We have received some thank you notes from some of our readers who, after purchasing and reading the The Hutch Report: Insights from the Top 50 Wealth Management Institutions, went and followed some of the smart money vehicles mentioned in the report. If you would have happened to have purchased and read The Hutch Report and reviewed some of the Bitcoin (BTC) and cryptocurrency vehicles being looked at by the smart money, you would have read about the OTC vehicle offered by Grayscale under the symbol GBTC. One of our readers who invested at the time is boasting a nice return of 17% to 20%. At the time of the report GBTC was trading around $115 to $120. Last week it hit a high of $143 and closed on the 28th of April at $137. BTC itself has surged in both price and market cap. At the time of the report the BTC market cap was about $20bn and last week it hit over $21.5bn with BTC itself breaking past $1300 even as high as $1330. And BTC is not the only one – Litecoin is surging as are most of the top market cap altcoins including Ethereum, Ripple, NEM, and PIVX and several more. Ethereum (ETH) broke out to an all-time high over $60 and as of this writing is now up to $71.32. PIVX which we first wrote about at the start of April hit some peaks over $2.00 and now seems to be maintaining around $1.80 levels. Another reader following the Insights section has sent us a thank you for the 77% return they have made so far on PIVX.
What is driving the growth in all of these? There is no clear answer. Some of the fuel is driven by renewed optimism of potential institutional investment vehicles for cryptocurrencies. Earlier this year, when we published our 2017 edition of The Hutch Report: Insights from the Top 50 Wealth Management Institutions, Bitcoin and other cryptocurrency values were climbing both in market-share and price. Bitcoin (BTC) in particular was climbing as excitement was mounting around the response from the SEC concerning the Bitcoin ETF applications filed by three different companies, SolidX, Gemini and Grayscale. BTC hit new records and exceeded the price of Gold at $1290. The SEC rejected all three applications causing the BTC price to falter as the market assumed the initiative was dead for the next few years. Recently the SEC has opened the door and approved a review of the Gemini (run by the Winklevoss twins) application. A subsidiary of Grayscale, Digital Currency Group, is looking at creating vehicles for other cryptocoins.
Whatever the reasons are, which may at best only really become known in hindsight, there does seem to be a clear trend and momentum. Some of our readers have asked us how does one go about investing in cryptocurrencies. We would like to remind you that this website and content is produced for general interest, is not specific to you, is for entertainment only and is not intended to provide nor constitute financial advice. In full disclosure, the authors may or may not be holding positions in any of the vehicles mentioned. Prior to making any investment decision you should undertake your own due diligence and/or seek the advice of a qualified and registered securities professional. With the preceding in mind, listed below are some of the websites and platforms that some of our readers have indicated they are using:
Market Prices and Market Capitalizations
Coinmarket cap https://coinmarketcap.com/ provides a great list of almost all cryptocurrencies along with their market cap, average price, amount in circulation and volumes. The nice thing about this site is that the price in US dollar is provided. Do note that the prices listed are the average prices across exchanges. It is possible on this platform to drill down and see the prices on each specific exchange as well. The astute individual would remark the discrepancy of prices on the different exchanges and see an opportunity for arbitrage. However, in this case one would also want to pay attention to volumes and liquidity which would impact the ability for arbitrage.
Cryptocompare also provides a comprehensive listing of cryptocurrency market caps and prices and allows different currency comparisons.
https://www.cryptocompare.com/coins/#/usd for a listing of prices as compared to US dollar.
https://www.cryptocompare.com/coins/#/btc for a listing of prices as compared to Bitcoin (BTC)
https://www.cryptocompare.com/coins/#/eur for a listing of prices as compared to EUR.
Exchanges and wallets
In order to buy a cryptocurrency you have to have an account on one of the exchanges that allows trade in the currency. Cryptocurrencies can be traded similarly to stocks including features such as limit orders. Only a handful of currencies can actually be bought directly with fiat currency such as US dollars or Euros. The most common denominator is BTC. BTC can be bought for US dollars or Euros and then BTC can be used to buy the other currencies. In choosing an exchange we would recommend choosing one that has volumes otherwise you may suffer liquidity issues. Some of the most popular Bitcoin and cryptocurrency exchanges are:
Poloniex (https://poloniex.com): allows trades in about 107 different cryptocurrency markets, with most volumes from Ripple. Ethereum and Litecoin.
GDAX (https://www.gdax.com): only trades in Ethereum, Bitcoin, and Litecoin. It does facilitate fiat currency purchase in USD, EUR and GBP for Bitcoin.
Kraken (https://www.kraken.com): allows trades in about 40 markets and does facilitate USD and EUR purchases for Bitcoin, Ethereum, Ethereum classic and Litecoin as well as a few other currencies.
Korbit (https://www.korbit.co.kr/): only trades in Ethereum, Ethereum Classic, and Bitcoin and allows fiat purchases using South Korean Won.
Bitstamp (https://bitstamp.net): only trades in Bitcoin and Ripple and facilitates fiat currency purchases in USD and EUR.
Bittrex (https://bittrex.com): supports over 190+ cryptocurrencies. This is the platform recommended by many of our readers. Bittrex does not facilitate direct fiat currency purchases. What some of our readers do is they buy Bitcoin on one of the other platforms that allows purchases in fiat currency and then they send the Bitcoins to their Bittrex wallet and then purchase the other currencies using their Bitcoins. The same process would be followed in reverse to extract fiat currency.
Coinbase (https://www.coinbase.com): Coinbase is a wallet for Bitcoin and Ethereum. It also facilitates purchases for both of these cryptocurrencies in USD.
Wallets: You can keep your crypto-money on the exchanges directly or store it in a wallet. The bitcoin.org site lists several bitcoin wallet solutions (https://bitcoin.org/en/choose-your-wallet). If you become adept at a specific cryptocurrency you may want to download the wallet specifically for those alternative currencies from the organization directly. For example if you are into PIVX, at https://pivx.org/ you can download the defacto PIVX wallet for your operating system directly. The advantage of using the wallet provided by the organization is that you can potentially also benefit from mining or staking and earn extra coins from the wallet. This is the case with the PIVX wallet which allows you to earn PIVX by keeping your wallet on and keeping PIVX in it. Whatever you do, be sure to make back-ups of your wallet and where possible use 2 or even 3 factor authentication.
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