In a recent article, Bloomberg News highlighted a growing trend in the hedge fund world: the increasing interest in memecoins. According to the report, the allure of these highly speculative tokens has become irresistible for some hedge funds as they seek to capitalize on the potential for quick and substantial returns.

Bloomberg cites the example of Stratos, which launched a liquid fund holding Dogwifhat, a memecoin that experienced a price appreciation of more than 300 times at one point. The fund, whose limited partners reportedly include venture capitalists Marc Andreessen and Chris Dixon, posted a 137% return in the first quarter, outperforming the overall crypto market.

The article also mentions that Brevan Howard has made a “tiny” investment in the memecoin sector, according to an anonymous source familiar with the matter. Additionally, Pantera Capital has acknowledged that “memecoins are here to stay” and that “memecoin trading creates gigantic” opportunities.

Bloomberg reports that memecoins are currently registering the highest trading volume on decentralized exchanges, with the overall market value of memes currently being around $54.7 billion.

Despite the growing interest from hedge funds, many crypto participants remain skeptical of memecoins, according to the Bloomberg article. Unlike more conventional cryptocurrencies, memes are not typically tied to specific projects and are often inspired by internet memes, characters, or trends. The article cites Quinn Thompson, founder of the hedge fund Lekker Capital, who compares the memecoin frenzy to the GameStop and meme stock phenomenon in traditional markets, calling it “the tip of the spear for speculation” and “gambling.”

However, the Bloomberg report also highlights the evolution of memecoins, with Cosmo Jiang, a portfolio manager at Pantera, suggesting that they have become more than just a joke. “People have started to call some memecoins as culture coins, they are a membership into a culture or a group of people with a shared believe system,” Jiang is quoted as saying.

The article further notes that the infrastructure surrounding memecoins has become more robust since the last crypto cycle, with improvements in liquidity and the development of sophisticated futures markets on centralized exchanges. This has enabled hedge funds to capitalize on the volatile movements of memecoins and effectively hedge their exposure, according to Josh de Vos, research lead at CCData.

As more hedge funds become comfortable with the concept of memecoins, Palley of Stratos expects the focus on these highly speculative tokens to increase. “I wouldn’t be surprised with firms creating meme-only funds, just as they created NFT-only funds,” he is quoted as saying in the Bloomberg article.

In an investor note released last month, Franklin Templeton, the American multinational investment firm, highlighted meme coins, stating that although these cryptocurrencies lack inherent value or utility, they could potentially offer quick financial returns.

Franklin Templeton has gone full degen. https://t.co/uXAaMFuU1b

— The Wolf Of All Streets (@scottmelker) March 13, 2024

Featured Image via Dogwifhat

On 15 October 2021, Jack Dorsey, the Co-Founder, Chairperson, and CEO of Block, Inc (NYSE: SE), formerly known as Square, initiated a Twitter conversation about the possibility of developing a Bitcoin mining system. This system would be based on custom silicon and open-source technology, aimed at both individual users and businesses globally. Dorsey proposed a model similar to the company’s hardware wallet strategy, which would involve an open development process in collaboration with the community.

Dorsey outlined several key considerations and questions surrounding the project through a series of tweets:

Decentralization of Mining: Dorsey emphasized the importance of distributing the mining process. He argued that decentralization is crucial for the resilience of the Bitcoin network, especially after the last Bitcoin has been mined. According to him, the main role of miners in securing transactions without relying on trusted third parties remains vital indefinitely.

Efficiency of Mining: He pointed out the need for more efficient mining practices, suggesting that advancements in clean and efficient energy usage are not only beneficial for Bitcoin’s economics but also for its environmental impact and scalability. Dorsey called for innovation across silicon, software, and integration, querying the community about the largest opportunities in this area.

Concentration in Silicon Design: Dorsey highlighted concerns over the concentration of silicon design within a few companies, which might lead to supply constraints. He noted that silicon development is costly, demands long-term investment, and benefits significantly from close integration with software and system design. He questioned why more companies are not involved in this sector.

Need for Vertical Integration: The thread also touched on the lack of focus on vertical integration in the industry. Dorsey suggested that considering hardware, software, productization, and distribution as a single system could enhance accountability and improve accessibility to end users.

Accessibility of Mining: Finally, Dorsey addressed the accessibility of Bitcoin mining, advocating for a system where setting up a mining rig would be as simple as plugging it into a power source. He pointed out the current lack of incentive for individuals to engage in mining due to its complexity and asked for input on the biggest barriers faced by people interested in running miners.

Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.

— jack (@jack) October 15, 2021

In an announcement on April 23, the Bitcoin mining division of Block shared exciting updates on its ongoing Bitcoin mining project. The company revealed that it had completed the development of its advanced three-nanometer (3nm) Bitcoin mining chip and is in the process of finalizing a full tape-out of the design with a leading global semiconductor foundry.

Block’s mining division emphasized that this milestone marks an important step in its pursuit of decentralizing both the supply of Bitcoin mining hardware and the distribution of hash rate. The company had previously shared its progress on manufacturing a five-nanometer (5nm) mining chip prototype, which met its design targets and validated its architecture and design approach.

According to Block, their 3nm mining chip will utilize the most advanced semiconductor process currently available, ensuring that it delivers the performance required for mining operators of all types to thrive in the fifth mining epoch (the period following the recent 4th halving of the block subsidy) and beyond.

Alongside the completion of their chip design, Block’s mining division announced that they are developing a full Bitcoin mining system. The company has been actively engaging with the mining community, listening closely to the feedback and insights provided by a wide variety of Bitcoin miners to identify the challenges faced by mining operators.

Block stated that building on these insights and in line with their goal of supporting mining decentralization, they plan to offer both a standalone mining chip and a full mining system of their own design. The company highlighted that they will be the only large, well-capitalized mining hardware vendor with a standalone mining chip solution, which they hope will help unlock mining system innovation and support the much-needed development of new mining system form factors and use cases.

Regarding their bitcoin mining system, Block’s mining division intends to leverage their extensive experience in product and software development, system engineering competency, supply chain management, and aftermarket support. The company says it has shipped tens of millions of devices and plans to use this expertise to bring a compelling and differentiated mining solution to the market.

Featured Image via Pixabay

The price of XRP, the native token of the XRP Ledger, has shown tentative signs of life in recent days, surpassing the $0.50 psychological barrier to now trade at $0.547 per token. This stability comes after a prolonged period of consolidation, and one analyst believes its price could explode by 150%.

In a newly published post on the microblogging platform X (formerly known as Twitter), analyst Egrag Crypto revealed he believes XRP might be on the verge of a significant move, pointing to a “double bottom” formation in XRP’s chart, a technical indicator often seen as a bullish signal.

This pattern, along with other technical factors, suggests a potential setup for a notable price increase, according to the analyst, that could see the native token of the XRP Ledger surge to $1.4, which would represent a rise of 150% from current levels.

In his post, Egrag Crypto wrote that the double bottom formation is “giving us a strong bullish signal,” and added he is “highly confident that the thurst will soon begin.”

#XRP Color Code 🎨 To $1.4(Update):Note: I've updated the consolidation zone to a supply zone and the wicking range to a demand and accumulation zone.Double Bottom Formation: The double bottom formation is giving us a strong bullish signal, and I'm highly confident that the… https://t.co/zBwbo5sKuA pic.twitter.com/Vi0j4fFtjn

— EGRAG CRYPTO (@egragcrypto) April 23, 2024

A breakout for XRP could reignite investor interest, which has waned as the broader cryptocurrency market has seen a downturn it now appears to be recovering from. Recent developments in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) may also be contributing to the token’s tentative momentum.

The SEC is seeking a $2 billion penalty against Ripple over XRP sales, alleging the token is an unregistered security. Ripple has vehemently disputed these claims, arguing that XRP is a utility token and not a security, with Ripple’s CLO arguing the $2 billion fine demand is evidence of “intimidation against all of crypto in the U.S.”

The company recently filed a response to the SEC’s request for penalties, urging the court to impose a significantly lower fine and highlighting changes made to XRP sales to prevent future violations.

As CryptoGlobe reported, a popular cryptocurrency analyst has recently stood by their bullish price prediction for XRP, predicting the cryptocurrency’s price will explode to over $200 per token, an over 30,000% rise from its current level.

Per his words, XRP has seen a “full logarithmic follow through” which means XRP “may be more than poised for $200+.” He noted that XRP’s price surged over 100,000% during the 2017-2018 bull run, and suggested that a 33,000% run from its current level “can be more than possible and developing.”

As reported the XRP Ledger has been progressing over time, with the total amount of XRP locked onto the XRP Ledger’s recently launched automated market maker (AMM) platform recently surging from around 330,000 XRP tokens to over 715,000 XRP, worth over $400,000, at a time in which the AMM platform is set to get key bug fix.

The rise in locked XRP also comes shortly after Ripple, a leading provider of enterprise blockchain and crypto solutions, announced its plans to launch a stablecoin pegged 1:1 to the US dollar (USD). The stablecoin would be fully backed by a reserve of US dollar deposits, short-term US government treasuries, and other cash equivalents.

As CryptoGlobe reported, the firm expects the stablecoin market to exceed $2.8 trillion by 2028, and its own stablecoin will be launched both on the XRP Ledger and on Ethereum.

Featured image via Unsplash.

The price of the flagship cryptocurrency Bitcoin surpassed its 200-day simple moving average (SMA) in October and entered bullish territory, before making a new all-time high above $73,500 last month.

The 200-day SMA serves as a key indicator of long-term trends, and its current rapid rise signifies strong bullish momentum. Notably, the indicator is on track to surpass its previous peak of $49,452 set in February 2022, currently hovering at $47,909 while Bitcoin trades at $66,200, according to a CoinDesk report.

Historically, data suggests that the most intense phases of Bitcoin bull markets unfold after the 200-day SMA breaks its previous high as a similar pattern emerged in early November 2020, six months after the third halving event. The 200-day SMA climbed above $10,320 at the time, and by mid-April 2021, Bitcoin had experienced a significant 4.5-fold increase to $63,800.

Looking back further, the 200-day SMA reaching new highs in December 2016, roughly five months after the second halving, preceded a monumental surge. Bitcoin witnessed a staggering 2,000% rise to over $19,000 within a year, while a similar trajectory occurred after the first halving in November 2012, which coincided with the average reaching a new peak.

While past performance is not necessarily indicative of future results, certain elements of these cycles appear to be repeating. For example, Bitcoin’s bear market reached its climax in November 2022, followed by price increases, aligning with the historical pattern of bottoming out 15 months before a new halving cycle began to fuel a rally.

As CryptoGlobe reported, a popular cryptocurrency analyst known in the space for accurately predicting the cryptocurrency market bottom during the 2018 bear market has recently revealed he believes that Bitcoin will make a new all-time high “within the next 1-2 weeks.”

The analyst revealed he sees Bitcoin’s price top around the $120,000 mark this cycle after noting that he sees it in wave five of a larger trend. Not everyone is as bullish, however, with a recent report from Fidelity Digital Assets suggesting Bitcoin is no longer “cheap” and is instead considered to be trading at its “fair” value.

Featured image via Unsplash.

A popular cryptocurrency analyst known in the space for accurately predicting the cryptocurrency market bottom during the 2018 bear market has recently said the price of Solana ($SOL ) is “gearing up for a violent breakout.”

In a post shared on the microblogging platform X (formerly known as Twitter) with over 250,000 followers, the popular pseudonymous cryptocurrency analyst that goes by Bluntz Capital on the platform showed a Solana price chart showing the cryptocurrency making higher lows after forming three corrective waves.

$sol gearing up for a violent breakout here imo pic.twitter.com/QcJVY0FIm4

— Bluntz (@Bluntz_Capital) April 22, 2024

Bluntz utilizes the Elliott Wave Theory, a technical analysis framework that suggests an asset’s price movement unfolds in a specific, five-wave pattern. Elliott Wave Theory, a popular form of technical analysis, postulates that market trends unfold in repetitive cycles driven by investor psychology. These cycles typically consist of a five-wave progression in the direction of the prevailing trend, followed by a three-wave corrective phase.

Ralph Nelson Elliott developed the Elliott Wave theory in the 1920s after he observed and identified “recurring, fractal wave patterns.” These fractal wave patterns are based on the psychology of the masses.

The popular analyst has recently revealed he believes the price of Bitcoin will reach a new all-time high “within the next 1-2 weeks,” after predicting Bitcoin’s “max pain scenario,” which would occur before the “real run up.” On the microblogging platform, the analyst revealed the scenario would be for BTC to lose its recent high and while doing so see investors buy the dip expecting it to keep on rising as they “think its some kind of triangle breakout.”

It’s worth noting Bluntz is famous for, in June 2018, predicting the bear market that was seeing the price of bitcoin drop from a then all-time high near $20,000 would end with the coin trading at $3,200. The prediction was nearly accurate, as BTC hit the target in December of that year.

Featured image via Unsplash.

The price of the native token of the XRP Ledger, XRP, has recently surged by more than 6% in a single 24-hour period after the number of whale wallets started surging to near a new all-time high.

According to data shared by cryptocurrency analytics firm Santiment, the number of wallets holding at least 1 million XRP tokens (worth around $545,000 at the time of writing) has risen to 2,013 over the last six weeks, rising 3.1% to be just one wallet shy of a new all-time high.

🐳 The price of #XRP has jumped ahead of the #altcoin pack, jumping +6% and as high as $0.5687 today. The amount of wallets, 2,013, holding at least 1M $XRP has been surging over the past six weeks (rising 3.1%), and is within 1 wallet of the #AllTimeHigh. https://t.co/2ZfC9v79x9 pic.twitter.com/rqKgcOYJJx

— Santiment (@santimentfeed) April 22, 2024

Over the past week the price of XRP has surged nearly 10% to now trade at $0.545 per token, despite being down around 11.2% year-to-date. The cryptocurrency has significantly underperformed year-to-date, with Bitcoin being up 56.8% over that period, and Ethereum moving up 39.6%.

As CryptoGlobe reported, a popular cryptocurrency analyst has recently stood by their bullish price prediction for XRP, predicting the cryptocurrency’s price will explode to over $200 per token, an over 30,000% rise from its current level.

Per his words, XRP has seen a “full logarithmic follow through” which means XRP “may be more than poised for $200+.” He noted that XRP’s price surged over 100,000% during the 2017-2018 bull run, and suggested that a 33,000% run from its current level “can be more than possible and developing.”

As reported the XRP Ledger has been progressing over time, with the total amount of XRP locked onto the XRP Ledger’s recently launched automated market maker (AMM) platform recently surging from around 330,000 XRP tokens to over 715,000 XRP, worth over $400,000, at a time in which the AMM platform is set to get key bug fix.

The rise in locked XRP also comes shortly after Ripple, a a leading provider of enterprise blockchain and crypto solutions, announced its plans to launch a stablecoin pegged 1:1 to the US dollar (USD). The stablecoin would be fully bakced by a reserve of US dollar deposits, short-term US government treasuries, and other cash equivalentes.

As CryptoGlobe reported, the firm expects the stablecoin market to exceed $2.8 trillion by 2028, and its own stablecoin will be launched both on the XRP Ledger and on Ethereum.

Featured image via Pixabay.

Recently, Michelle Makori of Kitco News engaged in an insightful discussion with Jared Dillian, a seasoned financial expert and author.

Jared Dillian is a financial writer, investment strategist, and former Wall Street trader. He is well-known for his expertise in financial markets and for writing in a way that makes complex investment topics accessible to a broad audience. Dillian was a former trader at Lehman Brothers, and his experiences there have significantly influenced his perspective on financial markets and investment strategies.

He is the author of the book “Street Freak: Money and Madness at Lehman Brothers,” which provides an insider’s view of the highs and lows of working at Lehman Brothers during its collapse. Jared Dillian also writes “The Daily Dirtnap,” a market newsletter aimed at professional traders and investors, offering insightful commentary on market trends and trading strategies. Additionally, he contributes articles to various financial publications and provides commentary on economic and market issues.

The conversation, deeply rooted in current financial landscapes, touched on the superior performance of gold over Bitcoin in a geopolitically turbulent year, the ominous state of the U.S. economy with its swelling debt and persistent inflation, and the prospective maneuvers of the Federal Reserve.

Here are are key takeaways:

1. Geopolitical Impact and Gold’s Performance: Dillian highlighted the recent incident where Iran attacked Israel, noting Bitcoin’s decline during such geopolitical unrest. He argued that in turbulent times, gold is a more reliable store of value over Bitcoin, projecting a significant uptick in gold’s value driven by increased safe-haven buying amid escalated Middle East tensions and heightened global uncertainty:

“I don’t consider Bitcoin to be a store of value. If we are in a period of time with geopolitical turmoil, then I think gold should vastly outperform Bitcoin.“

2. U.S. Economy and Federal Reserve’s Stance: Dillian shared his perspective on the current U.S. economic climate, pointing to solid growth and ongoing strength in the labor market. However, he raised concerns over inflation not aligning with the Federal Reserve’s targets, which could delay any potential easing of interest rates:

“Inflation actually bottomed about eight months ago, and it’s been going higher ever since. The last reading was higher than expected, came in at 3.5% on the headline… policy isn’t restrictive anymore.”

He anticipates that policy will need to remain stringent to combat these economic challenges effectively.

3. Debt Monetization and Its Implications: A significant portion of the discussion was dedicated to the concept of debt monetization, which Dillian believes could lead to a parabolic rise in gold prices. He explained that the U.S. government’s exorbitant interest payments make it reliant on low interest rates. Dillian says that if rates were to rise significantly, the U.S. might face functional insolvency, compelling the Federal Reserve to engage in yield curve control and extensive money printing to sustain government financing:

“We are spending 1.1 trillion a year on interest payments…the only solution is for the Federal Reserve to cap the yield curve, do yield curve control if you want to call it, and directly monetize the debt, and that is how gold gets that parabolic move.“

4. Short and Long-Term Predictions: In the short term, Dillian foresees a possible correction in gold prices following a rapid increase, suggesting it might be wise for investors to hedge their positions if they hold substantial gold assets. For the long haul, he believes that significant financial maneuvers, such as full-blown debt monetization, will likely occur in the next presidential cycle, drastically influencing gold prices and the broader financial landscape.

5. Financial Philosophy and Personal Strategy: Dillian also discussed his latest book, “No Worries: How to Live a Stress-Free Financial Life,” which delves into his philosophy of minimizing financial stress through wise financial management rather than mere cost-cutting. He advocates for making significant financial decisions correctly, such as housing and education, which can have far-reaching impacts on one’s financial health, more so than minor savings like foregoing daily coffee.

Featured Image via Pixabay

Ray Dalio, Founder, CIO Mentor, and Member of the Bridgewater Associates Board, is Founder, CIO Mentor, and Member of the Bridgewater Associates Board. Dalio is known for his principle-based approach to investing, emphasizing the study of historical economic cycles to mitigate risks. His focus on data-driven analysis and a deep understanding of macroeconomic forces have been instrumental in Bridgewater’s long-term success. Dalio is also the author of “Principles: Life and Work,” sharing his unique management philosophies and insights into building a successful organization.

Dalio begins by defining good money as being both a good medium of exchange and a good storehold of wealth that is widely accepted around the world. He identifies the dollar, euro, yen, and Chinese renminbi as the most globally recognized and accepted currencies, noting that they are all debt-backed monies. Dalio explains that when you hold these monies, you are holding debt liabilities, which are promises to deliver you money.

However, Dalio cautions that when there are significant risks of debts not being paid back or being paid back with money of depreciated value, the debt and the money become unattractive. He points out that when a government has too much debt to be paid, its central bank is likely to print money, leading to inflation and the devaluation of the currency.

In contrast to debt-backed currencies, Dalio highlights gold as a non-debt-backed form of money. He compares it to cash, except unlike cash and bonds, which are devalued by risks of default or inflation, gold is supported by risks of debt defaults and inflation. Dalio notes that gold is the third-most-held reserve currency by central banks, surpassing the yen and renminbi.

Dalio also acknowledges cryptocurrencies as another form of non-debt money, while suggesting that some people might argue that gems and art act similarly due to their non-debt nature, portability, and wide acceptance as storeholds of wealth.

According to Dalio, when the financial system is functioning well, with borrower-debtor governments meeting their obligations without resorting to money printing and devaluation, debt assets and other financial assets are good to hold. However, he emphasizes that when debt and inflation crises arise, gold becomes a valuable asset to own. Dalio states that this is the main reason that gold is a good diversifier and why he has some in his portfolio.

In a postscript, Dalio clarifies that he is sharing his thoughts on investments but not providing investment advice. He notes that he is not recommending that you buy gold. Dalio explains that in his communications, he is trying to convey how the markets work, explain what he thinks you should be aware of, and give some strategic investment thinking.

At the time of writing (10:45 a.m. UTC on April 23), gold is trading at $2,303.21 an ounce, down 1.3% on the day.

Source: TradingView

Featured Image via Unsplash

On April 22, Fidelity Digital Assets released its Q1 2024 Signals Report, providing valuable insights into the performance and dynamics of the two largest cryptocurrencies, Bitcoin and Ethereum. The report highlights the significant impact of Bitcoin’s 2024 halving and Ethereum’s Deneb-Cancun upgrade on their respective networks and the broader cryptocurrency market.

According to the report, Bitcoin experienced a strong start to the year, with a 64% price increase by mid-March, just short of Ethereum’s impressive 74% run. However, since then, Bitcoin has retraced 2%, while Ethereum has fallen by approximately 19%.

Source: TradingView Source: TradingView

The report indicates that the high fee environment has subsided, but elevated spot prices and the anticipation of the 2024 halving have incentivized miners to take profits, contributing to the current sell pressure.

Despite the selling pressure, the report highlights positive developments for Bitcoin. The short-term outlook remains positive, with the price trading above the 200-day moving average and maintaining a position 156% higher than the realized price. The golden cross formed on October 30, 2023, also indicates a favorable market sentiment. However, long-term holders are adding to the selling pressure, and 99% of addresses are in profit, which could incentivize selling if the price reaches an all-time high.

Source: Fidelity Digital Assets

Fidelity argues that on the Ethereum front, the Deneb-Cancun upgrade, which took place on March 13, has significantly impacted the network’s fundamentals. The report suggests that users may be pleased with the results thus far, as Ethereum experienced a 55% price increase in Q1 and has shown positive short-term price signals and growing on-chain metrics. Fidelity says the short-term outlook for Ethereum remains positive, with the price trading above the 200-day moving average and the golden cross formed on November 21, 2023, indicating favorable market sentiment.

The Ethereum network has maintained a higher rate of burn than issuance since the implementation of The Merge in September 2022, resulting in the removal of nearly 450,000 ETH from the network. Additionally, the number of validators staking on the network has increased by 8% since January, matching the growth rate seen in Q4 2023. Layer 2 adoption has accelerated significantly post-Deneb-Cancun, with Layer 2 transactions making up 80% of all transactions in the Ethereum ecosystem and fees from Layer 2 platforms dropping substantially.

The report also highlights the growing interest in staking, with an 8% increase in Q1 developers introducing a churn limit cap in March. It claims this change aims to benefit long-term network health by making it easier for lower resource nodes to participate effectively in staking. It goes on to say the net-negative issuance, showing growth in staked Ether, as well as base layer and Layer 2 usage, increases bode well for Ether’s long-term deflationary potential.

Source: Fidelity Digital Assets

Featured Image via Pixabay

In the wake of Bitcoin’s fourth halving, which occurred on April 20, the cryptocurrency market is reportedly experiencing a unique set of dynamics. Bitfinex’s latest “Bitfinex Alpha” report, published on April 22, delves into the on-chain data, revealing positive signals for Bitcoin despite the backdrop of economic uncertainty in the United States.

According to the report, Bitcoin exchange outflows are reaching levels not seen since January 2023, indicating that many investors are moving their holdings to cold storage, anticipating potential price increases. This trend suggests a growing confidence in Bitcoin’s long-term value proposition, even as the market navigates the immediate post-halving period.

Interestingly, the typical pre-halving price drop, often precipitated by active selling from long-term holders, has not yet materialized. The Bitfinex Alpha report suggests that this selling pressure is being absorbed by new market entrants, highlighting the resilience of Bitcoin’s current market structure.

Miners, too, are adapting to the reduced block reward by adjusting their strategies. The report notes a decrease in the amount of BTC sent to exchanges by miners, implying that they have been preemptively selling or collateralizing their holdings to upgrade infrastructure. This approach spreads potential selling pressure over a more extended period, mitigating the risk of a sudden market shock.

Bitfinex says the post-halving daily issuance rate of Bitcoin, estimated to add between $30 to $40 million worth of supply per day, is significantly outpaced by the $150 million average daily net inflow from spot Bitcoin ETFs. Their report mentions that this supply-demand imbalance underscores the potential for further price appreciation. However, the report cautions that the market’s response to the current geopolitical risks will provide crucial insights into Bitcoin’s long-term viability and valuation as a “digital gold” asset.

The Bitfinex Alpha report also highlights the complex interplay of international and domestic factors shaping the U.S. economic landscape. According to Bitfinex, while tensions in the Middle East have escalated concerns in global markets, particularly influencing oil prices, American consumer behavior has remained resilient, with retail sales data from March showing sustained consumer spending, supported by strong job growth despite rising consumer prices. This robust economic activity, combined with the recent uptick in inflation, Bitifinex argues, is influencing the Federal Reserve’s monetary policy, with expectations now leaning towards a postponement of interest rate cuts possibly until September.

The report also touches upon recent developments in the cryptocurrency industry, such as the U.S. Inland Revenue Service’s introduction of Form 1099-DA to enhance the reporting of digital asset transactions and the surging public interest in cryptocurrencies, as evidenced by the record-breaking Google searches for “Bitcoin halving.”

Finally, the Bitfinex Alpha report mentions Tether’s launch of four new business divisions—Data, Finance, Power, and Education—aimed at leveraging technology to build inclusive infrastructure solutions and promote financial empowerment globally.

Featured Image via Pixabay

On April 22, Ripple Labs filed a rebuttal to the Securities and Exchange Commission’s (SEC) push for nearly $2 billion in penalties. The move comes as the latest development in the ongoing court case between the two parties, which has been raging since December 2020.

The SEC has accused Ripple of raising $1.3 billion through the sale of XRP, which the agency claims is an unregistered security. On 13 July 2023, Hon. Analisa Torres, a district judge at the United States District Court for the Southern District of New York, granted the SEC’s motion for summary judgment concerning the Institutional Sales but denied it for other matters. Also, the court granted Ripple’s motion for summary judgment regarding the Programmatic Sales, the Other Distributions, and the sales made by Larsen and Garlinghouse. However, the court denied Ripple’s motion concerning the Institutional Sales. As for the SEC’s motion for summary judgment on the aiding and abetting claim against Larsen and Garlinghouse, it was denied.

In light of this ruling, the SEC argued in its court filing last month that Ripple should pay close to $2 billion in fines, including $876 million in disgorgement, $198 million in prejudgment interest, and a civil penalty of $876 million. The agency cited the severity of Ripple’s misconduct and the fact that the firm still holds the largest amount of XRP and continues to sell it, unregistered, to institutional purchasers.

Ripple, however, has a different perspective on the matter. In its opposition motion filed on Monday, the firm stated that the penalty figure should be closer to $10 million. Ripple’s Chief Legal Officer, Stuart Alderoty, took to X (formerly Twitter) to express the company’s stance, stating, “In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s ask is just more evidence of its ongoing intimidation against all of crypto in the U.S.”

Alderoty also emphasized that Ripple remains confident that Judge Torres will approach the final remedies phase fairly. The firm argued that the SEC fails to show that disgorgement is warranted and that prejudgment interest should be thrown out. Additionally, Ripple believes that a civil penalty should not exceed $10 million.

Our opposition to the SEC’s request for $2B in penalties for legacy institutional sales is now public. In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s ask is just more evidence of its ongoing… https://t.co/GLcdsyInZW

— Stuart Alderoty (@s_alderoty) April 23, 2024

In its filing, Ripple stated, “Ripple’s conduct was not egregious. Its Institutional Sales were made to forty-one ‘sophisticated individuals and entities’ over eight years. Those entities were fully informed about the transactions into which they were entering and chose to do so in their own financial interests. There is no allegation that Ripple deceived or misled them.”

Ripple also pointed out that the way it sells XRP has changed since last year’s court ruling. The firm has publicly acknowledged the ruling and has modified its contracts to avoid the problems identified by the court.

On 22 April 2024, Brian Kelly, the founder and CEO of Brian Kelly Capital, talked about Bitcoin’s prospects following its fourth halving on CNBC’s “Fast Money.”

He discussed several points that could be crucial for investors and enthusiasts interested in Bitcoin’s future movements:

Halving Impact on Sell Pressure: Kelly noted that the Bitcoin halving reduced the daily sell pressure from about $60 million to $30 million. However, he argued that in the context of Bitcoin’s trillion-dollar market, this reduction is relatively small and might not have a significant direct impact on Bitcoin’s price. Instead, the psychological effect and the narrative around the four-year halving cycle could play a more substantial role.

Institutional Participation and Spot Bitcoin ETFs: He highlighted the potential influx of institutional investors as a critical factor for Bitcoin’s future. Kelly said that with major brokerage firms like Morgan Stanley and UBS preparing to allow their clients to invest in Bitcoin, there’s considerable pent-up demand that could enter the market.

Bitcoin as a Safe Haven Asset: Kelly touched upon the idea of Bitcoin evolving into a safe haven asset, akin to gold, but suggested this transition could take another 10-20 years. He acknowledged that Bitcoin is still in the early stages of its adoption curve.

Impact of Geopolitics: The discussion also covered Bitcoin’s reaction to geopolitical events. According to the CNBC contributor, while Bitcoin has shown a correlation with gold during times of geopolitical tension, it responded negatively to recent events like the Israel-Iran conflict. Kelly explained that Bitcoin is still figuring out its “personality” as it becomes more integrated into the financial system and attracts diverse types of traders.

Federal Reserve Policies and Bitcoin’s Value: Kelly argued that as long as the Federal Reserve tolerates higher levels of inflation to manage the debt-to-GDP ratio, it could indirectly benefit Bitcoin. He explained that with potential reductions in purchasing power and real income due to inflation, Bitcoin could become a more attractive investment as a non-sovereign store of value. He said that as long as interest rates stay the same or go down, Bitcoin should do well, and the only nightmare scenario would be if the Fed decided to hike rates to a crazy level, say 10%, in an effort to crush U.S. inflation.

Other Ways of Getting Exposure to Crypto: He suggested that Ethereum and Solana were other good cryptocurrencies to invest in and that another good play could be investing in Bitcoin mining stocks.

Featured Image via Pixabay

According to a report by Reuters, Venezuela’s state-run oil company, PDVSA, is increasingly turning to the digital currency Tether (USDT) for its crude and fuel exports as the United States reimposes oil sanctions on the country. Three people familiar with the plan have confirmed to Reuters that PDVSA is speeding up its shift towards Tether (USDT) to reduce the risk of sale proceeds getting frozen in foreign bank accounts due to the U.S. measures.

Reuters reports that the U.S. Treasury Department recently decided not to renew a general license for PDVSA’s customers and providers, giving them until May 31 to wind down transactions. This move, according to Reuters, is expected to make it more challenging for Venezuela to increase its oil output and exports, as companies will now have to wait for individual U.S. authorizations to do business with the country.

As mentioned by Reuters, PDVSA has already been slowly moving oil sales to Tether (USDT) since last year. Tether (USDT) is pegged to the U.S. dollar and designed to maintain a stable value. Reuters notes that while the U.S. dollar remains the preferred currency for transactions in the global oil market, payments in cryptocurrency are emerging in some countries, although they are not yet frequent.

Venezuelan oil minister Pedro Tellechea told Reuters that PDVSA has different currencies, according to what is stated in contracts, and that in some cases, Tether (USDT) might be the preferred payment method. Despite the challenges posed by the U.S. sanctions, Reuters says that Venezuela’s oil exports have increased under Tellechea’s leadership, reaching around 900,000 barrels per day in March 2024, the highest in four years.

Per the Reuters article, by the end of the first quarter of 2024, PDVSA had moved many spot oil deals not involving swaps to a contract model demanding prepayment for half of each cargo’s value in Tether (USDT). Reuters also points out that the company is requiring new customers applying to conduct oil transactions to hold Tether (USDT) in a digital wallet, even in some old contracts that do not specifically state the use of Tether (USDT).

Reuters notes that the increasing reliance on Tether (USDT) has led PDVSA to work with intermediaries to meet the digital transaction requirements, as most traders’ compliance departments do not approve Tether (USDT) transactions. This practice has apparently become more common since the U.S. imposed secondary sanctions on Venezuela in 2020, disrupting the country’s relationships with large trading partners.

While Reuters points out that relying on middlemen for transactions could help PDVSA skirt sanctions, it will also mean a smaller portion of oil proceeds will end up in the company’s pockets. Despite this, Minister Tellechea remains optimistic about PDVSA’s future, telling Reuters that the company has “a big strength in trading” and is prepared commercially to address the return of Washington’s sanctions.

Featured Image via Pixabay

Cryptocurrency investment funds saw investors withdraw a total of $206 million over the last week, marking the second consecutive week of outflows. However, altcoins, including $LINK , $DOT , $XRP , and $ADA, saw significant inflows.

According to CoinShares’ latest Digital Asset Fund Flows report, cryptocurrency investment products focusing on multiple digital currencies saw $8.55 million of inflows over the past week, while products offering exposure to Litecoin ($LTC), a cryptocurrency often referred to as the silver to Bitcoin’s gold, saw $3.2 million of inflows.

Similarly, products offering exposure to Chainlink and Polkadot saw $1.73 million and $1.45 million, respectively, while those offering exposure to Avalanche, XRP, and Algorand saw $1.43 million, $1.33 million and $1.04 million of inflows.

Cardano-focused products saw inflows below the $1 million mark, although they surpassed the outflows Bitcoin Cash, Solana, and Short Bitcoin products saw of over $300,000 each.

In contrast, Ethereum-focused products saw $32.2 million of outflows, while products offering exposure to the flagship cryptocurrency, Bitcoin, saw $192.33 million of outflows as investors moved away from the cryptocurrency space amid rising concerns the Federal Reserve will keep interest rates high for longer than expected.

According to the report, the overall trading volume of these products dipped slightly to $18 billion.

Analysts believe the waning investor interest in ETPs, particularly those focused on Bitcoin, is likely a response to the Federal Reserve’s hawkish stance on interest rates. The expectation of prolonged high rates could dampen investor enthusiasm for riskier assets like digital currencies.

These flows come at a time in which Bitcoin could soon see a significant surge after the available supply on centralized cryptocurrency exchanges potentially runs out, while it’s set to become twice as rare as gold after its upcoming halving event. According to a report published by popular cryptocurrency exchange Bybit, the upcoming halving event will potentially lead to a short squeeze as there are only nine months left before the total supply of Bitcoin on these centralized exchanges is depleted.

The report details that there are only 2 million BTC left on cryptocurrency exchanges and, assuming a daily inflow of $500 million from spot Bitcoin exchange-traded funds (ETFs), around 7,142 BTC will be leaving exchange reserves on a daily basis.

Featured image via Unsplash.

A popular cryptocurrency analyst known in the space for accurately predicting the cryptocurrency market bottom during the 2018 bear market has recently revealed he believes that Bitcoin will make a new all-time high “within the next 1-2 weeks.”

In a post shared on the microblogging platform X (formerly known as Twitter) with his over 250,000 followers, cryptocurrency analyst Bluntz Capital revealed he sees Bitcoin’s price top around the $120,000 mark this cycle, after noting that he sees it in wave five of a larger trend.

expecting fresh #btc ath within the next 1-2 weeks.from a macro standpoint i think were currently in a wave 5 of a larger w3 with a few legs higher still to come.ultimately expecting us to top out around 120k this cycle. pic.twitter.com/rX11SEUPf0

— Bluntz (@Bluntz_Capital) April 22, 2024

Bluntz utilizes the Elliott Wave Theory, a technical analysis framework that suggests an asset’s price movement unfolds in a specific, five-wave pattern. Elliott Wave Theory, a popular form of technical analysis, postulates that market trends unfold in repetitive cycles driven by investor psychology. These cycles typically consist of a five-wave progression in the direction of the prevailing trend, followed by a three-wave corrective phase.

Ralph Nelson Elliott developed the Elliott Wave theory in the 1920s after he observed and identified “recurring, fractal wave patterns.” These fractal wave patterns are based on the psychology of the masses.

As CryptoGlobe reported, the analyst has earlier this month analyzed Bitcoin’s “max pain scenario,” which he predicted would occur before the “real run up.” On the microblogging platform, the analyst revealed the scenario would be for BTC to lose its recent high and while doing so see investors buy the dip expecting it to keep on rising as they “think its some kind of triangle breakout.”

Per his words, the scenario would then see BTC’s price “fade back into the lower end of the range again” before the cryptocurrency starts surging again. His price targets suggest BTC could fall to around the $64,000 mark before a surge takes it to around $82,000.

As recently reported Peter Brandt, a highly experienced and respected figure in the world of trading and market analysis known in the cryptocurrency space for accurately predicting Bitcoin’s 84% decline in 2018, has revealed he sees BTC surging toward the $80,000 mark in the near future.

Not everyone is as bullish, however, as Peter Schiff, CEO of Euro Pacific Capital and a well-known Bitcoin bear, has recently told investors that this is “their last chance” to sell their Bitcoin holdings and buy gold and silver instead, with the alternative being to “have fun staying poor.”

It’s worth noting Bluntz is famous for, in June 2018, predicting the bear market that was seeing the price of bitcoin drop from a then all-time high near $20,000 would end with the coin trading at $3,200. The prediction was nearly accurate, as BTC hit the target in December of that year.

Featured image via Unsplash.

The highly anticipated Bitcoin halving event took place late Friday night (US time), marking a significant milestone for the world’s largest cryptocurrency. This technical event, which occurs roughly every four years, cuts the reward given to Bitcoin miners in half, potentially setting the stage for a major rally in the price of Bitcoin.

HISTORY: THE 4TH #BITCOIN HALVING HAS OFFICIALLY HAPPENED pic.twitter.com/cwZGpky6DF

— Rizzo (@pete_rizzo_) April 20, 2024

According to CNBC, the halving has historically preceded significant bull runs, with Bitcoin touching new all-time highs after each event.

Bitcoin’s most explosive gains are typically post-halving. Great chart from VanEck. @matthew_sigel @JanvanEck3 pic.twitter.com/VmSXjpbY5j

— Gabor Gurbacs (@gaborgurbacs) April 17, 2024

This time around, miners have had years to prepare for the halving by seeking lower power costs and upgrading their equipment to more efficient machines. As noted by CNBC, some miners, like Core Scientific and Bitdeer, have focused on vertical integration and diversifying their revenue streams beyond purely Bitcoin mining.

CNBC reports that the increased competition resulting from new miners entering the market has been cutting into profits in recent years. However, as their article points out, the introduction of U.S. spot bitcoin exchange-traded funds (ETFs) has significantly shifted the pricing dynamics. The news outlet points out that the price of Bitcoin had already surged to a new all-time high above $73,000 in March, ahead of the halving event.

Source: TradingView

Interestingly, CNBC mentions that the block reward is no longer the primary form of miner revenue. Recent programming innovations in Bitcoin have apparently given rise to a growing ecosystem of projects building on top of Bitcoin’s blockchain, translating to greater transaction fee revenue for miners. Bill Barhydt, CEO and founder of Abra, told CNBC that he believes transaction fees could peak within 24 months at ten times their cost during the previous cycle peak.

As the halving event unfolds, CNBC reports that some miners are also exploring opportunities in the rapidly growing field of artificial intelligence (AI). Digital asset fund manager CoinShares suggests that more miners may shift toward AI in energy-secure locations due to the potential for higher revenues. However, as noted by CNBC, pivoting from Bitcoin mining to AI is not a straightforward process, as it requires a distinct infrastructure and a different skill set among employees.

According to CNBC, several mining firms, including BitDigital, Hive, Hut 8, Terawulf, and Core Scientific, already have either current AI operations or AI growth plans. Core Scientific, for example, has partnered with CoreWeave, a cloud provider that supports machine learning use cases. CEO Adam Sullivan told CNBC that the combined capabilities will support both AI and High-Performance Compute workloads, with an estimated revenue of $100 million.

Featured Image via Pixabay

On April 22, 2024, Kathleen Breitman, co-founder of Tezos Blockchain, appeared on CNBC’s “Squawk Box” to discuss with co-anchor Joe Kernen the Bitcoin market following its fourth-ever halving (on April 20).

HISTORY: THE 4TH #BITCOIN HALVING HAS OFFICIALLY HAPPENED pic.twitter.com/cwZGpky6DF

— Rizzo (@pete_rizzo_) April 20, 2024

Here are the main highlights of this interview:

Market Expectations and Reactions: Breitman was somewhat surprised by the robust buying interest in Bitcoin following the halving, noting that while the event was well-anticipated, there was a significant pullback just before it.

Impact of the US-Listed Spot Bitcoin ETFs: She discussed the impact of the spot Bitcoin ETFs launched in the US on January 11, suggesting that they make it harder to purchase Bitcoin due to increased demand.

The Role of Memes and Market Sentiments: Breitman pointed out that the Bitcoin market often operates on memes or popular market sentiments, which can drive price movements.

Security Budget and Transaction Fees: She described Bitcoin’s security budget, the amount of Bitcoin released per block, as independent of the actual security provided. With the halving, while the block reward decreased, transaction fees increased significantly, especially due to activities related to the Runes protocol, which she said is incorporating meme coins into Bitcoin. According to Breitman, this offset the reduction in block rewards to some extent.

Market Sophistication and Future Predictions: Breitman acknowledged that the Bitcoin market has become more sophisticated with more informed players. She said that while the Bitcoin price will probably go up because retail investors expect it to go up, the market should have already priced in the effects of the halving.

At the time of writing (3:05 p.m. UTC on April 22), Bitcoin is trading at $65,900, up 1.46% in the past 24-hour period.

Source: TradingView

Featured Image via Unsplash

On 20 April 2024, Jimmy Song, a notable figure in the Bitcoin community, shared his thoughts on the recent Bitcoin halving and the emergence of unusually high transaction fees. According to Song, the fourth Bitcoin halving occurred as scheduled on April 20 but was marked by unexpectedly high fees due to a new protocol implementation.

HISTORY: THE 4TH #BITCOIN HALVING HAS OFFICIALLY HAPPENED pic.twitter.com/cwZGpky6DF

— Rizzo (@pete_rizzo_) April 20, 2024

The Bitcoin halving is a predefined event that reduces the number of bitcoins generated per block by half, intended to limit the supply of new bitcoins over time. This halving reduced the block subsidy from 6.25 BTC to 3.125 BTC. However, what apparently caught the community’s attention was the block fees, especially the 37.626 BTC in fees in block 840,000, significantly higher than the subsidy itself, which Song notes as unprecedented.

Song explained that following this block, several subsequent blocks also recorded high fees, indicating a new trend in Bitcoin’s network. According to Song, this situation is starkly different from previous halving cycles, where blocks with fees surpassing the subsidy were rare and typically due to transaction errors.

According to Jimmy Song, the cause of these high fees is a new protocol named Runes, designed by Casey Rodarmor.

The Runes protocol is a token standard designed to bring the creation of fungible tokens to the Bitcoin network. Unlike Ordinals, which focus on NFTs (non-fungible tokens), Runes makes it easy to create tokens with identical properties, like traditional cryptocurrencies or meme coins.

Here’s how it works:

Utilizing UTXOs: The Runes protocol takes advantage of Bitcoin’s UTXO (Unspent Transaction Output) model. Every Bitcoin transaction involves consuming existing UTXOs as inputs and then creating new UTXOs as outputs. Using Runes, you can embed special data within a UTXO, marking it as a Rune and assigning specific properties to it.

Runestones: Think of “Runestones” as instructions within the Bitcoin network. They are special messages included in a transaction that tell the network how to create, mint, or transfer Runes. So, instead of just transferring Bitcoin, you can also perform operations to manage your Rune tokens.

Pre-Minting and Rune IDs: When you create (“etch”) a Rune, you can pre-mint a set amount for yourself. Each Rune is identified by a Rune ID that references the block and transaction where it was created, allowing easy tracking and proof of origin.

The Runes protocol aims to make the creation and management of fungible tokens on Bitcoin much more streamlined. This opens up possibilities for a wider range of use cases, like tokens representing projects, stablecoins, or even community-centric meme coins, all directly on the robust and secure Bitcoin network.

Song detailed the operational mechanics of Runes, which involves issuing assets that can conflict in name, leading to a unique challenge. If two assets are named the same, the protocol defaults to not issuing the newer asset if a name conflict exists, hence simplifying the process but creating problematic incentives. This simplicity leads to a strategic game among users who attempt to register asset names first by paying higher fees, a practice known as “sniping.”

This sniping has escalated into a competitive and costly frenzy, often likened to a “One Dollar Auction,” where participants irrationally overpay in fees to secure asset names, a dynamic resulting in significant fee increases. Song highlights the usage of Replace-By-Fee (RBF) transactions as a strategy to outbid competitors in this asset-naming race, further inflating the fees.

Moreover, Jimmy Song pointed out the role of miners in this new fee landscape. Miners can influence which transactions are processed first, potentially prioritizing transactions based on fees offered, adding another layer of strategy and complexity to transaction processing under the Runes protocol.

Furthermore, Song raised significant concerns regarding the sustainability and strategic implications of the Runes protocol. He noted that the high fees associated with Runes—often reaching 1000 sats/vbyte—are not only unprecedented but have also overshadowed almost every other transaction type on the network. He mentioned that the financial and operational impact is substantial, with over $20 million in fees generated in just the first 18 blocks after the halving. Song went on to say that at this pace, the daily expenditure on Runes issuance could escalate to $150 million, leading to a projected weekly spend of around $1 billion, a rate Song views as unsustainable in the long term.

On the same day, crypto analyst Dylan LeClair also voiced concerns over the escalating transaction fees on Bitcoin, attributing the spike to the launch of a new token protocol named Runes. According to LeClair, this protocol, which debuted on block 840,000 and utilizes a Bitcoin script function called Op_Return, has significantly influenced fee levels. He criticized the protocol, labeling it as “pure degenerate speculation” due to its lack of promised utility or benefits beyond mere speculative trading.

LeClair warned the crypto community about the financial risks associated with investing in what he refers to as “memecoins,” especially when transaction fees are exorbitantly high. He stressed that such speculative activities are essentially a negative sum game, suggesting that the costs could outweigh any potential gains. Moreover, he emphasized the importance of proper UTXO (Unspent Transaction Output) management as a critical practice in such high fee environments, indicating that this scenario might persist for an extended period.

Save your sats. Punting memecoins is a negative sum game, *especially* at these ridiculous fee levels. Secondly, this is a prime example of the importance of proper UTXO management. This high fee environment will likely last for some time.

— Dylan LeClair 🟠 (@DylanLeClair_) April 20, 2024

Featured Image via Pixabay

In a recent analysis shared on social media platform X, a popular crypto analyst known as “ecoinometrics” offered an intriguing forecast for Bitcoin’s price following its current (fourth) halving event, which occurred on 20 April 2024.

HISTORY: THE 4TH #BITCOIN HALVING HAS OFFICIALLY HAPPENED pic.twitter.com/cwZGpky6DF

— Rizzo (@pete_rizzo_) April 20, 2024

Understanding this prediction requires some background on key concepts related to Bitcoin’s economic model.

Bitcoin Halving Explained: Bitcoin halving is a significant event that occurs approximately every four years, where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. This mechanism is part of Bitcoin’s design to introduce new bitcoins into circulation at a controlled, decelerating rate, ultimately capping the supply at 21 million coins. Halvings tend to have a profound impact on Bitcoin’s price due to the reduced rate at which new coins enter the market, potentially leading to higher prices if demand remains strong.

Price Predictions for the 4th Cycle: According to ecoinmetrics, the price range for Bitcoin in this new halving cycle could be quite broad:

Lower Bound: Approximately $140,000

Upper Bound: Could soar as high as $4,500,000

These figures are speculative and hinge on Bitcoin following a growth trajectory similar to its performance in past halving cycles.

Realistic Views on Growth: Ecoinmetrics points out that while some observers expect diminishing returns for Bitcoin as it matures, similar to other large assets, this isn’t a guaranteed outcome. By comparing Bitcoin to megacap technology stocks, which often maintain robust growth despite their large market size, ecoinmetrics suggests that Bitcoin could similarly defy the typical expectations of diminishing returns.

Skepticism and Possibility: Despite offering an optimistic view of Bitcoin’s potential to reach an upper limit of around $4.5 million, ecoinmetrics remains skeptical about achieving this level in the near term. However, they see reaching mid-six-figure prices is seen as a plausible scenario within the current halving cycle.

At the time of writing (8:55 p.m. UTC on 21 April 2024), Bitcoin is trading at around $64,584, down 0.2% in the past 24-hour period.

Source: TradingView

Featured Image via Pixabay

In a recent thread shared on social media platform X, renowned financial analyst Lyn Alden provided an in-depth look into the nuances of purchasing gold, highlighting the trade-offs between cost, verification, and size.

Alden is well-known in the financial sector for her expertise in investment strategies and economic analysis. She runs Lyn Alden Investment Strategy, where she provides research focusing on macroeconomic trends, individual stock analysis, and personal finance. Alden’s approach blends engineering expertise with a deep understanding of financial markets, making her insights valuable for investors interested in both traditional assets and cryptocurrencies. Her analysis often covers topics like monetary policy, currency markets, and global economic shifts, offering a comprehensive view of the broader financial landscape.

Alden is the author of the book “Broken Money: Why Our Financial System Is Failing Us and How We Can Make It Better”, which was published last year. “Broken Money” delves into the historical evolution of money, examining its trajectory through the advancements in technology. While politics may influence monetary systems on a local and temporary basis, it is technology that propels these systems forward on a global and enduring scale.

The aim of the book is to equip readers with a comprehensive understanding of both the theoretical and practical aspects of money and its history. Lyn Alden guides readers from the use of primitive currency forms like shells and gold through the development of papyrus bills of exchange and the establishment of central banks to the advent of transformative technologies such as the telegraph and the creation of Bitcoin. Moreover, Alden investigates the fundamental nature of money itself, providing readers with the analytical tools needed to evaluate various monetary technologies and theories.

Broken Money now has over 1,000 ratings on Amazon.Thank you to everyone who took time to leave a rating or review!https://t.co/J1bZcdYFB8

— Lyn Alden (@LynAldenContact) April 17, 2024

According to Alden, as of 20 April 2024, gold prices hover around $2,400 per ounce, yet the actual cost to purchase a typical gold coin includes a premium of 3-5%, equating to an additional $100.

Alden explains that smaller items, like gold coins, which have a higher surface area relative to their mass, generally entail higher production costs. This design, however, aids in verification processes, making it difficult to counterfeit such items by substituting denser metals like tungsten. Conversely, larger gold bars, while cheaper per ounce with premiums of about 1%, present significant verification challenges—known as “tail risks”—due to the difficulty of validating their purity all the way through.

Furthermore, she elaborates on the economics of various sizes of gold coins. A gold coin weighing one ounce strikes a balance between cost and ease of verification, making it an economical choice among investors. On the other end of the spectrum, very small coins, such as those weighing one-tenth of an ounce, come with disproportionately high premiums. These can be as much as 37%, turning a theoretical $240 coin into a $331 purchase. Although these smaller units are less likely to be tampered with, the premium is considered steep relative to their value.

Alden concludes her analysis by reminding investors that the verification of bearer assets like gold coins is a real expense that must be accounted for. She also notes the additional costs associated with the secure transportation of gold, including insurance and potential complications when crossing international borders.

Featured Image via Pixabay