What’s the value of cryptocurrency/crypto-coin assets?

Author: During the day, Tim works as a teacher in the San Francisco Bay Area; in his spare time, he tracks emerging blockchain technologies with a keen eye on innovative application developments in the crypto currency space; he became a crypto coin investor/enthusiast after learning of the rapid growth of the Ethereum blockchain implementation in banking. During the winter months, you will likely find him skiing down the slopes of Squaw Alpine ski resort in Tahoe. Submit a question, suggestion or comment.

Let’s start off with a crypto currency market overview, as of August 14, 2017, the total CryptoCurrency Market Cap is over $139 billion USD; just four months ago, it was $25 billion. It’s important to note that the cryptocurrency market capitalization took eight years and four months to reach the $25 billion market cap milestone(May 2017). Suddenly, the cryptocurrency market exploded in value within the last four months with an infusion of $114 billion dollars. So what’s the takeaway?

There’s a massive influx of money flowing into crypto currency!

What’s the reason behind the rapid growth? Where is the influx of money coming from? Massive investments from institutional investors such as capital venture firms, fortune 500 corporations in all sectors of industry and even governments globally are pouring billions of dollars into this new blockchain technology. All these industries and governments are racing to be the first to develop robust blockchain applications which will revolutionalize how entities operate in the digital domain.

In layman’s terms: we are witnessing the GOLD RUSH to Internet 5.0 Blockchain Technology Innovation! What is the blockchain innovation?

Blockchain(also known as the distributed ledger technology – DLT), the technology underlying these digital currencies, is the catalyst for innovative application developments at the enterprise level in all sectors of industry. While Bitcoin introduced the blockchain technology to the world, Ethereum has been revolutionizing its enterprise use.

Bitcoin(BTC) price growth is due to its demand as a store of value as a cryptocurrency; Ethereum(ETH) price growth is due to its ability to create enterprise applications on the blockchain and ETH price growth is a result of demand for ether to fuel transactions on its platform with the surge of new ICOs(Initial Coin Offerings).

Between November 2016 and August 2017 in a span of nine months, the price of Ethereum(ETH) increased from 9 dollars to over 300 dollars due to the demand for Ethereum based business applications in the form of ICO((Initial Coin Offering). An ICO is like an IPO(Initial Public Offering) but in the cryptocurrency domain.

We’re at the edge of mainstream adoption of blockchain usage in everyday life mainly due to Ethereum’s innovative platform(a decentralized platform that runs smart contracts and Decentralized Applications, but without downtime, censorship, fraud, or third-party interference. The platform employs Ethereum Virtual Machine and the Solidity programming language, which enable secure and efficient transactions.)

Seeing an investment opportunity? Investing in Bitcoin and other cryptocurrencies provide an exciting opportunity to invest in an entirely new asset class(Initial Coin Offering aka ICO) with its inherent nature of high risk, high returns; high risk especially for those who start investing in these assets without learning and understanding the function and value of a specific crypto coin of investment interest.

“Emerging Bitcoin market is volatile. But in volatility, that’s how people have opportunities to make money.” – Sir Richard Branson, in a 2010 Street Smart Interview on Bloomberg.

“The investor must wait until a liquidity event. The emergence of digital currencies is a black swan event with extreme upside potential for investors. Bitcoin is currently the clear leader of this space, but there are many scenarios under which other AltCoins Asset Class could capture a significant portion of the digital currency economy.” – MetaStable Hedge Fund(an investment fund for Venture Capitals and High Net Worth Individuals). Since its launch in September 2014, MetaStable has delivered such eye-popping performance with profits of more than 500%

Bitcoin is a store of value and demand for its transaction capability is growing exponentially since to trade most altcoins, you first need to buy Bitcoin. Altcoins are pegged on Bitcoin. The price growth of Bitcoin is a result of a limited supply. There is only 21 million Bitcoin in existence, and demand has been increasing exponentially as financial institutions adopt its use in Enterprise level applications.

As of August 14, 2017, the global crypto currency market consists of 847 Currencies / 210 Assets / 5083 Markets and growing.  Global Market Cap$139,287,755,216  / 24h Volume: $5,528,391,729 || BTC Dominance: 50.8% / BTC 24h Volume: $2,511,340,000 / Circulating Supply: 16,506,550 BTC || ETH Market Cap: $28,020,926,957 / ETH 24h Volume: $904,606,000 / Circulating Supply: 93,994,314 ETH

Why invest in crypto-currency?

Excited to invest in your first crypto coin asset? Buying your first Bitcoin(BTC), Ethereum(ETH) and/or Litecoin(LTC) cryptocurrency is simple with the following step by step tutorial.

Step by step guide on how to buy your first Bitcoin, Ethereum and Litecoin

Here’s a step by step tutorial on how to buy your first Bitcoin with a Credit Card/Debit Card/PayPal or Bank Account 

(1) Create an account on Coinbase. Get $10 of FREE Bitcoin when you buy $100 USD or more of digital currency using my unique referral link:

https://www.coinbase.com/join/5928b9b255a99d028e420c25

Sign up with my referral link and we both get $10 free Bitcoin as a referral bonus. Buy $100 worth of bitcoin and your $10 bonus will cover the $4 credit card fee with $6 of the bonus remaining.

Sign up for Coinbase and get $10 in bitcoin with $100 purchase

As part of the identification verification process, you will be asked to take a photo of your driver’s license for ID verification which will allow you to increase your spending limit from $200 per day to $1,000 per day for credit card purchases and $5,000 limits per day for (ACH) bank transfers with a cap of $10,000 weekly bank limits. According to Coinbase, ID verification is required because “as a regulated financial service company operating in the US, we are periodically required to identify users on our platform. This ensures we remain in compliance with KYC/AML laws(relating to laws prohibiting money laundering/illegal activities) in the jurisdictions in which we operate, something that is necessary for us to be able to continue to offer digital currency exchange services to our customers.” Coinbase exchange is leading the way in terms of account security with their two-factor authentication and with their compliance with US laws.

Coinbase is a San Francisco U.S.based cryptocurrency exchange(ranked as the second largest exchange broker) with more than 10 million users, operating in the United States, UK, Canada, Singapore, and most of Europe. Coinbase lets you deposit fiat money (USD/EUR) from a bank account, and trade Bitcoin, Ether, and Litecoin. Also, you have the option of buying Bitcoins instantly with a credit card, PayPal or debit card(see below for Coinbase’s fee chart at the bottom of the page).

Buying Bitcoin instantly is time critical if you want to buy Bitcoin to trade for an altcoin that is presently trading at a low price. Bitcoin is pegged as the one coin that can be traded on exchanges that trade only crypto coins/altcoins since in these exchanges you can not buy a crypto coin with fiat currency(USD, Euro, etc).

After completing the account sign-up and verification, the next step is to decide which payment method you’d like to use to buy bitcoin.

(2) Navigate to the “Settings” link then to “Payment Methods”, then select “+Add Payment Method”

Select one of the above payment options then enter your info and confirm.

(3) Buy Bitcoin(BTC), Ether(ETH) or Litecoin(LTC) by selecting the “Buy/Sell” link. Select Bitcoin, Ethereum or Litecoin, then enter the amount in US Dollar which will automatically calculate the current exchange rate plus fee and provide you with your total cost and the amount you will be getting in the digital currency you chose.

Your coins will then be delivered to your Coinbase wallet which is located under the “Accounts” link.

Congrats! After completing the above steps, you’ve bought your first crypto-currency. Under the “Accounts” link, you can see how much you have in each of your accounts – dollar/euro, ETH (Ether), BTC (Bitcoin) and LTC (Litecoin), and you can decide to keep your funds in the Coinbase Vault(which is transferred to cold storage offline for secure storage if you want to keep it as a long term investment; learn how to use the Coinbase Vault) or keep in the exchange to buy, sell, or send your crypto currency anywhere you like such as to another exchange, desktop/mobile wallet or hardware wallet.

** Keep in mind the Coinbase USA exchange fee schedule when you select your payment option.

USA Base rate of 4% for all transactions**

Payment Method for Purchase Effective Rate of Conversion Fee (after waiver)
U.S. Bank Account 1.49%, with a $0.15 minimum
Coinbase USD Wallet 1.49%
Credit/Debit Card 3.99%

 

Payout Method for Sale Effective Rate of Conversion Fee (after waiver)
U.S. Bank Account 1.49%, with a $0.15 minimum
Coinbase USD Wallet 1.49%
PayPal 3.99%

 

USD Deposit Method Fee
ACH Transfer Free
Wire Transfer $10 ($25 outgoing)

 

* Note – In some cases your bank may charge additional fees for transfers between your bank account and your Coinbase account.

** The base rate for all Purchase and Sale transactions in the U.S. is 4%. Coinbase waives a portion of the Conversion Fee depending on the payment method you use. The effective rate of the Conversion Fee disclosed here is calculated as the base rate, net of fee waivers. The base rate does not apply to U.S. Dollar deposits and withdrawals. July 29, 2017 | source: https://support.coinbase.com/customer/portal/articles/2109597-buy-sell-bank-transfer-fees

*Legal Disclaimer: You should not rely on this website as financial investment advice. It is intended for general informational purposes only and the author is not a qualified financial advisor. Investing in crypto currency is highly speculative. The value of Bitcoin and other currencies can go up or down substantially. Consider seeking advice from a Certified Financial Advisor. The author takes no responsibility for using information provided for any purposes.

Just like any investment opportunities, the basic rule of fundamental investing applies – higher risk typically goes hand in hand with higher returns; that’s why those who want low risk, buy US treasury notes or put their money in a certificate of deposits, etc.

While Bitcoin is notorious for it’s ‘dark’ illegal usage in Darknets and recently in ransom-ware demands, the underlying technology of blockchain is now being used and developed on an enterprise level with the invention of Ethereum and similar altcoins with business applications.

Any mention of corporations, ICOs, crypto coins, altcoins aka cryptocurrency is not an endorsement and there’s no expressed or implied assurance or promised a return on investment.

As a note of caution: be aware that with the recent rules/proposed rules by SEC and other governmental agencies and how that may affect one’s investment in terms of taxation [source: Coinbase tax filing information 1 ] [2] [3] [4] [5]and other regulations.

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