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Survey: Retirees, Younger Investors Should Consider Long-Term Crypto

Survey_ Retirees, Younger Investors Should Consider Long-Term Crypto

One truth all too well hard to dispel is the fact that the older generations will always remember the impact of the last financial crisis, as well as the fear of it happening again. And while Bitcoin and the Blockchain may be making waves in their own ways, most American retirees can hardly picture themselves owning a Bitcoin without being reminded that if it’s too good to be true, it probably is.

This probably summarizes the survey carried out by precious-metal resource website Gold IRA Guide, as it discovered that more than half of its respondents said they know about Bitcoin but aren’t interested in investing. The source blames it on proper education on Bitcoin, its technology and its function as a currency. However, it’s truly hard not to be cautious, especially when Bitcoin’s volatility is nothing like anyone on Wall Streets have experienced even with the most volatile of stocks. And so as an investment, it probably doesn’t signal much safety. Okay, granted maybe gold may have been a little crazy too at some point.

Bitcoin volatility vs other assets

If history has taught anything, it is that not having a radical investment in one’s diversified portfolio can make growth rather slow, but even that is a double-edged sword. Still, a recommended 1% investment of an entire hedge funds capital into Bitcoin seems like a logical bet. And while it appears small, the nature of Bitcoin’s volatility can make a hugely positive impact when the price goes up and minimal when it goes down – after all, it’s just 1 percent of the entire portfolio.

But it appears even those retirees willing to invest in bitcoin do not know how. Perhaps a proper education is long overdue here.

Recently, a crypto enthusiast and host of financial podcast Evolvement, Michael Nye, expressed his excitement when his father paid off a golf bet he lost to a 70-years old neighbor using Bitcoin.

My Dad recently lost a golf bet to his 70 year old neighbor.

Instead of asking for fiat, my Dad’s friend asked for $BTC.

So my Dad set up a @Coinbase, bought some Bitcoin, figured out how to use a public key, and set $300 in #Bitcoin to his friend.

I’m so fuckin’ proud. ☺

— Nye (@MrMichaelNye) April 20, 2019

Extrapolating the findings of the survey, the 70-years old neighbor may as well belong to the “smallest group of respondents, a mere 2.7 percent, claim that they own at least some Bitcoin.”

The survey concluded suggesting “retirees and younger investors alike should seriously consider long-term investing in cryptocurrencies,” as well as an argument for Bitcoin :

Firstly,

“It’s a government hedge. Their worth has little to do with the constantly shifting fiat environment. This is why many analyst observers and investors view the digital currencies as contrarian assets like gold.”

Secondly,

“It offers another form of retirement asset diversification. As the digital assets keep increasing their adoption and rising higher in value over time, this will represent a once in a lifetime opportunity for investors wishing to substantially increase the value of their retirement savings.”

Remember? A radical investment within a portfolio.

Thirdly,

“It provides massive longer-term growth potential. This is why Bitcoin is ideally suited for retirement planning, as this future planning is built entirely on the longer term.”

Yes, risky as it may appear, still having a little of it as a means of diversification only makes sense even for the most risk-averse.

A recent assessment done by Morgan Creek warns of high-risk exposure of pension funds. Gladly, the millennial generation is more dynamic and shifting focus away from proven traditional investment tactics into cryptocurrency aided retirement plans. Testing new verticals and expanding investment horizons is just what the digital asset ecosystem is about.

 

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US Crypto Regulations Between a Rock and a Hard Place

US Crypto Regulations Between a Rock and a Hard Place

In the midst of the delay for the approval of Bitcoin exchange-traded fund (ETF) applications after several rejections, and current uncertainty regarding regulatory framework, US Securities and Exchange Commission (SEC) Commissioner Hester Peirce provided insights into the matter as an opportunity for better industry development.

Last week, Heister made comments on the issues of state regulation at the University of Missouri School of Law where she opined that “entrepreneurship and innovation do not have the happiest relationship with innovation”, which may be the core reason why crypto ventures have suffered in the hands of most regulatory systems.

The SEC’s clamp down on non-compliant ICOs (issuing securities disguised as utility tokens), its rejection of Bitcoin ETF applications, and somewhat deliberate delay in providing a regulatory framework as regards the industry may have a more logical than malicious intent behind it. Innovations, while they make life easier most of the time, always come outside the norms, especially those of the regulatory system and often times drives regulators to accept changes despite skepticism.

“Regulators, for their part, tend to be skeptical of change because its consequences are difficult to foresee and figuring out how it fits into existing regulatory frameworks is difficult,” she said, implying that it’s not an easy task for the SEC to reject what seemingly looks like a financial innovation in an attempt to weigh and understand the situation correctly.

The last financial crisis has made it easier for trust issues to thrive, especially on the part of the regulator, given that some ascribe the crisis to be due to “financial innovations”. Peirce pointed out that “…every innovation — even one that almost everyone agrees is good — carries with it some risk”, something currently agreeable with the cryptocurrency system.

Accordingly, since innovations can be unpredictable, so caution must be applied when drafting regulatory frameworks, especially for a new industry such as blockchain and its underlying assets. Peirce continues by saying that “as regulators, therefore, we must allow innovation to proceed, even as we put in reasonable safeguards and watch for unanticipated consequences”, and still, it has to come with no comprise to the securities laws in place. It behooves one to imagine where the true line of trade-offs will be drawn, seeing that the core structure of the crypto industry lies in decentralization, which by implication makes it harder for any regulator.

Still, the regulatory polarity has created distinct shades of gray areas around the world. With the Chinese government adamant with its crypto ban, the Indian government chose a rather bizarre stance — first with a ban on banking services to crypto related ventures, and then planned to develop a state-backed cryptocurrency, which it shelved later on. Meanwhile, other jurisdictions have launched out to attract the “rejected”, by providing a safe haven to crypto ventures, and a few nations are developing their own state-backed crypto to augment their economies.

In the UK, the principal regulator has extended an invitation to the public through its consultation paper to better assess a possible way forward for industry regulations. It said in late January: “We are consulting on Guidance for crypto assets to provide regulatory clarity for market participants.” Meanwhile, in the Middle East, the United Arab Emirates (UAE) has also hinted on possible ICO regulations to be introduced later this year.

So far, the crypto industry has had checkered developments and have more recently been in a stalemate (regardless of minor spikes in market dynamics), and many have been waiting eagerly for the next bull-run trigger. It’s basically what most crypto enthusiasts talk about these days, consequently, dialing down tech innovation, development and mass adoption of crypto products — at least, for the innovations that they stand for — and are relying on adjuncts gunning for more institutional involvement that would supposedly propel the market further.

While the US SEC does recognize the potential this innovative technology may provide, as Peirce says. “the United States has benefited greatly from the relative importance of non-bank financing”, supposedly placing them on par with the capital market. This further buttresses the point made by SEC boss Jay Clayton who viewed crypto as a “promise for adding efficiency to our [capital] marketplace”.

However, the regulatory watchdog maintains a stance of balance that involved protecting the interests of investors as market volatility, manipulation, hacks, frauds, exchange illiquidity, and a host of other unforeseen consequences from the unstandardized cryptosystem remain legitimate concerns.

Perhaps, when the SEC, as well as other financial regulators, have finally regulated the industry, these problems will be adequately tackled. Meanwhile, the regulator itself is waiting for the maturity of the industry marked by improved oversight on market surveillance, definitive asset classification, and airtight custody solutions, before embracing the industry wholeheartedly. But it still remains to be known at what cost?

The good news so far is that earlier this year, a bill was introduced in the House to help with asset classification, that partly takes care of one problem. Nasdaq introduced its SMARTS Market Surveillance solution which may have provided precedence in the direction of play towards controlling market manipulation. On the subject of custody solutions, crypto ventures are urged to ensure best cybersecurity practices. Fidelity, Coinbase, Gemini, BitGo, Ledger, ItBi and even Goldman Sachs are among many reportedly racing toward that end.

Peirce’s overall sentiment in a manner of speaking, perhaps one shared on both sides of the tussle is that the delay in drawing clear lines may actually allow more freedom for the technology to come into its own.

 

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