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Interested In Bitcoin And Ethereum? Now Might Be The Best Time To Invest Long Term

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Bitcoin and Ethereum
Bitcoin and Ethereum (Flickr)

Bitcoin and Ethereum are arguably the most valuable digital currencies right now. And they control roughly 70% of the entire cryptocurrency market. Based on past historical data on CoinMarketCap, both Bitcoin and Ethereum are currently trading at a price below their all-time highs. In December 2017, during one of the strongest bull run witnessed in the market, both digital currencies surged to an unprecedented value, above $20,000 and $1000 respectively.

As at the time of writing this article, Bitcoin is currently trading within the range of $10,000 to $11,000 while the price of Ethereum is trading within the $300 to $400 range. In 2017, the was a strong euphoria and people feared missing out (FOMO), but on the contrary to what many investors who rushed in at a later stage, the preceding years  – 2018 and 2019, the market saw massive plunge in pieces and many who bought in during those later stages of 2017, got burnt as a result of the crash. During which the crypto market saw a long bearish period.

However, in 2020, the crypto market, as indicated, has taken a new turn and we are seeing a spike in the prices of many cryptocurrencies. Unlike the previous bull run in 2017, the current increase has a lot of good indicators which we will be discussing in this article. Is this the right time to invest in Bitcoin or Ethereum? We will leave that decision for you to make after reading this article.

The Unprecedented Impact Of COVID-19

The advent of the COVID-19 pandemic has plunged almost every region of the world into a deep state of crisis. So many places, especially third world countries, are falling into an economic recession.

The financial market is currently in a turmoil due to the ongoing Covid-19 pandemic. As a result, foreign trade has been severely impacted. 

As reported by Coindesk, Nigerians and many other Africans are using Bitcoin and other cryptocurrencies to bypass trades hurdles. In a similar report, a local newspaper, Daily Independent, also lent credence to this fact by linking the impact of the financial scourge to the scarcity of dollars in the country. 

READ ALSO: Market Watch: 10 DeFi Tokens To Watch In 2020

Secondly, the constant devaluation of African currencies such as the Nigerian Naira and Zimbabwe’s dollar, amongst others, is pushing its citizens to adopt these digital currencies as a means of hedging against the unstable nature of their respective local currencies. Hence the ongoing narrative: crypto is for savings, fiat is for spending.

Due to an increasing rate of unemployment on the continent, many Africans are intensifying their search for investment opportunities. As such, trading cryptocurrency is seen as a viable alternative, and it is starting to spread like wildfire in the region. With more interests in Bitcoin and Ethereum, this will, in turn, translate into more demand.

The State Of The Stock Market and Major Commodities

The year 2020 has been quite rough for stocks and many other commodities, largely due to the ongoing Covid-19 pandemic which has been ravaging literally every market. In March, 2020, the S&P 500 had its worst crash since 1987, owing to the fact that many businesses were forced to a compulsory shutdown. The trading of crude oil and some major commodities were also significantly affected. Such that, the price of US oil futures fell below $0 due to the critical drop in demand of the commodity.

Mainland shares in China equally crashed drastically, erasing over $3 trillion in value. Frequent stock and commodity crashes have led investors into searching for a safe haven investment. On the contrary, although the crypto market valuation  also  dropped when the pandemic started, prices have largely recovered.

Bitcoin And Ethereum Considered A Store Of Value

Bitcoin and gold have many similarities, and they are the trending topics in town. Both assets are divisible. Gold has been used as a store of value for thousands of years, but bitcoin came into existence just 11 years ago. 

Central banks and governments have always stored gold as a reserve asset. Due to the incessant global economic crisis, governments diversify their currency by buying more gold as a reserve, thereby, reducing their reliance on the US dollar as a reserve asset. 

While interest in gold is still as strong as before, such a commodity is not readily available to the average man. Bitcoin is often regarded as digital gold and it is already considered by many, as a better store of value than gold. Also, cryptocurrencies are already garnering massive interest from institutional and top individual investors.

Furthermore, companies are already diversifying their assets into bitcoin and top cryptocurrencies. A Billion Dollar US firm, MicroStrategy, on its verified twitter handle, announced that the company bought $250 million worth of Bitcoin as a primary treasury reserve asset. That’s a staggering 21,454 Bitcoins, or 0.1% of all the Bitcoins that will ever exist (21 million). This development is a testament to the fact that corporate businesses are starting to own bitcoin as marketable security. 

In a similar move, Snappa, a graphic software company, confirmed a significant portion of the company’s overall cash reserves is in Bitcoin. According to the co-founder of Snappa, Christopher Gimmer: “The allocation itself represents 40% of our cash reserves.”

This development is a testament to the fact that corporate businesses are starting to own bitcoin as marketable security.

Should I Invest in Bitcoin or Ethereum?

Many are still skeptical about Bitcoin and Ethereum. Some people believe that it is too late to invest in these assets because their prices have skyrocketed over the years. 

The popular narrative is that good tech should pass the 10 year rule. Bitcoin is already 11 years since it was invented – and it’s growing stronger like never before. It is still early to invest in Bitcoin and Ethereum because these crypto assets stand to capture value from diverse markets.

READ ALSO: Cryptocurrency Staking Explained For Beginners

A study by Blockchain Capital indicates that cryptocurrencies are yet to hit their prime earning years. The study could mean two things: that the current value of these assets might only be a minute portion of what is to come when all the prospective investors join the bandwagon, or that this stage of the market is still considered an early one if one intends to invest in Bitcoin or Ethereum.

To illustrate, Gold has a market capitalization of around $9 trillion, whilst bitcoin and Ethereum have a capitalization of around $22.58 billion, with finite supply. As the interest continues to grow in cryptocurrencies, a large influx of capital is expected in this sector. 

US Banks Can Now Provide Custody to Cryptocurrencies

This news is another great indicator. The United States Comptroller of Currency (OCC), in a letter, recently clarified that national banks have the authority to provide fiat bank accounts and cryptocurrency custodial services to cryptocurrency businesses. This move means more interest from large financial institutions and individual investors in cryptocurrency is expected.

With countries like the US granting banks access to cryptocurrencies, it is widely believed that many countries will follow suit, and make the same decision.

What more? Well, Every Market Has Some Risk, Same Applies for the Crypto Market.

It is true that investing in bitcoin and Ethereum at the moment, has a high probability of yielding good returns in the future. 

However, it is vital that every investor understands that there are risks involved. Cryptocurrency and blockchain are still very young, and the prices of various cryptocurrencies are quite volatile. Bitcoin or Ethereum can add up to 10% value to its price within 24 hours, and equally lose as much, within the snap of a finger. 

As such, it is expected that one should possess a  basic understanding of how the market works, and equally develop a risk management plan to secure his or her capital.

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Crypto Assets

Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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Crypto Assets

6 Cryptocurrencies to leverage for Building Personal Wealth Long Term

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“Investing in Crypto should be viewed as another path towards financial independence that can help people beat inflation over time.”

—Alex Mashinsky (CEO, Celsuis)

The Crypto market is blooming. Nearly 1 in every 3 individuals in Africa, particularly Nigeria, currently trade cryptocurrencies for one purpose or the other. For more than a decade now, blockchain technology has pervaded the financial markets and persistently received traction from various quarters. Its adoption rate in Africa is a force to be reckoned with. The reports are glaring enough. This has then cultivated the growing appeal of the people in trying to employ crypto as a viable tool to build wealth, albeit long term.

Recently, thousands of cryptocurrencies were known to exist in the market and the numbers keep expanding. It is, therefore, imperative that these digital coins are closely observed to identify the favourable ones for a long-term game. We, at Decentralize Africa, know this. You don’t need to make any emotional rush. This is why we’ve put together highlights of sustainable cryptos that can help you build a fortune over time if you play your cards right.

  • Ethereum (ETH)

Coming first on the pack is Ethereum. The reason for this is not far-fetched. Earlier this year, ethereum was said to have amassed a market capitalization running into billions of dollars. As if that is not enough, Ethereum pointed out its plans to remake its consensus algorithm. This will in no small measure help the crypto network perform several seamless operations and that too with reduced energy. 

The major change that was done to Ethereum’s network, i.e, a modification to Proof-of-stake, will enable players in the system to pitch ethers in a more protected and also rewarding account. This is quite comparable to the bitcoin system. So, yes, Etherum is something that should be in the plans. 

  • Stellar (XLM)

Of course, Stellar has to find a place here, innit? For one, the cryptocurrency holds promising potential for those interested in the long shot. It is more or less a fertile space in the string of blockchain networks. Most of us are privy to how tedious, cross-border transactions tend to appear. This is where Stellar comes in. The versatile platform is capable of completing payments in a matter of seconds at a meagre fee; which is payable using the Stellar coins. Stellar’s efficiency is no doubt commendable. Although like most coins, it has had its share of a downward trend in prices, there is no doubt that Stellar is yet to reach its peak. As such, analysts have observed that there’s room for expansive growth as the year’s roll by. 

  • Bitcoin (BTC)

This sequence is deliberate though. We all know the mighty bitcoin will be here, don’t we? Bitcoin has amassed a wild price range, an ever-growing market capitalization and its prospects for investment opportunities speak loud enough. Although there is an influx of cryptocurrencies today, Bitcoin embodies a large percentage of the market value. 

Investing in bitcoin is never a bad business. It has its lows of course, but it jumps pretty back in most cases. Its wide acceptability is a testament to this fact. Several companies are integrating bitcoin in their payment structure, and business-men, banks are not left in the loop as well.

  • Solana (SOL)

Interestingly, Solana is one of the few digital coins to maintain a steady rise in value. It came up the pack in 2017 and has since improved its value system over time. It offers enticing packages, by being used to complete rapid transactions and every other thing that makes it a good catch. Solana might seem a bit obscure at the moment, but it is certainly one of the best to look out for.

  • Chainlink (LINK)

More accessibility means more acceptance, right? Chain-link is that cryptocurrency that’s relatively available to most people. It’s inexpensive and a good store of value as well. This is one of the reasons that attracts many investors to it. If you are looking to invest in a cryptocurrency in this context, this is one of the coins that can help build your financial portfolio in the long run. 

  • Cardano (ADA)

It is observed that the Cardano network holds a somewhat appealing impression for myriads of reasons. It consumes far less energy which then translates to a faster transaction rate. Also, it proves to be secure and it is one blockchain network that is quite keen on developing its systems.

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Bitcoin in Africa

ICE3X, One Of South Africa’s Oldest Crypto Exchange Cease Operations

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ICE3X

ICE3X, one of the first and oldest crypto exchanges in South Africa and across Africa which was founded in the year 2013 with roughly 80,000 clients ceased operations permanently due to low liquidity.

Earlier this year, ICE3X announced that they noticed some discrepancies in the balances pertaining to Bitcoin and Litecoin held on the platform on March 16. After several consultations and deliberations with their partner Merkeleon.com and subsidiary Coinspaid.com, no satisfactory conclusion was reached.

But on the advice of their auditing and legal team, ICE3X suspended deposits and trading of cryptocurrencies on their platform. In addition, Bitcoin (BTC) and Litecoin (LTC) withdrawals were also suspended pending the outcome of a full investigation and reconciliation.

ICE3X said that clients holding cryptocurrencies on their platform excluding Bitcoin (BTC) and Litecoin (LTC) will be able to withdraw their funds. They further said that this was done in protection of their clients.

On March 23, withdrawals from ICE3X platform by clients were totally disabled, and it was announced that withdrawals would now be done manually – clients would have to submit their withdrawals request via a Google Form.

The homepage URL of ICE3X which is ice3.com. Users will now be redirected to https://ice3x.co.za/status-update/ with no withdrawals support for Bitcoin (BTC) and Litecoin (LTC) yet, but clients were advised to place their withdrawals request for both.

On April 6, according to the website of 1CE3X, the South African Crypto Exchange will not be returning back to operations and advised to start their liquidation proceedings. Also, there are no longer withdrawal requests pending for any currencies except Bitcoin (BTC) and Litecoin (LTC).

At the point of writing this article, the latest update from ICE3X, shows that all withdrawal requests submitted up to April 6 have been rectified and all the remaining assets either cryptocurrencies or fiat are held in trust by Manong Badenhorst & Badenhorst Attorneys. Also, liquidation proceedings have been initiated and clients are advised to download the requisition form, which should be sent as a mail to avj@natliq.co.za.

Recently, Binance announced that ZAR trading pairs was delisted from their platform, according to the official Twitter handle of Binance Africa on March 31. It was recommended that users either trade out of their ZAR positions or withdraw all their ZAR balances before April 2, 10:00 AM (UTC). The affected trading pairs are USDT/ZAR, BTC/ZAR, ETH/ZAR, BUSD/ZAR, BNB/ZAR.

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