Cryptocurrency Investment

Is El Salvador’s Bitcoin gambit finally paying off?

The rise in El Salvador’s bond prices “almost defies gravity,” and it may soon have access to Eurobond markets, said Santander Bank.

El Salvador’s controversial $117.5 million Bitcoin investment briefly swung into profitability this past week for the first time in two years.

This was a milestone of sorts because, until then, not much had gone right crypto-wise for the impoverished Central American nation.

El Salvador still hasn’t come close to making Bitcoin (BTC) a medium of exchange as was anticipated when it made Bitcoin legal tender in September 2021, the world’s first nation to take such a step.

Sam Altman-linked Meanwhile Advisors creates BTC private credit fund

The closed fund will offer investors a 5% yield in Bitcoin and lend funds in BTC to institutions.

Bitcoin life insurance innovator Meanwhile Group has come out with a private credit fund denominated in Bitcoin (BTC). The closed fund will offer investors a “conservative” yield in Bitcoin and lend funds in BTC to institutional counterparties at the managers’ discretion.

Meanwhile Advisors is targeting a 5% yield on the Meanwhile BTC Private Credit Fund term. By vetting loan recipients, the fund “effectively mitigates” the risk associated with retail platforms that provide loans predominantly to individuals, the company said in a statement.

Bybit sees BTC, ETH ‘flight’ of institutional investors to stablecoins, but not for long

Cryptocurrency exchange Bybit has released its latest quarterly report, revealing the trading and holding trends of its institutional traders heavy in positive Bitcoin sentiment.

The cryptocurrency exchange Bybit released its fourth quarter report on Dec.

The report found that institutional traders had some 45% of their assets in stablecoins, with the remaining split 35% in Bitcoin (BTC), 15% in Ether (ETH) and only 5% in altcoins, which the exchange categorizes as anything other than the aforementioned digital assets.

The survey suggests that the “flight” to “safer assets,” like stablecoins, in a bear market “might explain this risk-averse asset allocation from traders.”

Nonetheless, institutional traders’ allocation of Bitcoin did spike in September, which differentiated itself from the holding patterns of other types of users.

*Surge in institutional traders’ BTC holdings in September 2023. Source: Bybit*

According to Bybit, the alignment of a surge in institutional BTC holdings with the prevailing positive market attitude toward Bitcoin can be correlated with “favorable lawsuit outcomes, fostering anticipation for the SEC’s potential approval of a spot BTC ETF.”

On Dec. 4, BTC surged above $41,000 for the first time in 19 months, and the overall market capitalization for the digital asset passed $800 billion, overtaking the real multinational holding company Berkshire Hathaway, and is now behind companies like Meta (formerly Facebook) and Nvidia.

Bitcoin for Christmas: MicroStrategy buys another $600M

The firm reported it held 174,530 Bitcoin as of Nov. 29 — worth roughly $6.6 billion at a price of $37,726.

Business intelligence firm MicroStrategy purchased 16,130 Bitcoin (BTC) in November, bringing its total holdings to more than $6 billion.

In a Nov. 30 announcement, MicroStrategy co-founder Michael Saylor said the company acquired the BTC for roughly $593.3 million — a price of $36,785 per Bitcoin. 29, MicroStrategy reported it held 174,530 BTC — worth roughly $6.6 billion at the time of publication — at a price of $37,726.

MicroStrategy has acquired an additional 16,130 BTC for ~$593.3 million at an average price of $36,785 per #bitcoin. As of 11/29/23, @MicroStrategy now hodls 174,530 $BTC acquired for ~$5.28 billion at an average price of $30,252 per bitcoin. $MSTR https://t.co/3XHhpIvsuA

— Michael Saylor⚡️ (@saylor) November 30, 2023

The business intelligence firm has consistently purchased large volumes of Bitcoin since announcing it would adopt the cryptocurrency as its treasury reserve asset in August 2020. Saylor’s last announcement was in September, reporting MicroStrategy bought 5,445 BTC for roughly $147 million.

Over 30% TikTok videos on crypto investments are misleading: Research

TikTok videos sporting popular crypto-related hashtags — such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading and cryptoinvesting — have cumulatively churned over 6 billion views.

More than 1 out of 3 influencers on TikTok, the go-to social media platform for the young generation, have been found to post misleading videos about Bitcoin (BTC) and cryptocurrency investments in a recent study.

TikTok has been widely adopted as a video-based alternative to Google searches. However, some influencers have been found to share unvetted misinformation on the social media platform about crypto investments, often trying to convince unwary viewers to put their (or their parents) hard-earned money into loss-making cryptocurrencies.

TikTok influencers use the hashtag ‘#cryptok’ while posting crypto-related content. An analysis of over 1,161 such TikTok videos — conducted by dappGambl — revealed that over one in three videos on crypto TikToks were misleading. The research also found that merely 1 in every 10 cryptok accounts or videos contained some form of disclaimer that warned users about the risk of investments.

Out of the lot, 47% of TikTok creators were found trying to push services to make money. Mainstream influencers, including Kim Kardashian, Jake Paul and Soulja Boy were also previously accused of promoting cryptocurrencies to their millions of fans without disclosing payments received.

The United States Securities and Exchange Commission forced Kim Kardashian to pay $1.26 million in penalties for the promotion of EthereumMax (EMAX). While TikTok influencers have a smaller reach than their mainstream counterparts, the potential financial risk for unwary investors remains equally high.

The research also found that 1 in 3 misleading videos on TikTok mention Bitcoin. Moreover, videos on TikTok sporting popular crypto-related hashtags — such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading and cryptoinvesting — have cumulatively churned over 6 billion views.

Viewers often oversee the ill-intent of their favorite influencers and end up trusting their content purely based on the high number of views or likes. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment.

Follow Cointelegraph’s TikTok account for the most recent news about crypto industry.

On April 2, a $1 billion lawsuit was filed against crypto exchange Binance, its CEO Changpeng “CZ” Zhao and three crypto influencers for promoting unregistered securities.

“This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security,” read the lawsuit filed by the Moscowitz Law Firm and Boies Schiller Flexner.

As Cointelegraph reported, the lawsuit alleges that “millions” of people could be eligible for damages.

Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable

Over 30% of TikTok videos on crypto investments are misleading: Research

TikTok videos tagged with popular crypto-related hashtags — such as #crypto, #cryptok and #cryptoadvice — have cumulatively garnered over 6 billion views.

More than one-third of crypto influencers on TikTok, the go-to social media platform for the younger generation, have posted misleading videos about Bitcoin (BTC) and other cryptocurrency investments, according to a recent study.

Many people now rely on TikTok as their first source of information rather than going to Google for answers, but the recent study from daapGamble alleges that many influencers are sharing unvetted misinformation about crypto investments, often trying to convince unwary viewers to put their — or their parents’ — hard-earned money into cryptocurrencies that will lose them money.

Many TikTok influencers use the hashtag “#cryptok” while posting crypto-related content. DaapGambl analyzed 1,161 such TikTok videos and found that more than one in three were misleading. The research also found that just one out of 10 “cryptok” accounts or videos contained some form of disclaimer that warned users about the risks of investing.

47% of the crypto TikTok creators were found to be trying to make money by pushing services. Meanwhile, mainstream influencers such as Kim Kardashian, Jake Paul and Soulja Boy were also previously accused of promoting cryptocurrencies to their millions of fans without disclosing the payments they had received.

The United States Securities and Exchange Commission forced Kim Kardashian to pay $1.26 million in penalties for promoting EthereumMax (EMAX). While crypto influencers have a smaller reach than their mainstream counterparts, the potential financial risk for unwary investors remains equally high.

The research also found that one in three misleading videos on TikTok mention Bitcoin. Moreover, videos on TikTok sporting popular crypto-related hashtags — such as #crypto, #cryptok, #cryptoadvice, #cryptocurrency, #cryptotrading and #cryptoinvesting — have cumulatively garnered over 6 billion views.

Viewers often overlook the ill intent of influencers and trust their content purely based on its high number of views or likes. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment.

Follow Cointelegraph’s TikTok account for the latest crypto industry news.

On April 2, a $1 billion lawsuit was filed against crypto exchange Binance, CEO Changpeng Zhao and three crypto influencers for allegedly promoting unregistered securities.

“This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security,” said the lawsuit, filed by the Moscowitz Law Firm and Boies Schiller Flexner.

As Cointelegraph reported, the lawsuit alleges that “millions” of people could be eligible for damages.

Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable

Nigerian crypto foreign investment is at a record low: Study

Foreign direct investment in Nigeria fell by 33% last year due to a severe shortage of dollars, which discouraged crypto companies from expanding into the country.

The largest economy in Africa has a foreign investment problem despite exponential growth in crypto adoption.

The National Bureau of Statistics (NBS) reported on Tuesday that foreign direct investment (FDI) in Nigeria, the largest economy in Africa, dropped by 33% last year due to a severe shortage of dollars. The shortage has also discouraged crypto companies from expanding into the country. In 2022, investment declined to $468 million from the previous year’s $698 million. According to the data, FDI has decreased by approximately 90% since its peak of $4.7 billion in 2008.

The adoption of crypto in Nigeria has grown at an exponential rate. The country has active adult crypto traders, with many citizens now preferring to store their money in digital currencies over fiat cash due to the constant devaluation of the national currency, the naira. In Chainalysis’ 2020 Cryptocurrency Geography Report, Nigeria ranked eighth in crypto adoption and usage rate among 154 countries included in the study. This adoption rate is expected to have encouraged more foreign crypto investment in the nation but the reverse is the case.

*Foreign direct investment into Nigeria plunges. Source: Bloomberg*

In an interview with Cointelegraph, local data analyst and crypto enthusiast, Obinna Uzoije, said the low rate of foreign investment in Nigeria could be attributed to the fact that the use of cryptocurrency was yet to go mainstream in the country. Uzoije explained that the lack of use of crypto in day-to-day economic activities and the ban on financial institutions from servicing crypto exchanges were to be blamed for the low investment rate.

As part of the 2021 ban, the Central Bank of Nigeria directed all commercial banks to close accounts belonging to crypto exchanges and other businesses transacting in cryptocurrencies in the country.

In a tweet, Olumide Adesina, a certified investment trader, reacted to the NBS report by saying that despite Nigerians “loving” crypto, fintech and entertainment, no state has taken the initiative to attract foreign investors in those areas. In another tweet, Adesina said Lagos State building a real tech and crypto community like Silicon Valley would create thousands of direct jobs.

Lagos State Governor, Babajide Sanwo-Olu, had earlier announced proposals for crypto adoption in the state, according to local media reports. Some of the initiatives proposed by Sanwo-Olu include establishing a dedicated sandbox regulatory framework for cryptocurrency, creating a crypto-focused innovation hub, and providing incentives for businesses that accept crypto payments.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

Hong Kong fund plans to raise $100 million for crypto investment

The new Hong Kong-based equity fund will focus on the regional market and embrace Web3 startups.

As Hong Kong is again opening up to the crypto market, local investors are launching a $100 million fund to finance the digital industry. The new fund, ProDigital Future, will aim at early-stage Web3 companies oriented at the regional market.

According to a Bloomberg report from March 30, ProDigital Future has finished its half-year fundraising period with about $30 million in its pockets. However, it plans to raise $100 million by the end of 2023.

The fund is led by Ben Ng, a partner at Hong Kong-based equity firm SAIF Partners, and Curt Shi, a long-time tech investor from China. At this point, Sunwah Kingsway Capital Holdings and Golin International Group have already hopped in to support the fund.

So far, Shi told journalists that the fundraising process has been “relatively smooth,” although the investors are cautious about putting their money into crypto projects. Reportedly, Hong Kong investors and some family offices from China, Australia and Singapore also participated in ProDigital Future.

The fund will “embrace Hong Kong and its policies” but intends to be present in Australia and Singapore, “as well as in Europe and the United States.”

ProDigital Future has already invested in six digital-asset projects with metaverse company GigaSpace and One Future Football, a digital football league from Australia currently operating in stealth mode.

In October 2022, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto. On Feb. 20, Hong Kong’s Securities and Futures Commission released a proposal for a licensing regime for cryptocurrency exchanges, set to take effect in June.

The regime suggests a necessary licensing procedure, demanding that potential market players meet several prerequisites, including the safe custody of assets, Know Your Customer, Anti-Money Laundering and Combating the Financing of Terrorism regulations.

Investors have more work to do in ensuring the success of Web3: PBW2023

At Paris Blockchain Week 2023, a group of Web3 professionals discussed how this new paradigm is disrupting traditional business models and creating opportunities for startups and investors.

A group of professionals in Web3 took to the master stage at Paris Blockchain Week 2023 to discuss how Web3 is changing the game for startups and investors. This new paradigm disrupts traditional business models and provides opportunities for startups and investors to tap into a new market.

In the panel titled “Crypto, Culture, and Capital: How Web3 is Changing the Game for Startups and Investors,” the group discussed how Web3 startups are different from Web2 startups and how the different cultures existent in them shape and affect their various ecosystems.

While recognizing the awesome milestones achieved by Web3 entrepreneurs, Laurenz Apiarius, the founder and managing partner of Blockwall Digital and Blockwall Capital, noted that this has had both good and bad effects on the industry.

Apiarius explained that there are entrepreneurs who take advantage of the Web3 narrative, knowing that there are investors who would overpay in valuation based on a futuristic belief of what can happen and end up not being able to deliver on their promises. This action, in turn, hurts investors who lose money in the process.

*Panelists at Paris Blockchain Week discuss how Web3 is changing the game for startups and investors.*

In light of the role of investors in Web3, Amos Meiri, founding partner of Node Capital, commented that the needs of Web3 organizations are different from what investors coming from Web2 are used to. Meiri explained that investors need to understand the technical, legal and even marketing of the projects that are being built; because it would help channel their support for entrepreneurs the right way.

Igneus Terrenus, head of partner relations of BitDAO, spoke on the decentralized autonomous organization (DAO) model of Web3 startup governance. He said that while the DAO is not a perfect model, the use of incentivization and education of DAO stakeholders is important. He explained that there is hope for DAOs to work alongside limited liability companies (LLCs) in the near future.

Magazine: Building community resilience to crises through mutual aid and Web3

Bitcoin retirement plans elicit caution from regulators

Some investment experts believe adding digital assets to retirement funds could make sense when the market becomes more stable, but not right now.

Even as the crypto market continues to forge an impressive recovery from the 2022 bear market, the industry continues to attract the wrath of regulators worldwide, especially in the United States. Three U.S. financial watchdogs recently issued stern warnings to individuals looking to invest in retirement funds offering exposure to digital assets.

The U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy, the North American Securities Administrators Association and the Financial Industry Regulatory Authority (FINRA) warned investors that individual retirement accounts (IRAs) that include cryptocurrencies could potentially be classified as “securities,” unless they are registered with the SEC or have a valid exemption certificate.

Moreover, in the past year, many policymakers have continued to aim at cryptocurrency investment vehicles, such as retirement accounts, citing the string of insolvencies witnessed last year. For example, New York Attorney General Letitia James has repeatedly called for a ban on all crypto-inclusive contribution plans and IRAs.

Regulators are understandably cautious, with one Canadian teacher’s pension fund, the Ontario Teacher’s Pension Plan, taking a $95 million loss on its substantial stake in the FTX crypto exchange.

However, some prominent crypto proponents in the U.S. Senate, like Wyoming Senator Cynthia Lummis, believe that Bitcoin (BTC) should be a part of 401(k) retirement packages.

Are crypto retirement funds a good idea?

To better understand whether including cryptocurrencies in pension funds makes investment sense, Cointelegraph reached out to Ilan Sterk, CEO of Altshuler Shaham Horizon — an Israeli cryptocurrency custody and trading provider — one of the few crypto firms in the country approved to deal with banks.

According to Sterk, minimal exposure to digital assets can be a good fit for long-term retirement-centric investments. He added, “For pensioners, an investment portfolio can be allocated between various assets like securities, bonds, hedge funds, digital assets and private equity. Blockchain and digital assets are considered a relatively new field but with high utilization and a wide ecosystem, so allocating a conservative portion to such investments might be fruitful.”

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That said, he does agree with the warnings issued by the SEC and FINRA, especially since they pertain to retirement accounts containing the hard-earned savings of many people. Sterk said that crypto is a “very volatile investment for a retirement account” and, therefore, people investing in such offerings should take the time to understand the inherent risks associated with digital assets. He added:

“I believe that regulators are crucial to organizing new investment fields like digital assets as well as for laying out clear guidelines, especially for pension accounts, so investors won’t find themselves penniless upon reaching retirement.”

In 2021, the Israeli Capital Market, Insurance and Savings Authority published similar guidelines for local institutions — including provident funds and pension funds — telling institutions that should they decide to invest in Bitcoin, they must detail and explain their decision to the regulatory body.

Extreme volatility of crypto

Wade Wang, the founder and CEO of Safeheron — a digital asset self-custody provider that recently integrated its multi-party computation multisignature security solution with MetaMask — told Cointelegraph that it is “not recommended” that retirement funds seeking long-term returns be exposed to cryptocurrencies, at least in the near future. He added:

“Investing in digital assets comes with high uncertainty and severe volatility. So far, any coins or tokens within the crypto landscape are circulated within their own individual markets. The circulation between these different ecosystems, especially traditional ones like pension funds, requires considerably greater development.”

Wang highlighted that crypto should not be viewed differently from other investment forms. As the industry matures and novel Web3 applications emerge, many traditional funds — including family offices and retirement funds — will continue to eye digital assets.

Zoomers wants crypto in their retirement funds

According to a survey conducted by U.S. asset manager Charles Schwab during Q4 2022, almost 50% of zoomers and millennials want to see crypto become a part of their 401(k) retirement plans. Millennials were born in the early 1980s to mid-1990s, while zoomers were born in the mid to late 1990s and early 2010s.

Analysts for Charles Schwab found that 46% of zoomers and 45% of millennials would like to invest in cryptocurrencies as part of their retirement plans. Moreover, the survey found 43% of zoomers and 47% of millennials had already put a portion of their savings into digital assets outside their retirement plans.

*Younger investors want a wider range of investment choices, like cryptcurrencies. Source: Charles Schwab*

These results lay in stark contrast to another survey conducted by the investment manager, which found that just 31% of Gen X’ers and 11% of boomers — those born anywhere between the mid-1940s to late 1970s — were keen on investing in digital currencies through their 401(k) retirement plans.

Bill to remove roadblocks

On Feb. 15, Alabama Senator Tommy Tuberville announced he would reintroduce the Financial Freedom Act to allow American 401(k) retirement plans to gain cryptocurrency exposure. The bill, first tabled in the Senate in May 2022, seeks to reverse a policy from the U.S. Department of Labor (DOL) directing the type of investments allowed in 401(k) plans, including crypto.

In Tuberville’s words, the bill seeks to prevent the DOL from pursuing enforcement actions for individuals utilizing brokerage windows to invest in digital assets. “The federal government shouldn’t choose winners and losers in the investment game. My bill ensures that everyone who earns a paycheck has the financial freedom to invest in their futures however they see fit,” Tubernille added.

The bill’s co-sponsors include several prominent pro-crypto senators, including Cynthia Lummis, Rick Scott and Mike Braun. In a December 2022 interview, Senator Lummis stated that despite the recent market meltdown, she is still quite comfortable with the idea of Americans incorporating Bitcoin into their pension funds.

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Similarly, on Feb. 14, Florida Representative Byron Donalds said he wanted to table a bill similar to Tuberville’s in the House of Representatives. Both Donalds and Tuberville are likely to face stiff resistance from members of the Democratic party, as Senator Elizabeth Warren has repeatedly expressed her concerns about crypto being included in 401(k) plans. Senator Roger Marshall also shares a similar stance.

What lies ahead?

Since the beginning of 2022, the DOL has warned pension fund owners about crypto, asking them to exercise extreme caution when dealing with cryptocurrencies, citing the risk of fraud, theft and loss of funds. Other regulators have also adopted similar stances across the globe. As crypto adoption grows, time will tell how legislators come to view this novel asset class, especially from a long-term investment perspective.