It’s fair to say sentiment toward crypto among the general public has plummeted in the past year. This may have a secondary effect of pushing financial advisors to shy away from the category, and digital assets in general, at least until there is more certainty in the markets and the forces driving them.
Looking at the long term — as advisors are supposed to do — lends itself to a different perspective. Crypto is still a relatively new technology, and with all new technologies, there is an adoption curve, and a good way to evaluate this is Metcalfe’s Law. Metcalfe’s Law states that a network’s impact is the square of the number of nodes in the network. For example, if a network has 10 nodes, its inherent value is 100 (10 x 10).
If you believe crypto is still early in its evolution (and it almost certainly is), it has unmatched potential to grow in an exponential manner. The analogy isn’t perfect, but one of the toughest times to buy Amazon stock was in the 2000s, when it was virtually stagnant; of course, that also turned out to be a great time to buy.
Crypto Staking 101: What Is Staking?Crypto Philanthropy 101
(Unspash, modified by CoinDesk)
Staking offers crypto holders a way of putting their digital assets to work and earning passive income without needing to sell them.
You can think of staking as the crypto equivalent of putting money in a high-yield savings account. When you deposit funds in a savings account, the bank takes that money and typically lends it out to others. In return for locking up that money with the bank, you receive a portion of the interest earned from lending – albeit a very very low portion.
Similarly, when you stake your digital assets, you lock up the coins in order to participate in running the blockchain and maintaining its security. In exchange for that, you earn rewards calculated in percentage yields. These returns are typically much higher than any interest rate offered by banks.
Florida’s governor and the Republican Party’s latest leadership candidate talked crypto and central bank digital currencies in a Twitter space with Elon Musk.
Disclaimer: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
