that Morgan Stanley is preparing an investment product that will provide their customers access to Bitcoin derivatives. Citing an anonymous source, Bloomberg contends that Morgan Stanley will provide customers with “synthetic exposure” to Bitcoin markets by enabling investors to take long or short positions on the digital currency.
In this way, Morgan Stanley is joining several other mainstream financial institutions striving to produce mechanisms for their clients to trade in Bitcoin without providing direct access to digital currencies. Bloomberg’s source notes that Morgan Stanley will charge spread fees to accommodate the inherent risks in brokering Bitcoin products.
Although...
Central Bank of Japan says issued digital currencies are not effective economic tools
The Bank of Japan’s (BOJ) deputy governor Masayoshi Amamiya has recently reiterated his negative stance towards central bank-issued digital currencies (CBDC), the New York Times reports Oct. 20.
Speaking on Saturday at a meeting in Nagoya, central Japan, Amamiya expressed doubts about the use of CBDCs, claiming that such digital currencies are unlikely to improve the existing monetary systems. Amamiya also stated that the BOJ does not plan to issue digital currencies.
The article reports that some financial experts consider a CBDC as a tool for central banks to control the economy once interest rates fall to zero. According to this theory, a CBDC would enable central banks to stimulate the economy by charging more interest on deposits from individuals and firms, which would in turn induce them to spend more money.
Amamiya has questioned that theory, claiming that charging interest on central banks-issued currencies...
Norway's Central Bank Mulls Digital Currency as Cash Use Declines
Norway's central bank is preparing for a future in which it might issue a digital currency amid a slump in cash usage in the country.
Looking into the possibility, a working group at Norges Bank has released a report titled "Central Bank Digital Currencies," which explains that, as citizens turn away from physical forms of money, the bank must consider "a number of new attributes that are important for ensuring an efficient and robust payment system."
Already, the country's DNB bank has stopped handling cash, with Trond Bentestuen, group executive vice president of wealth management and insurance at the bank, telling local media as far back as 2016, that only 6 percent of Norwegians use cash on a daily basis.
Further, Jon Nicolaisen, deputy governor of Norges Bank, stated in a speech last April that the role of cash "continues to diminish" as consumers move towards electronic payments, adding that "For many consumers, electronic central bank money could provide an...