Should I Buy Bitcoin? — Switzerland’s Largest Bank UBS Provides Guidance on BTC Investing – Markets and Prices Bitcoin News
Switzerland’s largest bank, UBS, has published guidance for clients about investing in bitcoin. The bank answers some important questions, such as whether one should buy bitcoin and other cryptocurrencies and whether bitcoin can be used to diversify portfolios.
UBS published a detailed report about bitcoin last week. It answers some questions that the bank is currently discussing with its clients, explained the report authors, including the firm’s chief investment officer of global emerging markets, Michael Bolliger. UBS Group is currently Switzerland’s largest bank by total assets, followed by Credit Suisse Group.
The first question UBS answered in its report entitled “The rise of bitcoin” was “Should I buy?” The report explains that “Many clients are asking whether they should invest in bitcoin and other cryptocurrencies,” adding:
Our general guidance is this: While we wouldn’t rule out further price increases, we’re somewhat skeptical of any essential real-world use cases, which makes it hard to estimate a fair value for bitcoin and other cryptocurrencies.
“We are also cognizant of the real risk of one losing one’s entire investment. Investors in cryptocurrencies must therefore limit the size of their investments to an amount they can afford to lose. We also suggest thinking about an exit strategy,” the report authors elaborated.
While admitting that “Indeed, prices [of cryptocurrencies] could continue to climb in the near term,” the authors warned that “There is little in our view to stop a cryptocurrency’s price from going to zero when a better designed version is launched or if regulatory changes stifle sentiment.”
Another important question UBS answered was whether bitcoin can be used to diversify portfolios. This subject “has become a key argument for investors,” the report emphasizes. Noting that “correlations spiked substantially in 2020 with the outbreak of the pandemic, but have normalized since,” UBS explained:
While empirical evidence is mixed, bitcoin has had an overall low correlation to a wide range of other asset classes, including bonds, stocks, the Swiss franc, and gold.
The bank also highlighted that both institutional and retail investors are buying bitcoin. The reasons for buying include bitcoin being an attractive investment opportunity, a hedge against depreciating fiat currency, and FOMO.
What do you think about UBS’ advice on bitcoin investing? Let us know in the comments section below.
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- 3 Best Cryptocurrency To Invest In 2021 | Bitcoin News Today | top altcoins buy now
- Bitcoin Was Not a Response to the Financial Crisis of 2008
- Bitcoin Price Drops More Than 11% on Claims of Double Spend Vulnerability
- Will bitcoin ever be a viable currency? | Australia news
- Bitcoin Consolidates Below $33K, Why BTC Could Attempt Bullish Break
3 Best Cryptocurrency To Invest In 2021 | Bitcoin News Today | top altcoins buy now
3 Best Cryptocurrency To Invest In 2021 | Bitcoin News Today | top altcoins buy now
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Bitcoin Was Not a Response to the Financial Crisis of 2008
Maybe it’s just that winter is dragging on, but I find myself getting increasingly irritated with mainstream reports about Bitcoin that say it was a result of the financial crisis.
It wasn’t, and that matters.
First, let’s look at why it wasn’t, and then I’ll explain why this misunderstanding bothers me.
Bitcoin’s pseudonymous creator Satoshi Nakamoto started working on the Bitcoin white paper in early 2007, over a year before the financial crisis hit mainstream markets.
In early 2007, the subprime mortgage industry was collapsing, but even lifelong finance insiders didn’t foresee the scale of what was to unfold. As Satoshi worked, bankruptcies and bank tremors would have been making the headlines, but there is no indication this added to his* urgency.
(*We don’t know that Satoshi was a “he,” but to avoid linguistic clutter I’ll use that pronoun throughout.)
By the time Satoshi uploaded the white paper to a cryptography mailing list in October 2008, the markets were in full meltdown, the U.S. government was taking over parts of the financial ecosystem, and central banks around the world were dropping interest rates and printing money.
The genesis block, mined by Satoshi in early January 2009, included the text of a headline from that day: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Many have taken this as proof that Bitcoin was created in reaction to the crisis. This reveals a lack of understanding of how much work went into the design of Bitcoin, as well as the long history behind the idea of peer-to-peer finance.
The confusion is also potentially damaging to the Bitcoin narrative.
Why? Because it misrepresents the intentions of the army of cryptographers that had been working on a decentralized electronic cash solution for decades. It diminishes the bigger picture.
Satoshi was not reacting to an event, just as those on whose shoulders he stood weren’t planning for a specific circumstance. They were all trying to solve the fundamental issue of financial sovereignty.
While we do not have (that I’m aware of) evidence of Satoshi’s thoughts on the financial system from before the publication of the Bitcoin white paper, shortly after the genesis block was mined, Satoshi wrote:
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
Satoshi was not referencing the financial mess at the time, even though its fallout was loud and hard to ignore. He showed signs of bigger thinking.
And as for the genesis block itself, maybe the timing and choice of embedded text was intentional, or maybe it was a coincidence – we’ll never know for sure. Either way, a point was made.
That point was a dig at how politically beholden the banking system had become. It highlighted the lack of solid financial structure and the diminishing trust in institutional solvency. It essentially represented the financial crisis that was unfolding. But it was an example rather than a smoking gun.
The financial crisis was not the reason for Bitcoin. It was a symptom of the reason for Bitcoin. And if we continue to hear claims that the crisis was the cause, we will start to believe that Bitcoin is a new solution to a relatively new problem.
It isn’t. It’s a long-awaited solution to a long-standing problem.
If we continue to think of Bitcoin solely in the context of financial crises, we could start to believe that the need for it will diminish as the painful adjustments recede into the mists of time.
It won’t – the technology can’t be put back into its bottle. Nor can the growing awareness of the vulnerabilities inherent in the financial system on which we all rely.
Bitcoin has managed to spread ideas that were previously the purview of an arcane mailing list, and in so doing, has changed the way we look at our financial rights, our data, even our identity. True, the timing of Bitcoin’s emergence helped with that spread, and the recent departure from traditional monetary policy has accelerated it. Financial privacy, seizure resistance and fiat debasement are just some of the concepts that the crypto market price swings have pushed into conversations that now reach even the hallowed halls of traditional finance.
But Bitcoin was not created to fix crises. It was created to give people a choice.
Let’s stop treating it as a reaction to a specific situation, and recognize that Bitcoin is a technological evolution of a process that started decades ago.
Let’s also give credit to a group of thinkers who realized from way back where centralization of finance and our economy could eventually lead.
After a momentous week in which COVID-19 briefly stepped back from the headlines to give space for us spectators to appreciate hope, rhetoric and a peaceful transfer of power, it feels good to take a breather and contemplate the scope of potential change ahead.
It’s not just that market infrastructure and institutional interest are growing in leaps and bounds (more on that below). It’s also that many of the regulatory authorities that determine the framework of financial markets, custody and value transfer are changing guard.
Gary Gensler will be the next chairman of the U.S. Securities and Exchange Commission (SEC). This possibility was reported last week, and was flagged as potentially very good news for the crypto industry, as Gensler has not only researched and often spoken in public about crypto assets and blockchain technology – he also has taught a course on the subject at MIT.
Chris Brummer, a Georgetown University law professor who runs the annual D.C. Fintech Week conference, edited a book on crypto assets and hosts the excellent Fintech Beat podcast, which often features compelling crypto content, may be the next chair of the Commodity Futures Trading Commission (CFTC), according to Reuters.
According to the Wall Street Journal, Michael S. Barr, a former U.S. Treasury Department official and onetime member of Ripple’s board of advisers, is likely to become the next Comptroller of the Currency.
This almost seems like a crypto-savvy trifecta of financial regulators which, as my colleague Nik De hinted at in his new crypto regulation newsletter The State of Crypto, is almost too much to ask for. It doesn’t guarantee crypto-friendly legislation, but at least it means the discourse will be relatively well informed.
· “While it is nigh on impossible to forecast an expected return for bitcoin, its volatility makes the asset almost ‘uninvestable’ from a portfolio perspective.” – Barclays Private Bank chief market strategist Gerald Moser, talking to Financial News. He goes on to claim that the current bull run has been driven by retail investors rather than institutional money, which is a bewildering interpretation of the data.
· Guggenheim Partners Chief Investment Officer Scott Minerd, who recently said that he thought bitcoin’s fair value could reach $400,000, has been looking at the BTC charts and now believes that the cryptocurrency could be in for a sell-off down to $20,000.
· Bill Miller featured bitcoin in his Q4 income strategy letter, and talks about his fund’s investment in the MicroStrategy convertible security. “The world is ruled by fat-tail events, or seemingly improbable occurrences that have an outsized impact, and all indicators so far point to Bitcoin being one.”
· “You know what, if you won the lottery – Yes, I’m gonna say it: 5% in bitcoin.” – Jim Cramer, host of the Mad Money program. Cramer apparently sees bitcoin as an “important new store of value.”
BlackRock, the world’s largest asset manager with $7.81 trillion under management, appears to have granted at least two of its funds (BlackRock Global Allocation Fund Inc. and BlackRock Funds V) the ability to invest in bitcoin futures, according to prospectus documents filed with the U.S. Securities and Exchange Commission. TAKEAWAY: For now, the funds will only be able to invest in cash-settled bitcoin futures, not actually hold bitcoin. And we shouldn’t assume that BlackRock will be betting on upside – it could use bitcoin futures to express bearish positions. But this move does echo comments made last month by CEO Larry Fink, when he said bitcoin could possibly “evolve” into a global market asset. And it is encouraging to see official acknowledgement that the world’s largest asset manager has invested resources in understanding the market.
If any of you heard some alarming chatter about a double-spend on the Bitcoin network (when a certain amount of BTC is spent twice, which in theory is impossible), here is an explanation of what really happened and how it’s nothing to worry about.
While bitcoin is still usually the first crypto investment for professional investors, due largely to its relative liquidity and range of onramps and services, Ethereum’s native token ether is starting to attract more institutional attention. A report from Fundstrat Global Advisors posits that the wide array of potential use cases for Ethereum gives ETH the best risk/reward scenario in the market, and believes that the asset could rally up to $10,500. TAKEAWAY: ETH has outperformed BTC for 8 of the past 12 months (and looks set to do the same for this one), yet it is currently below its all-time high (ATH), while BTC left its ATH in the dust three months and 52% ago (at time of writing). It is not easy to directly compare the two, however, since the underlying technology, use case outlook and risk profile are very different. We’ll be following this closely, so watch this space. (See our report on Eth 2.0 for more detail on its upcoming protocol shift.)
New U.S. Treasury secretary Janet Yellen got off on the wrong foot with the cryptocurrency community by claiming that bitcoin was mainly used for illicit financing. This happened on the same day that blockchain forensics firm Chainalysis published a report that shows that cryptocurrency-based criminal activity fell to 0.34% of total transaction volume, down from 2.1% in 2019. TAKEAWAY: That doesn’t look like “mainly” to me. Thankfully, she rectified shortly after in a written response to the Senate Finance Committee, stressing the need to “encourage their use for legitimate activities while curtailing their use for malign and illegal activities.” That sounds more reasonable.
London-based crypto liquidity provider Wintermute has raised $20 million in a Series B funding round, led by Lightspeed Venture Partners, with participation from Pantera Capital, Sino Global Capital, Kenetic Capital, Rockaway Blockchain Fund, Hack VC, DeFi Alliance and Fidelity-affiliated Avon Ventures. TAKEAWAY: Most of the meaningful raises we’ve seen recently have been for market infrastructure firms, which points to strong under-the-surface development and increasing sophistication from crypto markets, and expectations of significant growth in service demand.
Sen. Mike Flood (R) of Nebraska has introduced two bills that would allow the state’s banks to offer custodial services for digital assets. TAKEAWAY: Several states are likely to follow Wyoming’s lead in making their jurisdictions crypto asset-friendly. This will not just attract new businesses or retain existing ones in an industry with growth potential. It could also serve to attract investment funds, and enhance the opportunities for interstate crypto commerce and business deals.
Market research commissioned by trading platform eToro, which surveyed 25 large institutions in Q3, revealed that interest in crypto markets from pensions and endowments is increasing. TAKEAWAY: This would be a big shift if it materializes, as pensions and endowments are traditionally risk-averse investors. Crypto markets, as we were reminded this week, are not for the risk-averse. It’s a relatively small sample, and so can’t be taken as indicative of pending inflows, but it does hint at a shift in market perception.
According to a Deutsche Bank survey of market professionals, over 50% believe that BTC is at a 10 on a 1-10 “bubble scale”, and is likely to halve in value over the next 12 months. TAKEAWAY: Is this a sign of the market getting tired? Or, a sign of growing awareness amongst people who have yet to do research?
Digital asset management firm CoinShares has launched an exchange-traded bitcoin product (ETP) on Swiss stock exchange SIX. TAKEAWAY: It is becoming increasingly obvious how much livelier in terms of variety the listed crypto product landscape is in Europe vs the US.
Valkyrie Digital Assets filed an application this week for a bitcoin exchange-traded fund (ETF), the Valkyrie Bitcoin Fund, which would be listed on the New York Stock Exchange. TAKEAWAY: This is the second bitcoin ETF filing we’ve seen in the past three weeks, and is probably the first of many in 2021. With Gary Gensler as nominated head of the U.S. Securities and Exchange Commission, expectations are rising that the industry will see a bitcoin ETF approved this year.
Wall Street CFOs are more wary of putting company funds into bitcoin after last week’s 30% price plunge, according to Bloomberg. TAKEAWAY: As they should be. CFOs putting company reserves into BTC just for the headlines and possible share price bump are being irresponsible. BTC has a place on balance sheets, but it should be a cautious one. Microstrategy, the software company that kicked off this trend in August of last year, is placing conviction above caution, however, and revealed this week that it has added another $10 million worth of bitcoin during the dip.
Bitcoin Price Drops More Than 11% on Claims of Double Spend Vulnerability
Though Bitcoin price dropped today, the coin is up almost 30% in the last 30 days.
Bitcoin price suddenly dropped more than 11% after the crypto community was hit with news of double-spend vulnerability of the Bitcoin public ledger. Notably, Bitcoin dropped below the $30k level to trade around $29k but has stabilized slightly above $31k according to Coinmarketcap.
Bitcoin price drop affected almost the entire altcoin market. For instance, Ethereum dropped more than 13% to trade around $1137.73 at the time of writing. Others like Litecoin and Bitcoin Cash followed suit but had stabilized at the time of writing.
A report by BitMEX noted that there might have been a double-spend of approximately 0.00062063 BTC ($21). The claim spread like wildfire leading to fear in the crypto market on the newly identified bitcoin vulnerability.
However, BitMEX later clarified that it was not a double-spend but rather two blocks mined simultaneously. Ripple CTO David Schwartz explained it to be a conflict in the transaction that was later on solved. “Someone mined a bitcoin block that had a transaction in it, but that block was later replaced by another block that had a conflicting transaction in it. So if you relied on that first transaction (delivering some good because you thought you got bitcoin), you could have lost $22,” Schwartz said.
Inasmuch it was a FUD, the damage was already done as millions of trades were liquefied. Analysts worry that if the asset does not long from the current position, further bleeding could occur in the coming weeks. Meanwhile, Bitcoin volatility is said to spike during bull rallies and some analysts think the asset might be doing what it does best.
“Being Bitcoin, a 10% range intraday is a mere flesh wound to the digital asset, in a world where tradable versus investible is seriously blurred,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte. The digital coin could “easily be $35,000 again tomorrow or could drop through $30,000 and test notional support at $27,000.”
Notably, let not the recent retrace delude you, Bitcoin is up approximately 29.8% in the last 30 days. Besides, the asset gained more than 254% last year. From a technical point of view, Bitcoin price is still making higher highs and higher lows on the higher time frame. Mind you, Bitcoin price 200 moving average is still indicating the asset is on the uptrend.
Institutional investors continue to scramble for the asset with withdrawals from exchanges at their all-time high. Meanwhile, Grayscale Bitcoin Trust continues to record daily highs according to the daily updates.
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Will bitcoin ever be a viable currency? | Australia news
- This episode first aired on Today in Focus, the Guardian’s international every day information podcast
The Guardian’s UK expertise editor, Alex Hern, talks to Rachel Humphreys concerning the cryptocurrency bitcoin, which permits folks to bypass banks and conventional cost strategies. It makes use of a blockchain – a shared public document of transactions – to create and observe a brand new kind of digital token, one that may solely be made and shared in response to the agreed-upon guidelines of the community. At its coronary heart, bitcoin is an enormous database of who owns what, and what transactions had been made between these homeowners. However not like a standard financial institution, there is no such thing as a central authority operating that database.
Bitcoin’s worth has lately soared and the UK financial regulator, the FCA, is concerned that crypto funding corporations might be overstating potential payouts or understating the dangers from investing in bitcoin and merchandise associated to the digital forex. It’s a newer and comparatively flippantly regulated market, and customers are unlikely to have entry to state-backed compensation if one thing goes unsuitable. There has additionally been a increase in bitcoin scams.
Alex tells Rachel why he thinks bitcoin’s use is restricted and discusses whether or not it needs to be banned.
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Bitcoin Consolidates Below $33K, Why BTC Could Attempt Bullish Break
Bitcoin price is slowly recovering above $32,000 against the US Dollar. BTC is likely to face a strong selling interest near $33,500 and $34,000.
After forming a base above the $30,000 level, bitcoin price corrected higher. BTC managed to clear the $31,200 and $31,500 resistance levels to move into a short-term positive zone.
There was a break above the 23.6% Fib retracement level of the downward move from the $37,892 high to $28,809 low. It is now trading just above $32,500 and the 100 hourly simple moving average. There was also a break above a declining channel with resistance near $32,650 on the hourly chart of the BTC/USD pair.
Bitcoin price is approaching the $33,000 resistance level. The next key resistance could be near $33,500 or the 50% Fib retracement level of the downward move from the $37,892 high to $28,809 low.
Source: BTCUSD on TradingView.com
Any further gains could lead the price towards the $34,000 resistance zone. To move into a positive zone and start a steady increase, the bulls need to gain strength above $34,000 and $34,500 in the near term. The next major resistance is near the $35,800 level, where the bulls might take a stand.
If bitcoin fails to recover above $33,500 and $34,000, there is a risk of another decline. An initial support on the downside is near the $32,000 level.
The first major support is near the $31,250 and $31,200 levels. A downside break below $31,200 and a follow up move below $31,000 may possibly start a strong decline towards $28,500 in the coming sessions. It seems like the price might consolidate in a range below the $34,000 resistance level before it makes the next major move.
Hourly MACD – The MACD is slowly gaining momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now recovering towards the 40 level.
Major Support Levels – $30,000, followed by $28,800.
Major Resistance Levels – $30,800, $31,000 and $32,800.
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