A Bitwise report indicates that the results depend on the application of an adequate investment strategy. Allocating more than 1% of the portfolio to Bitcoin could disturb the balance between risk and profit.

A proper management strategy almost always helps Bitcoin to increase the value of a combined portfolio. That happens even when buying it at all-time highs, according to a study conducted by Bitwise.

A test portfolio that employs historical data allowed the San Francisco-based asset manager to find interesting facts. For example, investors that assign a small portion of Bitcoin to a portfolio composed of stocks and bonds have seen a noticeable increase in cumulative returns, even in the last three years.

The Bitwise report, published last May 6^th, jointly with research director Matt Hougan, indicates that an allocation of about 2.5% in Bitcoin in January 2014, with a quarterly rebalancing, could have increased portfolio returns from 26% to nearly 45% on March 2020. An allocation of 5% could have doubled the profit return of a traditional portfolio by up to 65% during the same period.

This is not entirely surprising as the price of Bitcoin has ranged from USD 750 to USD 6,500 in the past six years. Considering that Bitcoin was the best-performing asset of the past decade, investors could expect huge profit returns for holding something that witnessed a 766% price increase.

It is interesting to see that profit returns still increased, though only marginally. Even when Bitcoin was assigned to the portfolio, it was at the all-time high of USD 20,000 in December 2017. Besides, it remained at the same weighting as the portfolio until March 31^st, even when the stock had fallen by about 66% to levels below USD 6,500.

In the same period, assuming a quarterly rebalancing, an allocation of 2.5% or 5% contributed to profit returns from 0.005% to 0.40%, to a portfolio of 60% in global stocks and 40% in bonds. Without any Bitcoin allocation, the value of the portfolio would have decreased by 0.54%. An allocation of more than 1% in Bitcoin would have led to a 0.51% drop in the overall value of the portfolio.

In the report, Bitwise explains that these seemingly paradoxical results stem from Bitcoin’s nature as an asset, which is highly volatile but largely uncorrelated with other assets.

This makes it ideal for the volatility harvest, which is a wealth management strategy that emerged just in 2012. During this process, rebalancing increases returns by extracting value from the main well-performing but volatile assets, such as Bitcoin, and anchoring the mined value to something more stable, like a first-class stock.

However, Bitwise explains that this depends on a disciplined and consistent rebalancing strategy. Those who balance very often suffer from lower returns, while those who only maintain and never rebalance significantly increase their risk of falling.

Bitwise found that, between 2014 and March 2020, with a 2.5% allocation in Bitcoin, a monthly rebalancing would lead to profit returns of just 38% and increase the reductions to 22.3%. In that case, the savings would have produced 42.1% profit returns but would come with a reduction of 32%. An annual rebalancing showed the best of both worlds, with cumulative returns of 67% and maximum reductions of only 22.3%, while the rest remained the same.

The asset manager also said that the accumulation of many bitcoins in a portfolio, with an allocation greater than 5%, would increase volatility to the point where the risk of reduction could begin to outweigh possible profits.

By Alexander Salazar

The multinational company hopes to expand teaching methods using digital alternatives.

The renowned multinational company IBM launched a new technological platform to learn about Blockchain technology, Artificial Intelligence (AI), and Cybersecurity. Open P-TECH is an online learning platform that makes various pedagogical alternatives available to users. In this way. They could learn more about the latest in global technology.

The new learning tool seeks to train users to new future challenges, which include 4.0 technology and digital financial alternatives. The platform also hopes to involve most of the Latin American communities, among others.

Spokespersons of the multinational announced the launch of the platform that will include versions in Portuguese, English, and Spanish. The announced was made during the company’s annual conference, called IBM Think, which was held virtually this year.

Open P-TECH will be a new educational space aimed at young people between the ages of 14 and 20. The platform will also include adaptable tools for educators and teachers who need to refresh their knowledge of the mentioned areas. In this way, the platform offers various courses related to new technologies and their applications to current life and in the future.

Arvind Krishna, IBM Executive President, commented that the coronavirus quarantine can become a trigger for major technological changes worldwide. For this reason, the company considers that it is necessary to offer excellent educational alternatives that are responsible for training the youngest.

“As the pandemic accelerates digital transformation, new ways of learning must keep pace if we are to equip all young people with skills relevant to the digital era and marketplace”, the Executive President said.

The platform offers young people new ways to share badges or certification documents on social networks for professionals who are looking for future jobs, adapting their curriculum to new work alternatives. On the other hand, educators could find a new way to connect with their students and take ideas that can expand their knowledge or teaching classes.

P-TECH is an educational platform that IBM recently launched. This tool seeks to impart the latest in global technology systems. Launched in 2011, it currently manages to include 220 schools, with more than 150,000 students in 24 countries around the world.

This new adaptation to digital spaces hopes to expand the educational range and reach many more students, which would help strengthen economic aspects in countries with more vulnerable communities, the company said.

The statement mentions that it is the company’s responsibility to carry out the work of preparing new generations for the technological changes that will be part of the jobs in the future.

“IBM believes that companies bringing advanced technologies to market have a responsibility to prepare students and workers for the way those technologies will shape jobs and the nature of our work. Innovation should unlock opportunities to make our workforce more inclusive, not less”, IBM newsroom details.

This would be another opportunity to boost the adoption of blockchain technology as one of the current and most important new technologies in the world.

By María Rodríguez

The investigation determined that the global economy would be at risk if a global stablecoin fails.

The European Central Bank (ECB) recently released a report revealing an investigation to determine the impact of stablecoins on the global economy. ECB’s conclusions reveal that it could be risky to implement a global system based on stablecoin; this is because if the system suffers failures, the consequences for the economy would be high.

The economic instability that would arise due to a failure in the support systems of the digital currency, would put the established economic markets at risk. The document expresses the alert for the assumption of determining the use of a single stablecoin for the world.

Matteo Cominetta, Christoph Kaufmann, Mitsutoshi Adachi, and Anton van der Kraaij were the researches who conducted the study and titled the work as “A regulatory and financial stability perspective on global stablecoins”. The objective of this project was to determine the risks in the adoption of this technology and its implications in the world economy.

When concluding the research, the authors determined that, although this technology could establish fast and low-cost payment systems, adopting it could bring great challenges in the future.

The study contemplated different examples to know what could occur after systems like these are established. In this sense, the researchers evaluated Facebook’s Libra project and the processes it conducts for the activation and operation of the digital currency.

“If a stablecoin arrangement reaches a global scale, its malfunctioning could pose risks to the financial system. The asset management function of a global stablecoin arrangement could be similar in substance to a global money market fund whose shares are held by retail users (…) To reap their potential benefits without undermining financial stability, we must ensure that stablecoin arrangements do not operate in a regulatory vacuum”, the study says.

According to the research, the European Central Bank approves the use of stablecoins. However, the bank highlights that it is necessary to improve the regulatory systems that govern electronic money, as well as the scope of operations, technological specifications, and basic legal details to adapt to the current economic system.

Besides, the financial institution also determined that regulatory systems should not cover other similar technological projects as a preventive measure. This is because, if the global stablecoin fails, the impact would be less as there are fewer projects that the legal system supports.

Libra Generates Alarm in the World

Governments and international regulatory bodies have spoken, more than once, against the implementation of a single global currency as an asset. Libra, the digital currency that Facebook is preparing, would be able to make exchanges regardless of the country. It will not need to be covered by banking institutions. This situation has turned on the alarms worldwide regarding the possible use of this type of technology.

Although the Libra project is still ongoing, Mark Zuckerberg, CEO of Facebook commented, during a hearing before the United States Congress, that conducting this project was a high risk, but that they would not operate Libra if regulatory agencies do not allow it.

The community considers Libra as a stablecoin that anyone can use to make cross-border payments, using some electronic means. This is something that could be positive for some users but, at the same time, somewhat worrying for the authorities.

By María Rodríguez

According to recent data, the increase in this type of transaction increased since last February.

According to figures that Zcash manages, the number of transactions that this platform conducts has experienced a significant increase in last April. Zcash evaluations resulted in a considerable number of armored transactions that the company conducted in recent months. The adoption of these types of transactions may be an indicator of the dramatic change in the global financial sectors.

A user published the data through a public forum he dedicated to the platform of Zcash. The forum participant showed graphs that reflect the significant increase the platform has had during each month of this year, especially since last February.

The first graph indicates that, in February, the armored transactions reached 2,430. However, last March, these types of transactions obtained an increase of 112 %, managing to register some 5,172 transactions. In the following month of April, these operations continued increasing, achieving 68% more than in March. The graph reflected that the platform executed 8,712 armored transactions the last month.

The armored transactions conducted through the platform of Zcash offer users a higher level of privacy and security. That is one of its main benefits. The platform ensures the absolute confidentiality of those involved in the transaction, as well as the number of cryptocurrencies they transferred.

Furthermore, these high levels of privacy do not allow these transactions to be traceable, preventing hackers from obtaining information on the financial activities of the users.

Currently, some manageable applications allow crypto users to use Zcash’s network armored transaction method. A smartphone app is also available. This app helps the user to conduct these transactions, in addition to having a cryptocurrency wallet.

Privacy in Transactions Make the Authorities Nervous

The user who disclosed the data claimed that it was difficult to obtain the information. He said he had to use advanced computational techniques to find this information.

These types of transactions with high levels of security may be the main reason why some authorities consider the use of cryptocurrencies as dangerous. Unable to obtain detailed information on the transactions or on those who conduct them, the security agencies do not have enough tools to determine the use of these assets or their provenance. Legal authorities in some countries argue that they can use these types of alternatives to finance terrorism or corruption.

Some press reports indicate that another similar network is taking a greater presence among the rescues that some hackers ask on the Internet. According to these reports, the Monero cryptocurrency has a shielding system that makes it impossible to obtain information about the transactions or the user.

The European Police Office (Europol) noted, in a report, that using this cryptocurrency, in conjunction with the Tor browser, makes it impossible to trace the origin or destination of the transaction. For this reason, the European Police Office sees with concern the use of these technologies.

By María Rodríguez

Different crypto exchange houses increase their contracts before the halving, an event that will take place next week.

Since the beginning of the quarantine time in the world, due to the Covid-19 pandemic, many experts glimpse a major economic crisis that could raise unemployment figures to numbers never seen before. Despite this situation, businesses linked to the purchase and sale of cryptocurrencies may be experiencing the opposite effect.

Some companies related to the industry are increasing hiring. This increase would mean an important growth for the industry in one of the most difficult times for the global economy.

An example of this situation took place last Monday when the company Kraken LLC announced that it would conduct an increase of 250 new hires in its company, during this 2020. However, the figure could rise to 350, according to local media.

Similarly, Binance Holdings Ltd. also decided to make an increase of up to 25% in its payroll. They currently have 1,000 hired and they hope to incorporate this new human resource for the first quarter of the year. This new edition seeks to focus on supporting affiliate tools such as Binance Pool, the new mining alternative launched last April.

Likewise, OkEx and Coinbase are also in the process of recruiting a new workforce. The exchange house OkEx, mentioned that, although they have more than 1,000 employees, they could be preparing a new number of vacancies that could well be available by the end of May.

This growth in the cryptocurrency ecosystem is due to the calculations of some experts who assure that the fall of traditional financial markets would boost the purchase of cryptocurrencies. A warning of this can be reflected in the increase in investors and the numbers of people making transactions with digital currencies during the coronavirus pandemic.

Nic Carter, Co-Founder of the American company Coin Metrics, mentioned that the halving could open up a greater awareness of cryptocurrencies and their importance right now. “Halving excitement could well be part of this, more generally I would say that there is a greater awareness of cryptocurrencies as an asset class among the public”, it said.

Coin Metrics is dedicated to crypto market research, and they have recently recruited new staff to work full time at their Boston headquarters.

According to some members of the US government entities, requests for government aid have increased in recent weeks. Millions of Americans have become unemployed as a result of the pandemic, reaching figures above 30 million unemployed. These data turn out to be alarming, since the first figures registered on April 25^th, pointed to only 3.84 million jobless claims.

The cryptocurrency ecosystem has become a major topic of evaluation, despite many other businesses related to these assets have been decreasing their personnel incorporation compared to previous years. It turns out to be contrary to exchange houses, which use these assets to trade since they get their profits from the commissions for transactions made.

In this way, the recovery of bitcoin prices, the fall of traditional markets, the halving on the doorstep, and the increase of investors in areas less affected by the pandemic, make crypto exchange houses one of the best alternatives for business and capital protection in this year 2020.

By María Rodríguez

Countries such as Argentina, Chile, and Venezuela are the ones that register more operations on the Localbitcoins platform.

Trading volumes on the platform of Localbitcoins continue to rise in Latin America, even though these operations fell globally since the Know-Your-Customer (KYC) platform revision last year. Argentina, Chile, and Venezuela are some of the countries that continue to record a high volume in recent weeks, according to information issued by Coin.dance.

As an example of those positive statistics, the trading between Bitcoin (BTC) and the Mexican peso increased by 71% in late April. This happened during the week of April 25^th, when the users acquired bitcoins (BTC) in Mexico by paying about USD 430,000. This figure represents the fourth most intense weekly commercial activity recorded to date.

In Argentina, the number of peer-to-peer (P2P) operations also increased during last April. A new record of more than USD 710,000 in weekly volume was recorded in this country during the week of April 18^th. Meanwhile, the minimum volume reached to close the month was around USD 670,000, an amount that still being very positive for the market.

Trading Increase in Other Countries

Similarly, trading in Colombia also saw positive record volumes during April, one of the highest recorded for said Latin American country. The week of April 4^th was the second-highest trading in the Colombian market, with almost USD 2.7 million in trading volume. During the following weeks, the volume was also high and ranged from 2.1 to 2.6 million dollars.

The same week as Colombia, on April 4^th, Chile presented a record volume with almost USD 400,000 of trading. The market recorded positive numbers during the following week. This occurred after weeks of steady increase. Thus, the weekly commercial activity in Chile was previously between USD 280,000 and USD 325,000.

Hyperinflation in Venezuela

In the case of Venezuela, between Monday 13^th and Saturday 18^th April, Venezuelan users traded 530 billion bolivars on the P2P LocalBitcoins platform. This amount also represented a record within the portal dedicated to the sale and purchase of Bitcoins. It was the fourth time for the Venezuelan weekly trading to register a record since the beginning of April.

This increase in the number of bolivars traded occurs due to the hyperinflation that Venezuela faces, where they try to increase monetary liquidity to alleviate the difficult economic situation.

In this sense, data from the Central Bank of Venezuela indicate that monetary liquidity increased by approximately 20% in March. The financial institution added more than 13 trillion bolivars to the 61 trillion that were in circulation during February.

Although the increase in Bitcoin prices and inflation in Venezuela means that users must invest more bolivars each month; citizens continue buying bitcoins as a way to preserve their money.

With less than a week for the halving scheduled for this May 12^th, the value of Bitcoin recovered by 23% arriving at USD 9,400 during the week of May 4^th. Thus, according to the statistics of the Coinmarketcap tool, the current market capitalization of Bitcoin is USD 163,602,397,587. The crypto community expects the value of the main cryptocurrency to increase a bit more after the halving.

By María Rodríguez