Investing beyond Bitcoin: Which alts are ‘very important’ for high returns?


AMBCrypto News 26 June, 2021 - 05:00am 30 views

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Ever since altcoins started gaining traction, they’ve been compared to the market’s leader – Bitcoin. With market dynamics altering at a noteworthy pace, the Bitcoin v. altcoins debate will, perhaps, never come to a conclusion.

Pantera Capital’s CEO Dan Morehead, in a recent interview with Bloomberg, revealed that he is looking beyond BTC for big returns from the crypto-market. He said, 

“A really important way to think about it is if you’re just long Bitcoin, it’s kinda like in the 90s just being long Yahoo. There were 30 other really important companies to invest in in the 90s, and the same here. There are a lot of different products to be invested in.”

Altcoins like Ethereum and Polkadot have evidently out-performed Bitcoin in the recent past. In fact, at the time of writing, according to Messari’s data, BTC’s YTD returns stood at merely 12.64% while the same for ETH and DOT was 164.25% and 88.09%, respectively. 

Source: Twitter

Even when zoomed out, Ethereum and Polkadot have fairly been able to outperform the market’s king coin over the past year. At press time, ETH and DOT boasted returns of 1449% and 464%, respectively, while the same for BTC stood at 375%. Despite recording diminishing returns, however, it should be noted that Bitcoin fared considerably well when compared to the traditional asset class. 

Highlighting the same, Morehead said, 

“Cryptocurrencies are still out-performing other asset classes by an order of magnitude (or two) throughout this period of unprecedented fiscal and monetary expansion.”

In the interview, the exec further asserted that Pantera’s hedge fund, which typically trades liquid tokens, is up by 240% this year, a figure far greater than what BTC solitarily fetched it.

Apart from Bitcoin holdings, Morehead also revealed that his asset management company remains invested in Ethereum and Polkadot. He added,

“So obviously, Ethereum is the second biggest. It is very important… We’re big investors in Polkadot, which is kind of a newer version for Ethereum.”

However, at the time of writing, Bitcoin’s social volume (1173) quite evidently managed to outnumber Ethereum (474) and Polkadot (43) by a huge degree. Ultimately, BTC is here to stay, with the exec also asserting that the ongoing correction phase is the “best time” to buy the largest crypto because of its relative cheapness.

What’s more, Morehead also stated that BTC’s price would be 213% high within a year’s time and by 2031, the largest crypto would constitute 20% of the global purchasing power. That essentially implies that Bitcoin’s market cap would be about $250 trillion and would be trading above $12.5 million dollars per BTC by 2031. 

Source: Coinstats

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With a keen eye on the Indian economic ecosystem, Lavina Daryanani's writing predominantly revolves around crypto-happenings in the Asian markets. She has a strong background in journalism and a personal inclination towards business and financial reporting

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.

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Top 10 Cryptocurrencies In June 2021 – Forbes Advisor

Forbes 27 June, 2021 - 02:18am

From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which can make it overwhelming when you’re first getting started in the world of crypto. To help you get your bearings, these are the top 10 cryptocurrencies based on their market capitalization, or the total value of all of the coins currently in circulation.

Created in 2009 by someone under the pseudonym Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.

Bitcoin’s price has skyrocketed as it’s become a household name. Five years ago, you could buy a Bitcoin for about $500. As of June 2021, a single Bitcoin’s price was over $32,000. That’s growth of about 6,300%.

Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).

Ethereum has also experienced tremendous growth. In just five years, its price went from about $11 to over $2,500, increasingly roughly more than 22,000%.

Unlike some other forms of cryptocurrency, Tether is a stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favored by investors who are wary of the extreme volatility of other coins.

The Binance Coin is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world.

Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

Its price in 2017 was just $0.10; by June 2021, it had risen to over $350, a gain of almost 350,000%.

Somewhat later to the crypto scene, Cardano is notable for its early embrace of proof-of-stake validation. This method expedites transaction time and decreases energy usage and environmental impact by removing the competitive, problem-solving aspect of transaction verification present in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralized applications, which are powered by ADA, its native coin.

Cardano’s ADA token has had relatively modest growth compared to other major crypto coins. In 2017, ADA’s price was $0.02. As of June 2021, its price was at $1.50. This is an increase of 7,400%.

Dogecoin has been a hot topic thanks to celebrities and billionaires like Elon Musk. Famously started as a joke in 2013, Dogecoin rapidly became a prominent cryptocurrency option, thanks to a dedicated community and creative memes. Unlike many other cryptos, such as Bitcoin, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.

Dogecoin’s price in 2017 was $0.0002. By June 2021, its price was at $0.32—a 159,900% increase.

Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.

At the beginning of 2017, the price of XRP was $0.006. As of June 2021, its price reached $0.92, equal to a rise of 15,233%.

Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by U.S. dollars and aims for a 1 USD to 1 USDC ratio. USDC is powered by Ethereum, and you can use USD Coin to complete global transactions.

Cryptocurrencies may use any number of blockchains; Polkadot (and its namesake crypto) aims to integrate them by creating a cryptocurrency network that connects the various blockchains so they can work together. This integration may change how cryptocurrencies are managed and has spurred impressive growth since Polkadot’s launch in 2020. Between September 2020 and June 2021, its price grew 615%, from $2.93 to $20.95.

Uniswap is an Ethereum-based token that powers Uniswap, a decentralized crypto exchange that uses an automated liquidity model for trading. This means there is no central facilitator, like a bank or broker-dealer. Instead, it’s powered by smart contracts and pooled user resources. Uniswap’s platform is open source, so anyone can use the code to create their own exchanges.

Launched in 2020, Uniswap’s price started at $0.48. By June 2021, its price was $24.60, a gain of 5,025%.

Cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to pay for purchases online without going through an intermediary, such as a bank, or it can be held as an investment.

While you can invest in cryptocurrencies, they differ a great deal from traditional investments, like stocks. When you buy stock, you are buying a share of ownership of a company, which means you’re entitled to do things like vote on the direction of the company. If that company goes bankrupt, you also may receive some compensation once its creditors have been paid from its liquidated assets.

Buying cryptocurrency doesn’t grant you ownership over anything except the token itself; it’s more like exchanging one form of currency for another. If the crypto loses its value, you won’t receive anything after the fact.

There are several other key differences to keep in mind:

If you buy and sell coins, it’s important to pay attention to cryptocurrency tax rules. Cryptocurrency is treated as a capital asset, like stocks, rather than cash. That means if you sell cryptocurrency at a profit, you’ll have to pay capital gains taxes. This is the case even if you use your crypto to pay for a purchase. If you receive a greater value for it than you paid, you’ll owe taxes on the difference.

Given the thousands of cryptocurrencies in existence (and the high volatility associated with most of them), it’s understandable you might want to take a diversified approach to investing in crypto to minimize the risk you lose money.

Multiple companies have proposed crypto ETFs, including Fidelity, but regulatory hurdles have slowed the launch of any consumer products. As of June 2021, there are no ETFs available to average investors on the market.

You can buy cryptocurrencies through crypto exchanges, such as Coinbase, Kraken or Gemini. In addition, some brokerages, such as WeBull and Robinhood, also allow consumers to buy cryptocurrencies.

Kat Tretina is a freelance writer based in Orlando, FL. She specializes in helping people finance their education and manage debt.

John Schmidt is the Assistant Assigning Editor for investing and retirement. Before joining Forbes Advisor, John was a senior writer at Acorns and editor at market research group Corporate Insight. His work has appeared in CNBC + Acorns’s Grow, MarketWatch and The Financial Diet.

3 Reasons I'll Never Own a Cryptocurrency

The Motley Fool 27 June, 2021 - 02:18am

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Own crypto? If so, I hope you've made a fortune with it. Or, at the very least, I hope you sidestepped the huge drubbing most of them -- including the biggies like Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) -- have suffered since May's highs. Perhaps you're plowing into some new cryptocurrency positions following the recent sell-off, confident that digital currencies not regulated by governments are the future.

Just for the record, though, I'm still not buying into any cryptos... now, or ever.

Sure, I've seen how cryptos like Bitcoin and Dogecoin (CRYPTO:DOGE) meet (more or less) the six critical traits of a successful currency. You're probably familiar with this list yourself. Bitcoin and its peers are durable, portable, divisible, uniform, limited in supply, and acceptable. At least some merchants accept Bitcoin as payment, and even more are entertaining the idea.

Contrary to the internet's readily found list of what qualifies money as money, however, these six characteristics oversimplify some standards of currencies, and downright omit other important attributes. Three big problems stand out from the rest as practically insurmountable.

According to the most recent figures, the United States' Federal Reserve is managing a pool of about $20 trillion worth of its government-issued money; most of that is in electronic form only.

That's a lot to be sure, but it's a finite figure. The Fed adds to and subtracts from this pool to throttle economic growth, and other nations do the same with their currencies for the same reason. That's why you have to give up U.S. dollars if you want Japanese Yen, euros, Brazilian reals, or any other foreign currency. Each country's -- and the entire world's -- amount of currency is closely controlled, which is why exchange rates change over time.

Technically speaking, because the supply of fiat-currency is limited, it's scarce... at least on a per-capita basis.

But Bitcoin (and other cryptocurrencies) are scarce too. It's true that only 21 million Bitcoins will ever be "mined," or calculated. There's no limit, however, to the total number of cryptocurrencies that can be created to compete with Bitcoin. The aforementioned Dogecoin and Ethereum are just a couple of examples of alternatives that will be embraced should Bitcoin become too expensive or too cheap to continue using.

A currency's value only holds up when it's the only one that can be used to buy and sell goods and services in a regulated economic market, or when it must be traded with other currencies that are similarly scarce.

Crypto fans will be quick to point out that cryptocurrencies are increasingly being accepted as a means of payment. For a short while, Tesla (NASDAQ:TSLA) accepted Bitcoin as a means of paying for its electric vehicles, joining a few thousand companies all over the world that offer such a convenience. And El Salvador has officially made Bitcoin legal tender within the country, becoming the first nation to take such a progressive step.

Now read the fine print. Tesla may have briefly accepted payments in Bitcoin, but the purchase price of these vehicles was always, ultimately, based on U.S. dollars. Tesla merely facilitated a U.S. dollar-based transaction using the popular cryptocurrency, as is the case with many other outfits accepting crypto-based payments.

As for El Salvador, President Nayib Bukele made clear that "The government will guarantee the convertibility to the exact value in [U.S.] dollars at the moment of the [Bitcoin] transaction." Moreover, the U.S. dollar is still El Salvador's reference currency for accounting purposes.

In other words, these commitments to crypto aren't actual commitments.

Finally, while plenty of people are willing to do business in the present using cryptocurrencies, have you noticed how nobody's making long-term deals -- like loans -- with the likes of Bitcoin or Dogecoin? Contracts that require stability and predictability for both parties still name U.S. dollars or localized currencies as the only way to convey value in the future.

This is telling, but not surprising, given just a bit of thought.

Although it's not one of the usual six attributes of a useful currency, nobody can argue that money's value should not be relatively predictable from one day to the next, or from one year to the next. Thus far, cryptos have been anything but.

Indeed, borrowers agreeing just a few months ago to make loan payments in Bitcoins (not the dollar-based value of Bitcoin, but a total number of Bitcoins, akin to the way you pay your mortgage lender back in a fixed number of dollars every month) could be in serious trouble now, as the cost/value of each Bitcoin is still nearly five times what it was just a year ago despite the recent sell-off.

It matters because wealth creation is often built on borrowed money, to the benefit of the lender and the borrower. Their unpredictable value makes cryptocurrencies downright dangerous to use as the basis for the $10.3 trillion worth of mortgage debt alone that Experian says U.S. consumers are currently shouldering. Never even mind corporate debt and credit card debt levels.

Don't misunderstand. I know plenty of people have made good money with cryptocurrencies, and more will make good money with them in the future. There's lots of volatility here to cash in on if you can time your trades right.

This volatility that so many folks love, however, is the very same volatility that prevents cryptos like Dogecoin and Ethereum from being trusted as a true, stand-alone money that replaces fiat currencies. Regulatory oversight and mining limitations could and would curb this volatility, but such oversight defeats the entire purpose of cryptos in the first place. Talk about a catch-22!

The market doesn't really see this disconnect yet, but once it does, it'll work against all their values. Good luck between now and then.

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