It is often claimed that bitcoin offers little use to a society that traditionally operates using fiat currency. Others maintain the perspective that bitcoin is solely an investment tool used to generate capital gains or diversify a portfolio. Whilst the latter perspective may be valid, it is limited. Bitcoin can be viewed as a highly disruptive technology which may have the potential to evolve our financial system, described by some as a digital, social phenomenon. 

Its unique, decentralised, ‘peer-to-peer’ (i.e. absent of a third party) transaction mechanism allows Bitcoin to promote social impact where current systems are not succeeding. In this first of our series, we provide insight into the key ways that Bitcoin can potentially deliver social empowerment around the world.

Read the original article here.

In this five-part series on Bitcoin and the environment, we aim to deliver a thorough overview and context of Bitcoin’s energy use and environmental impact. First, one must understand what drives Bitcoin’s energy use. From there we provide an overview of the current state of the Bitcoin Network from an energy consumption point of view, alongside important industry trends and metrics. 

Bitcoin is frequently subject to interrogation, sometimes questioning its energy use, other times its electricity use, and other times its emissions. By the end of this series, the reader will be able to differentiate between electricity, energy and emissions with aplomb, as well as obtain a comprehensive understanding of global data on all of the above and where Bitcoin fits in. Finally, we close with how Bitcoin currently has, and will continue to have, unbounded further potential to be a driver of energy innovation by being a buyer of first- and last- resort for energy utilities and providers.

Read the original article here.

Craig Hobart, Head of Distribution at Monochrome Asset Management, attended the Advisers Big Day Out (ABDO) conference to discuss the developments in the crypto-asset space relevant to financial advisers following ASIC REP 705.

Mr Hobart’s speech included a market update and recap of the crypto-asset space, plus discussion of topics such as the pros and cons of the different pathways available to access crypto-assets, as well as the advice considerations in light of ASIC REP 705.

Read the original article here.

As the Roads to an Australian Bitcoin ETF series draws to a close, Monochrome peel back the layers of our own market, examining ‘crypto industry baskets’, regulation, and what may lie ahead for Bitcoin ETFs in Australia. During this piece the Monochrome team will provide overview and commentary on some of the indirect products available in Australia, as well as the regulation being laid for the future of Australia’s crypto-asset investment ecosystem.

Read the original article here.

One of the most common criticisms of Bitcoin I hear is that it sounds like a cult or religion. I believe that the religious element of Bitcoin is a feature, not a bug. In fact, I would say the single final financial backstop that gives Bitcoin “value” is its religious adherents. To begin, however, we need to understand what religion means in the context of the True Bitcoin Believer.

Read the original article here.

In the third part of Monochrome’s “The Roads to an Australian Bitcoin ETF” series, the team explores the intricacies of European exchange-traded products (ETPs) holding crypto assets and the challenges faced by European regulators in bringing these products to market.

Read the original article here.

Disclaimer: The content, presentations and discussion topics covered in this material are intended for licensed financial advisers and institutional clients only and are not intended for use by retail clients. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented. Except for any liability which cannot be excluded, Monochrome, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in this material or any loss or damage suffered by any person as a consequence of relying upon it. Monochrome advises that the views expressed in this material are not necessarily those of Monochrome or of any organisation Monochrome is associated with. Monochrome does not purport to provide legal or other expert advice in this material and if any such advice is required, you should obtain the services of a suitably qualified professional.

In the first article of our Risk Series, we outlined several frameworks which can be used to evaluate risk, such as the Value at Risk (VaR) and the Standard Risk Measure (SRM) frameworks, defined systematic and idiosyncratic risks and the four different categories Bitcoin’s risks fall under. Following this, in our second article, we evaluated the overall severity of Bitcoin’s idiosyncratic risks through the use of a risk framework adopted from Australia’s prudential regulator, the Australian Prudential and Regulation Authority (APRA), and developed risk mitigation plans for many of these risks.

When investing in exotic assets, investors would be wise to tread with caution. However, this can lead to investors worrying about situations or circumstances that, while potentially highly detrimental, have a low probability of occurring. Whilst Bitcoin has uncontrollable risks that mirror some of these criteria, and which should not be underestimated, there are more immediate risks that should be dealt with.

In this piece, we look at some of the risks of investing in Bitcoin that are beyond mitigation or are impracticable to mitigate, which we define as uncontrollable risks. Furthermore, conclusions will be drawn to determine whether or not these uncontrollable risks may become controllable in the future.

Read the original article here.

Despite first being launched on January 3rd, 2009, Bitcoin had no market value until over a year and a half later, first trading for around 5 US cents in July 2010. Just over 13 years later, a single bitcoin was worth approximately US$39,000 - a growth of just under 80 million percent (80,000,000%) since its inception.

When looking at the evolution of Bitcoin’s price, a simple linear time series imperfectly characterises it as highly volatile and unpredictable. As a result, there is no shortage of misconceptions on the historical path of Bitcoin.

This article explores how using a logarithmic scale allows us to more accurately interpret the growth of Bitcoin’s price, especially the first 8 years, which look largely uneventful on a linear scale as illustrated in the figure below. This is because Bitcoin’s historic growth has been exponential in nature – which we will soon discover is perfect for a logarithmic visualisation.

Read the original article here.

Disclaimer: The content, presentations and discussion topics covered in this material are intended for licensed financial advisers and institutional clients only and are not intended for use by retail clients. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented. Except for any liability which cannot be excluded, Monochrome, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in this material or any loss or damage suffered by any person as a consequence of relying upon it. Monochrome advises that the views expressed in this material are not necessarily those of Monochrome or of any organisation Monochrome is associated with. Monochrome does not purport to provide legal or other expert advice in this material and if any such advice is required, you should obtain the services of a suitably qualified professional.

In light of the March 2 release of the Cyber Security Industry Advisory Committee’s (CSIAC’s) recent paper, Monochrome provide summary of the recommendations and perspectives offered.

Following “Locked Out: Tackling Australia’s ransomware threat” and “Back to Business: Recognising and reducing cyber security risks in the hybrid workforce”, the Cyber Security Industry Advisory Committee has turned its focus towards Australia’s burgeoning crypto technology industry and the crypto-asset investment industry associated with it.

Titled “Exploring Cryptocurrency”, the paper provides a broad level overview touching on elements including secure storage, crypto usage in cyber crime and blockchain analytics with a number of included case studies. The paper also comments on prior CSIAC report findings, and provides guidance on an increasingly important sector in a post-Web2.0 world - cyber security.

Read the original article here.

Disclaimer: The content, presentations and discussion topics covered in this material are intended for licensed financial advisers and institutional clients only and are not intended for use by retail clients. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented. Except for any liability which cannot be excluded, Monochrome, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in this material or any loss or damage suffered by any person as a consequence of relying upon it. Monochrome advises that the views expressed in this material are not necessarily those of Monochrome or of any organisation Monochrome is associated with. Monochrome does not purport to provide legal or other expert advice in this material and if any such advice is required, you should obtain the services of a suitably qualified professional.

In the second of Monochrome’s multi-part series on Bitcoin’s investment market evolution, the team delves deeper into Canadian markets and the court cases that defined them, the world’s first spot Bitcoin ETF and why not all first-mover advantages are equal.

Read the original article here.

Disclaimer: The content, presentations and discussion topics covered in this material are intended for licensed financial advisers and institutional clients only and are not intended for use by retail clients. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented. Except for any liability which cannot be excluded, Monochrome, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in this material or any loss or damage suffered by any person as a consequence of relying upon it. Monochrome advises that the views expressed in this material are not necessarily those of Monochrome or of any organisation Monochrome is associated with. Monochrome does not purport to provide legal or other expert advice in this material and if any such advice is required, you should obtain the services of a suitably qualified professional.