Cryptocurrencies and companies related to the development of products and services designed on the blockchain (crypto business)
Cryptocurrencies (or properly digital currencies) are an equal, decentralized and digital currency whose implementation is based on the principles of cryptography to validate transactions and the generation of money itself. Like any digital currency, it allows you to make online payments securely.
Most of the cryptocurrencies are designed to gradually introduce new units of currency, placing a ceiling on the amount of money that will be circulating. This is done both to imitate the shortage (and value) of precious metals and to avoid hyperinflation. Compared to ordinary currencies managed by financial institutions or held as cash, cryptocurrencies are less susceptible to confiscation by law enforcement agencies. The transactions carried out with the cryptomete offer a good level of privacy, thanks to the pseudonymy characteristic of the users. The level of privacy varies according to the protocol used, and is total for those cryptocurrencies (such as Monero, Dash, Zcash) that use the “zero knowledge” validation system, thanks to which no information of the parties is exchanged. Source Wikipedia.
From the issue of the first cryptocurrency, namely Bitcoin (symbol: ₿; code: BTC or XBT) is a cryptocurrency created in 2009 by an anonymous inventor, known under the pseudonym of Satoshi Nakamoto, who developed an idea presented by himself on the Internet at the end of 2008. By convention if the term Bitcoin is used with the initial capital letter it refers to the technology and to the network, while if lowercase (bitcoin) refers to the currency itself.
Bitcoin is not classified as a currency by finance experts, but as a highly volatile trading medium. Unlike most of the traditional currencies, Bitcoin does not use a central body or sophisticated financial mechanisms, the value is determined solely by the demand and supply lever: it uses a database distributed among the network nodes that track of transactions, but uses cryptography to manage functional aspects, such as the generation of new currency and the attribution of bitcoin ownership. Source Wikipedia.
Do you think that this currency in its debut, in 2009, was about 0.01 $. Now, February 18, 2018, 13:57 hours 10.530 $ share. Who had the opportunity to invest, in that case of betting, on the appreciation of a new form of financial value, today would have a huge capital.
As happened to that Norwegian boy, Christopher Koch, who in 2009 when he was a student bought 5000 bitcoins for $ 24, he forgot about it and remembered it in April 2013, when they were worth $ 1.1 million. Imagine if you had kept them until today!
In seven years, the value of Bitcoin has increased by 880,000 times. If at that time an investor had decided to invest five euros in about 2,000 Bitcoins, today he would have about 4.4 million euros more on the bank account. If it had invested € 1,200 in 480,000 Bitcoins, the investor would have today at least € 1.1 billion.
But the story of Bitcoin is the first cryptocurrency appeared on the world stage, but now as I write the last sentences, February 18, 2018, the digital currencies existing on the site https://coinmarketcap.com/ are equal to 1.545!
Ethereum, the second cryptocurrency for capitalization after Bitcoin, quoted on February 17, 2016 $ 4.25 and now, February 18, 2018, a listing of $ 923 with a revaluation in a year of 21.618%. Unbelievable!
Of course, cryptocurrencies are not the solution or the way to get rich in a short time without risk.
In the specific case, thanks to the great success achieved by the major cryptocurrencies, the exchange (buy and sell platforms of digital currencies, such as Bitfinex, Binance, Kraken and Coinbase, which exchange Bitcoin against US dollar or Euro (Kraken), have spread.
Through these “exchanges” it is possible to buy Bitcoin directly or other cryptocurrencies, either by speculation or by a cassettista. Or again, to diversify risk, and opportunity, in an atypical but genuinely alternative value to all other financial instruments existing on world financial markets.
From Monday December 11, 2017 it’s possible to exchange Bitcoin-based futures on the Chicago Stock Exchange (CBOT) For the first time it is possible to exchange securities related to Bitcoin, but also Ethereum and Litecoin have their references.
In addition, it is also possible to purchase CFDs, ie contracts for differences, which have as underlying Bitcoin (BTC), Ethereum (ETH) or Ripple (XRT), on major financial platforms such as AVA Trade, BD Swiss or Interactive Broker. This type of investment involves a high risk investor profile and with sums that you can be lost.
Some important investment funds have also recently launched the possibility of investing in Bitcoin through an ETF that represents a direct correlation with Bitcoin, trying to double the daily trading moves on cryptocurrencies.
Finally, some important managers have launched on the market innovative and alternative forms of management such as the one called “crypto business”, that is a fund linked to companies that invest in services and products related to cryptocurrencies and blockchain technology that governs them. A further possibility of medium-long term investment with a high growth potential.
I also inform you that, in Switzerland, some banks are already equipped to offer the opening of the double-valued managed savings account, Bitcoin / USD, Bitcoin / CHF and Bitcoin / Euro.
According to a forecast for 2018 by Tom Lee, one of Bitcoin’s first Wall Street investors of Fundstrat Global Advisor, the value of Bitcoin could reach a price of $ 25,000 by the end of the year!
LongForecast analysts expect a gradual appreciation during this 2018 year with peaks close to $ 35,000 in November 2018 and then close the year close to $ 32,000.
Do not miss, of course, the detractors and catastrophists, who often hide behind big speculators such as Jamie Damon, CEO of JP Morgan who after having debuted last September, 2017, that Bitcoin was a scam and then, has retracted everything and bought a full of hands for its customers for over 73 million USD!
I certainly can not say that Bitcoin and the other cryptocurrencies are the solution to become rich.
But someone has already become, in spite of himself. And in the near future, could we see similar situations? Very unlikely but certainly an appreciation of values is possible.
And when it comes to cryptocurrencies, margins are unlimited.
Posterity will judge.
Valerio Rossi, financial analyst and economist
Lugano, February 27, 2018.