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Bitcoin is over $66,000. Here are 3 questions to ask yourself before you invest – CNBC

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Bitcoin, the largest cryptocurrency by market value, hit an all-time high on Wednesday, surging above $66,000. Its previous record of $64,899 was set in mid-April.

This surge comes after the first U.S. bitcoin futures exchange-traded fund made its market debut on Tuesday.

With all the hype, investors may feel tempted to buy in on the fear of missing out, or “FOMO.”

“A lot of people who have yet to get into the space or really learn more about it are going to be bombarded with a lot of noise right now,” Douglas Boneparth, certified financial planner and president of Bone Fide Wealth, tells CNBC Make It.

But before investing in bitcoin or any other cryptocurrency, it’s important to step back from the noise and excitement and first understand what it means to invest in a digital asset, he says.

To do that, Boneparth recommends asking yourself three questions.

1. Why am I investing?

First, assess why you want to invest in the first place.

If you’re just afraid of missing out, then you should probably pause before moving forward. It’s important to truly understand bitcoin, cryptocurrency or any asset prior to investing in it.

“‘Educate before allocate’ is a phrase that me and my friends are using,” says Boneparth, who has invested in bitcoin since 2014.

Taking a step back may be difficult, especially now as bitcoin hits an all-time high, but it’s worth taking some time to research what it is, how it operates and what the risks are before parting with your money.

2. Can I handle volatility?

Next, consider how well you handle extreme swings in price, since bitcoin is a notoriously volatile asset. “That’s not easy to handle for most investors,” Boneparth says.

For some people, the volatility “may be OK, that may coincide with your appetite for risk and your own risk tolerance and investment time horizon,” Boneparth says. “But, you still got to live with it.”

Other investors may prefer something more stable.

But regardless of your tolerance level, financial experts warn that the volatility makes bitcoin and other cryptocurrencies a riskier investment than something like a low-cost index fund, which should be kept in mind.

3. How much can I afford to allocate?

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Big Six banks expand investment offerings – Wealth Professional

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“ZMMK provides a solution for investors looking for a liquidity sleeve, or a place to hold their cash as they assess the market for other investments,” Mark Raes, head of Product at BMO Global Asset Management, said in a statement.

Meanwhile, CIBC has again expanded its lineup of Canadian Depositary Receipts (CDRs), which offer an affordable way to invest in some of the world’s largest companies with a built-in notional currency hedge, with eight new listings on the NEO Exchange.

The new CDRs include:

  • Advanced Micro Devices Canadian Depositary Receipts (CAD Hedged) – AMD
  • Berkshire Hathaway Canadian Depositary Receipts (CAD Hedged) – BRK (underlying shares Berkshire Hathaway Inc. Class B Common Stock (NYSE: BRK.B))
  • Costco Canadian Depositary Receipts (CAD Hedged) – COST
  • Salesforce.com Canadian Depositary Receipts (CAD Hedged) – CRM
  • IBM Canadian Depositary Receipts (CAD Hedged) – IBM
  • JPMorgan Canadian Depositary Receipts (CAD Hedged) – JPM
  • Mastercard Canadian Depositary Receipts (CAD Hedged) – MA
  • Pfizer Canadian Depositary Receipts (CAD Hedged) – PFE

They join 10 other CDRs that were launched on NEO in July and October. According to NEO, the average number of client trades in CDRs grew from around 700 per day in September to roughly 5,500 since the start of November. The CDRs on the exchange have also continued to track their underlying stocks precisely even during highly volatile periods.

“We are pleased with the reception we’ve seen so far for CDRs with Canadian investors. It’s clear this meets a need in the market,” said Elliott Scherer, managing director and head of Sales, Wealth Solutions Group, CIBC Capital Markets. “This expansion of our CDR offering provides greater opportunity for investors to diversify their portfolio without being exposed to currency risk at a fraction of the price per share.”

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TSX rallies as dividend increases help underpin financial shares

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Canada‘s main stock index rebounded on Thursday from a seven-week low hit in the previous session, with financials contributing to broad-based gains as major lenders boosted their dividends.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 297.43 points, or 1.45%, at 20,762.03, after posting on Wednesday its lowest close since Oct. 12.

Wall Street also rallied as market participants snapped up bargains while digesting the implications of a shifting pandemic. The Omicron variant has spooked investors for about a week.

“The market is awaiting confirmation on the severity of the new COVID-19 variant, the degree to which it escapes existing vaccines, and how infectious it is given this will likely dictate the global response in terms of restrictions,” said Russ Mould, investment director at AJ Bell.

Financials, which account for about 30% of the Toronto market’s value, gained 2.2%. Toronto-Dominion Bank and Canadian Imperial Bank of Commerce joined rivals in announcing higher dividends and share repurchases.

TD rose 4.9%, while CIBC ended down 2.8% after missing profit estimates as costs climbed.

All 11 major sectors ended higher.

The energy sector advanced 1.8% as oil prices rebounded after OPEC+ stuck to its policy of incrementally boosting output. U.S. crude oil futures settled 1.4% higher at $66.50 a barrel.

Consumer cyclical stocks gained 2.4%, helped by gains for Restaurant Brands International Inc and Magna International Inc.

Canadian Prime Minister Justin Trudeau’s government will outline limited new spending in a fiscal update to be released later this month, a source said, as inflation soars and some business groups and opposition politicians call for restraint.

 

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)

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Metaverse won’t be turning point in cryptocurrency adoption, investor Chesnais says

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The growth of online virtual worlds will help advance the mainstream adoption of cryptocurrencies for payment transactions but it won’t be a game-changer, according to Frédéric Chesnais, chief executive of French fintech company Crypto Blockchain Industries.

In blockchain-based 3D virtual worlds, often referred to as metaverses, users can purchase and trade virtual assets and services using cryptocurrencies. Some analysts have argued the growing popularity of metaverses will drive an explosion in digital tokens.

“I think it will be important but I don’t think this is the key turning point,” Chesnais, who was until earlier this year the CEO of videogame company Atari told a Reuters NEXT panel on Thursday.

Interest in the metaverse exploded after Facebook said in October it was changing its name to Meta and would be focusing on building its own virtual world. Other big companies and smaller fintechs are also rushing to develop digital worlds.

Crypto Blockchain Industries invests in blockchain projects and is developing AlphaVerse, a blockchain-based metaverse.

Chesnais said that the mainstream adoption of cryptocurrencies will be driven by the more than one billion people globally who do not have access to a bank account because they may not have an address or an official identity.

“The only way for these people to have access to a better way of life and be part of the economic system is to have a wallet and to be paid in cryptocurrency,” he said.

“This is the most important moment for crypto.”

On Wednesday, Yat Siu, the chairman and co-founder Animoca Brands — which invests in and builds various virtual worlds — cautioned that while digital assets are set to grow as virtual worlds become more popular, investors in these technologies will face “bumps in the road” as the technologies mature.

 

 

(Reporting by Michelle Price; Editing by Nick Zieminski)

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