Goldman Sachs: Cryptocurrencies ‘Are Not an Asset Class’

Goldman Sachs held an investor call Wednesday to discuss current policies for bitcoin, gold and inflation in the context of the COVID-19 crisis. The big takeaway? The stalwart investment bank is still no fan of bitcoin or other cryptocurrencies.

A slideshow released before the call cited hacks and other losses related to cryptocurrencies as well as their use to “abet illicit activities” as some potential liabilities.

Seven of Goldman’s 35 slides mention bitcoin, but the people on the call only discussed bitcoin for roughly five minutes at the end, with no questions taken after.

In the call materials, Goldman notes that while cryptocurrencies like bitcoin “have received enormous attention,” they “are not an asset class.”

Why? The reasons include bitcoin’s inherent lack of cash flow, unlike bonds, and its inability to generate earnings through exposure to global economic growth, according to the presentation. Goldman also notes bitcoin’s volatility, citing the recent drop to 12-month lows in early March. The price spiked nearly 5% to $9,200 a few hours before the call.

Some professional cryptocurrency analysts were less than impressed by Goldman’s analysis. “The criticisms were very cookie cutter, the type you’d expect if someone just read mainstream headlines,” said Ryan Watkins, bitcoin analyst at Messari and former investment banking analyst at Moelis & Company. “It’s like they didn’t fully diligence the asset.”

Goldman’s cash flow argument was particularly odd to Tom Masojada, co-founder of OVEX Digital Asset Exchange.

“Many investments that Goldman labels as ‘suitable for clients’ do not generate cash flows and are primarily dependent on whether someone is willing to pay a higher price at a later date,” he said on Twitter.

“One could argue bitcoin isn’t backed by anything, but to liken it to a game of hot potato ignores the subjective value such a novel asset provides,” said Kevin Kelly, former equity analyst at Bloomberg and co-founder of Delphi Digital, a cryptocurrency research firm that recently published a comprehensive report on bitcoin.

Bitcoin’s current value, according to Kelly, is backed by “the demand for an apolitical speculative asset that may or may not turn out to be one of the world’s most valuable safe havens.”

The two Goldman speakers on the call, its head of research and a Harvard economics professor, said several bitcoin forks, which they refer to as “nearly identical clones,” occupy three of the six largest cryptocurrencies by market value. With this, Goldman inferred that cryptocurrencies as a whole “are not a scarce resource,” according to the presentation.

This critique is “particularly eye roll worthy,” Watkins told CoinDesk. “Forks are their own assets and have nothing to do with bitcoin.”

In its conclusion, Goldman does not recommend investing in bitcoin “on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum-oriented traders.”

“I was hoping for a more constructive call,” said Kyle Davies, co-founder of cryptocurrency trading firm Three Arrows Capital. Still, he added, “The fact that they are having this call, period, means there’s a lot of interest.”

Source: https://www.coindesk.com/goldman-sachs-cryptocurrencies-are-not-an-asset-class

CryptoNews – Todo lo que usted quiere saber sobre las criptomonedas en un solo lugar

Russia Sort Of Dropped The Hammer On Bitcoin, Crypto

Russia’s State Duma hates bitcoin, ether, ripple, you name it. If it is not the ruble, or a currency issued by a state, Russia’s government is not into it.

The government posted an updated version of their new draft law “On Digital Financial Assets” on Monday for public comment, along with it additional documents that significantly change the way cryptocurrency is regulated in Russia. Breaking the rules comes with legal penalties now. But the good news is, Russians don’t have to give up their fixation on cryptocurrencies.

The law, which is not a major shift in tune from The Kremlin or the Central Bank in regards to official positions on privately issued crypto currencies, does however prohibit the circulation of all cryptocurrencies, as well as their mining and advertising.

“Сryptocurrencies go completely into the gray zone in Russia,” says Artem Kalikhov, chief product officer of Waves Enterprise. “People who own one or two bitcoins are not at risk. But all cryptocurrency exchanges and wallets hosted on Russian sites with a .ru at the end are now at risk.”

The new law doesn’t mean Russians cannot own digital financial assets legally. The Russian Central Bank has not yet introduced the rules for inclusion in cryptos as a security. The Russia crypto market is waiting for that still.

Anatoly Aksakov, a member of the Russian State Duma, says that the country’s new crypto law won’t go into affect until the summer.

Aksakov said on Thursday of last week that people can buy and hold cryptocurrencies, but should declare it on their taxes. By declaring it, they will be given legal protections, since the cryptocurrency will be considered as a property. If they don’t declare it, they will not have any legal protections. Either way, there will be no legal penalties for owning cryptocurrencies, according to a report by RBC Russia.

“For us, at KickEX, this is bad news,” says Anti Danilevski, CEO of the new KickEX, a crypto currency exchange run by the creators of KickICO back in the intial coin offering heyday a whole three years ago now.

“We were initially regulated in the European Union, not in Russia, because we anticipated this,” he says. “It’s a pity that cool technology startups are forced to leave the country and cannot operate in their homeland. We will transfer our team to the EU now,” he says. “It’s painful for me to see that in the field of cryptocurrencies and digitalization, my country is moving backward while the whole world is moving forward.”

Aksakov said “there will be no digital currency platforms operating on the territory of Russia” — meaning no exchanges.

For now, the Russian crypto community is still chewing on the letter of the law, opening it up to interpretation.

“Digital money” is not necessarily the same as “digital assets”, and the law seems to be concerned with tokens. They will get regulated, and most likely they will be adopted as private securities one day. If so, it will one day be possible to conduct regulated security token offerings in Russia, they believe.

In that case, maybe the hammer has not busted through the crypto piggy bank.

“As far as I can see, this is a fight against cryptocurrencies, not with tokens or blockchain,” Danilevski says.

To newcomers in the crypto space, it’s worth noting that there are distinguished differences between cryptocurrencies like Bitcoin, and other digital assets issued by a tech company issuing its own coin. While they all depend on blockchain technology; blockchain technology does not require cryptocurrency.

Waves was building a blockchain trading platform for the Moscow Exchange as a beta test to see how it would work to trade crypto currencies.

“That market in Russia is developing steadily now,” says Kalikhov. “The attitude of Russian regulators is that cryptocurrencies are not allowed; and financial assets based on blockchain technology are going to be subject to regulation, but blockchain technology itself is still a go.”

Source: https://www.forbes.com/sites/sap/2020/05/28/making-the-most-of-logistics-capacity-in-times-of-disruption/#6e326072140d

CryptoNews – Todo lo que usted quiere saber sobre las criptomonedas en un solo lugar

Nigerians’ love for cryptocurrencies on the rise, as it offers cheaper ways to transfer funds

Nigerians do have a high passion for digital currencies and are among the greatest users of cryptocurrencies in the world.

In 2019 Google Trends, Lagos, Nigeria was the number one city based on online search volumes for Bitcoin worldwide. While recently, in May 2020, Arcade Research ranked Nigeria fifth globally with its 11% of connected Nigerians owning or using cryptocurrencies.

In addition, data obtained from Coinmarketcap recently revealed the  largest cryptocurrency users around the world, with Nigeria surging by 46% among its youth users. As a country, it gains stood Nigeria Up 211%.

These trends have shown that Nigerians do have a high passion for digital currencies and are among the greatest users of cryptocurrencies in the world. This is based on a major fact that Nigerians are using cryptos to avoid expensive and heavily bureaucratic money transfer systems currently available. Many Nigerians rely on remittances for their daily activities and any way of making the process effective cheaper would be of great benefit to them, this is where Bitcoin comes in

What you need to know: Cryptocurrency is basically, a digital currency based on an innovative technology called the blockchain. Its users range from small businesses to process payments, financial tech-based startups, and retail consumers that use it to send money across the border and as an investment asset.

Consequently, Asia’s arguably most popular cryptocurrency exchange listed Nigeria’s Naira to be first African currency supported on its Binance P2P platform, The Binance CEO said:

“We no longer need to bank the unbanked. We can empower them with cryptocurrency financial services directly. Nigeria is a vibrant innovation hub with a great passion for cryptocurrencies. We strive to provide the easiest cryptocurrency access and best trading service for the African community, and P2P trading is a more flexible approach, giving users the freedom to choose their payment methods and counterparty in a trade.”

However Nigeria’s central bank issued a statement about three years ago banning the use of bitcoin for transaction purposes, this statement was sent to all banks in Nigeria warning them against facilitating the trading of cryptocurrencies but that seems not to pause Nigerians growing love for cryptocurrencies.

Source of information: https://nairametrics.com/2020/05/24/nigerians-love-for-cryptocurrencies-on-the-rise-as-it-offers-cheaper-ways-to-transfer-funds/

Cryptocurrencies: 2019’s Best-Performing Asset

By Moris Beracha.-

Cryptocurrencies have become the best performing asset in 2019. Sources have indicated that, according to recent research, the digital asset of cryptocurrencies has outperformed other assets by a wide margin. Although cryptocurrencies are still below the peaks experienced in 2017, they have returned great benefits from the so-called crypto winter, when everyone thought it was the end of it as a whole.

Cryptocurrencies are still trading at least 100 % above their 2018 price levels, even during a slight downward trend —Bitcoin prices are an example of this. 2019 didn’t start off as expected, but the massive rebound due to Bitcoin, which is the first of cryptocurrencies, did much to elevate the crypto space to its current position, where it has overtaken all traditional assets that include gold and oil along with paper assets.

Ethereum, which comes second only to Bitcoin in terms of market capitalization, has made gains of up to 35 % so far, and XRP, the only cryptocurrency that everyone thought would exceed expectations, is also 25 % negative at January prices.

While this presents a mixed bag for many, it also means that the crypto coins have passed the proof of concept test by being able to stay above in terms of perception and being able to capture the hearts and minds of millennials and the world.

This has also created a scenario in which the digital asset of decentralized accounting technologies appears to be the next big thing in the financial world. The central concept of decentralized finance driven by the cryptocurrency type could be the next level of evolution for global markets.

CryptoNews – Todo lo que usted quiere saber sobre las criptomonedas en un solo lugar

Do you know how to protect your cryptocurrencies?

By Moris Beracha.-

The bitcoins and the main cryptocurrencies in the market were designed with some important security patterns, which make them quite difficult to steal.

The fundamental aspects of cryptocurrencies include protecting user privacy, avoiding asset theft and avoiding harmful practices such as double spending.

However, there are some failures that are sought out by hackers, which allow them to take over and empty some accounts, leaving losses, in some cases, of thousands or millions of dollars.

According to the Bit2me cryptocurrency and blockchain academy, about a billion US dollars in Bitcoin have been stolen to date.

They recall the thefts in Mt Gt I and II, for a total of 769,408 bitcoins; the 173,655 bitcoins seized by the FBI when closing Silk Road; the robbery known as “Pony” Botnet, which stands out due to the number of machines involved, and which amounted to a total of US $ 220,000 in various types of cryptocurrencies that currently exist.

Given the latent threats, some experts in digital security make the following recommendations to have a safe and well-protected investment:

1.- Manage your own passwords. Leave the cryptocurrencies as little as possible in the hands of third parties and adopt measures regarding the pishing.

2.- Update software, antivirus and wallets.

3.- They recommend encrypting private passwords, for example, of the purses, with passwords or pins. Also, to make it difficult to decipher them, it is convenient to use complex passwords to encrypt.

4.- The use of password managers can be interesting, but it is necessary to write them somewhere else in case you lose access to the manager.

5.- If you decide to use online services, it is advisable to use double authentication or double security level.

6.- In case you use offline wallets, the best advice is to back them up and store them in different places. If any of them allow it, it is convenient to encrypt them.

7.- If wallets are used, it is advisable to confirm if they are HD or not. In the first case, it may be enough to backup the seed. In the second, it is convenient to switch to HD wallets, and, in the meantime, back up each transaction.

With these 7 steps you will be able to keep your cryptocurrencies safe and it is always necessary to be updated regarding security information in order to make hackers work harder.

Article Published in: https://medium.com/@morisberachawuani/do-you-know-how-to-protect-your-cryptocurrencies-2519e41f8a4c

CryptoNews – Todo lo que usted quiere saber sobre las criptomonedas en un solo lugar

Cryptocurrencies are becoming a more viable payment method in Venezuela

By Moris Beracha.-

The serious economic crisis in Venezuela has forced citizens to use electronic means of payment, including cryptocurrencies.

The high prices of products and services, besides cash shortage, is driving companies and businesses every day to find ways to exchange digital assets for the purchase and sale process.

In a press release, the Church’s Chicken fast food chain informed that 10 of its 13 restaurants nationwide will accept payments using the cryptocurrency Dash.

“Given the technology development worldwide, we were interested in not only remaining as a fast food chain restaurant, but being an icon in the financial and commercial economy of the country. Also, since other payment methods are managed globally and due to the financial problem we have in Venezuela, we believed and bet that we, even if we had economic problems, had a fundamental tool to develop in a complex country,” said Church’s Chicken’s Human Resources Director Yoneila Mata.

Meanwhile, the largest department store in Venezuela, “Traki” in some of its branches has displayed posters announcing they also accept cryptocurrencies as a means of payment.

It is worth stressing that the information has been confirmed in a section on Reddit by the user “ImViTo” announcing the purchase of over 800 school items and clothes with US $ 260 in Bitcoin, which would be donated to children in need in Venezuela.

Moreover, the retail store is adverting the acceptance of Bitcoin (BTC), including Dash, Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).

Likewise, the adoption of Dash in Venezuela has exceeded 2,500 merchants, and has turned the country into the main source of cryptocurrency wallet downloads.

According to Business Development head of Dash Merchant Venezuela Alejandro Echeverría, most of the work has been done in Caracas, 95% of merchants and users are in the capital.

“It’s the right way to do it: focus on one specific place, prove the strategy and then scale it. So, since we already proved that our strategy works, we need to repeat and scale it. Also, one of the things we need to solve is the liquidity issue. For this we already set up an alliance with Bitnovo for the Dash remittance project. In this way, we will get Dash into people’s hands and Dash will flow in the economy. Repeat and scale, that’s what we need to do. Besides, we will look to onboard big supermarkets and pharmacies,” he said.

Undoubtedly, cryptocurrencies could help Venezuelans solve the cash shortage overwhelming the economy; however, hyperinflation rates thwart the massive distribution of this technology, thus benefiting few people.

https://medium.com/@morisberachawuani/cryptocurrencies-are-becoming-a-more-viable-payment-method-in-venezuela-1c8ec52f8d51

https://crypto-news.blog/