Why Wall Street Players Trickled Into Crypto Markets?
Stock Market, in comparison, does not represent this interest as the crypto market today. It's all about the variability of instruments and the potential for income..
Introduce, what are you doing index investing, investing in all the world's stocks and bonds at once.
Let's compare the SP500 indicators, Nasdaq, RTS and MICEX.
By distributing $ 10'000 in equal shares between these indices, first 2017 of the year, you would see the subsequent rebalancing of your knapsack:
SP500 + eighteen percent
Nasdaq + nine percent
RTS 0%
MICEX - seven percent
Your portfolio would have changed by only five percent over the past year, adding to its own price $500.
Stocks and bods market
Introduce, that you are a supporter of the old school of investing, do not take big risks and invest only in bonds. Buy European bonds or US municipal debt securities, the effectiveness of which will be 0.5 to two percent per annum in foreign currency on the invested funds. Or Russian government bonds (OFZ) and you get a hike of about ten percent per annum, Covering?? official level of general price increase.
If you buy commercial bonds and securities of an organization, you will get about twenty percent per annum.
What attracts the crypto market ?
1)Highest market volatility
2) And ... the highest market volatility!
Sharp fluctuations in value are a possible source of incredible income.
While the indicators pass 1-2% in a day, these changes, Folding, move the market by a few percent per month. Stock Market, comparable, moves much faster, Distance, which indicators overcome per month, promotions take place in a day.
Assets on the crypto market go through a monthly change in the price of shares per day. High volatility and sufficient liquidity, provided by a huge number of miners, significantly increase the potential of cryptocurrency as an asset.
Trading
Traders make money on the difference in value. This is speculative activity, implying earnings on the difference in the exchange rate between the purchase and sale prices of the asset.
In the classical sense Trading generates income due to the number of transactions made. In this way, trading involves a large number of transactions, with the condition, that most of them will be profitable.
Traders, these are the market participants, study charts and looking for reversal patterns on it, support lines, channels, and other signals of technical analysis, that fit into their trading strategies.
Investment
Unlike trading, the investment process is based on the analysis of fundamental data, and implies transactions that are much longer and more effective.
The Winklevoss twins, as it became known from the press, are the first billionaires, made their fortune, successfully investing in bitcoin.
Investing, on the other hand, contains the principle of risk diversification.. Keeping a range of investment assets in one pool, allows you to reduce risks in a long-term game and balance market fluctuations.
Putting together a portfolio
For simplicity of example, consider a common investment strategy, following the works of Nobel laureates Eugene Fama, who is the father of efficient markets theory, and Robert Schiller, who won the market psychology research award.
Let's take the top 10 cryptocurrencies by market capitalization, distribute $10.000 between them in an equal proportion of funds and let's see, how much would have managed to earn over the past year on the crypto market starting from 1 January 2017
NO
$1000 / $0,003676 = 272'034 coins went to the portfolio.
272’034 coins * $0,353134 = $ 96'064 currently in portfolio.
Currency
$1000 / $13,79 = 72,51 coins went to the portfolio.
72,51 Coins * $235,90 = $ 17'106 currently in portfolio.
Dash
$1000 / $11,20 = 89,28 coins went to the portfolio.
89,28 Coins * $680,34 = $60’744 currently in the portfolio.
Litecoin
$1000 / $4,33 = 230,95 coins went to the portfolio.
230,95 Coins * $136,84 = $31’620 currently in the portfolio.
Ripple
$1000 / $0,0069 = 144'927.53 coins went to the portfolio.
144’927.53 coins * $0,2424 = $ 35'130 currently in portfolio.
Ethereum
$1000 / $7,98 = 125,31 coins went to the portfolio.
125,31 Coins * $443,25 = $ 55'545 currently in portfolio.
Bitcoin
$1000 / $963 = 1,03 coins went to the portfolio.
1,03 Coins * 13’928 = $ 14’463 currently in portfolio
Waves
$1000 / 0,2508 = 3'987.24 coins went to the portfolio.
3’987.24 coins * $8,68 = 34'609 currently in portfolio.
NEO
$1000 / 0,1447 = 6'910.85 coins went to the portfolio.
6’910.85 coins * $34,63 = $ 239'322 currently in portfolio
Lisk
$1000 / $0,1443 = 6'930 coins went to the portfolio.
6’930 coins * $8,13 = $ 56'340 currently in portfolio.
Cryptocurrency portfolio summary for incomplete 2017 year:
Initial balance $ 10'000
Current equivalent: $640’943
I would have known where to fall, would spread straws
Some cryptocurrencies, which are listed in the top -10 back to top 2017 of the year, are no longer on this list, they were superseded by other currencies, emerged later as a result of forks (Bitcoin Cash, Bitcoin gold, Ethereum Classic), or as a result of successful startups.
Undoubtedly, the given statistical analysis gives an idea of the possibility of earning money in classical financial markets and cryptocurrency.
