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Bitcoin & co., what are they ultimately for? Invest in Bitcoin halving expectation

Eduardo Strecht Ricou, Libertex Senior Analyst
I am often asked if I have a favourable or unfavourable opinion regarding the world of cryptocurrencies. I answer them with a question: “Do you know what Bitcoin is for?”
They sometimes answer that they’re “not sure” what Bitcoin is for, but that they heard the neighbour screaming out the window that he had made money buying and selling Bitcoin.
What is Bitcoin? A new revolution in the technological world
I am not referring to artificial intelligence or robots, but yes, to the world of cryptocurrencies. Everyone has heard a lot about this type of active crypto, the most famous being Bitcoin, as well as others like Ripple.
Bitcoin was created to make payments over the internet in a faster, safer and cheaper way, in addition to being a decentralized means of payment.
Blockchain is the basis of all cryptocurrencies. Without blockchain, Bitcoin would not exist
The subject is a bit technical. Blockchain is basically a global data book that contains all the reliable records, since all transactions are validated before a new block is composed. It is said to be so safe that it was even nicknamed “trust protocol”, that is to say, the reason for decentralization, in other words, that no one regulates or controls it. It is expandable, simply validating the data and records that are protected by advanced cryptography, not allowing the source data to be removed, revised or modified.
As it is a new technology, there is still much to explore and develop. The time of transactions must decrease. The validation of data, the lack of supervision and regulation can be seen as very libertarian, as well as a great danger, because users aren’t endorsed or protected by any corporation, public entity or state in the event that something bad happens, such as a hack.
Bitcoin mining involves the use of different equipment and media
The crypto miner has a complex job ahead. For Bitcoin mining, machines and computers with a high capacity are needed. Consequently, the energy cost to keep the machines running all the time in order to obtain tokens is very high.
To mine Bitcoin, we need computers like the ASIC, more commonly known as Antminers, which offer a fairly high TH/s rate compared to graphics cards (GPUs). The first problem is its very high acquisition price, with an average cost of around $2,000. It is clear that technological advances and new solutions will reduce the cost of acquisition in the future, forcing the manufacturers of these pieces of equipment to improve their machines every day. All this for important events such as the one we are facing with Bitcoin, the halving.
In a nutshell, the halving process is nothing more than halving the value of Bitcoin.
What is the meaning of the halving of the Bitcoin block?
Halving decreases the number of new Bitcoins generated per block. This means that the supply of new bitcoins is less.
In trade, lower supply with stable demand generally leads to higher prices. Since halving reduces the supply of new bitcoins, and demand generally remains stable, halving has generally preceded some of Bitcoin's biggest hikes. In 2012 and 2016, we had two halvings. The idea was developed to have programmed currency issuance and decrease over time, and that is why the cut in the miners’ reward is applied.
Halving has an impact on bitcoin mining, and by cutting the reward for mined blocks in half, the profitability to maintain the equipment is affected due to the drop in miners’ income.
The processing power of the Bitcoin network will undoubtedly increase with the halving event and the arrival of new miners on the market, equipped with chips that can provide greater power and efficiency. This is something that we will see more frequently after 12 May, next halving date.
There is a hypothesis that miners and mining groups will disconnect their equipment due to the losses that the halving event would cause. However, as we already mentioned, this cut in the issuance of coins could cause a price increase, such that it manages to balance economic calculations. However, there is a fair bit of doubt about how long it will take for the Bitcoin price to rise.
Therefore, since I don’t consider Bitcoin to be an asset, I also don’t need to consider the traditional and common currency that allows me to buy a coffee in the morning, without having to worry about the sudden change in value in relation to the US dollar.
Bitcoin is more than everything in its romantic essence: a decentralized, fast and secure digital payment method accessible to everyone
As I explained above, the cost of the miner can be very high. Therefore, the commissions as a percentage of the value of Bitcoin is what will create the solution to trade in the unregulated system of Bitcoin, so that miners are rewarded for their crypto services. With the cost of energy entering the equation, it is necessary to have the equipment in continuous operation.
According to a study carried out by the Dutch bank ING, 211 kWh are consumed to validate a BTC transaction. Said consumption has the capacity to supply a home for one month; hence, the electric bills of those who mine BTC are very high.
So, if the miner keeps half of his Bitcoin in the halving, with the high energy costs and the maintenance of his machines for the processing of Tokens, only the miner will survive if the price of Bitcoin rises and rebalances the mining cost; although today you can mine Bitcoin in Cloud Mining. This allows you to execute the extraction process without requiring the use of so many resources. Cloud mining is simpler: with a home computer and internet, we can connect to the cloud and process the algorithms remotely without the need for a machine (hardware), since it is a third party that supplies the machine to us. But alas, it is not profitable, even if it the energy costs are reduced for the machines.
Traders and investors therefore have the opportunity to buy and sell Bitcoin, but be aware that the idea of ​​listing Bitcoin greatly undermines its initial concept, the introduction of many speculators and the absence of more consistent news in the crypto world, brings a lot of noise and volatility to the cryptocurrency markets, removing the stability factor that is so necessary to a global currency for the exchange of goods and services on the planet.

After the crypto fever in 2018, we witnessed a correlation between Bitcoin and gold, from April to November 2019. The theory was that Bitcoin is just like gold. It does not have any yield or interest rates, and is used by large investors as an instrument for diversifying portfolios by risky assets. Some analysts have come to place Bitcoin as a protection instrument against turbulence in the financial markets.
What really happened in these last four months leads me to the conclusion that there is no correlation with gold, or with anything, for the simple reason that it is a digital currency, and what drives the price is more than just the news: if the Libra project goes ahead on Facebook and Bitcoin is dethroned. After the quarantine period, globalization will slow its pulse; will we return to regional and local trade? This would not be very positive for Bitcoin. The new needs created by the virus are increasingly launching us into the digital world. Will this be positive for Bitcoin?
There are some issues we may have to tackle in the uncertain months coming up ahead of us, as well as new solutions and inventions or opportunities.
But beware, Bitcoin is not the dollar, nor will it be in the coming years, and there are three reasons for this
The first: to relaunch the economy, the states and central banks must continue on a path of expansion and growth, and that implies the issuance of money, a lot of money.
The second reason is that in these last few months, the dollar was highly effective in solving merchandise payments with the planet practically all locked up at home.
The third reason is the very high volatility, although after the collapse in early March, Bitcoin managed to recover up to $7,500. That being said, I don’t see it taking off like gold. Seeing the dollar, by measurement of the dollar index (basket of six currencies against the dollar), with a very stable trend and reduced volatility, is more than essential in times of great turbulence in the financial markets, and when facing total uncertainty of the near future.
In short, I believe in the concept as an investor, it is very attractive for the future, but there are risks of price volatility, of being new, of being dethroned by the Facebook Libra, or of not being accepted and used on a large scale for the payment of goods and services. For the traders, it is very important to follow up on the news that has a great impact on the price of Bitcoin, just as the analysis of graphics helped us understand how the public reacted to Bitcoin at certain moments in the market.
Don’t miss the chance to buy Bitcoin now before the halving with Libertex.

Tottenham Hotspur Announce Multi-Year Partnership With Libertex
Libertex has become the Official Trading Partner of Tottenham Hotspur.

Driven by their determination to be the best, this partnership will showcase the progressive outlooks and commitment to continued improvement that enables Libertex and Tottenham Hotspur to perform at the highest level in their respective fields. Since 1997, Libertex has been at the forefront of cutting-edge developments in the trading markets, with the company’s innovation rewarded with over 30 prestigious industry awards. In keeping with their club motto, ‘To Dare Is To Do’, Tottenham Hotspur adopts a similarly pioneering approach in the modern game, investing in the latest technological developments to help deliver on-pitch success, epitomised by their world renowned, state-of-the-art stadium.

Spurred on by their ‘Trade For More’ ethos, the partnership will allow Libertex to share their love of the game with over 2.2 million of its international clients, offering a host of unique and exciting rewards, including exclusive events and premium matchday experiences at the Tottenham Hotspur Stadium, when fans can safely return to stadia. Libertex will also have a presence across the club’s digital channels and LED perimeter advertising system on matchdays.

Marios Chailis, Chief Marketing Officer at Libertex said: “Libertex could not be happier to partner with a team whose values echo our own so perfectly. Through this multi-year partnership, we’re thrilled to join the worlds of football and trading in the form of many exciting benefits for our clients and look forward to cheering on Spurs when they return to the pitch.”

Tottenham Hotspur Head of Partnerships Fran Jones commented: “At Tottenham Hotspur, technology and innovation is key to everything we do and we are excited to partner with Libertex, an organisation that shares this commitment through its own products and services.

A whole generation was missing out on online trading. Then came the coronavirus

“2020 is my favourite year,” said no one ever. But for millennials, this year has been yet another blow in what’s been a generational rough patch of economic disruption that made itself felt most keenly in the 2008 financial crash. After entering the job market during the Great Recession and saddled with college debt, suffering low wages and a rising cost of living, the younger generation now has to reckon with a COVID-19-induced economic downturn without the safety net that previous, wealthier generations had built for themselves.
It’s no wonder that millennials and Gen Y were shy about stocks. To the average person, investing is only something to consider after padding one’s savings, paying off college debt, and saving up for real estate, something that is still in the distant future for many younger people. Brokers, for their part, continue to use their arcane jargon and dwell in the image of the greedy 1980s. They’re about as uncool as you can get to the socially conscious, digital-native, avocado-toast generation.
But these turbulent times could actually hold a silver lining for younger people. COVID-19 feels like a significant historical event that has made governments, banks, and individuals all reflect on people’s relationships to the economy. As tech-savvy youth increasingly become aware that their potential to save cash just isn’t going to cut it, they’re more willing to step out of their comfort zone and start trading. It’s clear that the current economic system isn’t going to get better anytime soon. The oldest millennials are nearly 40, with retirement becoming an increasingly pressing concern.
A recent survey from Money Under 30 revealed that 61% of millennials think now is a good time to invest, with a higher 70% interested in learning more about the stock market. Where did they get the capital to invest?
Well, if you’re among the lucky one in three (33.5%) millennials who just started working from home, the coronavirus may have actually increased your savings. Of the millennials working from home, 78% reported that their total expenses decreased, with money saved on transportation and eating out more than making up for increased home utility costs.
Curiously enough, one in five (20%) of under-30s surveyed confirmed that they are planning to start investing precisely because of the pandemic, with 72% of women interested in learning more about investing (or doubling down on existing investments), compared to 82% of men. And it’s about time they do because one of the most respected financial players has rolled out a trading platform that’s tailor-made to younger investors that are eager to learn the ropes.
“Trade for More”: playing the stock market for a better future

‘Younger people are increasingly aware that to build wealth, they need to take the initiative into their own hands. That’s the whole philosophy behind ‘Trade for More’,” said Libertex CMO Marios Chialis. “We asked ourselves, ‘are users really signing up to trade? Or are they looking to invest so that they can achieve what they want in life?’ Whether it’s saving for retirement, raising a family, getting on the property ladder or planning future travels, we empower new users with the tools and skills they need to get what they want out of life”.
What do millennials want out of life? Retirement and homeownership a looming concern. Credit: USA Today, 2018
The ongoing COVID-19 pandemic may be driving young people to stake their claim in the financial market, but it’s also led to a downturn in the world of sport and entertainment. All sports around the world, from hockey to football to ice-skating have been affected by the economic shock of cancelled games, postponed fixtures and empty stadiums without ticket sales.
The global sports juggernaut that is association football has suffered along with the rest. By 19 March, almost all 55 UEFA member associations had suspended activity, save for the Belarusian Premier League.
Even as the Bundesliga, La Liga, the Premier League, Serie A and the UEFA Champions League all returned over the summer, football continues to struggle, with a reduced number of matches, under-staffed teams taking the field, sanctions against teams that violate COVID-19 safety rules, and of course, empty seats and plummeting revenues. These days, clubs are looking for new ways to monetise — and by partnering with trading platforms, they’re seizing a unique opportunity to join their fans in chasing financial returns.
To channel the spirit of perseverance through adversity, Libertex — in addition to being Valencia CF sponsors — has teamed up with Tottenham Hostpur FC, the English Premier League superstar that boasts the motto Audere et facere, meaning ‘To dare is to do’. Through this partnership, Libertex clients can win various perks and goodies associated with the club.
Libertex’s mission to win over the young isn’t just about football perks, however. It takes training to play the game, and the finance company aims to woo millennials by offering what they need to get over their fears of indices and candle charts — education.
Ignorance fuels Gen Y’s fear of the stock market, making education more critical than ever

A lack of education has been a significant barrier between younger people and investing. It seems that millennials react to the stock market just as they would to an unexpected call to a landline phone (if they have one): with terror. Around 66% of American millennials surveyed by Ally Invest in 2018 claimed the stock market was intimidating and expressed concern about their ability to understand how to invest.
Gen Z (defined in the survey as ages 18-23) were even more fearful, with 69% reporting that they’re intimidated by financial markets. The reigning fear was that they would make a bad call and lose their investment. Almost three-quarters of the millennials who are afraid of losing money when they invest are women compared to about two-thirds of men.
The true terror affecting millennials was a lack of education. Although a generation with high levels of college education, ignorance of the stock market is holding them back. One-third (34%) of respondents had no trusted source of advice. Over one-quarter (27%) cited their biggest fear came from simply not knowing how to get started, and 19% are scared about the time it takes to learn how to invest properly.
But the coronavirus pandemic, and the stock market’s relative resilience compared to the regular economy, may have convinced millennials that the financial markets aren’t the scariest thing out there. From the survey results, as attitudes change, the online trading platforms that stand to win out will be the ones that emphasise education. In other words, the trading platforms that can inform young investors about the stock market in a straightforward, trustworthy, and time-effective way.
The best investment starts with knowledge

Even as the market rebounds at the prospect of a coronavirus vaccine, millennials with money on their mind should take 2020 as a wake-up call to seize the opportunities that trading affords. But before going all in, young traders would do well to consider starting with the platforms that offer a full suite of educational materials, demo accounts, and training media such as webinars and tutorials. After all, the first and most important thing to invest in is yourself.

Libertex adds yet another payment method

After much anticipation, Libertex is delighted to announce that it is adding PayPal to its already extensive list of payment options. Famed for its accessibility, convenience and security, PayPal will offer Libertex clients yet another quick, easy and secure method for funding their accounts and withdrawing profits.
Nowadays, there aren’t many people who don’t have a PayPal account or haven’t at least considered opening one. And you don’t have to look far to see why. Its ease of use and integrability is unrivalled. All you need is an e-mail address, and you can make and receive payments in a variety of currencies in just one click. Then, your balance can just as easily be converted into the currency of your choice and transferred directly to your personal bank account. The service’s appeal to consumers everywhere is one of the reasons Libertex has been so keen to support this deposit method…and now it does!
This momentous agreement with PayPal puts Libertex firmly among the leaders of the online trading market, and everybody involved really couldn’t be prouder of this fact. Now Libertex clients can add funds to their accounts and withdraw their profits via virtually every method imaginable. In addition to SEPA bank transfers and debit/credit card payments, Libertex has long supported Sofort, Trustly, Skrill and many other deposit methods. Despite this wealth of choice, it always felt as if there was one big hole that needed filling — but not anymore.
Speaking on this special occasion for the company, Libertex CEO Michael Geiger commented: “We truly couldn’t be happier to be able to offer our clients this new payment option. PayPal is a real household name whose user-friendly reputation precedes it. With the addition of this exciting method, we will be making depositing and withdrawing funds even easier and more convenient for our valued customers around the world.”
Just when you thought the news couldn’t get any better, there’s more. PayPal deposits will be completely free for Libertex users. That’s right! The broker won’t take any commission on funds added to your trading account using this latest supported payment option. The service is set to go live on 1 December, and the hope is that this will become a date to remember in Libertex’s history!