A global 60/40 stock-bond portfolio mix could benefit from the marginal allocation to this portfolio of

Bitcoin (BTC) to further augment investor risk-adjusted returns, here measured by the Sharpe Ratio. If the historical BTC Sharpe Ratio is higher than that of a traditional 60/40 stock-bond portfolio, then additions of BTC to the traditional portfolio model in incremental amounts should improve the overall performance (as measured by Sharpe Ratio) of an investment portfolio that contains all three assets.

The advantages that a bitcoin ETF brings to investors, both retail and especially institutional, are rooted in the credibility accorded the relevant financial instrument through registration with the regulator and subsequent listing where this also takes place. Increased investor confidence brought about by such registration inadvertently leads to greater investor participation, higher trading volumes and pursuant improved liquidity. 

The thinking behind the development of blockchain technology was a move away from centralised control by building a decentralised network that allowed for peer-to-peer engagement away from the watchful gaze of governments and their proxies. This was thought to be a step in the right direction in enhancing user-privacy and allowing innovators the space within which to advance technology. A conflict, therefore, inevitably emerges
between those who wish to engage in initiatives that move away from centralised power by allowing individuals to interact directly without a controlling centre while at the same time enhancing user-privacy, on the one hand, and a system that is both centralised and regulated on the other. In this report, we delve into this conflict.

The existing mobile payments system- Mpesa already has huge penetrability in Kenya given the high mobile subscription, thereby limiting the opportunities towards total financial inclusion that a CBDC would provide in domestic retail payments. A CBDC could come in as a supplementary framework or as a back-up system enabling payments to be made in a CBDC currency rather than the existing fiat currency. This functionality would also be extended to include those on other mobile payments systems like PesaLink, PesaPal, JamboPay, etc

Here Blockchain and CryptoAsset (K) Ltd. give a view of how cryptocurrency or cryptoassets fit into the wider technological space involving blockchain and related technologies and the investment opportunities made available.

Decentralised Finance (De-Fi) aims to democratise finance by replacing legacy, centralised institutions with peer-to-peer relationships that provide the full spectrum of financial services – from everyday banking services, loans and insurance to complicated financial contracts including derivatives-trading and asset-trading.

It is almost impossible to believe that Blockchain Technology or Distributed Ledger Technology (DLT) has been around for ten years now. However, one key blockchain property that has transformative promise within the context of the public sector is the irreversibility or tamper-proof property. Once transactions or records are validated and entered into the blockchain database, they remain permanently inscribed and cannot be altered thereafter. 

As cryptoassets enter the mainstream, index funds are increasingly presenting both retail and institutional investors with the opportunity to gain exposure to the cryptoasset market. In this space, index funds are now being employed to track the activity and performance of specific cryptocurrencies or basket of cryptocurrencies to meet a variety of risk and return objectives of different client types.  

Looking at mining activity can provide critical insight into forecasting the price of and demand for Bitcoin, which helps investors identify good opportunities to enter the market.

According to some industry analysts, both the increase in mining difficulty as well as the increase in hash power are long-term bullish indicators for the price of Bitcoin. Across the years the correlation between Bitcoin price and the hashrate has been very high, suggesting a relationship exists between these two variables.

Cryptocurrencies are a recent phenomenon that has opened up immense opportunities in all fields of society and life. The reality, however, is that with this digital innovation has come increased scrutiny and concern from both legislators and regulators. Legislators and regulators are now faced with the difficult task of straddling a fine line between ensuring the stability of the global financial system and protecting the interests of investors while avoiding stifling technological innovation.  

Initially billed as a medium of exchange by its founder- Satoshi Nakamoto, bitcoin has risen exponentially in value- from a low of $0.17 in December 2010 to a historic high of $19,498.63 in December 2017- a rise of 11.47 million % (not a typo) in 7 years. Due to this very high valuation, bitcoin has lost any functionality as a medium of exchange (to replace or rival fiat currency) and is increasingly being viewed instead as a store of value. It has earned the title- ‘digital gold’. 

It is one year since the government launched the Kenyan blockchain and Artificial Intelligence report in a well-publicised event at the ministry of ICT.  It is perhaps a good time to look back and reflect on what has been achieved or not over that period. When one talks about blockchain, what comes to the mind of many is the money aspects made popular by the bitcoin crypto currency craze. Whereas crypto currencies are the first demonstrated use case of the blockchain experiment, they represent a very small part of what is the full scope of possibilities within the blockchain space. 

Initial coin offerings (ICOs) are a new way of raising funds for projects running on blockchain technology. Similar to the role venture capital (VC) plays in financing start-ups in traditional finance, ICOs are the future of venture investing in the blockchain world. With ICO start-up capital, exponential returns can be earned in a very short period of time. When a decentralized application is created, the start-up behind it can sell the associated coin or token early in the process for an amount based on what it thinks it’s worth at that stage in order to fund its continued development.  

While at the World Economic Forum at Davos last week, the CBK Governor Dr Patrick Njoroge sent out a flurry of tweets that caught the crypto enthusiasts in Kenya by surprise and sent them talking. Essentially, the governor seemed to warm up to the digital currency or crypto conversation, in stark contrast to his 2015 circular to financial institutions. In one of his tweets, the governor seemed to indicate support for digital currencies or cryptos, as long as there is a solid regulatory or a governance framework. 

The next decade has already been widely predicted and branded as the fourth industrial revolution. Essentially, this coming decade will see convergence of the three technologies of Cloud, AI and mobile internet (5G) getting deeper and enabling new business models to emerge. However, what is often underestimated is the impact that Blockchain technology will have in all these developments. Clearly, the most known use-case for Blockchain tech is also the most controversial one; the 10 year-long cryptocurrency experiment, that still continues to run without a technical glitch known as Bitcoin.