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- Bitcoin at ATH!!
Bitcoin hits new ATH!
Well…it did. But against the Yen and other world currencies.
What does that mean for us?
We also want to discuss DePIN - Decentralized Physical Infrastructure, and how it might be the talk of 2024
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Axis News Updates
📉Bitcoin Hitting ATH Against World Currencies
You've noticed Bitcoin's price fluctuations against the U.S. dollar, but have you taken a moment to consider its performance against other world currencies? It's reaching all-time highs against the Yen and several African currencies. Now, you might wonder, "Why does that matter to us here in the West?"
Well, let me tell you, it matters a lot more than you might think.
First, this phenomenon signals a devaluation of these currencies against the dollar. The dollar is gaining strength, while bitcoin, sitting pretty at around $50,000, is hitting record highs elsewhere.
This uniformity – a bitcoin is a bitcoin anywhere in the world – is precisely what makes it a universally appealing asset.
Here's the kicker: As currencies around the globe lose value and purchasing power due to inflation, more and more people in those countries are turning to bitcoin. It's not just about the U.S. dollar's purchasing power decline; it's a global quest for a reliable store of value. In countries experiencing even steeper inflation, bitcoin becomes an even more attractive option than the already strong dollar.
What does this mean for us and our clients?
When bitcoin hits these global all-time highs, it triggers a buying frenzy – the well-known FOMO (Fear Of Missing Out). This is crucial because it's not just about the value going up in those countries; it's about the global demand for bitcoin increasing, which, in turn, drives its value up even in dollar terms.
Understanding that bitcoin is the first truly global and accessible asset is vital. Its ease of purchase and universal availability make it a more attractive option for preserving purchasing power than traditional assets like gold or even the dollar itself.
How This Affects Financial Advisors
For us in the advisory field, this global perspective on bitcoin's value offers a fresh lens through which to view cryptocurrency investment strategies. It emphasizes the importance of considering global economic trends and currency valuations in our investment advice, especially when dealing with an asset as volatile and globally intertwined as bitcoin.
Here are a few takeaways for us:
Global Economic Insights: Understanding the global economic landscape is crucial. The strength or weakness of other currencies against the dollar can significantly impact bitcoin's value and, by extension, our investment strategies.
Diversification: This global trend underscores the importance of considering bitcoin as part of a diversified investment portfolio, not just for their potential high returns but also as a hedge against inflation worldwide.
Client Education: It's our job to educate clients about the global nature of bitcoin's value and how it can serve as a universal store of value. This can help set realistic expectations and foster a long-term investment perspective.
Stay Informed: When I went down the bitcoin and crypto rabbit holes, it forced me to learn more about US and global financial and economic systems. With the current geopolitical tensions, and economic situations, this knowledge will be important in evaluating all investments.
So, let's keep an eye on these global dynamics and consider how they can inform our strategies. Bitcoin's universal appeal and potential as an inflation hedge make it a unique asset in our portfolio toolkit.
We Launched a Podcast!
Years ago we had a podcast about crypto and DeFi, and we decided to re-launch the Interaxis Podcast. Now we’re talking about the happenings in crypto, and how they affect you, the financial advisor.
🌐Decentralized Physical Infrastructure (D-PIN): A Practical Guide for Financial Advisors
Decentralized Physical Infrastructure, or DePIN for short. It's a concept that might be new to some, but it has profound implications for the future of connectivity and, by extension, financial advising.
As usual, the video is at the end.
What is DePIN?
At its core, DePIN is about creating a network infrastructure that's built and maintained by a collective of individuals rather than centralized entities. This approach echoes the foundational principles of decentralized finance (DeFi) but applies them to the physical world of internet connectivity.
Historically, from telegraphs to modern fiber-optic cables, infrastructure development has been the domain of large corporations. These entities had the capital to lay cables across continents and oceans, connecting the world in ways previously unimaginable. However, this centralized approach has its limitations, notably in flexibility and accessibility.
The Shift to Decentralization
DePIN proposes a shift towards a decentralized model where individuals can contribute to the network's infrastructure. Imagine a scenario where your device connects to my device, forming a network. This network could then expand, connecting more devices, creating a mesh that serves as an alternative to traditional internet service providers.
The Role of Crypto Assets
Incentivization is a crucial component of DePIN. Participants in the network are rewarded with crypto assets for their contributions, such as setting up connectivity nodes, sharing bandwidth, or even mapping their drives. This model not only encourages participation but also fosters a new ecosystem for digital assets.
Practical Applications and Implications
Projects like Helium have demonstrated the feasibility of DePIN, using blockchain technology to create decentralized networks for IoT devices. These networks offer various services, including Wi-Fi and 5G connectivity, without relying on traditional infrastructures.
More New Valuation Metrics
Just like we’ve seen with other cryptoassets representing networks, protocols, and even art, we’re going to have to create new metrics for valuation of these tokens, and for the networks they represent.
Conclusion
DePIN is a term you’re going to see thrown around a bit more, and we wanted to make sure you understand. It might not be that you have clients with these tokens just yet
If you’re enjoying this, tell your friends. Always something happening in crypto and we’ll break it down for you.
See you next week!
-Adam