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Cryptocurrency and Inflation News for Financial Advisers

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A summary of the latest news and reports of interest to the financial advisor.

Fiduciary supporters strive for the “highest legal standard” of disclosures in the CRS form: InvestmentNews reports that the Institute for the Fiduciary Standard recently proposed a redesigned Client Relationship Disclosure, known as the Form CRS, that allows for a head-to-head comparison of advisors and brokers.

Investors flock to municipal bonds for returns and protection: The $ 53 billion in assets poured into tax-exempt municipal pension funds so far this year have already exceeded the inflows of all of last year, according to InvestmentNews.

Bank of America launches a digital retirement program to help employees get on the right track: According to FinancialPlanning, employees receive personalized insights, guidance and tools to help them build a financially secure retirement.

Don’t let your customers buy Bitcoin (or any other cryptocurrency): Joe Sweeney does not recommend investing in bitcoins in your clients’ portfolios.

Inflation Bend: PIMCO’s Tiffany Wilding and Andrew Balls predict that inflation will peak in developed countries in the coming months. However, the exact timing and extent are uncertain, mainly due to delivery bottlenecks.

5 planning strategies in the event that Biden cancels the reinforced base: President Joe Biden’s tax proposal removes the “increased base” for assets transferred after death, a move that would “reverse a century of tax law” and “have far-reaching ramifications for investors” according to Andy Friedman, founder and director of Washington -Updates.

Jeremy Siegel’s 7 Economic Forecasts for Consultants and Investors: U.S. inflation is set to grow much faster than Federal Reserve Chairman Jerome Powell, according to Jeremy Siegel, senior investment strategy advisor at WisdomTree and professor of finance at the Wharton School of the University of Pennsylvania.

Some consultants do not provide rollover advice due to the complexity of the DOL rules: ERISA experts say that according to the financial advisors, other advisors underestimate the complexity of the new escrow rule.

Crypto rule could come: Ex-SEC examiner: Each potential rule could encompass four main areas: issue, trade, clearing, and settlement and custody, Carlo di Florio, former director of the Securities and Exchange Commission’s auditing department, told FA-IQ sister publication Ignites.

Personalized Retirement Income Solutions to Play a Central Role in Retirement Friendly DC Plans: While the defined contribution (DC) industry has made significant strides in helping DC plan participants through the accumulation phase of their financial lives, plans are typically not designed to effectively support participants during their retirement years. New findings from the report by Cerulli, U.S. Retirement End-Investor: Solving for the Decumulation Phase, suggest that many major plan sponsors have expressed an interest in keeping participants’ assets in retirement, and in discussions with Cerulli, vendors announce that some of their larger plan sponsor customers are actively trying to make their plans more retirement friendly.

Five tax planning strategies for the ultra-rich: The Biden government’s proposals won’t have much of an impact on the rich, but some changes will have huge ramifications for the very rich, according to Allan Roth.

Notable research

Does the exclusion from Sin Stocks cost performance?

The researchers examine the effects of excluding sin stocks on expected portfolio return and risk. From an asset pricing perspective, the researchers find that popular exclusions tend to go against rewarded factors such as value, profitability, and low risk. This is detrimental to expected portfolio returns, but this loss of return can be offset by an overweight position in non-sin stocks with similar factor characteristics. We then discuss whether sin itself could be a price factor. Although there are theoretical arguments for the existence of a pronounced inventory of sin premium, this is not consistently supported by the empirical evidence. However, a sin bonus could arise in the future if exclusion policies reach the level necessary to significantly increase the cost of capital of sin stocks. Exclusions also involve risks in relation to the market and to competitors. The researchers show how this tracking error translates into an equivalent loss in expected return that is negligible at low tracking error levels but not at higher levels. However, even modest ex-ante tracking errors can result in significant long-term underperformance retrospectively, which can affect the durability of these strategies over time and the careers of the investors who implement them.

The NFT Market and Its Relationship with Bitcoin and Ethereum

Non-fungible tokens (NFTs) are transferable rights to digital assets such as art, play items, collectibles or music. The phenomenon and its markets have grown significantly since early 2021. The researchers examine the relationships between NFT sales, NFT users (unique active blockchain wallets), and the pricing of Bitcoin and Ether. Using daily data between January 2018 and April 2021, the researchers show that a Bitcoin price shock triggers a spike in NFT sales. Ether price shocks also reduce the number of active NFT wallets. The results suggest that (larger) cryptocurrency markets influence the growth and development of the (smaller) NFT market, but there is no reverse effect.

The Immature “Educated”: Age and the Definition for Accredited Investors

Accredited investors can participate in unregistered securities offerings such as private equity, venture capital and hedge funds if they meet the income and wealth thresholds. This definition provides a simple screening mechanism designed to restrict the purchase of complex securities to investors who are experienced enough to “take care of themselves”. The researchers are investigating whether older households, prone to age-related cognitive decline and more likely to reach the threshold for accredited investors, have greater financial literacy than younger non-accredited investors. The researchers find strong evidence that older households run the risk of meeting the definition of an accredited investor without the knowledge to avoid high agency costs in a largely unregulated securities market. Accredited households aged 80 and older are more than 80% less likely to have high financial literacy than non-accredited investors aged 60 to 64. This decreased financial performance in later life appears to reflect the rate of decline in cognitive measures.

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This major cryptocurrency project is suing the SEC

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In a reversal of the script, a leading cryptocurrency project and its co-founder are suing the Securities and Exchange Commission (SEC).

The lawsuit was filed on Friday by Terraform Labs, the company behind Terra’s decentralized financial protocol, and its co-founder Do Kwon, who confirmed in the filing that he and his company had submitted subpoenas from the SEC at the Messari crypto conference last month in New York were served city. Terra’s Luna cryptocurrency is currently the eleventh largest by market capitalization.

According to the lawsuit filed on Friday, Kwon and Terraform Labs are denying the SEC subpoenas after dialogue about the Mirror Protocol, a decentralized financial protocol on Terra that allows users to trade “synthetic” assets that track the price movements of. track real assets like Netflix or Tesla stocks. The SEC has been increasing its pressure on crypto firms that may offer unregistered securities. CoinDesk first reported the lawsuit aimed at overturning the subpoenas.

Do Kwon, co-founder and CEO of Terraform Labs, speaks to Yahoo Finance.

But the company’s lawsuit not only denies the subpoena and required testimony from Kwon, a South Korean citizen and resident, but also claims the SEC broke its own rules and hired an outside private litigation service company to call the subpoena at a crowded conference “intimidate and embarrass them in public”.

“The SEC’s behavior here violated not only its service rules, but also its rules that require it to keep formal investigative orders confidential,” the lawsuit said.

The story goes on

The filing also documents a five-hour Webex call on July 8, during which Kwon answered questions from SEC attorneys about how Terra’s mirror protocol worked. A later request by the SEC for documents that the company said were either too broad or non-existent “proved the SEC’s misunderstanding about the nature of the mirror protocol itself.”

As Yahoo Finance has previously documented, Terra is one of the premier Decentralized Finance (DeFi) projects. While the SEC’s investigation appears to focus on Terra’s synthetic asset-focused mirror protocol, the project also powers a decentralized stablecoin that differs from cash-backed competitors. Instead of storing cash and assets as collateral, Terras Stablecoin UST is backed by its own cryptocurrency, Luna. As money poured into the UST, the price of Luna (LUNA1-USD) has skyrocketed – it is now more than 6,200% year-over-year.

Do Kwon, co-founder of Terraform Labs, will be introduced as the speaker Yahoo Finance’s All Markets Summit: The Way Forward where he will be joined by Ava Labs President John Wu for a panel on DeFi hosted by Zack Guzman of Yahoo Finance at 12:40 p.m. EST.

Zack Guzman is an anchor for Yahoo Finance Live and a senior writer covering crypto, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.

Read the latest financial and business news from Yahoo Finance

Read the latest cryptocurrency and bitcoin news from Yahoo Finance

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What first bitcoin futures ETF means for cryptocurrency industry

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The value of Bitcoin (BTC) exceeded $ 66,895 for the first time in its history.

Chesnot | Getty Images

This week marked a milestone for the cryptocurrency as investors began trading the first US publicly traded Bitcoin futures fund, outpacing other ETF launches, and another followed on Friday.

These funds invest in bitcoin futures contracts or agreements to later buy or sell the asset at an agreed price, rather than directly in bitcoin.

The new products allow trading through regular investment accounts and bypass the hassle and security concerns of cryptocurrency exchanges.

More from Personal Finance:
The first bitcoin futures ETF starts trading. What to Know Before You Invest
Bitcoin is trading at more than $ 66,000. 3 things to think about before buying
That’s why the cryptocurrency crashes on the weekend

While the new offerings are lagging behind what the industry ultimately wants – ETFs investing in the currency itself – the excitement for initial launch hasn’t slowed.

The ProShares Bitcoin Strategy ETF (ticker: BITO) had one of the biggest first days on record for ETFs, raking in $ 550 million from crypto-hungry investors. In total, shares worth more than $ 1.01 billion changed hands, according to Morningstar.

In addition, the price of Bitcoin rose more than 4% to $ 64,206.51 on Tuesday, according to Coin Metrics, and climbed to an all-time high of $ 66,900 on Wednesday, beating the previous intraday record of $ 64,899 set in mid-April.

“The original intention [of bitcoin], and certainly still the intent of many, was to try to turn traditional finance on its head, “said Ben Johnson, director of global ETF research at Morningstar.

“Instead, traditional finance has trapped bitcoin in its tractor beam, reeled it in and turned it into something Wall Street will make millions, if not billions, of creating this whole new ecosystem,” he said.

Delayed Bitcoin ETF Approvals

Companies have been vying to release the first U.S. Bitcoin ETF for nearly a decade. But the Securities and Exchange Commission has been slow to adopt the asset as it cites concerns about the lack of regulation and the potential for fraud and manipulation in the Bitcoin market.

“General conservatism was a pattern among US regulators,” Johnson said, pointing to the landscape littered with updated Bitcoin ETF filings, abandoned applications, and other clouds of dust.

Previously, most Bitcoin ETF applications were based on so-called spot markets or invested directly in the currency, explained Stephen McKeon, an associate professor of finance at the University of Oregon at Eugene and a partner at Collab + Currency, a cryptocurrency-focused investment fund.

However, there was a postponement in August when SEC chairman Gary Gensler signaled that the agency may be more open to a futures-backed Bitcoin ETF under the Investment Company Act of 1940, which regulates mutual funds and could offer “significant investor protection.” .

I don’t think the SEC is in any rush to move forward and allow direct investments in Bitcoin through ETFs anytime soon.

Ben Johnson

Director of Global ETF Research at Morningstar

The change resulted in a spate of filings ahead of approvals this week.

With the Commodity Futures Trading Commission overseeing US Bitcoin futures and the ETF wrapper falling under the jurisdiction of the SEC, regulators can offer some investor protection, Gensler said on CNBC’s “Squawk on the Street” this week. But it is still a “highly speculative asset class,” he warned.

While the SEC is expected to approve a handful of other Bitcoin futures ETFs, it is unclear if and when the agency can give the green light to an ETF that invests in the currency itself.

“I don’t think the SEC is in a hurry to move forward and allow direct investments in Bitcoin through ETFs anytime soon,” Johnson said.

What to Know Before You Invest

While interest in Bitcoin futures ETFs is immense, many experts suggest taking the time to learn more about the assets before investing.

“It’s like Christmas in October for high frequency traders,” said Johnson, explaining how massive price volatility could be attractive to certain investors.

Although the funds can have a high correlation with Bitcoin, the asset does not reflect the value of the currency as it tracks the price of futures contracts, which can be unpredictable.

“I think you need to be incredibly careful and expect immense volatility,” said Michael Bisaro, president of StraightLine Group in Troy, Michigan, which is number 92 on CNBC’s FA 100 list for 2021.

There may be a place for it, but it can be “massively dangerous” when it becomes a large part of someone’s portfolio, he added.

However, some counselors say that a little dabbling may not be a problem once retirement and other financial goals are on the right track.

“I have no problem with clients investing out of their budget or their lifestyle,” says Jordan Benold, a certified financial planner, partner at Benold Financial Planning in Prosper, Texas, explaining how some have “fun money” on the side.

However, as more and more crypto-based products hit the market, investors could soon be faced with a dizzying range of portfolios.

“Bitcoin is just the tip of the iceberg,” McKeon said. “We will see ETFs with exposure to many different crypto assets in the years to come.”

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Cryptocurrency ATM Boom Comes to Colombia – Emerging Markets Bitcoin News

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Although Colombia is not a country that has adopted cryptocurrencies compared to Venezuela or some African countries, it is the country with the second most cryptocurrency ATMs in the Latam region. The reason for this could be that Colombia has a high percentage of cash. This makes cryptocurrency ATMs a very important tool for adoption in the country.

Colombia, crypto ATM port

There is currently a boom in cryptocurrency ATMs in Colombia as this is the country that is home to the second highest number of these ATMs in the region. Colombia was number one until not so long ago, before El Salvador made its Bitcoin bet and declared it the leading legal tender for cryptocurrency. There are currently 50 cryptocurrency ATMs in Colombia, but the reasons for this boom are not yet clear to some.

Colombia wasn’t particularly well known for its adoption of cryptocurrencies, and its involvement in government-level cryptocurrencies has been limited to a regulatory sandbox operated by exchanges with banks. However, there seems to be an increasing interest from cryptocurrency ATM companies to offer their services there. This could have something to do with the proximity to Venezuela and the lively trade between these two countries.

Alejandro Beltrán, CEO of Buda, a Latam-based exchange, told Forbes:

Colombia remains a major crypto hub in terms of transactionality, and with Venezuela ranking in the top 3 on the global adoption index, the borderline position makes ATMs great alternatives for consumers.

Numbers and explanations

The cryptocurrency ATMs are mainly concentrated in the country’s capital, Bogota, where there are 29. Six are in Medellín, three in Bucaramanga and Pereira, the rest are scattered elsewhere. This clearly shows that most of the crypto ATMs are concentrated in urban areas, away from the borders. This fact seems to rule out transactionality between countries as a major driving force behind the ATM push. However, Beltran has a different theory about this boom.

Colombia is one of the leading countries for using cash in the region, and these ATMs help customers manage and process funds that could not be used efficiently with the current restrictions on the country’s banking sector. In conclusion, Beltran said:

We believe this can be one of the great contributions the sector makes to keep the ecosystem growing vertically.

What do you think of the boom in cryptocurrency ATMs in Colombia? Let us know in the comments section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or approval of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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