BoE Governor Andrew Bailey Says Crypto Investors Trading In A Bubble

BoE Governor Andrew Bailey Says Crypto Investors Trading In A Bubble

  • Andrew Bailey’s public criticism of cryptocurrencies is well known, and the crypto detractor has not let up.
  • In a recent event, Bailey said crypto investors might see their investments go down the drain.

Crypto Has No Intrinsic Value

The Bank of England (BoE) Governor Andrew Bailey reiterated his earlier remarks that crypto investors should be prepared to lose all their money, per CNBC reports.

According to Bailey, crypto-assets generally do not have any intrinsic value, and their value proposition is zero.

The BoE governor has long been a critic of the nascent industry and was once quoted as saying that investors should be ready to see their investments erode. The first criticism was during the 2017 rally of Bitcoin. The digital asset, which traded as high as $20,000 then, subsequently dropped to a meager $3,122 in the opening months of 2018.

However, Bitcoin has made significant all-time highs (ATHs) in the past two years, rallying 80% since the beginning of the year but Bailey is not having any of it.

“I’m going to say this very bluntly again,” he added. “Buy them only if you’re prepared to lose all your money.”

Bailey’s comments closely resemble the Financial Conduct Authority’s (FCA) take on cryptocurrencies. The UK regulatory agency cautioned investors on trading cryptocurrencies in a released statement and said they might see their funds erode given the asset class’s volatility.

But this bad take does not seem to faze crypto investors who are most keen on the massive returns these virtual currencies bring.

Bitcoin itself has brought recognition to the crypto market and institutional investors now see it as a hedge against inflation.

Ethereum, the second most valuable cryptocurrency by market cap, has climbed 360% since the beginning of the bull run after making new all-time highs, and even meme-based cryptocurrency Dogecoin has not been left out, posting a whopping 12,700% increase since the turn of the year.

Other altcoins like Polkadot’s DOT and Ripple Labs’ XRP have not been left behind, with some increasing as much as 300% given the growing adoption.

Blockchain To Be Used In CBDC Design

Despite the many criticisms that trial cryptocurrencies, many central banks are looking to leverage the potential upsides blockchain affords to create central bank digital currencies (CBDCs).

CBDCs would be state-sanctioned and state-issued. They will also be equivalent to the fiat currency of the host country, only that they will be in digital format. Many national banks are already developing the digital form of their fiat currency, with Asian giant China leading in the race of wholesale CBDC use.

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Author: Jimmy Aki

Survey: South Korean Investors Welcome Controversial Crypto Tax Law

A new survey has revealed that a majority of South Korean investors support the proposed crypto tax law set to be unveiled next year.

53.7% Support Crypto Gains Tax

According to a recent survey sponsored by local television station YTN, many South Korean crypto investors support the government’s move to tax crypto gains.

The research carried on 500 respondents aged 18 years upwards by local research firm Realmeter showed that 53.7% of respondents support the proposed taxation regime scheduled to come into effect in Jan. 2022.

38.3% of responders feel it could hamper the sector’s growth, saying the move was biased.

The survey showed that respondents within the age bracket of 20 and 29 were strongly against the planned taxation more than any other age group.

47.8% of respondents in their 20s said they do not support crypto taxation, while 47.5% of respondents said it might be necessary to do so.

The data collated also showed that female crypto respondents were more supportive of the taxation scheme than their male counterparts.

Data collated by South Korean statesman Kwon Eun-hee showed that crypto investors in their 20s and early 30s were the most active participants with over 2.35 million confirming that they have traded digital currencies at least once in the top four crypto exchanges operating in the country: Bithumb, Upbit, Korbit, and Coinone.

But despite what may be a growing dissent against Seoul’s plans to regulate the burgeoning industry, Finance Minister Hong Nam-ki believes it’s only fair to tax capital gains on crypto transactions the same way other financial transactions are taxed.

But crypto stalwarts have called for a revision of the incoming tax law. The capital gains tax on virtual currency transactions has been pegged at 20% and will only affect trading profits that surpass the 2.5 million (about $2,234) mark.

South Korea’s Growing Regulations On Crypto

South Korea is determined to regulate its crypto sector. The Asian nation has been working steadily to bring the crypto industry under the purview of the government. It started by outlawing privacy tokens like Monero’s XMR.

It then extended its laws to comprise virtual assets service providers (VASPs), including cryptocurrency exchanges stipulating a hefty fine for any crypto company that fails to report suspicious transactions on its platform. It also said that failure to keep relevant customer data and separate management of customers’ transaction records would see them facing the full weight of the law.

These laws have since seen crypto exchanges like OKEx and Binance close shop in the country.

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Author: Jimmy Aki

Gemini Survey Reveals Adults Are Becoming More Interested in Cryptocurrencies

With cryptocurrencies gaining more and more media attention, investors in traditional financial markets are gradually looking into cryptocurrencies. Beyond institutions, more women are starting to get involved with Bitcoin.

14% of US Populace Own Crypto

According to a Gemini State of Crypto Report for 2021 on 3000 US adults, crypto is beginning to broaden its investor base.

The document estimates that 14% of the US population, roughly 21.1 million adults, own crypto assets. It also showed that 74% of these crypto holders are male, while 77% are under the age of 45.

Women are not left out, as they make up 26% of crypto investors.

The document also pointed out that the average age of a cryptocurrency owner is 38 years old, making approximately $111,000 per annum.

Gemini spoke about another group of investors called the “crypto-curious.”

Gemini defines this group as investors who are yet to take the crypto plunge but planning to do so in 2021. This section comprises over 63% of US adults.

About 13% of this group plan to diversify their investment portfolio into cryptocurrencies in the next 12 months.

Gemini notes that this could see 19.3 million new crypto holders coming into the space, which would double the crypto population in the North American nation.

The survey also shows an interesting trend. Women are more likely to buy crypto soon as 53% of female respondents say they plan to own a digital asset by the end of the year. 4% of the current female crypto owners are 55 years or older, and the average age is 44 years.

Regarding demographics, 52% of current investors reside in urban or suburban areas, while 26% are domiciled in small towns and rural areas.

Bitcoin Still Most Dominant Digital Asset

Even though cryptocurrencies are gaining mainstream acceptance and more investors are coming into the crypto space, the knowledge of the various virtual currencies on offer is still lacking.

95% of respondents still associate crypto with Bitcoin and claim partial knowledge of other digital assets.

Even though Ethereum is the second most valuable cryptocurrency globally, just 38% of respondents said they have heard about it.

Bitcoin forks, Bitcoin Cash and Litecoin, followed after that with 24% and 16% of respondents claiming knowledge about these lesser traded digital coins, respectively.

Foremost stablecoin USDt could only gather 11%, while San-Francisco blockchain firm Ripple Labs’ XRP had 6%. Oracle provider Chainlink had 8% of respondents saying they must have come across it once.

The least known projects were Cardano’s ADA and Polkadot’s DOT which secured a meager 2% given their influence in the crypto space.

This showed that most crypto investors and enthusiasts are still experiencing knowledge gaps regarding the various crypto assets in the blockchain ecosystem. According to Gemini, this can be addressed with accessible educational crypto materials to turn the crypto-curious into active crypto investors.

The survey also noted that most crypto investors view these digital assets as a long-term investment strategy.

A whopping 69% of investors buy and hold for long-term appreciation compared to 36% who trade short-term for profits. 27% of the respondents use digital assets to make purchases online.

Another survey by analytics firm Piplsay points to a growing faith in the safety of trading cryptocurrencies, with 50% of respondents stating their willingness to invest in the space. A further 57% demanded that consumer companies like Amazon and Apple start accepting cryptocurrencies as a form of payment.

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Author: Jimmy Aki

51% of Young British Investors Trading or Holding Crypto: Charles Schwab Survey

51% of Young British Investors Trading or Holding Crypto: Charles Schwab Survey

This is more than double the number of young investors, aged between 18 and 37, involved in stocks.

Young British investors are more interested in cryptocurrencies than they are in stocks, revealed a survey by U.S. financial group Charles Schwab.

The retail investing behemoth, which is also looking at the crypto market “closely” and awaiting regulatory clarity before they start offering crypto investment, surveyed investors aged between 18 and 37.

Its finding showed that 51% of these young investors have traded or held cryptocurrencies, double the number, 25% of those who are buying or owning equities.

Meanwhile, a mere 8% of investors over the age of 55 have traded cryptocurrencies.

Compared to Bitcoin’s 70% and Ether’s 205% returns YTD, which is after the recent 23%-26% pullback from all-time highs, S&P 500 surged 10.09%, gold -5.85%, and WTI 33.33% during the same period. The press release from Charles Schwab presenting the survey read,

“As more young people purchase speculative products, there is a fear that these investors are not diversifying their portfolios enough to mitigate risks in case cryptocurrency markets decline.”

The survey’s findings revealed that seven out of ten young investors were uncertain about building protections against losses in the current financial environment.

Schwab conducted the survey earlier this year, between February and March 2021, among 1,000 UK investors holding at least one type of investment.

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Author: AnTy

Blockstream Offer Investors Exposure to Bitcoin Mining with BMN Security Tokens

Blockstream Offer Investors Exposure to Bitcoin Mining with BMN Security Tokens

Blockstream, a Bitcoin mining company, is planning to tokenize Bitcoin mining, according to a release.

1BMN To Cost $240,000

Blockstream Chief Adam Back said that this would give investors access to Bitcoin mining without investing in the traditional mining hardware.

The investment opportunity, which will be publicly-listed as a security token offering (STO), targets non-US qualified investors and gives them access to hashrate mined at Blockstream’s colocation facilities.

The mined token will be called Blockstream Mining Note (BMN for short) and represents 2,000 terahash per second of the company’s computing resources.

Each Bitcoin mined would be held in cold storage for a period of three years before they are released to their hodlers, the company notes.

One BMN would cost investors $240,000 and would go on sale on April 7. The first tranche of 62.5 BMN would be available on European digital assets investment marketplace STOKR as fungible assets.

BMN mining operations will begin officially on July 9, with subsequent BMN tranches released in Q3 2021. Interested investors can get their hands on these tokens by paying cash or through crypto-assets like BTC and dollar-pegged USDt.

Blockstream will offer the BMN token on its sidechain, the Liquid Network.

Blockstream says it aims to raise about €12.5 million (about $14.5 million) from the first tranche and will raise €85 million (about $100 million) in total.

Hashrate Tokens Appealing To BTC Investors

Hashrate tokens are recent additions to the ever-expanding crypto space. It works more like a derivative and was launched by Bitcoin miner Poolin and the largest crypto exchange by trading volume Binance in December 2020.

They serve as a roundabout way high-net investors can gain Bitcoin exposure without owning the digital asset or setting up a mining business. This makes it easier for liquidity to flow into the Bitcoin mining market. They are usually traded on over-the-counter (OTC) secondary markets before moving into the exchanges.

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Author: Jimmy Aki

Survey: UK Investors See Cryptos as Better Investment Attractions To Stocks

A poll carried out by Censuswide for UK firm Parliament Street shows British investors closely monitor the crypto space.

UK Investors Have Crypto FOMO

The survey carried out in Feb. 2021 aimed to know how responders intend to diversify their investment portfolio following the economic uncertainty occasioned by the pandemic.

According to the 2,000 participant poll result, one-third of those questioned said they failed to take advantage of owning cryptocurrencies earlier and won’t consider joining due to current prices.

Despite feeling left out, 31% of investors believe the crypto market is expected to continue its bullish run. According to them, Bitcoin will likely hit the £50,000 mark before the year runs out. A further 18% of responders said BTC would surpass the £100K mark sooner rather than later.

For investors who were late to the crypto party, 25% of participants say they would have become millionaires if they had bought crypto at the start of 2020. Also, 37% of those questioned said that traditional assets like stocks, bonds, and shares were less profitable given the economic impact of the covid-19 pandemic on the capital markets. To them, cryptocurrencies are better investment attractions.

Cryptocurrencies have grown tremendously since the start of the year. Institutional demand has risen as corporate bodies see digital currencies as a hedge against the fast-eroding fiat currencies. With some of them converting all their cash reserves to cryptocurrencies, the industry has surpassed the $1 trillion mark in less than five years.

Bitcoin currently trades above $56,000, and there are many reasons why the prices are expected to rise even further. Increasing adoption of BTC as a speculative asset and medium of exchange are two essential factors. The limited 21 million supply restriction is also gradually turning it into a scarce commodity, leading many investors to call it “digital gold.”

But, Bitcoin is not alone. Ethereum stands heads-over-shoulder over other digital assets suitably called “altcoins.” With many altcoins fulfilling different specific purposes, the digital economy has become a wonderland for many investors. As a result, the traditional asset class has seen money moving into the crypto space due to its lower ROI.

Cryptocurrencies are highly volatile, falling sometimes 30% in a day, but their higher ROI and the utopian ideal of no central authority intermediating in transactions has seen the nascent industry continue to grow. Its underlying technology, distributed ledger technology (DLT), has also been praised for its myriad applications.

Rise of Bitcoin’s Addition to Corporate Treasuries

Last year, the addition of cryptocurrencies like Bitcoin to corporate balance sheets became a thing. Business executive and CEO of MicroStrategy Michael J.Saylor made it popular. Saylor was instrumental in convincing other industry heavyweights to join the crypto train. One of these tech veterans is Tesla’s Elon Musk.

Both men have done for crypto what Steve Jobs did for the internet. Saylor broke into the crypto space much earlier with a $625 million investment in BTC. At press time, his intelligence company holds a staggering $4.45 billion stake in Bitcoin alone. Musk came a little later, but his impact cannot be disregarded. In early February, Tesla’s $1.5 billion stakes in BTC saw BTC leave the support level of $42,000 to a new ATH of $58,000 in less than a month, climbing 20%.

Key collaborations from large firms like MasterCard, Square, Paypal, and assets management firm Grayscale have also made cryptocurrencies an exciting project.

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Author: Jimmy Aki

43 Million Retail Investors Now Gets Access to SUSHI, MATIC, & SKL on Coinbase Pro

43 Million Retail Investors Now Gets Access to SUSHI, MATIC, & SKL on Coinbase Pro

SKALE (SKL) reacted the most to the Coinbase Pro listing. The three crypto-assets will begin trading on March 11 and are not yet available in New York State and on Coinbase.com or its mobile apps.

Coinbase, the leading US cryptocurrency exchange, has listed popular DeFi token SUSHI along with MATIC and SKL.

SUSHI is the governance token of Sushiswap, the second-largest decentralized exchange (DEX), managing about $500 million in daily trading volume. The DeFi token is trading at $18.50, up 450% YTD.

MATIC powers the Polygon Network that aims to provide faster and cheaper transactions on Ethereum using Layer 2 sidechains. Trading at $0.321, the token has been having a spectacular 2021 with 1,720% gains this year so far.

The company disclosed that its investment arm, Coinbase Ventures invested in the project Matic in 2019 and owns MATIC tokens.

Unlike the other two tokens, SKALE reacted to the listing the most with a 93% increase in value, currently trading around $0.55. It is an Ethereum-compatible decentralized network designed to scale Web3 applications.

All three crypto-assets are listed against USD, BTC, EUR, and GBP, with SUSHI having an additional pairing with ETH as well.

Now, US users will be able to get access to these DeFi tokens, which, as Coinbase revealed in its SEC filing, are 43 million. Also, institutions will be joining in as they now account for 64% of Coinbase’s volume by customer segment as of Q4 2020.

These cryptos will be available in all of the exchange’s supported jurisdictions except for New York State. For now, they are not yet available on Coinbase.com or through its mobile apps either.

While the transfers on Coinbase Pro accounts are now opened, trading will begin on March 11.

These listings are just one of the many DeFi tokens that the exchange has been exploring for listing. Several major DeFi tokens, including AAVE, Bancor (BNT), Synthetic (SNX), YFI, Uniswap (UNI), Maker (MKR), are already on Coinbase.

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Author: AnTy

NYDIG Raises $200M from High Profile Investors, Insurance Firms’ Bitcoin Exposure Surpasses $1B

NYDIG Raises $200M from High Profile Investors, Insurance Firms’ Bitcoin Exposure Surpasses $1B

Soros Fund Management, New York Life, MassMutual, Morgan Stanley, Stone Ridge Holdings Group, and FS Investments are the big names, preparing to have an “explosion of innovation in Bitcoin products and services” in the coming months and quarters.

Bitcoin investment firm New York Digital Investment Group (NYDIG) has secured an investment of $200 million in a funding round led by some massive names.

Besides the parent company Stone Ridge Holdings Group, the strategic partners included Morgan Stanley, New York Life, MassMutual, Soros Fund Management, and FS Investments, announced NYDIG Monday. Bessemer Venture Partners and FinTech Collective, who led the two prior funding rounds, were also significant participants.

NYDIG will be working with these firms, which have been in partnership for years, for Bitcoin-related strategic initiatives spanning investment management, insurance, banking, clean energy, and philanthropy.

“These partnerships leave no doubt that institutional adoption of Bitcoin has arrived,” said Robert Gutmann, co-founder, and CEO of NYDIG. The firm is also planning to have an “explosion of innovation in Bitcoin products and services” in the months and quarters of partnership with these new investors.

NYDIG also shared that life, annuity, and property & casualty insurers now own, in aggregate, more than $1 billion of direct and indirect bitcoin exposure through the firm. Michael Saylor, CEO of MicroStrategy, which owns 91,064 BTC commented,

“Institutional funds are now flowing into Bitcoin at an accelerated rate via private equity, public equity, public debt, direct purchases of the commodity, & commodity futures.”

Towards the end of last month, Stone Ridge also filed with the SEC to add Bitcoin to its diversified alternatives fund. Anthony Scaramucci of SkyBridge called this open-ended mutual fund ready to buy BTC a “BIG deal.”

“Stone Ridge filing opens the door for every mutual fund to add Bitcoin (if they want to),” he said at the time.

While Bitcoin price is trading above $50k, there is simply no lack of bullish news in the market.

Goldman Sachs Group revealed substantial demand for digital assets from institutions as it works to reboot its Bitcoin trading desk. Additionally, in a survey of nearly 300 clients by the firm, 40% currently have crypto exposure.

“We see this as a hugely exciting time exploring the potential of that technology,” said Matt McDermott, global head of digital assets for Goldman Sachs Global Markets Division.

Today, PayPal also confirmed that it is acquiring the digital custody firm to “expand its initiatives to support cryptocurrencies and digital assets.”

The acquisition is expected to be completed in the first half of 2021, of which financial terms weren’t disclosed.

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Author: AnTy

Bitcoin Sellers Are Running Out of Ammo; Sees Green Start of the New Month

Meanwhile, Warren Buffett says Fixed-income investors worldwide, from pension funds, insurance companies to retirees, all are facing a “bleak future.”

Last week has been a brutal one for Bitcoin as the prices continued to go lower and lower. The low, for now, has been set at around $43,100, representing a drop of 26% from the Feb 21 high of about $58,300.

“BTC has not yet seen a capitulation wick but sellers running out of ammo,” commented trader and economist Alex Kruger. “Stocks & bonds opened sharply higher. Playbook is strong week up, not just a strong open.”

Still, another drop lower will take us to the January high of $42,000, which still won’t be anything out of the ordinary.

During the 2017 bull cycle, Bitcoin had several drawdowns of an average of 30% to 40%, and such a pullback this time would take us just under $35,000. This means we can see another leg lower especially given that March is not historically a bullish month for Bitcoin rather just the opposite.

$45k is actually very strong support, and “any dip into $39k is a no-brainer BTFD,” said on-chain analyst Willy Woo.

Moreover, the recent sell-off has been ignited by the macro environment. As we reported, the stock market has been dragging Bitcoin down along with it in the aftermath of bond prices soaring.

The sudden US treasury lift-off has been on the changing outlook for inflation and economic growth following unprecedented stimulus and monetary easing along with the increasing COVID-19 vaccinations. This further pushed the US dollar up.

Still, with the recent uptrend, the rates have only gone to pre-COVID levels. Even Warren Buffett mentioned it in their annual letter to his followers Saturday where he wrote, “bonds are not the place to be these days.”

The billionaire mentions how the yield on 10-year U.S. Treasury bonds has fallen 94% from Sept. 1981 levels. “Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future,” reads the letter.

Commenting on this, Bitcoin bull MicroStrategy CEO Michael Saylor said if we agree with this that “bonds are broken as a store of value, then corporate treasury reserve strategies employing bonds no longer work to preserve shareholder value,” and of course, the answer according to him is the leading cryptocurrency.

Buffett, however, didn’t mention Bitcoin, Robinhood, or WallStreetBets in his letter at all. Meanwhile, his company’s cash stockpile, known for being massive, has come down a bit to $138 billion.

A low yield has been actually positive for Bitcoin and risky assets; as such, rising yields impact the prices in the market.

On the first day of March, Bitcoin went just over $48k, making a green start of a new month, following positive sentiment in the risky asset driven by three variables: bond panic over, Powell to calm markets, and fiscal package approved, noted Kruger

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Author: AnTy

Jittery Macro Affecting Crypto But US Institutional Investors Continue to Buy Bitcoin

Jittery Macro Affecting Crypto But US Institutional Investors Continue to Buy Bitcoin

Bitcoin continues to be under selling pressure as the digital currency drops to nearly $46,000.

This latest weakness in the price of Bitcoin has been despite the Coinbase whales scooping coins off the market. In the last 24 hours, more than 30k BTC worth approximately $1.5 billion has moved out of Coinbase reserves.

A similar Bitcoin purchase preceded the $24k breakout when the digital assets moved from weak hands to strong hands.

“Another significant Coinbase outflows at 48k. US institutional investors are still buying BTC,” said Ki-Young Ju, CEO of crypto data provider CryptoQuant. “I think it will eventually go above 48k, which is the institutional buying level,” he added.

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As we reported, the ongoing stock sell-off has been dragging the crypto market down. It is basically the result of what’s going on in the macro environment with bond yields rising, pushing the US dollar up, which is not good for risky assets and gold. Young Ju said,

“I think the major reason for this drop is the jittering macro environment like the 10-year Treasury note, not whale deposits, miner selling, and lack of institutional demand.”

With the continuation of the big bond sell-off, investors have shifted their risk preference from high to medium. The Federal Reserve Chairman Jerome Powell meanwhile continued with the same rhetoric, committing to its ultra-loose monetary policy, exactly what the market wanted to hear.

But yields, which actually move inversely to the price of the bond, had a sharp increase still, which means investors are selling off their “worthless over-abundant government debt,” noted analyst Mati Greenspan in his daily newsletter Quantum Economics.

Besides the cryptos, which are trying to rally but struggling to reclaim the highs, the top tech stocks have been taking a beating. The tech-heavy Nasdaq had its worst day in four months, sliding 7.6% from its early February peak before ending Friday with a slight uptick. About the ongoing equity-crypto correlations, trader and analyst Alex Kruger says,

“For correlations to be meaningful, their *flows* must be significant relative to other flows. Hence why you will often see correlations spike during times of market turmoil, and diminish during times of heavy inflows into bitcoin when driven by bitcoin specific factors.”

According to him, the crypto market can rebound over the weekend if risk assets stay strong.

However, with March seasonality coming into play, the month that has been the majority of the times seen red price action, the market may see some sideways action next month if not bearish onslaught.

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Author: AnTy