July 11th, 2024

Meme coins: More than just a joke, a guide for investors

The world of cryptocurrency is wild. It’s full of crazy ideas, high risk, and yes, even some laughs. Lately, meme coins, digital currencies based on internet jokes and pop culture have been all the rage. They’ve drawn in investors with their wild price swings and passionate online communities.

Dogecoin, the Shiba Inu dog that started it all, might have begun as a lighthearted jab at Bitcoin, but some meme coins have skyrocketed in value. This leaves many wondering: how do you invest in this wacky but risky corner of the crypto market?

The truth is, there’s no guaranteed way to win with meme coins. Their value depends on a weird mix of things, so the usual ways of judging investments don’t apply as much here. A strong community and lots of trading can be good signs, but you need to look deeper when it comes to these crypto jokesters. Here are some key things to consider, along with a healthy dose of caution:

Looking beyond the hype: A strong community

A big and enthusiastic online following on Reddit, Discord, or Telegram can be a good thing but don’t just look at the surface. Here’s what you really need to see:

Real talk, not just memes: A good community talks about the memecoin’s future plans, how it might be used for more than just laughs, and how it might work with other projects. Look for people who genuinely care about the coin’s future, not just those mindlessly cheering it on.
Coders on the case: A dedicated team actively working on the tech behind the meme coin is a good sign. Look for frequent updates, code posted on platforms like Github, and clear ways to talk to the developers.
Keeping things clean: A well-moderated online community helps get rid of negativity, false information, and scams where people try to pump up the price and then dump their coins for a quick profit. Look for active moderators who keep the conversation healthy.

Trading volume: A double-edged sword

Lots of trading means there’s a lot of interest in the meme coin, which can make the price go up in the short term. But be careful:

Fake pumps: Beware of sudden spikes in trading that come out of nowhere. These could be the work of “whales” (people with huge amounts of coins) trying to drive the price up so they can sell for a quick profit.
Slow and steady wins the race: Look for trading that gradually increases over time. This suggests real growth, not just a temporary burst of excitement.
Big exchanges are good: Being on well-known cryptocurrency exchanges makes the meme coin more visible and easier to trade, which can lead to higher trading volume.

Beyond the basics: The x-factors

While a strong community and active trading are important, there are other things that can affect a meme coin’s success:

Celebrity tweets: A tweet from a big name like Elon Musk can send a meme coin’s price through the roof (remember Dogecoin?). However, relying on celebrities is risky because their interest can fade fast. Ideally, the celebrity actually holds and believes in the meme coin.
Real-world use: Memecoins that have a real-world purpose, like being used in online games or making payments, are more likely to stick around for the long haul than those that are just hype.
Fear of missing out (FOMO): This is when people buy something because they’re scared they’ll be left behind if they don’t. Be careful of buying sprees fueled by FOMO, and always do your own research before investing. We’ve seen this happen a lot with meme coins on Solana lately. Hopefully, they’ll show more stable growth later this year.

Laughter is great, but don’t invest based on it

Memecoins can be a fun and interesting part of the crypto world. They create a sense of community and offer the chance to make a lot of money (or lose it all). But if you only invest in them because they’re funny or because there’s a lot of buzz online, you’re setting yourself up for disaster.

By looking at data like how engaged the community is, trading volume, and other important factors, you can approach meme coins with a bit more caution and maybe even some success (without the tears).

Remember, a good meme might make you laugh, but it shouldn’t be the only reason you invest your hard-earned money. And hey, maybe someday we’ll even get that Dogecoin ETF!

Source: https://e27.co/meme-coins-more-than-just-a-joke-a-guide-for-investors-20240708/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

March 26th, 2023

IMF Wants “Control” Over Crypto Than Banning It Outright

As of March 2023, there have been discussions on the stance of the International Monetary Fund (IMF) towards cryptocurrencies. While some believe that banning cryptocurrencies should be an option, the IMF chief has stated that there are disagreements over restructuring debt for distressed economies. The IMF’s position on cryptocurrencies seems to be geared towards exerting control rather than an outright ban.

One article from Bloomberg suggests that the IMF is committed to presenting a foundation for the regulation of private cryptocurrencies. The report suggests that the Financial Stability Board and the Bank for International Settlements are also involved in this effort. However, it is not clear from this report whether the IMF prefers regulation to an outright ban.

Another report from Yahoo Finance suggests that the IMF is concerned about cryptocurrencies being used to evade capital controls imposed by governments. The report also suggests that the IMF is discouraging countries from making Bitcoin the legal currency of their countries. However, the report does not explicitly state whether the IMF prefers regulation to an outright ban.

Reports from other sources suggest that the IMF is more interested in regulating cryptocurrencies than banning them outright. For example, an article from the South China Morning Post suggests that India has asked the IMF and the Financial Stability Board to prepare a technical paper on crypto assets that could be used to formulate a coordinated and comprehensive policy to regulate cryptocurrencies. The article notes that while some countries may consider banning cryptocurrencies outright, this approach may not be the most effective way to manage the risks associated with these assets.

However, despite these concerns, the IMF’s recent actions and statements suggest that the organization does not necessarily favor an outright ban on cryptocurrencies. Instead, the IMF appears to be focused on developing effective policies and regulations for crypto assets. For example, in February 2023, the IMF’s Executive Board discussed a board paper on “Elements of Effective Policies for Crypto Assets” that provided guidance to IMF member countries on key elements of an appropriate policy response to crypto assets. The paper defined and classified crypto assets based on their underlying features, described their purported benefits and potential risks, and presented a policy framework for crypto assets that aimed to achieve key policy objectives such as consumer and investor protection, financial stability, and anti-money laundering and combating the financing of terrorism (AML/CFT).

In addition, the IMF’s recent actions suggest that the organization is open to working with countries to develop coordinated and comprehensive policies to regulate crypto assets. For example, India, which currently holds the G20 Presidency, has asked the IMF and the Financial Stability Board (FSB) to jointly prepare a technical paper on crypto assets that could be used to formulate such policies.

“Developing effective policies and regulations for crypto assets” seems to be the underlying agenda. There are various reasons for the IMF’s stance on cryptocurrencies. One of the reasons is that the IMF seeks to protect the stability of the global financial system. The use of cryptocurrencies has the potential to disrupt traditional financial systems and destabilize the global economy. By exerting control over cryptocurrencies, the IMF hopes to minimize the risks associated with this disruptive technology.

IMF’s stance on cryptocurrencies is that it believes in the potential benefits of the underlying blockchain technology. Blockchain can potentially increase transparency and accountability in financial transactions, which could help reduce corruption and fraud. By exerting control over cryptocurrencies, the IMF hopes to encourage the development of blockchain technology while minimizing the risks associated with cryptocurrencies.

Some argue that the decentralized nature of cryptocurrencies is one of their greatest strengths and that too much control could undermine this feature. My concern is that the IMF’s desire for control over cryptocurrencies could lead to overly restrictive regulations that restrict innovation and growth in the industry. Apart from losing out on innovation, I would like to point out a few other pointers that I picked up while reading related news articles.

The use of the term “digital money”. Speaking on the sidelines of the G20 finance ministers meetings in Bengaluru, India, IMF Managing Director Kristalina Georgieva explained, “We are very much in favour of regulating the world of digital money”. In my humble opinion, crypto is not digital money. I would consider crypto as crypto assets, not money. If she considers crypto as digital money, USD is also digital money; it will confuse normal people. It also can be misinterpreted that IMF is considering crypto as a legal tender.
CBDC is not cryptocurrency. According to an interview with Bloomberg published on February 27, she responded to a question on her recent comments about a potential complete ban on cryptocurrencies. “Our first objective is to differentiate between central bank digital currencies that are backed by the state and publically issued crypto assets and stablecoins.” Again, this statement makes things more confusing. Central bank digital currencies, CBDCs, are a new form of a digital currency issued and regulated by central banks. It has nothing to do with cryptocurrencies.
Fully backed by? In the same interview, she also said that fully-backed stablecoins create a “reasonably good space for the economy,” but non-backed crypto assets are speculative, high risk, and not money. The term “fully backed” should be appropriately defined, fully backed with high-quality and liquid assets or 1:1 fiat currency or another altcoin. Some stablecoins, such as Tether, are backed by a mixture of cash and other assets but are not transparent about the types of assets doing the backing. In fact, Canadian regulators have classified fiat-backed stablecoins as securities, indicating that stablecoins may be subject to securities legislation. It is important to carefully evaluate the backing of stablecoins before considering them as a stable investment option.
CBDC is 100% not stablecoin. CBDC refers to a digital form of a country’s currency that is issued and backed by a central bank. On the other hand, stablecoins are cryptocurrencies that are designed to maintain a stable value relative to a certain asset, such as the US dollar or gold. For instance, the UK is exploring the development of a CBDC, known as the Digital Pound, which would take at least five years to develop, according to the deputy governor of the Bank of England. The Bank of England is exploring both wholesale and retail CBDC. Still, they see limitations, and the design and structure of the digital pound could vary greatly depending on its intended use.

IMF may be clear on all these terms, but I would like to highlight that the interchange and usage of words in interviews must be consistent to avoid misunderstanding.

Coming back to the core topic, the IMF’s stance on cryptocurrencies is geared towards exerting control rather than an outright ban. The organization believes that cryptocurrencies have the potential to disrupt traditional financial systems and destabilize the global economy, but it also recognizes the potential benefits of blockchain technology.

Who will have the ultimate control?

The debate over the role of cryptocurrencies in the global financial system is likely to continue for some time to come.

Source: https://www.securities.io/imf-wants-control-over-crypto-than-banning-it-outright/

Anndy Lian

www.anndy.com

j j j

February 28th, 2023

SEC chair Gensler confirms “everything other than Bitcoin” is a security: Implications and analysis

SEC Chair Gary Gensler reiterated that Bitcoin is not a security but a commodity under the Commodity Futures Trading Commission (CFTC) purview. He also stated that “everything else other than bitcoin is a security,” which has significant implications for regulating cryptocurrencies and digital assets in the United States.

Gensler’s statement reflects the SEC’s long-held view that many cryptocurrencies and digital assets are securities under U.S. law. The SEC’s definition of a security is broad — it includes any investment contract in which an individual invests money in a common enterprise with the expectation of profits solely from the efforts of others. In other words, if an asset is sold as an investment with the expectation of profit based on the efforts of others, it is likely to be considered a security.

Gensler’s comments have sparked debate in the cryptocurrency community. Some argue that his view is overly broad and that many digital assets do not fit the SEC’s definition of a security. Others argue that the SEC’s approach is necessary to protect investors from fraudulent or manipulative activities in the cryptocurrency market.

One of the key implications of Gensler’s comments is that many digital assets may be subject to SEC regulation. This could include initial coin offerings (ICOs), a crowdfunding campaign where investors purchase digital tokens in exchange for cryptocurrencies like Bitcoin or Ethereum. Many ICOs have been criticized for their lack of transparency and accountability, and the SEC has taken enforcement action against several ICO issuers in recent years.

Another implication is that exchanges that trade digital assets may be subject to SEC oversight. Under U.S. law, exchanges facilitating securities trading must register with the SEC and comply with various regulations. If the SEC views many digital assets as securities, then exchanges that trade those assets may also be required to register with the SEC and comply with its regulations.

His comments suggest that the SEC may take a more aggressive approach to regulating the cryptocurrency market. This could include increased enforcement actions against issuers of digital assets considered securities and against exchanges that facilitate trading those assets. It could also lead to new regulations to increase transparency and accountability in the cryptocurrency market.

The SEC’s approach to regulating cryptocurrency has been debated for several years. Some argue that the SEC’s current approach is too cautious and stifling innovation in the cryptocurrency space. Others argue that increased regulation is necessary to protect investors from fraud and manipulation.

Gensler’s comments suggest that the SEC will likely take a more assertive approach to regulate the cryptocurrency market in the coming years. This could include increased enforcement actions, new regulations, and closer scrutiny of digital assets and exchanges that operates in the U.S.

Maybe we can take a step back to look into a few things. Firstly, it’s important to understand the context of Gensler’s statement. As mentioned earlier, Gensler reiterated the SEC’s stance in an interview with CNBC in July 2022 that Bitcoin is not a security but a commodity that falls under the Commodity Futures Trading Commission’s jurisdiction. He did not label other digital assets, avoiding answering the question directly. However, in a tweet by Jake Chervinsky in February 2023, it was suggested that Gensler may have prejudged that every digital asset aside from Bitcoin is a security.

Then my question is: What exactly is a security? In the US, the Securities Act of 1933 defines a security as any investment contract, note, stock, or any other type of investment in a common enterprise with the expectation of profits solely from the efforts of others. In simpler terms, it means an asset representing an ownership interest or a right to receive future profits or cash flows from a third party.

Suppose we consider Gensler’s statement that everything other than Bitcoin is a security. In that case, it implies that most digital assets such as Ethereum, XRP, and other cryptocurrencies would be considered securities under US law. This means that they would be subject to SEC regulations and oversight. It’s worth noting that this is not a new position for the SEC. For years, the SEC has warned cryptocurrency companies that their tokens could be classified as securities if they meet certain criteria.

The implications of this classification are significant. If a digital asset is classified as a security, the issuer must comply with SEC regulations, including registration and disclosure requirements. It would also have to follow strict trading, reporting, and investor protection rules. Additionally, investors would be protected under federal securities laws, which could increase their confidence in the digital asset market. However, it could also lead to additional costs and regulatory burdens for the companies issuing digital assets.

My opinion on this matter is that while Gensler’s statement may have been perceived as a blanket statement, the SEC’s approach to regulating cryptocurrencies is nuanced and fact-specific. The SEC has been clear that it will evaluate each token on a case-by-case basis to determine whether it meets the legal definition of a security. In other words, just because a digital asset is not Bitcoin does not automatically mean it’s a security.

Furthermore, regulatory oversight is necessary for the cryptocurrency market to mature and gain mainstream adoption. The lack of clear regulations has been a major roadblock for institutional investors, who are hesitant to invest in a market perceived as unregulated and risky. Clear regulations would also protect retail investors who may not have the knowledge or resources to navigate the complex world of cryptocurrencies.

To conclude, while Gensler’s statement that “everything other than Bitcoin” is a security may have caused some alarm in the cryptocurrency community, we believe that it’s important to view it in the context of the SEC’s broader approach to regulating digital assets. The SEC’s focus on investor protection and market integrity is crucial for the long-term success of the cryptocurrency market.

As the market continues to evolve, we expect that the SEC’s approach will continue to evolve, and we look forward to seeing how it develops. Meanwhile, I hope SEC can be more precise and take a more responsible stance when putting statements out in the market.

Source: https://cryptoslate.com/sec-chair-gensler-confirms-everything-other-than-bitcoin-is-a-security-implications-and-analysis/