What We Learned in 100 Crypto Talks With Institutional Investors

Through meetings with over 100 institutional investors over the past four months from California to New York, one thing has stood out most − an overwhelmingly positive response.

These endowments, family offices, pensions and other institutions are enthusiastic about crypto assets despite an overall pullback in crypto valuations upwards of 75 percent from their all-time highs.

This is remarkable.

Though the majority of these investors want to dip their toes in the crypto pool, they come from varying backgrounds and have different levels of knowledge:

  • Those just beginning their crypto educational journey
  • Those that didn’t have a “crypto specific mandate,” but are evaluating crypto managers in the same way they evaluate all emerging fund managers
  • Those that are well versed in crypto, and considering an immediate allocation.

Not surprisingly, each category of investors had different questions and goals.

The ‘Beginning’ Investors

Learning a new industry can be daunting.

The typical learning curve looks something like this:

  • Phase I: The first time you hear about blockchain or crypto –> Skepticism
  • Phase II: You spend the next six months researching and learning –> Optimistic but confused
  • Phase III: You spend the next 12 months going deeper down the rabbit hole until you want to dedicate the next 20 years to this new technology –> Passion and full adoption

Most investors considering digital assets are somewhere between “Phase I” and “Phase II” and, even if they weren’t thinking of allocating, it was not uncommon to hear some variation of “crypto is hard to ignore right now.”

Two points resonate universally with this group:

  • You’re 100% long the financial system right now! Even if you moved to 100 percent cash across all of your investments, you are still 100 percent long the financial system (via the banking system). As we saw in the 2008 banking crisis, 2011 European sovereign crisis and the 2018 emerging market currency crisis, there is systemic risk out there that investors want to hedge against. Crypto offers investors exposure outside of the traditional financial system, and many argue it is actually more dangerous NOT to have some exposure to crypto than it is to have a small allocation.
  • Crypto is both an asset class and an infrastructure. As an asset class, there are opportunities today to participate in the growth of emerging technologies. The pie is growing even as prices collapse and, with enough research, you can figure out which slices of the pie to grab.As an infrastructure, you have time to wait. But you’ll want to familiarize yourself today because one day soon, every asset class you own may be represented in digital asset form (equities, fixed income, real estate, hard assets). Viewing the utility of cryptocurrencies through price alone misses the fundamental revolution. Cryptocurrency and blockchain have uses far beyond price.

What matters most is understanding how crypto assets can meet their goals and fit within their risk tolerances, as well as how it fits as a smaller piece of an overall balanced and diversified portfolio.

Understanding every nuance is secondary. For example, most investors who invest in healthcare equity funds don’t fully understand Medicare reimbursement, hospital admissions and patent processes. Instead, these investors know enough to recognize that they want exposure to healthcare, and then hire experts to express the individual views for them.

This is likely what will happen in crypto.

The ‘Traditional Hedge Fund Due Diligence’ Investors

Investors in this camp spend most of their time seeking out strategies that expose them to the potential upside while limiting downside risk:

This is what most often gets their attention:

  1. Don’t focus on how high it can go; focus on how low it can go. A good fund manager in any asset class tries to capture most of the upside, while ensuring that downside risk is mitigated. This is an especially important message for investors to hear in crypto, since most of what they see and hear strictly focuses on outlandish return potential.
  2. DO NOT short this market today. I’ve spent my entire career trying to isolate idiosyncratic risk and removing market risk through cap structure arbitrage trades and long-short trades, but this strategy does not yet work in crypto for a variety of reasons (asymmetric upside, low liquidity, high costs, etc). As such, the best hedge today is simply not to own a token that you don’t like. Currently, the best way to protect against the downside is by sizing positions correctly according to risk/return profiles, taking chips off the table when this equation is no longer favorable, and using derivatives to hedge tail risk.
  3. A top-down AND bottom-up approach. Active management matters in crypto, perhaps more than in any other asset class, because of the large swings and bifurcations between top performers and underperformers. Understanding the macro landscape (top down) while simultaneously searching for value (bottom-up approach to security selection) is how to take advantage of current market conditions. Few investors want to hear about best ideas because they are not ready to execute them on their own − but they do want to understand the process.

Conversely, the biggest pushback from this group is that the underlying asset class itself is still so new, and it’s hard to invest in something that has unknown tangible value. But it’s important to remember that many asset management strategies can work on top of any underlying asset class. For example, there are managed futures funds that focus on very esoteric underlying assets (like weather futures).

Others in this group point to how some crypto assets are “frauds” or have market values in large excess compared to value. But this exists in traditional asset classes too.

There are hundreds of penny stocks that retain market cap value and trade, despite no underlying value. And there are plenty of “stub bonds” in the corporate bond and distressed market that have no value but remain priced and trading for decades.

As the overall size of legitimate crypto assets grows, these outlier, “worthless,” tokens will fade and become less impactful.

The ‘Savvy Crypto’ Investors

As you might expect, investors in this bucket are trying to figure out which managers they trust to generate high risk-adjusted returns in the crypto space. In addition to focusing on risk management like group 2 above, this group of investors often got much more granular with their questions about what specifically goes into a crypto portfolio.

The two messages that resonated the most were:

  1. Developers are the new research analysts. Research has greatly evolved over the past decade, especially with the emergence of digital assets. The ability to read lines of code in GitHub, test pre-launch products and engage with various development communities is a must for any fund investing in this space.
  2. What is ‘fundamental research’ in crypto? This is a smart question. Unlike traditional asset classes like equities and fixed income, there is no widely agreed upon Graham & Dodd Security Analysis in crypto. BUT, that doesn’t mean valuation frameworks aren’t in the works. There has been great work done like MV = PQ, NVT analysis and even variations of Metcalf’s Law. It’s right to question the fundamental value of these new technologies, but wrong to dismiss the lack of progress.

Looking ahead, this group is already excited about today’s crypto assets, but also focused on what is coming in the future. They want to align themselves with managers who are in a position to take advantage of today’s opportunities, while also being on the front-line when new opportunities arise.

Conclusion

This past year has opened my eyes to the progress that is being made on both the technology side and the education side. Whether investors have a specific mandate or not, most are trying very hard to figure out where crypto fits into their process and portfolio.

While it is true that many funds already have some secondary or tertiary exposure to crypto via their traditional hedge fund or VC investments, it’s becoming clear this alone is not satisfying their needs.

As stated earlier, “Crypto is pretty hard to ignore right now.” Unless investors want to completely write it off, they will have to figure out how to get involved.


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Author: Jeff Dorman
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13 Celebrities Who Back Cryptocurrency And May Own Millions in Bitcoin

  • There’s no shortage of public figures who have advocated crypto as the currency of the future.
  • From artists like Pitbull and Snoop Dogg to actors Johnny Depp and Ashton Kutcher, recent years have seen a surge in the number of celebrities to get involved with cryptocurrencies.
  • Some of them could be in possession of millions of dollars worth of bitcoin.

Up until relatively recently, cryptocurrency hadn’t captured the interest of the general public; it was reserved almost exclusively for the engineers, developers, and entrepreneurs who had been involved in its conception around a decade ago.

However, the bitcoin bubble in 2017 caused cryptocurrencies to soar in value, and led to millions purchasing cryptoshares and even setting up their own mining farms.

Despite the considerable drop in the value of bitcoin over the past year, experts are predicting a new cryptocurrency boom in the near future, possibly from 2020.

With a considerable number of public figures already investing their fortunes in cryptocurrency, more seem to be jumping on board with cryptocurrency for business ventures and more.

Here are 13 celebrities who have publicly backed various cryptocurrencies.

Bill Gates

Despite having reservations about Bitcoin more recently, Gates is one of the most well-known bitcoin-invested public figures in the world.

“Bitcoin is exciting because it shows how cheap it can be,” he explained in an interview. “Bitcoin is better than currency in that that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”

Gwyneth Paltrow

Though Gwyneth Paltrow receives a lot of attention in the media, often for questionable health advice on her lifestyle website “Goop”, the actress is involved in a number of other business ventures too.

Paltrow is another advocate of crypto — in fact, she was the face of bitcoin wallet, Abra, as well as becoming an advisor there from August 2017.

Last November Paltrow shared an article on Twitter on “The Basics of Bitcoin and Crypto Currency, and How to Invest”.

Paris Hilton

Despite controversy over the owner of LydianCoin having been convicted of domestic violence, in September 2017 Hilton stated that she was “looking forward to participating in the new” ICO.

Snoop Dogg

Although it’s not known how many albums he ultimately sold, Snoop Dog was selling them at 0.3 BTC in 2013.

Based on bitcoin value today, he could possibly have earned over roughly $1,000 per album. The artists also made an appearance at an XRP Community Night crypto party.

Ashton Kutcher

As well as founding his own investment firm “A-Grade” in 2010, Ashton Kutcher has invested in UnikoinGold along with billionaire Mark Cuban.

The esports gambling startup responsible for the currency, Unikrn, marketed UnikoinGold as a currency to be used for betting on the likes of League of Legends, Dota 2, and Counter-Strike: Global Offensive.

The actor has also invested in Uber, Airbnb, and BitPay in the past.

Hugh Laurie

British actor, Hugh Laurie, well known for his role as Gregory House, M.D, hadn’t had any particular interest in crypto up until four years ago.

However, in 2015, a friend suggested he invest in Bitcoin, at which time it was starting to rocket in value.

At the behest of a friend, Laurie invested in BTC at the value of $5,000.

Mike Tyson

As well as investing in Bitcoin, Tyson has produced Bitcoin ATMs branded with his face tattoo.

In collaboration with Bitcoin Direct, he also came up with a Bitcoin Wallet with the same branding as the ATM.

In 2015, Engadget reported that he had launched a Bitcoin ATM system, a virtual wallet operated using bitcoins.

Pitbull

In April 2018, Pitbull announced that, in conjunction with eMerge Americas, he would be launching Smackathon — a cryptocurrency to revolutionize payments in the music industry.

Lionel Messi

Lionel Messi became brand ambassador for Israeli company Sirin Labs in late 2017.

Sirin Labs is producing the world’s first crypto smartphone and, according to the his Instagram, the footballer is backing it.

A post shared by Leo Messi (@leomessi) on Dec 7, 2017 at 6:26am PST

Ethereum World News reported at the end of last year that the Finney phone is now available and has a variety of features aimed specifically at crypto users.

Mel B

Mel B became the first British artist to begin accepting bitcoin as payment for her 2014 Christmas single through a partnership with CloudHashing.

Cloudhashing is among the biggest companies in the industry offering bitcoin-mining contracts.

“I love how new technology makes our lives easier, and to me that’s exciting,” said the artist, on announcing that she’d be accepting crypto payments. “Bitcoin unites my fans around the world using one currency.”

Floyd Mayweather Jr.

Floyd Mayweather Jr. has been promoting several ICOs for some time, including Stox, Hubii Network, and Centra.

In 2017, he tweeted:

Madonna

Madonna, along with Bill Clinton, is one of many public figures involved in spreading the word about how easy and secure cryptocurrency is as a payment method.

The Queen of Pop teamed up with Facebook and Ripple last year for an online fundraiser to benefit her Raising Malawi foundation.

Ripple matched each dollar donated to the campaign, with Madonna describing Ripple’s involvement as a “generous commitment” to her organization.

Johnny Depp

While the Johnny Depp has received a lot of tumultuous publicity over the past few years, in part, down to his unusual spending habits, the actor hasn’t shied away from getting involved in crypto.

Last autumn, the actor became a partner at blockchain startup TaTaTu.

According to CCN, the platform rewards users in the form of tokens for interacting with content like films and games.


Source
Author: Pavel Ramírez and Ruqayyah Moynihan
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What Bitcoin’s Dominance Says About The State Of The Crypto Market

If the prolonged bear market that we’re in has shown us one thing, it’s that Bitcoin is still the king of crypto. The market’s continuous, slow bleed throughout the year has on several occasions brought the total market cap below $200 billion in September, and lately it’s been hovering around the same levels as November last year. And we’re not out of the woods yet. However, Bitcoin dominance — the demand for Bitcoin compared to other cryptocurrencies — is growing at a disproportionate rate to the total market cap.

In fact, Bitcoin dominance has passed 51 percent at the time of writing (down from 55 percent a couple of days ago).

Dominance was at its lowest during the bull run in January when most other cryptocurrencies, also known as altcoins, or just alts, were booming. However, up until the bull run started, dominance was growing, and we see the same thing happening. If we’re following trends, this could be an indication that another run is getting closer.

Bitcoin’s popularity usually rises during bearish times and there are a few explanations for this. It’s obviously the one high-profile currency everyone has heard about and is therefore a natural choice for crypto neophytes. Also worth noting is the high correlation between the price of Bitcoin and altcoins. They have always been strongly coupled. However, with its relatively low volatility compared to other cryptocurrencies, Bitcoin is considered a safe haven in bear markets. After all, it’s only retracted 75 percent from its all-time high, whereas the majority of altcoins are down 80-95 percent from their peaks.

This difference isn’t really surprising, as a coin’s price movements are primarily a function of liquidity. Bitcoin has higher volume and market cap than any other coin and its thicker order books mean smaller movements. This is why traders who employ proper risk management often move funds into Bitcoin when they believe the market is going down and then back into altcoins when arrows point upwards again. Alts rise higher and fall harder.

This also makes Bitcoin a good option for risk averse investors who are uncomfortable holding positions in altcoins but don’t want to exit the markets. Tether (USDT), a stablecoin pegged to the US dollar, obviously offers the strongest store of value proposition when all crypto prices are dropping, and offers an alternative to going fiat, but it’s been struggling to gain trust from the general crypto community due to ongoing controversy and speculation about whether it truly has the dollars in reserve to back its tokens.

Adding to this, Bitcoin is still the only universal on- and off-ramp to the crypto world. Whichever coin or token you want to buy, the first step is usually spending your fiat on some Bitcoin and then trading that for other assets — or, if you’re a more experienced gambler trader, you can long or short it with margin trading. It’s the same procedure the other way around as well: If you want to sell, you likely have to go through Bitcoin before cashing out to fiat.

And although the exchanges have been launching more trading pairs with Ethereum and USDT this year, most traders tend to stick with the Bitcoin pairs as they hold the most volume. Another point is that among most traders, the goal is always to accumulate more BTC, not USD, and the preferred denomination of prices is in Satoshis, or sats for short.

So, with Bitcoin involved in most of the market action, shouldn’t its dominance be even higher? We don’t have to go further back than to March 2017 to find it at 85 percent. Fast forward to June the same year. Everyone now wants in on Ether and the hottest ICOs, and the percentage drops to 40. Back to present-day, the around 2,000 altcoins currently listed on CoinMarketCap is not only a sign of greed among unnecessary ICOs but also of a protocol, dapp, and token race spun out of control. Enabling anyone to create a new cryptocurrency in an hour has heavily diluted Bitcoin’s market share.

More than 1,600 of the altcoins out there have a market cap between $10 million and zero. But they have no liquidity, no trading volumes. Look at Rubycoin or LEOcoin for example. They both rank relatively high on CoinMarketCap with market caps of about $10 million and $13 million, but their daily trading volumes are close to zero. There are hundreds of coins out there like these, taking dominance from Bitcoin just by existing, even though they are in reality dead.

This tells us there are basically too many alts in the market now for Bitcoin’s dominance to rise much further. I’m not saying all of these low volume coins deserve to die, though. Altcoins with good fundamentals are attractive targets for risk-hungry traders and investors scouring the smaller exchanges for the next potential 10, 100, or even 1000x project. These difficult-to-find coins, often referred to as “gems”, are definitely high-risk, high-reward plays for traders who know what to look for.

Some alts disappearing will, however, be good for the market as a whole, and I believe most of the projects listed only on smaller exchanges will. The majority on the likes of Binance, OKEx, and Huobi, will probably survive due to the retail demand there. When BTC inevitably makes its move and ends this bear market, new buyers will enter the market.

Despite new altcoins popping up every week, Bitcoin’s dominance is still increasing. While this does show its strength, a look at history tells us it could also be a sign that a new bull run is in the making. Currently we’re seeing seemingly random alt breakouts, with coins rising 10-20 percent in price over a few hours, only to drop back just as fast to the level they were before. Sudden price jumps and retraces like this aren’t usually organic but rather whales coming out to play, but they could also be a sign of impatience among investors afraid to miss out out on the next alt season.

There are some major events on the horizon for crypto, and the outcomes of these will largely decide which direction the market is going to take. Bitcoin exchange-traded fund proposals, Bakkt launching, major banks introducing crypto trading, and other risk-averse products that will make cryptos more liquid and trusted, are coming into the market. As we reach each of these milestones we’ll see some very bullish headlines, which alone could be enough to trigger the next bull run.

Look for Bitcoin dominance to rise first, then drop again as altcoins start going off one after the other. Still, regardless of upcoming news, we’ll continue to see huge corrections and gains, and until the infrastructure and ecosystem is ready for altcoins to decouple from Bitcoin, the king continues to lead the rallies.


Source
Author: Trond Vidar Bjorøy
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Regulators Land Punches, But There’s a Long Fight Over Crypto Ahead

There are shifts at ShapeShift and not everyone’s happy with them.

When the token exchange recently announced a new “membership” model with mandatory account identification, there was outrage from certain members of the cryptocurrency community who felt it was abandoning its pledge to privacy and destroying its core value proposition.

Bitcoin developer Peter Todd, for one, was brutal:

ShapeShift described the move as a way to provide added perks to loyal customers and to explore approaches to tokenizing that loyalty. But it was clear that the threat of action by regulators played a big hand in the move.

In a blog post announcing the move, CEO Erik Voorhees, a prominent crypto libertarian and vocal proponent of individuals’ rights’ to private value exchange, acknowledged to his customers that the mandatory aspect of the new model “sucks.” And in a reply to crypto developer Greg Slepak’s suggestion on Twitter that he write an “honest blog” about what happened, Voorhees responded by saying “What I write is being watched very closely. Please give us time.”

But in a statement provided to CoinDesk, Voorhees offered further explanation for ShapeShift’s policy shift. He said an official know-your-customer (KYC) identification system “was not added a result of any enforcement action, but rather a proactive step we took to derisk the company amid uncertain and changing global regulations.”

“We remain committed to the struggle for financial privacy and sovereignty for all humans,” he said, but added,

“Ultimately, ShapeShift is a corporate entity, and we have to abide by laws around the world. “

New York’s AG Office Enters the Fight

Now, with the New York Attorney General’s office releasing a report accusing various crypto exchanges of doing too little to prevent market manipulation, one could conclude that regulators are gaining the upper hand in their ongoing battle with the crypto industry’s more anarchic elements.

Along with the capitulation at ShapeShift, long viewed as a model for those wanting to conduct exchanges outside of the state surveillance ingrained in KYC identification regimes, it does look as if officialdom is striking some heavy blows right now.

But this will be a long struggle, a boxing match, if you will, that still has many rounds to go. New technologies, the dynamic development of token-based business models and an evolving regulatory landscape will continue to create avenues for blockchain and cryptocurrency developers to protect privacy and challenge government intervention.

That, in turn, will spur regulators to pursue new enforcement approaches to maintain their power, which will be followed by new solutions from the crypto side to deal with those efforts. It’s hard to say who will win in the end. Perhaps it will never be resolved.

Some of the battle comes down to defining and managing jurisdictional boundaries — and that doesn’t necessarily go in favor of the regulators.

Crypto technology is, for example, ensuring that the New York Department of Financial Services no longer has the de facto global reach it wielded under the previous assumption that any decent financial entity had to operate in the New York market. The reason old-style financial companies felt compelled to submit to NYDFS rules was that the most important financial intermediaries — the investment banks, the correspondent banks, the custodians and so forth — were based in the state. But crypto technology is explicitly intended to bypass those intermediaries and create peer-to-peer exchange.

This is why exchanges like ShapeShift and Kraken felt comfortable opting out of the New York market when they decided that NYDFS’s BitLicense was too onerous. They could simply choose not to deal with residents of the state — much to the chagrin of the New York Attorney General’s office, which called the exchange’s refusal to cooperate with its request for information “alarming.”

We’ll have to see if there’s any negative fallout for Kraken CEO Jesse Powell, who mockingly responded to the NYAG’s report by comparing the state to “that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them.” However, Powell’s bravado suggests Kraken is confident it has successfully shut itself off from New York residents and so can, effectively, tell the state’s officers to take a flying leap.

Ironically, Kraken is able to derive that confidence because of sophisticated technological new tools for managing customer accounts that KYC compliance officers call for — such as monitoring IP addresses, which can indicate if someone trying to trade on the exchange’s site is in New York.

New Pro-Privacy Tools

Meanwhile, advances in cryptographic privacy are coming thick and fast, with blockchain developers making strides with tools such as zero-knowledge proofs. Cryptocurrencies such as zcash, monero and dash all enjoy these qualities.

And within Bitcoin Core, work is being done to make it near impossible to trace transactions — a goal that’s critical, not so that criminals can exploit cryptocurrencies, but so that enterprises that might want to use these technologies don’t expose corporate secrets to their competitors.

“Layer 2” solutions such as the Lightning Network, which allow for transactions to occur “off chain” will also enhance the privacy of cryptocurrency users. Meanwhile, related solutions such as discreet log contracts, which essentially blind information oracles from information about the contracting parties they serve, will create extremely private smart contracts and could encourage crypto “dark pools” whose transactions are invisible.

And of course, there’s a big push toward decentralized exchanges. Lawyers often point out that these models are still vulnerable to regulatory oversight, since the developers of the software can be held accountable. But once powerful price discovery systems, atomic swap mechanisms and safe custody models are built so that buyers and sellers can find each other without intermediaries, what’s to stop a new “Satoshi Nakamoto” from anonymously bequeathing such a system to the world and avoiding the clutches of the law?

The Law Is the Law, Though

Still, it’s naïve to suggest that government doesn’t have powerful weapons. If activities that take place on these systems are deemed illegal, then participants must engage them in full knowledge that they are breaking the law. And if they’re caught doing so, prison is always a possibility. That threat can be a strong, moderating force on behavior.

The powers of the state are far-reaching. With the implicit threat of jail time or fines, it can force businesses to spend heavily on legal fees and compliance costs without even taken any action. Voorhees told CoinDesk that ShapeShift spent “over a million dollars of legal expenses on this topic” before making the decision to change policy.

So, in reality, we don’t know who the ultimate winner is in this crypto-versus-regulators fight.

But perhaps this back and forth can have a positive outcome if it sparks a dialogue around the best way to permit innovation and the degree to which privacy needs to be protected. As I’ve argued elsewhere, privacy should be viewed as a key element of an effective system of exchange, without which money can cease to fungible.

That’s why it’s encouraging to see policy makers in various jurisdictions try to give more leeway to innovators in this industry.

On Friday, Rep. Tom Emmer of Illinois, a new co-chair of the Congressional Blockchain Caucus, announced he would introduce three new bills providing safe harbor protections with lightweight regulatory models for blockchain startups. And we’re seeing jurisdictions like Singapore open up a constructive global dialogue on how to encourage innovation in areas such as utility tokens without leaving developers to fall afoul of securities laws.

Such frameworks can give a lease of life to those building a more frictionless, liberal system of value exchange. It could even provide opportunities for ShapeShift, whose new accounts model includes some interesting opportunities in tokenized membership, which could facilitate experiments in disintermediated and decentralized exchange, even within the confines of a KYC regime.

So, grab yourself some popcorn. This is going to be a long one.


Source
Author: Michael J. Casey
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VeChain (VET) Price Expected to Boom as Bithumb Completes Asset Switch

The Korean exchange activated trading in the new token on September 21.

Bithumb, one of the most active Korean exchanges, has switched to the new VeChain (VET) digital asset, one of the up-and-coming platform coins. Initially, a trading bot discovered the listing, triggering a surge in prices:

A bit later, the exchange issued its official statement and stopped the trading of old VEN coins. VeChain uses the dual-asset model, and only VET will be traded for now. Meanwhile, VeThor (VTHO) is separately finding its marketplaces.

The listing of the VET asset has rekindled expectations of a new price hike. Reddit users are awaiting an immediate effect on the value since Bithumb will provide a diversified trading profile and access to Korean investors.

After the bot tweet, VET climbed from $0.013 to $0.014 at 3:00 UTC. At the time of writing, it changes hands at $0.014262, up around 8% in the past 24 hours. The price increase also mirrors the general market recovery, which has seen all coins posting gains.

Short term, the VeChain project is attractive for the passive income in VTHO from running nodes. VTHO currently trades at $0.0014 on much less liquid exchanges.

Unfortunately, VET no longer outperforms the market and is down 85% from its all-time high. The bullish factor here is that a significant number of the coins would be locked for staking.

Recently, the VeChain platform introduced its first tracking product, aiming to meet the KYC requirements of the crypto sector. In a blog, the company noted:

“The need for KYC and digital ID maintenance is pivotal for blockchain to see widespread adoption across the world not only from a Cryptocurrency point of view but also in general use. Being able to validate, audit, and trustmembers of the system helps reduce bad players as well as allows government and financial institutions better protect its users.”


 

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Author: Christine Masters
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RESEARCH: UK CRYPTO INVESTORS’ LACK OF KNOWLEDGE IS ‘VERY CONCERNING’

Recent research from IW Capital found that 38 percent of the British population do not “understand” cryptocurrency. Furthermore, a mere 5 percent of those cryptocurrency investors polled have actually turned a profit — a fact the investment house’s CEO finds “very concerning.”

A FUNDAMENTAL LACK OF INFORMATION OR KNOWLEDGE

British investors do not understand cryptocurrency, according to recent research from IW Capital. The Mayfair-based SME investment house shared the research with Express.co.uk.

The report surmises that the vast majority of the UK investing community finds investing in cryptocurrency to be a worse decision than investing in traditional markets.

The investment house polled 2,0007 respondents, 38 percent of which said they do not understand cryptocurrency. Additionally, one-third of respondents are under the impression that the supposed bitcoin bubble will soon burst, while a mere 7 percent believe cryptocurrency investments are better those made through traditional channels.

According to the research, only 5 percent of cryptocurrency investors have turned a profit — a statistic likely skewed by the fact that more than 2.5 million Brits have “casually invested in cryptocurrency without fully understanding the investment.” (Which is the fastest way to lose money, especially in a bear market.)

FAILURE TO SEEK FINANCIAL ADVICE

Indeed, it is the fundamental lack of knowledge which is largely responsible for the aforementioned results. According to IW Capital:

The data reveals that, fundamentally, Brits do not have enough information or knowledge on the topic of cryptocurrency. In fact, many have no knowledge about the subject whatsoever. Losses have also been compounded by failing to take proper investment precautions, such as consulting a financial advisor. The investment house also noted:

Despite a widespread dearth of knowledge surrounding this particular asset class, disconcertingly, 1 in 20 Brits – nearly 3 million – have invested in cryptocurrency without fully understanding it, with only 5 percent having taken advice from a financial adviser when investing in cryptocurrencies.

Only 5 percent of those who have invested in cryptocurrency have made financial gains. 11.5 million have failed to make a financial gain when investing in a cryptocurrency.
London School of Economics to Offer Online Cryptocurrency Course

IW Capital CEO Luke Davis also told Express.co.uk that the results of the research are “very concerning,” explaining:

It is shocking, but not surprising, to see so much confusion around the topic of cryptocurrency. I do not believe this is a reflection of UK investors’ risk profile, as a positive appetite for alternative finance remains, but to see that investments have been made without proper financial advice and a lack of facts and education is very concerning.
This news might not come as much of a surprise, however, as the number of first-time investors into the cryptocurrency space during the holiday season’s ‘bubble phase’ has been well-documented. Many of those who jumped aboard the bitcoin bandwagon in December have since gotten rekt and shaken out of the market.

The results are also further proof that one should always do his or her own research and due diligence before investing in cryptocurrency, and should never invest more than he or she can afford to lose.


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Author: Adam James
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