New Channel For Brands Promotion That Will Blast Advertising Market

Imagine a perfect world where the advertisement of your brand is shown only to target audience any time they use their phones. The targeting is based on location, gender, education and other characteristics which give advertisers and brands only real views for real possible clients. The advertising market launches more and more application that is developed in accordance with brands’ requirements and provide a possibility to set detailed configurations and make the promotion process simpler. One of the companies has recently launched a mobile application which is claimed to become the next revolution in the advertising market and we are about to tell you why it worths your attention.

According to Statista, there will be 2,5 billion people using smartphones by 2019. Mobile users unlock their phones from 80 to 110 times per day. At the same time, 69% of consumers from 18 to 39 years old use mobile phones for a research of products before purchasing them. Mobile devices automatically become a new channel for brands promotion as people simply cannot imagine their lives without their phones. Applications for smartphones will definitely change the advertising market.

What is the new technology?

Emarketer research states that $101 billion was spent on mobile ads globally last year which is 5 times more than in 2012. Spendings in this sector will only increase.

EasyVisual is an advertising network that before the launch of the app has already had a 3,5 million audience in 190 countries including South Korea, China, Vietnam, Poland, Slovakia, Germany, Ukraine, Turkey, Czech Republic, Israel. The company has made a right choice and decided to use as much potential of smartphones as possible in order to make brands promotion successful and cost-effective.

Banners App and its benefits

Advertising of cryptocurrencies hasn’t become simpler with the development of the blockchain technology and its fast increasing popularity. Facebook was the first social network to forbid crypto ads at the time of the Bitcoin, Ethereum and Ripple bubble. Web giants like Google, Bing, and Twitter have followed by as well. It’s getting more complicated to promote crypto projects and coins, so the advertising market comes up with new ideas and approaches in order to give cryptocurrencies a chance to get audience awareness on the same level as other products and services.

One of the ways to solve the existing problem for crypto advertisement is to launch a mobile application. For example, Banners App is based on Android operating system and doesn’t have any ad restrictions for crypto. The app can be downloaded from Google Play and is activated any time a user unlocks a phone. Users indicated their personal information in the app: location, gender, marital status, education, languages, interests, professional achievements, and wellness. The targeting is based on the following characteristics. Besides, users can set the number of times they want to see the ad.

By using Banners App brands and advertisers get:

  • A mobile application based on the leading and more profitable operating system in the market;
  • Statistical data on advertising campaign: number of real views and a conversion rate of the advertisement;
  • Payment for real views of the ad that is shown only to the target audience.

Thanks to EasyVisual there will be no more useless advertisement and money spent on the promotion will prove its worth.

Cryptocurrency: Privacy, Anonymity, and Security

Encryption is the most important step from a cybersecurity perspective. It is a basic level of security, which can be layered further. Before deciding to get a cryptocurrency wallet, think about the ways you’re going to protect it online. Unfortunately, antivirus software and unique passwords don’t have the desired effect. From a cybersecurity perspective, they are not enough, especially when talking about running a business or having a wallet online. Although cryptocurrency becomes more popular from day to day, there are no individual ways of protecting it separately. Thus, applying to a VPN is essential. Read this ivacy vpn review to get a general understanding of the topic.

Cryptocurrencies like Bitcoin require from you working with VPN providers all the time. Without a VPN, you put any online transaction at risk even without being aware of it. The only true way to keep it safe is not by providing a protecting shield only but encrypting (coding) it as well. And that is what a VPN can do. So, let’s look at this VPN-Bitcoin connection a little bit closer. What can you get and what can you lose?

VPNs for Bitcoins

It is difficult to protect cryptocurrencies without protecting your data as a whole. You should start with browsing history and online traffic first of all.

Do you know that even now your traffic can be monitored and spied on by someone sitting near you (if you’re using a public network) or your home Internet service provider (if you’re reading this article on your home PC)? If it is not a problem for someone to spy your traffic, then it is not a problem for them to reach your online wallet as well.

How often do you communicate with your business partners online or manipulate your online wallet while being outside your house or office, using a public wifi? Most people do it on a daily basis. Mobile computing and online marketing on the go mean doing business stuff whenever and wherever it is comfortable for you – in the airport, in a hotel, in a coffee shop, in a department store, in a train, and so on. We go online on the public networks without worrying about our personal and business information being stolen.

An increased number of people who are into cryptocurrencies and online wallets has caused an increased number of both professional hackers and beginners with basic hacking techniques. Hackers know when your computer or smartphone is the most vulnerable and reach it to own any kind of sensitive information related to business and finances. And are you aware of the spots in which your mobile phone is the most vulnerable?

The biggest danger for a gadget is a public network. Despite the fact that free WiFi services are very handy and time-saving, allowing you to work from anywhere, they are dangerous for those unprotected devices. If you don’t have a VPN, but you have a Bitcoin wallet online, going on the public network is a huge risk. In this case, cryptocurrency transactions are not recommended at all.

Maybe it’s high time to get a VPN, at least to try one. You can get more info on cybersecurity following the link.

Discover more about VPN

If you have never used a VPN before then you’ve missed a lot of great stuff on the Internet. A VPN is a virtual private network. This software creates a secure connection between your device (computer/laptop/smartphone) and a server. It is an additional layer of protection, which you’re providing for your traffic. A VPN can be represented by an invisible tunnel, which your data is going through while being encrypted. If data is encrypted, it becomes unreadable and unreachable for other devices on the network. A VPN helps to keep your activities online completely anonymous, allowing you to browse the Internet safely no matter how unprotected or safe a certain network is. At the same time, a VPN is a much bigger thing than that. It can solve a lot of issues online.

There are three main functions of any VPN service:

  • Data security and online privacy.
  • The service can change your geographical location and real IP address, allowing to surf the net with a complete anonymity.
  • Unlimited Internet access by opening up those websites, which are closed in your region for some reason.

But in the world of crypto, a VPN takes a special place. There is no antivirus able to both encrypt and change your IP the way a VPN does it. An IP address can tie you to a certain geographical location. If you do transactions somewhere in the airport full of absolutely different people, who can potentially see your traffic, you are recommended to change your IP to make your devices invisible to others.

VPN Principle of Work

A VPN is not a fancy service available for governments and corporations only. It is something everyone can afford on a daily basis. If you don’t have enough money to pay monthly or you don’t want to pay for a VPN at all, you can easily find a free option. The same way you can easily find a paid option. All of the services operate in a similar way with slightly different quality and the number of servers available depending on what you’ve chosen.

So, first of all, you have to pick a service depending on your budget, a number of servers you need, quality of Internet connection, OS, devices you have, etc. Then, you have to download it and register. Here you should know that free VPNs can save logs and passwords. So, think twice before getting a free service, especially if you plan to work with cryptocurrencies particularly.

Now you are offered the list of the global servers to connect to. You choose the country, which you would like to connect to. That’s all. As you can see, there is nothing difficult. The servers offered by a VPN work like a middleman between your device and the Internet instead of connecting your computer directly to the global network. Your traffic goes to the VPN server and back. The VPNs make the requests for you on various content and websites. Thus, it is not your computer or smartphone that is connected to the Internet directly, but a VPN with its server.

There are a lot of things, which can be said about how good and important a VPN is in the 21st century, which is the age of mobile computing and development. No matter how updated your device or software is. No matter what antivirus or password you have. A VPN remains one of the simplest but the most effective tools for keeping your data safe online. So, never neglect it, especially if you run a business or have an online wallet. A VPN doesn’t cost a fortune. At least try a free service to see all the benefits by yourself. Check Bestvpnrating.com if you need help.

Today’s Gold Rush is Looking Rather Green

As the US economy grows at the fastest pace in decades, unemployment has dropped to the lowest level since the beginning of the millennium. With growth forecast to carry on throughout next year, fuelled to some extent by a fiscal reform introduced by President Trump, the Federal Reserve has signaled that several more interest rate hikes are on the cards. Some observers expect up to 6 before the end of 2019, despite somewhat disappointing real wage growth and political noise from the US President indicating discomfort with the Fed’s tightening of its monetary policy.

In the meantime, the rest of the world lags

The BoE, the ECB and the BoJ still have some way to go before we can talk about an alignment of monetary policies with their US counterpart. But the divergence in central banks’ policies doesn’t completely explain the dollar’s allure. The greenback is becoming the safe haven of choice for many investors. With 10-year treasury yields hovering just below 3%, many no longer look to gold as the first choice of refuge during times of uncertainty. With a global trade war looming, each escalation in rhetoric, from each of the sides, has triggered a rush to the US currency. Even though the current administration in Washington would prefer a weaker dollar, it seems that, at least for now, the appetite for the greenback will remain high every time new tariffs (or threats) on imports from China, Canada or the EU are announced.

This is a particularly sensitive situation for emerging economies running substantial current account deficits and large exposure to debt denominated in the US currency. A bullish dollar means larger debt burdens and higher inflation, which in turn trigger further selling of local assets and have a compounding effect on the devaluation of local currencies. It’s a vicious circle and escaping can be difficult, especially when politics get in the way.

A scenario perfectly illustrated by the current state of the affairs in Turkey, where President Erdogan has somewhat restricted the ability of its central bank to manage the situation. Elected on a populist program, Mr. Erdogan has been interfering with the Turkish central bank’s attempts to substantially raise interest rates to try halting the devaluation of the Lira. Forecasts in the short to mid-term look complex for Turkey and its currency. Even adopting more orthodox damage control methods may no longer be sufficient. Looking at Argentina will probably send shivers down the spines of officials of other emerging economies too. The South American country raised interest rates to 60 percent (the highest in the world) and agreed to a $50 billion rescue loan from the IMF. However, these steps were insufficient to the eyes of investors and, as the Peso piles up losses closing on 50 percent to the Dollar, so far this year, there are growing concerns that the Latin American country may be close to defaulting on its large public debt.

These concerns will of course further exacerbate the situation and increase the chances of contagion to other emerging economies like India, South Africa, Indonesia or Brazil. It is worth noting that not all emerging economies present vulnerable underlying conditions (running large current account deficits, for example) but the market smells blood and some investors may be tempted to pull out of EM economies altogether. On the other hand, it is also possible that as summer comes to an end and liquidity increases, should global trade tensions dissipate, dollar bulls won’t be so bold. Under these more favorable conditions support may be found for EM currencies, especially the ones with solid underlying fundamentals, proving the more pessimistic scenarios wrong.

This article was written by Ricardo Evangelista Senior Analyst at ActivTrades

‘Alternative Data’ is Going Mainstream, Here’s Why Investors Should Pay Attention

When it comes to investing, the name of the game is information. To keep up with others and outperform in an increasingly competitive market, fund managers and retail investors alike are always on the lookout for crucial information that will give them an advantage. Information comes in a variety of forms; most commonly, many are used to traditional data and information supplied by companies themselves. Investors look to a prospectus or other financial documents to make decisions, but that’s also the same information others are looking to for their own analysis. What other options do they have though?

One area of finance that’s rapidly expanding is the introduction of alternative data. Unlike traditional data sources, alternative data is information collected and utilized in an investment strategy that does not come directly from the company in question. To stay ahead of the curve, investors are using alternative data as a competitive advantage to generate alpha. Alternative data is a simple term used to describe a wide array of information that isn’t traditionally considered when making investment decisions. These data sets can range anywhere from social media feeds, to communications metadata, to satellite imagery, and nearly everything in between. In fact, the alternative data movement is getting so much attention that the Deloitte Center for Financial Services recently called it “today’s innovation [that] could be tomorrow’s requirement,” further stating that:

“The lure of alternative data sets is largely the potential for an information advantage over the market with regard to investment decisions. True information advantage has occurred at various times in the history of securities markets, and alternative data seem to be just its most recent manifestation…Speed and knowledge are advancing with the use of advanced analytics, and there will be no waiting for laggards, no turning back.”

This new trend is all about embracing the shifting investing landscape and looking at non-traditional ways of evaluating and monitoring industries. To put things into perspective, consider the case of alternative data in the way of logistics data. According to Greenwich Associates “Alternative Data for Alpha” research, logistics data is at the top of the alternative data wishlist for both asset managers and hedge funds, and for good reason.

In the study, Greenwich Associates gives an example of looking at the logistics and supply chain data for a large tech company that’s just about to release a new mobile device. Investors are anticipating this new device rollout to substantially impact upcoming earnings, but they also know that the success of the new device rollout is dependent on factors other than the tech company itself.

Other key factors to consider in the release, before making any investment decisions, is the company’s dependence on many small, private suppliers from across the globe. Alternative data like additional information on suppliers, their background, company health, and history, etc. all come together to give investors a bigger picture of the situation and make more informed investment decisions.

Above is just one example of using alternative data to inform investment decisions but there are essentially limitless possibilities and types of alternative data out there. For the time being, alternative data is still new enough to provide investors with an advantage over others; however, that likely won’t be the case for much longer. Greenwich Associates predicts that alternative data will “only be alternative for so long—eventually becoming a core part of any portfolio manager’s toolkit once the aforementioned roadblocks are taken down.”  Those roadblocks? According to their study, factors like “prohibitively high fees” and the procurement process is too cumbersome ranked the highest.

Providers Bringing ‘Alternative Data’ Mainstream

Since the future of alternative data in the investment world looks like it’s here to stay, the next question investors are asking is how do we get it to be more accessible? Given the responses from Greenwich Associates’ research, there are still barriers keeping alternative data from being utilized to its fullest extent. Fortunately for investors, there are some ways the information is being brought out from obscurity and into the mainstream. Here are some up and coming projects tackling the current pain points holding alternative data back.

AlternativeData is currently connecting institutional investors of hedge funds and long-only asset managers with alternative data for investing. The company, consisting of former buy-side and sell-side analysts and data analysts, allows investors an easy way to purchase data from their network of alternative data providers.

The Quandl Data Hieratchy
The Quandl Data Hierarchy

Competitor Quandl offers institutional investors similar services by connecting them with alternative data. Quandl believes that “alternative data is going to be the primary driver of active investment performance over the next decade.” Additionally, Quandl offers businesses the chance to work with them to convert current data they may have collected into a source of recurring revenue. Many companies have been using their own alternative data to inform their decisions, so why not leverage what they’re not using for more revenue?

Closing the list is SciDex, a blockchain-based alternative to other providers. The SciDex foundation is building a decentralized marketplace for users to buy and sell scientific data that can then be used for making more informed investment decisions. SciDex is different from other providers because of its focus on a democratized marketplace for data and its artificial intelligence (AI) tools used for building smart data sets. Exchange users will also have the ability to create calls for contributions of data they need and will have access to voting on the blockchain for issuing grants and subsidies for new data providers to grow the industry as a whole.

Whether your needs as an investor are looking to new blockchain and AI focused technology for access to alternative data or going through a more traditional provider, the number of ways to gain access to the data you need is growing. Current estimates put the total amount spent on alternative data to be around  $183 million per year, but Tabb Group expects that the amount could likely double over the next five years. It’s only a matter of time before alternative data is no longer “alternative” as more funds incorporate the data into their strategy and investors don’t want to fall behind; as Deloitte put it: Today’s innovation could be tomorrow’s requirement.

MiFID II – What You Need to Know

Trading online is highly fluid, not just because of the dynamic nature of the global markets and economies, but also the constantly evolving laws and regulations. At AvaTrade, our clients are our top priority and as part of our commitment to our traders, we are always staying abreast of these regulatory changes to ensure that we remain fully compliant.

Fundamentals of MiFID

The first version of MiFID (Markets in Financial Instruments Directive) came into effect across the EU in 2007 and it is the cornerstone of the EU’s financial markets regulation. The aim of MiFID was to improve competitiveness for investment services and provide protection for investors in financial instruments by establishing:

  • A code of conduct and organizational requirements for investment firms
  • Authorisation requirements for regulated markets
  • Reporting to prevent market abuse
  • Trade transparency for shares
  • Rules on the admission of financial instruments for trading

Over the years, there have been various proposals and debates around the revision of MiFID, and the final legislative texts were finally adopted by the EU Parliament in June 2014. This revised version, which includes MiFIR (Markets in Financial Instruments Regulation), became collectively known as MiFID II and it came into effect in January 2018.

Assisting in the technical standards, advice, and implementation of the regulation is ESMA (European Securities and Markets Authority), an independent EU Authority. ESMA continues to play an active role by creating a supervisory culture and practices, including the development of Q&A’s (questions and answers) to help organizations in the implementation of MiFID II. ESMA, while independent, reports to various EU bodies, including the EU Parliament.

Introduction of MiFID II

At the beginning of 2018, MiFID II came into effect for investments firms. This new legislative framework was designed to not only strengthen investors protection but to provide additional transparency; the fairer, safer, more resilient, and efficient functioning of the financial markets.

In summary, some of the key issues that MiFID II addresses:

  • Removal of trading bonuses – under the new regulation, brokers cannot offer trading bonus incentives to clients.
  • Professional trader classification – based on a questionnaire that clients complete and other criteria, clients must be classified as either retail or professional traders. Depending on the client’s classification, they are entitled to different features and benefits. For example, the amount of leverage.
  • Reduction in leverage for retail clients – while leverage can be a great tool to maximize profits, it can also magnify losses. Overall, the amount of leverage that can be given to clients who are classified as ‘retail clients’, has been reduced.
  • Avoiding conflict of interest – one of the key concerns that MiFID addresses is the avoidance of conflict of interest between brokers and their clients. The aim is to ensure that brokers continuously act in the best interest of their clients.
  • Registering of automated trading algorithms – under the new regulation, algorithms used for automated trading have to be tested, registered and have protection measures built-in.
  • Greater transparency and reporting – brokers must provide more detailed reporting on trades, including volume and price, as well as keep records of all communications and conversations with their clients.
  • Communication simplicity and clarity – all communications, especially marketing communications, must be clear, fair and not misleading. Plus, the risks of investing in financial instruments must also be clearly stated.

In conclusion

The new regulation has been in the making for many years, with many iterations and will continue to adapt and evolve. The entire MiFID document is almost 7,000 pages, but the essence of this framework is to ensure a fair, transparent and more secure environment for all stakeholders, especially investors. The above is a highlight of just some key areas that MiFID II deals with. AvaTrade clients can have complete peace of mind knowing that AvaTrade complies with these regulations and will always act in their clients’ best interests.

For more information detailed information on MiFID, please visit: https://www.esma.europa.eu/policy-rules/mifid-ii-and-mifir

Cryptoshopping on Storiqa: Pay for Goods with Cryptos

Storiqa has already gained outstanding landmarks in crypto – successful $25 million hard cap, market capitalization over $150 million, a release of beta MVP. The company moves further according to the roadmap and presents Storiqa Wallet prototype on the official website.

Storiqa aims to create a quick-to-setup marketplace for SMEs with minimal financial borders and global transactional fees. Multicurrency payment solution helps to facilitate the last option. Storiqa Wallet is a mobile application through which clients can make payment both in cryptos (e.g. Bitcoin – BTC, Ethereum -ETH, Litecoin – LTC) and fiat (e.g. USA dollar, euro).

Storiqa Wallet allows allocating budget among a few currencies simultaneously. Vendors who will trade on the marketplace Storiqa.com can easily transfer crypto to fiat and vice versa. Shoppers will be able to transfer fiat and crypto easily before purchasing products. All these multicurrency transactions are conducted smoothly and orderly in the application due to lean business processes between banks and crypto exchanges behind. EMI (Electronic Money Institution) license assures secure and legal business processes. AML (Anti-Money Laundering) document is an inevitable step before getting the license. Both they confirm operations in the legal field.

At a later stage, Storiqa Wallet will be used outside the marketplace ecosystem. It means that paying for coffee with crypto is not a vague idea. Apple has already successfully applied NFC technology for ApplePay. Implementing NFC in Storiqa wallet allows using this multicurrency solution for any payment.

STQ token is presented on several exchanges at the moment, among them fiat pair to IDR. On July 5 STQ will meet new fiat pairs on cryptocurrency platform EXMO. Previously Storiqa increased market capitalization four times with the combination of product update and new exchange.

Contact:
Anastasia Taved
PR Coordinator
E-mail: a.taved@storiqa.com
Social: @nametaved

About Storiqa

Storiqa was founded in August 2017, with the aim of creating a quick-to-setup marketplace for SMEs with minimal financial borders and global transactional fees. Their key features and tools are based on using cryptocurrency and blockchain technology to resolve existing industry problems between buyers and sellers.

Payment can be made in either crypto or by credit/debit card through Storiqa’s multicurrency wallet, and their tokenized business model creates a self-sustaining STQ token economy providing higher cash back to buyers and access to preferential platform features for sellers.

About EXMO

Founded in 2013 and based in London, Kiev, Barcelona, and Moscow, EXMO is #1 exchange in Eastern Europe, and one of the world’s largest global exchanges in volume and liquidity. There are 1.5 mln users, 50 000 active traders, 315 000 daily visitors, 56 trading pairs, 5 fiat currencies (USD, EUR, RUB, PLN, UAH) on the platform. The average daily trading volume is $50 mln.

Essential FX Trading Strategies – A Quick Introduction to Trading Ranges

Traders can get hung up on trends – the fact is that most of the time market is not in a strong up or down trend; it is moving sideways (although this is itself a trend of sorts). When markets are fluctuating up and down with no strong direction, trading the range can be a useful approach, particularly for intra-day forex traders hoping to profit from short-term volatility in prices.

Traders seek to identify overbought and oversold extremes – resistance and support areas, buying when the market is oversold and selling when it is overbought. Ranges, it may be said, are often corrective waves within a stronger trend with the direction of the price flattening out and holding within a range while the longer term trend pauses for breath. Alternatively, strong trends can simply run out of steam and prices can start to fade sideways for a period of time until new information is available to reignite the trend or spark a reversal and a new trend in the opposite direction.

The basis of trading a range is to identify when prices are reaching an extreme within the range and are due to reverse course in the other direction. In many ways, therefore, trading ranges is about spotting short-term trends and reversals. Many range traders are not fussed about direction – their view is that prices will tend to trade through a particular level more than once or multiple times and therefore will seek to profit from this oscillation around a mean.

The importance of Support and Resistance

The most important aspect of trading ranges is being able to identify the upper and lower price bounds – in other words, we need to identify the range.

We can do this by identifying highs and lows to create support and resistance levels. For instance, on the below chart we can see a clear trading range for the EURGBP pair from September 2017 to March 2018 with prices moving within the c87-90 range without any clear evidence of direction.

An example of the EURGBP stuck within the 87-90 range.

To identify the range, we can look for multiple touches (at least 2) on the lower and upper bands – the levels of support and resistance. These need not be precise and may be classed as zones of support and resistance.

Moving Averages and Mean Reversion

If one views prices changes as a distribution around their average, then it stands to reason that they will have a tendency to revert to the mean. Moving averages play an important part in range trading by showing where this mean price is and therefore highlighting how far price action is moving away from the mean. The idea of range trading is that when prices do move a long way from their average, there is a solid chance that they will in part at least try to move back to the average, or mean. If markets are in a strong uptrend, they will tend to be above moving averages; and below if in a downtrend.

In a sideways market such as this example of gold (below chart), the price action oscillates intermittently on either side of the 50-day moving average.

An example of Gold (XAU/USD) hugging its 50-day moving average.

Timing

With our range identified, we can start to consider entry and exit points for our trades. The use of indicators and oscillators is important here. The aim, of course, is to enter when the market approaches one extreme of the range, and exit once it reaches the other. Determining when a market is overbought or oversold is clearly very important. Various indicators can be used to help. For instance, the Relative Strength Index and Commodity Channel Index (CCI) are indicators that may be used as these delineate prescribed overbought and oversold levels.

Setup

There are different ways to approach a range trade. You can use established levels of support and resistance, incorporate indicators and oscillators, and/or make use of moving averages. There is no hard and fast rule, but considering the various elements and knowing how and where to apply each –and when not to – is important. In a simple range-bound market, the idea would be to place a buy order just on or just above established support or enter when the price is considered oversold and is below the moving average. A stop loss order can be placed below the support level or somewhere below the entry point. The take-profit (limit) sell order can be set on or near the level of established resistance, or near where the moving is. As ever with trading, having a clear risk to reward ratio in mind is important. Usually, traders will look for this to be something like 1:2, or 1:3.

Managing risk – spotting breakouts

We have just touched on stops, but these are very important. Breakouts can occur and so a stop can protect your trade from running higher losses. However, many false breakouts are common in range-bound markets and therefore it is important to pay close attention to how far your stop is away from the entry point. In this regard, the importance of thinking about support and resistance as zones rather than precise price points is useful as it can allow for many false moves. By the very nature of range trading, you are at risk of a breakout leading to losses. Looking for breakout patterns on price charts plays an important part, while indicators and oscillators will also help identify when a breakout might happen. For example, when Bollinger Bands narrow it is usually a sign of a very sharp price move – something that you should beware when trading a relatively narrow range.

This article was written by ETX Capital

Top Five Cryptocurrencies Experts Talk about Bitcoin, Blockchain and ICO’s

Yet, it feels as only a few understand cryptocurrencies’ deep foundations, how it works and where the notion heads for.

We gathered cryptocurrencies experts, real experts. They know the technology, the conflict inside the Bitcoin world, the aspiration, the obstacles and much more.

Meet The Experts

  • Please tell our readers about yourself and your company. What is your first experience with Cryptocurrencies? What is your relation to the cryptoworld?

Mr. Rosenfeld: I’m a mathematics M.Sc. graduate of the Weizmann Institute of Science, specializing in machine learning. I have worked as the head of research of the internet startup Similarweb, where I was in charge of developing algorithms for measuring connections between websites and analyzing web traffic.

I first heard about Bitcoin in March 2011 from a blog post on lesswrong.com. Shortly after I’ve quit my existing job to focus exclusively on activities in this area.
Among other things, I have established the Bitcoin community in Israel, founded Bitcoil – Israel’s first Bitcoin exchange service, and performed mathematical research on the algorithms that underlie the functioning of the Bitcoin and blockchain system.

I now serve as the chairman of the Israeli Bitcoin Association, a nonprofit organization with the goal of maximizing the benefit that the people in Israel gain from the Bitcoin/Blockchain technology.

Mr. Herzog: Eyal Hertzog is a venture-backed technology entrepreneur for over 20 years. Since 2014 Eyal has been working in the cryptocurrency space, beginning with AppCoin, empowering local communities with local currencies, and now Bancor Protocol, an on-chain, fully decentralized conversion solution between tokens connected to the network, through a low-cost, perpetual and adjustable smart contract liquidity mechanism. Bancor successfully completed a record-breaking token sale in June 2017, raising over $153 million for BNT, the Bancor Network Token, which serves as the hub connector for the Bancor Network™, a decentralized liquidity network allowing every integrated token to be instantly converted to any other, with no counterparty.

In addition, Eyal is a talented piano and bass musician and enjoys windsurfing and snowboarding in his free time.

Mr. Beigel: I first got acquainted with Bitcoin when I was basically out of a job in April 2013. I remember reading an article on TechCrunch called “Bitcoin: How An Unregulated, Decentralized Virtual Currency Just Became A Billion Dollar Market”.

After reading a bit about Bitcoin I got hooked, downloaded a Bitcoin wallet and bought my first Bitcoin. Later on, I decided to create an information website since I figured what better way is there to learn about something than teaching it to others. Today 99Bitcoins (which was officially founded in January 2014) serves almost 2 million readers each month who are looking to take their first steps into Bitcoin and cryptocurrencies.

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Ms. Torteman: Deloitte’s global experience with blockchain technology started with Blockchain 1.0 back in 2009, when the major focus was on the bitcoin and other cryptocurrencies application, and developments were mostly concentrated around payments implications. Ever since throughout the “evolution” toward the Blockchain 2.0 and to the Distributes Ledger Technology (DLT), Deloitte has been operating substantially as a thought leader to encourage cultural and market education of the DLT business potential, and in developing proofs-of-concept and production-ready solutions across different sectors.

Industries ranging from the Financial Services to the Industrial Sector, Retail and Distribution, Supply Chain, Life Science & Health Care, State Governments, Telecom, Real Estate, Energy and Resources, Automotive, Media, and others. Up until today, Deloitte has launched globally over 45 POCs exploring different blockchain application, in use cases such as International Trade, Supply Chain, Cross-Border Payments, KYC and others, and holds many strategic collaborations with many of the world’s leading blockchain players. Deloitte operates today 4 blockchain labs globally, devoted to developing, delivering and deploying blockchain business application. We offer diverse practices and professional services to accompany both blockchain initiatives and startups, as well as enterprises and corporates.

Mr. Assia: I started trading when I was 13 years-old when my father taught me about the markets, and have been fascinated ever since. My brother and co-founder Ronen Assia who comes from an industrial design background used to say that I have the hobbies of an accountant and how he understood nothing from all the screens and charts in my room.

It was clear to us from the beginning that the global markets and economies were connected to one another, yet somehow 99% of the world was disconnected and disengaged from this ecosystem. In 2007, we invented eToro under the vision that we wanted to open up the global markets for everyone to trade and invest in a simple and transparent way. Today, eToro is a global trading and investing platform, with over 6 million registered members and thousands of new accounts opened each day. eToro’s mission is to revolutionize the way people access the financial markets.

We started looking at Bitcoin in January 2011, after a long romance I had (and still do) with creating new and better currencies for the world. Back then we bought some Bitcoins and tested the technology – which fascinated us. In September 2012, we started a project which became www.coloredcoins.org, the main mission of this project was to enable anyone to create additional currencies to be traded as P2P assets on the blockchain exchange.

When we started writing the specifications of the new colored coins protocol – we started working with Vitalik Buterin, who later on decided to start his own path and created Ethereum. When we realized that in order to build the coloredcoins infrastructure we will need to invest a lot of money and it’s premature for the core business of eToro, we decided to spinoff coloredcoins, and since then Colu coin has raised more than 15M USD and launched virtual currencies for local communities.

  • As cryptocurrencies are considered to be an alternative to central banks and Fiat money, how do you see cryptocurrencies integrate into our financial system in a regulated and responsible way?

Mr. Rosenfeld: I believe cryptocurrencies are a challenge for regulators and will continue to be so, and that is a good thing. In general, I believe that less regulation is needed than the one that we currently have, but so far the technology for a less-regulated financial system did not exist. The advent of Bitcoin and other blockchain applications necessitate rethinking the goals of regulation and how the current approaches should be adopted.

The first step is that cryptocurrencies are used without a clear regulatory framework. The next step will be that the traditional framework will be expanded to encompass cryptocurrencies. However, many of the existing definitions were not intended to cope with the new concepts that have been introduced; and eventually, completely new frameworks, which are appropriate for this new economy, will have to be devised.

In the following decades, cryptocurrencies will coexist side by side with traditional currencies, but it is plausible that within 30-40 years, they can replace them completely.

Mr. Herzog: I believe that this will be a long process and we can also learn from the process that we’ve already seen take place on the internet.

For example, many services that were heavily regulated, such as radio and TV, migrated into digital networks and took on new forms in terms of content creation, approval and distribution. This created a very different landscape that could not be easily compared to the previous reality and so required new thinking around how to best protect consumers while upholding freedom of speech among other considerations. So the regulations we have today for the financial sector, which is in many ways designed to protect end users and customers from fraud and other dangers, may not be relevant to a new reality of an interconnected world of cryptocurrencies. It will likely require a different set of tools, different types of protections and different thinking.

Mr. Beigel: Sure, I think many currencies will jump on the opportunity to solve major banking issues just like Ripple is doing. Also, I personally believe Bitcoin will become regulated eventually. That, of course, doesn’t mean everyone will follow regulations (the same way people avoid regulation on US dollars), but it will eliminate a lot of the fear surrounding Bitcoin and cryptocurrencies in general.

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Ms. Torteman: Cryptocurrencies interests across the Financial System worldwide is indeed on the rise. More than 80% of the world banks today are experimenting with blockchain and bitcoin technologies, and this figure is predicted to increase in the coming years. Government organizations worldwide are exploring the use of blockchain technology to improve their operations, where notable examples include Japan who approved this year recognizing bitcoin as a legal method of payment while also categorizing it as a kind of prepaid payment instrument; The U.S. Federal Reserve plan to issue a FedCoin cryptocurrency which will provide two way physical convertibility between the fiat money and electronic reserves, and in China, the National Central Bank (PBOC) is developing its own digital currency. Market adaptation of the bitcoin within stock exchanges worldwide is increasing as well, as bitcoin has proven its practicality and viability as a safe asset with the potential to serve as a counterpart to economic uncertainty, leading to both investment firms and individual investors to continuously purchase bitcoin.

Despite these amazing developments and the wide advantages cryptocurrencies brings, their successful implementation and cross-global adaptation face a number of challenges and critical questions. First, in terms of theory: cryptocurrencies are neither intrinsically valuable, like gold, nor do they have roots in a commodity expressing a certain purchasing power.

What kind of economical long-term impact would yield their mass global adaptation and their potential replacement of existing monetary paradigms? Cryptocurrencies represent the first time that a societal function such as the transference of funds, thought to require a trusted party, is replaced by algorithms and protocols. Will these adaptations change our existing global monetary system? Do we need to redefine how we understand economics today? And will other societal functions such as Law, Government, Corporation, and Academia follow suit and be replaced? Second, there remains considerable uncertainty in many markets over the future of the regulatory environment, and whether cryptocurrencies are considered a foreign currency; a commodity or asset, treated like goods; or represent a completely new form of currency which requires a whole new financial paradigm.

As modern currencies have always been created and regulated by national governments, what would be the implications of shifting from this “historic model”? We believe that answering these questions and others is essential for the true integration of cryptocurrencies into the financial system, and we are seeing that regulators worldwide are indeed exploring these issues.

Mr. Assia: The technology that powers Bitcoin and other cryptos, is a disruptive invention in the computer science field, called the blockchain. As a computer scientist myself, I believe this technology is comparable to when I first discovered the internet in 1995 and learned about TCP/IP. It’s as big invention as electricity and the internet; While new technologies might disrupt it, there is a clear network effect and first mover advantage when launching this type of technology. I believe that governments will have to adapt to blockchain technology. In a recent research paper that I read, it stated that a significant number of central banks in the world are already looking at blockchain technology, and due to the gravity of blockchain it will be inevitable that they will have to adopt it.

  • Bitcoin and other cryptocurrencies are under pressure since the beginning of 2018. What are the main reasons and how do you think cryptocurrencies will perform in the rest of the year?

Mr. Rosenfeld: We’re seeing now the aftermath of a textbook bubble in the price of Bitcoin and other cryptocurrencies. The hype and media attention outpaced the capacity for growth in the fundamentals, leading to inflated expectations. During the peak, we’ve warned that the bubble would likely burst, and it did. This is all par for the course and we’ve been there before – there was a major bubble in Bitcoin’s price in 2011, and twice in 2013.

In the long run, I expect continued growth in all parameters. What happens in the short run is anyone’s guess, but I hope that 2018 will be the year where we get much more regulatory clarity and the adoption of new exciting technological improvements to Bitcoin such as the lightning network.

Mr. HerzogThe prices of cryptocurrencies have been volatile historically. This is a new and unfamiliar space, with limited successful case studies and a lot of speculation, so investors sentiment can change quickly. Current sentiment seems to be on a positive trend but until we witness more successful examples of blockchain solution, it is expected to remain highly speculative.

Mr. BeigelThe main reason for the pressure so to speak is mainly government regulation. That’s actually a good thing because it means Bitcoin is becoming more and more mainstream. What we should be focusing on is not the fact that the hype has died down but rather the fact that even with all of this pressure Bitcoin is still growing in adoption day by day. Other cryptocurrencies are just following Bitcoin’s lead as far as I can tell and at the moment I personally don’t pay a lot of attention to them. My guess is that 2018 will be the year of Bitcoin regulation so to speak, and that will lay the foundation for mass adoption once the next price spike arrives. Since by then it will be considered “normal” to buy Bitcoin.

Mr. Assia: The early part of the year is historically a tricky time for cryptocurrencies, but speculation about regulation in recent months has also been weighing on the market. Even long-term investors have been tested by continued sideways price movements. But it’s important to remember that cryptocurrencies are in the early stages of development, so these cycles are to be expected. We expect to see the price of cryptocurrencies continue to rise over the long term, although price volatility will remain a feature while the market matures.

  • Bitcoin prices rose exponentially during 2017, creating bubble talk. Although cryptocurrencies suffered a sharp drop in prices during 2018, do you believe that the current prices actually reflect the real value or perhaps prices are overvalued?

Mr. Rosenfeld: It’s no secret that currently, Bitcoin is used for speculation much more than for actual commerce. While this remains the case, the exchange rate will be volatile and there will be no clear-cut answers to questions about the sustainability of any given price point.

It also means that Bitcoin price is strongly tied to the probabilities of different future scenarios, rather to actual current usage. In the most optimistic projections of Bitcoin replacing all existing currencies, the price per unit can easily surpass $10M of today’s USD. A price of $5000 per bitcoin represents a chance of 0.05% of this happening, which I think is not completely far-fetched.

Mr. Herzog: I actually don’t think that there is a specific right value for Bitcoin because the value of Bitcoin is basically a speculation. It’s the current sentiment of the people that are interested in or trading with Bitcoin regarding the future of that particular cryptocurrency in relation to the evolving blockchain landscape, such as what role will Bitcoin play, how big will it be, how fast it will get there. I think these are wild speculations and the potential is unprecedented because we are talking about a product that can compete with money itself as a solution for commerce. So you can expect any kind of jump in prices at any point. I think it’s important to mention that even though it is volatile and it has been very volatile throughout its lifetime, the long-term direction is quite clear.

I remember many people talking about the stock market in the same way, that even though it may be volatile and may drop from time to time, the overall long-term prospects are very positive. So I think that this is a similar situation and I believe that in the long term, cryptocurrencies will continue to gain in value, while it is unlikely to predict any specific one.

Mr. Beigel: The previous year and this year as well:) I actually believe Bitcoin is undervalued. I think that if we want Bitcoin to serve as some sort of reserve currency then its price should be much higher than what it is at the moment.

Ms. Torteman: There’s clearly a lot of interest in the crypto world, reflected by the continuing rise of the bitcoin value. We think that bitcoin and other cryptocurrencies high volatility of prices represents some of the challenges these currencies are facing, caused first due to the regulatory uncertainty, the differentiation of governments acceptance, and due to the entrance of many “non- crypto community” newcomers, which don’t necessarily hold a thorough understanding and hence are much more influenced by any external developments.

Meni quote

Mr. Assia: The big players are still on the fence, most of them have not invested in cryptocurrencies yet. Since the supply of Bitcoin is limited, and there are still very big pockets that have not started buying yet, I think we are still in the early days of cryptocurrencies and we won’t see the full value for a long time.

  • ICO’s are a legitimate new way to raise funds and its popularity increases significantly during 2017 &2018, what do you think is the correct way to approach ICO’s? Should it be regulated?

Mr. Rosenfeld: I believe things should only be regulated as little as possible – but that said, the current trends in ICOs clearly highlight the problems that regulation was intended to solve, and what can happen in its absence. There are 3 key problems we can identify:

  1. Investors in ICOs don’t get actual company stock (which provides well-defined rights and benefits), but rather tokens of questionable long-term value.
  2. The ICO market is bubbling, and funds raised by companies are an order of magnitude higher than appropriate.
  3. ICOs are marketed to innocent laymen, who are unable to discern the above two problems and are tempted to invest indiscriminately, fueling the bubble.

To become legitimate, ICOs will need to start offering company shares instead of tokens, be more transparent, and set sane limits on the funds raised.

ofir quote 3 (2)

Mr. Herzog: Token Generation Events are providing an amazing new solution for an innovative project, and in a digital format and liquid format, we’ve never seen before. It’s like comparing the printing press to the Internet. Similarly to above, the regulations that are in place today did not have this specific technological environment in mind, and so will likely undergo evolution to be effective for this new reality. Until we get there, it would be great if the industry could self-regulate in order to help both participants and regulators find the best path forward.

Mr. Beigel: Definitely. At the moment the ICO market is a complete disaster in my opinion. People are investing their money only because of hype and probably less than 5% are actually doing their due diligence as they should be.

Too many people are taking advantage of this situation and the lack of knowledge about cryptocurrencies to make a quick buck. I really hope the ICO mania calms down because a lot of people are going to lose their money the way it currently looks.

Ms. Torteman: 2017 was indeed the breakthrough year of the ICOs with investments raising over $3 billion USD, compared to $300m the previous year (the sums reflects the value at the issuing). 2018 is a continuation of the trend. ICOs are interesting vehicles as they enable monetization to open code initiatives and consist another complementary element to the “blockchain philosophy” by serving as a token that represents some kind of value. ICOs defiantly represent an aspect of the consolidating “New Economy” as a new investment vehicle which expends and innovate the existing fundraising methods, and its effects have the potential to influence and innovate traditional methods as well.

We in Deloitte IL see the cryptocurrencies evolution as part of an economic and social development and operate to assist ICO enterprises with the standard business establishment of their operations. We currently accompany multiple ICOs initiatives of Startups, Tech companies, and VCs with diverse professional business services such as Accounting, Taxation, Business strategy and more. Similar to other new technological developments, it takes some time for the market and for institutions to understand the advantages and disadvantages and to react accordingly. We believe that given the continuously growing volumes of ICOs it is essential to define standardization for the process and to make sure certain concrete criteria regarding the commercial, technological and financial details of the new ICO, as well as its potentials investors, are well defined. Regulation can also assist in preventing frauds and hacker’s thefts, and in preventing potential money laundering. Until the process will be standardized, potential investors interested in entering an ICO should carefully study the company and its product, and conduct sufficient due diligence before entering.

Mr. Assia: ICO’s are an innovative platform to raise funds for companies but before one decides whether they want to invest, they should perform an appropriate level of due diligence so they are comfortable with the investment. I believe that in the medium-long term, regulators will find an adequate balance between innovation and protecting investors, in a way that enables innovative models to grow to disrupt obsolete areas in the financial services.

  • Bitcoin’s community suffered many divisions and conflicts so far. Do you support one decentralized Bitcoin currency or the notion of other Bitcoins (Bitcoin Cash, Bitcoin Gold, etc) as well?

Mr. Rosenfeld: I happen to be a pioneer in recognizing the prospect of Bitcoin splitting into several currencies, and my series of blog posts on the matter starting over two years ago which, to the best of my knowledge, the first time anyone has seriously considered this.

I do strongly prefer that there will be one currency, and right now I prefer it to be according to the vision of the Bitcoin Core team. But I recognize the fact that other people disagree, and I believe that if we find ourselves unable to reconcile these disagreements, splitting the currency is a healthy thing to do, with each of the forks have the right to coexist peacefully with the others.

Mr. Herzog: I believe that having multiple currencies used by different groups using different technologies and trying different ideas in different models is actually a good thing. I think this is how evolution occurs faster when various groups try multiple different options to see which ones work best. So I’m not a big fan of this monolithic model of one single currency in the middle. I don’t think it works as well. I think that what we’re seeing with Bitcoin is actually a leadership challenge.

There are different interested groups and those interests are pulling Bitcoin in different directions. And I think it’s very hard to make a progress or make important decisions to move forward quickly in this way. Now, given that cryptocurrencies and blockchains are very young technologies, I think we still have a very long way to go, and a lot of improvement to make in order for these to be useful for the average person. So I do think it’s really the best thing that can happen that several hard forks will lead to several diverse teams compete with different approaches.

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Mr. Beigel: In general, I support the market, and the market at the moment shows support for Bitcoin Core. Also, after reading quite a lot about the matter, I believe that the Bitcoin Core team are the most capable team to lead Bitcoin forward.

 

  • There are many who criticize Bitcoin as a tool that can create frauds, what is your opinion about that and what would be the best way to prevent it in the future?

Mr. Rosenfeld: Bitcoin is actually much less suitable for illegitimate uses than is commonly believed. Its pseudonymity strikes a good balance between a degree of privacy, and the ability to spend resources on tracking any suspected illegal activity.

In any case, Bitcoin-related crime should be condemned and fought just like any other kind of crime. Like any technology, Bitcoin can be used for a lot of good but also for evil. It is rarely a good idea to write a technology off just because of the latter and “throw the baby out with the bathwater”.

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Mr. Herzog: I think that there is definitely a risk of people using Bitcoin for unsavory tasks or purposes. We’ve seen it used for ransom and other activities which are illegal in many places. And I believe that the same thing was said about the internet in the beginning, that people might use it to connect terrorist cells, defraud people or other unwanted behaviors. And of course all of these things did and do happen on the Internet, and yet, generally people would likely still prefer the risks than losing the benefits of having this technology. While it’s easy for us to think about all the negative things that a new technology can bring, it’s actually harder for us to realize and envision all of the positive things it can bring as well. It is likely that eventually, we will be much more appreciative of the benefits blockchain technology is bringing to society, than the inevitable risks.

Mr. Beigel: I find it amusing how people blame Bitcoin for fraud. It’s like saying that dollars create bank robberies. People who make such claims seem to be affected by the FUD (fear, uncertainty, and doubt) created by the media instead of thinking for themselves.

Sure, Bitcoin can be used for paying a ransom, but so can Euros, British pounds, and Dollars. You don’t see anyone banning those currencies. Having said that, there are 2 main ways to make Bitcoin safer for the public:

  1. Continued development of the Bitcoin protocol and Bitcoin services that make it easier and safer to use Bitcoin.
  2. Market education – The internet wasn’t safe back in 1994 and isn’t a safe place today. However today, people are more educated about the risks involved in the online activity. The same will happen for Bitcoin, I’m sure of it.

Mr. Assia: I don’t think Bitcoin creates more fraud than other segments of the financial sector. People have learned to abuse every invention that humanity has created since the dawn of history, but it didn’t prevent humanity from keeping on innovating. I believe that as long as the Bitcoin community grows, and more people and institutions are getting involved, regulators will create a clear regulatory framework that will strengthen the ecosystem and minimize fraud.

  • Regulation has continued to be main the main catalyst for cryptocurrencies’ legality and price fluctuations. China, Japan, Russia, South Korea and other leading economies are the driving force of cryptocurrencies regulation. How can you evaluate the current situation? Can you vision a global regulation of cryptocurrencies?

Mr. BeigelAt the moment it’s hard to assess since each country is acting on its own accord. You don’t see countries “copying” regulations of one another. In the end, I do believe some sort of main guidelines will emerge since the world is moving toward globalization of taxation but it won’t happen in the next year or so, it’s just too soon. At the moment each country is dealing with itself with how Bitcoin and other cryptocurrencies are disrupting their own sovereignty.

Mr. Assia: Governments across the world are looking into how cryptocurrencies are affecting consumers and the best ways to regulate them. The recent G20 summit suggests that some international cooperation is possible, but it’s too early to say whether a global regulatory framework is on the cards. Ultimately we are supportive of appropriate regulation for cryptocurrencies, both to protect customers and help secure the long-term future of the industry.

Mr. HerzogThere seems to be more clarity in some of the jurisdictions such as Switzerland and Singapore, where we can see the industry thriving. I believe that it is a matter of time until more jurisdictions will recognize the potential of the technology and embrace it. The less welcoming jurisdictions will experience talent drain and slower economic growth. It’s pretty clear that if a country would choose to block the internet 20 years ago, it would have a devastating effect on its economy. Banning blockchain technology would probably result in an even worse setback for any country that chose to do so.

Mr. Rosenfeld: Over the next few years I expect to see countries adopting Bitcoin and cryptocurrencies in general as part of their existing regulatory frameworks. Since those differ by country, each will have its own approach to Bitcoin, we will not see a global “one size fits all” treatment. It might take a decade or more to construct entirely new frameworks specially tailored to this new innovation. Progress in regulation can definitely boost mainstream adoption while making it difficult to abuse the technology for criminal purposes.

  • How do you see the crypto world evolution in the future?

Mr. Herzog: I think that the first killer app of cryptocurrencies was Bitcoin, a decentralized, permissionless private currency. Unfortunately, the best feature of Bitcoin also challenges its brand, because if you have a permissionless, private currency then it works best for things that are unpermitted or that you would like to keep private. For other things, credit cards actually work better. They have significant advantages such as they are safer, easier to protect, harder to steal and more accessible to most people. The next killer app we’ve seen develop is crowdfunding, specifically on Ethereum, thanks to smart contracts. I believe that we will continue to see growth here and the attraction of new entrepreneurs, investors, technologists, and participants to space as a result. From there, the next big innovation will emerge.

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Mr. Beigel: 2018 is going to be super exciting. I think we will witness Bitcoin’s transition from the early adopters to the early majority, governments will start taking a stand on cryptocurrencies and hopefully, cryptocurrencies will become more dominant in everyday transactions.

Mr. Assia: It has been a breakthrough year for cryptocurrencies and I see this continuing in 2018. The crypto markets will get more mature, innovation will rise along with new internal and external regulation, which will help create a more stable market. In addition, we will experience the first government to POC blockchain technology in the core technology of the financial services. It will no doubt be a fascinating market for cryptocurrencies.

Mr. Rosenfeld: Over the next few years, we should see steady growth in all parameters – more businesses accepting Bitcoin, more startups developing new blockchain applications, more users, more regulatory clarity, more academic research, and of course a higher exchange rate.

In 20 years, I expect that when you go to any shop in the world, you’ll be sure that it accepts Bitcoin.

In 30 years, when you go to a shop, you won’t be sure that it accepts the local currency.

Ms. Torteman: We believe that we are standing in the middle of one of the most interesting technological developments of the past decade. The blockchain is to value, what the internet is for information.  It is an enabler, applicable to diverse industries. We see cryptocurrencies as representing the first wave of the technology, where the big potential for cross industries adaptation across different use cases will be DLT based.  We predict that we will see in the coming years more industries continuing to explore and adopt blockchain based solutions. Organizations will further continue to explore scenarios in which blockchain could reinvent parts of their operations, value chains, business models and even products, and will continue to invest resources and to discover how blockchain could help bring new efficiencies to costly, slow, or unreliable transactions, and to introduce new models for partnership and collaboration. Business, government, and society are built on trust. As such, any promise to use modern computing principles to transform how we achieve and apply trust is indeed, disruptive.

How to Take your Weed Higher?

As the markets continue to evolve, opportunities for investment continue to expand, providing investors an opportunity to invest in companies directly linked to the manufacture or growth of a particular product, or to invest in a range of companies exposed to the manufacture, growth and sale of a product and / or products.

The debate on whether to invest in a single stock or index has been ongoing for decades with Fund managers charging exuberant fees, as high as 5% redemption fees, if an investment is for less than 1 year and that’s before considering an annual management fee of up to 1.5% per annum for a traditional vanilla fund, which means that you would need to have a net return of 6.5% before being able to walk away with any capital gain, quite a tall order in today’s world, volatility and market sentiment able to catch you out without warning.

The fee structure of actively managed funds has brought forward the argument that investing in a series of indices is a more appropriate investment strategy, reducing annual fees to as little as 0.5%, with a your investment weighted according to the index to which you are exposed.

A strong case for passively managed investments, where the fund manager or yourself directly, invest in an index would be the Dow’s rally which started off on 8th November and ending on Friday, 27th January. The broad based exposure would have ensured that the investor is protected against nonperforming stocks, diversification away from a single company being the key.

Such investments are certainly sound for the less seasoned investor, though it has to be said that even the most seasoned get it wrong, ultimately the reason why actively managed funds present a higher risk to the investor.

In a similar way, investing in a single company poses many risks to the investor and the reason for making such investments would largely differ than wanting to be exposed to a particular sector or niche within a sector.

An investment into an index provides exposure to the product or niche segment, without running the risk of investing in dud stock.

So with Marijuana becoming legalized in states across the U.S and now forming part of the arsenal of the healthcare sector to deal with various ailments, one might be considering how to gain exposure:

  • Unlike gold, holding physical is probably not the best idea, primarily because there are limits to what weightage is legal and how physical would be bought and sold, as it certainly wouldn’t be OTC in the market sense of the word, and at the end of the day, dealing is dealing, quite different to trading.
  • Investment by way of stock picking gives you exposure to the marijuana sector, but leaves you exposed as explained earlier, the key risk being the lack of access to information in such a nascent sector and perhaps the ability to identify key risks within a company, their ability to generate income and to survive the tougher times.
  • Investment via an index would certainly prove the most effective medium for the silent majority, though the downside is that the upside may well be diluted, if you have the know-how to select individual stocks on merit.

Having hunted around various stocks and indices, an example of how investing into the sector and not directly into a particular stock can reap rewards or lead to lost opportunities, would be as follows:

The Marijuana Index
The Marijuana Index

Source: The Marijuana Index

The daily return on various stocks exposure to the sector can have quite a spread, to reduce the risk, exposure to The Marijuana Index would certainly smooth out the highs and the lows, diversification easing some of the volatility, to give you a 0.19% loss on the day, as reflected within the table below.

This would have been a far better return for an investor stock picking GoldenLeaf, while on the flip side, MassRoots Inc. would have left the investor out of the money.

Marijuana Index
Marijuana Index

Taking the index investment more macro, some investors would prefer to be exposure to the Dow Jones Industrial Average, for example. The Index would unlikely give you any return reflective of the Marijuana sector due to the constituents and weightings and the few, if any marijuana stocks that are listed on the Dow.

It’s ultimately a top down approach that leads you to the micro-analysis and stock picking, which investing into an index largely removes, requiring only a macroeconomic outlook.

Whether investing directly in stocks or in indices, it is important to remain vigilant, monitoring live commodity charts, looking for trends and tracking performance of the commodity as a whole. Is it in line with the investor’s expectations?

LTB Marijuana Index
LTB Marijuana Index

The Dow would have been a far better investment than the Cannabis Index through November and December of last year, thanks to the Trump rally…

Weed can certainly go higher, the only question being how much higher the investor wants to go and at what price.

So what lies ahead for the sector?

Key considerations for investment into the sector will include the outlook on legislation, investment tools available for the markets and investment opportunities, market focus having yet to materially shift to new segments that can provide investors with alternative investment opportunities:

The biggest move is expected to be in Canada, where legislation is expected to be passed this year to legalize the recreational use of marijuana. Things were moving along smoothly until Trump’s election victory, the Canadian government now concerned over implications of legalization on the relationship with the new administration.

Trump, in the past, has in fact been in support of legalization of medical marijuana at federal level and for U.S States to have the freedom to legislate on the legalization of recreational use. Things have become somewhat clouded with the appointment of Jeff Session as the U.S Attorney General and the nomination of Neil Gorsuch for the Supreme Court, both considered to be a negative for legalization of marijuana.

Thrown into the mix is the fact that most U.S states who have yet to approve legalization of marijuana are in fact republican led, which suggests that any change in legislation at federal level may prove to be a challenge for Trump to get through the house.

The sector remains largely in its embryonic phase however, with sentiment towards the use of marijuana seeing a material shift, a recent CBS poll showing that 76% of those surveyed were in favor, for medical use.

Until there is legalization at federal level, bank will certainly not want to be exposed, with FINRA unlikely to approve any filing for listing by a marijuana company, while the drug is classified as a class 1.

Across the border, things have progressed further with companies listed on the Toronto Stock Exchange, including companies such as Aurora Cannabis Inc (ACB:CN); Aphria Inc. (APH:CN); Organigram Holdings Inc. (OGI:CN) and perhaps more well known, Canopy Growth Corp, it’s ticker appropriately given as WEED:CN, Canopy Growth Corp. having seen rapid expansion in the medical sector, the 5-year chart below certainly eye catching.

Medical Sector
Medical Sector

Source: Bloomberg.

The bet for now has to be on the legalization of recreational use of Marijuana in Canada, where there are an estimated 4m recreational users with a potential sales in excess of C$6bn.

In the U.S a change in Federal Law on the use of marijuana for medical use will certainly bring in some of the bigger pharmaceutical players and we could begin to see companies deliver similar returns as Canopy Growth in the coming year or two, assuming the U.S president has some influence over both Session and Gorsuch.

The industry could end up seeing a similar level of interest as the electronic car sub-segment of the Auto-sector, where car makers are playing catch with the likes of Tesla in what is an inevitability than a gamble. Just looking at market acceptance to the use of marijuana for medical use alone should be enough to suggest that opportunities are abound, now just a matter of when rather than if.

Stocks on the Toronto Stock Exchange would be the first point of call, ahead of any change in U.S federal laws, at which point the floodgates will undoubtedly open, the likely leaders being those vertically integrated, extraction and consistency key to end product demand.

Canopy Growth has certainly been flying high, now it’s a question of who is next…

EUR/USD Wave analysis and forecast of 31.10 – 07.11: Decline in the pair continues

Estimated pivot point is at the level of 1.2770.

Our opinion: Sell the pair from correction below the level of 1.2770 with the targets of 1.25 – 1.24 – 1.23.

Alternative scenario: Breakout and consolidation of the price above of the level of 1.2770 will enable the price to continue the rise up to the levels of 1.2950 – 1.30.

Analysis: Presumably, the formation of the final fifth wave of the “bearish” momentum continues on the daily timeframe. Locally, the third wave is being formed. If this assumption is correct, after the completion of the local correction it makes sense to expect that the pair will decline in the fifth wave. Critical level for this scenario is 1.2770.

EUR/USD Wave analysis and forecast of 31.10 – 07.11: Decline in the pair continues

EURUSD Daily

GBP/USD Wave analysis and forecast of 31.10 – 07.11: The pair is undergoing correction. The rise in the pair is possible.

Estimated pivot point is at the level of 1.5870.

Our opinion: Buy the pair from correction above the level of 1.5870 with the targets of 1.6380 – 1.64.

Alternative scenario: Breakout and consolidation of the price below the level of 1.5870 will enable the price to continue the decline to the levels of 1.58 – 1.57 as part of the “bearish” trend.

Analysis: Presumably, the formation of the correction as the wave B is ongoing. Locally it is likely that the formation of the wave (b) of a is nearing completion. If this assumption is correct and the pair does not fall below the critical level of 1.5870, after the completion of the wave (b) the price can grow up to the levels of 1.6380 – 1.64.

GPBUSD H4

GPBUSD Daily

USD/CHF Wave analysis and forecast of 31.10 – 07.11: The pair is likely to grow.

Estimated pivot point is at the level of 0.9439.
Our opinion: Buy the pair from correction above the level of 0.9439 with the target of 0.97 – 0.98.

Alternative scenario: Breakout and consolidation below of the level of 0.9439 will make the pair continue to decline to the level of 0.9370.

Analysis: Based on the forming wave structure we can assume that the fifth wave of the “bullish” momentum is being formed; it is likely that within this wave the third wave iii of 5 is being developed. If this assumption is correct, the pair will continue to rise up to the levels of 0.97 – 0.98. Critical level for this scenario is the level of completion of the second wave – 0.9439.

USDCHF H4

USDCHF Daily

USD/JPY Wave analysis and forecast of 31.10 – 07.11: Uptrend dominates.

Estimated pivot point is at the level of 108.77.

Our opinion: Buy the pair from correction above the level of 108.77 with the target of 112.00 – 112.60.

Alternative scenario: Breakout and consolidation of the price below the level of 108.77 will enable the pair to continue the decline to the levels of 107.56 – 106.20.

Analysis: Presumably, the formation of the diagonal triangle within the fifth wave of the senior level is nearing completion. Locally, the third wave is being developed. If this assumption is correct the pair can go up to the levels of 112.0 – 112.60.

USDJPY H4

USDJPY Daily

USD/СAD Wave analysis and forecast of 31.10 – 07.11: Uptrend continues.

Estimated pivot point is at the level of 1.1159.

Our opinion: Buy the pair above the level of 1.1159 with the target of 1.14 – 1.15.

Alternative scenario: Breakout and consolidation of the price below the level of 1.1159 will enable the pair to continue the decline to the levels of 1.11 – 1.1050.

Analysis: The formation of the local correction as the fourth wave iv of 5 has completed. Locally, price reversal is expected as well as small one-two waves. If this assumption is correct and the price does not break down critical level of 1.1159, the pair can rise to the levels of 1.14 – 1.15 in the fifth wave v of 5.

USDCAD H4

USDCAD Daily

EUR/USD Forecast Nov. 15, 2011, Fundamental Analysis

It was a strong bearish opening for the EUR/USD this week with heavy losses seen despite the expected relief on the new Italian government.

The relief rally on the new Mario Monti government in Italy and the ability of the debt-ridden nation to meet the target in the bond sale did not ease the jitters. The high yields and warning from Merkel that Europe is facing the toughest hour since WWII fueled fears and skepticism that the crisis is far from over and leaders will not be able to contain the damage.

We still see heavy headwinds for the euro and since the relief failed to prop the common currency on Monday, the outlook for the week seems more pro-dollar as the jitters and risk aversion might persist with heavy data Tuesday especially the expected weak GDP figures from the euro area.

Germany will start the day with the GDP for the third quarter at 07:00 GMT where the economy is expected to expand by 0.5% after 0.1% the previous quarter.

From Germany we also have the Zew Survey for November at 10:00 GMT where the Current Situation index is expected to slow to 35.0 from 38.4 and the Economic Sentiment Index to fall further to -52.0 from -48.3.

Turning to the euro area, the GDP is also due at 10:00 GMT where the economy is expected to have contracted as well by 0.2% in the third quarter in line with the pace seen in the second quarter.

The Trade Balance is due at the same time for the month of September which is expected to hold at 1.0 billion euros deficit from the previous month.

The U.S. economy will start the data at 13:30 GMT with the Producer Price Index for October which is expected with 0.1% drop after 0.8% rise and on the year to ease to 6.3% from 6.9%. Excluding food and energy it is expected with 0.1% rise from 0.2% and on the year to rise to 2.9% from 2.5%.

Also at the same time we have the Retail Sales Index for October which is expected to slow with 0.3% gain after 1.1% surge and excluding autos to rise 0.2% after 0.6% rise in September.

As for the Empire Manufacturing Index for November it is expected to ease the contraction to -2.30 from -8.48.

At 15:00 GMT the Business Inventories for September are due and expected to slow to 0.2% from 0.5% previous rise.