The watershed moment for bitcoin

Regulators are clamping down on scams and legitimising the industry.
Nasdaq-listed MicroStrategy bought $425m worth of bitcoin to form part of its reserve assets. Image: Eric Thayer, Bloomberg

The crypto industry has historically had a bad reputation, and with good reason.

As with many disruptive technologies that emerge into a regulatory grey zone, some of the first real-world applications for crypto were illicit and harmful. They included the infamous Silk Road e-commerce site of the pre-2014 era, where drugs and guns were freely on offer, as well as several fraudulent and overhyped initial coin offerings (ICOs), Ponzi schemes and other get-rich-quick scams.

It is easy, amid the drone of the 24-hour news cycle, to lose sight of big-picture trends but when you zoom out and look beyond the negative headlines there have been a lot of jaw-dropping developments in the fast-developing world of crypto.

Today, crypto is an increasingly regulated market across the developed world and while South African regulators are lagging behind, they have said they are working on implementing some form of interim measure while a formalised framework around the asset class is developed.

Watershed moment

On October 1, the US Department of Justice filed both civil and criminal charges against BitMEX, an offshore crypto derivatives trading platform widely known for enabling customers to make highly speculative trades with up to 100x leverage.

This was big news. BitMEX is one of the largest crypto derivatives exchanges in the world, with notional trading volume that regularly ranges between $1 billion and $2 billion daily. Large traders use it frequently.

So how did the market react when the charges landed on October 1?

It didn’t. The market didn’t care and one day later the crypto market was up more than 2% from where it was the day the BitMEX news broke. It was as if nothing happened. In previous times, such an announcement would have torn the crypto market into a downward spiral.

This is a sign of the crypto market’s growing maturity.

How does this affect the outlook for crypto markets?

“This matters because of what it means long term for the widespread entry of institutional and professional investors into the space. Crypto is still a clunky, disruptive, early-stage technology investment opportunity. These sorts of moments bring attention to the incredible maturation taking place in this space. Slowly but surely, the world is realising that crypto plays by the rules. And that’s a very big deal indeed,” says Sean Sanders, the CEO and founder of Sabvest-backed crypto investment platform Revix.

He continues: “If you’re new to the cryptocurrency space and it all seems a little confusing, then we at Revix are here to help. We make it incredibly easy to get started and to own a wide range of cryptocurrencies without a blockchain and cryptography PhD.”

Cryptocurrencies go mainstream

Crypto is going mainstream, with heavyweight institutions jumping on board, among them:

  • PayPal recently announced that its customers will be able to buy and sell bitcoin and other cryptocurrencies using its website and mobile app. Cryptocurrencies will soon be used to buy items from the 26 million sellers which accept PayPal as a means of payment.
  • Square, Twitter CEO Jack Dorsey’s payment company, made waves earlier this month after its surprise reveal of a $50 million bitcoin purchase.
  • Billionaire hedge fund pioneer Paul Tudor Jones recently announced he is holding 1% to 2% of his assets in bitcoin.
  • Billion-dollar Nasdaq-listed MicroStrategy bought $425 million worth of bitcoin to form part of its reserve assets alongside its US dollar cash balance.

Source: Revix

“These are the biggest crypto developments of 2020 and they represent a major levelling-up of the asset class. With PayPal opening their doors to crypto we could see the number of crypto investors double overnight. These blue-chip institutions understand that cleaning up the bad actors is necessary and essential to the long-term success of the asset class,” says Sanders.

According to crypto media outlet TheBlock, real crypto trading volume on global exchanges with legitimate volume topped $169 billion in September, up from about $35 billion at the start of 2019. That’s a nearly four-fold increase in crypto activity in less than two years.

Bitcoin, the world’s largest and most well-known cryptocurrency, has seen its fundamentals continue to improve, with both the average computing power securing the network, known as the hash rate, and an average number of active bitcoin account addresses continuing to trend higher.

Smart money is buying bitcoin

What’s also happening is that ‘smart money’ is accumulating bitcoin: the number of bitcoin addresses containing between 1 000 and 10 000 bitcoins hit a new record last month.

Much like the early days of the internet, the initial scepticism over crypto was well justified, but this is changing fast. It’s by no means squeaky clean but the reputational risks are receding.

Sabvest, the JSE-listed speciality investment group, backed investment platform Revix which makes crypto investing more accessible for everyday investors. Revix’s investment products offer access to the largest cryptocurrencies in much the same way one would access other investment products. That way, clients get secure crypto exposure without the challenges of buying, storing, or safekeeping cryptocurrencies directly.

Sanders says those who feel they have missed the crypto boat are wrong. The industry is just getting started.

“We are in the early days of crypto. The opportunity for bitcoin, and the crypto industry as a whole, is now. People are still saying that we need to see real-world adoption of digital currencies but that is happening right in front of our eyes. Just look at the latest stats on Africa’s crypto transfers and last week’s announcement by PayPal, which is embracing cryptocurrencies. Crypto is here to stay and it’s only going to grow.”

The growth of Africa’s crypto transfers

Smaller crypto transfers in Africa have increased by 55% in the last year. Africans are increasingly turning to cryptocurrencies as a way to store value or as a means of exchange and remittance. Many Africans are using cryptocurrencies to hedge against the instability of their local currencies.

As of September 2020, the number of monthly crypto transfers to and from Africa passed the 600 000 mark. The total number of transfers under $10 000 jumped by 55% to reach $316 million.

The total value of cryptocurrencies sent to Africa in 2020 is set to surpass last year’s total of $8 billion, with almost $1 billion of this sent in June alone. Nigeria, South Africa and Kenya lead the region in cryptocurrency transfers.

How to get started easily and securely in crypto

If you’re looking to get into the cryptocurrency space for the first time and don’t know where to start, Revix can assist.

While there is definitely a learning curve to some aspects of crypto, buying, storing and using digital currencies doesn’t need to be complicated.

For those new to crypto, the first step can be the hardest; Revix’s online platform makes investing in crypto easy and effortless. Revix customers can get started with as little as R500 and, once invested, funds can be sold and withdrawn at any time. So, there’s no lockup period where you can’t access your funds.

Real-time support

What really separates this fintech from its competitors is its real-time customer support team. “Banks and other investment platforms fail dismally when it comes to responding to customer queries in a friendly and timely manner. This is not acceptable and so we make a promise to all of our customers that any query will be answered in minutes, not hours or days,” explains Sanders.

Revix offers investors the ability to securely and effortless buy, sell and hold bitcoin, gold tokens which are fully backed by physical gold bars, and three diversified ready-made crypto ‘Bundles’ that spread your investment across several cryptos similar to index trackers such as the JSE Top 40 or S&P 500.

Sanders explains: “Crypto investing can be complicated, time-consuming and downright intimidating so we created an ultra-simple investment platform that enables you to own the top cryptocurrencies without the hassle of securing your own keys or keeping up to date with the fast-paced market.

Reducing risk

Picking one individual cryptocurrency to back – even if it is bitcoin – is risky because it exposes you to potentially unexplainable swings in value, regardless of your best analysis. Even the professionals only get it right half the time. Spreading your investment across multiple cryptos by investing in a Revix Bundle reduces this risk.

A good place to start is the Revix Top 10 Bundle which evenly spreads your investment across the top 10 largest cryptocurrencies. The bundle is reweighted monthly to ensure no single crypto has more than 10% weighting and so you’re diversified across more than 85% of the cryptocurrency market.

In addition to the Top 10 Bundle, Revix also offers two theme-based crypto bundles. The first is the Payment Bundle that provides exposure to the top five payment cryptocurrencies, aimed at making digital payments cheaper, faster and more global. The second is the Smart Contract Bundle, which consists of cryptocurrencies such as Ethereum that enable developers to build applications on top of their blockchains, similar to how Apple builds apps on top of its iOS operating system.

Brought to you by Revix.

For more information, visit Revix.

This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing please take into consideration your level of experience and investment objectives, and seek independent financial advice if necessary. 



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