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Fidelity: Bitcoin to Decouple from Other Investment Assets with Its Market Cap Skyrocketing

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The report by Fidelity depicts that Bitcoin has major fundamentals that put it further from health and economic adverse effects.

Fidelity Digital Assets, a firm focused on researching institutional asset investment, has released a report on the role of Bitcoin as an uncorrelated alternative investment that may provide portfolio optimization benefits.

Fidelity Report on Bitcoin

According to the report, which is the second report in its Bitcoin Investment Thesis series by @riabhutoria, there is a huge potential in the crypto industry especially with Bitcoin for institutional investors. The report by Fidelity noted that Bitcoin has managed to decouple from other investment assets like gold, stocks and other precious metals.

“Bitcoin’s correlation to other assets from January 2015 to September 2020 (displayed in the table below) is an average of 0.11, indicating there is almost no relationship between the returns of bitcoin and other assets,” the report indicated.

Bitcoin has mostly gained institutional investors confidence during the height of the pandemic when the stock market and most global economies came to their knees. Bitcoin together with other cryptocurrencies on the other hand were able to stabilize despite the increased volatility and have managed to climb significantly year to date.

The report by Fidelity depicts that Bitcoin has major fundamentals that put it further from health and economic adverse effects. “Bitcoin has distinct underlying fundamentals that are not affected by the health and economic situation created by COVID-19,” the report stated.

The report also indicated that Bitcoin has gained favor among investors as its success is not predicted on a single purpose. Whereby, the asset can be used as a store of value and a means of exchange.

On the Flipside

Indeed, Bitcoin and other digital assets whose inflation rate is known and fixed are set to largely benefit from the increased global monetary stimulus meant to kickstart the global economy from the coronavirus pandemic.

As governments print more money to solve the economic hardships, Bitcoin and other cryptocurrencies remain under controlled measures. Hereby, Bitcoin’s value is poised to skyrocket in the near future as more institutional investors flock into the industry.

According to metrics provided by CoinGecko, Bitcoin was trading around $11,404.02, having added approximately 37.6 in the past one year. Additionally, the asset was up 10.4%, 5.2% and 7.5% in the past 30 days, two weeks and seven days respectively through Tuesday.

Notably, Bitcoin had a market capitalization of around $211,166,894,135 with its daily trading volume at $19,333,804,475. Having survived a significant portion of the pandemic without failure, institutional investors feel confident in raising their portfolio stake in Bitcoin.

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Algorand (ALGO) price strengthens as institutional investors back the project

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Consolidation periods tend to follow strong rallies but they also present a good opportunity to survey the field and evaluate projects that have strong fundamentals.

One project that continues to gain traction in terms of price recovery and network adoption is Algorand (ALGO), a pure proof-of-stake (POS) blockchain network that has secured new partnerships and real-world use case applications, as well as support from multi-million-dollar funds in recent weeks.

Big funds invest in Algorand-based projects

Raising funds is one of the biggest challenges many projects face and in the last month the Algorand network announced that Arrington Capital, a digital asset manager, had pledged $100 million in funding meant to help accelerate additional development across all facets of the smart contract platform.

This development came on the heels of the June 2 announcement that Borderless Capital, a venture capital firm, had created a $25 million fund aimed at supporting Miami-based blockchain startups developing digital payment solutions on the Algorand network.

Related: Exodus Wallet raises almost $60M in crypto in regulated offering

New partnerships lure investors

A scroll through the Algorand Foundation Twitter feed shows a growing list of cryptocurrency projects across a variety of sectors that have joined up as part of the Algorand community to take advantage of the low fee, POS environment.

The nonfungible token (NFT) sector is showing some interest in the network following a partnership with Curate that will allow for the minting of NFTs as well as the release of a bridge by Curvegrid that will allow businesses to build NFT and blockchain technology into their business and consumer mobile applications.

Other recent examples of adoption include a partnership with the Bermuda-based MAPay healthcare payment solution, which will host its payment solution on Algorand blockchain in an effort to improve efficiency and reduce healthcare costs, as well as a partnership with Xfinite and Eros Now to create a blockchain-based content engagement platform for the 224 million registered users of Eros Now.

These new partnerships come after a busy year for the network which also included the integration of USD Coin (USDC) and Tether (USDT), the two largest stablecoins in the cryptocurrency ecosystem. 

The growing list of network partnerships and investments from players in traditional finance suggests that ALGO is well-positioned to see future growth as the blockchain sector sees continued adoption and the crypto market recovers from it recent sharp correction.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.