Schlagwort: Blockchain

Is Crypto Dead? What to Buy/Mine? FinTechs beyond Blockchain?

A close-up of a Bitcoin held against a price chart showing market fluctuations, symbolizing the debate on whether crypto is dead and highlighting opportunities in blockchain and FinTech investments.
Bitcoin held in front of a declining price chart, reflecting the question ‚Is Crypto Dead?‘ and exploring future investment strategies. | Photo Credit: via Marco Verch

Is crypto dead? With Bitcoin crashing to its lowest this year, losing over 25% in a week, many investors are asking this exact question.

Yesterday, on my way to an AI roundtable, I had an interesting conversation about the future of crypto assets. I met Michael, who works for one of the world’s biggest insurance companies, on the train from Frankfurt to Munich. Of course, our conversation started with a nifty 7-minute Tableau demo – a wonderful ice breaker!

After closing the demo with the Bitcoin Dashboard on Tableau Public, the conversation quickly headed towards crypto assets and (non-)blockchain FinTechs. These are the top 3 of Michael’s questions that I want to share with you – together with my answers:

1. Is the blockchain innovation dead or is crypto dead?

Absolutely not! Blockchain is a relatively new technology which has a long way to go before it becomes mainstream. Last year, the most successful projects were those that aimed at adapting new technologies for convenient use. Furthermore, crypto assets create a new structure of safe and anonymous storage and management of information. Projects like Ethereum have proven to be extremely useful for building steady and secure smart contracts, cloud storage, and product quality control.

For a deeper dive into blockchain’s potential, I recommend my previous post: Digital Banking: The Opportunities of Blockchain, AI, and Machine Learning.

2. Are there still interesting crypto assets to buy or to mine?

Yes, indeed! In particular, I suggest focusing on crypto assets targeting innovative use cases. If you buy these, you are actually investing in technology projects:

  • Chainlink (LINK): Provides decentralized oracles that connect smart contracts with off-chain data, essential for the future of decentralized finance (DeFi).
  • Stellar (XLM): Focuses on cross-border payments and financial inclusion, making it ideal for emerging markets.
  • VeChain (VET): Specializes in supply chain management and ensures transparency in logistics.
  • Factom (FCT): recently announced a partnership with Equator PRO, and according to the press release that announced the -partnership, Equator PRO is a software-as-a-service (SaaS) solution that aims to offer efficiency and oversight to help other mortgage servicers.
Factom use cases highlighting blockchain applications such as proof of existence, digital identity, audit history, and compliance—examples that address whether crypto is dead or evolving.
Factom use cases demonstrating blockchain solutions like proof of existence, data integrity, and compliance—key insights into the ‚Is Crypto Dead?‘ debate.

For mining, consider these:

  • Grin (GRIN): Uses the privacy-focused Mimblewimble protocol, offering scalable and anonymous transactions.
  • Ravencoin (RVN): Focuses on asset tokenization and remains a strong candidate for mining enthusiasts.

For more insights into diversifying a long-term crypto portfolio, see my blog post: How to Diversify a Long-term Crypto Portfolio.

Definitely! FinTech innovation goes far beyond blockchain. Key areas to watch include:

  • AI-powered Financial Analytics: Platforms like Tableau and Microsoft Power BI are transforming how businesses visualize and analyze data in real-time. AI integration can deliver actionable insights faster than ever.
  • Robo-Advisors: Tools like Betterment and Wealthfront use machine learning to provide personalized investment strategies.
  • Alternative Lending Platforms: Companies like Mintos and Funding Circle are making loans more accessible to small businesses, leveraging AI and data analytics for risk assessment.

Outlook: Is Crypto Dead or Ready to Evolve?

The question „Is Crypto Dead?“ often arises during downturns, but history suggests resilience. Blockchain technology is still in its early stages, and future innovations, such as quantum-resistant cryptography and tokenized real-world assets, will shape its evolution.

We may soon witness seamless integration of AI with blockchain, enabling self-governing smart contracts and predictive financial models. Moreover, decentralized finance (DeFi) is set to challenge traditional banking structures, creating opportunities for financial inclusion on a global scale.

For a broader discussion on trends impacting digital banking, explore my earlier post: Digitalization Trends in Finance.

What’s your view on crypto?

Let me know your thoughts via Twitter:

Disclaimer: This blog post is for informational purposes only and does not constitute investment advice.

How to Diversify a Long-term Crypto Portfolio

Close-up of a golden Bitcoin, representing digital currency and its role in building a diversified crypto portfolio for long-term investments.
Bitcoin coin symbolizing cryptocurrency investments and crypto portfolio strategies.

Last Friday, it was my pleasure to give an Executive Talk at the Frankfurt School of Finance & Management. While the focus of my presentation was Digital Transformation, plenty of the questions raised by the audience were about cryptocurrencies and how to build a diversified crypto portfolio.

Frankfurt School (@FrankfurtSchool) highlighted the session on Twitter, noting: „Our #FSEMBA students are especially interested in the use cases of today’s Executive Talk.„

After receiving follow-up emails from participants seeking guidance, I decided to expand on the topic in this blog post. For additional insights into blockchain and artificial intelligence trends, I recommend reading my related post: Digital Banking: The Opportunities of Blockchain, AI, and Machine Learning.

Why Invest in Cryptocurrencies?

The cryptocurrency market has shown explosive growth, with returns exceeding 1200% since early 2017. Finding this kind of return on investment (ROI) elsewhere is challenging. For example, a $500 investment in January 2017 could have grown to $6000 within a year!

This guide provides a framework for building a long-term cryptocurrency portfolio based on diversification and risk management principles.

Crypto Portfolio Allocation Strategy

I recommend balancing your portfolio with up to five coins in the Top 10 market cap, making up 70-85% of your investment, and complementing it with smaller altcoins in promising projects for the remaining 15-30%. This mirrors Timothy Chong’s analysis of Markowitz-style crypto optimization.

Top Cryptocurrencies for Long-term Investment

Bitcoin (40%)

Bitcoin (BTC) remains the foundation of most crypto portfolios, often referred to as „digital gold.“ It is considered a safer long-term investment due to its market dominance and steady growth.

  • Price (as of time of writing): $16,708
  • Gain Over Past Year: 2,170%
  • Market Cap: $278 B (#1)
  • Circulating Supply: 16,734,237 BTC

Ethereum (30%)

Ethereum (ETH) is the leading platform for decentralized applications (dApps) and smart contracts, driving significant innovation in decentralized finance (DeFi).

  • Price (as of time of writing): $470
  • Gain Over Past Year: 5740%
  • Market Cap: $45 B (#2)
  • Circulating Supply: 96,272,074 ETH

Litecoin (10%)

Litecoin (LTC) is often referred to as the „silver“ to Bitcoin’s „gold.“ Its faster block generation time (2.5 minutes) and lower transaction fees make it ideal for payments.

  • Price (as of time of writing): $170
  • Gain Over Past Year: 4690%
  • Market Cap: $10 B (#5)
  • Circulating Supply: 54,255,483 LTC

Ripple (10%)

Ripple (XRP) focuses on enabling fast and low-cost international money transfers. It has gained traction among financial institutions for cross-border payments.

  • Price (as of time of writing): $0.25
  • Gain Over Past Year: 3500%
  • Market Cap: $9.6 B (#4)
  • Circulating Supply: 38,739,144,847 XRP

Monero (10%)

Monero (XMR) is a privacy-focused cryptocurrency that uses advanced cryptography to ensure transaction anonymity. It has become a go-to option for users seeking privacy.

  • Price (as of time of writing): $264
  • Gain Over Past Year: 3370%
  • Market Cap: $4 B (#9)
  • Circulating Supply: 15,449,232 XMR

Outlook

As cryptocurrencies continue to evolve, they are likely to become the backbone of decentralized economies. Technologies like smart contracts and blockchain interoperability will pave the way for a seamless global financial ecosystem. In the next decade, we may see tokenized assets replacing traditional stocks and bonds, making financial services more accessible worldwide.

Additionally, privacy-focused coins like Monero will grow in importance as regulators impose stricter oversight, driving demand for anonymous transactions.

Quantum-resistant blockchains could also emerge as a critical innovation, securing cryptocurrencies against future quantum computing threats. The integration of artificial intelligence in blockchain governance may further revolutionize decision-making processes in decentralized networks.

FAQs About Crypto Portfolios

Q: Isn’t it too late to start buying cryptocurrencies now?
A: No. With growing adoption, Bitcoin could still reach 100,000 EUR/BTC and beyond in the coming years.

Q: Where can I buy Bitcoin, Ethereum, and other coins?
A: Coinbase and Binance are popular exchanges for buying and selling cryptocurrencies. Sign up on Coinbase now and receive $10 in BTC!

Q: How can I securely store my cryptocurrencies?
A: Use hardware wallets like the Ledger Nano S or create paper wallets for offline storage.

Final Thoughts on Building a Crypto Portfolio

Building a diversified cryptocurrency portfolio requires careful planning and research. The examples shared in this guide highlight promising projects and balanced strategies to help manage risks.

I welcome your thoughts and questions in the comments or on Twitter:

Disclaimer: This blog post is for informational purposes only and does not constitute investment advice.

Price and Sentiment Analysis: Why is Bitcoin Going Down?

Bitcoin Price and Sentiment Analysis with variable Moving Average: click to open interactive Tableau dashboard with annotations
Bitcoin Price and Sentiment Analysis with variable Moving Average: click to open interactive Tableau dashboard with annotations

Bitcoin has become one of the trendy investment assets in the recent years. Whenever bitcoin prices approach historical highs, every investor should watch the currency closely. Bitcoin rallied by more than 20% in the first days of 2017, crossing the $1000 mark for the first time since November 2013.

As many experienced bitcoin traders will remember, the first $1000 peak was a case of obvious over exuberance. Bitcoin was hot, plenty of money was pouring into it. Bitcoin investors got too excited, causing a price surge. Prices then rebounded and suffered a long-term collapse shortly after.

Moving Average Convergence/Divergence Indicator

Many traders rely on a Moving Average Convergence/Divergence (MACD) indicator. The MACD is a measure of the convergence and divergence between two EMAs (usually 12 and 26 days) and is calculated by subtracting the two of them. The signal line is constructed by creating an EMA (usually 10 days) of the signal line.

The signal line crossing the MACD from above is a buy signal. The signal line crossing the MACD from below is a sell signal. Relying only on momentum-based indicators (such as the MACD) and optimization-based models, however, will most certainly fail to indicate heavy price drops, as the drop in late 2016.

Predicting Fear with Sentiment Analysis

In late 2016 a lot of people began to pour money into bitcoin again. This time because they were worried that stock markets and other assets were due for a drop. For investors, it is essential to figure out whether or not these fears are actually founded. However, such „safe assets“ are prone to suffering from bubbles. People get scared, get invested into gold, or bitcoin, then realize that their fears were unfounded. As a result bitcoin prices could plummet.

So how to catch emotions such as fear in advance? Twitter is a valuable source of information and emotion. It certainly influences the stock market and can help to predict the market. Sentiment analysis can lead price movements by up to two days. Negative sentiment, however, is reflected in the market much more than positive sentiment. This is probably because most people tweet positive things about bitcoins most of the time. Even more positive news occurred after breaking the $1000 barrier.

This content is part of the session “Price and Sentiment Analysis: Why is Bitcoin Going Down?” that I deliver at the Frankfurt Bitcoin Colloquium. Have a look on my upcoming sessions!

[Update 14 Jun 2017]: Axis for Moving Average adjusted. Relative Date selector added with last 6 month as default. Screenshot updated.

Feel free to share the Bitcoin Price and Sentiment Analysis dashboard, which is also featured as Viz of the Day on Tableau Public: