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Tuesday, October 4, 2022

Are You Dollar Cost Averaging your Bitcoin?

Welcome to Crypto Talks by Kalkine, I’m your host Sage, broadcasting live from the Kalkines Sydney studio, let us tickle your DeFi fancies as we share some of this week’s trending crypto news. Forcryptocurrencytraders, 2021 has been a wild ride so far and many analysts are anticipating a capitulation in the meme stocks Dogecoin and Safemoon if that’s a new term for you, that could see investors sell off or surrender their positions en masse.

Yet with rumors that Apple may be buying Bitcoin circulating, there are still many reasons why decentralized finance or DeFi allures newcomers to start investing. A major persuasion is that it’s open to almost anyone in the world with a computer and internet connection to generate passive income from the allusive internet currencies. In the first half of the year alone, Bitcoins price has seen more ups and downs than a Sydney Tower elevator. And some analysts are expecting that after a rebound due soon that Bitcoin could crash to as low as USD$14000.

We wait with bated breath to see how this roller-coast ride pans out. For those holding onto Bitcoin for the long term, however, things haven’t been quite so bad. This brings us to the first topic in today’s show Dollar Cost Averaging your Bitcoin assets. We will also be taking a closer look at how cryptocurrency investors can make passive income through lending and staking their coins and the cultural revolution that is meme stocks and what that means to finance. First introduced by Benjamin Graham, known as the Oracle from Omaha, Warren Buffets mentor.

This led Mr. Buffet himself to advocating compound investing. The stock market takes many guises, with some seeing it as a lucrative investment vehicle when using low-risk strategies such as Dollar Cost Averaging, this concept can also be applied to the crypto market with investors raking in long-term benefits. First and foremost this strategy of Dollar Cost Averaging which involves making regular small deposits into buying assets such as Bitcoin can help to alleviate the issues of availability of Lump sums of free cash, needing to accurately time purchases by estimating the support price ranges in the market, taking a load of stress off of investor’s shoulders.

In the extremely volatile crypto market, this strategy can prove to be useful by minimising your risk and maintaining good exposure to the market’s assets. Fast spikes in price and rapid movement won’t directly affect your investment As it is spread out over time, and the cost averaged out over time allowing the investor to gain from compounding annual growth. You can view it in this way – as the market decreases your regular interval purchases will be gaining assets at a discount and when the market gains, the value of the portfolio increases.

So, if your investment goals are to gain from long-term gains then dollar-cost averaging could eliminate those sleepless nights waiting for the next Tweet from billionaire CEOs who have been impacting the crypto price movements. Slow and steady could win the race for you. Not all crypto coin holders are keen on risky trading via exchanges some are also making gains through less aggressive strategies utilizing other protocols available through the DeFi network to expand the value of the virtual assets.

Whether it’s their Lassaiz-Faire economic inclinations that lead to the shunning of the traditional banking system or a basic need due to their remote geographical location. Global crypto holders earning annual percentage yields (APY) on their coin holdings which outshine most bank’s savings accounts returns. Let’s take a look at two of these methods now.

Method #1: Lending Could it be as straightforward as it sounds? Smart contracts lock in digital assets allowing users to monetize gains via third-party platforms. This is a highly recognized DeFi activity and made familiar by large platforms like Maker DAO who specialize in the lending protocol. It’s gained popularity as there is a limited chance of defaulting on repayments. It has been reported that some platforms, such as Compound Finance, offer APY as high as 8.1%. So borrowers access the loans and the lenders are paid interest accrued through the smart contracts. It staking is taken to the next level basically.

Method #2: Staking Users who wish to earn passive income from their digital assets are also aiding the crypto markets with needed liquidity through the capital in their virtual assets earning incentives. All without the use of the middle-man banks. Maybe the traditional systems have a skewed focus leveraging the corporations instead of the individuals? I’ll let you be the judge of that. You may remember last week when Uniswaps own token UNI surged, due to Uniswaps exchange mechanisms being imported onto CoinMarketCap allowing Ether-based tokens to be swapped directly on their site.

In a similar method to lending, staking is a process where digital assets are locked into smart contracts. In a similar structure to savings accounts using blockchain technology, staking crypto coins can accrue interest in the form of blockchain tokens.

Similar to Uniswap other Defi Exchanges offering Automated market maker facilities are Pancakeswap with their token CAKE and PPAY token derived from Plasma.Finance DeFi exchange. A national taxation policy would be of interest to how it affects the earnings from these investments.

And is important to consider your financial objectives and position before making any investment decisions. This information is not financial advice but more an overview of some of the options available for passive income streams to those who hold crypto coins. Due to Chinas regulations onto the crypto sector reducing the number of computers on the network significantly there is now also less security on the network.

So, investors should approach opportunities with caution being aware that there are rug pullers and scammers out there who have intentions of draining liquidity pools by stealing investor’s tokens. Because of this risk, portfolio trackers have increased in popularity such as Zerion and Rotki that allow DeFi investors to keep track of their wallets over multiple platforms using a single control panel.

It has been estimated that close to $30 million in cryptocurrency has been stolen by hackers in this year alone. And now we’re due for a short break, but don’t move a muscle as well be back to with more crypto trending news right after this. Welcome back viewers you are watching Kalkine TV live from the Sydney studio and my name is Sage.

In the 2nd part of today’s show, we are going to look at how meme stocks such as Dogecoin are changing the face of finance. Art and money is an age-old discussion and why is not everyone in the world liquid in the capital with free-flowing cash? These are the philosophical conundrums that many an aesthete may ponder before he lays his head down to sleep. However, the emergence of meme stocks such as Dogecoin gives bittersweet food for thought on the subject.

There are no hard and fast rules for determining the value of art in culture yet in the open digital economy where economics, art and tech converge Dogecoin as a cultural product has seen some success.

Not only because of its famous fans such Snoop Dogg, Gene Simmonds, Elon Musk and Mark Cuban raising its value as a financial asset. But how legitimate are its holdings, when it was created as a joke in 2013, in a system that is defined by oligarchies and free-markets? Maybe its Dogecoins ability to steer internet surfers away from online betting and gaming to putting their money into meme stocks instead where power in numbers can even turn the tables on some of the largest global hedge funds, causing them to lose millions of dollars of investor funds on trades as we witnessed early in 2021.

For some professionals, Dogecoin appears to be little different than a Ponzi scheme, whose trading volume spiked in little over 24 hours from zero to $3.2 million per month. Owning Dogecoin is about participating in a cultural revolution, it’s is about being able to offer tips on trades and feel the euphoria of helping others make an easy buck on the side. But for all its obscurity it’s not alone, surpassing other meme coins SEXcoin and BBQcoin breaking through as a financial asset with the help of its famous advocates.

And the uproar from platforms such as Reddit WallStreetBets, where influencers such as YouTuber Roaring Kitty garnered interest into meme stocks such as Gamestop stock. On the back of the famous short squeeze created by a bulk of retail investors buying Gamestop stock when global hedge funds had prepared to short the stock, lost millions of dollars of money. Dogecoins market capitalization at its peak was approximately $52 billion making it more valuable than Barclays Bank $44 billion. All in all, cryptocurrencies are somewhat of an economic revolution where it’s not all about the money but about participation in the industry and being in the know.

And we all know that knowledge is power. So why don’t more financial advisors recommend crypto to their clients, the plain and simple reason is that it’s not regulated by the Securities and Exchange Commission and Financial Industry Regulatory authority, which is the reason why trading online platforms and apps are so successful in the sector.

However, data gathered from the Financial Planning Associations 2021 Trends in Investing Survey indicated that 26% of financial advisors are going to increase their use or guidance veering towards the use of cryptocurrencies in the next 12 months. Let’s face it, viewers, it may not yet be legal tender, due to its volatility, but crypto is here to stay with over 4000 altcoins being mined. Perhaps it will take more than a billionaire’s approval to make Bitcoin a mainstream currency.

Indeed, Paraguay has become the second country after El Salvador to recognise Bitcoin as legal tender. This is perhaps the way of the future for Bitcoin to gain more mainstream recognition and thus gain more stability than the year 2021 has had to offer. Thanks for joining us on the report today please stay tuned to Kalkine TV for more trending news across the economy, markets and diverse themes and sectors.

Read More: Biggest Bitcoin FUD FAIL

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