Bridgewater Associates CEO Ray Dalio Owns Bitcoin, But Cautions its ‘Greatest Risk is its Success’

We’re in the part of the cycle where gold, bitcoin, real estate, everything is going up, but with the US dollar on the verge of devaluation and inflation looming, future expected returns go down after a point, meaning there’s “no longer the incentive to buy those things.”

“I have some bitcoin,” revealed Ray Dalio, the founder, and CEO of the world’s largest hedge fund Bridgewater Associates.

Dalio revealed this during the Consensus event held by CoinDesk that was recorded on May 6, joining the herd of institutional investors warming up to cryptocurrencies.

This is because he would rather “have bitcoin than a bond” in an inflationary scenario, he said.

This makes sense given that since March 2020, the price of Bitcoin has gone from $3,800 to $65,000, and even after the recent 54% sell-off, it is trading around $37,500. Meanwhile, the yield on benchmark notes, US 10-year Treasury bonds, has only managed to move from 1.473% to 1.62%.

The yield on treasury bonds has been falling for decades, which was at 15.82% back in late 1981. Bitcoin, on the other hand, has been hitting a new ATH every cycle.

Dalio was previously skeptical about Bitcoin and later said he is learning about it and then wrote about it having the capacity to be an alternative store of value. Now, he has finally come around and invested in cryptocurrency. Recently, as we reported, Bridgewater’s chief financial officer, John Dalby, left the firm to join bitcoin custodian NYDIG.

Bitcoin looks appealing in the current environment where the US dollar is on the verge of devaluation, last seen in 1971, said Dalio. China is threatening USD’s role as the world’s reserve currency.

Here, Bitcoin with its gold-like properties is looking increasingly attractive as a savings vehicle, he said.

However, for him, the biggest concern remains regulatory crackdown. Dalio said,

“Bitcoin’s greatest risk is its success.”

Losing Control

During his interview, Dalio talked about how the greenback is in the mid of the first cycle, “debt and credit create buying power,” of the rise and fall of the global reserve currencies.

The second cycle is an “internal cohesiveness clash cycle” as both the wealth gap and political groups grow and then the rise of another great power that challenges the existing top currency.

The first cycle started as the government created buying power, a “stimulant” in the short term, but eventually, they have to pay back their debts, becoming long-term “depressants.”

So, if they need more money, they have to keep printing, and then taxes go up, leading to capital controls as happened in 1971 when President Richard Nixon took the U.S. off the gold standard, making dollar “fiat” currency, and stocks went up.

“It causes… gold, bitcoin, real estate, everything to go up because it’s really going down in dollars. And that’s the part of the cycle we’re in.”

Inflation is of importance here, especially monetary inflation that happens due to a devaluation of the currency, rather than the other one caused by supply and demand.

While pushing the prices of real estate, stocks, and cryptocurrencies up, their future expected returns would go down after a point. Once they come down to the interest rate level, “then there’s no longer the incentive to buy those things.”

However, a neutral cryptocurrency such as Bitcoin can act as gold, but the government has the capacity to control anything. And as more people start preferring Bitcoin than bonds, like him, the more savings go into BTC than into credit, “then [governments] lose control of that,” he said.

And such a situation, he said, can lead those governments to crack down on bitcoin holders, he said. Overall, it’s about technology and whoever wins this race wins it all, Dalio said.

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Author: AnTy

YFI’s Andre Cronje: Greed & ‘A Whole New Ponzi’ We Came Up With is Behind DeFi’s Insane Growth

  • “The current massive influx (in DeFi) is purely because of this new greed cycle that we’ve created seemingly out of thin air,” said Andre Cronje of yEarn.
  • Decentralized Finance (DeFi) is flying with more than $9 billion of total value locked (TVL) in this sector.

There is no doubt about the ongoing DeFi mania, which is glaringly obvious, especially in the way the unaudited protocols are locking in billions of dollars in less than a week of their launches.

Not to mention the skyrocketing prices of these DeFi tokens.

So, what is exactly driving this massive growth?

Greed is a pretty simple answer that has come right from the mouth of the horse. Cronje, the founder of DeFi darling YFI, the governance token of Yearn Finance in his interview with Chainlink said,

“I mean, the reason there’s such a massive influx of money right now is because people are making money in insane amounts and the reason they’re making money in insane amounts is because we came up with a whole new Ponzi.”

And the Ponzi, Cronje is talking about here is governance tokens, “which is this wonderful way where we give away free worthless tokens that for some reason people buy.”

The next wave then buys it so that the first wave can sell it, a cycle that then just keeps on repeating, while the token continues accruing more and more value.

YFI token gained popularity and a cult-like following for its most decentralized approach — zero supply, zero value, no VC funding, and no tokens allotted to the management.

The token hit an all-time high of $38,865 on August 31st, after its launch just over a month before that.

Also, “how economics work is that money comes to money,” shared Stani Kulechoiv, the founder of another popular DeFi protocol Aave.

It is “fake exposure” with those with capital deploying it in different protocols, minting tokens, and then selling them to those with only sufficient capital to buy them.

“It’s not fair,” for sure, but this is like the financial system, and “that’s how the market works,” Kulechoiv said.

The Real Thing

While all of this is making people wealthy by insane amounts, “it’s not the sustainable part of DeFi,” said Cronje.

But underneath it, all are also the protocols that are accruing value like the Synthetix ecosystem, Aave ecosystem, Compound, and the supporting tools like Chainlink. He said,

“These are the real things accruing value because they’re the ones that are going to be here in a year from now when this greed phase is over.”

According to Kulechoiv, in Synthetix or Yearn, one is optimization yields — using technology to get rid of efficiencies — and “that’s like the real growth that is happening.”

There’s substantial growth in things that we’re building, but then there’s the noise on top of them. It’s a dilemma in finance because the noise will always be there when people enter into financial markets with less knowledge, and they have to pay for that knowledge by actually buying things from other people, explained Kulechoiv.

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Author: AnTy

Stansberry’s Eric Wade Talks Next BTC Bull Run, Cryptocurrency Masterclass

Crypto Market Set for the Next Bull-Run Following the Bitcoin Halving Cycle Per Stansberry Analyst Eric Wade

Eric Wade, who works with established the Stansberry Research Group, recently opened up his own Cryptocurrency Masterclass to share insights about his Crypto Capital research service.

In addition to the Stansberry Research Cryptocurrency Masterclass program, Eric Wade also shared recent insights on the next crypto market bull run following the recent bitcoin halving cycle. According to the financial analyst, the crypto market is geared up for another bull-run due to a number of specific reasons outline in his post and Crypto Capital service. In a recent analysis, the former Wall street banker (who sold the domain name for $1 million) has said that the crypto market is set to experience a big change which only a few have spotted as of now, especially as the BTC price shaved off nearly $1,000 in the past week.

“It’s like an oncoming train that you can’t see yet. There’s a thrum in the air. And the rails are starting to vibrate.” reads the post.

In his view, the new bull-run will be accelerated by big institutional players like hedge funds and Venture Capitalists who flocked the market after Bitcoin rallied to $20,000 back in 2017. In addition, the crypto market appears to have followed a certain pattern over its decade of existence. Wade speculates that the market has been consolidating since 2018 and is likely to hit new-highs very soon as per the cycle.

Aside from his recent rundown of the catalysts of the emerging cryptoasset class, Eric Wade’s Cryptocurrency Masterclass with Stansberry Research is meant to be a course that shares everything you need to know about bitcoin and cryptocurrencies for 2020 and beyond. The former Merrill Lynch financial manager, who apparently turned $7 investment into $1 million gain, is now focused solely on the crypto markets and educating the newcomers joining the ecosystem from all around the world.

The Bull Factors in Crypto Markets

As expected, an upward shift in market prices has to be supported by fundamental factors. Wade has since highlighted that the recent BTC halving is one of the factors that might cause a significant price shift. Previous BTC halving’s in 2012 and 2016 were characterized by an accumulation period followed by big bull markets. According to Wade, the shock in supply is met by an upward shift in Bitcoin prices. While it is still early to feel the May 2020 halving effects, Wade is optimistic that the trend will replicate itself.

Other than the halving, governments have been exposed by the COVID-19 pandemic. Today, quite a number have printed huge sums of money which seems to be eroding the confidence in them. Tesla founder, Elon Musk, has said on twitter that central banks recent behavior has made Bitcoin ‘look solid by comparison‘. Wade, who is opening up the Crypto Masterclass with Stansberry Research, is a long standing advocate for bitcoin and many major altcoins. Having wrote pieces ranging all over the crypto ecosystem: such as ‘How Bitcoin Will Survive the U.S. Government’ or ‘Become a Blockchain Expert in Less Than Four Minutes’ – Eric is a forward facing researcher who will detail everything there is to know about the program and his Crypto Capital research service for aspiring investors looking to get a formal education about how bitcoin works and why cryptocurrencies are set to change the future of finance.

Furthermore, the masses are moving towards paperless money in a bid to keep the pandemic at bay. It is no surprise that large retailers have heeded to the FinTech call with some like Starbucks accepting Bitcoin. Wade predicts that the next bull-run will see the crypto market cap increase tenfold into a trillion plus league (the current all time high is when it reached $838 Billion back in January 2018 and sits at $250 Billion today):

“When the next bull market begins, crypto’s userbase will grow by 10 times or more… the industry’s entire market cap will balloon into the trillions… and many cryptos could soar thousands of percent.”

Wade, who is releasing the Cryptocurrency Masterclass with Stansberry Research just after the third bitcoin halving, went on to put some virtual respect on his bitcoin is digital gold perspective:

“Many investors see bitcoin as a store of value, or “gold 2.0.” But bitcoin isn’t just “digital gold.” It has far bigger upside right now. Its supply can’t be artificially increased because it’s not issued by a central bank. In other words, bitcoin prices aren’t set by a narrative, but by supply and demand… And that demand has come roaring back…Plus, as we said… the latest halving is something that has only happened twice before. And both times, it sent bitcoin soaring.”

A simple but humorous questions is, where is he wrong?

Bitcoin’s Prospects

Despite the skepticism, BTC has survived the odds as a living breathing entity for the past 136 months straight. Since Satoshi’s release of the blockchain-based bitcoin network software system on January 3, 2009, to its third halving cycle of thirty three scheduled, Bitcoin with a capital ₿ is outperforming all other asset classes in the last ten years. Some now tout it as the ‘digital gold’ or ‘gold 2.0‘; this narrative has caused a surge in demand recently as more people acquire a part of this leading crypto asset.

One thing is for certain, a long-standing early-day adopter and now leading bitcoin finance researcher, Eric Wade, by way of Stansberry Research, has put together the Cryptocurrency Masterclass to present his Crypto Capital newsletter research service. The aim is to help educate, inform and support those who see the advantage of staying cutting-edge relevant about the future of Bitcoin’s optimistic outlook as a blossoming force within the financial hierarchy of the world’s economical backbone.

Looking back, the first halving in November 2012 was followed by an 8,000% spike in Bitcoin’s price within the course of 2013. It was initially trading at $12 but had jumped to $994 by the end of 2013. This pattern was repeated in 2016 when the coin soared 2,900% to trade at $20,000 in 2017 from $650. While the stats point to a likely replication, the volatile nature of crypto markets has always taken us by surprise and only time can tell where the wind will blow.

To find out more on the Stansberry Research Cryptocurrency Masterclass by Eric Wade, go watch and read what the bitcoin advocate, analyst and crypto aficionado has in store today.

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Author: Andrew Tuts

Bitcoin Cash & Bitcoin SV Halving Next Week to Put Selling Pressure on Bitcoin as Well

  • Bitcoin Cash (BCH) and Bitcoin SV (BSV) halvings to “drastically” expose them to potential 51% attacks
  • A cycle of decreased profit margins, increased selling, capitulation, and a culling of the least efficient miners to take place

Crypto community is excited about the Bitcoin reward halving next month but interestingly bitcoin forks’ halving is here.

Bitcoin Core’s (BTC) fork Bitcoin Cash (BCH) and the latter’s fork Bitcoin SV (BSV) will go through their respective block reward halving on April 8 and April 9 next week.

Meanwhile, Bitcoin Cash has laid off 50% of its employees just days before its halving.

More Miners will Turn to Bitcoin

Both these Bitcoin’s forks will have their halving one month prior to bitcoin because of the very rapid block generation in Bitcoin Cash which started right after its fork in August 2017. However, the block production rate was later normalized with an update of the difficulty adjustment algorithm.

Now, these early halvings might have a “dramatic effect” on both BCH and BSV’s hash rate, according to Arcane Research. Currently, a vast majority of this hash rate share (94.8%) belongs to the world’s leading cryptocurrency and both BCH and BSV have a meager less than 3% share.

Source: Arcane Research

The halving event could be expected to have at least a temporary halving of the hash rate as the miners switch to mine BTC because mining Bitcoin will be more profitable than BCH and BSV.

Both the forks can capture the share only if their price or fees increases drastically or hash rate halves.

A decline in hash rate means both Bitcoin Cash and Bitcoin SV will be “drastically” more exposed for potential 51% attacks.

Things could change when Bitcoin halving occurs in mid-May, however, the effect on BTC would be “minuscule” because it already accounts for almost 95% of SHA-256 hash rate.

Selling Pressure for All Three

In its latest report, Coin Metrics also discusses the effect of halving and that,

“miners are a continuous and significant source of selling pressure that has a pro-cyclical impact on prices.”

Miner-led selling pressure for all three of the cryptocurrencies is currently high which is only expected to increase further as all of them undergo their halvings. This is because all three assets share the same SHA-256 mining algorithm and miners can “seamlessly” redirect their hash power to the digital asset that provides the highest return.

BCH and BSV halving will force miners to direct more hash power to Bitcoin which is expected to increase the difficulty and further squeeze profit miners for all miners. Coin Metrics states,

“We expect miners to follow a cycle of decreased profit margins, increased selling, capitulation, and a culling of the least efficient miners from the network.

Once this cycle is complete, the miner industry should return to a healthier state that is supportive of future price increases.”

At the time of writing, Bitcoin (BTC) has been trading at $6,750 BTC -0.61, Bitcoin Cash (BCH) at $235 BCH -2.65, and Bitcoin SV (BSV) at $177 BSV -1.86.

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Author: Bitcoin Exchange Guide News Team

Gartner Says Blockchain is Currently at the Disillusionment Stage Within the Hype Cycle

The blockchain technology is not living up to it’s big hype, at least according to Gartner’s Hype Cycle. A recent report made by The Next Web’s Hard Fork shows that the interest in the blockchain is decreasing and that many blockchain implementations are failing to live up to expectations. Because of this, investment is bound to decrease, too, unless some results are discovered.

The Hype Cycle is something created by Gartner, a graphical representation of how people get hyped about the new technology and then end up abandoning as they discover that the hype was too big. The company affirmed that the blockchain is “sliding into the trough of disillusionment”.

According to the company, most blockchain technologies are still from five to ten years away from having a real revolutionary impact in the world, but investors are often not that patient. They gave their money for development, now they want results.

Source: Gartner (October 2019)

Avivah Litan, an analyst from Gartner, believed that the blockchain has not been able to achieve the expectations mostly because it is still stuck in experimental mode, which is still set to happen for a quite long time.

According to her, the technology will only mature by 2028, when it will be fully operational and able to properly scale up. Fortunately, not everything is pure bad news. Some platforms will be scalable and interoperable by 2023, which will start some progress in the area and finally lead us to Web 3.0. Here is her direct quotes on the matter.

“Blockchain technologies have not yet lived up to the hype and most enterprise blockchain projects are stuck in experimentation mode,”

Adding; “Blockchain is not yet enabling a digital business revolution across business ecosystems and may not until at least 2028, when Gartner expects blockchain to become fully scalable technically and operationally.”

And finally “We are witnessing many developments in blockchain technology that will change the current pattern. By 2023, blockchain platforms will be scalable, interoperable, and will support smart contract portability and cross-chain functionality. They will also support trusted private transactions with the data confidentiality required. Altogether, these technology advances will take us much closer to mainstream blockchain and the decentralized web, also known as Web 3.0″

Gartner has been looking at the blockchain for a long time now and it noted back in 2016 that the blockchain already was suffering from being overhyped. While it might be frustrating to have to wait for so many years, at least there is hope for the future.

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Author: James W