You can’t get very far these days without hearing the word cryptocurrency or Bitcoin. And, with good reason. Bitcoin and cryptocurrency outperformed any other asset in the market in 2020. In a year of financial volatility, cryptocurrency stayed strong when long-adopted assets like gold, silver, and crude oil declined.
Despite these strong numbers, bitcoin only has a 2% adoption rate. You could read that as market skepticism, or you could read it as an opportunity to get in on the ground level before it takes off. Deltacore Capital, a Barclays award-winning hedge fund that focuses on digital assets, is leading the way in cryptocurrency investment.
I asked them for their five tips for those considering investing in cryptocurrency. Here’s how to get started the smart way.
Tip1# Do your due diligence.
Don’t go into investing blindly. Make sure you do your research and vet your sources. Cryptocurrency is generating a lot of buzzes online, especially on social media or from self-proclaimed crypto gurus. But talking about it doesn’t make you an expert. You need data-driven information to make an informed decision.
Consult experts who have a history in both investment and an understanding of digital assets. Make sure your information is coming from the right people, and don’t fall prey to the blind enthusiasm of get-rich-quick investment schemes. If you want to make a sound investment, you need to be in it for the long haul.
Tip2# Make trades based on data.
The market never lies. This may seem like simple advice, but many investors get caught up in what they “think” will work or the types of investments they’re biased towards.
Data is the only way to correct bias. Keep track of how the data develops over time. Make sure that your trades and investments are motivated by quantifiable data, and not by personal opinion. If you can’t back it up with numbers, it’s not a worthwhile investment.
Tip3# Keep emotions out of investing.
Investing is a long-term commitment. If you can confidently say you’ve done your research and have made strong calculations, don’t be thrown by short-term fluctuations. You should never make a financial investment based on excitement and opportunity alone. Keep your emotions about investing separate from the action of investing. Don’t let them govern your decisions.
Tip4# Understand market caps.
One thing is for sure: the potential for growth with any investment can be found in its market cap. A market cap is the total dollar amount a company is valued at based upon the stock market. It’s calculated by multiplying the number of outstanding shares a company has by its current market price (CPM). It’s not about how cheap or expensive an asset is, but about how much potential it has for growth.
Are you sensing a theme? Smart cryptocurrency investments are data-driven. Make sure that you can see the end goal, or the life of your investment, from the start. Market cap informs the level of risk associated with an investment, growth potential, and even how sensitive they are to economic changes.
Tip5# Invest with a strategy.
Cryptocurrency investments aren’t for those looking to get rich and get out. You have to have a strategy for moving forward. Gathering data and information is essential to creating a strategy, but it’s also about knowing what you are willing to invest (both monetarily and in terms of time). Figure out exactly what you want from your investments, and how much you’re willing to spend. Building these parameters will help you make smarter decisions as you learn.
Successful investors are proactive and not reactive. Investing in cryptocurrency requires a strategy, and a willingness to stick with long-term goals. Experts like Deltacore Capital, who are well-versed in balancing the risk and reward of investing, are making it possible to get in on the ground level of cryptocurrency by making calculated, data-informed steps. If you want to be an early adopter, they’re certainly leading the way.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
