Bitcoin has out-performed any other financial investment, up 1,500% just this year. Kevin Hua looks at where the meaningful investments are behind this rally.
The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
We’ve written about how cryptocurrencies are up 1,500% over the last 9 months. That performance has eclipsed all other financial instruments and leaves investors asking whether it’s a raging bull market or a bubble waiting to pop?
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What’s a cryptocurrency?
- A digital currency where encryption technology regulates the generation, use, transfer and verification of a transfer of funds without the need for a central banking system
- Examples are Bitcoin or Ether.
Many media articles say cryptocurrencies are for drug traffickers, hitmen and arms dealers. Is there more to it?
- Cryptocurrencies have legitimate commercial applications
- All cryptocurrencies consist of a network of peers. Each peer holds a ledger of every transaction made by a digital currency and the balance of every account. This is called a blockchain.
- The blockchain ensures autonomous, instantaneous and reliable accounting of Bitcoin transactions using digital encryption.
- It can be a reliable method of instantaneous transactions with the ability to settle in real time with no counterparty risk and reduced transaction costs
Examples of commercial application
- By banks and investment managers to settle trade in real time
- In law to create “smart contracts”
- In manufacturing to automate payments and supply chain processing
The future of Blockchain – is it a buying opportunity or speculative bubble?
- Risks – concerns around entering a bubble and regulatory risk
- e.g. Last week Chinese government made plans to ban trading of Bitcoin on domestic exchanges. China accounts for 25% of bitcoin trades.
- Safer way to gain exposure is by investing in companies focusing on cryptocurrencies and managing blockchain like IBM and Microsoft
- AtlasTrend’s Big Data Fund has been constructed to capture the long-term structural trend of big data and invests in companies with exposure to the Internet of Things and cryptocurrencies.
Listen to more interviews in this series:
The Rapid Marriage of Off-line and On-line Shopping from Amazon
Big Data: What, How and Where to Invest
Disney and Netflix are Parting Ways
Investment opportunities from the growth of Online Shopping
Nike Sprints Ahead with Amazon and Instagram
Amazon’s Tuition Costs US$13.7bn for a Food-ucation
AtlasTrend manages a global share fund investing in companies driving or benefiting from the big data trend. For more insights on big data as an investment trend and access to invest in the AtlasTrend Big Data Big Fund, sign up for a free 7-day trial.