Why and how to value digital assets?

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• Sandbox implementations of Central Bank Digital Currencies (CBDCs) are underway to test the impact on global financial stability, monetary policies, and financial inclusion.
• See how effective the right digital asset management strategy can be, with a platform that has the flexibility to grow with your needs.
• We are not responsible for any delay in the settlement of a Transaction resulting from circumstances beyond our control, including any third-party systems failure.
• These systems provide a comprehensive approach to managing a company’s resources, offering tools for storage, tracking, and security.
• This will help you make informed decisions about when to buy and sell your investments.
• However, revolutionary as it was for communication and data transmission, these goals were not attained.
• Finally, whereas cryptocurrencies can be purchased using fiat currency this is not the case for NFTs, which are typically purchased using cryptocurrency.
• 3iQ (carrying value of £4.4m at end-March 2024) – a leading Canadian digital assets manager founded in 2012.

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A significant position in any digital asset other than Bitcoin (and, depending on the case, including Bitcoin) may require several days or weeks to be unwound, with a possible negative effect on the price of the digital asset. In terms of risk, first-off, it should be understood that digital assets are deemed to be highly speculative investments. According to Taurus, the items outlined below are a non-exhaustive list of some of the key risk scenarios investors should be aware of when delving into the digital assets space. Third, they are liquid, meaning they can be easily sold or converted into cash. Finally, digital assets are portable, so they can be stored and accessed from anywhere in the world. Ripple is a digital currency that helps banks and other financial institutions to send and receive money instantly, with lower fees and fewer delays.

Risks of investing in digital assets include:

We believe that digital assets have become an established, distinct asset class with growing acceptance among retail and institutional investors. Bitcoin’s investment case is centred around its ‘digital gold’ status as an incorruptible, trustless, independent monetary system with a predefined currency supply based on a peer-to-peer network. The appeal of blockchains such as Ethereum is underpinned by decentralised finance as a global, open alternative to the existing financial system without the need for traditional intermediaries and in a 24/7 set-up. Finally, non-fungible tokens (NFTs) extend the technology’s use cases beyond finance and into areas such as gaming, fine art, licensing and digital identity. Throughout this exploration of digital assets, we have navigated the various risks and challenges that accompany investments in this innovative yet tumultuous domain. While the lure of high returns and the frontier technology of blockchain offer exciting opportunities, the complexities of operational risks, market volatility, regulatory uncertainties, and technological vulnerabilities underline the need for a cautious approach.

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• This is especially true for small businesses that may not have the resources to invest in digital asset management  (D.A.M.) sysD.A.M.s.
• This means being prepared for price corrections and potentially substantial declines in value, regardless of the current price or market conditions.
• Finally, digital assets are portable, so they can be stored and accessed from anywhere in the world.
• Drawing on the insights presented, it is unmistakable that digital assets, despite their potential, carry significant risks that require thorough understanding and strategic management to navigate successfully.
• During the weeked, XRP price exchanged hands at $0.45 as the digital remittance token remained submerged during the third trading week of October.

This development could see XRP price retest the $0.381 to $0.433 demand zone. Ripple price retested the upper limit of the $0.331 to $0.464 range for support on Monday, October 17. On Monday, October 17, the bulls were rejected from both indicators simultaneously near $0.485.

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Smart ContractA self-executing contract with the terms of the agreement directly written into code. These digital contracts execute automatically once certain terms and conditions are met. Proof of Stake (PoS) An mechanism where validators on a blockchain are chosen to create new blocks based on the number of coins they hold and are willing to “stake” as collateral.

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The crypto market experiences extreme price volatility due to several intertwined factors. Firstly, the supply and demand dynamics significantly impact prices, especially for cryptocurrencies like Bitcoin, which have a fixed supply limit. This scarcity can drive prices up as supply nears its limit, making the asset more attractive during periods of increased demand. Additionally, large investors or “whales” can influence market prices dramatically by buying or selling large quantities of crypto, often leading to rapid price fluctuations. The digital asset space is notoriously vulnerable to security breaches, which pose a substantial risk to investors. High-profile incidents like the Mt. Gox heist, where a substantial portion of Bitcoin’s market capitalisation was wiped out, illustrate the severe impact of security vulnerabilities.

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First, the value of digital assets is subject to high volatility, i.e., the price of digital assets may rapidly go down as well as up, on any given day, including on an intraday basis. Moreover, investments in digital assets are deemed highly speculative investments, and the risk of substantial or total loss in purchasing or selling exists. Investing in crypto assets comes with risks, including volatile prices, hacks and scams. However, some people believe that crypto assets have the potential to revolutionize the financial system and create new opportunities for investment.

Crypto Finance secures digital assets licences in Germany

Staking income from native tokens of PoS blockchains (including Ethereum) has become an important earnings contributor for CS. The staking rewards in excess of those distributed to CoinShares Physical ETP holders were the main contributor to the year-on-year increase in revenue from CoinShares Physical products in Q124 to £3.3m, versus £0.6m in Q123. Moreover, CS booked around £5.9m of staking rewards in the CSCM division by deploying its own capital, including part of the funds used as collateral for the XBT Provider Ether products. The current staking yield as per CoinDesk’s Composite Ether Staking Rate stands at c 3.19% at 17 June 2024, which is broadly in line with end-2023 (3.40%), but represents a decline from c 5% in September 2022.

What’s On the Horizon for Digital Assets? A Conversation with Mike Novogratz, CEO of Galaxy

This still largely comes from its legacy XBT Provider products, whose AUM we expect will decline from US$3.6bn at end-March 2024 to US$1.1bn by FY30. The net outflows from this product group should be more than offset by net inflows to other products (CoinShares Physical in particular), further supported by upward digital asset price pressure from increasing adoption. As a result, we expect CS’s AUM could be around US$14.7bn by FY30 (with a European market share of c 24%) compared to US$6.1bn at end-March 2024. We anticipate that CS will, in the long run, face pressure from declining management fees and staking yields (and potentially also lower CSCM returns as digital markets become more efficient). However, this could be offset by CS’s expansion in terms of actively managed products (which is not reflected in our cautious forecasts for now). The process of valuing your company’s digital assets is crucial, but it’s also difficult.

Digital Assets: Pricing, Allocation and Regulation

• For instance, our second issuance featured a groundbreaking investor access model.
• Georgina Lok, head of market development at the Hong Kong Monetary Authority, spoke with OMFIF about the benefits of distributed ledger technology and the HKMA’s experience of issuing tokenised bonds.
• In November, assets under management (AUM) of digital asset investment products maintained the momentum they gained in October, growing by 14.1% to $43.3bn, and marking a cumulative rise of 120% in 2023.
• In no event shall You be liable for any amount greater than the value of the Crypto and fiat currency that is credited to, (or where applicable, ought to have been credited to) Your Account at the time of any alleged loss or claim.
• CS is one of the pioneers in the emerging digital assets sector (see our initiation note for details), formed in 2013 and headquartered in Jersey, with offices in London, Paris, Geneva and New York.

While digital assets offer high growth potential, they also come with volatility and regulatory uncertainty. For the average investor, a diversified approach within the digital asset ecosystem can help manage risks. As the market matures and regulations improve, digital assets may become safer long-term investments.

• The UCL Centre for Blockchain Technologies has led an important effort to systematise the many ways in which enterprises can take advantage of the new token business models.
• Those are the policies and practices that will apply to your use of the linked website, not the HANetf policies and practices.
• The decentralised nature of blockchain can lead to governance challenges, making it difficult to coordinate updates across the network.
• These metrics include website traffic, social media management, and conversion rates.
• Features like asset tags allow for easy categorisation and retrieval of assets.
• This may help hedge against market-specific downturns, potentially increasing portfolio resilience while helping reduce overall susceptibility to price fluctuations.
• Digital assets corresponding to the above criteria are ranked in descending order of their full market capitalization and the top 20 digital assets identified.
• The view that I tend to agree with is that these are commodities because the value of them fluctuates according to supply and demand.

Roundup, March 2023

Digital assets differ from traditional investments like stocks and bonds in several ways. Unlike traditional investments, digital assets are often secured by blockchain technology, providing greater transparency and decentralization. They also offer new avenues for fractional ownership, global accessibility, and instant transfers. In contrast, traditional assets are typically tied to centralized financial institutions and are subject to more regulatory oversight. An example of a digital asset is cryptocurrency, such as bitcoin or Ethereum.

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• Financial institutions and other stakeholders across the value chain now face significant ESG and business conduct risks that need to be managed given the considerable interests at stake.
• Digital assets are a new and unique asset class, and as such, they come with their own set of risks and rewards.
• Investors are witnessing groundbreaking trends in blockchain applications, tokenized assets, and decentralized finance (DeFi), offering a wealth of opportunities.
• Operational risks in digital asset investments are significantly heightened due to the lack of regulatory oversight.
• Smart investors are guided by the history of the price action of these digital assets to trade securely.
• As that same 55-day SMA is trading downwards, the push was inevitable to the downside in SOL price action which broke through $30.21.
• Regular maintenance and security measures protect their value and longevity.

CoinShares International (CS) is a pioneer and a well-established player in the nascent, high-growth digital asset industry. The company recently introduced a dividend policy to pay out between 20% and 40% of its total comprehensive income adjusted for currency translation differences. This is underpinned by the steady income from management fees and capital market infrastructure activities, including rewards from staking digital assets, most notably Ether following the recent major upgrades to the Ethereum blockchain network. Digital asset investment products saw inflows of US$2.2bn, marking the largest weekly increase since July this year.

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Th y are often used to store or transfer value and can be bought and sold on exchanges. Establishing robust governance procedures and tracking proper metrics is essential to ensure that these assets are  used effectively and efficiently. Doing so will help the organization reach its goals and remain competitive in today’s digital world.

As that same 55-day SMA is trading downwards, the push was inevitable to the downside in SOL price action which broke through $30.21. The big dilemma bulls are facing is that they need to step in now or go for the bounce off the next big support at $26. If bulls let it go too far, however, the risk increases that SOL price action will drop to $18.66 and lose over 25% of its value. During the weeked, XRP price exchanged hands at $0.45 as the digital remittance token remained submerged during the third trading week of October. Although a bounce is likely to occur near the current levels, the larger trend seems to be pointing to lower targets for the coming weeks. Nevertheless, XRP price auctioned at $0.44 as Ripple lost more than 5% of market value in a day’s time.

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Consensus rewards are more stable in the short term but are inversely correlated with the proportion of ETH staked on the network, which has been steadily rising from c 14.6m (or c 12% of total supply) in September 2022 to c 33.1m (28%) as at 17 June 2024. This was accompanied by a decline in the consensus rewards yield from c 4.00% to 2.82%. The transition to PoS has vastly reduced the energy consumption of the Ethereum network (by c 99.99%), which may be appealing to investors cautious of the use of energy and the carbon footprint of blockchain networks. Here, we note that the total revenue (transaction fees) generated by the Ethereum network amounted to just over US$2bn in 2023, according to Grayscale.

Is Crypto a Digital Asset

This newsletter keeps you informed in making smart cryptocurrency decisions. As defined by Taurus, digital assets are digital representations of any types of assets, securities, rights, currencies or units of accounts registered on a distributed ledger, such as a blockchain. They include, but are not limited to, cryptocurrencies such as Bitcoin, Ethereum or Litecoin. They can also include securities such as classical shares or bonds registered on a distributed ledger.

Digital currencies are a new form of currency created and stored electronically. The first digital currency was Bitcoin, which is becoming more popular as more people are trading them. They are straightforward to use, anonymous and can be transferred very quickly. Digital currencies are also very easy to set up, so you don’t have to spend much time buying and setting up the currency. As digital assets have become more prominent, many companies have measured their return on investment (ROI) in this area. This is because they want to know whether their digital assets are paying off and how they can improve their strategies.

The development of these products is carried out by CS’s Hedge Fund Solutions business, which was launched in September 2023 and attracted its first external limited partners in Q423. When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. This information is provided for informative purposes only and should not be construed to be investment advice.

These digital leaders are able to use technology to reach out to people on a global scale and spread their message. There are, of course, some considerations that must be considered when establishing such a fund. First and foremost is ensuring that the fund has adequate resources to support its activities. Additionally, the fund must be managed carefully to avoid conflict with the parent company’s core business. With these factors in mind, a corporate venture fund can be an invaluable tool for any company looking to gain a competitive edge in the marketplace.

This convergence of traditional finance with digital assets is creating new opportunities for both retail and institutional investors. Asset custody in the realm of digital assets involves managing these assets within a digital environment, which exposes them to unique risks. The commingling of customer assets on trading platforms can lead to situations where individual investments are not distinctly accounted for, increasing the risk of loss if the platform faces financial difficulties or security breaches . Operational risks in digital asset investments are significantly heightened due to the lack of regulatory oversight.

We believe that it is the only major Ethereum ETP in Europe that offers such an attractive combination of zero fees and transparent staking rewards. Products of some competitors (eg 21Shares and VanEck) also offer a staking yield, but at the same time charge a management fee. Most of CS’s other single-asset European ETPs also provide exposure to native tokens of proof-of-stake blockchains, and currently offer staking yields ranging from 2.0% to 5.0% and a 0% management fee. The management fee on the BLOCK index stands at 0.65%, half of which goes to CS.

If you wish to learn more about our products and services, please speak to your financial adviser/intermediary. With careful planning and consideration, you can make sure your digital asset portfolio reaches its full potential. By diversifying your investments and considering all of the factors mentioned above, you can maximize your chances for success. Litecoin is a digital currency designed to be the silver to Bitcoin’s gold. It is eight times as energy efficient as Bitcoin and uses the same technology to verify transactions. They are also very secure and are not at risk of losing your money or your account.

We assume that the lower staking rewards will be partly offset by a pick-up in gains on CS’s delta neutral and fixed income strategies, as well as some income on DeFi activity. We assume that the average return generated by CSCM will become more moderate in the long run as digital asset markets mature and in turn become more efficient. Assuming continued digital asset adoption, we value CS at SEK88.0 per share (up from SEK82.7 previously).

They require different management strategies to ensure they are secure and well-maintained. Going into the new week, Cardano price auctioned at $0.3619 the rally north has breached the 8-day exponential moving average. The Relative strength index has rallied into over-bought, hinting at bullish confidence.

However, its performance will depend on macroeconomic factors, market liquidity, and regulatory policies under the Trump administration. “These downward adjustments, typically ranging from 20% to 40%, serve as a vital mechanism for reestablishing market equilibrium and are an integral part of bitcoin’s historical price patterns”. FinTech and market electronification are addressed through ICMA’s various committees, working groups and work streams as well as through bilateral discussions with member firms and technology providers. ICMA is at the forefront of the financial industry’s contribution to the development of sustainable finance and in the dialogue with the regulatory and policy community. For more profit-oriented endeavours, those participating are going to want to get paid and this is where digital commodities could provide the necessary liquidity and fungibility to make a market for them a feasible proposition. Get access to the very latest content matched to your personal investment style.

“The resulting economic uncertainty and market instability often push investors toward safer, more traditional assets, potentially triggering a sell-off,” explains the 21Shares head of research. That was a major crisis for cryptocurrencies, and Digital asset price analysis one in which the bitcoin price slumped below $20,000, losing 75% over 12 months. This report has been commissioned by CoinShares International and prepared and issued by Edison, in consideration of a fee payable by CoinShares International.