Tag: investment

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Crypto Guides

Is Investing In Binance Coin a Good Decision In 2020?

Introduction

Introduction

Introduction

Binance coin is a widely known cryptocurrency made by the Binance exchange. It is by far the world’s largest cryptocurrency exchange and offers a wide range of crypto-to-crypto pairs. This cryptocurrency runs on the Ethereum blockchain with ERC 20 standard. Binance coin is also responsible for expanding the scope of the operation of the Binance exchange because the currency supports various utilities on the platform like paying for exchange fees, trading fees, listing fees, and other fees that are payable on the Binance exchange. 

It was made available to the users for the first time during an Initial Coin Offering (ICO) on July 25, 2017. Angel investors were offered 10% of the BNB tokens, the founding team was offered 40% of the tokens, and the various other participants were offered the remaining 50% of the tokens through the ICO process. The funds raised through the ICO process were planned to be allocated for various purposes like: 

  • Branding and marketing of Binance
  • Development of the Binance platform.
  • Upgradation of the Binance ecosystem. 

During April 2018, the market cap of the Binance coin was $1.4 billion.

The Binance coin has also collected support with the help of partnerships that have helped the usage period of the coins. One such partnership was done with Uplive, a premier live-video streaming platform of Asia that sells virtual gifts to the users in exchange for BNB tokens to an extensive user base of 20 million on Uplive. 

Is Binance Coin a Good investment or not?

There are a lot of factors that help to determine whether an asset will be a good investment or not. Market structure, daily trade volume, and USPs (Unique Selling Points) are some of the most relevant factors to make this judgment. Market structure can be defined as the macro price activity of an underlying asset. In the case of BNB, the market structure seems promising.

The currency took off in the year 2019 at an approximate price of $6 and climbed its all-time high price of $38.54 as of June 21, 2019. After that, the price has been significantly retraced along with the rest of the cryptocurrency market and has maintained a good price. Also, at any point in time, the price action of BNB coin remains above the key price levels as well as market structure. 

The daily trading volume of BNB is also impressive. At the time of writing this article, the last 24-hour trading volume $2,193,941,846. Apart from the market structure and daily volume, there is an important factor, i.e. tokenomics, that can help to determine whether an asset will be a good investment or not.

Tokenomics means the design of the cryptocurrency and its characteristics that impact its value. These characteristics include game theory, economic incentives, computer science, and cryptography. The tokenomics of Binance coin are very strong. It has been designed in a way that allows easy adoption and utilization, which increases the price of the coin even more. 

Conclusion

Binance Coin (BNB) is a popular cryptocurrency and can always be found ranked on the top 10 spots of the CoinMarketCap platform. It is a leading token in the crypto exchange ecosystem and is utilized on a large scale on the Binance platform. If Binance will continue to invest efforts in expanding the products, it has to offer and onboards new users. Then there won’t be any reason to classify Binance coin under the ‘not a good investment’ category.

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Crypto Daily Topic

Gold Vs Bitcoin: Which one is a Better Long-term Investment?

The most striking difference between gold and Bitcoin is that the former is a tangible asset. At the same time, the latter is an intangible digital asset that is created by computers crunching complex equations. From an investment perspective, gold is regarded as a ‘safe haven’ asset given its long history as an alternative investment […]

The most striking difference between gold and Bitcoin is that the former is a tangible asset. At the same time, the latter is an intangible digital asset that is created by computers crunching complex equations. From an investment perspective, gold is regarded as a ‘safe haven’ asset given its long history as an alternative investment […]

The most striking difference between gold and Bitcoin is that the former is a tangible asset. At the same time, the latter is an intangible digital asset that is created by computers crunching complex equations. From an investment perspective, gold is regarded as a ‘safe haven’ asset given its long history as an alternative investment for hedging against stock market volatility. Also, the increasing ownership of gold by central banks and governments further validates its ‘safe haven’ status as a reliable store of value. 

Bitcoin, on the other hand, is a new entry into the asset market. It made headlines in 2017 when it traded at an all-time high price of $20,000. Since then, it’s the market price has been swinging violently, which explains why it’s considered a speculative investment. Although Bitcoin’s outsized volatility usually scares off investors, it has contributed to the increase in the value of the digital asset in the long haul. 

That said, in a digital economy, hoarding piles of gold bars as a store of value can be overly cumbersome. As such, many investors are concerned about their long-term wealth and are mulling over investing in Bitcoin – a virtual currency whose future looks promising in the era of the digital economy. 

Fundamental differences between Gold and Bitcoin 

Besides the physical-digital difference, other key distinguishing features need to be examined before investing in either gold or Bitcoin. These include: 

i) Supply and demand

As with most assets, the value of gold and Bitcoin is tied to their supply and demand. The higher the supply, the lower the demand, leading to lower market prices/value. 

For starters, it’s hard to know the exact supply of all the gold in the world. However, if one were to draw a graphical representation of gold’s supply, one would notice a gradual increase in gold’s market supply over the years. With this in mind, we can deduce that gold’s price will decline at some point due to low demand. Also, owing to its unknown supply, the price of gold is prone to sneaky inflations. With Bitcoin, it’s a different case. 

A well-known characteristic of Bitcoin is that its supply is capped at a known value – 21 million Bitcoins. So far, there are about 17 million Bitcoins in the market. This is to say that its supply will decrease over time, driving up its demand. Consequently, Bitcoin’s price will increase. Also, a fixed supply means that Bitcoin can’t bend to inflationary pressures associated with overproduction. Additionally, as modern commerce becomes more digitized, Bitcoin users will increase in equal measure, further increasing its value.

ii) Liquidity

When investing in an asset for the long-term, it implies that you won’t liquidate it anytime soon. However, it would be best if you considered the asset’s market liquidity. This is especially true when you need to raise a high amount of cash, and the only way is to sell part of your entire investment. 

For gold, it’s easy to exchange it for fiat cash by selling it to a local buyer. How fast and easy you exchange it depends on the amount of gold you have. Liquidating a few gold bars/jewelry is easier compared to liquidating a sizeable amount of gold, not to mention the risk of theft.  

Bitcoin, on the other hand, has a relatively high liquid market, making it easier to exchange any amount of Bitcoin for cash. The high liquidity is due to an increased number of exchanges with high trading volumes, in addition to other intermediary solutions such as Bitcoin ATMs and stablecoins. What’s better, Bitcoin can be liquidated in smaller amounts, of up to 8th decimal place, making it easy to liquidate just the right amount. Unfortunately, gold isn’t divisible into smaller amounts as those of Bitcoin’s magnitude. 

iii) Reliability

Suppose there’s one area that gold triumphs over Bitcoin, is in reliability. For more 2,000+ years, gold was used as a medium of exchange. Even after the advent of money, it has managed to maintain a relatively stable value.

At one point in the long history of gold, the US government, under President Franklin Roosevelt, implemented measures to prohibit and criminalize the possession of gold. Even though the gold prices plunged following these drastic measures, trading and possession of gold increased significantly in subsequent years. If the same crackdown were placed on Bitcoin usage, it would put the digital currency at the end of the bench. Even worse, a change in consumer preferences or the advent of a new technological disruption has the potential to stunt the growth of Bitcoin ultimately. As such, gold being a natural resource will consistently hold its value for more years compared to Bitcoin, which is a dynamic human-made system. 

Additionally, gold investment has proper regulation, while investment in Bitcoin is not regulated. This gives gold added legitimacy making it a preferred investment option. 

iv) Utility 

Gold has several uses besides being a store of value. It can be used on luxury items like jewelry and even in electronic devices where it acts as a conductor. In some cases, gold coins are also used in place of fiat cash. Due to these real-world use cases, it has a more readily available market, which adds to its liquidity. 

Bitcoin, having been in the market for just 11 years, is making quite plausible efforts to gain real-world use cases besides its position as a speculative investment. Infrastructures such as Merklized Abstract Syntax Trees ( MASTs), Taproot, and Schnoor signatures are pushing Bitcoin in the direction of real-world functionality in which it’ll contribute to the development of smart contracts. Moreover, it is anticipated that as Bitcoin usage increases in the incoming digital economy, its demand will rise relative to its mathematically metered supply. This will increase Bitcoin’s price and liquidity. 

Conclusion: which one is Better? 

Gold has been around for quite a long time and doesn’t show any clear sign of fading away from the market anytime soon. Its value will likely increase as various governments use it as a monetary reserve. The same can’t be said about Bitcoin since it’s still in its infancy stages. As we approach the digital economy, Bitcoin investors are bound to reap hugely. So, asking whether Bitcoin is a better long-term investment compared to gold isn’t entirely appropriate, as it is possible that the two can, and will, exist as complementary assets. As such, both Bitcoin and gold can fit in an investor’s long-term portfolio for diversification purposes. 

Categories
Crypto Exchanges

Bitmex Vs. Deribit Vs. Bybit: Which one is the Best Crypto-derivative Exchange? 

Cryptocurrency derivatives are an ideal investment option for individuals looking to generate more returns from the crypto market. Although they appeal most to experienced traders, trading derivatives is the less risky alternative to the standard cryptocurrency trading. 

Crypto Exchange_Forex Academy

Cryptocurrency derivatives are an ideal investment option for individuals looking to generate more returns from the crypto market. Although they appeal most to experienced traders, trading derivatives is the less risky alternative to the standard cryptocurrency trading. 

Cryptocurrency derivatives are an ideal investment option for individuals looking to generate more returns from the crypto market. Although they appeal most to experienced traders, trading derivatives is the less risky alternative to the standard cryptocurrency trading. 

Derivatives are used to hedge against risks or to speculate the price of the underlying asset. Investors are, therefore, protected from price fluctuations since they only buy the asset at the fixed price stipulated in the derivative contract. Additionally, investors don’t have to worry about asset theft/loss as they aren’t required to hold the underlying asset itself. 

Given the intricacies of derivative trading, it’s highly recommended to choose a platform that’s uniquely designed to support this type of crypto trading. That said, Bitmex, Deribit, and Bybit are among the most preferred derivatives trading platforms by investors.

In this comparative guide, we pit them against each other and reviewed their ease of use, security, and liquidity to find out which one gets the job done efficiently:

Platform Stability and User Experience

When choosing a crypto derivatives trading platform, you will want to vet its ease of use and the complexity of its sign-up process. Avoid platforms with a complex user interface as they cam prove intimidating, especially to first time users. 

The sign-up process for the three platforms is rather simple since all you require is a username, password, and country of residence. Bitmex doesn’t, however, process registration requests from residents of such countries as the US, Seychelles, Cuba, Iran, Syria, among others. Of course, the geo-restriction can be bypassed using a strong VPN to hide the IP address. With the other two platforms, Deribit and Bybit, users from anywhere around the world can sign up without any restrictions. 

Bitmex is best operated on its official website thanks to its smart and simple layout. What’s better, users can customize the web layout and change such features as themes, text colors, and integrate different trading tools. The platform, however, has neither developed its own mobile app nor optimized its website for mobile use. Deribit, on the other hand, has a user-friendly mobile app, which is a good compensation for its relatively clunky website. 

Bybit wins on all fronts as far as user-friendliness is concerned. Their desktop user interface is easy to navigate and rarely experiences downtimes, which is a common case with Bitmex. Recently, Bybit released its own app available to both iOs and Android users.  

Liquidity 

Liquidity in derivatives trading entails a lot more than just cash flow and the ability to sell options/futures in the shortest time possible. However, this is not to diminish the importance of these two factors. In fact, the two are an integral part of any trading platform since they are an indication of a healthy supply and demand. 

High liquidity for derivatives allows for ultra-tight bid-ask spreads and reduced risk of slippage when executing orders. For the derivatives market to achieve high liquidity, it must have high trading volumes and create room for intense price competition between sellers and buyers.  

Bitmex boasts of higher trading volumes compared to both Deribit and Bybit. In fact, as of this year, the exchange posted higher trading volumes than other top exchanges that process standard cryptocurrency trading. Due to its high liquidity, Bitmex has the tightest spread and least slippage, meaning your orders will always be filled just at the right amount. On top of that, the exchange offers a variety of futures contracts, including BTC futures, ETH futures, ETH perpetual, XRP futures, LTC futures, ADA futures, TRX futures, EOS, and Bitcash futures. This further increases its trading volume,  increasing liquidity. 

Deribit trades an upward of 0.5 billion daily, so its liquidity is relatively high. Perhaps if the exchange offered more trading options than just BTC futures and BTC perpetual, its liquidity would increase substantially. Launched two years ago, Bybit often struggles with liquidity issues. But the team behind this exchange, which comprises of leading crypto trading experts, is continually working to increase the trading volume and liquidity. Moreover, as the exchange gains traction in the market, it’s liquidity is bound to increase over time.

Security

Exchanges often fall victim to cyber hacks resulting in loss of investors’ funds. When choosing an ideal derivatives trading platform, you want one that prioritizes the security of your funds. 

Since it was established in 2014, Bitmex has grown to become one of the largest exchanges in the market. Due to its size, the platform is arguably a more attractive target for hackers. Impressively though, the exchange has never been hacked for the six years the platform has been active, an achievement that can be attributed to its high-level security measures. 

The platform stores investor’s funds and crypto reserves in an offline and multi-signature wallet. About 95% of the funds are stored in a cold wallet to deter theft by cybercriminals. The remaining amount is stored on the platform’s hot wallet to facilitate daily transactions.

Additionally, Bitmex allows users to secure their accounts with the Google-powered two-factor authenticator. 

In its short life, Bybit has managed to meet the industry-standard security protocols. Similar to the other two, Bybit maintains cold wallets where the bulk of the clients’ funds are stored. The rest of the funds are stored in a hot wallet to facilitate daily transactions. A multi-signature system is employed every time the funds are moved between the cold wallet and a hot wallet. 

The three exchanges are arguably at par as far as security is concerned. But Bitmex takes the lead due to its once-per-day withdrawal policy, which reduces the risk of hackers’ interception. 

Conclusion 

The fact that the three exchanges are exclusively designed for derivatives trading makes them ideal for any investors looking to get into crypto futures contracts. However, Bitmex has the upper hand, having laid a strong foundation on all fronts since it was established. At the same time, both Deribit and Bybit give Bitmex a good run for its money, an indication that they can be trusted by investors.