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Bitcoin [BTC] an insurance against irresponsibility of governments, says Ikgai Asset Management’s Travis Kling

Jibin M George

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Bitcoin [BTC] an insurance against irresponsibility of governments, says Ikgai Asset Management's Travis Kling
Source: Pixabay

Freedom from the interference of the government or any other third party has long been one of the most attractive aspects for those investing in Bitcoin. True believers in the cryptocurrency found some support today after the CEO of a reputed cryptocurrency hedge fund backed its utility and potential.

Traditional fiat currency has been something that can be twisted and manipulated by governments to serve their economic needs. However, such amenability can often be a bane as too many corrective actions can produce spells of instability in the economy. The firm in question, Ikgai Asset Management has been cautious against such actions taken by the States and has suggested that cryptocurrencies such as Bitcoin can take advantage of these, on its way to mass adoption.

Speaking on the issue, CEO of Ikgai, Travis Kling said:

“It’s like a CDS against fiscal and monetary policy irresponsibility.”

Here, CDS refers to credit defaults swaps, an insurance-like financial instrument that triggers a payout when borrowers default on their debts.

Kling suggested that the fact that cryptocurrencies such as Bitcoin are free from any third party interference makes it more secure and guarded against any actions the government may take. Kling’s thoughts come in light of the mounting debt the U.S government has incurred over the past decade. Attempts to stimulate economic growth such as passing budgets with huge fiscal deficits and low interest rates on loans have the potential to trigger hyperinflation, which may lead to the U.S Dollar losing its value, Ikgai warned.



Such a scenario, Kling suggests, is the best possible scenario for the mass adoption of cryptocurrency. Kling’s statement comes despite the fact that the price of Bitcoin has fallen significantly from its $19,000 highs in December 2017. Kling further went on to say that Bitcoin perhaps, offers better value than a traditional investment asset like gold.

Ikgai however, isn’t the only firm placing its bets in Bitcoin’s favor. Morgan Creek Capital Management is also moving ahead with its plans to invest in the cryptocurrency by launching a fund that will deal with the infrastructure of the cryptocurrency world. Talking about the launch, CEO Mark Yusko said:

“We are in the middle of the greatest wealth opportunity … It’s beyond any of our imaginations.”





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Bitcoin

Bitcoin [BTC] will take another 22 years to regain its all-time high, says research analyst

Akash Anand

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'Bitcoin [BTC] will take another 22 years to regain its all-time high', says research analyst
Source: Pixabay

Bitcoin [BTC]’s rise and fall has been a consistent event that has grabbed headlines in the cryptocurrency space. According to the latest financial analysis conducted by UBS research analyst Kevin Dennean, the fans of the cryptocurrency will have to wait for over 22 years to climb back to its earlier heights of $19,000- $20,000.

Dennean made these claims comparing the pattern of Bitcoin and the cryptosphere with the trends of other financial system crashes like the Dow Jones crash of 1929, the NASDAQ slide in 2000 and the Oil tumble of 2008. The UBS analyst pointed to how a lot of the cryptocurrency’s proponents stated that Bitcoin is en route to a bull surge because ‘other assets did that in the past’. He laid the foundation for the delayed rise of Bitcoin by saying:

“We’re struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are.”

Dennean was also of the opinion that not every bubble that bursts recovers its old highs, taking the example of the Nikkei crash, which after 30 years of its fall, has still not managed to reach its earlier peak, currently trading at around half its all-time highs. The Japanese asset price bubble was an inflated economic bubble in the late 80s where the real estate and the stock market prices were greatly volatile. In 1992, the price bubble burst and Japan’s economic machine came to a standstill.



Another figure used by Dennean was the fact that all the asset classes, including Bitcoin, fell by 75 percent with Bitcoin breaching the 80 percent barrier. After the crash, only the Dow Jones and the NASDAQ provided a reprieve to users after rising back to its earlier highs.

At the time of writing, Bitcoin was trading for $5292 with a market cap of $93.423 million. The 24-hour trading volume was clocked at $12.985.





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