- Crypto is becoming an increasingly attractive option for seasoned financial investors.
- North Korea is holding a cryptocurrency conference in February, but the United Nations says attending is a big no-no.
- The third-ever bitcoin halving is fast approaching, and analysts think it could lead to a new all-time high for the prominent token.
Cryptocurrency might not be mainstream yet, but after an eventful 2019 for the industry, more and more financial advisors are planning crypto investments. According to a survey of more than 400 financial advisors, 13% are planning to add crypto investments to their clients’ portfolios in 2020 — a 7% jump from 2019.
Even more significantly, 54% of polled advisors cited increasing returns as the key reason to allocate more investment money to cryptocurrency. According to Bitwise Managing Director Matt Hougan, financial experts now feel that crypto has proven its staying power, making it more of a viable option to those who historically kept their investments in traditional finance. “What we are seeing happen is its moving to a broader audience of advisors,” said Hougan. “The reason that’s happening is it’s proven it’s not going anywhere. Regulations are clearing up and major firms like Fidelity are coming into the market.”
So how are financial advisors acquiring cryptocurrencies for their clients since there isn’t a digital currency ETF in the market yet. Hougan said there are either acting in an advisory role, showing clients how to purchase crypto in a secure and safe environment, investing in the Grayscale Bitcoin Trust which trades over-the-counter or are purchasing shares in private funds that provide access to cryptocurrency like the Bitwise 10 Large Cap Crypto Index.
The financial advisors interested in cryptocurrency are also optimistic about its trajectory in the years to come. Of the survey respondents, 64% expect the price of bitcoin to increase in the next five years.That’s up from 55% in last year’s survey. Meanwhile, 34% think the price of bitcoin will at least double by 2024.
“Crypto continues to be top-of-mind for advisors searching out new and uncorrelated sources of return,” said Tom Lydon, founder, and CEO of ETF Trends in a press release announcing the results. “The survey results clearly indicate growing interest in crypto from advisors and their clients alike.”
When you think of cryptocurrency hotspots, North Korea probably doesn’t come to mind alongside industry havens Silicon Valley, Malta, and Switzerland. Nonetheless, the U.N.-sanctioned country has shown quite a bit of interest in digital currency, even revealing that it was building its own cryptocurrency last fall. North Korea is even throwing a cryptocurrency conference next month, but don’t book that ticket just yet: the United Nations has warned its members that attending is a likely sanctions violation.
North Korea has been under U.N. sanctions since 2006 due to its nuclear weapons program, and has been known to detain foreign visitors without warning or reason. Avoiding a conference in such an embattled nation might sound like a no-brainer, but it’s happened before. When North Korea hosted its first such convention last year, an American visitor was arrested for violating sanctions.
The next conference is due to be held from Feb. 22-29, according to its website.
An excerpt from the upcoming annual report by the U.N. sanctions experts, seen by Reuters, warns that presentations at the conference “have included explicit discussions of cryptocurrency for sanctions evasion and money laundering.”
It then spells out that U.N. sanctions require countries to prevent the provision of “financial transactions, technical training, advice, services or assistance” if they believe it could be contributing to North Korea’s nuclear or ballistic missile programs or to the evasion of sanctions.
As anyone familiar with bitcoin knows, one of the things that makes the prominent token so valuable is its scarcity. Every time 210,000 BTC blocks are mined, the crypto goes through a process called halving, which cuts rewards for mining a block in half, logically enough. The reason for halving, which takes place approximately every four years, is to decrease the rate of issuance. We’re now just over 100 days out from the next bitcoin halving, and it could result in a steep increase in value.
This will only be the third halving event in bitcoin’s history, and both were shown to increase the value of the token both before and after they took place. Previous halvings in 2012 and 2016 both had serious implications for bitcoin’s price; in particular, after the latter event, BTC’s value shot up to 29 times its value between July of 2016 and the token’s all-time high in late 2017.
Along the same lines, some of the most prominent technical analysts in the crypto community affirm that Bitcoin entered a new bull market last week. The break of the $8,500 resistance level, was seen as a make-or-break point that could have set out the stage for a bull run. According to Mohit Sorout, a partner at Bitazu Capital, a new uptrend is emerging.
However, there are other analysts who disagree with the bullish outlook. Chris Slaughter, the founder and CEO of LVL, for instance, has been studying a fractal since Dec. 27, 2019, that has proven to be correct. This pattern anticipated the recent rally that took Bitcoin above $8,500. Now, Slaughter estimates a downturn in the market that could push BTC to “new lows.”
That’s the roundup for January 18, 2020. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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