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17 Trillion Reasons Why You Should Own Bitcoin, According to Gemini Boss Cameron Winklevoss

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  • Alex Dovbnya
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    Here's some good advice from Cameron Winklevoss, one of the richest Bitcoin holders

17 Trillion Reasons Why You Should Own Bitcoin, According to Gemini Boss Cameron Winklevoss
Cover image via www.123rf.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

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Those who are still not sure about buying Bitcoin, the world's leading cryptocurrency, might consider taking a piece of advice from the man who made his fortune because of it.  

Gemini boss Cameron Winklevoss says that $17 trln held in negative interest bonds represents 17 trln reasons why you should own BTC.       

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The big bond bubble

As reported by Bloomberg, the global negative-yielding debt has reached a whopping $17 trln back in August. Around the same, the 30-year German government bond sunk into the negative territory for the first time ever, which a common trend among eurozone countries. 

Negative-yielding bonds
image by zerohedge.com

This startling number reminded everyone about the growing bond bubble (when prices get unreasonably high). The bad thing about all bubbles is that they eventually tend to burst.

Another plausible scenario would be the "Japanification" of global bond markets. After the crash of the country's property market, the Japanese government implemented near-zero interest rates that have been dormant for years.    

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Bitcoin's next recession

The negative yield debt (coupled with the ongoing US-China trade war) could lead to another much-feared recession that would most definitely allow Bitcoin to thrive. In fact, the 2008 financial crisis lead to the creation of the paradigm-shifting cryptocurrency. 

However, there is also another camp, which claims that Bitcoin could be sold off just like another risk asset. While BTC is traditionally considered to be a non-correlated asset, 2019 has proven to be some sort of an outlier. There have been periods when Bitcoin would trade in tandem with gold and even with the S&P 500. 

As reported by U.Today, Fundstrat's analyst Tom Lee suggests that Bitcoin can be ambidextrous, meaning that it can work just fine both in risk-on and risk-off environments. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability

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  • Vladislav Sopov
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    According to its Financial Stability Report of November 2019, the Board of Governors has warned about the dangers of stablecoins.

Federal Reserve System: Stablecoins Pose Potential Risks to Financial Stability
Cover image via
Contents

The Board of Governors of the U.S. Federal Reserve System have issued their monthly Financial Stability Report. This special report is dedicated to the profits and risks of "global stablecoins".

Stablecoins: Global System with So Many "Ifs"

First, the Federal Reserve admits to the numerous advantages that stablecoins present as a concept. It has been highlighed that stablecoins are "faster, cheaper, and more inclusive payments could complement existing payment systems". This is in comparison to cases where traditional financial institutions are sophisticated and poorly accessible. Stablecoins can also be managed to eliminate the volatility of cryptocurrencies, which is one of the borders for them to be utilized as the medium for exchange.

Therefore, the "global stablecoin initiatives" like Facebook's Libra can rapidly achieve cross-border adoption. However, the major threat for stablecoins is apparent - the "inability to convert in national currency". The loss of confidence in "pegging" the stablecoin to traditional assets can lead to a run, in which several holders will attempt to liquidate their stablecoins at the same time.

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This dramatic scenario may be caused by "poor design and governance", and can result in severe consequences for international economic activity, asset prices, and financial stability.

Transparency First

The Federal Reserve also outlined in its report that in many cases, stablecoins can be utilized for money laundering, terrorist financing, and other financial crimes. Therefore, the Federal Reserve would require operators of such systems to conduct their Due Diligence, as well as Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to avoid any abuse. Moreover, the problems of disclosure policy and protecting investor data should be of paramount importance for stablecoin issuers:

Disclosures should clearly detail consumer and investor rights and protections, including whether the holder of the stablecoin has any rights to the underlying asset. Issuers should be transparent on how the stablecoin is tied to the underlying asset, has been said in the Report.

Last but not least, the report highlighted that the Federal Reserve, together with the Group of Seven, will closely monitor stablecoin developments as well as all the risks associated with it.

Have anyone ever invested in stablecoins? Do you prefer to use it, or to pay extra fees for fiat gateways? Tell us your story on Twitter!

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About the author

 Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockhain. Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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