Bitcoin has surely taken the stock markets by storm after rising in excess of 16-fold this holiday season alone. Analysts are actually forecasting a $20,000 cost over the world’s most revolutionary cryptocurrency by year end. However, bitcoin’s meteoric rise hasn’t escaped criticism with skeptics questioning the force behind its massive rally within the last six months.
This has led some to invest the cryptocurrency market might be getting ready to crash in the future, or at a minimum undergo a cost correction prices with Bitcoin leading the way. Bitcoin is just not a property, it’s actually a currency, meaning that it really is almost impossible to attach a worth to it unless it can be backed by gold bullion like the majority of fiat currencies.
While fiat currencies are backed real assets like gold together with economic fundamentals, what drives bitcoin is not discovered. Legendary investor Warren Buffett once likened it towards a modern “Money Order” saying that it lacked intrinsic value and was simply a medium of greenbacks transfer.
However, lots is different since then primarily online platforms and places now accepting bitcoin like a form of payment. This paradigm shift is partly what needs triggered the skyrocketing on the worth of bitcoin.
The leading market sentiment will be that bitcoin could too are the future of the forex market, which has resulted in increased hype and speculation. This hype assists in order to along side entire cryptos significantly raising the valuation of the cryptocurrency market. While Bitcoin has rallied 2000% over the past Twelve months, Litecoin comes to an end 4000% while Ethereum increased 5600% at the moment, as at the time of penning this article.
From an industry valuation perspective, Bitcoin is nearing the $300 billion mark, that could effectively value it above most multinational corporations including Citigroup, Intel Corporation, Oracle, and UK’s HSBC Holdings, among others which have been currently priced at about $200 billion to $250 billion.
These companies report real revenues and income. Bitcoin won’t. So, what can happen if investors were offered usage of these stocks just as they’re able to put money into Bitcoin? Things could change dramatically.
But the true gamechanger is not in tokenizing stocks like Apple or Google, however rather in tokenizing those assets that are fitted with proved very difficult for retail and individual investors to access. A sample is real estate property while gold and diamonds also produce the cut.
By using blockchain technology, startups are finding an alternative way to disrupt markets that previously proved rigid to transfer, and somewhat resistant to technological shifts.
By definition, blockchain is actually a continuously growing listing of records, called blocks, which might be linked and secured using cryptography. These blocks allow different users to view the encrypted information securely and transparently without physical verification of documentation or assets whose info is represented in the records.
The blocks also ensure a decentralized accessibility to the data shared thereby limiting any potential cases of fraud. Classifying the content into blocks of data also permits the tokenization of assets represented from the encrypted data.
This tokenization is exactly what some startups have sought to maximize in a very bid to disrupting industries which are only obtainable on the elite, like gold bullion, diamonds, and real-estate.
Digitization of the real estate market began when i was younger as typified on platforms like Prime A workplace, which capture key information regarding various real estate properties including location maps, available amenities, services, and rates. Now, with blockchain, similarly info is encrypted in a variety of blocks, which companies will then tokenize and provides towards marketplace for token-based trading.
This theoretically becomes some sort of an asset-backed cryptocurrency with real asset value placed on each token depending on the property’s value.
ATLANT, that is certainly one of many pioneers of tokenized properties platforms that allow retail investors to trade property in tokens predicted to completely launch its services buy while any other players are tipped to follow shortly. Soon, regular investors could possess a piece of the “Trump Tower”, or a handful of London’s top commercial buildings without having to do without a significant amount thanks to tokenization.
Another interesting market which has emerged as an excellent target for tokenization is a diamond market. Diamonds are inherently expensive jewelry and just a few people can claim to own not less than a chunk. They may be more of private products than publicly tradable assets.
Trading diamonds can be tricky because looking to determine whether the quoted expense is fair is not as easy as just determining the load of the stone. This as well as the battle of transportation and storage make purchasing diamonds an exceedingly trial for retail investors based on Beyond 4Cs. However, the cryptocurrency publication rack on the verge of change that, again with the capacity to tokenize the asking price of most difficult stone that is known.
It’s now understood that you have gold-backed cryptocurrencies. GoldMint and OneGram are awesome examples, however the list is above that. Now, cryptocurrency market players have felt the desire to move a notch higher and introduce diamond-backed cryptocurrencies. This move has been confirmed following a launch of PinkCoin SparkleCoin and D1 Coin, which are diamond-backed cryptocurrencies.
Again, just as is the situation of gold-backed cryptos, there happens to be a value that come with each coin of any diamond-backed cryptocurrency. For example, each time a SparkleCoin investor buys confirmed range of coins, each coin is immediately backed by $5.00 price of GIA certified diamonds (in value) produced by established diamond wholesalers.
This allows interested diamond investors to trade diamonds in small tokens that can be bought and sold with relatively smaller degrees of money. And also this increases liquidity inside an, otherwise, very illiquid diamond market.
One of the biggest takeaways readily available developments is the cryptocurrency market players have recently found the right way to attach some value on the hype. There’s no denying the fact that the prevailing prices of Bitcoin and Ethereum are impelled by pure speculation without the need of fundamental arguments to back them up. However, while using introduction of asset-backed cryptocurrencies, the perception could change thereby offering the market with an all new lease on life.
DISCLAIMER: This article expresses my own, personal ideas and opinions. Any information We’ve shared come from sources that we believe for being reliable and accurate. I didn’t have any financial compensation in some recoverable format this post, nor must i own any shares in any company I’ve mentioned. I encourage any reader to accomplish his or her diligent research first before you make any investment decisions.