Tag Archives: Ethereum

A few thoughts on Trump’s victory and investing under Trump 2.0

Deposit Photos

By now, there’s not much I can add to the ubiquitous media coverage of Donald Trump’s shocking imminent return to power.

Since our “beat” here is Financial Independence I’ll spin this that way. A few weeks back we looked at a Franklin Templeton webinar on the investment implications of either a Harris or a Trump victory. See this blog I wrote on October 23rd, headlined Don’t mix politics and investing but financial community thinks a Trump victory more positive for stocks.

You can say that again. As I write this in a daze mid Wednesday, the Dow Jones Industrial Average was up 1300 points or 3%. Bond prices, on the other hand, are going in the opposite direction.

Franklin Templeton also issued a press backgrounder conveying the view of various money managers. For obvious reasons, below I have cherrypicked the ones that address a Trump victory.

Before we get to that, I’ll point to a Globe & Mail column by Andrew Coyne published Wednesday (Nov 6th), in the aftermath of the election result. The headline tells the tale: Trump’s election is a crisis like no other, not only for the U.S. but the world. (likely under a paywall.) The world yes, but especially Canada. If you can access the column also check the hundreds of reader comments, which offer many and varied takes on the implications of Trump 2.0 on the Canadian economy and politics.

Personally, during the run-up to the election I did not tinker with our family’s portfolio to take advantage of any alleged “Trump trade” or “Kamala stocks.” Those who noted this site’s 10th anniversary the day before the election will probably feel this is a broken record, but I’ve found that a globally diversified balanced portfolio with exposure to all major asset classes is adequate preparation for whatever the investment world may have in store for us.

Asset Allocation ETFs play offence and defence

Let the money managers at places like Franklin Templeton, Vanguard Group, BMO ETFs, Blackrock or Robo advisors decide the relative proportions. Those who engage financial advisors or portfolio managers may want to check in for a portfolio update. For average DIY investors, those Asset Allocation ETFs often referred to in this site should allow investors to sleep at night no matter what horrors await us in January and beyond. In other words, the stocks component of these AA ETFs let you play offence and benefit from the rising of stocks as animal spirits take over investors. But a healthy fixed-income allocation also allows you to play defence in case things get too ebullient. As the old saying goes, you want to “Eat well and sleep well.”

Continue Reading…

Post Ethereum Merge, will Crypto survive or thrive?

By Jacky Goh

Special to the Financial Independence Hub

According to a recent report from CNBC, Ethereum has just completed its “final dress rehearsal” for the so-called Merge, which will shift the second-largest cryptocurrency by market value from a “proof of work” validation protocol to “proof of stake.” As CNBC notes, this upgrade has been years in the making and is considered “one of the most important events in the history of crypto.”

The reason is simple: efficiency. Moving to “proof of stake” will reduce Ethereum’s carbon footprint over 99.5% per its internal estimates, and also significantly lower its “gas” prices, i.e. the cost of transactions. Carbon emissions and the cost of converting crypto to fiat currencies (or other crypto currencies) are the two major criticisms of Ethereum, in particular, and crypto, in general.

Network will be more secure and less prone to manipulation

The Merge is not only important to the investing public, however; it’s a critical upgrade for the crypto community. The Ethereum network will now be more secure and less prone to manipulation. For example, anyone who wants to take over 51% of the network will now need to hold half of the total staked amount in ETH, rather than 51% of the mining hash power, as was the case previously. What this means is that the platform is guaranteed to be controlled by those who have a long-term interest in its success, ergo the term “proof of stake.”

But it’s the lower “gas fees” that will probably attract the most attention: and have the most profound effect on adoption. As the cost to process any transaction on the Ethereum blockchain goes down, more adoption will occur, meaning more people will be more open to participate in Ethereum blockchain projects. Think of how stock trading took off in the 1980s after US markets were deregulated and the world’s first discount stockbroker, Charles Schwab, opened for business. More recently, Robinhood spurred another surge in trading by reducing the cost of stock transactions to zero. This is commonly referred to as the “democratization” of investing. With the Merge, a similar revolution is coming to crypto. Continue Reading…

Zoomer Magazine: my column on investing in Crypto

 

Zoomer Magazine has just published a column by me on investing in cryptocurrencies. Contained in the June/July 2022 issue, the headline is The Crypto Conundrum.

There is an online version but it is not yet available: when it is, I will update with a clickable link. Alternatively, you can subscribe to the print edition and/or the digital edition, by clicking here.

As the adjacent artwork shows, “this notoriously volatile investment is not for the faint of heart” and I therefore “advise caution.”

As Murphy’s Law would have it, between the time the article was written and edited, crypto crashed, with Bitcoin plunging below US$30,000. In fact, this weekend was a brutal correction for crypto in general: see this Reuters report on Bitcoin touching an 18-month low of US$23,476 over the weekend.

The article does of course stress the volatility of this asset class and it goes without saying that if you’re a long-term believer in crypto — a so-called HODLer (for Hold On for Dear Life) — then you’re much better off investing in Bitcoin closer to $30,000 than the near $60,000 it reached late in 2021.

The article arose when a Zoomer editor was intrigued by a MoneySense column I wrote early in 2021 about my own personal experience with investing in Cryptos. You can find it by clicking on this highlighted headline: How to invest in Cryptocurrencies(without losing your shirt.

The gist of both articles is that I suggest investors restrict themselves initially to just Bitcoin and Ethereum, which I regard as the “Big 2” of crypto. I also suggest using ETFs in registered portfolios, and taking profits if and when they materialize: by selling half on any double, you can do what Mad Money’s Jim Cramer calls “playing with the house’s money.”

The other guideline I offer is to restrict total crypto investments to 1 or 2% of your total wealth: a range recommended by billionaires like Paul Tudor Jones or Stanley Druckenmiller. 

Start small and try to play with the house’s money as soon as you can

 If you find you lucked out and the 1% becomes 3% or the 2% becomes 5%, then sell about half so that you’re back to your original target.

The article notes that as reported here, as of January 2022, Fidelity has 2% in its balanced and 3% in its more aggressive asset allocation ETFs. FBAL has 59% stocks, 39% bonds, and 2% crypto while its growthier FGRO is 82% stocks, 15% bonds and 3% crypto. These seem to me prudent allocations for investors wanting a sliver of crypto. Continue Reading…

What Time Magazine person of the year Elon Musk has to say about Cryptocurrency

LONDON, UK – June 2021: Bitcoin cryptocurrency on a Tesla electric vehicle logo.

By Sia Hasan

Special to the Financial Independence Hub

Time Magazine’s Person of the Year Elon Musk — chief executive officer of Tesla, The Boring Company and founder of SpaceX — has helped bring cryptocurrency into the public spotlight. He supports cryptocurrency and has made people more aware of what it is and how it works.

What is Cryptocurrency?

Cryptocurrency, also known as crypto, is a digital currency traded for goods and services. Many companies issue their own cryptocurrencies to be spent specifically for the service or product they provide. A company’s crypto is comparable to arcade tokens or poker chips. People must exchange real currency for cryptocurrency to buy the product or service.

A type of decentralized technology called Blockchain is what powers cryptocurrency. Different organizations (none of which have absolute control of the data) can trace the data through the processes of multiple computer systems. Blockchain manages and records transactions with an online ledger that is very secure. It can be shared and used by anyone with the proper credentials.

Blockchain allows businesses to use shared and protected information for collaboration. It is starting to emerge in almost every industry. It is a good fit for CRM for small business because it provides a secure place to store certified data.

Why do people use Crypto?

Because cryptocurrency is decentralized — not regulated by an authority or issued by a government — it offers autonomy to its users. Crypto is not subject to the boom and bust cycles in a country’s economy. Theoretically, it promises more control to the owner.

Cryptocurrency offers low transaction fees for international payments. Foreign purchases and wire transfers have associated costs and can be expensive. There are no banking fees related to cryptocurrency, such as minimum balance fees or overdraft charges. Continue Reading…

The best Cryptocurrency Payment Apps and Wallets in 2021

Different coins of crypto currency, including ethereum, litecoin, bitcoin, monero, ripple, and dash.

By Hristina Nikolovska

Special to the Financial Independence Hub

The latest Bitcoin bull run made many people want to jump on the train and use or store cryptocurrencies. There are many digital assets to choose from, and while wallets support most of them, the traditional payment apps have just started to experiment. PayPal was the latest company to show interest in allowing users to purchase cryptocurrencies with its app. 

Even though it covers 26 currencies in various countries, PayPal currently allows Bitcoin purchases to US citizens only. Still, that’s a great start. If you’re curious to know how to use crypto or invest in it and hold it, these are some of the best payment apps and crypto wallets to explore. 

Cryptocurrency Payment Apps

Both merchants and private individuals can use these payment apps to send and receive various coins. Fees are minimal, and payments are fast. 

Coinbase Commerce

Coinbase Commerce is one of the most famous cryptocurrency apps to help merchants accept payments. Coinbase Commerce doesn’t charge fees, and it also supports price-stable cryptocurrencies. Payments are irreversible, and merchants can immediately sell earned crypto for cash or USD coin. This app integrates with WooCommerce and Shopify. 

BitPay

BitPay is available for both personal and business users. This app can store and manage BTC, Bitcoin Cash, Ethereum, and other coins. Also, it comes with a BitPay Prepaid Mastercard. Merchants can use this app to accept crypto payments with just a 1% fee. 

Electroneum

Electroneum (ETN) is helping people across the globe pay for goods and services in-store and online. It’s accepted in more than 190 countries and brings benefits to people, merchants, and corporations. It removes the need for a bank account and provides new payment opportunities for all. 

GoCoin

GoCoin is one of the longest-running blockchain invoicing platforms. It supports Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and EOS. The fee is only 1%, and the GoCoin gateway provides ultimate flexibility and security of payments for merchants. Merchants of all sizes, as well as startups, are using GoCoin all over the world.

BTCPay

BTCPay Server is an open-source crypto payment processor. It’s secure, private, and free to use. There’s no usage fee, and merchants can connect their e-commerce store or use other apps to receive payments. BTCPay is excellent for invoicing and supports WordPress, Tor, WooCommerce, Magento, and other platforms. 

The Best Wallets to Store Digital Currencies 

Even though payment apps can also serve as wallets, some cryptocurrency owners prefer to download separate software to store their investments.  Continue Reading…