“…The high value of bitcoin right now might scare off some, but for those with the financial opportunity to take a small risk, or the time in their life to make up for potential loss, cryptocurrencies are more than worth the risk...”
Recent times have seen an astronomical rise in the value of cryptocurrencies, as bitcoin has increased in value by over $4,000 in 2017 alone, and major money investors have taken notice. Some financial advisers have been publicly skeptical about the digital form of currencies, especially given the inflation of value recently, but with the possibility for an even greater rise in value over the coming years, many investors just cannot resist the temptation of this currency.
Future projections for cryptocurrencies are very optimistic for the most part, but the risk involved has been enough to keep some investors away previously. At this point, many investors are beginning to see cryptocurrency as the money of the future, especially as more people switch from using cash to plastic, and as online purchases take more of the market. Online marketplaces continue to grow, and according to a survey performed by BigCommerce.com, 51% of Americans prefer online shopping to visiting a brick and mortar store, and 96% of Americans with access to the internet and a computer have made an online purchase. As the older generations continue to phase out, this trend will rise, as will the value and preference for digital currency.
New users mean new technology must be developed to fit the needs of these users. Just as paper currency was invented to represent gold and make the currency more accessible many centuries ago, so too must a form of accessibility be made for these new cryptocurrencies. Websites like Coinbase provide digital wallets for users of multiple cryptocurrencies, and are working on new technologies which can help cryptocurrencies become the money of the future.
I see cryptocurrency as a way to hold and invest money safely, while planning for the future. The high value of bitcoin right now might scare off some, but for those with the financial opportunity to take a small risk, or the time in their life to make up for potential loss, cryptocurrencies are more than worth the risk.
“…Financial institutions are drooling over the opportunity to invest right now, as bitcoin has seen an increase of over 1000% in the last year. Clearly, many believe the trend will continue upwards, and technology is adapting to make that possible…”
New Investment Opportunities Rising for Cryptocurrency Users
A week ago, cryptocurrency service Coinbase announced their new service, Coinbase Custody, to provide users with an increase in the opportunity to use cryptocurrencies for investment purposes. This service essentially holds currencies in strictly controlled, secure storage, and is meant for investors interested in trading the digital currencies of Bitcoin, Ethereum and others. The custodial service allows for multiple signers for the account, as well as providing audit trails to account users. Custodial accounts allow the administrator of the account to assign different duties to individual users as an additional form of account security.
Additional benefits to using the custodial feature are the ability to whitelist IP addresses and the ability to set withdrawal limits on accounts. Allowing users to whitelist IPs means that these users can create portfolios with reviewed and approved IPs for the account. Coinbase provides users with phone support for the assistance of trades and other account issues, as well as guaranteed response times for all fund transfers. They also undergo regular security audits from outside sources, to provide investors with peace of mind over their funds.
Major players in the financial industry have taken notice of the success of cryptocurrency, and want ways to safely get involved.
As stated by Coinbase CEO Brian Armstrong,
“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today”.
These companies want a way into the market, which means they see money to be made. Custody is the secure option for investment these companies have been waiting for, and given the strong desire, the value of cryptocurrencies is poised to swell.
Opportunities Expand as Bitcoin Futures set to Become Available This Year
Coming before the end of this year, investors will have an opportunity to invest in future projections for bitcoin. Since bitcoin is the strongest cryptocurrency, it is currently the only form that will have futures offered on it, but over time, some other forms might be added. Each contract will include five bitcoins, while spot position limits have been set at 1,000. As far as contracts go, minimum price fluctuations are set at $5 per bitcoin, or $25 per contract.
CME group, the financial institution offering these future, has explained their guidelines for major fluctuations in bitcoin value. They offer these figures regarding fluctuations, “Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price”.
Financial institutions are drooling over the opportunity to invest right now, as bitcoin has seen an increase of over 1000% in the last year. Clearly, many believe the trend will continue upwards, and technology is adapting to make that possible.
The rise in cryptocurrencies should come as no surprise to anyone, but it is certainly occurring much quicker than many thought it would. As usually happens, technologies are changing much quicker than humans are able to adapt to it. I see these recent efforts as simply adaptation to the times and technologies available.
As more new technologies are developed and released, more people will come to understand the value that can be found in cryptocurrencies, and will come to exploit it, but at a much greater price. Get in on the market now before it really blows up. The tools are there, it just might take some extra work to learn how to use them to your advantage.