Liechtenstein Based Start-up To Issue Tokens At The Value Of Collectable Cars

Investment platform CurioInvest and Seychelles-based digital asset platform MERJ Exchange Ltd. will jointly begin offering a token backed by collector luxury cars.

The so-called Car Token (CT1) token is set to be attached to the value of collectible cars giving more people a chance to have a portion of an asset, BNN Bloomberg informed on the 30th of January, 2020.

The company specified that the appeal of the token also lies in the fact that the value of such goods continues to increase in value. “When you look at fine art, collectible cars, they have been perceived historically as safe havens,” said Fernando Verboonen, founder and CEO of CurioInvest.

Verboonen added that each holder of CT1 tokens will be an advantage from holding a portion of an asset, though did not delve into a comprehensive explanation at that juncture. CurioInvest’s site stipulates that a token owner is able to share in any latent profit when the vehicle is resold, where the amount of money they get is directly proportional to the value of the car.

It is also said that “any vehicle that increases in value by more than 20% will be resold by CurioInvest so that investors can share in the profits.” As such, the partners are planning to list 500 collectible cars on the exchange worth over $200 million.

Although the token is backed by the value of classic cars, CurioInvest told Cointelegraph that it does not consider it a stablecoin but rather a security token as it comes with and by the Financial Market Authority approved prospectus and International Securities Identification Number.

Jim Needham, head of digital strategy at MERJ, further said: “You can have a guy in Uganda who’s able to invest in a rare car that’s kept in a vault in Stuttgart, tokenized by a company in Liechtenstein and it all fits within this recognized regulatory environment.” However, that Ugandan investor will hardly be able to drive the car he invested in..

When asked what would push people to hold such tokens and what would be the impetus behind it, CurioInvest said that individuals can invest in multiple cars and thus “invest in the virtual garage of your dreams, backed by tangible, real-world assets.”

For the future, CurioInvest plans to allow investors to monitor their vehicles via webcam, occasionally visit the vehicles, and participate in driving experiences involving similar cars.

Considering the way depreciation could affect the token value, CurioInvest pointed out that all forms of investment are vulnerable to risks. The company also noted that cars are real assets, which may be subject to material risks such as potential vehicle damage, and added:

“The value of an investment is determined by market forces and thus, it can fluctuate in both directions. You will make a profit if the value of the vehicle exceeds maintenance costs when it is resold by Curio. If you are selling Car Tokens peer-to-peer, there is no guarantee that you will locate a buyer willing to purchase them at your desired price.”

Some other car manufacturers have also embraced blockchain in regard to classic cars. Thus, Italian luxury sports car brand Lamborghini began using the Salesforce Blockchain to authenticate heritage Lamborghini cars. The platform enables Lamborghini to trace, certify andauthenticate heritage cars faster and more securely using its blockchain platform.

Explained: Asset Diversification And Allocation For Cyptocurrency

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In the traditional world of finance, the performance of different assets could vary under different market conditions. For example, real estate investment trusts could outperform general equities in a turbulence market, and defensive stocks could disappoint investors when the appetite for risk is heightened. That’s when diversification comes in. The main purpose of exposure to different asset classes is to balance risk and return in a portfolio.

In the cryptocurrency space, diversification could also be one of the ways to manage risk exposure. However, some would argue that it is impossible to diversify a crypto portfolio due to the fact that major altcoins are highly correlated with Bitcoin. However, with a carefully selected basket of altcoins — in conjunction with stablecoins — investors could able to navigate the market more effectively with manageable risk.

There has always been a debate about putting all your eggs in one basket. While in some cases concentrating on only one asset could maximize profitability, this also maximizes the risk exposure. On top of that, a heavy-concentration strategy gives investors no room for any errors in analysis, and it overexposes the investor to unnecessary risks.

However, over-diversification could also hurt investment returns. Some investors believe that the more assets they own, the better return they can have — and that’s not the right concept. It could increase investment cost, add unnecessary due-diligence efforts and lead to below-average risk-adjusted returns.

Asset Allocation

Financial professionals almost universally acknowledged asset allocation as the most critical decision in the entire investment process. Consensus research has proven that 80–90% of a portfolios’ risks and returns can be attributed to asset allocation. However, the allocation process is often the most ad hoc and ignored step in investment decision making.

Many investment advisors want to exclude cryptos from the allocation process as they consider the assets “too risky”. But one must evaluate the benefits of the asset class when combined with more traditional allocations.

4 Types of coins to diversify and allocate

Bitcoin- 25–33% of your portfolio

Bitcoin is currently the largest cryptocurrency based on market cap and makes up over 50% of the entire cryptocurrency world. It would be fair to say that the entire cryptocurrency market is highly correlated to Bitcoin’s price movements. Bitcoin is also the default base currency of the cryptocurrency world. Anyone that wants to buy any other altcoins or tokens, would need to purchase Bitcoin first in order to easily acquire any other coins. This is because local cryptocurrency exchanges usually limit the amount of coins that can be purchased by local fiat money.

Ethereum- 15% of your portfolio

Ethereum is one of the coins that is used alongside Bitcoin as a base currency since it is much faster than Bitcoin. The utility of Ethereum is also correlated to its price; the more developers and projects built on Ethereum, the higher the demand for ETH coins, which will lead to a price increase. Having a portion of your investments in established and credible coins such as Ethereum is vital in stabilizing your portfolio.

Passive Income Provider- 25% of your portfolio

XcelToken Plus is a great passive income provider. ERC20 token on the Ethereum Blockchain Platform, that is painstakingly crafted with the purpose of building, engaging and fostering a large crypto-community within the hospitality, retail and gaming sectors.

By holding a good portion of a passive income earner token, you will be rewarded regularly for keeping faith with the brand. As a keen investor, you want to be in a position of having a mix of risk in your portfolio ranging from high to low. A passive income earning-token is a must-have.

Stablecoins- 35% of your portfolio

Stablecoins are a great way to protect your portfolio from volatility and provide you with much-needed liquidity (or ‘cash’) whenever you have a need. Imagine putting all of your money into cryptocurrencies and the market takes a deep dive; you would lose a major portion of your investments. It is therefore important for you to always keep a portion of your portfolio in stablecoins so that you can cash-out when needed or simply buy more cryptocurrencies when prices take a dive. This action plan will also prevent massive losses in your portfolio.

A well-diversified portfolio goes a long way in ensuring success in the ever-evolving and volatile cryptocurrency markets. There are over 2,000 coins and tokens with varying degrees of risks and characteristics for investors to choose from. Having a balanced portfolio with all the four categories of coins could save you from lots of headache and worry. Lastly, investors should always perform thorough due diligence before investing in any coin.

Cryptocurrency: A Source Of Passive Income

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In order to understand how crypto can become a source of passive income, we must first understand or define what passive income is.

What is Passive Income?

Passive income is earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable. However, it is often treated differently by the Internal Revenue Service (IRS). Portfolio income is considered passive income by some analysts, so dividends and interest would therefore be considered passive.

Passive income is a big step for cryptocurrency: it’s about time that people use digital assets productively. There are options that vary in time-intensity to fit one’s investor capacity and crypto needs at the same time.

Cryptocurrencies are complicated so you need to make the point that it could be very easy. It’s common knowledge that institutional investors, specifically from CME, are increasingly embracing the world of crypto. As far as passive income is concerned, institutional clients may be interested in these types of earnings in which case certain conditions are met. For example, the return on investment should be at one level or higher than the return on investment instruments in the classical market. At the same time, risk level must not exceed fiat market risks. Otherwise, investments will be deemed as risky and may be of interest only to highly speculative hedge funds that specialize in this domain.

Staking isthe simplest way to earn passive income, as the market pays you for holding cryptocurrencies for a certain period of time. It offers an investor a potential ROI which is more predictable than others and no investment in hardware is required. Technically, staking means a user stakes his coins to “forge” blocks by maintaining a wallet or node. When staking your coins, investors usually go through a lock-up period while voting — rules on this vary from project to project. After voting, investors get their coins back as well as the staking reward (up to 30% of the coins put in stack). Staking has been misrepresented as the equivalent of a bond in cryptocurrencies. In reality, it is much more of an instrument to participate in the corporate governance of a project and getting paid for it. As mentioned earlier, you don’t need mining hardware because staking is fulfilled via e-wallets.

Blockchain has two layers: application and implementation. The lightning network belongs to the implementation layer or Layer 2. The owner of lightning has the ability to quickly process a lot of transactions. This method does not offer an immediate return on investment; however, they offer transaction fees. Lightning network nodes have strong potential: they are expected to grow in demand within the market. So, if you invest in lightning nodes, your returns will increase in line with their usage maximization.

Here everything starts with setting up automated lending on a crypto exchange platform. AI is used to manage lending operations. Again, the income depends on the amount of your holdings: the more you own, the more AI works for you, and ultimately, the more your passive income is. While the process of lending is fully automated, an investor can take control of parameters — loans can be varied in size and length.

For beginners, here are a few tips to make cryptocurrency a profitable investment.

First of all, always assess the risks cold-headed. You should never invest in an asset if you have heard about or just because it is “hype”.

Secondly, rumours in the cryptocurrency market should be carefully filtered. There is no need to jump on every headline risk before properly checking the news provider and if the story has legs.

Finally, work with credible exchanges — your prudence matters a lot for your own safety and the stability of the entire ecosystem.