In light of current economic difficulties, Robert Kiyosaki referred to Bitcoin, gold, and silver as an escape from the system.

Millionaire businessman and author of the book Rich Dad Poor Dad, Robert Kiyosaki, mentioned Bitcoin (BTC) numerous times in a podcast interview with Morgan Creek Digital co-founder Anthony Pompliano, referring to the asset as an escape.

“The reason I endorse Bitcoin is just for one frickin’ reason: You’re not part of the system,” Kiyosaki said. “It’s a separation of government and my money,” he laughingly added, quoting sentiment Pompliano has expressed many times.

Uncertain times can spur flight to safety

Throughout the interview, Kiyosaki riffed on many concepts through the lens of someone reportedly enlightened about what he called a manipulated system.

Kiyosaki referenced current U.S. economic struggles in tandem with government solutions, such as bailouts.

“The Fed is not a bank, it’s a cartel owned by the richest people on the planet, which we’ll never see,” he said, referencing books called The Creature From Jekyll Island, and Grunch of Giants. “The guys that own the Fed control the world,” Kiyosaki added.

“The pandemic is probably real,” Kiyosaki said of coronavirus. “But then you get so desperate, you’ll take the money,” he added referring to various U.S. government efforts, such as stimulus checks to citizens. “It’s communism,” he added.

Kiyosaki on the best stores of value

Kiyosaki pointed to gold, silver and Bitcoin as ways to escape inflation and the reportedly controlled system that currently faces difficulties.

“The reason is, you’re off the central banking system — you’re outside the system,” he said. “That’s why I say, gold and silver are God’s money, and Bitcoin is open-source people’s money,” he added.

Kiyosaki, however, is somewhat of a polarizing figure in general, with several YouTube videos and articles questioning his claims and concepts.

The published author also made headlines several days ago when he posted multiple tweets promoting Bitcoin.

A group of eight Crypto Valley experts says the upcoming Bitcoin halving will be very different from those in the past.

With the Bitcoin halving just four days away, CV Lab, an incubator and co-working space for blockchain companies, along with Cointelegraph, invited a group of eight experts from Switzerland Crypto Valley for a live panel discussion held on May 7.

The Crypto Valley experts came to a consensus that this Bitcoin block reward halving would be different from the previous two, regardless of which direction the price of Bitcoin (BTC) goes.

Shifting focus on Bitcoin’s value proposition

The experts agreed that the macroeconomics’ environment is changing. More and more people are considering storing their life savings in Bitcoin as a hedge against the current troubled monetary system.

The power has also started to shift from miners to the community and traders, according to Arnaud Salomon, CEO of Mt Pelerin. He explained:

The power has shifted away from miners. They’re not in the same position as they used to be ten years ago or even five years ago […]. The stock is already so big and because today there is a lot of Bitcoin in circulation people are willing to trade and exchange.

Event moderator Alexandre Juncker and author of “Blockchain Quarterly” said the halving highlights Bitcoin’s monetary mission to oppose arbitrary monetary policies conducted by central banks. He noted:

We witness the very moment when a vast economic crisis triggered by a pandemic is threatening to overwhelm already over-indebted States. In the turmoil to come, the value-proposition of debased unstoppable pure Bitcoin whose money supply is written in code is likely to meet popular adoption flying away from fiat hyperinflation in many countries.

Additionally, Bitcoin adds discipline rather than competes with the existing financial system, according to Yves Longchamp, head of research at Seba bank. He stressed that BTC offers an alternative, which people can voluntarily use for storing value in something that is not correlated with other financial assets.

“Forget about price prediction”

Finally, professor Fabian Schar from University of Basel closed his presentation during the panel discussion with his own view on the halving, saying:

Forget about price prediction. You might as well flip a coin. There is really no way of telling which way it’s going. Also it’s the least interesting thing about the halving. Because there are so many interesting parameters and so much stuff going on behind the scenes, so many observations we have to make.

By  TING PENG

Bitcoin is approaching the most eagerly anticipated moment in its history, and markets are feeding the excitement after weeks of gains.

Bitcoin (BTC) is just days away from a historic crossroads this week — what will the coming days have in store for traders and hodlers?

Cointelegraph takes a look at the major factors influencing the market just over a week before the largest cryptocurrency’s third block reward halving.

Just 8 days left till the Bitcoin halving

The next eight days will focus on one topic only for Bitcoin analysts — its third block reward halving. Technically known as the “block subsidy halving,” the event will drop the supply of “new” Bitcoins paid to miners by 50% to 6.25 BTC per block.

This immediate 50% drop in supply should have considerable knock-on effects for demand, especially taken against the historical precedent of the previous two halvings.

The impact is neatly summarized by Bitcoin’s stock-to-flow price model, which suggests that major price movements should come 1-2 years after the halving.

Cointelegraph has reported extensively on stock-to-flow’s various iterations and their forecasts.

BTC isn’t done with stocks yet

Bitcoin continues to exhibit some copycat price behavior which tracks movements on major stock markets.

As of Sunday, futures for the S&P 500 and Dow Jones among others were tanking 3%, which soon translated into a fresh price dip for BTC/USD.

At press time, the pair traded at around $8,700, down 3.7% on the day, having bounced off support at $8,500.

Coronavirus continues to weigh on sentiment, as the United States and China spar over the pandemic’s origins and handling, sparking trade fears.

Fundamentals tap all-time highs

Bitcoin’s network fundamentals remain on an upward trajectory despite mixed price action. Hash rate and difficulty are hovering near all-time highs.

The difficulty is set to increase by a modest 1.4% on May 5 and will be the last such increase before the halving seven days later.

The two aspects of Bitcoin go hand in hand for analysts, as Bitcoin’s automatic difficulty adjustment mechanism prevents manipulation of supply rate, regardless of how much BTC is worth in fiat terms.

D’après le fournisseur de données blockchain glassnode, le fait que les investisseurs envoient leurs bitcoins depuis les bourses vers des portefeuilles indique un « potentiel passage sur des stratégies de conservation à plus long terme ».

Le mois prochain, la première crypto-monnaie exécutera son 3ème halving, soit la réduction de moitié des récompenses distribuées aux mineurs qui sécurisent le réseau. Très attendu par les bitcoiners, l’événement devrait avoir lieu autour du 11 mai 2020 et fera ainsi passer les récompenses de 12.5 BTC par bloc miné à 6.25 BTC.

Les données de glassnode montrent en effet que le nombre total de bitcoins conservés sur des crypto-exchanges a chuté à moins de 2 200 000 BTC, un niveau qui n’avait plus été observé depuis l’été 2019.

Les soldes ont chuté de près de 10% par rapport aux sommets de janvier […] Apparemment, les nouveaux investisseurs sont là pour le long terme, utilisant Bitcoin comme asile alors que la confiance dans les marchés traditionnels vacille,” précise glassnode.

En vue d’une augmentation des prix, les crypto-traders ont tendance à retirer leurs jetons numériques des bourses pour les conserver plus en sécurité dans des portefeuilles propriétaires.

Pour Richard Rosenblum, responsable du trading pour le fournisseur de liquidité GSR, le halving du Bitcoin pourrait « propulser son cours vers le haut et emporter le reste du marché avec lui ».

Une analyse partagée par la crypto-bourse singapourienne Luno qui estime que son prix pourrait même atteindre 100 000$ suite à la réduction de moitié.

Bien que les 2 précédents halving (2012 et 2016) aient très largement boosté le prix de la crypto-monnaie, d’autres analystes sont plus méfiants pour cette fois-ci.

Le halving du Bitcoin en mai 2020 ne fera rien au prix. Ce ne sera pas un événement,” avait annoncé plus tôt Jason Williams, cofondateur de Morgan Creek Digital.

Certains estiment même que son prix pourrait tester les 3000$ à l’approche de l’événement.

Bitcoin a bénéficié d’un rallye de plus de 50% par rapport à son creux de la mi-mars […] Les indicateurs de l’une de nos stratégies basées sur l’élan commencent à montrer une sérieuse baisse. Une configuration qui pourrait conduire à une vente de 50%, envoyant les prix vers les 3000$,” a confié Nicholas Pelecanos, responsable du trading chez NEM Ventures.

Innovations in blockchain technology are changing the paradigm and even the concept of possessing gold.

Gold’s history as a symbol of value dwarfs that of any other artifact. Used as money in both ancient Greece and the Roman empire, gold was also the preferred method of payment for goods along the Silk Road. When modern banking emerged during the Italian Renaissance, the concept of paper money convertible into gold was invented. This practice ended a half-century ago, but the value of gold remains timeless.

Starting with England in 1717, modern nations began anchoring their national systems of money to gold in what became known as the “gold standard.” By the late 1800s, and until World War I, the most advanced economies were united in this approach. Today, although the money of nations is no longer anchored to it in any way, gold has retained considerable economic utility. Whether used to preserve savings or as a hedge against financial instability, gold has been a mainstay in individual, institutional and state portfolios.

Gold ownership is challenging

In spite of this storied history and the clear economic utility of a scarce asset, gold ownership remains challenging. Unlike fiat money in bank accounts or financial assets in investment accounts, stores of gold must be physically safeguarded against theft. As these volumes of stored gold increase, incentives for theft also rise, pushing the cost of secure custody higher. Another challenge is transportability. Theft must also be physically guarded against during transit, but eliminating this risk can be prohibitively expensive. Not everyone can afford an armored Brinks truck.

More challenges arise at the transactional level where the gold must be both verified for its authenticity and denominated in such quantities as to suit both the buyer and seller. Due to the high costs of purity testing and the difficulties of dividing physical gold, these constraints dramatically lower the potential for voluntary transactions between buyers and sellers. The potential for lower-value transactions suffers the most, as these buyers and sellers typically cannot rely on economies of scale to offset transaction costs. They may also prefer to use smaller and more precise denominations than the antiquated “gold bar.”

Together, these challenges create significant friction for both buyers and sellers of physical gold. These hurdles can be especially discouraging for smaller investors who may be dissuaded from ownership of the physical asset altogether. Popular gold-based financial products such as Exchange-Traded Funds, or ETFs, might then be used to gain some exposure, but this is not an economic equivalent to physical gold ownership.

What is the purpose of gold ownership?

Despite the challenges associated with physical ownership, gold markets continue to be among the most liquid in the world. Much like the geological deposits of this shiny metal, the demand for physical gold ownership is widely dispersed around the globe. The desirability of gold jewelry is universal, but so is the need to protect oneself from currency debasement and other financial turbulence. In countries where currencies are known to depreciate rapidly, it is far more common for citizens to hold their savings in physical gold rather than as money in a bank account.

Just weeks ago, amid the COVID-19 crisis, long lines could be seen forming outside of Bangkok gold shops as residents queued to sell their gold.

Because of work stoppages brought on by the health crisis, many Thai nationals sought to convert some of their savings into much-needed cash. The eight-year high Thai baht price of gold made this an especially attractive option and highlights the ultimate purpose of owning gold: exposure to the spot price of physical gold in terms of one’s own fiat currency. Whether it is a Thai shopkeeper protecting their savings, or a global hedge fund executing a complex investment strategy, the economic purpose of owning physical gold is the same: exposure.

Fulfilling the purpose while overcoming the challenges

The days of waiting in line to buy or sell gold may soon be over. While Bitcoin (BTC) has been heralded as “digital gold,” related innovations in blockchain technology are quietly shifting the paradigm of physical gold ownership. By leveraging this new technology, Tether Gold (XAUT) and other gold-backed stablecoins are fulfilling the economic purpose of physical gold ownership while overcoming many of the traditionally associated challenges. With a quickly growing market cap of approximately $86 million, XAUT has eclipsed PAX Gold (PAXG) to become the most widely held and circulated gold-backed stablecoin.

By embedding legal title to specific allocations of authenticated physical gold into a digital token, this highly innovative class of products combines the best of three distinct worlds:

(1) Direct exposure to the price of physical gold.

(2) The cost-efficiency and accessibility of traditional financial assets, such as ETFs.

(3) The transactional utility of a digital token.

Before gold-backed stablecoins, only the largest investors could avoid making stark trade-offs between (1) and (2) above. Everyone wants direct exposure to the price of physical gold, but at what cost? From the burden of securing physical storage and transportation to the added friction of purity-testing and low divisibility, it is easy to see how direct exposure has become prohibitively expensive for most investors. Unable to harness economies of scale, these investors are then priced out of physical ownership and priced into a synthetic proxy.

But margarine is not butter. Without traceable allocation to specific, authenticated and securely vaulted physical gold, these synthetic gold-based financial products can never amount to the real thing, no matter how popular they become. Today, through technical innovation and legal design, gold-backed stablecoins have been working to harness economies of scale for everyone. Now, for the first time in gold’s long history, investors can gain direct exposure to the price of physical gold without having to overcome the traditional associated costs and challenges. Physical ownership has been democratized.

The market impact of democratizing physical gold ownership

The benefits of gold-backed stablecoins extend well beyond the gains for individual buyers and sellers. The market as a whole is affected. John Bogle’s 1975 launch of the first index fund offered a similar value proposition to investors: democratization of diversified equity market exposure. Recognizing that the performance of actively-managed mutual funds could not justify their high fees, Bogle set out to offer low-cost, passive investment products by replicating the market at scale. These products’ popularity exploded in the ensuing decades, as individual investors began to recognize how much money Bogle’s invention could save them.

Despite these clear gains for individual investors, the long term impact of index funds on global equity markets has been ambiguous at best, and likely destructive. With passive investing strategies having grown to represent an ever-greater share of market activity, the proliferation of these index products has raised fundamental concerns over liquidity and price discovery within equities markets. Bogle himself recognized this problem later in his career, as he worried that the explosion of passive investing had opened the door to manipulation from speculators. Having designed index funds for long-term investors, Bogle remained dismayed into his final days by the speculative turn that the now-massive ETF industry had taken. Warren Buffet has described Bogle as the man “who has done the most for American investors,” but the jury is still out on what passive investing has done to American equity markets, something Bogel himself recognized.

Gold-backed stablecoins have flipped this story on its head. Cost-efficient ownership of physical gold has certainly been democratized but in a way that supports the long-term liquidity and price discovery within global gold markets. Whereas the growth of passive investment flows, as recognized by Bogle, would increase the susceptibility of equity markets to manipulation, the growth of gold-backed stablecoins would have the opposite effect. Since today’s gold markets are already dominated by “paper” — financial instruments with no direct connection to specific allocations of physical gold — the functioning and integrity of these markets can only improve as gold-backed stablecoins gain prominence.

With myriad advantages from both the individual and collective standpoints, gold-backed stablecoins really do allow the investing world to have its cake and eat it too.

By  MATTHEW ALEXANDER

If you need more information related to PAXG gold-backed stable coin you can send an email to  info@bashlux.com with your name and email address.

Building on previous advantages for traders and miners, Portugal continues to establish a crypto haven with Technological Free Zones.

In a bid to drive innovation forward and to stimulate the economy, Portugal has recently approved a nation-wide plan to encourage digitalization in several fields. Published on April 21, the “Digital Transitional Action Plan” puts forward multiple ways, in which the Portuguese government will provide infrastructure and incentives for innovation, entrepreneurship and competition, as well as internationalization for enterprises in the country.

Although digitalization is a recurring topic when discussing economic strategies, the COVID-19 pandemic has put the subject in the spotlight as private and public entities alike try to mitigate the economic downfall brought about by the mandated lockdowns. The plan focuses on three main strategies highlighted in a summary by a Portuguese law firm VdA Legal Partners: “Capacity-building and digital inclusion of people, digital transformation of businesses and digitalization of the State.”

Although the plan covers a broad range of strategies for digitalization, the creation of Technological Free Zones (ZLT) has sparked interest within the cryptosphere as Portugal continues to make provisions that incentivize cryptocurrency industry activities in the nation.

According to Rémy André Ozcan — the CEO of Tozex, a tokenization platform, and the co-founder of the French Blockchain Federation — these initiatives put Portugal on the right track toward being one of the most attractive crypto capitals in the world. In a phone conversation, he told Cointelegraph:

“This initiative is great, and coupled with the tax breaks introduced a few years ago, it makes Portugal a very attractive place to start and manage a cryptocurrency-related business. This is an area where other countries like France can learn from Portugal. The creation of economical areas dedicated to encourage blockchain-based business is a major milestone for Portugal.”

Indeed, following the tax breaks for cryptocurrency trading and issuance, the Portuguese government is now doubling down on its crypto-friendly position by facilitating research activity for companies using or testing blockchain, among other technologies. Helena Mendonca, a principal consultant at VdA Legal Partners, told Cointelegraph how important these ZLTs can be:

“ZLTs will allow, where possible, the flexibilization of legal and regulatory provisions for purposes of tests (such as experimentation or exemption laws that are test-friendly) or, at least, a mechanism where tests will be assisted and supervised by regulatory authorities (like regulatory sandboxes or innovation hubs). The creation of a framework for tests brings several benefits, as it will facilitate the performance of tests, which in turn, allows a better assessment of the technical and commercial viability of technical solutions.”

What do ZLTs mean for crypto business?

The creation of Technological Free Zones sets a positive tone for companies at the technological forefront of their respective fields, giving clear and practical advantages for companies experimenting with technologies, such as blockchain. These ZLTs create flexible regulatory provisions for testing purposes, include on-site testing in real-life environments, and assistance from regulatory entities with or without special legal and regulatory regimes.

Although these benefits apply to testing, they translate into advantages for companies once they go into financing and production stages. Given the regulatory and financial viability certified by the oversight of regulatory entities during the testing periods in ZLTs, acquiring investment or other forms of positive engagement is made easier. Sanja Kon, the CEO of Portuguese crypto start-up Utrust, told Cointelegraph:

“This type of government-led initiative will certainly incentive companies to ponder the use of blockchain tech. A sandbox and special economic zone will be especially beneficial to blockchain start-ups working in innovative fields involving finance and digital money.”

It’s important to note that the approach taken by the Portuguese government is a cross-sector one, which means that solutions that leverage several technologies do not suffer constraints observed in countries where sector-specific “regulatory sandboxes” were created. According to Mendonca, that’s a very important distinction that shows the level of commitment put on these technologies and on regulation to back it:

“What is more, the creation of a legal instrument – the backbone law – (instead of only initiatives by regulators, as most countries have done) shows, in clearer terms, the commitment of the Portuguese Government with relation to testing activities, while at the same time is a more stable approach that gives more visibility to the investment made by Portugal in promoting an experimentation environment and culture.”

Initiatives like these help companies and can stimulate the creation of new ventures within the country while placing Portugal on the map for companies that may be facing challenges in other jurisdictions due to a lack of an aligned cross-sector approach for testing when experimenting with novel technologies.

However, not only can these benefits help guide companies through their testing stages they also present a learning opportunity for ventures that want to stay compliant, even when working with experimental technology. According to Mendonca, the learning process goes both ways, as regulatory entities can also observe these technologies at play first-hand and draw insights from the experience:

“Tests also give essential information for future laws applicable to novel technologies — this is all the more relevant for the fintech sector where the regulation of cryptocurrencies (and an aligned EU approach for crowdfunding) is being discussed: Hence, tests play a central role in the design of risk and outcome-based laws anchored in objective data and society needs.”

Crypto in Portugal

Cointelegraph previously reported on how the Portuguese government had introduced tax breaks for those trading and/or mining cryptocurrencies within the country.

Related: No Tax for You: Why Crypto Traders and Miners Might Head to Portugal

Although further tax breaks are not the focus of the Digital Transition Action Plan, they have an important role to play when it comes to promoting the creation of innovative products or services leveraging these technologies. Mendonca told Cointelegraph:

“Portugal’s tax breaks already available for cryptocurrency traders and miners (prior to the Digital Transition Action Plan and ZLTs) are reliable and credible as they fit into the normal functioning of the European VAT system.”

Although the cryptocurrency scene in Portugal is not as lively as other countries like Malta, where regulation has also been known to be on the friendly side, the government is surely walking in that direction, lifting regulatory and legal constraints that can make or break new ventures, especially when working with such experimental technologies. Nevertheless, there are still some challenges ahead for the small European country. Ozcan told Cointelegraph:

“This initiative will work if those economic zones create a real ecosystem where you can find major SMEs, universities, research centers and public desks. […] I believe that the development of this industry needs direct communication between entrepreneurs, lawyers, regulators, investors.”

By ANTÓNIO MADEIRA