Surrounded by the Buzz of Bitcoin.

Bitcoin is the buzzword when it comes to digital assets, and perhaps it deserves to be. It was the first one out of the gate to make huge headway in a new asset class. But just as a copy is a copy and Xerox is a company that makes copy machines, we need to separate Bitcoin from being the all-encompassing digital asset.

Entry into this era of digital assets is a matter of timing, and that timing is left to you, the individual investor. My style of investing prefers to wait until investment vehicles, security, and regulatory actions are in place or close to becoming in place. It is a game of wait and see, hopefully having intelligently deduced what the final result will be that satisfies my objective.

I have been watching the regulatory environment, filed any crypto holdings or trades I had with my tax returns (because the IRS requires it), and heard from my bank that they “do not typically release funds to Coinbase.” Though they do eventually release the funds.

The average investor that wants to get in the digital asset market before the possible onslaught of major banking firms open the doors can look inside the United States.

For starters, Coinbase (San Francisco, CA), Uphold (Headquartered in Charleston, SC), Evercoin (Silicon Valley), and Bittrex (Seattle, WA) are US based firms that provide different investment vehicles and options for the digital asset investor.

Coinbase

A major digital currency exchange that allows for the deposit of $USD (fiat) from your bank account to a USD account within the Coinbase platform, or directly purchase Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). The platform has been in the news recently as the Securities and Exchange Commission (SEC) and Wall Street have been gearing up for the digital asset revolution.

Uphold (Welcome to Uphold. The Internet of Money)

Feels more like a brick and mortar institution, in my opinion, for the digital currency space. To me, that is comforting. Here, you can buy and sell over 30 different assets that you can hold, exchange, or sell around the world. Currencies available for bank transfers include: US Dollar ($), Euro (€), British Pound (£), and Chinese Yuan (¥).
Uphold has also achieved the distinction of supplying a Cryptionary (like a dictionary) for users to facilitate an understanding of the language and buzzwords in the digital asset environment. This is an excellent tool and I suggest that you look at it to better familiarize yourself with the industry.

Evercoin

An exchange. Here, you can exchange currencies from one to another. For example, you want to exchange Litecoin from your Coinbase account to XRP that you hold in a digital or hard wallet, you can do it through Evercoin. Select the amount of one coin that you want to exchange for another and the application automatically sets the amount of the other coin you will receive. The exchange rate already includes all fees, so what you see is what you get. Very easy to use.

Bittrex

Has the look and feel of a professional trading platform and may be a bit scary for newcomers to the digital asset investment world. They are based in Seattle, WA and was founded by previous Microsoft security professionals. They host a massive number of cryptocurrencies with over 190 available.

Wallets: Hot and Cold

Hot wallets store your crypto on an internet enabled device. You also have the option of storing your assets directly on the exchange you are using, and should research the level of security, past breaches, and insurance coverage provided should a hack occur.
Cold wallets store your crypto offline. Currently, this is arguably the most secure way to store your digital assets. There are different manufactures of these devices and each device may NOT store the different digital assets that you are interested in purchasing. DO YOUR RESEARCH to learn which cold wallet will perform for your investment needs.

Examples:
Think of it like this:

HOT WALLET= connected to the internet (MultiBit, Armory (desktop wallets) MyCelium, CoPay (mobile wallets)
COLD WALLET= NOT connected to the internet (Trezor, Keepkey, Ledger Nano S)

All of the examples above; the exchanges, platforms, apps, and wallets have different user features, fees and account set up requirements. Be prepared to offer your personal identifying information in order the financial and banking regulatory rules be adhered to. These verifications vary from a copy of your driver’s license, to possibly more if you are a big investor. Do your own research and understand the risks associated, the assets you are interested in, and other details such as purchase and withdraw limits.

This post is meant to wrap your head around entering the digital asset investing world. There are many questions and regulations that need to be ironed out, and time will establish the system. My point is this; I believe that the digital asset is here to stay and where it took Amazon 20 years to reach its share price, the digital asset world will move more quickly. Technology and the digital world has become not only comfortable and familiar, but necessary. This is the next extension of the digital evolution.
I am not a financial advisor and you should perform your own research, due diligence, and obey tax and regulatory laws.

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.

What do a Former US President, Keynote Speech, and Cryptocurrency have in Common? Ripple Labs.

A puzzle involves strategy and seeing a picture of the final result can help you develop that strategy.

In difficult puzzles, there is an indiscernible area of the puzzle that you guess your way through. Maybe a field of grass where the blades are so alike one another that the only way to find the next piece is to find the proper shape of the puzzle piece, rather than looking at the picture.  This is the cryptocurrency world. The picture, however, is not right in front of us, so we are often left to our own reasoning, understanding, and logic.

The players are either known or unknown with a landscape that changes often and internationally. Built on the blockchain, cryptocurrencies are but one use for this technology, and each crypto can have an entirely different use case. Some will rise to the top and be adopted as accepted technology, while others wither away before they even gain a foothold in the international marketplace.

As an investor, researcher, and investigator, you are watching all players, sifting through news, tweets, whitepapers, and the like. Government, bankers, investors, and companies are at the table. Even with the seemingly perfect strategy, you may come up short. For no other reason, researching and connecting dots in this infant asset class and watching new use cases unfold is fascinating. That is why I write about the crypto sphere.

Take for example Ripple Labs. Ripple is a San Francisco based company that has found a very specific niche in the blockchain-cryptocurrency world. They focus on payment remittance and liquidity for cross-border payments. To make the almost instantaneous liquidity possible (i.e. sending USD to Japan for Yen in a matter of seconds), the dollar converts to a cryptocurrency called XRP, then to Yen, almost immediately. This is ground-breaking in the world of finance and money transfer. The other contender in the payment remittance sphere is IBM, which uses the Stellar (XLM) platform.

Using a cryptocurrency to act as a liquidity solution brings some concerns, such as the price stability of that currency. If trading volatility affects prices, how might that affect the cost of the transaction for the transacting parties? The instant in-and-out speed (about 3 seconds) of using the XRP ledger should quell some level of this concern working to provide real-time gross settlement of payment (RTGS).

Banks and money transfer platforms (Western Union, MoneyGram, etc.) must hold reserve funds  (in Nostro/Vostro Accounts) in order to facilitate these cross-border payments and the time can take days to perform the transactions using the existing system.

Ripple asserts that they are not XRP and if Ripple were to shut its doors forever, XRP will still exist. Think of it like this: Ripple is a company that has designed some of its services to use XRP. I suggest gaining greater insight into Ripple as a company due to their fascinating approach to blockchain technology. I am not suggesting an investment into XRP, but an understanding of Ripple. They have surrounded themselves by very influential people and are a company to watch as the cryptocurrency and blockchain revolution progresses.

Former US President, Bill Clinton will be the keynote speaker for a Ripple event called Swell. Ripple invites well-thought  regulation to the cryptocurrency marketplace. As a matter of fact, Ripple has been very vocal about their intentions to work with regulators. Ripple’s business focus is within a very regulated industry and aims to improve the efficiency of certain banking functions.

Ripple Labs promotes that Swell, “connects the world’s leading experts on policy, payments, and technology for the most provocative dialog in global payments today.” Having former President Clinton, Founder and Board Chair of the Clinton Foundation, shows me a strong effort to bring government regulators to the table.

DISCLAIMER: As the domain name of this site suggests, the content of my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. I hold XRP and XLM.

Cryptocurrency Investing is Surrounded by Powerful Information.

Let’s take a look at the hiring statistics for Coinbase:

Coinbase is arguably the fundamental route for cryptocurrency new-comers to get into the market. That is not to say that other options do not exist, perhaps better options. Options that spread more of the cryptocurrency universe at your fingertips. Remember, Coinbase currently hosts only four currencies so far: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).

With the investment world still largely focused on technology firms such as Amazon and Apple, which have tremendous market capitalizations, expansion, and hiring trends, I think it wise to look at the growth of companies and industries surrounding the cryptocurrency market.

The hiring data from Coinbase as it is available on Linkedin.

Coinbase Hiring - Linkedin Stats

Certainly, we can look at this exponential growth as an indicator that this market segment is growing…quickly. In July of 2016, Coinbase employed just under 211. In two years’ time, they have grown at a rate of 170% to a current total of 570 employees.
As an investor looking for cues and educational instruments regarding the growth and stabilizing of an emerging market, employment data of leading companies in the sphere is a good place to start. This is not to say that it is the crystal ball, as we know that companies rise and fall with the times.

Let’s take a look at BlackRock’s CEO, Larry Fink:

Do bankers lie and what motive might they have to keep people misinformed?

This is a July 16, 2018 video clip from an interview with BlackRock’s Chairman and CEO, Larry Fink.

https://www.bloomberg.com/news/videos/2018-07-16/blackrock-s-fink-says-clients-aren-t-looking-to-buy-cryptocurrency-video

After being asked by Bloomberg interviewer Erik Schatzker, Mr. Fink says that none of his clients have expressed any interest in crypto. Meanwhile Schatzker states that Goldman Sachs, JP Morgan, and Morgan Stanley are building out crypto trading desks.
Mr. Fink again states that he has not heard from any clients that they want to be in crypto. You can develop your own conclusion with what he says, but I believe that he may not be showing all of his cards.

The Elephant in the Room: Insurance for Crypto Assets:

Bloomberg published an article recently uncovering the quite side of insurance for cryptocurrency storage. AIG, Chubb, XL, and Aon are a few of the tycoons quietly, and quickly, building their portfolios for insuring the cryptocurrency markets. Read the full article on Bloomberg.

Some quick market research on cryptocurrency topics show that this asset class is quickly becoming an allure to not only the original crew of techies, but to the financial institutions that our economies rely on.

The Final Take:

There is an incredible amount of information and misinformation to be found with regard to cryptocurrencies. From where I stand, I prefer to look at the digital assets underlying use case. Where is the news around not only the coin, but the institutions that play a part in making it available? Even then, some digital currencies exist today, that may not exist in the future. Regulators may come down with one fell swoop and knock some (or many) coins/ICOs/tokens out of existence.

If you are reading blogs such as this, you are obviously intrigued with the idea that the cryptocurrency market is ripe for the picking. It is my intrigue with this new asset class that has me writing this blog and providing the insights that I find.

Read. A lot.

Look for information that allows you to place an educated bet. I can tell you that with the onslaught of new cryptocurrencies and ICOs (Initial Coin Offerings), there are many bogus attempts to lure people’s money into worthless coin purchases. Look at the structure of the crypto asset and use your reasoning to determine which tokens you want to get into.

CoinMarketCap provides an extensive listing of available coins. Currently, there are 1,656 coins listed and prices range from fractions of a cent to thousands of dollars. However, not each of the coins listed is available through the same platform. In some cases, you need to discover an exchange method for purchasing a specific coin. This could very likely mean buying a token on a platform like Coinbase and exchanging that coin for another coin, which you hold in a wallet. This is a major reason why people are finding it difficult to get in the crypto currency asset pool.

My approach to investing in crypto assets will likely be different from your approach. I would never tell someone to do something that they were uncomfortable with or that I would not do myself, so you need to rely on your own judgement when determining the level of investment risk that you are willing to expose yourself to, if any.

The cryptocurrency market is global, but regulated differently by the country you reside in. You may be able to set up some accounts in one country that you are unable to use in another.

For example, DX.Exchange is an institutional and individual trading platform sitting on NASDAQ’s technology. Though NASDAQ is based in NYC, DX.Exchange is based in Estonia and will be regulated by the Estonia Financial Supervision Authority. The regulatory issues keeps the US usability of this platform at zero, as of now.

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. 

In the Bit-ginning…

Photo by Moose Photos from Pexels

When I first heard about cryptocurrency, I had a gut feeling that it would somehow become something big. The problem was, I was uncertain about how to get possession of it in late 2010, early 2011 when Bitcoin moved to around $1.00.

Fast forward six years when I asked a good friend of mine who works in the tech industry what he thought about Bitcoin, and he said, “I looked into it about 3-4 years ago, but never ended buying into it.” In late December of 2016 when this conversation was had, Bitcoin was around $800.

Even more of a stinger, when I finally learned how to set up for proper investing in the cryptocurrency market, Bitcoin had just touched $17,900…per coin. Hindsight being 20/20, it is the risk-reward scenario that both entices investors and leaves others sitting on the sidelines. The other aspect of sitting on the sidelines is lack of information.

Those that got on board early enough to realize a price swing of $17K in under ten years are the exception. The rest of the investor community can decide to educate themselves and develop an investment strategy early, get into the game late, or not at all. I say set realistic expectations, educate yourself, know your limits, and if you decided to get in the game, go long.

The fact is, in 2011, very few people new how to enter the digital asset market. It was the wild-west of investing and it went square in the face of the regulated banking industry. Investment platforms were unknown, untested, and uncertain in the level of security they provided . Realistically, that was the perfect timing for a decentralized monetary system to come into the picture. Banks, big business, and governments across the world were sinking and when Bitcoin went live in 2008, it was making a statement in a huge way. A decentralized, peer-to-peer currency system. The belief in the banking system was at an all-time low and an opportunity to capitalize on the system’s failure was to be exploited.

We are ten years from the “Great Recession,” and have watched the stock markets rally to all-time highs. When the “whales” decide that they want to take their profits, the house of cards will fall swiftly. We have seen this with the meteoric rise and fall of crypto prices through 2017.

Simultaneously, we are witnessing the dawn of a new asset class: digital.
Remember how I said the early years of cryptocurrency were the wild-west and the digital asset community was standing square in the face of regulated banking? A decade later, we see a concerted effort to bring the digital asset community into the same system of regulation that fails at least once in a generation, if not more. That’s just how it goes. The US government is in play when it comes to the digital currency market with regulations, tax law, and policies. Many in the cryptocurrency world believe that a decentralized approach is best. Other minds see the regulating authorities as the appropriate method to bring economic stability

Fortunately, we are at the very beginning of instituting this new class of investment vehicles, and that can have long-term benefits. We may or may not see the hyper price increase that was seen with Bitcoin over the past ten years. Many would state that the prices were wildly manipulated to achieve such highs. Others, however, believe that we are just at the beginning and the coin market will see a “flippening” where Bitcoin (BTC) loses its current spot as the number one token. I suggest reading the following thoughts on the possibility of a Bitcoin ETF as the SEC prepares to approve or deny its listing in the next couple of months.

 

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.