Stock Investment

Next Bitcoin rally to start in Q2 2023 — Mark Yusko explains why

October 26, 2022 Coin Telegraph

Assets

The anticipation of the next Bitcoin halving will spark a crypto rally in 2023 regardless of the grim macroeconomic picture, according to hedge fund manager Mark Yusko.

The anticipation of the next Bitcoin (BTC) halving will be the main catalyst that sparks a new crypto rally as soon as the second quarter of 2023, according to hedge fund manager Mark Yusko.

The halving mechanism, which reduces Bitcoin’s block rewards by half every four years, has historically been a major catalyst for crypto rallies. The next halving is expected to occur in early 2024.

“Usually the market will anticipate that by about nine months,” Yusko said in a recent interview with Cointelegraph.

According to the hedge fund manager, the halving will propel Bitcoin to $100,000, and potentially beyond, “by the laws of math.”

“If the block rewards get cut in half to 3.125 from 6.25, then the price has got to double-ish in order for the miners to continue to make money,” he stated.

Yusko thinks the rally is going to take place despite an unfavorable macroeconomic picture dominated by high interest rates and slow growth.

That is because, according to Yusko, digital assets will ultimately prove to be uncorrelated with equity markets.

“Traditional assets are driven by economic growth, Fed policies, inflation. Crypto is driven by the technology itself, millennial adoption,” explained Yusko.

Watch the full interview on our YouTube channel, and don’t forget to subscribe!

Roth IRAs: The ideal long-term cryptocurrency investment?

September 20, 2022 Coin Telegraph

Bitcoin Price

Considering investing in cryptocurrencies for the long run? Roth IRAs and other tax advantages investment vehicles are worth considering.

As the cryptocurrency market matures, more governments throughout the world introduce legislation to tax proceeds from crypto-related activities, with traders often triggering taxable events that can lead to future complications.

Avoiding paying taxes is illegal, but there are legal ways to dodge triggering taxable events while hodling onto one’s cryptocurrency holdings: Roth IRAs. These are individual retirement accounts (IRAs) with a special type of tax-advantaged system.

Using IRAs to avoid triggering taxable events with cryptocurrency investments is a strategy that has been considered for some time, with North American mining and hosting firm Compass Mining offering a solution for BTC users to mine directly to their IRAs last year.

Before diving deeper, it’s important to point out that Roth IRAs are only available in the United States, although other countries often have their own form of tax-advantaged investment vehicles. Often, stocks with significant exposure to Bitcoin — such as MicroStrategy — have to be used as a proxy for some of these vehicles.

What are Roth IRAs?

A Roth IRA is a type of individual retirement account to which investors contribute after-tax earnings. What makes Roth IRAs stand out is that what investors place in these savings accounts can grow tax-free and be withdrawn without any other taxes being owed after they’re aged 59 ½, if the account has been open for at least five years.

Essentially, a Roth IRA considers that since taxes have been paid on the funds being contributed into the account, investors do not need to pay any further tax as long as they meet the specific conditions outlined above.

Roth IRAs can be funded in various ways beyond regular contributions, which have to be made in cash. Assets permitted into Roth IRA accounts include stocks, exchange-traded funds, money market funds, bonds, mutual funds and cryptocurrencies.

The Internal Revenue Service (IRS) does not allow for direct cryptocurrency contributions into these accounts, but these are various Bitcoin IRA solutions that are designed for investors to save cryptocurrencies in these accounts. It’s worth pointing out that yearly contributions to Roth IRAs are limited based on IRS specifications and that investors can keep Roth IRAs as long as they please, as there are no required minimum distributions.

Is it a good idea to add crypto to a Roth IRA?

Cryptocurrencies are known for being extremely volatile, which means they aren’t for every investor out there. More conservative investors will likely be happier holding bonds, mutual funds and exchange-traded funds, while investors with a larger risk appetite may consider allocating to crypto.

The growth potential of cryptocurrency holdings in a portfolio is enough to lure in investors who believe cryptocurrencies will keep on growing in popularity as the infrastructure around them boosts accessibility and new crypto-related products and services are created. This growth potential, it’s worth pointing out, comes with heightened risk.

As tax-free withdrawals from Roth IRAs require accounts to be at least five years old, cryptocurrency investors looking to take advantage of them should always be prepared to hold onto their funds for a long time.

Chris Kline, co-founder of cryptocurrency IRA platform Bitcoin IRA, told Cointelegraph that there are no tax benefits on contributions to Roth IRA accounts, but there are tax benefits on distributions:

“If you have a longer time horizon in Bitcoin and crypto, a Roth IRA could be an appealing choice for those looking to take advantage of the long-term promise digital assets offer.”

To Kline, cryptocurrencies are going to “disrupt the very fabric of our everyday lives in ways like the internet disrupted communication and email disrupted the post office.” The co-founder of Bitcoin IRA added that while real estate and gold were premier examples of diversification in the past, crypto has “asserted itself as an alternative in the modern economy.”

Recent: The Metaverse is becoming a platform to unite fashion communities

Kline added that cryptocurrencies can offer an “alternative path forward for people of all ages” and that there’s been a surge in interest in investing in crypto assets for diversification.

Kunal Sawhney, CEO of equity research firm Kalkine Group, seems to disagree with Kline’s approach. Speaking to Cointelegraph, Sawhney said that if a person has “spent time and labour to earn money, it should ideally not go into extremely risky assets like cryptocurrencies.”

Otherwise, he added, it “defeats the idea of investing for retirement.” Sawhney cautioned that cryptocurrencies aren’t just Bitcoin (BTC) and that betting on these increases the risk that investors fall prey to Ponzi schemes.

As an investment category, he said, cryptocurrencies “might not be so bad” as these assets may become the “biggest contributor to the overall amount in the Roth IRA when the contributor retires and plans to withdraw.” Once again, their potential outsized performance is weighed against their risk.

For long-term investors expecting these outsized returns, placing cryptocurrencies in a Roth IRA lets them realize their capital gains without getting taxed, although they’ll have to stomach the ups and downs for a while.

Portfolio diversification

The extreme volatility of cryptocurrencies makes them a not-so-easy investment when talking about retirement, with the jury being out on whether including cryptocurrencies in a 401(k) retirement plan is sound financial planning or gambling with the future.

To Sawhney, investors need to have a pre-determined strategy for their Roth IRA. The CEO noted that a 60/40 portfolio, with greater exposure to stocks than to bonds, was “long considered balanced and financially rewarding” but suggested cryptocurrencies are changing things:

“Now that there is an option available to hold relatively the most volatile asset, cryptocurrency, a new strategy, say 50/40/10, might be considered. Here 10% could go to the new asset class comprising cryptos. Investors should have the option to change the allocation share per their risk appetite.”

Recent: Does the Ethereum Merge offer a new destination for institutional investors?

Due diligence, Sawhney concluded, is crucial as Roth IRAs are often “viewed as one of the best investment vehicles for young and low-income earners.”

Speaking to Cointelegraph, Kevin Maloney, interim CEO at crypto retirement account provider iTrustCapital, said that volatility is actually “one of the main reasons why many investors prefer using a Roth IRA or any other type of IRA to invest in crypto.” He added that even day-traders could benefit:

“For those who want to ‘day-trade’ due to the volatility of crypto, an IRA still represents a solid option because they won’t be paying yearly taxes on their gains so long as they aren’t taking distributions.”

Whether investors are looking to add cryptocurrencies to their Roth IRA accounts, it’s important note that crypto assets are only available for these accounts through custodians, which may charge hefty trading fees.

It’s up to every investor to analyze what type of investment vehicle best suits their situation and risk appetite. Roth IRAs may be extremely beneficial for long-term investors, as, since 2014, the IRS has taxed cryptocurrencies as property, and capital gains taxes can be owed on depreciated assets.

The views and opinions expressed do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

These publicly traded firms are pulling institutions into crypto

November 9, 2021 Coin Telegraph

Coin Telegraph

With increasing institutional capital flow into the crypto markets, publicly listed digital asset companies offer the best crypto gateway to institutional investors.

Cryptocurrencies have quickly emerged as one of the hottest investment vehicles of the past decade, gaining traction first from retail traders, as seen in 2017, and now from institutional investors.

From being a domain of bedroom coders to a growing financial sector with over $2 trillion in market capitalization, the crypto space has seen a sudden surge in value and continues to attract huge interest from investors.

While crypto assets have proven to be valuable, volatility remains a top concern, especially for institutional players. Sure, any investor can buy some cryptocurrencies and profit from their rising value. However, investing in established companies that are involved in the crypto and blockchain business is another way of diversifying and gaining from the overall uptake of everything blockchain and crypto-related.

This gives investors exposure to an investment vehicle with a low correlation to the volatile price swings of the crypto market.

Here is a look at some of the top publicly traded digital asset companies available to retail and institutional investors alike.

Coinbase

Coinbase’s direct listing on Nasdaq in April this year was a watershed moment for the entire cryptocurrency market. Boasting as the largest crypto trading volume for a crypto exchange in the United States, Coinbase made its debut on Nasdaq as a publicly-traded company with a valuation of close to $100 billion. Coinbase chose to go with a direct listing as opposed to the conventional initial public offering.

Founded by Fred Ersham and Brian Armstrong in 2012, Coinbase offers crypto trading services to more than 40 million retail users and about 7,000 institutions spread across the globe. While its main source of revenue has been the transaction fees on its crypto exchange, Coinbase hopes to go beyond trading to offer a debit card that allows consumers to spend their digital assets conveniently. Coinbase also offers a cloud-based digital asset custody service, an asset loan service and a data monitoring service for digital assets on the blockchain.

Microstrategy

Microstrategy is a software company with more than 40% of its market valuation invested in Bitcoin (BTC). The company has been increasing its Bitcoin stash over the past year with an accumulative purchase of Bitcoin worth more than $5 billion at current prices.

With more than 100,000 BTC to its name, Microstrategy has gone from relative obscurity in the world of finance to a crypto giant and a well-known firm on Wall Street. The company’s CEO, Michael Saylor, a Bitcoin evangelist, routinely touts Bitcoin on social media as a revolutionary invention and has also been vocal in defense of the company’s move to invest aggressively in crypto.

Recently, MicroStrategy sold $1 billion worth of its stocks holdings to inject the proceeds in acquiring more Bitcoin. Since the company announced its debut in Bitcoin, Microstrategy’s stock price has soared by more than 400%.

Riot Blockchain

Riot Blockchain is a U.S.-based Bitcoin mining and publicly listed company that uses a multitude of specialized machines called application-specific integrated circuits to mine Bitcoin. Recently, the Bitcoin mining firm dove deeper into the business with the purchase of a Bitcoin hosting facility in North America called Whinstone US.

In a press release, Riot Blockchain’s CEO Jason Les mentioned that “with Whinstone’s preeminent infrastructure and best-in-class construction, development and operations organization, Riot is extremely well-positioned to increase the scale and scope of its operations.”

Whinstone’s energy management strategy will reportedly help Riot Blockchain manage its Bitcoin mining energy costs, enabling access to reliable and responsive power to further support the Bitcoin network.

Riot Blockchain receives its mining machines from Bitmain and hosts more than 35,000 Antminers, leading to a hash rate capacity of 3.8 EH/s.

Paypal

Although PayPal stock is not purely a crypto play, the company opened its doors to digital currencies, allowing its customers with personal accounts to buy, sell and hold several cryptocurrencies including Bitcoin. Customers on PayPal can go as far as checking out with crypto even as the company continues to test out the concept of allowing crypto on its platform.

Given that digital assets and crypto are the future of finance, PayPal’s adoption of the crypto is a move to increase the usage of its app among retail investors, as well as facilitate more transactions between customers and merchants.

Furthermore, the company’s CEO has mentioned crypto several times, adding that its crypto functionality is not a speculative move but rather a developmental one that will offer customers more choices when shopping online.

Marathon Digital Holdings

Marathon Digital is a Nasdaq-listed company that has seen its stock price rally recently due to its Bitcoin purchases and mining activities. In May this year, the company released a letter of intent to collaborate with Compute North in hosting a Bitcoin mining data center with a 300-megawatt capacity.

So far, the company has seen tremendous progress with its revenue rising by 1,444% year-over-year with a host of over 70,000 Bitcoin miners setting its hash rate to 10.37 EH/s. Given the rising Bitcoin mining energy concerns and the recent developments, Marathons Digital expects its operation to achieve carbon neutrality by up to 70%.

Marathon Digital’s balance sheet has about 18.3 % of its total valuation invested in cash and Bitcoin, and continues to purchase more Bitcoin as well as store the crypto it produces at much larger percentages. According to reports, Marathon Digital is capable of mining upwards of 50 Bitcoin per day, setting the company’s value over $5 billion.

Hut 8 Mining

Hut 8 Mining features a unique approach to Bitcoin mining with a business model that is designed with scalability in mind. Believed to be one of the most promising Canada-based mining and blockchain infrastructure firms, the company has mined 264 Bitcoin in September alone, averaging about 9.11 BTC mined per day.

The company has adopted a long-term Bitcoin hold strategy where 100% of the self-mined Bitcoin is deposited in custody as the company advances toward its goal of holding 5,000 self mined Bitcoin by the end of the year. As of Sept. 30, Hut 8 Mining has accumulated 4,724 Bitcoin in custody.

EQONEX Group

EQONEX Group is a digital asset firm offering financial advisory services. This Nasdaq-listed company has since rebranded with the inclusion of additional services such as a crypto exchange, a custody platform and a multi-venture trading service, as well as an over-the-counter (OTC) offering.

With a Nasdaq listing in September 2020, EQONEX has since emerged as the first crypto-related firm to be listed on Nasdaq. So far, its crypto exchange has been growing, hitting a 24-hour trading volume of over $260 million and a 30-day volume of $4.5 billion.

Although it is not one of the biggest crypto exchanges, EQONEX touts its regulatory compliance and the fact that it doesn't make markets, thus avoiding the conflict of trading against its clients.

Growing institutional interest

Investing in stocks from digital asset companies offers a distinct advantage, whereby the investor is not directly exposed to the volatile market movements that riddle the rest of the crypto market.

Investing in crypto-related businesses also grants an investor the convenience of avoiding the complexities that come with buying and safely storing digital assets, all while exposing the investor to the upside of the crypto and blockchain industry.

Whether investing directly or indirectly, it has never been easier for institutional capital to flow into the crypto and digital asset market, given the increasing number of digital asset companies whose stock is traded publicly on stock exchanges such as Nasdaq.

Even companies such as Nvidia and AMD are increasingly contributing to the crypto and blockchain industry thanks to the use of their graphical processing units in mining crypto. These are just a few picks of the many publicly listed digital asset companies that investors can look to when it comes to traditional routes of investing in crypto.

NYSE Arca files with SEC to list Bitwise Bitcoin ETP Trust

November 3, 2021 Coin Telegraph

Coin Telegraph

Exchange-traded products with exposure to cryptocurrencies are increasingly gaining ground.

NYSE Arca, a subsidiary of the New York Stock Exchange (NYSE) Group, wants to list and operate a trust based on Bitcoin (BTC) exchange-traded products (ETP).

In a rule-change proposal with the United States Securities and Exchange Commission, NYSE Arca proposed to list shares of the Bitwise Bitcoin ETP Trust.

The proposal clarifies that each share of the trust will be represented by fixed “units of undivided beneficial ownership,” allowing the shares on the stock exchange to reciprocate their value in accordance with Bitcoin’s market price.

Moreover, the trust will be operated by two third-party associates serving as the trust’s custodian, administrator and transfer agent. According to the filing:

“Under normal circumstances, the Trust’s only asset will be bitcoin, and, under limited circumstances, cash. The Trust will not use derivatives that may subject the Trust to counterparty and credit risks.”

Upon the SEC’s approval for the rule change, NYSE Arca’s Bitwise Bitcoin ETP Trust will process all “ordinary fees in bitcoin (rather than cash), as a way of seeking to ensure that the Trust holds the desired amount of bitcoin-per-share.”

On Oct. 14, Bitwise had filed for a BTC ETF with NYSE Arca, which according to Bitwise chief investment officer Matt Hougan, holds “actual BTC.” The filing outlines Bitwise’s intent to register 1,000 shares of its Bitwise Bitcoin ETP Trust with an offering price of up to $25. The company had first applied for a Bitcoin exchange-traded fund (ETF) registration with the SEC in January 2019, which was later withdrawn amid concerns raised by the commission:

“We are currently working hard on answering the questions that the SEC raised in its 112-page response to our initial filing. We remain fully committed to the development of a bitcoin ETP.”

The SEC is expected to announce its approval or disapproval for the rule change proposal in the next 45 days after soliciting and reviewing the comments based on the filing.

In September, SEC Chair Gary Gensler urged crypto businesses to register with the regulatory body, resulting in numerous proposal filings.

Despite years of resistance, the commission recently approved a Bitcoin Strategy ETF filed by Valkyrie on Oct. 26.

Congratulations to @ValkyrieFunds on the launch of its Bitcoin Strategy #ETF $BTF!

Learn more about the U.S.-listed Bitcoin futures ETF and how it invests in a new future: https://t.co/mDrWbHn0xI pic.twitter.com/rE5QibNWiB
— Nasdaq (@Nasdaq) October 22, 2021

Gensler said that crypto can be a “catalyst for change” within a set framework, which can be achieved through regulatory clarity:

“To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they qualify for an exemption.”

Valour Uniswap exchange-traded product to increase UNI exposure

October 26, 2021 Coin Telegraph

Coin Telegraph

Valour Uniswap ETP, with UNI as the underlying asset, launches on the Boerse Frankfurt Zertifikate AG stock exchange.

Valour, a Zurich-based exchange-traded products (ETP) issuer, announced the launch of a fully-backed investment product to increase exposure to Uniswap decentralized exchange’s native token, UNI.

The UNI token serves as the underlying asset within the Valour Uniswap ETP offering available as a fully-backed passive investment product. The Uniswap ETP was launched on a European stock exchange named Boerse Frankfurt Zertifikate AG, the Frankfurt Stock Exchange co-owner.

Valour CEO Diana Biggs highlighted the inaccessibility of blockchain-based investment products on traditional markets and stock exchanges. Speaking about Valour Uniswap ETP’s position in making DeFi investments available via mainstream investment channels, he said:

“Uniswap ETP will provide investors with the opportunity to gain exposure to areas of innovation, in particular to decentralized finance (DeFi).”

As of Oct. 25, Valour’s assets under management (AUM) offerings grew over 3033% in 2021, surpassing $290 million from trading on traditional stock exchanges. The Uniswap protocol passed $500 billion in total trading volume since Nov. 2018.

A Cointelegraph report from Oct. 19 credits Uniswap’s layer-two volumes surge to high transaction fees on the Ethereum (ETH) blockchain.

Hayden Adams, the founder of Uniswap, estimated that Uniswap v3 processed daily volumes worth $115 million across the Arbitrum and Optimism smart-contract networks.

Uniswap v3 on layer 2 (arb + OE) doing an all time-time high of $115m volume!!

2⃣ L2 season is here :)
— hayden.eth (@haydenzadams) October 18, 2021

According to a crypto market data provider, Nomics, Uniswap v3 drove $80 million in volume on Arbitrum and roughly $14 million on Optimism during that timeframe.

Elon Musk’s Tesla is already $1 billion in profit from holding Bitcoin

October 14, 2021 Coin Telegraph

<div>Elon Musk's Tesla is already billion in profit from holding Bitcoin</div>

Bitcoin Analysis

Tesla's Bitcoin stash is now worth $1 billion more than when Elon Musk approved the purchase in February.

Tesla's (TSLA) bold foray into the Bitcoin (BTC) market has been paying off in 2021 as BTC price rallies in October to hit over $58,000 on Oct.14.

Tesla currently holds roughly 43,200 BTC, worth roughly $2.5 billion at today's prices, according to online monitoring resource Bitcointreasuries.net. This is approximately 65% or $1 billion more than what the carmaker paid in February when Elon Musk's company revealed that it added $1.5 billion in BTC to its balance sheet.

*BTC/USD daily price chart. Source: TradingView.com*

In Q2, Tesla's sold 10% of its Bitcoin holdings — about 46,000 BTC — at a reported average price of around $50,000 per token. In its Q2 earnings report, the company had notified that it booked gains worth $128 million from its Bitcoin sale.

Tesla made first billion in profit in Q2 from selling cars

Following the latest Bitcoin price rebound, Tesla's net profits from its crypto holdings came out to be as much as its income from Q2.

In detail, Tesla had reported $1.14 billion in net profit for Q2, the first time it ever crossed the one billion dollars mark. The income was a part of $11.96 billion in revenue that Tesla made mostly by selling cars — about $10.21 billion. The remaining $354 million came from the sales of regulatory credits.

Tesla revealed on Oct. 1 that it had delivered 241,300 electric vehicles during Q3, compared to 201,250 vehicles in the previous quarter. Combined with Tesla's Bitcoin profits, expectations are high for blockbuster earnings set to be released after the market closes on Oct 19.

"We think Q3 will be TSLA's strongest quarter ever," said Piper Sandler analyst Alexander Potter.

Will other companies follow?

Thus far, Tesla's Bitcoin strategy has been very successful, providing a case study of how other corporates could replace a portion of their cash reserves with BTC.

That said, several companies that invested in Bitcoin before Tesla, have seen even greater gains.

For instance, business intelligence firm MicroStrategy purchased around $3.15 billion worth of Bitcoin in multiple buying rounds. With its first purchase dating backing to Aug. 11, 2020, the company's net Bitcoin profits are now near $6.3 billion, almost doubling its investment.

Jack Dorsey's payment service firm Square also seen considerable gains from holding Bitcoin, now worth over $442 million from its $220 million investment.

Additionally, Canada-based crypto mining firm, Hut 8 Mining Corp, has seen its $39.3 million Bitcoin purchase increase in value by more than 600%, reaching around $250 million. Back in June, the company also revealed plans to hold 5,000 BTC by 2022.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

What are Roth IRAs?

Is it a good idea to add crypto to a Roth IRA?

Portfolio diversification

Coinbase

Microstrategy

Riot Blockchain

Paypal

Marathon Digital Holdings

Hut 8 Mining

EQONEX Group

Growing institutional interest

Tesla made first billion in profit in Q2 from selling cars

Will other companies follow?

Share this video