Cryptocurrency Features in Barron's, 4/12/21

[yogibearbull]

I am posting these separately here so that these will be accessible easily and not get lost within the Barron's titles.

Pg S4: COVER STORY. BITCOIN [21 million total, 18.6 million mined] is having its day in the Sun. After 1,000% surge last year, Bitcoin market value is $1+ trillion. Bitcoin futures trade on CME. Companies such as MS, PYPL, SQ, V, BK, TSLA, Fidelity, MassMutual, Coinbase [IPO in April] handle cryptocurrencies to varying degrees. Fidelity, VanEck, Grayscale have applied for crypto-ETFs that the SEC has resisted for several years [some foreign crypto-ETFs do exist]. There are thousands of cryptocurrencies. As digital-gold, they are pressuring real yellow gold. But cryptos face obstacles that include technology, energy intensive “mining”, price instability, illiquidity, illicit use, government policies/restrictions, central bank digital currencies [CBDC].

Pg S7: How do retail customers invest in CRYPTOCURRENCIES? Through financial advisors; separately managed accounts [SMAs]; wealth management services [Fidelity, JPM, BK, NTRS]; Grayscale trusts GBTC, ETHE; Bitwise crypto index funds BITW; Coinbase accounts.

Pg S11: Companies that deal with cryptos [now, or soon] to some extent include PYPL, V, BK, SQ, TSLA, MSTR, MARA, RIOT, MassMutual, Coinbase, BlockFi. There is also a block chain ETF BLOK.

Pg S13: Financial advisors and wealth management advisors [WMAs] are starting to offer cryptocurrencies [Bitcoin, Ethereum, Litecoin, etc] at special/sub- AUM fees. Current fund options have high fees, premiums/discounts and liquidity limitations [GBTC, ETHE, BITW]. Applications for crypto-ETFs are pending from Fidelity, VanEck, Grayscale. The new SEC Chairman GENSLER is knowledgeable about cryptos.

Pg 27: ETFs. Until a genuine crypto-ETF is approved by the SEC, here are some options: Funds that hold cryptos or crypto-futures [GBTC, GDLC, OBTC, BITW], funds that hold some cryptos [ARKW], blockchain technology ETFs [BLOK], companies that hold some cryptos [MSTR, SQ, TSLA].

Pg 34: OTHER VOICES. JOYCE LAI, New York Angels [an investment group] and ConsenSys Mesh [Attorneys]. Is this crypto-art or crypto/decentralized-finance [DeFi]? A “ghost” game NFT Aavegotchi allows one to create own NFT “ghost” from NFT pixel-art-pieces. Aave protocol is used for digital-lending/borrowing and fungible receipts [aTokens or aETHs]. One injects aTokens “spirits” into the ghost to keep it going. New Ethereum blockchain technology standard is used to mix fungible aTokens and nonfungible “ghost” [NFT “ghost”]. This combination is guaranteed-verifiable and transferable. While this is a game, think of its implications for structured financial products [mREITs, etc]. It can also be used to create digital-assets without analog/real world corollaries, e.g. a crypto-universe with digital-land. [NFT = Nonfungible Token] [FT = Fungible Token (e.g. current money)] [All this is very vague to me, so my summary is also super vague].

big-bang-investors.proboards.com/thread/367/barron-april-12-2021-1

[anitya]

I am waiting for somebody to write a detailed article on Crypto impact on global warming. And whether the benefits outweigh the costs.

The name of the Company escapes my memory but there is a competitor to Coinbase.  May be somebody in the forum recalls.

[yogibearbull]

The first [Pg S4; Cover Story] article has some energy use details and a picture of crypto server room.   www.barrons.com/articles/companies-are-diving-into-bitcoin-what-to-know-before-you-invest-51618003535?mod=past_editions

".....Another obstacle, less widely discussed, may be Bitcoin’s rising environmental toll. Bitcoin’s annualized energy consumption has surged to 135 terawatt hours, doubling in the past year, according to the Cambridge Bitcoin Electricity Consumption Index. That is more electricity than countries such as Sweden or Ukraine consume in a year.....Some, or perhaps most, of that electricity may be generated by renewable resources such as wind, solar, hydro, and geothermal activity. Much of the world’s mining takes place in China (65%), along with Iceland, Canada, and other countries with relatively inexpensive energy. Indeed, renewables account for 73% of the energy mix in the mining network, according to CoinShares, a Bitcoin asset manager.....But the math looks fuzzy. In China, miners migrate seasonally: They set up shop in regions where hydro is cheap and plentiful in the summer and then decamp as the generators produce less, packing up for places like Inner Mongolia, where electricity comes largely from coal. But how much mining is actually generated by renewables isn’t known. “Mining in China is predominately renewable, but it’s very difficult to get exact numbers,” says Christopher Bendiksen, head of research at CoinShares.....Even if mining is relatively green in China, it’s far less clean in other hubs, including Kazakhstan and Iran. The industrial opportunity cost to all of the energy consumed by Bitcoin isn’t known—though electricity isn’t entirely fungible across regions. And as the price rises, the electricity toll does, too. If the price were to reach $1 million, up from $58,000, Bitcoin would become the world’s fifth-largest carbon emitter, passing Japan, according to BofA....."

[Capital]

Thank you yogibearbull. My understanding is that most of the possible BitCoins have been mined. I also remember reading somewhere that, as the possible BitCoins that can be mined gets smaller, the cost to mine grows exponentially.

[Capital]

Just some thoughts from someone not dabbling in this stuff (me) - I wonder what will happen to the price of BitCoin once the last one is mined. Also I am guessing that if the price had not grown at the rate it did grow, the cost to mine new BitCoin might not be worth the value of the BitCoin mined. Another thing, the constant increase in supply from mining has also, supposedly, slowed down. That may also be a cause in the dramatic price increase. Anybody out there that really has an understanding of crypto please speak up. I find this entire crypto thing interesting, even if I do not believe that anything really exists to back up its valuation.