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Funding the fight against global warming – Investment Executive

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It finds that meeting the commitments made under the Paris Agreement to limit global warming will require a fundamental transformation of the global economy, requiring much greater investment.

The overall estimate of US$100-trillion to US$150-trillion worth of new investment translates into at least US$3 trillion to US$5 trillion of investment per year, which would be between five and eight times higher than current levels, the report said.

To generate this sort of investment, “the price of carbon must rise to fully price in emissions,” it suggested.

Moreover, the report said that climate finance needs aren’t linear, meaning that a lack of action now will translate into even greater investment needs in the future.

Given the scale of the challenge, the report called for coordinated action by the government and the private sector to significantly grow the climate finance market, with a view to developing the financial and risk management tools that are needed to catalyze investment.

“The unprecedented call to action aims to help mitigate substantial mis-pricing and potential financial stability risks which would undermine the long-run ability of the financial system to direct finance to fully support the Paris-aligned transition,” the GFMA said.

The paper also sets out the role for capital markets firms and other market participants to facilitate the transition, while continuing to serve investors and clients.

“[T]o meet the targets set out in the Paris Agreement, we need to act quickly to build a high-functioning market structure that can facilitate a significant increase in the level of investment in the climate transition,” said Steve Ashley, GFMA chairman and head of the wholesale division at Nomura, in a release.

“It’s important to note that, while the banking and capital markets sector stands ready to facilitate change, we need the support of policy-makers and the wider private sector to create the incentives to make this work,” he said. “We hope this report will act as a call to action.”

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Bitcoin – a Means of Financial Investment – Net Newsledger

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When it comes to money and financial assets, it’s only a thin line that separates them. Even though some people classify money as a particular type of financial asset, this, in turn, does pay back little or no interest at all. Other types of financial assets do have huge interests or returns on investments (ROI). Take for example, when you buy stocks and bonds, you would expect to get some kind of interest on it or receive dividend payments, you can even go as far as selling the stock at a very high price in the future.

Even though Bitcoin was developed with the intent of serving as an international currency, there have been changes over the year and the increase in demand for bitcoin has made it a means of investment for many people. Today, Bitcoin has turned into a high financial investment asset that can be used for different transactions.

Bitcoin which is being characterized as a means of financial investments has drawn the interest of many investors and at the same time, it has given room for financial loss. While it can be argued that the line between financial assets and money is very thin, investors’ actions generally have revealed the role asset plays in the economy.

Truly, Bitcoin price chart has really been inconsistent over the years, sometimes we experience a high run-up in price and sometimes, it is followed by some drastic crashes but checking through this chart, it has been studied that it consistently retained a large portion of its gains every time it plummets. Since the first introduction of Bitcoin, it has been the first digital asset to start the current ecosystem of cryptocurrencies. For quite a while now, investors have seen its future as a possible and replacement to the physical money we have now.

Today, the hype surrounding Bitcoin has basically been keeping it as a financial investment instead of using it as a means of payment for goods and services, You can start earning with immediate bitcoin. Jannet Yellen, who is a Former Federal Reserve said that Bitcoin is “not a stable store of value and it doesn’t constitute legal tender. It is a highly speculative asset”.

The amazing benefits Bitcoin introduced to the market cannot be over-emphasized. For one, it is a safe ecosystem for your peer-to-peer money transactions. There are little to no intermediates when it comes to Bitcoin transactions. That is why it is cost-efficient and also very fast. You can send millions of Bitcoin within a few minutes and the cost of sending this is very low compared to using fiat currency. Bitcoin has made international payments so easy in a previously unimaginable way.

If you are an investor looking to invest in bitcoin through the capital markets, then you should do that with Bitcoin Trader.Using Bitcoin Trader provides investors some certain advantages which makes an investment in bitcoin a more reliable option. For one, their system ensures a transparent trading environment through DLT technology. Also, they use trading algorithms that implement HFT trading techniques which generate profits from even the slightest market movement.

When investing in Bitcoin, you can approach it from two different scenarios:

Short Positions on Bitcoin

When there is a Bitcoin bubble (which means rise in prices of bitcoin followed by a decrease in the price), investors might bet on bitcoin decreasing in value. With this, they might decide to sell bitcoin at a certain price, and after some time, they buy it at a price lower than the selling price. Take for example, if you buy bitcoin worth $1000 and later sell it at that same rate, and you wait for bitcoin to decrease in value before buying it back. You would be buying it at a very lower price, thereby making more profits.

But you have to be careful when taking this approach, there is a high possibility that the market might move against, which might result to losing money. Before going for this, as an investor, you should have a deep knowledge about leverage and margin calls.

Long Positions on Bitcoin

With this strategy, investors want a less immediate return. They purchase bitcoin and wait till the end of a price rally before selling it. This process can be approached in so many ways, one of them is relying on the cryptocurrency’s volatility for a high rate of return, should the market move in the investor’s favor. Several bitcoin trading sites like Bitcoin Trader now exist. These platforms have provided leveraged trading. Bitcoin Trader has a trading program that conducts bitcoin trading automatically.

Final Notes

The decision to make Bitcoin a means of financial investment boils down to your appetite for risk. The price could drop drastically, going against you as an investor, and a single online hacking or hard drive crashing can wipe out your stash of Bitcoin with no compensation or repayment. You need to transact with a reliable trader!

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India’s risky investment climate – Financial Times

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Last year, India celebrated a milestone in its long campaign to attract foreign direct investment, crossing the $500bn mark in cumulative inflows over the past two decades. For the government, it was a welcome piece of good news and a sign that overseas interest remained undimmed. The numbers, however, obscure a less promising reality. India’s economy, hard hit by the pandemic, has fallen into recession and there are worrying signs that the government of Prime Minister Narendra Modi, far from pursuing a path of liberalisation, is turning inwards.

There are good reasons to scrutinise the supposed momentum behind the foreign investment influx. While foreign companies, including Amazon and Walmart, have gained footholds, a shifting regulatory environment has all too often sent the wrong signal to international investors. And although Silicon Valley money poured in last year, a large chunk was directed at a single company: Jio Platforms, the telecom-and-digital services arm of Mukesh Ambani’s Reliance Industries, which attracted more than $10bn from the likes of Facebook and Google.

Foreign companies may be investing but the overriding trend is still through joint ventures or by taking minority stakes in companies owned by powerful Indian entrepreneurs. James Murdoch recently reunited with Uday Shankar on a media venture. All too often, the sums involved are not large and appear to be more defensive plays than a serious attempt to commit to the Indian market.

There are longstanding concerns that Mr Modi’s government, far from being the business-friendly administration that executives had hoped for when his Bharatiya Janata party came into power has, at best, an ambivalent attitude towards foreign investment. It has proven itself to be, in essence, an economic nationalist government. Regulation has remained unpredictable and frequent policy changes, including the recent increase in import tariffs, have fostered uncertainty

The precariousness for international investors has been exacerbated by New Delhi’s ambivalent attitude to the rule of law, in particular in reference to two corporate tax disputes, with Vodafone and Cairn Energy, which had gone to international arbitration. They stem from a decision by the previous Indian government in 2012 to change the tax code retrospectively, a move that gave it the power to claim taxes for deals struck years earlier if the underlying assets were in India. The government lost its case against Vodafone in September and against Cairn in December.

The government has since challenged the Vodafone ruling. Business expects it to do the same in the Cairn case. It is time for the government to accept the rulings. It should also make clear that it will no longer use or follow up on retroactive tax claims. Both actions would send a powerful signal that India is committed to the fair treatment of investors. Mr Modi commands strong popular support and should ignore dissenting voices that believe the government would look weak to its domestic audience. 

There is a risk that the recent backlash that has greeted government proposals to modernise India’s agricultural sector might reduce the incentive to liberalise in general. This would be a shame. As western companies seek to diversify their operations from China, India has a unique opportunity to become an alternative destination for manufacturing investments. As China has shown, export-oriented manufacturing is a critical factor for economic growth. India has a valuable opportunity to signal that it is open for business.

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Money managers debate Bitcoin's investment value – Economy, Law & Politics – Business in Vancouver

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Varshney Capital partner Praveen Varshney’s son Aneesh urged him to start buying Bitcoin in 2017 | Martin Dee

Venture capitalist and Varshney Capital partner Praveen Varshney started buying Bitcoin in 2017, when the cryptocurrency was priced around US$15,000.

His teenaged son, Aneesh, was too young to open an account but had been pestering Varshney to open one so Aneesh could invest $500.

Varshney complied to help Aneesh learn about investing.

The Varshneys have since invested thousands more dollars into the cryptocurrency, which surged more than 300% in the past six months to a value of more than US$40,000 for the first time in early January. 

Their most recent purchases were in late December.

The road has been rocky. Bitcoin’s price spiked to more than US$17,500 in early 2018, before falling to less than US$5,000 later that year.

bitcoin chart

(Image: This chart shows Bitcoin’s value during the past year | TradingView.com)

Varshney also co-founded Mogo – a Vancouver-based financial-technology company with a platform that enables the general public to buy Bitcoin.

“What investors in Bitcoin like is that it has an arithmetically programmed, fixed supply of 21 million [coins],” Varshney said. “You can’t ‘print’ or make more Bitcoin.”

That fixed supply buttresses Bitcoin’s stored value compared with fiat currencies, which governments around the world have debased by printing additional money to help grapple with ever-larger debts, he said.

Around 18.5 million bitcoins are in circulation. The remaining 2.5 million have yet to be mined or created.

“Good money has scarcity, durability, portability, verifiability and divisibility,” Varshney said. “Bitcoin beats even gold in these.”

Varshney said Mogo charges a 1% fee to buy bitcoins, has competitive exchange rates and does not require account holders to provide passport identification, which some platforms demand.

Another popular way to invest in Bitcoin is to buy shares in Grayscale Bitcoin Trust, which is solely invested in Bitcoin, so its share price tracks the price of Bitcoin.

Regardless of how an investor wants to gain exposure to the price of Bitcoin, there are plenty of financial advisers who suggest a rethink.

“It is in bubble territory,” said longtime money manager and author Thane Stenner, who plans to join Canaccord Genuity Wealth Management next month as a director and vice-president of wealth management. “The old historical story around the Dutch tulip frenzy comes to mind.”

In the 1600s, single tulip bulbs in the Dutch Republic sold for many times the average annual salary of skilled workers.

“I struggle to fully understand the value proposition of Bitcoin vis-a-vis gold,” Stenner said, “and my bet would remain on gold long term.”

Leith Wheeler CEO Jim Gilliland shared Stenner’s skepticism.

jim gilliland

(Image: Leith Wheeler CEO Jim Gilliland says his company does not invest in Bitcoin or other digital currencies because their fundamental values are obscure | Chung Chow)

“It’s unclear, in terms of the demand, as to what the fair value for something like Bitcoin is,” he said.

“For us, as value investors, we would like to have some underlying pinning of value. For companies, it’s earnings power. For credit instruments, it’s the ability to repay. For something like a digital currency, even though it has a restricted supply and is used as a store of value, for us, we can’t have a clear understanding of what the underlying value is of that asset, so we don’t invest in digital currencies on behalf of our clients.”

Genus Capital CEO Wayne Wachell called the precipitous rise in the value of Bitcoin “breathtaking.”

He pointed to a JPMorgan Chase & Co. research note in early January, written by managing director Nikolaos Panigirtzoglou, which said Bitcoin’s price has the potential to reach US$146,000 in the long term.

“If it becomes a true tender, It’s going to have some legs here,” said Wachell, who owns no Bitcoin and has not bought any for clients.

He suspects that central banks around the world could try to control cryptocurrencies by taxing them.

Varshney, however, rejects that idea.

“How can they?” Varshney asked. “This is a global currency. How does a government even monitor it?” •

gkorstrom@biv.com

@GlenKorstrom

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