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Cryptocurrencies versus a financial crisis

George Miller

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Cryptocurrencies versus a financial crisis
Image Source: ripplecoinnews.com
Reading Time: 4 minutes

 

The Crypto Market has not yet passed the most important test

Bitcoin, the most popular cryptocurrency, has existed for over 9 years, although the cryptocurrency market started to gain most popularity last year. However, this period of time is not that long enough to be able to assess how the cryptocurrency market will behave in the long term and if it will grow, as its supporters expect. All this is because the cryptocurrency owners did not come into contact with the key factor that allows to assess the durability of any given market – the financial crisis.

How will Bitcoin and other cryptocurrencies behave in the face of the financial crisis?

We can distinguish two extreme approaches to this issue. People counting on the fact that the cryptocurrencies will replace FIAT currencies in the future and completely change the financial system believe that the global financial crisis will be a period of bloom for the cryptocurrencies. On the other hand, sceptics believe that the crisis will be very acute for this market – there will be drastic falls and a large part of the projects may not survive. The latter group includes American investor James Chanos, known for catching assets that can be earned from short selling.

Chanos warns that people counting on the fact that the cryptocurrencies purchased by them will perform the function of a value storage like the real estate market during the crisis will be very disappointed. In his opinion, periods of turbulence on the markets are the worst time to keep the cryptocurrencies. He even said that it would be a much better idea to keep… food.

“The last thing I would like to have when everything falls asleep is Bitcoin,” said Chanos in an interview with the Institute for New Economic Thinking.

According to Chanos, cryptos are only a speculative game, hidden under the slogan of a revolution of the traditional financial system. He doesn’t openly call Bitcoin fraud, but points out that some projects may be so.

The bull market is the source of the success of the cryptocurrencies?

While the usability of cryptocurrencies is a subject of discussion, Chanos draws attention to an important factor that has made investing in cryptocurrencies so popular. This is a certain repeatability of behaviour, correlated with cycles on financial markets. It’s all, of course, about the rises and the downturns, and their impact on the financial decisions.

Bear markets have it to each other that they significantly increase the level of risk aversion. During the bull market, this level of risk aversion decreases. The problem, however, is that this decline does not stop at reasonable levels. Long-lasting rallies make investors willing to take more and more risks and even make investments that they would normally consider inappropriate. As a result, a prolonged bull market is an ideal environment for the development of speculative bubbles or dishonest investment patterns (e.g. financial pyramids or ponzi schemes). This is also facilitated by low interest rate levels, which discourage people from holding savings on secure deposits. Investors in such conditions are more likely to choose riskier investments in order to achieve a satisfactory return. The gambling and sports betting industry is thriving in these conditions with sites like the Sportsbet offering traditional betting but with Bitcoins. This increases the risks associated with gambling tremendously – when we gamble using FIAT currencies we know that when we win 400$ at blackjack, we will come home with 400$ (minus possible casino fees). But when we gamble with cryptos? We can come home with our 400$ in BTC and wake up next morning to 800$ or 200$. This is indeed a silent revolution, and not only the gambling and betting sites know that.

A repetition of the Internet boom?

Chanos reminds us that the bull market ended at the beginning of the 21st century with a dotcom bubble. Just as the dotcom boom contributed to the proliferation of companies connecting to the Internet industry, so now, like mushrooms after the rain, new cryptocurrencies are emerging, and companies are appearing on the stock exchanges trying to gain publicity thanks to the link with blockchain technology. The bear market of the beginning of the last decade ended with strong discounts of the leading entities from the dotcom sector and cleared the market of smaller players and entities impersonating Internet business.

Will the same fate await the cryptocurrencies and the ICOs? Such a scenario seems plausible. As in the case of grants, the largest projects such as Bitcoin or Ethereum may remain on the market, which on the one hand will lose out on a general sale, but some of these losses will be compensated for by the capital fleeing from smaller projects.

Why should the crypto owners lose money during the financial crisis at all?

If we treat the cryptocurrency market as other investment markets, the risk parameter should be a key one. During financial crises, the highest outflow of capital is recorded in high-risk markets. This is transferred either to cash or to low-risk markets (so-called safe harbours).

The cryptocurrency cannot currently be considered to be either a cash equivalent or a safe haven. Globally, traditional currencies are preferable to cryptocurrencies and this should not be expected to change until the next financial crisis. It should be remembered that the capital circulating on the financial markets is mainly institutional capital, i.e. still sceptical about cryptos.

To put it very simply, all of this is primarily about the already mentioned risk parameter – cryptocurrencies are characterised by a much higher investment risk than financial instruments that do not use leverage. On the one hand, it gives a chance to achieve high rates of return (as in the previous year), and on the other hand, it poses a threat of significant slips, as in this year. The financial crisis and the accompanying economic collapse are making risk aversion drastically increasing. The uncertain high profit in the future is no longer so attractive, especially when the spectre of redundancies in companies and difficulties in finding new jobs arise.

George Miller started his career in content marketing and has started working as an Editor/Content Manager for our company in 2016. George has acquired many experiences when it comes to interviews and newsworthy content becoming Head of Content in 2017. He is responsible for the news being shared on multiple websites that are part of the European Gaming Media Network.

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Cryptocurrency

Russia to formulate new legislation on cryptocurrencies

Niji Ng

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Russia to formulate new legislation on cryptocurrencies
Image Source: usethebitcoin.com
Reading Time: 1 minute

 

The Russian Parliament Duma is likely to consider a new legislation on cryptocurrency in the coming winter. Anatoly Aksakov, the State Duma Committee head on the Financial Market, said that the parliament will consider a new regulatory bill to monitor the cryptocurrency circulation in the market space in January or February

He said: “The long-awaited law on digital financial assets is in the GPU for approval … It is in conjunction with two others: the law on the regulation of investment platforms or crowdfunding and changes to the Civil Code. We agreed that the law on digital financial assets should be adopted along with these two legislative acts … Judging by the information that I have, this is January-February. Most likely, February, of course. Consideration of all three bills should pass,” he stated.

Earlier last year, the lower chamber adopted the first reading of digital assets bill, which was introduced by the Federation Council members with Aksakov as the head and the deputies of State Duma. However, his statement suggested that this time in February the law would be framed in such a way that it administers crypto activities in the insurance and banking sectors.

 “The next law from digital is a bill regulating the activities of electronic platforms, in use, the marketplace. I submitted this bill to the State Duma for consideration at the end of December. We have a plan to adopt this law by February 15 in order to launch a pilot project about 20 credit institutions and the Moscow Stock Exchange are preparing, “he said.

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Asia

CoinPoint continues its global expansion by signing new deals in the Asian iGaming market in 2019

George Miller

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CoinPoint continues its global expansion by signing new deals in the Asian iGaming market in 2019
Reading Time: 2 minutes

 

It’s a beginning of a very successful year for CoinPoint Group INC. CoinPoint is a leading multinational premium digital marketing agency, with outstanding place on the global blockchain and crypto map since 2013.

CoinPoint a well-known partner within the iGaming business, as it has helped dozen of igaming companies achieve amazing results and exponential growth in their business, while first integrating blockchain into their model and helping operators position themselves better in the market.

Asia, being the major and one of the biggest markets in terms of iGaming for all sectors including live dealers, sports betting and table games, is in a dire demand for new technologies and solutions and also professional and experienced partner to advice on the right marketing approach in such a dynamic and demanding industry. By participating in one of the biggest Asian iGaming events in March 2019, CoinPoint is aimed at confronting these demands and further assist the most aspiring projects in the industry reach the well-deserved prominence.

Denitza Alexieva, Head of Marketing of CoinPoint Group INC. underlines:
Asia is a complex market and our clients recognized they needed a professional agency with global experience and a strong network of local partners. CoinPoint has been in this market since 2013 and it helped numerous platforms, providers and operators implement crypto solutions throughout the years. We see Asia as the leading market to implement blockchain technology into iGaming businesses. We at CoinPoint keep bestowing our blockchain and crypto knowledge to them, so that they can keep up the pace with the latest blockchain trends.

EOSBet is the first fully-licenced and provably fair on-chain casino whose marketing campaigns and Asian market reach is successfully put through by employing CoinPoint’s remarkable strategies and network of connections. EOSBet is currently ranked as no.1 Gambling dApp on ample of dapp reviews, and has seen its user-base grow significantly, especially those from Asian countries.

“We’re very excited about CoinPoint’s expansion into the Asian iGaming market. The vast majority of our traffic comes from Asia, so it’s important to have a strategic marketing partner in the region. Players in the Asian market have a strong understanding of the benefits that blockchain technology brings to the gaming industry, especially with regards to provable fairness and new token economies”.

Similarly, we are lending RWB solutions international a hand in crypto implementation and integration especially in Korean and other Asia-Pacific countries. The immediate upshot of our consultation is an emergence of Asian-based iGaming brands which started optimizing RWB’s resources to the best of their capabilities.

Miscellaneous clients operating on the Asian market, have been added to CoinPoint portfolio, but can’t be quoted because of signed NDA. The majority of CoinPoint’s clients spring from dApp and payment solution industries.

Nowadays and further down the road into 2019, CoinPoint is, and will be, working more with Asian clients and partners to present, implement and monetise blockchain solutions, together with dApps technologies, advanced acquisition channels, hosting and CDN prioritization, new age of gaming solutions, P2P sports betting and many more.

If you are interested in discussing our capabilities and outreach in Asia, you can contact us on sales@coinpoint.net .

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Cryptocurrency

Secure Trading Group joins hands with Bit4.Sale

Niji Ng

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Secure Trading Group joins hands with Bit4.Sale
Image Source: crypto.ch
Reading Time: 2 minutes

 

The UK-based Secure Trading Group has signed an agreement with cryptocurrency exchange Bit4.Sale for providing payment solutions. The deal will ensure a seamless checkout experience for the customers of Secure Trading Group with the help of 3D Secure technology.
Bit4.Sale makes use of sophisticated technologies, aiming to deliver the best customer experience so everyone wanting to buy cryptocurrencies can do it with ease. Barriers to transactions were eliminated, making them as fast and efficient as possible. Bit4.Sale offers Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash and pays securely with their debit and credit cards.

Bit4.Sale’s cryptocurrency exchange places a huge emphasis on security and the creation of a safe, secure and reliable environment for the transferral of digital assets via their web interface. Secure Trading Group calls upon cyber security sister-company Cyber1 for security solutions, meaning that Bit4.Sale’s platform will be resilient to even complex, multi-layered threats.

“Bit4.Sale are new to card payments, and Secure Trading/acquiring.com’s proven expertise makes them the perfect payments providers to help us take our first steps in this area,” Aleksei Kriachkov, the owner of Bit4Sale said. “As a new company, we want to choose only service providers with prominence in the Blockchain and crypto sectors, and this relationship will ensure that. Having said that, this partnership will help us deliver the best possible experience to our customers. The process of purchasing Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash from our cryptocurrency exchange is secure and seamless. All our clients need is to register on the exchange, verify their identity, which has been set up in a user-friendly and easy way, and place their first order!”

“We pride ourselves in providing fantastic technical and personal support; our UK-based Support and Account Management teams are experts in the payments landscape, and Bit4Sale will benefit hugely from this,” Craig Brightly, head of sales at Secure Trading added. “We are continuing to grow our influence in the crypto sector, and exciting, ambitious crypto companies such as Bit4Sale help us to do this.”

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