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Bitcoin (BTC) climbs above $23,000

The world’s largest cryptocurrency is down roughly 50% since the start of 2021.

CFOTO | Future Publishing | Getty Images

Bitcoin broke the $24,000 threshold for the first time in more than a month, as hopes of a rate hike less aggressive than feared from the Federal Reserve triggered a relief rally in cryptocurrencies.

The world’s biggest cryptocurrency surged as high as $24,047 Wednesday, up more than 8% in 24 hours and trading at levels not seen since mid-June, according to Coin Metrics data.

Traders took comfort from the prospect of softer policy action from the Fed at its next rate-setting meeting.

The effects of tighter monetary policy from the U.S. central bank have weighed heavily on risky assets like stocks and crypto.

Bitcoin is still down roughly 50% since the start of 2021.

“This isn’t necessarily the end of the crypto bear market, but a relief rally for Bitcoin is long overdue,” said Antoni Trenchev, CEO of crypto lender Nexo.

“Bitcoin is beginning to find its feet after a shaky month, and the next week will be telling,” he added.

The U.S. central bank is expected to hike rates again at its next policy meeting, but economists are forecasting a less aggressive increase this time of 75 basis points rather than 100.

Cryptocurrencies were touted as a source of value uncorrelated with traditional financial markets. But as institutional capital poured into digital assets, that thesis failed to materialize once the Fed began hiking interest rates and traders fled equities.

A rally beyond $22,700 means the cryptocurrency has now recovered its 200-week moving average, laying the technical groundwork for a “trend reversal,” according to Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank.

“The market needs a little more assurance for deceleration in the pace of rate hike by the Fed,” he said. “Nevertheless, a short-term outlook for bitcoin is bullish and it could go as high as around $29k this week.”

Meanwhile, traders are betting that the worst of an intense market contagion caused by liquidity issues at some large crypto firms has likely subsided.

Digital currencies have been under immense selling pressure in the past couple of months, as the collapse of some notable ventures caused ripple effects in the market. Terra, a so-called algorithmic stablecoin, plunged to near-zero in May, setting off a chain of events that ultimately led to the bankruptcies of crypto firms Celsius, Three Arrows Capital and Voyager.

Ethereum ‘Merge’

Elsewhere in crypto, ether climbed nearly 5% to $1,609.06, while other so-called “altcoins” were also higher.

The second-largest token is up more than 50% in the past seven days, fueled by optimism over a highly anticipated upgrade to its network known as the “Merge.”

Developers now expect the update, which would move ethereum away from environmentally dubious crypto mining to a more energy-efficient system, to be completed by Sept. 19.

“Crypto mining has been highly criticised for contributing to climate change due to its energy intensive nature and as wildfires rage across Europe and the United States, the promise that Ether transactions could be less damaging to the environment has caused a wave of interest,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.


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Bitcoin rally falters as digital assets struggle to gain footing | Crypto News

June’s 41-percent drop for the world’s largest cryptocurrency is the steepest recorded by Bloomberg data going back to 2010.

By Bloomberg

Bitcoin, fresh off its biggest-ever monthly decline, whipsawed traders with wild swings on Friday as digital assets struggle to regain their footing.

The largest token rallied as much as 11.3% in Asia on Friday, briefly closing in on the $21,000 level. Bitcoin then quickly gave up most of those gains, trading around $19,400 at 11:30 a.m. in London. June’s 41% drop was the steepest in Bloomberg data going back to 2010.

Largest token extends period of volatility around $20,000 level

Bitcoin’s gyrations underscore the uncertainty looming over cryptocurrencies as investors struggle to assess how far central banks will go to tame rampant inflation. Adding to the confusion, major crypto players ranging from hedge fund Three Arrows Capital to lender Celsius Network have been thrown into disarray by the market selloff, raising the prospect of further contagion.

Euro-area inflation accelerated to a fresh record in June, with consumer prices jumping a faster-than-expected 8.6% from a year earlier. Inflation numbers for the zone have outpaced economists’ forecasts for 11 of the past 12 months.

Bitcoin “could be vulnerable to one more ugly plunge that could have many traders fearing a fall towards the $10,000 area” if the turmoil on Wall Street continues in the third quarter, Edward Moya, senior market analyst at Oanda Corp., wrote in a note. The token last traded at those levels in mid-2020.

The risks aren’t deterring El Salvador, whose President Nayib Bukele said on Twitter that the nation had again bought the dip, this time adding 80 Bitcoins at a price of $19,000 each.

Earlier this week, Michael Saylor’s Bitcoin-backed tech firm MicroStrategy Inc. said in a filing it had purchased another 480 coins worth about $10 million at the height of the crypto swoon.

Bitcoin has been gyrating around the $20,000 mark after crashing below $18,000 on June 18. The lack of direction is reminiscent of how the coin traded in the wake of the TerraUSD stablecoin collapse in early May, when it clung close to $30,000 for weeks before plunging again.

–With assistance from Brett Miller.


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EU hammering out cryptocurrency regulations that could set global standard – National

Europe prepares to lead the world in regulating the freewheeling cryptocurrency industry at a time when prices have plunged, wiping out fortunes, fueling skepticism and sparking calls for tighter scrutiny.

The European Union took a first step late Wednesday by agreeing on new rules subjecting cryptocurrency transfers to the same money-laundering rules as traditional banking transfers.

A much bigger move was expected as EU negotiators hammer out the final details late Thursday on a separate deal for a sweeping package of crypto regulations for the bloc’s 27 nations, known as Markets in Crypto Assets, or MiCA.

Like the EU’s trendsetting data privacy policy, which became the de facto global standard, the crypto regulations are expected to be highly influential worldwide.

Read more:

Bitcoin and crypto platforms are in trouble. What’s behind the collapse?

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The EU rules are “really the first comprehensive piece of crypto regulation in the world,” said Patrick Hansen, crypto venture adviser at Presight Capital, a venture capital firm.

“I think there will be a lot of jurisdictions that will look closely into how the EU has dealt with it since the EU is first here,” Hansen said.

He expected authorities in other places, especially smaller countries that don’t have the resources to draw up their own rules from scratch, to adopt ones similar to the EU’s, though “they might change a few details.”

Under the Markets in Crypto Assets regulations, exchanges, brokers and other crypto companies face strict rules aimed at protecting consumers.


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Cryptocurrency industry has rough week amid market uncertainty


Cryptocurrency industry has rough week amid market uncertainty – Jun 14, 2022

Companies issuing or trading crypto assets such as stablecoins — which are usually tied to the dollar or a commodity like gold that make them less volatile than normal cryptocurrencies — face tough transparency requirements requiring them to provide detailed information on the risks, costs and charges that consumers face.

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Providers of bitcoin-related services would fall under the regulations, but not bitcoin itself, the world’s most popular cryptocurrency that has lost more than 70 per cent of its value from its November peak.

The European rules are aimed at maintaining financial stability — a growing concern for regulators amid a string of recent crypto-related crashes. The stablecoin TerraUSD imploded last month, erasing an estimated $40 billion in investor funds with little or no accountability.

Read more:

Shouldn’t stablecoins be stable? What’s behind TerraUSD’s collapse

The meltdowns have spurred calls for regulation, with other major jurisdictions still drawing up their strategies. In the U.S., President Joe Biden issued an executive order in March on government oversight of cryptocurrency, including studying the impact on financial stability and national security.

Last month, California became the first state to formally begin examining how to broadly adapt to cryptocurrency, with plans to work with the federal government on crafting regulations.

The U.K. also has unveiled plans to regulate some cryptocurrencies.

A few European countries, like Germany, already have basic crypto regulations. One of the EU’s goals is bringing rules in line across the bloc, so that a crypto company based in one country would be able to offer services in other member states.

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The EU rules, which would still need final approval and are expected to take effect by 2024, include measures to prevent market manipulation, money laundering, terrorist financing and other criminal activities.

On Wednesday, EU negotiators signed a provisional agreement for the bloc’s first rules on tracing transfers of crypto assets like bitcoin, which is aimed at clamping down on illicit transfers and blocking suspicious transactions.

When a crypto asset changes hands, information on both the source and the beneficiary would have to be stored on both sides of the transfer, according to the new rules. Crypto companies would have to hand this information over to authorities investigating criminal activity such as money laundering or terrorist financing.

“For too long, crypto-assets have been under the radar of our law enforcement authorities,” one of the lead EU lawmakers negotiating the rules, Assita Kanko, said in a statement. “It will be much harder to misuse crypto-assets and innocent traders and investors will be better protected.”

The EU institutions are working out the technical details before the crypto tracing rules receive final approval.


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Crypto scams on the rise across New Brunswick


Crypto scams on the rise across New Brunswick

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Bitcoin Drops Below $20,000 as Crypto Selloff Quickens

The price of bitcoin fell below $20,000 Saturday for the first time since late 2020, in a fresh sign that the sell-off in cryptocurrencies is deepening.

Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping by as much as 9% to less than $19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk.

The last time bitcoin was at that level was in November 2020, when it was on its way up to its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000.

Bitcoin has now lost more than 70% of its value since reaching that peak.

Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble Saturday.

It’s the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation.

The overall market value of cryptocurrency assets has fallen from $3 trillion to below $1 trillion, according to coinmarketcap.com, a company that tracks crypto prices. On Saturday, the company’s data showed crypto’s global market value stood at about $834 billion.

A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The crypto industry has also upped its lobbying efforts — flooding $20 million into congressional races this year for the first time, according to records and interviews.

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.

Cryptocurrency lending platform Celsius Network said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another crypto lending platform, Babel Finance, said in a notice posted on its website Friday that it will suspend redemptions and withdrawals on products due to “unusual liquidity pressures.”

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is overleveraged.”

The cryptocurrency exchange platform Coinbase announced Tuesday that it laid off about 18% of its workforce, with the company’s CEO and co-founder Brian Armstrong placing some of the blame on a coming “crypto winter.”

Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.

Crypto had permeated much of popular culture before its recent tumble, with many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago. Many nascent investors — especially young people — invested in crypto based on a false hope that was sold to them, he said.

“There are real human victims here that are ordinary people.”


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Bitcoin drops below $20,000 as crypto selloff quickens

NEW YORK (AP) — Bitcoin fell below the psychologically important threshold of $20,000 on Saturday for the first time since late 2020, in a fresh sign that the selloff in cryptocurrencies is deepening.

The price of the most popular cryptocurrency had plunged as much as 9.7% to less than $18,600 by late afternoon on the East Coast, according to the cryptocurrency news site CoinDesk. At some points during the day, it was below $18,000.

The last time bitcoin was at that level was in November 2020, when it was on its way up to an all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000 again.

Bitcoin has now lost more than 70% of its value since reaching its peak.

Ethereum, another widely followed cryptocurrency that has been sliding in recent weeks, took a similar tumble Saturday.

The cryptocurrency industry has seen turmoil amid wider turbulence in financial markets — this past week was Wall Street’s worst since 2020, during the early days of the coronavirus pandemic.

Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation. Higher rates can help bring down inflation, but they also heighten the chances of a recession by increasing borrowing costs for consumers and businesses and pushing down prices for stocks, and other investments like cryptocurrencies.

The overall market value of cryptocurrency assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, which tracks crypto prices. As of Saturday afternoon the company’s data showed crypto’s global market value stood at about $816 billion.

A spate of cryptocurrency meltdowns has sparked urgent calls to regulate the freewheeling industry, and last week bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The industry has also upped its lobbying efforts, flooding $20 million into congressional races this year for the first time, according to records and interviews.

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.

One of them, Celsius Network, said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another platform, Babel Finance, said in a notice posted online Friday that it would suspend redemptions and withdrawals on products due to “unusual liquidity pressures.”

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is overleveraged.”

Cryptocurrency exchange platform Coinbase announced Tuesday that it had laid off about 18% of its workforce, with CEO and cofounder Brian Armstrong placing some of the blame on a coming “crypto winter.”

Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.

Crypto had permeated much of popular culture before its recent tumble, with Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago.

Many nascent investors — especially young people — invested based on a false hope that was sold to them, he said: “There are real human victims here that are ordinary people.

Alex Diaz, the administrator of a Facebook group for Bitcoin enthusiasts, said he believes the bitcoin crash is not the fault of bitcoin but of parallel developments in the cryptocurrency space, some of which are “just schemes or outright scams.”

“What it will take to recover is just time,” Diaz said.

___

Chan reported from London. Associated Press journalist Leah Willingham in Charleston, West Virginia, contributed to this report.

Copyright 2022 The Associated Press. All rights reserved.


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Bitcoin drops below $20,000 as crypto selloff quickens

NEW YORK (AP) — Bitcoin fell below the psychologically important threshold of $20,000 on Saturday for the first time since late 2020, in a fresh sign that the selloff in cryptocurrencies is deepening.

The price of the most popular cryptocurrency had plunged as much as 9.7% to less than $18,600 by late afternoon on the East Coast, according to the cryptocurrency news site CoinDesk. At some points during the day, it was below $18,000.

The last time bitcoin was at that level was in November 2020, when it was on its way up to an all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000 again.

Bitcoin has now lost more than 70% of its value since reaching its peak.

Ethereum, another widely followed cryptocurrency that has been sliding in recent weeks, took a similar tumble Saturday.

The cryptocurrency industry has seen turmoil amid wider turbulence in financial markets — this past week was Wall Street’s worst since 2020, during the early days of the coronavirus pandemic.

Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation. Higher rates can help bring down inflation, but they also heighten the chances of a recession by increasing borrowing costs for consumers and businesses and pushing down prices for stocks, and other investments like cryptocurrencies.

The overall market value of cryptocurrency assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, which tracks crypto prices. As of Saturday afternoon the company’s data showed crypto’s global market value stood at about $816 billion.

A spate of cryptocurrency meltdowns has sparked urgent calls to regulate the freewheeling industry, and last week bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The industry has also upped its lobbying efforts, flooding $20 million into congressional races this year for the first time, according to records and interviews.

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.

One of them, Celsius Network, said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another platform, Babel Finance, said in a notice posted online Friday that it would suspend redemptions and withdrawals on products due to “unusual liquidity pressures.”

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is overleveraged.”

Cryptocurrency exchange platform Coinbase announced Tuesday that it had laid off about 18% of its workforce, with CEO and cofounder Brian Armstrong placing some of the blame on a coming “crypto winter.”

Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.

Crypto had permeated much of popular culture before its recent tumble, with Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago.

Many nascent investors — especially young people — invested based on a false hope that was sold to them, he said: “There are real human victims here that are ordinary people.

Alex Diaz, the administrator of a Facebook group for Bitcoin enthusiasts, said he believes the bitcoin crash is not the fault of bitcoin but of parallel developments in the cryptocurrency space, some of which are “just schemes or outright scams.”

“What it will take to recover is just time,” Diaz said.

___

Chan reported from London. Associated Press journalist Leah Willingham in Charleston, West Virginia, contributed to this report.

Copyright 2022 The Associated Press. All rights reserved.


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Bitcoin and crypto platforms are in trouble. What’s behind the collapse? – National

The plummeting value of Bitcoin and turmoil across major cryptocurrency platforms has many investors fretting about their digital wallets and leaders in the space warning about a “crypto winter.”

So what’s happening, and what does it mean for your portfolio? Here’s what you need to know.

What’s happening to Bitcoin?

Bitcoin is continuing a downward spiral that has marked much of 2022 for the popular cryptocurrency.

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The digital currency continued to sink Tuesday following a 16-per cent drop on Monday that sent its value as low as US$22,400. Bitcoin has lost more than two-thirds of its value compared to all-time highs in November of last year.

Bitcoin is not the only crypto asset facing a downturn.

Ethereum, another widely-followed cryptocurrency, was down roughly 17 per cent on Monday. The crypto market as a whole dropped below a value of US$1 trillion this week.

Investors have been selling riskier assets such as digital currencies and technology stocks as the Federal Reserve raises interest rates to combat high inflation.

Monday marked the start of a bear market on Wall Street as the S&P 500 fell 20 per cent below a previous high point in January.

Read more:

Wall Street enters bear market as rate hike, recession fears send stocks lower

Alex Tapscott, managing director of the digital asset group at Ninepoint Partners, tells Global News that cryptocurrencies have suffered through the same “broad-based selloff” in 2022 that’s hit the value of higher-risk assets including tech stocks such as Netflix and Meta.

He says that trend has “accelerated” recently as investors look to get riskier assets off their portfolios.

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“Investors are looking to de-risk all over the board and Bitcoin and crypto assets are getting washed up along with it,” he says.

What’s happening to crypto platforms?

Bitcoin’s latest falls are also being tied in part to alarming moves from some major crypto exchanges and lending platforms who have announced plans this week to stem operations or cut jobs.

On Sunday, the cryptocurrency lending platform Celsius Network announced that it was pausing all withdrawals and transfers between accounts in order to “honor, over time, withdrawal obligations.”

Celsius, with roughly 1.7 million customers and more than US$10 billion in assets, gave no indication in its announcement when it would allow users to access their funds.


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What you need to know before investing in cryptocurrency


What you need to know before investing in cryptocurrency – Nov 4, 2021

Caisse de dépôt et placement du Québec, the province’s pension fund, is among Celsius’ backers.

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“That has created a crisis of confidence, I think, in many other companies in the sector and people are now wondering just how at risk their investments might be,” Tapscott says.

Meanwhile on Tuesday, crypto exchange Coinbase announced it was cutting 1,100 jobs, or 18 per cent of its workforce. It joins companies including BlockFi and Crypto.com in slashing hundreds of jobs amid the collapse.

Coinbase CEO Brian Armstrong said in a blog post announcing the decision that the platform grew too quickly as it tried to capitalize on the crypto boom last year and would need to cut costs as it prepares for an economic downturn.

“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong wrote.

What’s a ‘crypto winter’?

The “crypto winter” that Armstrong reference in his post typically refers to a prolonged period or months or years in the cryptocurrency sphere when digital assets are declining in value with very little interest in the space as a whole.

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“It is what it sounds like. It’s a winter, it’s cold, it’s cool. Investors don’t want to be in it. More sellers than buyers,” says Genevieve Roche-Decter, CEO of Grit Capital.


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Crypto market value falls below US$1 trillion as bitcoin hits 18-month low


Crypto market value falls below US$1 trillion as bitcoin hits 18-month low

This could be a period when so-called alt-coins that popped up during the crypto mania of the past few years could plummet and lose all value, she says, similar to the dot-com bubble of the late 1990s.

Read more:

Shouldn’t stablecoins be stable? What’s behind TerraUSD’s collapse

Tapscott is less convinced that winter has come for cryptocurrencies.

While there have been previous busts and declines across the crypto world, he notes that recent years have seen institutional investors take on a more vested interest in digital assets.

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Payment processors such as Paypal, Visa and Mastercard have gotten into crypto and many exchange platforms still have a sizeable access to funding that they wouldn’t have had in earlier downturns.

“There’s a lot of funding. It’s quite sophisticated, it’s much more widely held, there’s far more innovation and therefore utility,” he says.

“And I think as a result we’re going to see the winter, such as it is, be a little less cold and a little less long than anything we’ve seen in the past. I think if anything, it will recover much faster this time.”

What should you do about your portfolio?

For many investors who got into the crypto space amid the recent hype of Super Bowl commercials and Reddit threads, this will be the first time seeing the value of their digital assets dwindle.

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Roche-Decter says that owning cryptocurrencies is “not for the faint of heart” and that it could take years before assets such as Bitcoin return to their previous highs, if they ever do.

Bitcoin and other cryptocurrencies have seen great gains as well as great falls, and anyone counting on big payoffs in the space will likely have to take on a long investment horizon, she says.


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Money Matters with the Baun Investment Group at Wellington-Altus Private Wealth


Money Matters with the Baun Investment Group at Wellington-Altus Private Wealth

When it comes to making money with your portfolio, Roche-Decter says many young investors might be discouraged to hear that volatile assets such as crypto are not usually the best path forward.

“Boring is actually sexy. The way to make money long term is to be in just basic companies that generate revenue in up and down markets. And unfortunately, that’s not what that generation wants to hear,” she says.

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For investors wanting to ride the crypto roller coaster, Roche-Decter recommends a more limited exposure. An overall portfolio could have 80 per cent safer assets and 20 per cent to have fun with in more speculative ventures, she suggests.

“I don’t support all of those things, but you have to keep some of it entertaining and keep yourself in the game. The rest of it — sleep at night,” she says.

— with files from Global News’s Anne Gaviola, The Associated Press, Reuters

© 2022 Global News, a division of Corus Entertainment Inc.




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Young Malaysian investors unfazed by cryptocurrency crash

PETALING JAYA: The crash of cryptocurrency and the bearish crypto market serves as no dampener for young investors who are willing to hold on to their digital investment assets.

Anthony Pang, a 30-year-old forex trader who invested in several cryptocurrencies said he was aware of the current bear market.

“But now, I’m letting it hold,” said Pang.

However, Pang was optimistic, as most of his investment is placed on forex trading, and cryptocurrency only comprises less than 30% of his investment portfolio.

“I only consider it a loss if I cash out in this bear market,” said Pang, who did not disclose the amount his assets have dropped in value.

Pang, who has been dabbling in cryptocurrency investments since 2020, advised youths not to invest everything into cryptocurrency.

“Invest only the money you can afford to lose,” said Pang, who is also a freelance model.

Bitcoin made global headlines when it crashed to below US$24,000 (RM106130.40), which is the lowest level since 2020.

This comes as part of a series of price crashes for the cryptocurrency, which has seen a more than 60% drop in value over the last seven months.

It was also reported that global market capitalisation shrunk by 12% to US$970bil (RM4.29 trillion) on Monday (June 13).

Bitcoin day trader Muhamad Al Hafiz Hambali, 35, said that he does not feel anxious about the unpredictability of cryptocurrencies as he is well aware of the risk.

“I have spent almost RM10,000 in less than a year. Now we are facing a ‘minor hiccup’ and I believe the situation will return to normal soon,” said the trader, who is a father of two.

He added he got into cryptocurrency by chance and picked it from videos he watched on YouTube.

“I find it very interesting and initially I made a lot of money,” he said, adding that it helped to cover some of his family expenses.

He hoped that authorities would take measures to raise awareness on the issue in order to make it more mainstream and accessible to more people.

Jeffrey Halley, who works in online forex trading, said cryptocurrencies were slumping along with other asset classes as high inflation in the United States raised concerns that the US Federal Reserve would embark on a more aggressive interest rate hikes and other central banks in the world may also do the same.

“It has been exacerbated by liquidity issues and crypto-lender Celcius stopping depositors from getting their money back,” said Halley, OANDA’s senior market analyst for Asia Pacific.

He was referring to Celsius Network freezing withdrawals, swaps and transfers.

“Well, cryptocurrencies and their spectacular rally are perhaps the most strident example of speculative excess that occurred as central banks slashed rates to 0% and qualitatively eased over the pandemic.

“Now that inflation is entrenched for the first time in 20 plus years, and central banks globally are tightening monetary policy, cryptos, like equities, are facing a reckoning over their true valuations as interest rates rise,” he said.

Naturally, there’s a lot of fear in the market with panic sellers reacting aggressively to market conditions, he added.

“Speculators are being hit the hardest naturally and much like in 2017, you will see many such participants exit the market with the remaining projects and investors building to the next cycle,” he said.

Meanwhile, George Wong, of Access Blockchain Association Malaysia, said the slump was due to a combination of factors and US inflation rates, the US stock market as well as the major issue caused by Celsius all had a role to play.

Access Blockchain Association Malaysia is a non-profit organisation specialising in blockchain development and cryptocurrencies.

However, Wong said that the drop has been cyclical and it is not the first time such a slump has occurred.

“Like mentioned, it happened in 2017 and you’ll see it happening again in the next cycle. I expect the speculators to exit, like I mentioned and the fundamentally strong projects to continue building in the market. Bitcoin, to me, will continue to be a store of value although I do see other cryptocurrencies slowly gaining dominance as Bitcoin is certainly an ageing tech having been the first in the market,” added the subcommittee chairperson for NFTs and Metaverses over at Access Blockchain Association Malaysia.

On whether more people are disposing of their holdings due to the tough economic times, he said this boils down to market sentiment and people may be trying to preserve their wealth and are taking steps to cut their losses in the face of such an aggressive downtrend.

“Many forget that many millionaires were made in the rally not too long ago and there was a lot of easy money being spent particularly in NFTs (non-fungible tokens).

“I can’t exactly say which assets are hit the hardest as this has yet to be seen. I do not think we have seen the bottom in the overall market, not just crypto, and which is the hardest hit has yet to be seen.

“I personally think commodities will be the most robust within these 1-2 years for obvious reasons but it’s hard to predict if you’ve seen the bottom of cryptos yet,” he added.

Wong advised investors to not rush into any buying decisions right now as many things seem cheap and the market could plunge deeper. He went on to add that reacting “too quickly” may also result in major short-term and even mid-term losses.

“It’s important to practice a bit of prudence in the current market climate. Cash is really king as opportunities may arise in such a crisis and if anything, there are plenty of options in the market.

Fundamentally strong companies or projects are particularly viable at this point in time and they’re easier to identify as the scam or speculative projects are exiting the market aggressively,” he said.




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