Category: Modern comic book investing
- 9 лет назад
- Время на прочтение:0минута
- от автора Kagar
- comments: 4
What are the ground rules? Crypto specialists say the most important rule for investors is to be prepared to lose all their money. On April 13, bitcoin began a sharp decline, its exchange rate shedding 23 per cent in less than two weeks. Marcus Swanepoel, chief executive of Luno, a retail-focused cryptocurrency exchange with 5m-plus customers, says that in some cases they were overstretching themselves.
Luno surveyed its clients last year and found that 55 per cent had no other investments. Borrowing money to pump up trades with leverage amplifies gains but inflates losses. As there are no official rules, trading platforms allow investors to wager multiples of the money they deposit, inflating the amount at stake by as much as a times.
Choosing the right coin is also important. There are hundreds of cryptocurrencies; most are worthless and some are plain scams. Bitcoin is the oldest, most liquid, coin and it is the one that enjoys support due to institutions investing due to its limited supply.
According to its original computer-based design, only 21m bitcoins will ever exist and 99 per cent of these coins will be mined by Other cryptocurrencies are not limited in this way and the hundreds of available digital coins all have different characteristics. The technology behind ethereum is also used in a nascent market dubbed decentralised finance, making the coin a relatively safe choice.
In the UK the easiest way to access cryptocurrencies is to buy a portion of bitcoin on an established exchange such as Coinbase. Given that exchanges have suffered outages, been hacked or collapsed, this is the safest approach, though it is more expensive than other exchanges. Coinbase typically charges a spread of about 0. Fintech companies such as Revolut also offer a way in for bitcoin buyers, but there is no way to transfer bitcoins from the app elsewhere or into other types of coin.
Since they may only sell it back within Revolut, investors only nominally own bitcoin via the app. In the US, investors are able to buy shares in diversified cryptocurrency funds such as Grayscale , which can then be bought and sold like other mutual holdings. Institutional investors can also buy into exchange traded products but these are inaccessible for retail investors in the UK. These are a bet on technology, however, rather than the cryptocurrency. Recommended Investment masterclass with Merryn Somerset Webb Selling cryptocurrencies also has tax implications.
Digital assets count as property for accounting purposes and profits may be subject to capital gains tax. Scammers are a growing problem. Some ask investors to send their private keys to their crypto holdings, promising to return with a profit. But once done, there is no way to undo a transfer. Many seasoned investors say the ad should say the opposite. But in the past 12 months companies and institutional investors have cautiously dipped their toes into digital assets. Since central banks around the world responded to the coronavirus pandemic with easy money policies, large asset managers and hedge funds have been looking for ways to protect themselves from a return of inflation and the erosion in value of of some currencies, including the dollar.
Central banks are even exploring the idea of issuing digital alternatives for domestic currencies. To some analysts, central bank digital currencies lend legitimacy to the crypto space, while others believe it is an attempt by central banks to wrest back control of the market. As the unregulated market bounces through its latest price gyrations, it is a long way off from either stability or security.
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