crypto investment

Bitcoin Bull Tim Draper Reveals Crypto Investment Secrets – Ripple, Bitcoin Cash, Tezos, and More

Renowned tech billionaire Tim Draper revealed that his crypto investment portfolio in 2020 was not only restricted to bitcoins, but also contained a variety of altcoin assets.

Draper: Mass crypto adoption is coming

Previously, the venture capitalist had purchased approximately 30,000 bitcoins (BTC) from a Silk Road auction hosted by US Marshals. However, the Bitcoin bull recently disclosed that his crypto holdings were not only limited to the “digital gold” currency.

Currently, Draper holds at least half a dozen different altcoins in his possession, including Bitcoin Cash (BCH), Ripple (XRP), Tezos (XTZ), and Aragon (ANT). Speaking about his investment strategy with digital currencies at a conference, Draper said:

“I’m a believer. I think it’s happening – it’s coming. It’s so important for the world, and I want the world to know it, and I want other people in the world to get on board.”

Draper firmly advocated that it was only a matter a time before global crypto adoption became an eventuality and that investors were already diversifying their funds more and more by storing their assets in cryptocurrency.

The venture capitalist is living proof that digital currency investments could secure assets and lead to financial growth – Draper’s current Bitcoin holdings are estimated to be valued at around $315 million, translating to an increase of more than 1,500% from his initial investment in 2014. Back then, Draper had bought BTC at a price of $632 per coin.

Fast forward six years, Bitcoin is currently trading sideways at around $10,000 per coin.

Why millennials should invest in Bitcoin

Tim Draper had previously touted BTC’s horn publicly, advising millennials to invest their money into the cryptocurrency. The successful tech entrepreneur asserted that Bitcoin was the key for the younger generation when investing and ensuring they had sufficient money for retirement.

According to Draper, millennials are at an advantage, because they are at a point in history where the future of the world’s global financial system is unfolding before their eyes.

The tech billionaire mentioned that while the older generation had saved for retirement by putting away money a little at a time, this strategy no longer worked for millennials, as they were born into a world already buried in huge monetary debts.

Bitcoin Scarcity and PayPal Crypto Inclusion Send BTC Prices Higher, Says Pantera Capital

Pantera Capital, a crypto investment company recently published a report indicating that the entry of payment giant PayPal integrating Bitcoin and other cryptocurrencies into its platform gave a significant rise of Bitcoin price, and now it is not known where the rally will stop.

In its official blog, the US-based investment company reveals that Bitcoin scarcity to the market is a major cause of recent price increase and that majority of newly mined Bitcoins are being acquired by PayPal.

PayPal recently established its new service that enables customers to hold, sell, and purchase cryptocurrencies directly from their PayPal accounts. With PayPal’s over 300 million active users, the new service is having an enormous impact on the price of the leading cryptocurrency.

Pantera Capital said that since PayPal went live, Bitcoin trading volumes began exploding. PayPal is already purchasing almost 70% of the new supply of Bitcoins. According to Pantera, within a few weeks, PayPal would be purchasing more than all of the newly-issued Bitcoin.

Pantera mentioned that the scarcity of Bitcoin supply and higher demand set higher prices. The entry of large financial firms such as Square mobile payment company and PayPal has set a good example for others. Other larger financial institutions would follow their lead. Of course, all financial institutions like banks would be in the race to service cryptocurrencies. The supply scarcity would become even more imbalanced as more firms seek to invest in Bitcoin and thus spikes the price up. According to Pantera: “The only way supply and demand equilibrate is at a higher price.”

Meanwhile, Pantera stated that as a result of the divided US elections, where the Democrats clinched the White House while Republicans gripped the Senate, there would be more pressure on the US Federal Reserve to expand its balance sheet. Such a money-printing policy would inflate the prices of things whose quantity cannot be eased – like equities, real assets, stock, Treasury bonds, etc. But Bitcoin is set to benefit as the opposite would be happening and its value rises as a result of its quantitative tightening and its demand increase as investors view it as safer than government fiat currencies.

Bitcoin Hits A New Record High Of Over $37,000 As Wild Price Swing Resumes

While extreme swings continue to rock Bitcoin, the price of the world’s largest crypto asset has reached another all-time high.

The cryptocurrency increased in value by approximately 8% to climb to around $37,254.00, surpassing the previous high record experienced on January 3 when it was trading at $36,190 in the late afternoon, in Eastern Standard Time (GMT-5).On Monday, January 4, Bitcoin had dropped its price by as much as 17%, but its bull run appears far from over.

Several factors have been identified for contributing to the increase of Bitcoin’s value, suggesting that it may be difficult to pinpoint one particular reason that can serve to explain the cryptocurrency’s latest volatility. Some traders have identified JPMorgan Chase & Company’s prediction of long-term Bitcoin price reaching as much as $146,000 in value as the cause of the recent price rise. However, others have pointed out that FOMO (fear of missing out) may be the cause of the record rally. Coinbase, the largest crypto exchange in the US, stated that it was witnessing “connectivity issues” on both its mobile app and website following Bitcoin’s ascent to $37K.

Vijay Ayyar, Head of Business Development at Luno cryptocurrency exchange in Singapore, said:

“Clear bull market, and we’re not getting 30 per cent to 40 per cent drops like in 2017. The market is more mature with bigger buyers. Keep in mind though that we’re in a parabolic phase and they do top out.”

Matt Long, head of distribution and prime products at OSL crypto brokerage firm in Hong Kong, said that while the latest price swings are part of the past boom and bust cycles, Bitcoin’s ability to reverse its price fall so quickly this week indicates institutional investors are not abandoning the crypto space.

Long said: “Monday’s dip was instructive as institutional investors used the opportunity to buy in. Institutional investment is firmly in the digital asset sector, and potentially accelerating.”

Likewise, Stephen Innes, chief global market strategist at Axi, said: “The chase higher is back based on the notion that bigger main street investors are interested in building longer-term positions.”

Bitcoin as a Hedge Against Market Risks

Bitcoin offers a hedge against risks such as inflation and a weakening dollar in an economy thriving on monetary stimulus. The crypto’s dizzying rally has attracted interest among Wall Street giants, with several institutions seeking to capitalize on the impressive returns being offered by the digital asset.

Many companies and prominent investors such as Stan Druckenmiller, Scott Minerd, Paul Tudor Jones, and others have begun allocating their funds into Bitcoins. The crypto market is being driven by institutional investors mainly from North America, China, Japan, and South Korea.

Bitcoin Tops $40,000 for The First Time but Experts Warn of Looming Price Correction

Bitcoin surged above $40,000 for the first time on Thursday, January 7, as the cryptocurrency continues the wild rally that has seen it jump over 700% since its low moments experienced during the March crash last year. The world’s most popular digital currency reached as high as $40,402.46 and added 6.1% to its value, before pulling back slightly. Currently, it is trading at $38,199.06 at the time of writing.

Bitcoin climbed to $20,000 on December 6 and hit $30,000 for the first time on January 2. Other altcoins such as Ethereum (ETH) and Ripple (XRP) have also gained value by 1.8% at $1,200 and 31% at $0.32 respectively.

Crypto experts have however warned that a price correction could be imminent after Bitcoin achieved such a great rally.

Gavin Smith, CEO of cryptocurrency consortium, Panxora Group, said:

“While further growth is inevitable, investors should not expect this to move in a straight line. The reality is that bitcoin is far from being a magic money tree, nor is it free from downward price swings. In fact, we can expect dips as sharp as 25% at times as investors periodically withdraw profits.”

The recent surge in the price of Bitcoin occurred as the market capitalization for the entire crypto industry hit $1 trillion on Thursday, January 7. This is according to data released by cryptocurrency trackers CoinGecko and CoinMarketCap.

Meanwhile Glassnode blockchain analytics firm has identified increased interests among retail investors in the past few weeks, with the number of BTC wallets or addresses holding a “non-zero amount” of Bitcoin hitting an all-time high of over 33 million.

The blockchain data and intelligence provider also stated that while interest in Bitcoin and related news coverage issues has increased, it is far from being in bubble territory. Glassnode mentioned that the number of daily news Bitcoin has reached at the moment is still not comparable to the volume witnessed in 2017, therefore indicating that the cryptocurrency is witnessing a strong organic growth in its adoption, though not the kind of “virtual growth typical of a bubble.”

Bitcoin : A Game-Changer in the Financial Market

Increased interest among institutional investors and more recently retail investors has contributed to the surge of Bitcoin price this year. Companies and retail investors are attracted by the cryptocurrency’s potential for quick gains in a world of negative interest rates and ultra-low yields. Many investors see Bitcoin as a hedge against inflation amid huge monetary stimulus being proposed to alleviate the economic crisis triggered by the coronavirus pandemic.

Chamath Palihapitiya Sees Bitcoin as a Hedge Against Economic Uncertainty

The price of Bitcoin has experienced a significant rise in the past few days, recently surging above $40,000. Chamath Palihapitiya, the renowned billionaire, venture capitalist, and founder and CEO of Social Capital venture capital firm, has described Bitcoin as a hedge against global uncertainty.

In an interview with CNBC, Palihapitiya cited a possible five or ten-year time horizon before Bitcoin would likely hit $200,000 in value. He explained that this was partially due to the lack of trust in governments. Palihapitiya said:

“The reason is because, every time you see all of this stuff happening, it just reminds you that wow our leaders are not as trustworthy and reliable as they used to be.”

He further stated: “So just in case, we really do need to have some kind of, you know, insurance we can keep under our pillow that gives us some access to an uncorrelated hedge.”

Governments across the globe have embraced various measures to tackle the economic impact caused by the COVID-19 pandemic. For example, the US has mass-printed fiat for stimulus packages and economic relief, triggering a depreciation of the world’s de facto currency, the USD.

In comparison with the dollar, Bitcoin has distinct underlying fundamentals that are not affected by the economic and health situation triggered by the coronavirus. Since the leading cryptocurrency is borderless and run by people, it allows holders to control their funds by themselves – with no centralized authority required. It has also been touted as a hedge against inflation by numerous market bulls.

In October last year, Fidelity Digital Assets investment company published a report showing Bitcoin’s lack of price correlation to other mainstream financial assets like stocks, gold.

Palihapitiya mentioned: “It’s (Bitcoin) going to eventually transition to something much more important, but for right now, you’re just getting all these data points that prove this thing.”

He further said: “The fabric of society is frayed, and until we figure out how to make it better, it’s time to just have a little schmuck insurance on the side, and everybody’s running in. It’s just an incredible thing.”

Bitcoin Possesses Safe-Haven Asset Qualities

Bitcoin serves as a hedge against uncertainty. Typically, uncertainties are situations where the odds cannot be calculated. Unqualifiable uncertainty, such as the rise in inflation, can be hedged against with Bitcoin. The leading cryptocurrency has qualities that make it an ideal safe-haven asset.

First, it has a high degree of accessibility that makes anyone able to send and receive funds in a permissionless way. On the other hand, fiat currencies are subject to a high degree of uncertainty as they rely on third-party custodians to verify their transactions. Secondly, the fixed cap of Bitcoin supply at 21 million BTC minimizes the uncertainty affecting all fiat currencies that depend on central banks’ monetary policies.

By exercising the power to print an unlimited amount of money, governments deliver economic relief at the risk of depreciating fiat, therefore increasing the instability of currencies.

Bitcoin is a Good Long-Term and "Plan B" Investment for Black Investors, says KRBE Digital Assets Group Co-Founder

In an interview with CNBC on Tuesday, January 12, Isaiah Jackson, the co-founder of KRBE digital assets group and author of “Bitcoin & Black America”, said that cryptocurrency is the key to fixing economic injustice and therefore encourages Black investors to embrace crypto assets for long-term savings.

Jackson, a Bitcoin advocate, stated:

“For the first time in history, we have a Plan B option to the current financial system which has seen years of redlining, racial discrimination and other egregious acts by retail banks to the Black community, and in my opinion, the Black community has the opportunity to shift our mindset and our money.”

He urges black people to shift their energy into crypto and Bitcoin as there is no barrier to entry and it is “unconfiscatable.” He termed this phenomenon as something that has not been seen in the history of the US for the Black community. He, therefore, thinks that cryptocurrency is a step in the right direction and can help in the long-term.

Since mid-October last year, Bitcoin’s price in comparison with the US dollar has more than tripled, but declined more than 10% on Monday 11 January, imitating the extreme volatility witnessed in 2018.

However, Jackson does not see Bitcoin’s fall experienced this week as a concerning issue for long-term holders. He said: “The drop that we’ve seen recently is nothing more than market cycles. If you’re in Bitcoin as a savings account, as a way to preserve your wealth, then this volatility should not scare you at all.”

Bitcoin’s Benefit to The Black Community

Bitcoin, the world’s leading crypto asset, continues to rally into the new year by trading above $30,000 for weeks. The cryptocurrency has been on the high ride this year and now is up more than 180%, driven partly by new institutional support and low-interest rates stemming from the coronavirus. It is therefore high time to invest in Bitcoin as an increasing number of people use it as a hedge for inflation.

Money printing is seen as one of the greatest drivers of inequality. Black-owned businesses have long faced challenges in getting financing. For example, only 12% of black business owners who applied for the Paycheck Protection Program loans (PPP) obtained what they have asked for, compared with 49% of white-owned businesses. Furthermore, the relationship of black-owned businesses with banks is impeded by their smaller size and by “absolute racism” (discrimination).

However, Bitcoin cryptocurrency fixes these problems and gives financial freedom to the black community.

Bitcoin Recovers Its Losses After Early Week Plunge and Manages to Maintain Price above a Crucial Level

Bitcoin has recovered most of its losses seen at the beginning of this week, thus proving to skeptic investors who were quick to predict the end of the top cryptocurrency’s bull run.

The world’s leading crypto asset advanced as much as 7.5% to briefly climbed to $40,000 again on Thursday, with other altcoins such as Ethereum, Litecoin, and Bitcoin Cash also seeing a rise in their value. Over the weekend, Bitcoin was trading at about $36,230, thus experiencing a fall by 6.5% after clearing $40,000 earlier in the week.

Craig Erlam, a senior market analyst at Oanda Europe, said:

“While $35,000 may provide an interesting test, the only level that really matters is $30,000. A break of this could trigger a much sharper correction.”

He further added:

“We know it’s an extremely volatile instrument – the only difference this time is the absolute numbers are now much larger due to its growth over the last month.”

Meanwhile, Mike McGlone, a commodity strategist at Bloomberg Intelligence said that both institutional and retail investors adopting Bitcoin has contributed to pushing its price higher. He stated: “This is a very unique phase in the Bitcoin process of price discovery that favours a strong rally.”

Bitcoin experienced an impressive surge last year, which it advanced its value by over 300%. Crypto advocates claim that red-hot gains are solid and are here to stay because the current coronavirus pandemic has created the perfect conditions for the digital asset amid global central bank money printing activities.

Nevertheless, there are still skeptics that worry that the largest cryptocurrency by market cap has gained too much too fast, with several claiming that its surge is a sign that the crypto market is overloaded with speculative behaviour.

Technical analysts have stated that the price is fluctuating between support levels, which could pave the way for a far deeper retreat or see high records. The Relative Strength Index for the leading cryptocurrency, which tracks momentum over the last 14 days, shows that the only recent fall below crucial levels indicates that the digital asset was overbought.

What Drives Current Bitcoin Bull Run

In recent weeks, crypto-centric products have experienced an increase in popularity as investors have rushed to get a slice of the action.

For example, Grayscale cryptocurrency investment firm has experienced a 900% surge of inflow investments. That 900% rise was driven by demand for Bitcoin from institutional investors like hedge funds, endowments, and pension funds. The firm stated that it has experienced total inflows of more than $3 billion across its products in the fourth quarter.

Institutional and current retail demand has been cited as major reasons explaining why Bitcoin hit $40,000 last week and tripled its rally, in comparison with last year.

Goldman Sachs to Begin Offering Bitcoin and Crypto Products to Clients

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Goldman Sachs, the second-largest US investment bank, has stated that it will offer Bitcoin and other crypto products to its private wealth clients within the next few months.

In an interview with CNBC, Mary Rich, the recently promoted global head of digital assets for Goldman’s private wealth management division, said that the investment bank expects to start offering Bitcoin exposure to clients of its private wealth management division in the second quarter.

Although the bank has not said which cryptocurrency investments it will start supporting, Rich said that Goldman plans to offer a “full spectrum” of investments in Bitcoin and digital assets, “whether that’s through the physical bitcoin, derivatives or traditional investment vehicles” in the next three months.

In an internal memo announcing the appointment promotion of Rich, the bank said that Rich will “leverage the firm’s capabilities to ensure [it] can meet client’s interest across digital asset classes and technologies.”

The private wealth management division is designed for the wealthiest clients, those with a minimum of $25 million to invest. According to Rich, the decision by Goldman was driven by consumer demands.

Rich stated: “There’s a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that.” She added: “There are also a large contingent of clients who feel like we’re sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space.”

Institutions Turning to Bitcoin

Goldman’s move comes less than two weeks after Morgan Stanley (the third-largest US bank) announced that it will begin offering Bitcoin exposures to its wealthy clients in April this month. The move means that clients of two of the world’s famous investment banks – Morgan Stanley and Goldman Sachs – would access a nascent asset class that has interested billionaires and crypto believers alike.

Last May, Goldman said that cryptocurrencies are not an asset class. Sharmin Mossavar-Rahmani, chief investment officer for Goldman’s wealth management business, has repeatedly stated that Bitcoin is not appropriate for investors. But the bank has changed its tune on cryptocurrency, and now plans to launch a set of Bitcoin and crypto products.

Goldman’s decision indicates that major financial institutions are starting to embrace crypto assets after years of skepticism due to their volatile nature.

But other firms have been investing in Bitcoin. Tesla recently accepted Bitcoin as a form of payment and had bought $1.5 billion in the crypto as a part of its cash reserve. Mastercard, Uber, BlackRock, BNY Mellon, and many more are also looking into Bitcoin.

As more financial institutions invest in cryptocurrencies, more firms are expected to join.

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European Hedge Fund Firm Plans to Buy $84 Million Worth of Cryptocurrencies

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Brevan Howard, a European hedge fund asset management firm, is planning to invest in cryptocurrencies.

A person familiar with the sources revealed that Brevan Howard asset management company plans to invest 1.5% of its $5.6 billion hedge fund into cryptocurrencies, meaning that the firm would invest $84,000,000 into crypto assets.

Brevan’s crypto fund will have a diverse portfolio by focusing on several cryptocurrencies besides Bitcoin and Ether.

Brevan Howard is not new in the crypto field. Its co-founder Alan Howard has a wide experience in the field, investing his personal money into crypto assets, and has been a billionaire investor in cryptocurrency investment firm Distributed Global based in California since early 2018.

Tucker Waterman and Johnny Steindorff, co-founders of Distributed Global, will oversee the initial allocation of Brevan’s crypto fund.

Brevan Howard has made several bets in crypto firms over years but now is taking a direct exposure approach with crypto assets. The European hedge fund asset management firm recently bought a 25% stake in the US-based One River Asset Management, a $2.5 billion company whose crypto funds are backed by Alan Howard.

Brevan Howard, best known for its macro trading prowess, is now expanding its investments following a year of record gains.

What the Smartest Investors Are Doing

Brevan Howard has become the latest fund manager seeking to explore the boom in crypto assets. The move is the latest indication that crypto assets are going mainstream as the European fund manager joins the likes of Billionaire hedge fund managers Stanley Druckenmiller and Paul Tudor Jones who have turned into prominent crypto supporters, calling Bitcoin as a better store of value against declining fiat currency and a better asset than gold.

In May 2020, famed macroeconomic investor Paul Tudor Jones bought Bitcoin as a means to protect his portfolio from the negative effect of central-bank-induced inflation. He evaluated several types of potential investments, including stocks, commodities, and gold and concluded that Bitcoin was the best option.

In November 2020, billionaire hedge fund manager Stanley Druckenmiller bought Bitcoin as a means to make profit as the dollar continued declining in value.

Michael Saylor, Paul Tudor Jones, Jack Dorsey, Stanley Druckenmiller, and many other Bitcoin bulls are among the best and most respected investors now buying Bitcoin in huge amounts as the crypto continues appreciating as a store of value.

Fidelity Study Shows 70% Institutional Investors Eyeing for the Crypto Market

Despite institutional investment in the crypto market evaporating, a study conducted by Fidelity Digital Assets found out that 70% of institutional investors are still eyeing this field in the future.

Price volatility is considered as the biggest stumbling block to new entrants, followed by the lack of fundamentals needed to assess value and concerns around market manipulation, according to Reuters, citing the Fidelity study.

Yet, price volatility is not new to the crypto market, as evidenced by the fact that Bitcoin (BTC) shed off more than 30% of its value in a single day to hit lows of $30K on May 19 from an all-time high (ATH) price of $64.8K recorded in mid-April.

It, therefore, shows that new institutional investors in the crypto space are keeping fingers crossed to see how price volatility transpires. Meanwhile, around 90% are eyeing crypto investment in the next five years.

The study noted:

“Around 90% of those interested in investing in the future said they expected their company’s or their clients’ portfolios to include digital asset investments within the next five years.”

Additionally, more than half of the 1,100 institutional investors surveyed between December and April disclosed that they own crypto investments. Those interviewed included digital and traditional hedge funds, high net worth investors, financial advisors and endowments, and family offices.

Market analyst Lark Davis recently stated that the amount invested by institutions and corporates in the BTC market was a small per cent of their total cash reserve. He noted that publicly traded companies had around 10 trillion in cash reserves, of which nearly 6 billion had been invested in Bitcoin. Therefore, out of the 41,000 publicly traded companies, less than two dozen had taken positions in BTC.