In today’s edition, Christopher Jensen from the Franklin Templeton cuts through some of the noise and misunderstandings about cryptoinvesting in today’s myth-busting article.
Then Pablo Larguia from Senseinode answers questions about inserting rewards into Ask an expert.
—Sarah Morton
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Myth Busting: 3 things that investors still take wrong at crypto
Cryptocurrencies have been around for over a decade, but remain largely misunderstood by the investment community. In this article, we expel some of the greatest myths about crypto to help you assess opportunities and risks.
Myth # 1: “Investment in crypto is complicated and confusing.”
The prospect of dealing with digital wallets, private keys and unregulated crypto exchanges has led to many traditional investors believing that investing in crypto is outside of them. However, the emergence of Crypto Exchange-Traded Products (ETPS) in 2024 presents investors with a new Avenue to access digital assets in a well-known investment vehicle.
With Crypto ETPs, investment in digital assets like Bitcoin has become as simple as buying shares on a stock. Investors can buy Bitcoin and Ether ETPs through their regular brokerage accounts, just like any other security. This eliminates the need to set up and control cryptocurrency books on an exchange, making Crypto accessible to a wider audience. In addition, these ETPs are regulated financial products, providing an extra layer of security for investors. Although there is certainly a lot of truth behind the old crypto-word language, “not your keys, not your crypto,” the popularity of Crypto ETPs shows that self-defense doesn’t have to be the only way to get crypto exposure.
Myth # 2: “It’s too late to invest in Bitcoin-I missed the upheaval.”
While Bitcoin has seen significant award assessment, the idea that it is “too late” to invest is misled. In reality, Bitcoin remains in the early stages of institutional and mainstream resolution with significant potential for future growth.
At about $ 1.7 trillion, Bitcoin’s market value is less than 9% of Gold’s (~ $ 19.4 trillion) and an even smaller fraction of the stock, bond and real estate markets. If Bitcoin continues to win traction as a store of value, exchange agent or reserve active, its market capital could expand significantly.
Bitcoin’s hard-capable supply of 21 million makes the inherent scarce-94% of all BTC has already been extracted and as much as 20% can be permanently lost. Meanwhile, Bitcoin’s issuing rate, otherwise known as its “block payments”, shrinks about every four years, which means new supply is continuously while demand is growing, especially from institutional investors.
The launch of BTC Exchange-traded products just over a year ago has crushed items, with cumulative influxes exceeding $ 35 billion the fastest growing ETP launch in history. These products provide both institutions and retail investors with regulated, trouble -free access to Bitcoin that speeds up the mainstream venue.
The recent presidential change in the United States has launched a significantly more favorable attitude towards digital assets. Policies that once prevented the adoption are reassessed open the door to wider institutional participation. On March 2, the administration announced that it went ahead with the creation of a crypto strategic reserve that would include five larger coins – Bitcoin (BTC), Ether (ETH), Ripple (XRP), Solana (Sol) and Cardano (Ada). In addition, 18 US states actively review the adoption of Bitcoin Reserve, while a total of 33 states are considering legislation to establish their own Bitcoin reserves. This emphasizes Bitcoin’s growing recognition as a legitimate financial asset.
Another major shift is the recent cancellation of SAB 121, which removes an important regulatory barrier to crypto uptake by paving the way for the banks to more easily last Bitcoin and digital assets. This can unlock a significant institutional demand and further integrate Bitcoin into the financial system.
Bitcoin is still in the early laps of adoption. Its small market size in relation to traditional assets, supply restrictions, institutional momentum and developing regulatory landscape all suggest that the opportunity to invest is far from past. While previous award assessment does not guarantee future returns, the narrative ignores Bitcoin’s best days behind it, the wider macroeconomic and institutional trends in games.
Click here to read the full article on Franklin Templeton’s website.
All investments involve risks, including possible loss of principal.
Blockchain and Cryptocurrency Investment are subject to various risks, including the inability to develop digital asset applications or to utilize these applications, theft, loss or destruction of cryptographic keys, the possibility that digital asset technologies may never have been fully implemented, cybersecurity -risk, conflicting intellectual property requirements and inconsistent and changed rules. Speculative trade in bitcoins and other forms of cryptocurrencies, many of which have exhibited extreme award volatility, is of significant risk; An investor may lose the full amount of their investment. Blockchain Technology is a new and relatively untested technology and may never be implemented on a scale that provides identifiable benefits. If a cryptocurrency is considered a security, it can be considered to violate federal securities laws. There may be a limited or no secondary market for cryptocurrencies.
AndChristopher Jensen, Head of Research, Franklin Templeton Digital Assets
Ask an expert
Question: Why are inserting rewards often seen as a type of investment?
ONE: Many people perceive effort as passive income, as returns are often expressed by the help of annual percentage dividends (APY). However, its source of income is not from interest; Instead, it is generated by revenue earned to perform critical network security tasks.
Question: Why is it inserting a security feature, not an investment?
ONE: The British Treasury recently stated that efforts are not an investment scheme, but instead of a core security and cryptographic service that is essential for validation of transactions on a proof-of-stake (POS) blockchain. Stacking is a security function as participants ensure decentralized networks and rewarded for making it effective. Protocols such as Ethereum define validator rewards through publicly available mechanisms, such as EIP-2917.
While poor wages can be predictable, they swing based on validator benefits and networking conditions. Recognition of efforts such as the backbone of Blockchain safety ensures a political framework that is consistent with its true role.
-Pablo Larguia, founder and CEO, Senseinode
