Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional Stimulus
Investors appear to be locking in profits and jumping off unregulated crypto-asset Bitcoin and other cryptocurrencies following the official declaration of Joe Biden as the President-Elect of the United States.
Bitcoin plunged by over $8,000 to $33.781 per coin, down from over $41.457 per coin it traded a few days ago.
Ethereum followed with a 15.17 percent decline to $1,067.30 per coin.
Stellar and Ripple lost 11.71 percent and 15.36 percent, respectively.
The decline in cryptocurrency value was as a result of the recent stimulus announcement by President-elect, Joe Biden, and the fact that Democrats now control both the lower and upper houses. It means little to zero policy hindrance when President Biden is officially sworn in on January 20, 2021.
Businesses and investors are now more optimistic about other sectors of the economy and expect the new stimulus package to boost stocks and other traditional assets that are better regulated than the crypto space.
It means institutional investors that are jumping on bitcoin and other cryptocurrencies have started holding back to assess new opportunities opening up with the incoming president.
Also, the American Dollar sustained its bullish trend against haven currencies and other currencies as investors up purchase of American assets as evidenced in the surge in yield.
Bitcoin Price Drops to be Used as Buying Opportunity: deVere CEO
Bitcoin Price Drops to be Used as Buying Opportunity: deVere CEO
The Bitcoin price drop will be used as a key buying opportunity by savvy investors, predicts the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The observation from Nigel Green, the chief executive and founder of deVere Group, which has $12bn under advisement, comes as the price of the cryptocurrency plummeted 11% on Thursday.
Earlier this month it valued at $42,000. On Friday at 12 noon (CET) one Bitcoin was valued at $31,400.
Mr Green says: “Bitcoin bashers and crypto cynics have been revelling in this week’s price drop.
“However, for many savvy investors, falling prices will be used as a key buying opportunity. They know the long-term trajectory of digital currencies – like stock markets – is upwards.
“They will be, sensibly, treating the volatility in cryptocurrency markets as they would in traditional markets. By topping up their portfolios when prices are lower and/or taking advantage of lower entry points, they can often considerably strengthen their position. The crypto market is no different.”
He continues: “I believe we can expect further pull-back in the price in Bitcoin in the near-term, which too will be used proactively by traders.
“But make no mistake, in the long-term, prices are going in one direction: up.
“Why? Because of the digitalisation of economies and every aspect of our lives, including our financial lives, that shows that there will be an increasing demand for digital, global, borderless money – characteristics that are inherent to the likes of Bitcoin.
“Also, due to the consistently surging interest from institutional investors, multinational companies, household name investors and government agencies.
“This was evidenced, once again, last year with the decision by PayPal, one of the biggest payment companies in the world, to allow customers to buy, sell and hold Bitcoin.”
Last week, the deVere boss championed greater regulatory scrutiny of cryptocurrencies such as Bitcoin as they play an increasingly normalised role for investors.
He noted: “There is sustained and growing interest in the likes of Bitcoin from both retail and institutional investors. They are now increasingly handling the assets as they would any other asset in the portfolio –for example, sometimes profit-taking, sometimes reinvesting, using the volatility to their advantage, and using these alternatives to help with all-important diversification.
“These mainstream, normalised investor strategies demonstrate that cryptocurrencies must come into the regulatory tent and be held to the same standards as the rest of the financial system.”
Mr Green concludes: “Volatility in the crypto market, as in all financial markets, is not necessarily a bad thing for investors and can be capitalised for their long-term financial gain. Harnessed effectively, it can be a very powerful strategy.”
Bitcoin Needs Greater Regulatory Scrutiny – and Here’s Why: deVere CEO
Greater regulatory scrutiny of cryptocurrencies such as Bitcoin must become a priority as they continue to play an increasingly normalised role for investors, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.
deVere Group’s chief executive and founder Nigel Green – a long time advocate of cryptocurrencies – is speaking out after both the UK’s Financial Conduct Authority (FCA) and the president of the European Central Bank (ECB) called for more robust regulations for cryptocurrencies this week.
The calls follow the price of Bitcoin jumping more than 300% last year and gained a further 40% earlier this month to reach an all-time high.
Mr Green says: “The calls by financial watchdogs and central banks for greater regulatory scrutiny must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system.
“What’s needed is a strong regulatory framework to be established and approved at an international level. The forthcoming UK-hosted G20 summit might prove to be the ideal opportunity.
“Such regulation will help protect investors, tackle cryptocurrency criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.”
He continues: “There is sustained and growing interest in the likes of Bitcoin from both retail and institutional investors. They are now increasingly handling the assets as they would any other asset in the portfolio –for example, sometimes profit-taking, sometimes reinvesting, using the volatility to their advantage, and using these alternatives to help with all-important diversification.
“These mainstream, normalised investor strategies demonstrate that cryptocurrencies must come into the regulatory tent and be held the same standards as the rest of the financial system.”
Previously, the deVere boss has said that one of the best ways to address the regulatory issues is via the exchanges.
“Nearly all foreign exchange transactions go through banks or currency houses and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid,” he has noted.
“For this to happen, banks will need to open accounts for exchanges, which is why they must be regulated.”
Mr Green concludes: “Cryptocurrencies in some form or another are here to stay – and the market is only set to grow.
“There can be no doubt that regulation of the crypto ecosystem is required and, I believe, it should be a priority.
“The work being done by many international financial watchdogs, lawmakers and central banks, such as the FCA and the ECB, in this area is something I fully support.”
Coinbase Acquired Routefire to Deepen Operations
The leading U.S cryptocurrency exchange company, Coinbase, has acquired Routefire, a trade execution startup, in an effort to expand and improve its exchange business.
In a blog post by Jason Victor, the Chief Executive Officer, Routefire, the company can executive $1mm+ orders with 50 basis points or more in price improvement.
The blog read in part, “After an incredible journey that began in early 2018, it is with pride and a deep sense of gratitude that today we are announcing we will be discontinuing Routefire’s services and our team will be joining Coinbase to continue developing best-in-class execution services for digital assets.
“We’ve had an incredible few years serving this community. When we entered the space, crypto market infrastructure was in its infancy, and traders were sorely in need of a solution that allowed them to execute quickly and efficiently across venues without suffering the market impact common to large block orders.
“Our mission was to enhance trading infrastructure in crypto markets, and we developed one of the most performant tools in the space, routinely filling $1mm+ orders with 50 bps or more in price improvement. Most of all, we enjoyed listening to and partnering with our customers to build the Routefire platform.”
A spokesman for Coinbase confirmed the transaction but refused to comment on the details.
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