It's moving hard, very hard! 📈📉 - Newsletter #26
The crypto market is exploding, with gains of nearly 15% on the biggest stocks like Bitcoin and Ethereum
It's moving hard, very hard! 📈📉
Welcome to the new issue of the Ambrosia Newsletter. We meet again to review the crypto news.
If you want to follow our adventures day by day, go to Linkedin 🔔
A SPECTACULAR END TO THE MONTH
3 weeks ago:
🚫 SEC sues 2 largest crypto platforms Binance and Coinbase
👉 Consequence: the market collapses with falls of over 30% on the biggest altcoins
✅ Biggest managers expose themselves to crypto
👉 Consequence: The crypto market explodes, with rises of nearly 15% on the biggest stocks like Bitcoin and Ethereum
We have indeed seen a very strong institutional interest in cryptos! It all started with BlackRock, the octopus with $9,000 billion under management, proposing a spot ETF on Bitcoin.
In the days that followed, financial giants Charles Schwab, Fidelity Digital Assets and Citadel Securities announced the launch of a new crypto-currency exchange.
The result? The price of bitcoin soars above $31,000 and takes the rest of the crypto market with it 🚀
In short, these volatility movements once again confirm that it's almost impossible to "time" the market! The best option for minimizing risk is to accumulate entry points by buying little by little, on a recurring basis.
That's what Ambrosia's programmed investment plans are all about 🗓
68% OF BITCOIN HAS NOT MOVED IN 1 YEAR
The majority of investors no longer touch the BTC they buy. Most have a BUY AND HOLD strategy 👊
This means that many are now abandoning short-term approaches like trading to simply hold their bitcoin in the hope that the value will increase over time.
Long-term thinking is often the best way to make money when investing!
Learn more about crypto with this blog written by our teams!
What is Bitcoin?
Bitcoin, a revolutionary cryptocurrency, has attracted worldwide attention since its inception in 2008
Blockchain for dummies
A revolutionary technology on which all crypto-currencies are based
THE MIC IS YOURS
We answer your questions in public. Here's the best one we received:
Philippe: "I want to invest an envelope of €10,000 in crypto. Is it better to invest all at once, or to smooth it out over time?"
First of all, let's define lump sum and DCA strategies:
👉 Lump sum = Invest your entire envelope at once.
👉 DCA = Dollar Cost Averaging. This strategy involves buying the same amount of an asset at regular intervals, regardless of price trends.
DCA smoothes risk over time. You'll sometimes buy when prices are high, and sometimes when prices are low. Ultimately, you'll have an average purchase price.
And since DCA allows you to take less risk, the trade-off is lower returns than with a Lump Sum strategy.
So which strategy is best? Well, both are relevant! It all depends on your investor profile!
If you have a large sum of money to invest, for example as the result of an inheritance, Lump sum will often be the preferred choice.
A Vanguard study shows that, in around two-thirds of cases, lump sum increases the value of the portfolio more than DCA 💁♂️.
On the other hand, if at the end of each month you manage to put a little money aside, DCA seems to be the obvious choice.
And if you have a lot of money to invest + a monthly savings capacity (what luck), you can also do a mix of both strategies ✅
In any case, whichever strategy you choose, try to think long-term! In any case, at Ambrosia, we're here to help you choose the best strategy for you.
PUBLIC DEBT IN FRANCE
Our beloved country's debt is close to €3,000 billion! That's 111.6% of GDP by the end of 2022 🤦
And since the subprime crisis in 2008, public debt has more than doubled! Thanks to monetary injections 😅
Why is this worrying? A few weeks ago, the rating agency Fitch Ratings downgraded France. The purpose of this rating is to assess the solvency and repayment capacity of a State.
And these assessments are represented by letters: "AAA", "AA", "A", "BBB", "BB", etc... The highest rating being AAA.
By lowering our rating from AA to AA-, Fintech Ratings is in other words indicating that France's creditworthiness is considered to be weaker 👎
What are the consequences? As it becomes riskier to lend money to the French state, the interest rate on borrowing will be higher.
And every year, France has to repay part of its maturing debt. But with the ECB's rate hike and a higher rate due to our poor credit rating, it's going to cost an arm and a leg 💸
That's it for today! See you very soon 😁
Subscribe to our newsletter to keep up to date with the crypto market!