There is no doubt that the Bitcoin halving event has generated an inordinate amount of interest in the cryptocurrency. Speculators, normal investors as well as ordinary people are making inquiries about or looking to buy Bitcoin.
It seems no one wants to miss out on a chance to double the value of their investment portfolios as some are predicting.
At the time of writing, Bitcoin had appreciated in value by more than 20% in the last week of April or some two weeks prior to the so-called halving. So what really is this halving and why does it matter?
Bitcoin was created with the intention of making it an electronic cash system and for that to work, its creators had to embed this with a preset of rules or a monetary policy that predetermines how the digital money would function. This includes the total amount of Bitcoin that can ever be issued and how the issuing is carried out.
For instance, the Bitcoin monetary policy ensures that for every block that is completed, new coins are issued or created. Furthermore, the process of issuing coins itself is decentralized and thus, it is not feasible for any one party to circumvent or manipulate the Bitcoin ecosystem. This explains the high confidence that crypto traders have about this upcoming halving event.
In fact, this has happened before, first in 2012 when the event resulted in the block reward dropping from 50 coins to 25. This happens every 10 minutes.
In 2016, this reward further dropped to 12.5 and now it is expected to drop to 6.25 coins for every block starting 12 May 2020.
In the meantime, every last halving event has been associated with a spike in value of Bitcoin. In the past, Bitcoin value grew tenfold after halving and expectations are that its value will grow exponentially even after this halving. There is no doubt many people want to buy into Bitcoin and other cryptocurrencies so they can earn such fabulous profits.
It might as well as be the case that the lockdown measures, which force people to stay locked inside, have given people enough time to learn about Bitcoin and the halving event. This is evidenced by reports suggesting that halving was the most widely searched word on Google at some point!
Nevertheless, a great number of these would-be traders are not sure of what to do in the event of them succeeding at halving. For some, this will perhaps be the first and last time they trade in cryptocurrencies.
It should be noted that there is a world of difference between a theoretical understanding of cryptocurrencies and the actual practice of trading in Bitcoin.
For starters, cryptocurrencies are very volatile; they can drop value significantly in just a matter of hours. It is easy to lose thousands or even millions of dollars just as it is easy to gain the same.
Theory learning cannot truly equip an investor for these possibilities but real trading does. In any case, very few people will bother to invest in Bitcoin or other cryptocurrencies if the risks or costs of learning via actual trading are too high. There is therefore a need for a hybrid system that enables a novice trader to enjoy the best of both worlds and with lower risks.
The Yuppex Trading Platform
This is what an Estonian crypto trading startup had in mind when it created the Yuppex platform. Yuppex is a crypto trading platform where both experienced investors and inexperienced ones can invest and earn.
The sleek Yuppex platform comes embedded with a function that allows an experienced investor (or even an inexperienced one) to set up a peer to peer management account. The asset manager (who is the experienced investor) will set out terms and conditions for investors that wish to participate in his investment fund.
Here the asset manager lays down things like the minimum investment thresholds, the maximum amount that needs to be raised for the fund to be activated, the rollover period as well as the frequency with which the asset manager gives updates. More importantly, the manager also sets the management fee which everyone interested in investing will know in advance.
The concept is very much similar to hedge funds with the main distinguishing feature being the denomination of the pooled funds. The Yuppex pooled funds are denominated cryptocurrencies.
For new investors who do not have an appetite for high risks, this platform gives them an opportunity to invest now when excitement is very high. However, since the investment will be managed by an experienced trader, novice investors are rest assured of continuity and profit flow even after the halving excitement has subsided.
Asset managers are a great way to ease ignorant or less knowledgeable investors into this trade. Asset managers seem to know when to buy and when it is time to sell. The same asset managers are also experienced at techniques such as margin or short trading. No learning in class can equip an investor with the requisite knowledge needed to perform such techniques, only real trading does.
So even though a budding investor pays a fee for the services of an asset manager, this often turns out to be a much better option than theoretical learning or even mock trading. This is because there is a high probability investors will still make a profit even after paying the fees, something that is not possible with the other two options.
For their part, asset managers have an interest in seeing the value of their investment portfolios grow and thus earn a return for traders investing in them. To assure new traders, the Yuppex platform also comes with a rating system that ranks asset manager’s probability to earn a profit on behalf of investors based on their historical performance. This system ranks or assigns a score which is then displayed alongside an asset manager’s profile. A higher rating means a higher probability of succeeding.
So halving or no halving, a Yuppie—a name given to traders on this platform—will remain invested in cryptocurrencies as they take advantage of Yuppex’s peer to peer management account system.
A Platform for High Risk Takers Too
Now it is important to note that the Yuppex trading platform has been designed to serve two types of traders, those that want to invest in others’ pooled funds and those confident they can do this on their own and with their own funds. This distinction is borne out of the realization that not everyone is risk averse. Some people naturally cherish high risk situations and they are willing to do anything as long as there is a chance of them getting huge rewards.
For such individuals, Yuppex has created a function within the platform known as the self trader. This function is especially suited for investors that have prior crypto trading experience or those coming through Yuppex’s real life crypto trade training via the peer to peer asset management.
With this option users will have absolute control of their funds, they decide when to withdraw or when to invest. So for instance, some experts believe the halving event will result in Bitcoin doubling in value immediately after. A self trading investor can choose to act on this belief by accumulating as many Bitcoin as possible before halving.
There are two possible outcomes here; if the trader’s gamble turn outs to be correct, then they will rake in the profits but if the value stays the same, the investor can swiftly change the composition of their crypto investment portfolio without waiting for the rollover period to lapse.
With such a platform, Yuppex is attempting to solve the problem of information asymmetry that has plagued investment platforms for decades. Those with ready funds have until now been unable to buy cryptocurrencies for hodling while those that do usually struggle to liquidate or to swap with other assets.
Yuppex brings a solution for types of investors and indeed this could not have come at a better time.
Terence Zimwara is a blockchain writer, content creator and crypto analyst who has contributed to a number of international publications and news sites like Coindesk, BitcoinAfrica, Coin Info News publications. He is also involved in efforts aimed at raising awareness about the potential impact of this technology in communities across the African continent.