Learning the friendly way

A common misconception for people outside of the crypto community is that cryptocurrencies are used for illicit and fraudulent activities. While a decade ago, cryptocurrencies were largely associated with the dark web and drug trafficking, these days the modern crypto landscape is much more regulated.

In fact, most countries these days have integrated rules and regulations pertaining to the use of cryptocurrencies, from conducting business with crypto to outlining the tax requirements.

The industry is also required to complete stringent KYC (Know Your Customer), AML (anti-money laundering), and anti-fraud procedures when working with crypto, leaving little to no room for criminal activity or criminal networks involved.

Understanding the intricate world of crypto compliance: avoiding serious and organized crime

Staying compliant with cryptocurrency regulations is vital for all companies in the industry, as failure to do so can result in hefty fines and loss of business. Established businesses take KYC/KYB/AML processes very seriously in order to protect their reputation and minimize risk.

Leading market players are not the only ones that must adhere to these tight regulations. Every platform that enables crypto transactions in most crypto-friendly nations is required to follow such protocols. These entail thorough KYC/AML procedures and establishing the identity of its clients.

The company is required to comply with local requirements if it wants to operate legally. Another reason why using a regulated platform to manage your cryptocurrency is always the best option.

At the same time, B2B clients have entirely different expectations. KYB serves to evaluate every potential partner thoroughly, working out many details and investigating the company's directors.

A few compliance tips for businesses:

• Ensure your staff and partners have a basic understanding of crypto security measures.
• Make sure your policies are always up to date and submitted on time.
• Ensure monitoring procedures are up to date and operating optimally.
• Review your past progress and adapt your plans as needed. 

Crypto vs fiat currency: law enforcement investigations

According to a study, less than 1% of illicit funds used in financial crimes in 2019 were carried out using digital assets (even less in 2020). Considering how cryptocurrency operates, this number may surprise you. What's more surprising is that most of these crimes were related to scams; less than money laundering, drug trafficking, terrorist financing, and any other major major criminal use of cryptocurrency.

Money laundering statistics currently attribute $1.6 billion worth of cryptocurrencies being involved in financial crimes, compared to the estimated $1.6 trillion laundered through cash annually.

Responsible crypto enterprises and cryptocurrency institutions are frequently eager to cooperate with authorities and aid in the fight against financial crimes and criminal activity. Tether's chief technological officer was quick to respond when a token swap platform was hacked, immediately taking action on a $33 million USDT transaction related to the incident. A few weeks later, the assets' owners were reimbursed.

Blockchain surveillance firms, such as Chainalysis and Elliptic, employ specialized software for the following purposes. They collaborate with it to gather blockchain data and examine it for possible illegal behavior. This plays a vital role in helping law enforcement trace digital currency transactions related to the Dark Web and stop illicit funds flowing straight into the wrong hands.

Does crypto hinder law enforcement investigations?

Contrary to popular belief, cryptocurrency transactions are not anonymous. In fact, many cybercriminals have been caught because their identities were eventually traced. For example, the Justice Department was able to track down 63.7 BTC paid by Colonial Pipeline Company to hackers after its computer systems were disabled and caused fuel shortages and a gas price surge across the East Coast. This criminal use of cryptocurrency was quickly investigated and prosecuted.

As blockchain technology uses cryptography to secure its transactions, there is another misconception, and that is that crypto transactions are anonymous, when in reality they are pseudonymous. This means that all transactions on the blockchain are visible, however, they are not tied to identities. So, should you know someone's wallet address you can see their transaction history. This provides law enforcement access to transaction history and the chance to conduct on-chain forensics.

The good news is that law enforcement is getting better at tracking down illicit funds each year. And the cryptocurrency sector is only eager to assist.

Final Thoughts

The recent rapid growth of global regulations has helped foster the growth of the cryptocurrency industry. Digital currencies are actually traceable and don't account for a large majority of financial crimes, despite what many people believe.

Ethical cryptocurrency platforms implement strategies to counteract unlawful endeavors, shield users from fraudulent schemes and potential hazards, and promote responsible financial conduct. Such initiatives encompass collaboration with law enforcement agencies and the provision of educational resources and incentives to users.

Though cryptocurrencies have been implicated in a limited capacity for funding illicit undertakings, this occurrence is overshadowed by the substantial employment of traditional fiat currencies in fraudulent and illegal actions each year. However, this should not necessarily deter the use of either fiat currencies or cryptocurrencies, as both can serve legitimate purposes.

If you’re thinking about incorporating crypto into your business or looking to better understand how digital currencies are infiltrating the business world, you’ll find everything you need to know on the topic below. Looking at the benefits these digital currencies can provide, as well as the downsides, we are effectively dissecting the concept of cryptocurrency in a traditional business model.

Each day we move into a more digital space, be it from the way we communicate to the way we pay for goods, there is no denying that the direction we’re headed in is digitally dominated. The evolution of money is taking a similar stride, from gold coins to banknotes to electronic transfers, and now, digital currencies.

Since the advent of Bitcoin, the world’s first cryptocurrency, over a decade ago, the world has embraced the new age payment system (even if it was one sector at a time). From early investors and developers to huge corporations, crypto has and continues to, infiltrate the financial sector. The recent Bitcoin futures ETF approval provides a classic example.

Crypto In Business

Since the global pandemic, Bitcoin (and the cryptocurrency industry) has edged itself into both the mainstream media as well as the corporate world. Following global market crashes, Bitcoin rose from the ashes and soared to reach unprecedented highs months later.

Many corporations looked to shift their company reserves from the devaluing US dollar to Bitcoin, instigating a massive wave of institutional involvement. Many big companies, everyone from PayPal to Wholefoods, started accepting (or facilitating the trade of) Bitcoin, and gradually crypto became less of a taboo in the Financial sector.

By the end of 2020, it is estimated that around 2,300 businesses in the United States had started accepting cryptocurrencies, alongside the 17,000 Bitcoin ATMs available across the country. As more businesses create teams to focus on the benefits of implementing cryptocurrency in their business, we’ve outlined the pros and cons of adopting the revolutionary technology.

The Pros Of Crypto In Business

For those not yet familiar with the benefits of crypto, or perhaps what it could do for companies (especially virtual and e-commerce ones), find the advantages that cryptocurrency can bring below:

• Removes The Middleman

The intent behind cryptocurrency creation was to establish a peer-to-peer payment system that circumvents the need for intermediary banks and financial establishments. This direct transactional approach results in diminished fees, quicker processing times, and a reduction in the often protracted paperwork and administrative formalities. Instead of relying on centralized entities, this payment system relies on a distributed network and a transparent, unchangeable ledger for its operational functionality.

• Fast, Secure Settlements‍

The network can facilitate international transactions in under an hour, for a fraction of the cost that fiat transactions cost. Using encrypted means of facilitating transactions, cryptocurrency networks are much more secure than any traditional bank.

• Increased User Engagement And Conversion Rates

The more payment options a company offers, the bigger the net of potential customers and conversion rates. The same is true for a wider range of currencies. By providing more options for customers to choose from, the wider the net of potential profit grows.

• Growth Potential

Change often leads to growth, particularly in saturated, highly competitive markets. Adopting and supporting crypto in business practices puts the company at the forefront of emerging technology, a space many will want to be as the world gets more digital.

• Lower Transaction Fees

Payment networks are notorious for charging high fees when receiving transactions, however, Bitcoin and other cryptocurrencies typically charge a much lower percentage.

The Cons Of Crypto In Business

Of course, there is always a downside to everything. Below we look at some of the risks associated with incorporating cryptocurrencies in business.

• Volatility

Cryptocurrencies have become synonymous with volatility, as the markets move to match supply and demand. Each market has been known to go through stages of increased price movement, however, analysts remain certain that while short term volatility is imminent, long term growth is on the cards.

• Consider Your Target Market

Not everyone has jumped on the crypto bandwagon so it is best to assess whether your clientele would be interested in such an option. If your business is catered to a predominantly older demographic then perhaps incorporating crypto as a payment option is not the best move.

• Security Is Your Responsibility

In the past, many people have lost their crypto portfolios due to lost private keys or hacks. With cryptocurrency, the onus lies on the holder to maintain adequate security measures in order to ensure the safety of the funds.

Conclusion

After evaluating the advantages and disadvantages of incorporating cryptocurrency into your business, take a moment to determine if this decision aligns with your company's strategic direction.

Investing is not as easy as the internet makes it seem, with every profit comes plenty of research behind it. Not to mention all the strategies as well. Similar to trading, investing can at times be time-consuming and demanding. While investing is beneficial in so many aspects, it can also come with some trial and error. This is why seasoned investors have made it a goal to share the knowledge they have with the rest of the world.

Someone else's candle shining doesn’t dim your own. So if we are lucky enough to have access to this vast array of information, thanks to the internet and investors, then we should use it, and that is why we have decided to help you learn more about Dollar-Cost Averaging.

What is DCA?

DCA is an abbreviation for Dollar-Cost Averaging. You may be wondering what DCA is? To put it simply, DCA is an investment strategy that sees people investing gradually over time rather than dropping a lump sum of money into assets.

Let’s say you have a total of $10,000 monthly, lump-sum investing would see you entering all that money into an asset market. DCA on the other hand would see you investing $500 each month or week. Not only does DCA provide you leeway to pay your bills while still investing, but it also protects you from excess loss. While lump-sum investing does have its perks, it also has the potential for big losses.

By investing only what you are willing to lose, you are at no risk of financially crippling yourself. DCA ensures you do not lose all your money on an investment, whereas one wrong trade in lump sum trading can greatly set you back. DCA is a great way for newbies to test the markets and trust in an investment before moving forward, seasoned traders are also a fan of DCA as it allows them to diversify their funds in a more structured way.

The point of DCA is to avoid market watching and big losses, DCA is the practice of routinely investing smaller amounts, timed over regular intervals, regardless of price.

Why & how to use DCA

The how is easily answered, as already stated prior, it is as simple as allocating a set amount aside each month for investing. You invest your set amount a month routinely, regardless of the price, growing your total shares. But the real question is why? Why is this strategy so popular and why is it so highly recommended? Let’s get into it.

The benefits right from the get-go are clear, you hold less risk of losing everything at once. As the traders' tale goes, only put in what you are willing to lose. Lump-sum investments do not take this approach with caution, putting it all on the line, or a large portion at least.

DCA means you are continuously putting in small amounts that do not greatly limit your day-to-day life while still growing the value of your portfolio. DCA is a longer-term investment strategy. DCA also eliminates some of the risks involved with investing. Such as we have seen on game shows, some investors are baffled and do not know whether they should settle for less or go for more.

With DCA, the markets don’t matter, you are buying your assets at whatever price they are at and reaping the profits when the price climbs. But also, by purchasing every week rather than all at once, you have the option and ability to buy in on the volatile markets getting better prices per share than someone who put it all in at once.

This strategy also helps you manage emotional investing, forcing you to hold onto your investment despite FUD being spread, ensuring you don’t sell low or buy high. There are too many benefits to DCA to be listed, these are just a few that have been highlighted by investors.

Frequently asked questions

Now that you know what DCA is, how to use DCA, and why you should use DCA, let’s answer some other frequently asked questions to help broaden your understanding. These are some of the most frequently asked questions in regards to the DCA strategy:

Is DCA a good strategy?

Yes, that is why it is a recommended strategy. DCA takes the emotional volatility out of investing in market volatility, helping reduce risk and loss and avoiding trying to time the markets. You are still investing in projects you believe in, just in a more manageable way.

Is DCA good for crypto?

Yes, just like traditional investing, people investing in cryptocurrency can greatly benefit from DCA. Investing small portions routinely still grows your portfolio, but allows you to better manage your funds and resources.

Can DCA make you rich?

Whether DCA can lead to wealth accumulation is a nuanced matter and relies on how you implement the strategy. There are no guaranteed gains in trading activities. While I cannot provide financial advice, investing money using DCA or any other approach has the potential to yield positive results. It might take longer to match the returns of those who invest a lump sum, but it can mitigate the risks associated with timing the market. Time and patience are key factors in this process."

How frequently should I be using DCA?

How often you choose to employ the Dollar-Cost Averaging (DCA) strategy is a matter of personal preference and can vary among investors. Consistency is important, so it's recommended to select a frequency that aligns with your comfort level. This could range from daily, weekly, to monthly intervals, depending on what suits you best."

Is it better to DCA or lump-sum?

Again, this is not financial advice, but both do have great potential. In our opinion, DCA provides a more manageable way for new and busy investors to get into the markets without the risk of losing it all. Which one is better really depends on your investment goals. Investors have seen far more advantages in DCA than lump-sum.

The DCA Conclusion

While there are many investment strategies out there, we thought we would introduce you to Dollar-Cost Averaging. This is a favored strategy by many investors, that is not to say it is the only or best strategy, just one to consider. There are many perks that come with DCA, and that’s what we wanted to highlight in this piece for you today. DCA provides a sense of commitment that is hard to find, ensuring you secure your space in the market without any added risks. There will always be risks involved with investing, but the DCA strategy finds some ways to minimize those risks in comparison. We hope this article has provided you with insights into Dollar-Cost Averaging and its potential to support your investment journey.

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While these terms might seemingly be used interchangeably, there are indeed fundamental differences between them. Whether you're brand new to the industry, looking for a new opportunity, or have been in the market for a while, distinguishing between the three will be a valuable endeavor. When it comes to the realm of blockchain assets and the information surrounding it, we are knowledgeable. Let's delve into it.

What are digital assets?

Digital assets are non-tangible assets that are created, traded and stored in a digital format. This includes everything from a website to a spreadsheet to a logo, anything uniquely identifiable that holds value. In the context of digital assets vs cryptocurrencies vs tokens, both cryptocurrencies and tokens are digital assets as they're created, stored and traded using blockchain technology. 

Through blockchain technology, cryptocurrencies and tokens utilize an advanced encryption technique known as cryptography. This maintains their security and ensures that the digital assets cannot be counterfeited or double-spent. Each individual asset represents something, whether it be content, value or a tangible item.

What Are Cryptocurrencies?

While cryptocurrencies fall under the umbrella of digital assets, they too hold a unique characteristic. In order for a digital asset to be classified as a cryptocurrency, it must be created on its own unique blockchain (often referred to as a blockchain's native token). 

Cryptocurrencies can be traded as a medium of exchange or store of value, depending on the platform for which it is built. On top of that, cryptocurrencies can also be used to pay transaction fees for using the network, or as an incentive to ensure the network is well-maintained. 

Commonly, cryptocurrencies possess a decentralized nature, which implies that they operate without dependence on a central authority for network upkeep. Their functioning is governed by code that enables transactions and creation, rather than a centralized entity. Employing either blockchain or distributed ledger technology, cryptocurrencies leverage cryptography to ensure secure network operation, minimizing the need for trust and reducing the risk of fraudulent activities.

An illustration of a cryptocurrency is Bitcoin, which is constructed on its own blockchain and serves as a type of digital currency.

What Are Tokens?

Tokens differ from cryptocurrencies in that they are created on top of existing blockchain networks and not their own. A prime example is any ERC-20 token built on top of the Ethereum network, while these are still digital assets, they are classified as tokens due to their use of an existing blockchain. DAI, COMP and USDT are all examples of tokens that utilize the Ethereum blockchain.

While some are also mediums of exchange or stores of value, tokens provide more varied use cases. For example, some tokens are used to play games while others might be used for services specific to that platform, or across the greater decentralized finance (DeFi) landscape. 

There are a number of token standards available which each serve different use cases, the majority of which are built on Ethereum. The most common, the ERC-20 token standard, allows for the creation of a token that can then be used across a range of compatible dapps (decentralized apps). Another common token standard is the ERC-721 which is used to create non-fungible tokens, NFTs.

Tokens are typically characterized by the following:

• Permissionless
• Programmable
• Trustless
• Transparent

Tokens tend to take on much wider use cases, such as representing both tangible (property, art) and non-tangible (processing power, governance rights) which cryptocurrencies are integral to the running of the blockchain network. ‍

In Conclusion

Digital assets encompass a spectrum that includes both cryptocurrencies and tokens. Cryptocurrencies are constructed using their individual blockchains, whereas tokens are established atop pre-existing blockchains. The evolution of the blockchain sector and its regulatory landscape is an ongoing process, with the potential for the expansion of token standards and diverse applications spanning cryptocurrencies and tokens. This progression can pave the way for a wide range of social and economic solutions.

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Whether you’re starting your investment journey or looking to learn something new, in this article we’re breaking down the differences between an exchange-traded fund (ETF) and a mutual fund. 

When trying to decide which investment strategy is right for you, it can be difficult to choose between ETFs and mutual funds. Both have their advantages and disadvantages, so it pays to do your research before making a decision.

Exchange traded funds are baskets of securities that trade on exchanges like stocks. A mutual fund is a professionally managed investment portfolio that pools investors’ money together in order to purchase a variety of assets such as stocks, bonds, and real estate investments.

In this article, we will explore the differences between these two types of investments, including the costs associated with each option and how they may fit into your overall investing strategy. By understanding the similarities and differences between both options you can make an informed decision about which one is right for you.

The basics: ETF vs mutual fund

ETFs, as the name might imply, are funds that are traded on an exchange, a basket of investments like stocks or bonds. These can track a particular sector, index, commodity, or other assets, with the first ETF tracking the entire S&P 500, the SPDR S&P 500 ETF (SPY). By investing in the S&P 500 ETF, one is investing in all 500 stocks that make up that particular index. 

An actively managed mutual fund on the other hand is a pool of funds managed by a team of professionals and might include a mix of stocks, money market accounts, bonds, and other options. Unlike ETFs, these actively managed funds can only be traded once a day after the markets have closed as their prices are set once a day. 

ETFs and mutual funds: the similarities

While they differ in significant ways, these two investment instruments also have some similarities. 

1. Both mutual funds and ETFs are managed by professionals

Both ETFs and mutual funds are managed by professionals that are responsible for which investments go into the funds. The difference here is how they're managed. ETFs are passively managed funds while the latter is an actively managed fund. 

2. Both carry less risk than single stocks

Exchange-traded funds, much like a mutual fund, offer investors the ability to pool their resources and invest in a variety of businesses. Mutual funds and ETFs are inherently less risky than investing in single stocks due to the diversification they provide. However, these two forms of financial investments have distinct goals that set them apart (which we will discuss shortly).

3. Both offer a wide range of investment opportunities

Both mutual funds and ETFs offer a wide variety of options when it comes to investing. From a fund that reflects the stock market to one filled with a combination of stocks and bonds to one that follows a particular industry such as technology, there is more than likely to be an ETF or mutual fund out there covering just what you're looking for. 

ETFs and mutual funds: the differences

An important component of understanding these two instruments and determining which one is right for you is establishing the differences between the two. Below we take a look at the differences between a mutual fund and an ETF.

1. They function differently

While ETFs mimic the market producing returns based on the index they follow, a mutual fund is a collection of investments designed to outperform the market. Mutual funds are created by teams looking to build an attractive investment, while ETFs are more typically a collection of "like-minded" investments. 

2. They're managed differently

As touched on above, ETFs are passively managed while a mutual fund is actively managed. Let's break that down. ETFs simply follow the market index for which they're created, and can typically offer lower fees due to not needing a team of managers to select the investments. 

Mutual funds on the other hand are actively managed by professionals and designed to beat average market returns making them susceptible to higher fees (and higher returns). A mutual fund is the best solution for diversifying risk. 

3. They're bought differently

ETFs are traded on stock exchanges in the same way that stocks are, allowing investors immediate trading access during stock exchange hours. These instruments can be bought and sold for particular prices at particular times of the day. Some might say that ETFs are essentially mutual funds that can be traded like stocks. 

Mutual funds however can only be traded after market trading hours and have their price set once a day. To buy actively managed mutual funds, one will need to use a financial advisor, a broker or purchase directly from the fund itself. One might also be able to buy mutual funds from a mutual fund company directly. This instrument also allows for automatic monthly payments providing an easier solution to consistent investing. 

Which is right for you: ETFs vs mutual funds

While neither mutual funds nor ETFs is perfect, both ETFs and mutual funds are great options for investing. Mutual funds tend to be more highly recommended for retirement and other long-term saving goals while ETFs are almost always more tax efficient due to the nature in which they are traded. Which is the right instrument for you will be determined by your needs and preferences.

Best long-term investment option: mutual funds

To build a secure retirement nest egg, it is essential to make wise investments for the long run. Mutual funds are an ideal option as they provide great returns and stability over time, allowing you to leave them for 10, 15, or even 20 years. 

Best short-term investment option: ETFs

Investors are able to capitalize on ETFs just like stocks, actively trading them during the day in an attempt to realize short-term gains and make quick returns. While mutual funds are known to be more expensive options, ETFs tend not to be entirely fee-free either. It's important to note that these come with costs each time that you invest, incorporating operating costs, transaction costs, or could be in a fee-based account. 

Conclusion

ETFs are designed to mimic market indexes and have been shown to provide 10%-12% growth over longer periods of time.

Mutual funds on the other hand are designed to beat market averages, providing higher returns over the long run. Investors looking for a diversified long-term option are advised to look at these four growth stock mutual funds: growth, growth and income, aggressive growth, and international. Always look to mutual funds that have proven results in terms of long-term growth.

If you're new to investing or unsure about the best approach for your financial goals, it's highly recommended to consult a qualified financial advisor. A financial advisor can provide personalized guidance based on your individual circumstances, risk tolerance, and investment objectives. They can help you create a well-rounded investment strategy that aligns with your financial goals, time horizon, and risk tolerance.

Before making any investment decisions, take the time to educate yourself about ETFs, mutual funds, and general investment principles. By combining your own knowledge with expert advice from a financial advisor, you can make more informed investment choices and work towards achieving your financial aspirations.

Never underestimate the power of emotions and trading. While this might sound redundant, emotions play a much larger role in decision making than most might like to admit, and crypto trading is no exception. In order to make successful decisions, traders need to avoid the emotional rollercoaster and learn to look at the markets objectively. 

Here we will show you how to master the emotional pitfalls of decision making when it comes to trading, a skill every successful trader has acquired at some point in their journey. Outlined below are several points one can incorporate into their trading practices, whether trading daily or once a month. 

Outline your trading goals

Before you implement any of these strategies into your trading practices, first establish what your trading goals are. Are you looking to make small returns on short term trades, or are you looking to make smart decisions over a long period of time? When it comes to mastering emotional management in trading you will need to ensure that every decision is in the best interests of your ultimate goal.

Black And White

Learn to remove the grey areas when it comes to decision making and view crypto trading in black and white, i.e. trade like a robot. By incorporating a systematic and rule-based approach to trading you can automatically alleviate the grey areas, this might include algorithms and computer-executed trading strategies. 

Red Light, Green Light

Colours play a huge role in our psyche and can often trigger an emotional response. For instance, if you see a big red candle this will likely stir feelings attached to danger, stopping and signs of warning. Don’t fall into the trap of allowing this to trigger you, and the same goes for seeing green candles. Don’t allow these colours to trigger your emotions and make decisions that deviate from your end goal. 

Axiomatic Framework

Solidify a set of rules for your trading practices that provide unquestionable pathways through which you can trade. For example, set up entries, exits, risk limits and stop orders. Also look at establishing rules in advance around when to exit a trade if it moves favourably or unfavourably, and what your risk parameters are. 

If a trade does not entirely meet all the predetermined criteria you established, do not enter a trade. 

Take A Break

If you’re on a bad streak, consider taking a break from trading activities to re-centre. This practice is used by risk managers on trading floors and is referred to as cut-offs. If a trader is experiencing a poor performance streak they will be moved to a demo trading model until they start to perform better, this also might include taking a break completely. 

Self Reflect On Behavioural Shortcomings

Dig deep to find what reactions you make when faced with emotions such as greed or fear. Attempt to learn as much as possible about your behavioural patterns when trading so that once triggered you can learn to recognise these patterns so as not to fall victim to your own emotional responses. 

Balance

Don’t underestimate the power of balance as it plays an imperative role when it comes to clear judgement, reason and logic. When it comes to being a strong athlete, it’s imperative that the athlete needs to be in a good mental space too. The same runs true for being a strong trader, mental (and even physical) strength plays a strong role in overall balance and your ability to function optimally. These positive changes reverberate across all aspects of your life and can certainly have an effect on your trading endeavours.

Master emotional management in trading

Ultimately the most disciplined version of yourself will yield the best results when it comes to trading. Consider improving on all aspects of your life and then implement several strategies listed above and you should be well on your way to an incredibly successful trading path. 

To learn more about this topic, consider reading “Trading in the Zone” by Mark Douglas and “The Psychology of Trading” by Brett N. Steenbarger.