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BUILDING TRUST IN THE CRYPTO MARKET

BUILDING TRUST IN THE CRYPTO MARKET

The cryptocurrency (‘crypto’) market is on the rise. Bitcoin, the main altcoin with a market share of over 60%, has seen its price increase from around $4,000 in April 2019 to over $10,000 in July 2019, despite the recent Congressional hearings on Facebook’s Libra.

In tandem with increasing prices, institutional investors are getting more involved in the market. Last year, we saw institutional investors surpass high-net-worth individuals (HNWIs) for the first time in terms of purchasing cryptocurrencies. It’s fast becoming part of a diversified investment strategy. Whilst there is still a strong UK/US footprint, we’re seeing deals in Switzerland, Hong Kong and Canada.

The speed of professionalization in the cryptocurrency market has ramped up, with much of the recent growth driven by more efficient financial infrastructure. This is helping financial institutions to take a more considered look at crypto, and use it to revamp their portfolios. As of July 2019, the total market capitalization for these digital assets in circulation is just under $300bn. It’s likely that this will rise above $300bn in the near future, though longer-term prospects depend on how the industry adapts to upcoming regulatory framework, with the likes of the Financial Industry Regulatory Authority (FINRA) looking to apply rules that will provide a stable platform to trade digital assets while reducing risk.

Trading volumes have been boosted by a sharp rise in over-the-counter (OTC) trading as crypto projects look for liquidity. In the so-called ‘Crypto Winter’ of 2018, crypto-centric OTC desks, including Genesis Trading and Circle (backed by Goldman Sachs) started reporting tremendous growth and this trend is continuing. According to research by Diar, over 25% of Bitcoin in circulation now sits in addresses that have a balance of between 1,000 and 10,000 BTC – volumes that point to financial institutions.

These institutional investors opt for OTC trading as opposed to spot exchanges for a number of reasons. Exchanges often have low liquidity in their order books which rules out large orders, OTC allows large orders without an unfavorable impact on the price, and exchanges limit the total number of Bitcoins that can be traded in one go – Coinbase, for example, has a daily trading limit of $25,000.

That said, there are a few complications that both buyer and seller could run into when they want to set up an OTC trade. There is often no guarantee that the asset (altcoin) will be delivered or cash paid. Most OTC brokers don’t provide an appropriate custody solution, which increases this settlement risk. It’s also worth noting that current OTC trading doesn’t include suitable Know Your Customer (KYC) procedures as it lacks the monitoring and surveillance tools of traditional trading systems.

A Safer Trade

However, there is a different avenue that institutional investors can explore. OTC trading via escrow can effectively tackle these risks and issues. This more robust approach benefits both sides of the trade as the escrow agent will follow everything to the letter. The seller benefits from dealing with a party that has funds to make the purchase, whilst the buyer can be confident a trusted independent party won’t release funds until the altcoins have been received. Crucially, by trading via escrow there is no need for participants to seek out an additional custody solution – it’s already in hand – and the escrow agent will perform KYC as part of the service provided.

If you go down this route, it’s important to select a global partner to avoid any multi-jurisdictional issues cropping up. The right partner will always start with a rigorous KYC process. Once both parties have been positively identified and no red flags are raised, they will move to exchange the cryptocurrency and the cash.  In most cases, it is best to first run a simulated deal with a small exchange of cryptocurrency, backed by cash in escrow, between the address of the seller and that of the buyer to establish a working link to build on.

Crypto represents a good opportunity for investors and it has a big future. There will undoubtedly be market consolidation, with a small number of the 1,500+ altcoins in circulation emerging as a favored core. As institutional investor appetite increases, bigger names will enter the arena. You can stay ahead of the game by using an escrow agent to implement custodial arrangements and manage the risks associated with this emerging asset class.

Assessing Job Security For Those Over 50

Generations ago it was unusual to bounce around from employer to employer, as the working world was very different and people had a strong sense of loyalty. In 2019, all of that has been turned on its head, and sticking with the same organization for several decades is practically unheard of. Even if someone doesn’t want to leave their place of employment, the desire to bring in younger and cheaper help is something that employers have to evaluate regularly.

Unfortunately, this new dynamic means that people in the latter parts of their career journey end up getting the short end of the stick. A study conducted by ProPublica and the Urban Institute found shocking results that support this claim: of the people they evaluated over the age of 50, a whopping 56% of them were laid off before retirement.

Major Changes

Being forced to find new employment is never fun or easy no matter what age you are, but for individuals who are nearing 65, it can be particularly challenging – especially if they rely on a certain level of income to make ends meet. Far too often, those who were laid off after 50 had a difficult time obtaining employment that gave them the same level of financial security. In fact, only 10% of those in the study were able to make just as much at their new job as they did at their previous one.

What’s more, getting a college degree today is practically a prerequisite for most decently paying jobs, and as people in their 20’s graduate with a completely fresh and updated set of skills, they become major competition for older folks. While you’d think that nothing beats 30 years of experience, employers also have to look at their bottom line and determine which candidates offer the most overall value.

Stopping The Bleeding

Unless you can predict the future, you never really know when you might be in the position of finding a new job later in life. Aside from careful financial planning to ensure you have backup funds in the event your new job doesn’t pay as well, it’s important to take other actions to set yourself up for success. Above all else, networking will be one of your most important tools to rely on when looking for other opportunities.

There are a lot of online platforms that allow you to connect with others, but none of them offer quite as much potential as Completed.com. Here, you can not only detail your work experience but can gain valuable feedback from others that you know. Think of it as an enhanced resume, where your personal relationships are highlighted and potential new employers can see just how amazing you are. If you’re over 50, there’s no reason to not sign up for your free profile today.