Wednesday March 03, 2021
Bitcoin (BTC) $49,964.00   Ether (ETH) $1,574.93
  • Events
  • News
    • Blockchain Technology
    • Capital Raising
    • Crypto Exchanges
    • Crypto Payments
    • Gaming & Betting
    • Networks & Protocols
    • Security
    • Vendor Technology
    • Wallets
NEWSLETTER SIGNUP
EXCHANGE 300+ COINS
CryptoNinjas
  • Crypto & Blockchain Links
  • Real-Time Market Data
  • Bitcoin ATM Map
  • Token Offerings/Listings
No Result
View All Result
CryptoNinjas
No Result
View All Result
Home Crypto Exchanges Trading

The Easy Way to Navigate the Crypto Markets Volatility Storm

Published by CryptoNinjas.net
09/06/2017
The Easy Way to Navigate the Crypto Markets Volatility Storm

Cryptocurrencies remain one the most volatile, yet attractive investments today. Still, a single move from the regulators can make the crypto markets look like a bloodbath, so many investors would think of them as risky investments. But there’s already a way of investing in crypto with exposure to real assets. Asset-backed tokens give you the benefits of crypto, such as low transaction costs and transparency, as well as the security of having a physical asset.

The first asset-backed tokens have already appeared. They are linked to fiat currencies, like Tether (linked to USD), precious metals, like Digix, and shares of blue chips, like tokenized Apple, Facebook and other shares currently traded on the LAT platform. The market capitalization of the asset-backed cryptocurrencies may exceed $4 trillion by 2025, and they will account for at least 80% of the total cryptocurrency capitalization as the market develops.

Volatility is a fact of crypto markets

Investing in cryptocurrencies is not for the faint of heart, as these are one of the most volatile assets on the market today. Reaching all-time highs can be followed by impetuous crashes within just a few days. Just like the price of Bitcoin that reached the milestone value of $5,000 on Friday, has fallen almost 13% since.

While Bitcoin is the least volatile cryptocurrency, its weekly volatility reaches up to 60% per annum, and the other coin pairs show even bigger swings. That, for sure, repels lots of conservative investors from the market. Along with a tightening regulation of the blockchain industry.

Regulation is coming

This time cryptocurrency prices are in the fall because of the after a new ruling from Chinese regulators, banning ICOs and asking for all related fundraising activity to be halted immediately. The directive made no mention of the major cryptocurrencies. But their prices tumbled immediately: Ethereum, widely considered the biggest beneficiary of the ICO boom, was down more than 12%, and Bitcoin was down 7% as China is the country where 42% of all Bitcoin transactions have accounted for this year.

Chinese regulation comes as one of the strongest regulatory challenges so far to the burgeoning market for digital token sales, but not the first one to crash the market. In the beginning of August, SEC had officially confirmed it was looking into regulation of cryptocurrency ICOs and warned that ICOs may be considered securities. Singapore quickly followed suit.

It’s obvious that regulators are trying to prevent investors from losing their money to scam projects. But can they stop the development of the newborn crypto economy?

Still a very attractive investment

While volatility and the tightening regulations may be off-putting, the returns on digital asset classes remain extremely attractive to investors. There’s no other asset class in the world that could’ve given you the historical performance of this sector. To put things into perspective, in the beginning of 2017, Bitcoin was priced at around $970 and Ether at roughly $8.

The historic performance is not a representative of future earnings, but our estimation is that by 2025 the total capitalization of cryptocurrencies will exceed $5 trillion, as crypto wallets penetration will reach 5% of the world’s population. It’s a pretty conservative estimate, compared to some of the market forecasts. Peter Smith, the CEO of Blockchain, and Jeremy Liew, the first investor in Snapchat, said that the market capitalization of Bitcoin alone may explode to $10 trillion by 2025.

With such perspective, not many people would like to go back to fiat. And there’s already a way for them to hedge their crypto investments with real assets without converting. The rise of asset-backed cryptocurrencies let you have both – the security of having a physical asset and the convenience of a crypto.

Asset backed tokens to drive industry growth

Asset-backed cryptocurrencies have their value linked to real-world assets, such as equities, commodities or fiat money. There are historical analogs of the way they work. Centuries ago, you could park some gold with a goldsmith, and receive an “I Owe You” note from them. These notes could be transferred from person to person, and anyone holding it could go back to the goldsmith and claim the actual gold.

Asset-backed tokens are the digital equivalent of those notes. They are claims on the underlying assets, that get passed between people, while all the transactions are recorded on the blockchains. They have benefits of crypto, such as low transaction costs, security, trustless exchange and smart contracts functionality. At the same time, they are a good store of value by design since their volatility is lower, and they are more predictable and less risky. These assets are more likely to be favored by the regulators as they have a valuable collateral behind them.

The first asset-backed tokens, linked to fiat currencies, precious metals, shares of blue chips, and commodities have already appeared. Our estimation is that the market capitalization of the asset-backed cryptocurrencies may exceed $4 trillion by 2025, and they will account for at least 80% of the total cryptocurrency capitalization as the market develops.

That will make the tokenized assets platforms, that significantly reduce costs of creating such tokens, help their spread and offer significant diversification and portfolio optimization opportunities to crypto holders, the leaders of the blockchain industry.

FacebookTwitterLinkedinRedditE-MailTelegram

Related News

Cryptocurrency exchange LATOKEN lists PIVX token
Token Offerings/Listings

Cryptocurrency exchange LATOKEN lists PIVX token

03/16/2020
XRP, LTC, TRX, and ATOM now available to buy with bank card on LATOKEN
Crypto Exchanges

XRP, LTC, TRX, and ATOM now available to buy with bank card on LATOKEN

01/16/2020
LATOKEN CryptoNinjas
Crypto Exchanges

Crypto exchange LATOKEN launching major new upgrades

10/27/2019
LATOKEN BitCNY
Token Offerings/Listings

LATOKEN lists bitCNY stablecoin from BitShares

10/17/2019
LATOKEN Tezos XTZ
Crypto Exchanges

Crypto exchange LATOKEN lists Tezos (XTZ)

10/16/2019
Load More
Leave Comment

Where to Exchange

Bit2MeLeading Spanish Bitcoin ExchangeVisit
BL3P
European Bitcoin ExchangeVisit
ChangellyExchange & Buy 150+ CryptocurrenciesVisit
itBitAmerica's First Regulated Bitcoin ExchangeVisit
  • Trending
  • Latest
CasinoCoin to migrate to XRP Ledger amidst rebranding

CasinoCoin to migrate to XRP Ledger amidst rebranding

03/01/2021
Horizen to integrate IOTA Oracles on its sidechain protocol Zendoo

Horizen to integrate IOTA Oracles on its sidechain protocol Zendoo

03/01/2021
Canadian bitcoin exchange CoinSmart raises $3.5M to expand into Europe

Canadian bitcoin exchange CoinSmart raises $3.5M to expand into Europe

03/01/2021
ZelaaPayAE deploys Pundi X's merchant crypto payment solutions for UAE

ZelaaPayAE deploys Pundi X’s merchant crypto payment solutions for UAE

02/24/2021
Glow programming language brings smart contract simplicity to Cardano

Glow programming language brings smart contract simplicity to Cardano

02/26/2021
Crypto services firm BCB Group raises $4.5M led by North Island Ventures and Blockchain.com Ventures

Crypto services firm BCB Group raises $4.5M led by North Island Ventures and Blockchain.com Ventures

03/02/2021
DEX aggregator 1inch integrates Bitquery's API-powered crypto trading data

DEX aggregator 1inch integrates Bitquery’s API-powered crypto trading data

03/02/2021
Crypto exchange BiKi cooperates with Hacken on security test

Crypto exchange BiKi cooperates with Hacken on security test

03/02/2021
Binance makes strategic investment in crypto hedge fund Multicoin Capital

Binance makes strategic investment in crypto hedge fund Multicoin Capital

03/02/2021
Crypto investment platform Unchained Capital closes $5.5M funding round

Crypto investment platform Unchained Capital closes $5.5M funding round

03/02/2021
  • Home
  • Directory
  • Data
  • About
  • Contact
SUBSCRIBE

© 2016 - 2021 CryptoNinjas Disclosures | Privacy Policy

  • Home
  • Crypto Links
  • Market Data
  • Blockchain Tech
  • Exchanges
  • Capital Raising
  • Vendor Technology
  • Token Offerings/Listings
  • Payments
  • Wallets
  • Bitcoin ATM Map
  • Conferences & Events
  • About
  • Contact

© 2016 - 2021 CryptoNinjas Disclosures | Privacy Policy


Go to mobile version