Liquid Gold

Posted by Warner Schwartz on August 6th, 2021

Mass market adoption by a stablecoin issued by Big Tech firms may change that calculus quickly. Treasurers generally operate in only one of the monetary slipstreams - the commercial bank money layer of the fiat currency system. The modern age of fiat currency only dates from Bretton Woods, when Nixon suspended convertibility of USD to gold. In the past we have had many different forms of money – commodity money, representative money, managed money and other flavors. One constant that goes back to Babylonian times is the sovereign’s prerogative to decide what should count as money. Because changing dollars for bitcoin is slow and costly, traders wanting to realise gains and reinvest proceeds often transact in stablecoins, which are pegged to the dollar or the euro. Such coins, the largest of which are Tether and USD coin, are now worth more than 0bn. On some crypto platforms they are the main means of exchange. This maturing, however, has failed to tame the wild gyrations that characterise crypto markets. About a year later, the price of one bitcoin hovered around ,000. It has since recovered a portion of those losses, but is nowhere near its one-time high price point. Some critics who argue that bitcoin is too volatile still see potential for the blockchain system to be widely used. Meanwhile, bitcoin’s supporters see a global financial system sea change under way that is buttressed by all the functions of cryptocurrency. He details the current state of today’s “hyperinflationary” environment, and how diversifying your portfolio with gold royalties can protect and preserve your capital during such a time. While we’re 100% confident in Liquid Crypto Profits based on real user results, we don’t want you to have any doubts. The platform, automated funnel & included traffic are all set up for you. Generate a lucrative CRYPTO BUYERS list at the same time, on autopilot. But cryptocurrencies aren’t going away either—on the contrary, they are helping revolutionize finance altogether by threatening to eliminate traditional “middlemen” in transactions, whether that be private banks, lawyers, or even central banks. I have a very fast computer and I want to mine bitcoin and other currency. You might have a very fast computer, but unless the processor is optimized for mining bitcoin, you probably won’t mine bitcoin at an economical rate that covers the cost of electricity. Very powerful processors called ASICs sell for thousands of dollars apiece and are custom-designed for specific cryptocurrencies. But if you’re hellbent on mining bitcoin on your personal computer, there are several mining applications from which to choose. Bitcoin is the first mover, however, with inherent advantages. It is also a gateway to decentralized applications that are built on top of Ethereum. The Status app will be available for mobile to enable on-the-go use. The team behind Status held an ICO on June 20th and raise million. It seems inevitable that the IRS will treat profits and losses from cryptocurrency bets the same as it treats other investment income. Why are there vast disparities among trading values in cryptocurrencies? First, different cryptocurrencies trade on their own dynamics. There are differences in the number of coins outstanding, different uses for them, and different rules of operation. If things do go awry, there is not one management group or individual to hold responsible. Moreover, the lack of regulation and anonymity of not having an identifying owner associated with Bitcoin also creates opportunities for illicit transactions. To the extent that governments crack down on illicit activities through Bitcoin in the future, it is not clear how it would affect demand for this asset. In addition, it is very likely that IRS reporting and tracking of Bitcoin transactions will increase substantially as time goes on. It plans to provide blockchain solutions that offer efficiency, security and data integrity. The start-up carried out its ICO in June to support the project development. That Liquid Crypto Gold bonuses held the record until Tezos overtook it three weeks later. ICO is a way for start-ups to raise money by issuing a new cryptocoin, while users pay them bitcoin or ethereum. Bitcoin's performance this year has validated its place in any forward-looking, diversified investment portfolio as we saw institutional investors add the billions worth of digital assets to their treasuries. In the eyes of some market observers, bitcoin is still searching for its place in the asset allocation spectrum, but many backers of the digital currency typically compare it to gold, a comparison gold bugs are often loathed to acknowledge. Bitcoin advocates argue that the notorious cryptocurrency can be a good safe-haven investment. However, the product has tended to trade closer to equity markets in recent times and has been plagued by massive volatility, which has either made investors fortunes or crushed them. In addition to traditional fiat currencies, if there’s one asset Bitcoin is often compared with, it’s gold. In fact, the largest cryptocurrency is often referred to as ‘digital gold’. They’re not exactly regulated the same way banks are, because banks obviously have FDIC protections, and if the bank goes bust, the government will guarantee your savings in that bank up to a certain threshold. That’s not the case with bitcoin banks because there’s no possibility to have that FDIC because there isn’t a lender of last resort beneath that system. It comes in, and it got started in these places due to the fact that the local unit of account, the Venezuelan bolívar, has completely disappeared. And by the way, I have very good sources on the ground in Venezuela, and today as we speak, with inflation, as I measured, over 2,000 percent in Venezuela, about 80 percent of all the transactions are actually done in US dollars. And bitcoin, at most we’re talking about a fringe footnote that’s picked up by bloggers and bitcoin fanatics and that kind of stuff, but it’s peanuts. But importantly, on days when bitcoin was beneath its highs, it was trading on average 53.5% below its highs. By contrast, when gold was trading beneath its highs, it traded on average 25.6% below its highs, and for the S&P 500, that number was 3.8%. In other words, when bitcoin prices fall, they tend to fall hard. Other cryptocurrencies have also had strong price appreciation — and have been similarly volatile with substantial drawdowns. In other words, cryptocurrencies have historically offered significant reward and significant risk. The traditional move would be to hedge against stock volatility with gold. Today, VanEck offers active and passive strategies with wide exposures. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. As is evident in the table above, Bitcoin and other cryptocurrencies are not a new type of money. The fact that it’s not used in a retail payments context, no one buys coffee with grains of gold, that doesn’t delegitimize gold as a monetary good. It just means that people are using it more as a way to store value over time, especially relative to sovereign currencies. So the idea that the dollar — per your M4 definitions, generates value — from the perspective of a regular person, does not hold. It might hold in a larger financial ecosystem, because the Treasury would print more money.

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Warner Schwartz

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Warner Schwartz
Joined: January 9th, 2021
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