Cryptocurrency books aimed at novice users or non-users tend to follow a very similar pattern. Almost all start with an obligatory “history of money” and explain why fiat is, let’s say, “flawed,” — to be polite. Then Bitcoin (BTC) in introduced, wielding a fistful of shiny new tech that can address some of these issues.
The books go into mining, wallets, exchanges, Ethereum and smart contracts, altcoins and decentralized finance — also known as DeFi. Once the authors are sure that the reader is sold on the idea of buying into crypto, they wrap it nicely up with a (foregone) conclusion and settle smugly back down.
However, even equipped with the desire (and know-how) to buy their first cryptocurrency, the reader may still feel there is a barrier to taking the next step. In fact, once the purchasing decision has been made, a whole new raft of questions crop up tha a savvy crypto convert will want answered.
How much should I spend? What strategies are open to me? Should I invest or consider trading? How can I maximize gains while minimizing risk? Few books delve deep enough into such territory to give a reader the confidence to enter the market with at least half an idea of what they are doing.
Breaking the mold?
Digital Assets: Your Guide to Investing and Trading in the New Crypto Market aims to fill that gap. Written by Jonathan Hobbs, an investment industry veteran turned independent advisor, the book is divided into two parts.
Admittedly, the first part kicks off as expected with cash-bashing; but in fairness, it would be hard to leave this out of a crypto book aimed at beginners. And let’s be honest, it never gets old to hear how bad the traditional financial system really is.
Hobbs then gives the lowdown on Bitcoin, but only so much as to show that it can be trusted, that it is a hedge against inflation and that there is a reason for it to continue to appreciate in value over the long term.
Ethereum and DeFi are similarly explained from an investor’s perspective, such as how money can be made through staking tokens on lending platforms, trading derivatives or providing exchange liquidity.
Part One is rounded out with a couple of chapters on how the range and accessibility of crypto products have much improved, for both institutional and retail investors. The development of institutional-grade custody solutions and crypto-exposed funds and trusts has finally opened the floodgates to an increasing amount of institutional and corporate money.
Improvements in the security and functionality of retail exchanges and wallet solutions, along with the rise of DeFi, cater to the needs of individual investors like never before, and this gets us to the point at which we are left off by most of the other books.
Saving for a rainy day
Luckily, this is where Digital Assets is just getting started. The longer Part Two deals with all the nitty-gritty on trading and investing, starting with the question of how much of one’s assets should be held in crypto.
Hobbs explains the importance of a diverse investment portfolio and compares the historical returns on various proportions of stocks, and having up to 10% in Bitcoin. Certain readers may be dismayed to hear that due to crypto’s volatility, he does not recommend putting too much of one’s nest egg into it.
Digital Assets also provides examples showing the effect that rebalancing a portfolio can have on reducing risk and exposure to volatility.
The book continues on to crypto investment strategies, covering the ever-popular HODLing, dollar-cost averaging and the more aggressive value averaging. The potential results of each are illustrated with examples using real historical data over various time frames.
And then, it gets started with the big kid stuff…
Make the trade
If you are an average enthusiast, technical analysis will be a baffling source of confusion. Of course, some may understand what a “falling wedge” is, what “flipping resistance into support” means and the importance of the “20-week moving average.”
But you will have no idea why these things affect Bitcoin’s price the way they do, and hence, you will have no real faith that you can use them to predict future action. Correction: By this point, you should have some idea.
Hobbs’ primer on reading charts, identifying trends, moving averages, trading volume and Fibonacci retracements makes it seem like technical analysis is something that can actually be done, or at least learned over time.
Digital Assets goes on to explain how one can profit from Bitcoin’s volatility by trading short or long on futures contracts. It shows how to read candlestick charts and describes a number of trading styles, along with their associated trading time frames.
Of course, mitigating risk is just as important as taking profits, and there are techniques given to do so using stop losses, position sizing strategies and the various types of orders that can be placed on exchanges. Hobbs also explains when to use leverage, when to enter and exit a trade, and when to take profits.
A good investment?
The last few sections of Digital Assets examine the potential to incorporate altcoins into a crypto portfolio, explain the basics of options trading, and give guidance on how to tie all of this together into a personal investment strategy.
The book has an easily accessible style, with plenty of diagrams and real-world examples to illustrate the pros, cons, and potential risks and returns of each of the various methods of investing and trading. Some of the concepts around stops losses and hedging Bitcoin options took a few reads to fully understand, but as well they might.
If really digging for things to criticize, it would be the examples that use Trader A through Trader D to compare the different strategies, which was occasionally confusing. However, this was not half as confusing as it was when Hobbs chose to get creative with his character names — by the end of the options chapter, it was hard to remember who was who among Lagertha, Ragnar and Uthred.
In conclusion, while it may not offer as much to those who are already pro traders, Digital Assets is pretty much essential reading for those who have been tempted to dabble in trading but never quite had the confidence. You may find that you are shorting perpetual futures while hedging with a protective call option in no time… and I might just see you there.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.
Pele NFTs to Drop on Ethernity Chain from May 2
NFTs is about capturing value of precious moments compliantly. Ethernity Chain does this brilliantly, this time by dropping a new collection of NFTs honoring the legacy of the iconic Brazilian soccer player, a world cup winner, and a legend in soccer halls, Pele.
Pele is coming to Ethernity Chain
An announcement from Ethernity Chain—a differentiated platform introducing authenticated NFTs, on Apr 16, said Pele’s collections would be available in two weeks from May 2.
These valuable collections are created by Kingsletter and Visual Lab–leading Australian Concept artists. It is the first time the legend’s trading cards have been released digitally.
The second batch will be Pele NFTs will be released later this year.
It is easy to see why the physical vintage cards of Pele are worth millions and considered the most valuable in the world.
Pele’s Golden Records make his NFTs Valuable
Pele is award-winning and honored severally in the last 60 years or so.
Together with Diego Maradona, they are joint winners of the FIFA’s Player of the Century award.
He was also instrumental in three World Cup-winning teams of 1958, 1962, and 1970.
Besides, he was unplayable during his playing years. Thus far, he remains the highest goal scorer in Brazilian national team history, scoring 77 goals in just 92 appearances.
Before retiring in 1977, Pele scored 500 goals for Santos—a professional football club in Brazil.
For this, Pele is adored and endeared by football fans and bodies globally for his contribution to Soccer and tireless efforts in eradicating poverty. Through the Pele Foundation, the mega football star is empowering Children battling poverty.
For this reason, 90 percent of Ethernity Chain’s sales will directly benefit the charity.
Jason Heuser’s NFT Collections Sold out for Big Dollars
This collection will be the second following Ethernity Chain’s partnership with Jason Heuser, which saw the drop of the “Welcome to the Internet” collection.
It was an immense success since the “Legendary Edition NFT” eventually sold for $162k from 22 bids. The NFT hard a reserve price of $35k.
Other NFTs—the “Limited Super Edition” sold for $173,824 while the “2012 Original” was scooped for a whopping $224,800.
Mergers and acquisitions are rising, leaving crypto assessments in question
Fintech, cryptocurrency and mergers and acquisitions are poised to intersect significantly in the coming year. M&A activity is expected to rebound quickly — more than 60% of decision-makers at large companies who were surveyed by FTI Consulting for a February report agree that their company has recently been a target of aggressive M&A, and 39% say their companies are looking at M&A as a result of the COVID-19 pandemic. At the same time, the cryptocurrency market is making strides toward mainstream acceptance.
As a result, there’s likely to be an uplift in deals involving cryptocurrency assets and valuations throughout 2021. While this trend is likely to spur some exciting developments in the financial sector, it is also starting to raise unprecedented questions about whether cryptocurrency and these complex business models can be accurately assessed and verified in the context of dealmaking.
Digitizing the world of finances
The effects of the COVID-19 pandemic have driven significant shifts from physical to digital services across a wide range of industries — none more dramatically than in the financial services industry, in which S&P Global has reported that an estimated 420 billion transactions, worth $7 trillion, will switch to cards and digital payments by 2023, reaching $48 trillion by 2030.
PayPal further legitimized cryptocurrency when it began accepting it in November 2020 and announced its acquisition of Israeli crypto startup Curv in March. Visa has also been active in the fintech arena, most recently with its $5.3 billion acquisition of Plaid in January. Investors are also keeping a close eye on the developments that will follow Coinbase’s recent debut on the Nasdaq stock exchange. Naturally, all of this activity is generating a lot of interest in fintech and cryptocurrency companies among traditional financial services institutions and big tech corporations. Even amid market lows during the first half of 2020, cryptocurrency-related M&A hit $600 million, more than the total for all of 2019. All signs point to an even larger year in 2021.
The need for due diligence
Of course with M&A, IPOs and capital raises also comes the need to conduct due diligence, market assessments and valuations. But when cryptocurrency is involved as the primary asset or a key asset, there are additional, complex layers to standard due diligence processes.
Buyers and target companies need to consider conducting a technical assessment of the digital assets at play. Potential buyers will want to know how to verify the cryptocurrency assets and ensure that the target company’s reported assets are accurate. Because cryptocurrency companies often operate under unconventional business models, and due to the very nature of distributed ledger systems, it’s not always clear what’s what. The crux of the issue is to find out about any problems, risks or inaccuracies in a target company’s cryptocurrency assets, framework and business model and whether they have the correct procedures in place to support their crypto-based business activities.
Likewise, cryptocurrency companies that are looking to raise money or sell their business to a larger technology or financial services corporation (or file for an IPO) can help position their business by conducting in-depth assessments that will demonstrate their differentiators and value to potential buyers, and support subsequent valuation and due diligence activities.
The nuances of the crypto space
Many may not understand the importance of conducting a technical assessment and cryptocurrency evaluation as part of their larger financial due diligence, or that it’s even possible. However, experts in this space are beginning to develop complex methodologies to conduct, fast, in-depth and cost-effective technical assessments of cryptocurrency assets and leverage digital forensic investigation techniques to sample and verify digital wallet ownership, digital asset ownership, as well as verify assets under custody, and the value and validity of assets.
Additional areas that buyers should examine in a crypto-focused technical assessment include:
- The full scope of digital asset holdings, including hot wallet services, cold wallet storage, business wallet services, portfolio management and other services.
- Size, locations, duties and other key details relating to technical and sales support, and development teams.
- Risks within cryptocurrency-related contracts, privacy, security, Know Your Customer, Anti-Money Laundering, signatures and other policy controls.
- Code audits across wallets, user interface and application programming interfaces.
- Governance implications (such as regulatory requirements and standards including the United States government’s Cybersecurity Maturity Model Certification and the European Union’s General Data Protection Regulation).
- Technical structure and stability.
- Third-party partnerships, data use and obligations.
- Research and development projects and developmental coin/token support.
In addition to traditional financial due diligence and valuations that accompany fundraising and M&A transactions, buyers in this space will also need to validate and assess the technical elements of the target company’s cryptocurrency assets and structures. Doing this right will require the support of a domain expert in blockchain and cryptocurrency who understands the technical complexities and knows what questions to ask. Cryptocurrency remains an enigma to many people, but a thorough, expert-driven technical audit can reveal risks and eliminate guesswork to support the execution of high-value, disruptive deals.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Steven S. McNew is a senior managing director within the technology practice of FTI Consulting. In his role, Steven helps clients evaluate and implement blockchain solutions and builds cost-effective, defensible strategies to manage data for complex legal and regulatory matters. Steven is an expert in blockchain, information and data security, complex discovery and digital forensics. He completed studies in blockchain and cryptocurrency at MIT and has led engagements involving blockchain assessments, pilot projects and software selection and implementation. He has also led disputes involving issues related to blockchain and various forms of cryptocurrency.
AgeUSD to Launch as First Stablecoin on Cardano Network
Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.
The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.
Do We Need Another Stablecoin?
Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.
AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).
“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”
The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.
The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.
AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.
Cardano ADA Price Update
As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.
It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.
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