Bitcoin and Ethereum have 75% of the total capital of the cryptocurrency market. The amount of cryptocurrencies on the market surpasses 8,400.

The increase of the cryptocurrency market continues at a constant pace. Currently, only with bitcoin (BTC) and Ethereum’s native cryptocurrency, Ether (ETH), there is already a capitalization of more than a trillion dollars. That is, more than USD 1,000,000,000,000 between both currencies’ circulations.

With BTC floating around $ 48,000 and ETH over $ 1,700, the total capital between the two significant cryptocurrencies is close to $ 1.1 trillion, according to CoinMarketCap data.

The more than 18 million bitcoins currently circulating in the market are equivalent to a sum that circles $ 889 billion. Simultaneously, Ether’s current supply, of about 114 million, yields a total capitalization of more than $ 200 billion.

The domination of both currencies in the total market capitalization is a fact. With more than 8,400 cryptocurrencies listed on CoinMarketCap, the market barely reaches $ 1.44 trillion. In other words, only between BTC and ETH is 75% of the capital of this market.

After the leading cryptocurrencies, the picture is very different: only the stablecoin tether (USDT), an asset that maintains a 1: 1 parity with the dollar, exceeds 30,000 million dollars in capitalization. And only up to the top 10 do we find coins above 10,000 million.

Currently, bitcoin positions itself among the ten most valuable assets in the world. Bitcoin is protecting under its wings the shares of Tesla, Facebook, Visa, Paypal, and MasterCard.

Although to a lesser extent, ETH is also beginning to appear on the world’s heavyweights. The Ethereum cryptocurrency currently ranks 53rd among the most valuable assets in CompaniesMarketCap data. It has already surpassed other vital companies like AT&T, the pharmaceutical company Pfizer. This phenomenon places Ether as one of the most significant cryptocurrencies out there.

Strength of Altcoins Can Counter Bitcoin?

Bitcoin is domaining the market (that is, control over the total capitalization of cryptocurrencies) and remains above 60%. And this phenomenon occurs even though most of the major altcoins have outpaced the rise of bitcoin in percentage terms in recent weeks.

The morning of this Thursday, February 11, an index tended to compare bitcoin and the top 50 of altcoins points due to the latter’s dominance against BTC.

According to records from blockchaincenter.net, Altcoins own this month. In the lasts 30 days, more than 80% of the other cryptocurrencies have risen more than BTC. This percentage looks promising.

However, the situation remains the same: bitcoin by far keeps reigning over the market widely. With More than 8,400 cryptocurrencies, and by gathering the value of all of them together, it just covers a little more than half of a single one (BTC). Bitcoin remains the most suitable cryptocurrency in the crypto world.

By: Jenson Nuñez

Cardholders will now gain the ability to consolidate cryptocurrency payments without intermediaries. The initiative will invigorate the payment methods with crypto assets.

Mastercard will set an allowance for affiliated merchants to bring and receive payments in bitcoin later this year. It means that the establishments that accept credit cards can also accept payments in cryptocurrencies without intermediaries and beyond the fiat ecosystem.

In an official statement, the company stated that payments through cardholders could also settle in cryptocurrencies at all affiliated businesses.

The company added that this procedure would see effectiveness on the crypto assets that share compatibility with its network. However, The company signaled that it would give the green light to stablecoins, which the company considers more reliable, among many of the options currently available.

CEO Michael Miebach’s promised for the fourth quarter of this year to integrate digital currency payments “directly onto our network,” providing maximum flexibility for customers and merchants alike.

The acceptance of bitcoin in Mastercard affiliates means a new dawn for evolving transaction procedures inside this company. The CEO of the company, Ajay Banga, explained that bitcoin did not serve as an instrument for a financial embodiment of unbanked sectors because its volatility is unpredictable and terrifying.

Practical Solutions and Suitable Options Regarding Payment Methods

Banga said that central bank digital currencies offered a more practical solution to achieve financial inclusion. Banga also considered that the most suitable option in the face of the decrease in cash use was to digitize fiat currencies, “helping cross-border trade flows.”

Since July 2020, Mastercard users with settlements in Europe can recharge their cards with cryptocurrencies and use them worldwide through the Wirex.

The MasterCard statement is: “We are seeing this unfold on the Mastercard network, with people using cards to buy crypto assets, especially during the recent surge in the value of bitcoin. Mastercard also sees that users are increasingly taking advantage of crypto cards to access these assets and convert them to traditional currencies to spend.”

Mastercard’s executive vice president of digital assets also said in a blog post that MasterCard is not promoting the use of cryptocurrencies but enabling alternative ways for customers, merchants, and people in business to be free.

Mastercard Has not Still Assured Which Cryptocurrencies Will Allow Into its Network

Mastercard currently offers cards that enable customers to make every transaction or operation with cryptocurrency. Still, those payments suffer a conversion into regular currencies right before they begin to move through the company’s network.

According to Dhamodharan, supporting crypto assets will give many more merchants the green light to move forward and accept such payments and create a culture in which these merchants can cut out inefficiencies.

Mastercard did not clarify which specific cryptocurrencies the company will allow onto its network. Still, it said there are high expectations to provide more support for crypto assets in the future.

By: Jenson Nuñez

Jack Dorsey’s company even plans to pay its employees and suppliers with Bitcoin. The co-founder and CEO of Twitter considers Bitcoin to be the equivalent of a “national currency” of the Internet.

Twitter could eventually join the growing list of companies investing in Bitcoin. The company’s CFO, Ned Segal, confirmed that they are considering including an investment in the cryptocurrency. However, they have not yet made a decision or taken any steps in that direction.

In recent days, Segal spoke in an interview with CNBC about the company that created one of the main social networks in the world. He said that they are considering investing in Bitcoin, which would make sense as Twitter co-founder Jack Dorsey supports the cryptocurrency.

Regarding the institutional interest in Bitcoin, Segal noted that they have observed the financial decisions of other companies, including investing in Bitcoin. He added that they have evaluated employee and supplier payment scenarios with the cryptocurrency and how this could work.

“We have thought a lot to consider how to pay employees or suppliers who demand their payments in Bitcoin. We have also thought about what we could do if we needed to have Bitcoin on our balance sheet at the time of payments,” said Ned Segal, CFO of Twitter.

They are currently considering a hypothetical entry into Bitcoin, but Segal noted that their approach to crypto poses certain risks. The executive considers that the turning point for such entry could be to meet a commercial counterpart demanding payments in the cryptocurrency.

The Long Relationship between Jack Dorsey, Twitter and Bitcoin

Among the most famous bitcoiners is precisely the co-founder and CEO of Twitter, Jack Dorsey. The businessman is of the opinion that Bitcoin is the equivalent of a “national currency” of the Internet.

Dorsey has expressed on many occasions his support to the open source project that Satoshi Nakamoto created. In addition, he has made investments so that the work of developers who contribute to Bitcoin continues.

He has offered Bitcoin-paid contracts to those engaged in developing projects and improvements for Bitcoin. He has also launched a grant system through his cryptocurrency-focused company Square Crypto.

In October, Square invested USD 50 million in Bitcoin, equivalent to 1% of the company’s assets. Since that month, the company has been on the list of large investors who have been entering Bitcoin.

Besides Twitter, there are other prominent companies that support the use of Bitcoin at the institutional level, such as MicroStrategy. The latter has created an investment fund to accompany the entry of other companies and has openly promoted Bitcoin.

Interest in Bitcoin has reached large mutual funds, such as those of tycoon Bill Miller, investor Stanley Freeman Druckenmiller, and SkyBridge Capital. Even Elon Musk’s Tesla electric car company joined the wave with an investment of USD 1.5 billion.

The pioneering cryptocurrency is trading above USD 46,000 at the time of this writing. Comments from renowned businessmen Michael Saylor and Elon Musk have been very influential for Bitcoin to continue breaking its all-time highs.

By Alexander Salazar

Bitcoin has had an annualized return of 100% in the last eight years. Ecoinometrics maintains that S&P 500 and gold have had returns of 9% and -1%, in contrast to Bitcoin.

Ecoinometrics concludes in its latest newsletter that returns improve by including Bitcoin (BTC) in a traditional investment portfolio. They analyze the impact of the cryptocurrency on a portfolio with various percentages of S&P 500 index assets and gold.

The firm does not include bonds in the portfolio analysis but limits itself to varying the percentages of Bitcoin, S&P 500, and gold. They work with the annualized returns on those assets in the last eight years. They then calculate the annualized return on the portfolio in each of the scenarios.

Portfolios with a Single Asset

The first three cases of the analysis correspond to each of the above-mentioned assets, separately. The annualized return on a portfolio with 100% of Bitcoin, 0% of S&P 500, and 0% of gold, in the mentioned period, is 100%. The biggest drop for Bitcoin in the period is 89% and the Sortino ratio is 1.26.

The annualized return on a portfolio with 0% of Bitcoin, 100% of S&P 500, and 0% of gold is 9%. The largest drop is 37% and the Sortino ratio is 0.28. “This does not look very good compared to BTC,” according to the study.

The third scenario shows a portfolio with 100% of gold, which has the worst return (-1%), compared to the first two. The biggest drop in the period is 42% and the Sortino ratio is 0. “Unless we have predicted the minimum, it is not advisable to hold only gold,” says Ecoinometrics.

Impact of Bitcoin on Returns

The inconvenience of integrating a portfolio with only gold leads Ecoinometrics to test the combination of 50% of S&P 500 and 50% of gold. The annualized return is 4%, the biggest drop is 23% and the Sortino ratio is 0.27.

Next, they analyze a scenario without gold and assign 50% to Bitcoin and 50% to S&P 500, improving the return to 63%. Ecoinometrics highlights that adding the shares to Bitcoin significantly reduces the largest drop, which goes from 89% to 58%. Concerning the Sortino ratio, which is 1.29, it is very close to the 1.26 value of the portfolio with only Bitcoin.

Ecoinometrics also tests portfolio performance without S&P, assigning 50% to both Bitcoin and gold. Overall portfolio performance drops a bit, but Econometrics finds it acceptable. The return is 56%, the largest drop is 64% and the Sortino ratio is 1.6.

The tests reveal that the returns on portfolios with two assets offer advantages, compared to portfolios with a single asset, according to Ecoinometrics.

Combination of the Three Assets

They include a case of more balanced participation of the three assets, with about one third for each. Finally, they test a scenario with a lower share of Bitcoin.

A portfolio with 34% of Bitcoin, 33% of S&P 500, and 33% of gold has an annualized return of 43%. The biggest fall in the period is 45% and the Sortino ratio is 1.21. According to Ecoinometrics, by adding gold and stocks to Bitcoin, the maximum drop decreases even more.

In the last scenario, they reduce the percentage of Bitcoin to 25% and assign 70% to S&P 500 and 5% to gold. The return falls to 37%, regarding the balanced case, and the largest fall also decreases to 37%. However, the Sortino ratio drops to 1.07, which implies a lower overall performance, compared to the previous case.

Previous studies have included simulations with Bitcoin percentages below 10%. A study that Fidelity Digital Assets conducted in 2020 included 1%, 2%, and 3% Bitcoin, with historical data from the previous 5 years. These simulations revealed significant increases in returns on portfolios with some percentage of Bitcoin.

By Alexander Salazar