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Is Bitcoin The New Institutional-Grade Safe-Haven Asset?

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Is Bitcoin The New Institutional-Grade Safe-Haven Asset?

With the adverse effect of the covid-19 pandemic on the world economy, investors seek dependable safe-haven assets to protect the value of their funds. According to Michael Saylor, the Chief Executive Officer of MicroStrategy, Bitcoin is a compelling institutional-grade safe-haven asset. With its performance so far in 2021, Bitcoin is capable of attracting more mainstream investors.

Safe-haven asset

Since the third quarter of 2020, wall street institutions have been embracing crypto assets, especially bitcoin. The ongoing recent Bull Run has its roots in the massive embrace of these institutional investors. Online payment giant PayPal announced its support for bitcoin and other altcoins. Currently, people can trade bitcoin and some selected altcoins on the PayPal platform. 

Also Read: Bitcoin Lightning Network

Institutions like Greyscale, Microstrategy, Square, etc., all have invested heavily into bitcoin. Based on the ongoing adoption, there is a high chance that corporate firms will be completing their balance sheets with bitcoin in the future. Excess cash is becoming a drag on shareholders’ value in our current monetary system. Therefore, we should expect more institutional investors to embrace bitcoin as a treasury reserve asset. 

What Is A Safe-Haven Asset?

They are those assets that maintain their value, appreciate, or outperform when the financial market crash. However, a safe haven asset is not guaranteed to yield positive returns in every market dips. Investors seek safe-haven assets to limit their exposure to losses during a bear market. Safe-haven assets can vary depending on the particular down market. Therefore, to have a safe-haven asset, you need to perform ample due diligence. 

Investors diversify their portfolios using safe-haven investments. Such investments are beneficial in times of market volatility. Examples of safe-haven assets include Gold, Treasury bills (T-Bills), Defensive stocks (healthcare, utility, etc.), and cash. Although cash is considered the only true safe-haven during a market downturn, it offers no real return and is negatively impacted by inflation. 

Bitcoin is a Good Hedge Against Inflation 

The truth is, in a covid-19 stricken world, there is no such thing as a safe-haven investment. Everything is taking a hit, but certain investments are taking the hit less than the majority of the others. Bitcoin is arguably a good hedge against inflation; thus, it can be seen as a store of value. 

Read: Bitcoin Price Plunge: Is the crypto bubble about to burst?

In today’s monetary system, consumers need a currency that has the capacity to rise to keep up with inflation. Bitcoin helps to protect the holder’s purchasing power. According to JPMorgan Chase analysts, bitcoin will continue cementing itself as a hedge against inflation. In the long-term, this could edge out gold by driving more investment flows into bitcoin. 

Can Bitcoin Be Seen as a Safe-Haven Asset?

David Smooke, Founder and Chief Executive of Hacker Noon, believe that it will be irresponsible to see bitcoin as a safe-haven investment. According to Smooke, the shift in narrative around bitcoin has major implications, especially for the digital financial world’s future. 

He believes that bitcoin has some merit and more potential as a store-of-value asset. We are currently very early in the digital cash revolution; and as gold is the mascot for the current financial system, bitcoin is the mascot for the rise of digital cash. Bitcoin is unlikely to play the role of a transactional instrument that can be used for day-to-day purchases. 

Bitcoin can be the backup to omnipresent digital cash. However, it is currently inefficient to handle the volume of micro-transactions that the mass adoption cash system requires. Many people have come out to describe bitcoin as the “digital gold,” but is that really true? Well, no matter how much we would want to believe that, bitcoin is certainly not digital gold. 

Bitcoin does not have the speed competent enough to serve as a medium of exchange and no barrier to competitive entry. Gold is a physical element and the same as another precious element on the periodic table. Unless we have a new precious metal introduced to the periodic table, there is a real physical limit to competing with those precious metals. 

Related: Top Bitcoin Hardware wallets 

Although bitcoin is limited in terms of the number of tokens, it has no barrier to competition. This is the reason we have more than 50,000 cryptocurrencies. There is no doubt that bitcoin has a special place in the world of store-of-value assets. Like other store-of-value assets, bitcoin drives its value from the scarcity of supply. According to Anton Altement, Chief Executive of Osum.Finance, whether or not bitcoin will be considered a safe-haven asset, is dependent on public perception and narrative. To Altement, store-of-value is not an intrinsic quality of any of the things that society collectively agrees are valuable. 

Bitcoin Price Driving Institutional Investment 

Today, there are many bitcoin advocates from an institutional standpoint. We have top business leaders coming out to express their support and affirm the inherent potentials in bitcoin. Today, bitcoin is increasingly recognized as a hedge against inflation. The outstanding price-performance of bitcoin has reinforced the roles of these institutional advocates. 

The crypto asset touched an all-time high of above $40,000 on more than one occasion in the week. Some believe that bitcoin will record a price of $146,000 in the next decade. JPMorgan Chase analysts are one of the market experts who are certain BTC will hit that mark.

Conclusion  

Bitcoin is more of a store-of-value asset than a safe-haven asset, considering the market’s volatile nature. The potential of bitcoin is not in question. However, we need to exercise a little restraint on how we project the mascot to rise of digital cash (Bitcoin). 

 

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Top 10 Blockchain Startups in Nigeria 2020

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Over the years, modern technology has been dominated by companies based in first world countries. However, technological resources shouldn’t be located exclusively to a minute part of the world. In reality, the possibility of technology invading every sphere of human endeavor with its potentials can only be achieved when tech resources are distributed globally, as well as their use in helping local populations who are already showing a degree of commitment to improving their developing communities. More so is the advantage of knowing which of the crypto companies to invest in and how. With this list of the top 10 Blockchain Startups in Nigeria 2020, you can never be wrong in your choices!

In Nigeria, Africa’s largest economy, a number of blockchain startups are growing to meet the need for a cryptocurrency-thirsty populace. This is regardless of the fact that cryptocurrencies are not yet accepted legal tender in the West African country. Between April and June this year (2020) alone, $34.4 m was transacted in Bitcoin in Nigeria, the largest share on the continent. As stated by Usefultulips, South Africa followed behind with $15.2 m; Kenya with $7.8 m; Ghana, $ 640,000 and Tanzania $600,000.

It should not be alarming, therefore, that useful platforms through which cryptocurrencies are traded are springing up in handful places around the country.

Of all these platforms, I bring to you those that I consider the top 10 of Blockchain startups in Nigeria. See them below:

Top 10 Blockchain Startups in Nigeria 2020

(1) Quidax

Co-founded in 2016 by Uzo Awilli and Buchi Okoro, Quidax allows its users to freely purchase as well as sell cryptos in their local currency. Trading in Ethereum, Ripple, Bitcoin, Litecoin alongside other cyptocurrencies can be easily done on Quidax.

(2) BuyCoins

Provided by Bitkoin Africa, BuyCoins was founded in 2017 by Timi Ajiboye, Tomiwa Lasebikan and Ire Aderinokun. BuyCoins has a funding of $120,000. Users on BuyCoins have the opportunity to buy and sell cyrptocurrencies within a very short range of time.

BuyCoins conduct their services via their app, taking off prospective traders the stress of seeking other traders in the crptocurrency market. BuyCoin supports Bitcoin Cash, Litecoin, Bitcoin and Ethereum. Cryptos can be traded via their app which is available for IOS and Android devices.

(3) Bundle

Bundle is provided by and backed by Binance and was founded by Yele Bademosi. With Bundle, users can sell or buy Ethereum, Bitcoin and BNB. They also offer their customers the opportunity to buy cryptocurrencies using bank or card transfer. Proceeds from sales of cryptos, could also be withdrawn and deposited into your commercial bank account. With just N500, you can trade in BNB or Bitcoin.

(4) Yellowcard

Yellowcard provides users services for purchasing cryptos via the internet through debit cards or bank transfer. With this, they (users) can load their back accounts in the local currency, before paying for the digital coins they’re interested in. Currently, Yellowcard is in support of dash and Bitcoin core and would be adding tether (USDT) and Bitcoin cash (BCH) in the days ahead. Yellowcard is founded by Chris Maurice

(5) Patricia

With a dynamic operating mode, Patricia makes trading in cryptos like Ethereum, discounted gift cards, Bitcoin, Perfect money, etc. easily available to prospects.

(6) ABiT Network

Founded by Gauis Chibueze (aka Bitcoin Chief), ABiT Network provides blockchain e-commerce services throughout Africa. Some of ABiT’s products include ABiT Play, ABiT Go, ABiT Farm, ABiT Reps, ABiTCrowd, ABiTrader, and Tatcoin. For instance, with ABiT Reps, ABiT offers youths the opportunity to earn by telling others about ABiT products. Their apps can be found on different online stores such as Android and IOS.

Top 10 Blockchain Startups in Nigeria 2020

(7) CryptoTvPlus

CryptoTvPlus is one of the leading media agency on the continent. They provide the latest info on events, updates, project reviews in the digital currency market. They have an active online presence on Facebook, Twitter and YouTube with an application for easy access on Google play store. Founded in 2018, Cryptotvplus has a revenue of $ 15.40 million.

(8) Bitfxt

Bitfxt is another Nigerian cryptocurrency startup. Recently, in February 2020, they secured N5.45 billion from UK-based Payitup clearinghouse Ltd in a bid to expand their cytocurrency infrastructure. Traditionally, Bitfxt deals in Bitcoin and allows trade from prospects all around the globe.

(9) Roqqu

Founded by Uchenna Nnodim, Roqqu provides a speedy platform for the buying and/or selling of cryptocurrencies. Within thirty minutes, withdrawals are completed using Roqqu. They support EOS, STEEM, Ethereum and Bitcoin transactions. Like other cryptocurrency trading platforms, Roqqu has an app on Google Play store for easy trading. Traders on Roqqu are referred to as Roqquians.

(10) NairaEx

Founded in 2015, NairaEx has recorded over hundred thousand users with over one million transactions. They are one of the most popular in the digital currency market on the continent. NairaEx is a top blockchain company in Nigeria where cryptocurrencies such as Litecoin, Bitcoin Cash, Ethereum, and Bitcoin are traded. They are a reliable company for the exchange of Bitcoin and other cyptos through common payment platforms. NairaEx allows users to fund and withdraw within the same day.

11.Conclusion

The majority of the blockchain companies mentioned and discussed in this piece and others not mentioned here are founded and spearheaded by young Nigerians. These are highly spirited individuals who are seeking novel solutions to ancient problems in their immediate environment.

Ranging from agriculture, to the energy sectors and the financial payments service industries, these startups are making life better for many. You should find a way and align with the current trend. There is something for you if you invest in cryptocurrency today.

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