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Cryptocurrencies Added to the List of Top Threats to Investors by Texas Security Board

According to the latest Texas Investors Guide, Texas regulators have added cryptocurrencies to the list of top threats to investors. In an edition of the states Securities Board’s “Texas Investor Guide: Strategies for Investing Wisely and Avoiding Financial Fraud,” the regulatory body included cryptocurrencies to the list of investments with potential red flags. The report described cryptocurrencies as extraordinarily volatile and challenging to grasp for people who are not professional traders.

The report stated the investment opportunities in cryptocurrency mining pools and ICO’s director at senior and retirees, who obviously place security over speculation. They further went ahead to warn, “In the riskiest cryptocurrency-related offerings, promoters do not provide audited records or other financial information to back up their claims of extraordinarily high profits. […] Promoters’ claims of ‘secure’ cryptocurrency-related investments and ‘guaranteed’ profits should be approached with caution: Cryptocurrencies tend to be extremely volatile, and investors may be unable to quickly liquidate products tied to them.”

In the document, the regulators advised that potential investors should not take part in cryptocurrency offerings unless the basic facts of the company and its physical location can be determined. The guide further explained that investors could send funds to third parties, and they further outlined the need to deal only with entities that are registered, keeping in mind that people who fall prey to any deceptive body will be left helpless. The report also listed unregistered individuals, oil and gas offerings, and promissory notes along with cryptocurrencies.

Late last month, the North American Securities Administrators Association (NASAA) — an international investor protection organization mentioned cryptocurrencies as being amongst the top five threats to investors for the year 2020. This report included the top five schemes with high chances of getting investors trapped this year, and all these were based on complaints, ongoing investigations, and the current enforcement trends.

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Bitcoin Set to Recover From the Coronavirus Pandemic-Triggered Global Financial Crisis?

The price of Bitcoin has seen a decline of 8 percent from the start of this year until early April, and 90% of Finder’s survey panel believes it is caused by the coronavirus pandemic. Although COVID-19 made up for most of the explanation for the dip, many believe that the Plus Token scam also had an impact.

As economists are forecasting a global recession, the majority of the crypto community believes that Bitcoin could survive a global financial crisis. As governments around the world had been seen scurrying to produce and import scarce medical gear, BlockToken Co-founder Genson Glier added, “Most individuals will have some loss of faith in their government, especially given the crisis. This loss and lack of trust are just one of the reasons why BTC has been able to establish itself. I think people will see it as an additional asset class for wealth distribution, now more so than ever.”

Elvira Sojli, an associate professor at the University of New South Wales suggested that the upcoming Bitcoin halving event will support Bitcoin’s price. “The shrinkage in resources due to losses in the stock markets and demand for goods further depress the BTC price. The halving is the only thing keeping the price above the $5,000 threshold.”

Bitcoin as a safe-haven asset

The majority of those who were surveyed say that Bitcoin’s recent behavior affects its viability as a safe-haven asset; however, it has been suggested that the market is slow on “picking it up as a commonly tradable item.” This further suggests that Bitcoin is still lacking liquidity, while gold is currently increasingly being liquidated.

Bitcoin and Ethereum win sentiment scores

Those who were surveyed were asked if they had a positive or negative outlook on 11 cryptocurrencies. Bitcoin and Ethereum showed a majority of positive outlooks, while Binance Coin received the highest negative sentiment rate.

Ajay Shrestha, a Ph.D. candidate at the University of Saskatchewan commented, “I believe BTC (and ETH) will be more widely adopted on a long-term basis. BTC being a native cryptocurrency has lots of growth potential. Ethereum being adopted for the utility of the tokens and applications to utilize blockchain-backed digital assets will continue to rise and thrive.”

Goldman Sachs Invites Investors to Conference Call on Bitcoin, Gold and Crisis Markets

According to a recent investors’ invitation, Goldman Sachs is calling for a conference call event to further discuss inflation, gold, and Bitcoin. The investment bank seeks to hold a call with its top investors on the “US Economic Outlook & Implications of Current Policies for Inflation, Gold, And Bitcoin”.

Per the invitation, the event is scheduled to take place on May 27th. There are no specific details concerning the exact content and agenda of the conference. However, the report shows that the bank aims to discuss how the risk of monetary inflation and the current central bank policy could impact assets such as gold and Bitcoin.

Banks Learning to Love Cryptocurrency

When the cryptocurrency industry emerged in 2009, financial institutions and banks visualized Bitcoin as a mere technology used by criminals on the dark web. Four years ago, nearly every financier, banker, and bank either had never heard about Bitcoin or were laughing at it.

But the perception has changed in the last few years and several leading banking institutions now recognize the once worthless Bitcoin and its associated ecosystem and technology, as a significant force for payment in the future.

As banks around the world begin to like the concept of Central Bank Digital Currencies, the clash between the traditional banking system, blockchain, and cryptocurrencies has subdued. In this scenario, the biggest turnaround has been JPMorgan Chase, the US banking giant. Jamie Dimon, JPMorgan CEO, once called Bitcoin a “scam” only later for the bank to deploy its own crypto coin.

Now Goldman Sach, another Wall Street giant bank is also taking an interest in cryptocurrencies. The investment bank aims to host a conference call concerning inflation, gold, and Bitcoin.

This year has witnessed some significant events that shook the world economy, with Federal Reserve printing over $3 trillion. But multiple experts argue that such measures adopted by the U.S government could adversely impact rates of inflation in world economies. Other central banks across the globe are also taking similar measures.

But most hard money advocates feel that this is the right time for scarce assets such as gold and Bitcoin to thrive. For example, American billionaire hedge fund manager, philanthropist, and conservationist, Paul Tudor Jones, recently said that Bitcoin will be playing a crucial role as a hedge against worsening economic recession, which has led to rising unemployment rates.

Goldman Sach’s conference call event seems to embrace a similar sentiment. But what is interesting is the fact that the event will be hosted by Sharmin Mossavar-Rahmani, Chief Investment Officer at Goldman Sachs. In 2018, Rahmani was a vocal Bitcoin critic who blasted Bitcoin and other cryptocurrencies as worthless. But it is yet to be seen whether her opinions have changed over the years.

Goldman Sachs seems now to pay attention to Bitcoin. Other Wall Street juggernauts are beginning to pay attention. Goldman Sachs’ current announcement comes a few days after JPMorgan, the largest investment bank on the globe, announced that it is opening accounts for two cryptocurrency exchanges namely Gemini and Coinbase. This is a significant milestone for the cryptocurrency industry as this paves the way for new possibilities for banks to work hand in hand with crypto-based firms.

It is interesting to see banks now attempt to fit blockchain and cryptocurrencies in their systems. Recognition and legitimacy have been granted to this space. However, it remains to be seen how things would unfold from here.

Goldman Sachs May Follow JP Morgan To Launch Own Cryptocurrency

In a recent interview, CEO of Goldman Sachs, David Solomon, revealed that the US banking giant could follow the footsteps of its competitor JPMorgan Chase in launching its own crypto coin. Solomon further said that the bank has been performing extensive research on stablecoins and asset tokenization. In the interview, the Goldman CEO expressed his belief in the potential that cryptocurrency holds in enabling frictionless and quick cross-border payments. Just like JPMorgan, Goldman Sachs believes that such currency will need to be backed by fiat currencies. Solomon acknowledged the reality that banks are keen on joining the cryptocurrency race. He said that banks must remain innovative, otherwise, they will disappear.

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Telegram Hit With $18.5 Million SEC Fine and Set to Return $1.2 Billion to Investors as it Dissolves TON Project

Pavel Durov’s grand crypto dreams for his Telegram crypto project are coming to an end with the civil settlement with the SEC and a promise to return billions to investors.

Telegram, the world’s leading social messaging app, has agreed to pay an $18.5 million in a civil penalty to resolve criminal charges over an unregistered digital token offering. The company has also promised to return over $1.2 billion to investors, which remains unspent from the $1.7 billion that it raised through its ICO (initial coin offering) in 2018.

The regulator turning up the heat

On Friday, the US SEC (Securities and Exchange Commission) said that it had received court approval of the settlements with Telegram and its owned subsidiary TON Issuer Inc., to resolve charges over the company’s unregistered offering of digital tokens commonly identified as grams that violated the federal securities laws.

Now Telegram has up to four years to pay investors and 30 days to pay SEC’s penalty. As part of that agreement, the UK-based company must also notify the SEC in case it wants to issue another digital coin within the next three years.

The settlement between the Telegram and the SEC brings to an end the months of a long legal battle between the two parties, which started when the SEC filed a legal complaint with Telegrams back in October 2019.

The rise and fall of Gram crypto project

Telegram officially abandoned the Telegram Open Network (TON) cryptocurrency project on May 12, 2020. The firm unveiled the project with its ICO in 2018 in an effort to monetize the messaging platform that has over 400 million global users.

In October 2019, the SEC sued Telegram alleging that the firm had raised capital through the sale of 2.9 billion Gram tokens to finance its business. However, Telegram lawyers tried to defend the ICO by arguing that the firm was not selling gram cryptocurrency, but was rather planning to issue grams that would be minted within the company’s network. In March, the US District Court for The South District of New York sided with the SEC at all steps preventing Telegram from launching its TON network.

So far, Telegram has no luck and this explained the reason why the company went ahead and stopped the TON project. Although the official TON network is inactive, community developers and validators unveiled a fork of TON known as Free TON in the previous month.

This case and settlement could have greater implications for other simple agreement for future tokens (SAFT) raise, particularly for those projects that have yet to launch.

Bitcoin Price Surges Over the $10,000 Mark—Traders Expect it to Edge Higher

Bitcoin price crossed the $10,000 mark on July 26, reaching its highest level in almost two months. Bitcoin (BTC) is trading around the $10,248 level at press time. The last time Bitcoin was at the $10K level was on June 10.

Bitcoin has had very low volatility in the past few weeks. However, Bitcoin’s surge to $10K has not pressured traders to sell, with the sentiment of BTC trading even higher. Glassnode’s on-chain data, “Bitcoin days destroyed” indicator suggests that traders did not use the recent price surge to trade or sell.

Rob Sluymer, technical strategist at Fundstrat Global Advisors LLC said:

“We remain positive on the overall precise structure for Bitcoin and do expect it push through $10,000-$10,500 as part of its longer-term bullish technical profile. The range remains a resistance band that Bitcoin will need to break above to signal its next move to resistance at $13,800.”

In June, Bloomberg predicted that Bitcoin’s price in 2020 could reach $20K. As Bitcoin’s volatility was at its lowest-ever against crude oil, this indicates that the cryptocurrency is joining the mainstream and progressing towards the digital equivalent of gold.

Binance CEO Changpeng Zhao (CZ) said in a tweet:

“$10k is no longer exciting.”

As the US government is about to see the second round of COVID-19 stimulus checks, it was speculated whether Americans would invest in Bitcoin. With the excess money printing due to stimulus checks being paid out by the US government, Gemini CEO Tyler Winklevoss advocated in a recent public tweet that Bitcoin is the way to go, and should definitely be invested in. He explained that with the US Federal Reserve’s plan of mass printing money, the “stage for Bitcoin’s next bull run is set.”

Bitcoin continued to rise, as gold has also seen the same trend, almost surging to record levels. Bitcoin has been deemed as “digital gold.” Bloomberg’s April 2020 Crypto Outlook report previously said that the COVID-19 pandemic’s shake-out of the stock market may be accelerating Bitcoin’s maturation into a new kind of digital gold.

Ether sees a 20% surge

Ether (ETH) underwent a 20% surge, and the increase in pricing can be attributed to the rising popularity of DeFi applications and the resulting number of dividends pay-outs. This is exciting for the crypto community, as Ethereum has not seen the time of the day since its early 2018 crash.

Also, until recently, it has been seen to be trailing behind its counter rival Bitcoin on the crypto markets. But 2020 appears to be the year that revolutionizes it all for Ethereum.

The Bank of Russia Wants Strict Limits for Non-Professional Russian Crypto Investors

The Bank of Russia has published a proposal that aims to limit the amount of digital assets that non-professional investors can purchase in a year. In other words, the central bank has proposed to set limits on annual digital asset investments by non-professional investors.

In the proposal published on October 14, Russia’s central bank has suggested that non-professional investors in the country should not be allowed to invest more than 600,000 Russian rubbles (about $7,800) worth of digital assets in a year.

The central bank announced that both digital financial assets and other digital assets would be part of the cap, implying that stablecoin holdings, tokenized securities, cryptocurrencies like Bitcoin would all count on the law.

However, there are no limits set on the amount that professional investors would be allowed to invest in stablecoins, tokenized securities, or crypto assets.

An individual must meet the following five requirements to be regarded as a professional investor:

Have a net worth of not less than 6 million rubble ($7,800)
Own securities that total more than $7,800
Have a degree in economics
Frequently trade large amounts of securities
Have working experience in a financial organization for at least two years

Currently, the requirements are only proposals, as the central bank stated that it is willing to listen to feedback from the public on the matter until October 27.

The new proposal is part of the nation’s newly passed cryptocurrency law “On Digital Financial Assets” or DFA, which would come into effect from January 1st 2021 when the country’s very first crypto-related law (DFA) is implemented.

Russia Seeks to Launch A CBDC

Russia’s central bank has recently built up its work with a focus on digital assets. On October 14, the country’s major financial regulator published a report that announced a potential issue of its own national digital currency recognized as the ‘Digital Rubble.’ In the report, the regulator said that the national economy is rapidly becoming digitized, a trend that has led to the need for advanced payment systems, which are built on a state-backed digital currency. However, the central bank has clarified that while it is still examining the feasibility of issuing a government-back digital currency, it has not yet decided to do so.

Bitcoin Maximalist Max Keiser says Investors Holding Assets Other than BTC and Gold are in Trouble

Bitcoin maximalist Max Keiser tweeted recently, saying that due to another wave of expansion of the Federal Reserve’s balance sheet, all assets that investors hold are now in trouble, all except Bitcoin and gold.

Economists believe that the US Federal Reserve would continue to funnel record amounts of money into the economy to fight the global recession caused by the COVID-19 pandemic.

By the end of 2020, the estimated figure for the balance sheet would be around $7.4 trillion as the Fed is buying $25-$30 billion of treasuries and mortgage-backed securities every week. The Fed’s balance sheet has increased from $4 trillion in mid-March this year to about $7 trillion currently. Congress approved trillions of dollars in stimulus funding with more stimulus measures for businesses and the economy expected to be offered next year as well.

The infusion of cash into the financial system has renewed concerns that inflation could continue to surge. Despite the fact that several US citizens are happy to get stimulus checks from the Treasury, the move essentially debases the US dollar, reduces it’s purchasing power, negatively affects the value of stocks, treasury bonds, and even hard assets like land, real estate, properties, and makes every citizen poorer. Keiser, therefore, says that gold and Bitcoins are the only assets that could be stored safely nowadays.

Investors Seeking to Invest in Bitcoin Than Gold

Unprecedented money-printing and stimulus measures by the U.S Federal Reserve amid the Coronavirus pandemic is the main reason why investors have been looking to invest in Bitcoin and gold as safe-haven assets. Especially newfound appetite for Bitcoin among investors has significantly increased because it performs better than gold. Many investors flock to Bitcoin investment because they regard it as a hedge against inflation-inducing government policies.

This year, Bitcoin has done better than both world and U.S stocks, posting a loss of about 5% compared to respective declines of 13% and 16% for the S&P 500 and MSCI All-Country World Index. The leading cryptocurrency appeals to traders and investors because it provides the chance of quick returns as the stimulus measures wash into markets.

Bitcoin has appeal to investors as it offers potentially higher-risk-reward scenarios, which they cannot find in other assets. Furthermore, investors prefer the cryptocurrency because it is immune to the impact of government policy or geopolitical tension due to its decentralized nature.

Anthony Pompliano Says Bitcoin Price Correction Indicates BTC has Moved from Weak to Strong Hands

Bitcoin bull and the co-founder of Morgan Creek Digital Hedge fund, Anthony Pompliano has noted that the ongoing price correction of BTC is a signal that Bitcoin is moving from weak hands to strong hands per a Twitter post he shared.

Bitcoin has impressed the world with its recent price performance which broke several all-time highs in the past couple of weeks, peaking at around $42,000 per coin. The growth which started last year has been reportedly fueled by a massive embrace of the coin by Wall Street firms including online payment giant PayPal Holdings Ltd, business intelligence firm MicroStrategy Incorporated and Grayscale Capital to mention a few.

The massive buy-up of Bitcoin by these firms made the headlines which thus made investing in the coin more attractive and retail investors also joined the train in a bid to kill their FOMO. The combined bullish actions of both the institutional and retail investors kept Bitcoin high above $38,000 for a while, a price territory that is now currently threatened.

As Bitcoin moved by about $20,000 in less than a month, many Bitcoin holders have seen gains in their holdings and the price dip can be attributed to a sell-off by those investors who are taking profits from the coin. Pompliano however believes that as many of these sellers ditch their crypto holdings, it goes to the hands of investors who see a bigger move in the future and are thus taking advantage.

Pompliano wrote in a tweet:

“Bitcoin moved from weak hands to strong hands today”

How Big Will This Ongoing Correction Be?

While Bitcoin is renowned for very wild price swings, it may be hard to project how big this ongoing correction will be. For the previous ATH broken by BTC back in December 2017, the coin swung from above $19,000 to below $10,000 in the same correction as what we are seeing. How far this dip will go is perhaps what many sellers are unwilling to witness, and what many others see as an opportunity to buy up more coins.

Ethereum Recording Massive Retail Storm As Number of Ethereum Addresses Hit Another ATH

Ethereum’s journey continues as data from Glassnode shows the cryptocurrency is seeing a massive influx of retail investors buying up the cryptocurrency.

While the number of Ethereum addresses with at least a 0.1 ETH in them jumped to a record high yesterday, the market bulls have maintained the momentum as the Ethereum addresses with the same number of Ether locked in them has surged to a new all-time high (ATH) of 3,726,395, a slight increment from the previous ATH of 3,726,002.

The run-up to setting the new milestone is not surprising as Ethereum bulls have been ambitious in their push to steer Ethereum price to hit and surpass its all-time high above $1,432.88, a feat it recorded back in January 2018. At the time of writing, Ethereum’s current price is just 7.96% away from its all-time high and is trading at $1,326.00, a 10.2% surge in the past 24 hours.

Ethereum Has a Corresponding Increase in Transaction Volume

The determination to push Ethereum price past its ATH has also been reflected in the total volume of Ethereum per the transaction volume. Glassnode data also revealed that the total Ethereum transaction volume just went above 8 Trillion ETH and currently pegged at 8,000,274,971 ETH.

While Ethereum is still the unmovable second-ranked coin, the coin’s overall contribution to helping maintain a healthy cryptocurrency market cannot be undermined. With a total contribution of 14.68% to the overall global crypto industry’s market cap, its lone market cap of $151 billion is a testament to the growth the coin has picked up in the past days.

While both institutional and retail investors seek an alternative to the out-of-reach Bitcoin, Ethereum continues to be the attractive altcoin and this is shown in the metric growth of ETH on all fronts.

C10: An All-Weather Approach to Investing In Cryptocurrencies

The future of cryptocurrencies looks bright as an increasing number of investors are looking for alternative investment opportunities, but many remain hesitant because of the market’s extreme volatility. Crypto10 Hedged is an index fund that allows investors to own a portfolio of the top 10 cryptocurrencies with a single token (C10) while mitigating risk and volatility through its dynamic cash hedging algorithm.

C10 has performed exceptionally well since its inception in 2019, with the fund’s assets under management recently surpassing $8.5 million on the back of a red-hot rally for cryptoassets over 2021 to date, with the fund outperforming Bitcoin over the period. The dominant cryptoasset, Bitcoin, has seen tremendous growth over the recent bull run, surpassing its previous all-time high of $20k by over 150% to $52k. Alt coins such as ETH have yet to reach quite the same level of outperformance relative to their 2018 highs, however, they have been staging an impressive resurgence off the back of Bitcoins rally, contributing to the C10 fund’s performance.

The C10 fund follows a passive strategy with medium- to long-term investors in mind. It is the ideal option for those who are more risk-averse and looking for an all-weather approach to investing. The fund helps investors ride trends effectively – taking advantage of cryptocurrencies’ rapid price appreciation during bull markets, but reducing exposure during bear markets by increasing its cash position.

The index fund comprises the top 10 cryptocurrencies by market capitalization, which rebalances weekly – a frequency optimized by our quant team to enhance returns by locking in profits from surging assets, and similarly reducing exposure to assets in free-fall. There is also a cap of 15% per asset, which ensures further risk mitigation by preventing single cryptocurrencies from dominating the portfolio.

The weekly rebalancing process takes the dynamic cash allocation into consideration. By allocating cash weekly, the algorithm has the flexibility to be responsive to market movements. The fund is able to allocate up to 100% exposure to yield-bearing cash during periods of market drawdown, which effectively hedges the fund from this downside volatility. When the market stabilizes, the fund is reinvested into cryptocurrencies. This strategy is one of the main factors which makes the Crypto10 Hedged fund a safer investment – allowing investors peace of mind that is not typically associated with crypto investments.

The Crypto10 Hedged investment fund is open-ended and accessible via the Invictus Capital Investor Platform, which has the advantages of convenience and complete transparency. Investors do not have to trade through an exchange, and liquidity is available at any time to enter or exit the fund.

To invest in the Crypto10 Hedged fund, investors will follow a similar subscription and redemption process to that of traditional mutual funds. To buy the C10 token, you can visit the newly-redesigned Invictus Capital Investor Platform. The NAV of the fund is displayed in USD and is updated in real-time.

FREQUENTLY ASKED QUESTIONS

Which data science techniques are used to rebalance C10?

C10’s cash allocation is rebalanced weekly by using a proprietary machine-learning algorithm that underwent extensive backtesting. Apart from the main parameter, which is the total market cap, it considers many factors in portfolio construction such as mean-variance through correlations paired with risk parity analysis. The algorithm is also set up to consider specific inputs from the in-house Invictus Capital analyst team for qualitative traits. Lastly, it uses various market indicators to determine cycles, momentum and technical signals to determine optimal cash weightings. It is continuous in the learning process, continually comparing realized and forecasted performance.

What are the fees?

Ongoing costs include a 1.7% fee per annum for management, administration and custody. These are always reflected in the C10 token price displayed. A 0.5% fee applies for each subscription and redemption, to protect against scalping and arbitrage.

Which currencies can you use to invest with?

Investments into C10 can be made with Bitcoin (BTC), Ethereum (ETH), DASH, TrueUSD (TUSD), Tether (USDT), Mastercard, VISA or bank transfer. No minimum investment applies.

How to redeem my C10 tokens?

C10 tokens can be redeemed for their total value in ETH through the Investor Portal. The C10 smart contract holds liquidity for redemptions which are processed hourly. A forward-pricing model is used.

What are the smart contract details?

C10 is an ERC-20 token issued on the Ethereum blockchain. The smart contract address is 0x000C100050E98C91f9114fa5Dd75CE6869Bf4F53, and there are 18 decimals.

For further questions or more information, investors can talk directly to the Invictus Capital team on Discord or Telegram

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