Trends with Benefits
Trends with Benefits Recap: Crypto Series RoundupEd Lopez, Head of ETF ProductJuly 26, 2021
Bitcoin has been a major focus for us here at VanEck for quite some time however, understanding the world of bitcoin can be intimidating, largely in part to it having its own language. This year we decided to extend that effort by producing a special podcast series, dedicated to bitcoin education. To help us elaborate on the topic, we welcomed a group of guests, each of whom are subject matter experts in their respective areas of cryptocurrency.
In this episode I kick off our crypto series by speaking with Pierre Rochard, Bitcoin Strategist at Kraken about the basics of bitcoin and what investors should know in order to understand the digital currency.
Kraken is one of the oldest and largest bitcoin exchanges. Pierre helps me break through some of the complicated jargon that surrounds bitcoin and explains things in layman’s terms. We begin the series by asking a basic question, that I think many still have a hard time answering simply: What is bitcoin?
Dan Tapiero, Manager Partner and CEO of 10T Holdings and Co-founder of Gold Bullion International, joins us for the second episode to discuss a different investor segment as it relates to bitcoin—institutions.
Many institutional investors are rethinking the traditional 60/40 allocation and seeking out alternative sources of alpha. Dan highlights bitcoin’s compelling performance profile and what it would look like in a 60/40 portfolio, if one were to look back over the last decade. Dan also explains which factors he believes have led to institutions becoming more comfortable with bitcoin, as well as what onboarding bitcoin at these institutions entails.
Ari Paul, CIO of BlockTower Capital joins me to discuss how bitcoin is traded and the market outlook for the cryptocurrency amidst its growing acceptance and long awaited legitimization by the government, financial services industry and most importantly, investors.
We discuss the mechanics of trading bitcoin by first discussing the technology behind cryptocurrency, i.e., cryptography, and the vital role trust must play between the investor and the given cryptography technology. As normalization of bitcoin continues to increase, the mechanics for trading bitcoin still has a little ways to go. While investors are not able to log into their brokerage account and purchase bitcoin the same way they would a traditional asset, Ari believes we will eventually see this over the next decade.
In our latest episode, we continue the conversation by exploring the perceptions, realities and implications of bad actors in bitcoin with Jake Chervinsky. In addition to serving as General Counsel at Compound Labs, he works on regulatory policy for the crypto industry through the Blockchain Association. So, he spends a lot of time working with legislators and has a great sense of how they view crypto.
If you’re intrigued by cryptocurrency, as many are, we encourage you to give this series a listen and hope that you enjoy!
Please note that Van Eck Securities Corporation (an affiliated broker-dealer of Van Eck Associates Corporation) may offer investments products that invest in the asset class(es) discussed in this podcast.
The views and opinions expressed are those of the speaker(s) but not necessarily those of VanEck. Commentaries are general in nature and should not be construed as investment advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed.
Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.
Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.
Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.
- Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
- An investment in cryptocurrency is not suitable or desirable for all investors.
- Cryptocurrency has limited operating history or performance.
- Fees and expenses associated with a cryptocurrency investment may be substantial.
There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.
Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
Van Eck Associates Corporation
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