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Cryptocurrency

Germany’s biggest bank says more people now prefer Bitcoin over gold

Germany’s biggest bank, Deutsche Bank, recently disclosed that more people are beginning to prefer Bitcoin over gold in hedging their money.

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Germany’s biggest bank, Deutsche Bank, recently disclosed that more people now prefer Bitcoin over gold in hedging their money.

In a note credited to Zerohedge, the financial juggernaut of Europe’s biggest economy, revealed investors are steadily seeing Bitcoin as a legitimate store of wealth option.

READ: Investors are selling Gold ETF for cryptocurrency

What they are saying

Deutsche Bank research strategist, Jim Reid, gave key insights into what is changing investors to see Bitcoin more as a tool to hedge their cash better than traditional safe-haven assets like gold.

READ: Nigeria needs to spend $3 trillion in over 30 years to bridge infrastructural gap – Moody’s Report

Bitcoin is up another +3% overnight and seems to be creating a momentum of its own. It’s up over 70% in the last six weeks, as more and more investors are starting to see it emerge as a credible asset to invest in. There also seems to be an increasing demand to use Bitcoin where Gold used to be used to hedge Dollar risk, inflation, and other things,” Reid said.

Bitcoin’s strong performance is no shock to some analysts, especially in the context of the benchmark cryptocurrency showing a high correlation with global equity markets.

READ: Credit to Nigerian economy falls to N38.67 trillion

Given that equities are now near, or in some cases above, their highs reached in February, it’s not surprising to see BTC do the same,” said Ryan Watkins, BTC analyst at Messari.

Why compare returns from BTCs to gold or other precious metals? “Gold is bitcoin’s most aspirational asset,” explained Watkins. “Like BTC, gold is a scarce commodity, whose value is derived almost entirely from its monetary premium.”

READ: Africa’s GDP could fall by 3.4% in 2020 if COVID-19 continues – AfDB 

What you should know

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Nairametrics revealed how the yellow precious metal underperformed BTC by nearly 11% points, despite surging to about 16% in the first half of 2020 and touching eight-year highs last month. Platinum and silver both ended the first half of 2020 with negative gains.

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READ: Union Bank Nigeria Plc posts N15.9 billion profit in 9M 2020, up by 2%

Bottom line

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It is fair to understand the bias of global investors on choosing the flagship crypto, taking into account that gold is up 26.37%, while Bitcoin is up 120% on the year.

READ: Nigeria’s oil sector contracts by 13.89%, as covid-19 plunges economy into recession

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Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Cryptocurrency

VP Osinbajo disagrees with CBN, calls for crypto regulation

Vice President Yemi Osinbajo had recently called for Crypto regulation knowing fully well the role Crypto play in the global financial ecosystem.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

The Vice President of Nigeria, Prof. Yemi Osinbajo has recently called for Crypto regulation knowing fully well the role Crypto plays in the global financial ecosystem as he opined that such disruption often makes room for progress.

Osinbajo also advised the SEC, and Central Bank of Nigeria in creating a regulatory road map, while fully appreciating the stance of the CBN, Nigerian SEC, and law enforcement agencies on the possible abuses of crypto assets.

The vice president further stressed the importance Cryptocurrencies would play in the coming years as they will most likely challenge traditional banking, including reserve banking, in ways the world hasn’t yet imagine, stressing the need for Nigeria in being prepared for such a seismic shift.

He also called for scaling up of government-private sector interventions because, “the task of national development requires that we fire on all cylinders, after all at one stage China was building 1.9m housing units per year.”

READ: Why Crypto black market is thriving in Nigeria

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Cryptocurrency

Why a number of investors are trading stocks through blockchain

More than half (56%) of Robinhood account holders are considering leaving the platform as a result of the fiasco.

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The recent outrage by WallStreetBets over the temporary suspension of GameStop (GME) and a few other stocks has led a significant number of stock traders to seek other viable means of trading stocks.

Recent data retrieved from Fortune Magazine revealed that such fiasco which led to the suspension of trading such stocks by leading American stock trading app, Robinhood, has severely damaged its brand.

More than half (56%) of Robinhood account holders are considering leaving the platform as a result of the fiasco. 40% of Robinhood investors say they aren’t considering it, and 4% say they’ve already left the platform as a result of its stock limiting. It looks like Robinhood is learning the lesson Warren Buffett preached for years: “It takes 20 years to build a reputation and five minutes to ruin it.”

READ: This US stock gained 185% since we selected it

Blockchain technology is already revolutionizing financial system services. This technology has made the need for a third party unnecessary in transactions or access to the stock market. Conventionally, buying stocks usually requires a stockbroker, paperwork, or a long list of financial assessments.

Unlike regularly traded stocks, tokenized stocks do not require any sort of paperwork or the need for a stockbroker as a middle-man, which makes them free from the stockbroker’s fees.

Tokenized stocks are derivatives assets. This simply means that the price of a tokenized stock is determined by the price of the company’s stock. If a particular asset is traded at a certain price on a stock market, the same price or a little difference in price will be traded on different exchanges.

Tokenized stocks are digitalized forms of a company’s stock traded on secondary markets. What this means is that Tesla, Apple, Facebook, etc. stocks can be traded on a crypto exchange. Trading Tesla’s stocks, for instance, on crypto exchanges makes it easily accessible to purchase anywhere.

READ: What bad stocks have in common with bitter relationships 

Tokenized Gold, Silver, Tesla, etc. are traded on FTX Exchange and other leading crypto exchanges where spot markets and futures can also be traded.

What you must know: The group tagged as the Wallstreetbets is a longstanding subreddit channel founded in 2012, where many Reddit users discuss highly speculative trading strategies and ideas.

  • The group has caused huge disruption to financial markets in the previous week, especially among institutional investors like Melvin Capital who recently recapitalized their fund amid its losing positions at Gamestop.
  • Stock traders are becoming concerned that hot trending stocks such as GameStop, rising at such an alarming rate might lead to great chaos at global financial markets, in the long run.

That said, tokenized stocks are traded round the clock like crypto assets, though the flip-side is, they can’t be liquidated when the traditional market is closed.

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