Finance Archives - Yannick HUCHARD

In 2017, Tommy Lee forecasted #Bitcoin would cross the $100,000 mark.

I received an alert: “Bitcoin reaches a new all-time high of $99,261 USD. This is an increase of +47.64% since last month.”

Whether you believe in #cryptocurrencies or not isn’t the point. The point is you must understand what they are and what they represent to make the right decision and fall into the trap of FOMO (fear of missing out).

Contextual Knowledge:

Bitcoin is both a cryptocurrency and the name of its underlying #Blockchain network
To hold Bitcoin, you need a Bitcoin wallet or an online service that manages the wallet (though technically, you aren’t the direct owner)
You can transact in Bitcoin via your wallet or a Bitcoin Visa Card
Bitcoin is considered “digital #gold” – a store of value that historically outperforms other asset classes, with an average yearly return of approximately 182%
Bitcoin’s volatility is unparalleled: -64.3% in 2022, +155.4% in 2023
Bitcoin #ETF (or ETP in Europe) represents the traditional finance-approved version. In 2023, #Blackrock issuing a Bitcoin ETF did send a strong signal
Some businesses are diversifying investments through Bitcoin, with #MicroStrategy holding approximately 331,200 bitcoins as a strategic asset
El Salvador has adopted Bitcoin as its official national currency

Why the current boom?

President Donald Trump, known as a “pro-crypto” leader, has been making strategic moves. After issuing two #NFT collections in 2022 and 2023, he launched “The Defiant Ones” #DeFi platform with his sons Eric and Donald Jr. Trump.

Furthermore, he appointed Elon Musk as co-head of the Department of Government Efficiency (note the playful D.O.G.E. acronym).

Musk, notorious for supporting the #Dogecoin community, has seen the cryptocurrency soar by 193.44% in a month, with a pivotal moment on November 5th, 2024 – the US election day.

Markets aren’t always rational, but the sequence of events always tells a story.

Golden Rule: If you do not understand the product, do not invest.

In #tech we trust.

🫡

The Negative Impact of Bank of Startups’ collapse

The recent bankruptcy of Silicon Valley Bank (SVB), a major financial institution has sent shockwaves throughout the startup world, particularly for those in the ESG (Environmental, Social, Governance) and blockchain/cryptocurrency sectors. The impact of this bankruptcy could have far-reaching consequences, affecting not only startups but also venture capitalists and pension funds.

One of the major risks associated with this bankruptcy is the domino effect it could have on venture capitalists and pension funds. For example, Vanguard Group has 11.2% of its holdings in SVB, which has a significant stake in the ESG and blockchain/cryptocurrency industries. If SVB were to suffer from bankruptcy, it could have a ripple effect on investment firms, followed by a temporary loss of trust in the market.

Furthermore, its collapse could erode investor confidence in smaller regional banks and drive investment toward larger, “safer” banks. This shift in investor sentiment could make it more difficult for startups to secure funding and could hinder the growth of ESG innovations and DeFi initiatives.

It’s important to note that investors with significant influence in the markets, such as Peter Thiel (co-founder of PayPal), can have a major impact on market psychology. Whether right or wrong, their opinions can sway investor sentiment and potentially exacerbate the negative effects of downfall.

In light of these developments, startups should be vigilant and prepare for potential challenges in securing funding. Investors should also carefully consider the risks associated with investing in these industries and the potential impact of external factors such as bankruptcy cascade. Overall, the effects of this financial earthquake serve as a reminder of the interconnectedness of the financial world and the importance of being mindful of potential risks and challenges.