The Economic Collapse is Coming: Is Crypto a Safe Haven?

The Economic Collapse is Coming: Is Crypto a Safe Haven?




The Economic Collapse is Coming: Is Crypto a Safe Haven? Economic Inequality. According to the Credit Suisse Research Institute, more than half of all adults globally have a net worth below 10,000 USD, while close to 1% of adults globally are millionaires who combined own 44% of global wealth. The Occupy Wall Street protests in 2011 were born from the fact that those outside the top 1% felt excluded from the world's wealth creation process and given the short end of the stick. While the Occupy Wall Street protests stopped, the wealth gap continues to widen to this day. How will retail investors participate and catch up in the wealth creation process? In this video, we present a solution that shows the global macro-trends happening in terms of wealth creation and how they all lead towards one converging path. Legacy Financial Systems Will Collapse. There are two types of people in the world, people who want to invest now, and people who want to invest later. Today people are working multiple jobs because, since 2008, the current financial system is failing people. The world’s monetary system is entirely unpredictable. China wants to take over blockchain and challenge the US dollar as a reserve currency. Fiscal debt has doubled since 2008, while wages have not increased since 2008. There’s $250 trillion in worldwide debt, $15 trillion of which is negative yield debt compared to the $200B in 2014. ​ ​ From the American Federal Reserve bank cutting interest rates twice to Hong Kong entering its first recession in over a decade due to protests, the world’s economies are signaling a possible global recession. Ray Dalio of Bridgewater, the world’s biggest hedge fund, expresses his concerns that since 2008, the US has printed $15 trillion to buy stocks propping up the equities markets; this made the rich even richer as the top 1% have as much money as the bottom 90% combined. The legacy financial systems are facing long term challenges that will be hard to fix. A lot of those systems will crumble, and chaos will ensue. ​ When titans fall, newcomers swoop in to replace them. And lots of money is made by those who are early in seeing the opportunity. Experts Predict Crypto is the Future The World Economic Forum has repeatedly predicted that around 10% of the world's GDP will be held in the form of tokenized assets by 2027, which amounts to about 9 trillion USD based on the 2019 projected GDP. The Royal Bank of Canada (RBC) sees cryptocurrency as a potential 10 trillion USD ecosystem. The current crypto market cap hovers between $200 to $300 billion. So, according to WEF and RBC, the crypto market still has more than 40x potential growth. The future of crypto is looking brighter than ever with the entry of Samsung, Facebook, JP Morgan into cryptocurrencies. As current and future generations adopt crypto, passive-active crypto investment strategies and vehicles will become a necessity for mainstream crypto adoption. Crypto is well positioned to merge with the global trends of quantitative investing, robo-advisors, and factor investing. Gen Y and Gen Z will live and grow up in a world where they have given up on actively trying to manage their money. They will be comfortable outsourcing their investment management to robo-advisors for quantitative and factor investing. But for crypto to become a legitimate investment instrument, it will have to solve three investor pain points. Investor Pain Point #1 - Most Traders Lose Money "Markets go up in an escalator and come down in an elevator." Profits earned gradually can be wiped out in a fraction of the time. Or put more plainly, gains earned over 12 months, can be wiped out in less than a month. This adage remains valid for all investors, regardless of the market. According to the Financial Analysts Journal, 65% of day traders lose money. In other words, more than twice as many traders lose money compared to those that do manage to make money. Based on these facts, trading is not a viable solution for retail investors that want to participate in the transfer of wealth. As a result, passively managed investment vehicles such as index funds, ETFs, and robo-advisors are on the rise. Investor Paint Point #2 - Quants Dominate Trading One of the reasons most traders lose money is because they are competing against quantitative trading hedge funds. These are typically billion-dollar investment companies using powerful computers and algorithms to invest on their behalf, under the guidance of brilliant investment analysts and engineers. Humans are no match against quantitative trading. Wall Street, part of the top 1%, has already learned this and embraced quantitative trading. We can look at the best hedge fund of all-time, Renaissance Technologies, founded by Jim Simons, a former code breaker and math professor. Jim Simon's fund manages over 68 billion dollars USD. Renaissance is arguably the most successful investment firm the world has ever seen. Warren Buffett's track record of 20.5% annualized returns since 1965 doesn't approach Simons' average of 39% gains over a three-decade span. And that's after his company has taken a 5 percent management fee and 44 percent of the profits. Simon's is one of the leading figures for the quant movement as documented in the book "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution." Investment strategies and systems that have proven to be successful on Wall Street find their way into crypto. In 2019, PwC published a Crypto Hedge Fund report. The results are pretty eye-opening. The median fund returned -46% in 2018 vs. a Bitcoin benchmark of -72%. In 2018, the median fundamental fund returned -53%, discretionary fund -63% and quant fund +8%. “The only crypto hedge funds that made money during the 2018 bear market were quants, in a year when bitcoin lost more than 72% of its value.” The quant revolution is no longer just a Wall Street phenomenon. The revolution has reached crypto, and this is the future of investing. How does the average crypto investor compete against quant funds? With robo-advisors. Robo-advisors are quantitative funds for retail investors. Investor Paint Point #3 - Asset Selection and Factor Investing Factors such as size, value, momentum, quality, and low volatility are investment characteristics that have empirically proven to improve portfolio returns over time. Factor-based investment strategies consist of the systematic analysis, selection, weighting, and rebalancing of portfolios in favor of investments with specific characteristics that proved to enhance risk-adjusted returns over time. Most commonly, investors gain exposure to factors using quantitative, actively managed funds or rules-based ETFs designed to track custom indexes. The cryptocurrency ecosystem consists of thousands of cryptocurrencies but no suitable platform for factor investing. Cryptocurrency markets are far from efficient. As a result, investors with excellent research have a competitive advantage. Doing research is hard but necessary for investors seeking excess returns. Factor investing requires more than just access to quantitative data via APIs. Factor investing also requires human intellectual capital to analyze fundamentals. Crypto investors lack adequate platforms that aggregate human capital, analytics, and quantitative analysis for factor analysis and investing. Crypto is Finance for Everyone We believe that crypto is the future. We believe crypto will save people by giving them a free market again. Our friend and one of the first people involved in crypto, Charlie Shrem, says all you need is five bitcoin, and you will never have to work again. We believe Charlie is right; bitcoin is poised to come out on top after climbing the ladder of chaos happening in the global markets. It is incredibly important that you diversify your portfolio and hold some cryptocurrency so in case this scenario plays out you will not lose your wealth. In the late 1990s, everyone started investing in internet stocks, and in 2001, the dotcom bubble popped. People were irrationally exuberant back in that time exactly how they were in 2017 with cryptocurrencies. After the bubble popped, the real internet companies that had true visions and use cases had tremendous returns. For example, if you invested in Amazon in 2002 after the bubble popped, you would have seen your shares go from $5 to $1770 almost 300 times return. Or if you invested in Netflix, it went from $0.50 to $290, almost 600 times return. We believe the same will happen with crypto. Compare that to the non disruptive technology investments if you just invested in the Nasdaq composite after the bubble popped in 2002 it went from $1,100 to $8,500 a mere 7x return and that includes the internet juggernauts. At TokenMetrics.com, we see an incredible opportunity to use our knowledge in the field to create something that will help our users to invest in these companies that are going to change the future. Token Metrics allows you to take advantage of the crypto revolution that is in progress and the AI revolution that is coming. The best of both worlds. When bitcoin started going from $3K to $14K in 2019, did you have a fear of missing out (FOMO)? Did you FOMO into investments at the top of the crypto market in 2017. With the Token Metrics platform, you will not have to worry about your emotions dictating how you invest. We are here to help you navigate through investing in crypto! What we offer is both unique and complete. Monetary and fiscal policy is going to force people into all these assets. We provide a new type and style of investing that mirrors what big Wall Street firms like Vanguard and Goldman Sachs created in the 1970s and 1980s. If you want to profit from crypto and AI, this is the one-stop-shop. We have built on top of our previous investment by adding many different data points that will help value cryptocurrencies. Robo-advisers used by Wealthfront and Betterment and our competition will not be capable of competing with us. They are not going to be able to accurately price different cryptocurrencies because they do not know what drives the value of crypto as it is an entirely different asset class. It derives its value differently. We want to build a platform where you can put your crypto or your money, and our machine learning robo-adviser will invest for you based on hundreds of metrics. We’ve started with the first step, a crypto analytics platform. Sign up for a 14-day free today at tokenmetrics.com. Do you agree with this vision? Or do you disagree? Please let us know in the comments below.
















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