Merely navigating the deluge of acronyms, abbreviations and initialisms in the crypto sphere can prove overwhelming. But in reality, if you stick to the basics, read frequently and obey your risk tolerance, you’ll find it really isn’t rocket science after all.
Many believe they are too late to the game. Jon Ovadia, CEO of leading South African cryptocurrency exchange OVEX, says the answer to that question is a resounding “no”.
“Cryptocurrency is very much so in its infancy, albeit considered a mainstream asset class. Why? Because we are at the start of building an entirely new financial system, one in which people – and not institutions – own and control their wealth.”
No doubt there are some growing pains that this space will likely face in the years to come — from government spats to misaligned incentives, regulatory scrutiny and network congestion. These obstacles, however, are time and again overcome.
Even major banks tried to kill cryptocurrency and have failed miserably. Governments have attempted to ban it, to no avail. At the 2014 World Economic Forum in Davos, Jamie Dimon, CEO of JPMorgan Chase, called bitcoin a “terrible” store of value that was also being used for illicit purposes. And now JPMorgan is the first-ever US bank to enter the metaverse and offers over six different crypto funds to its clients.
In the last two weeks, however, things have changed dramatically. We now live in unprecedented times. The Russia-Ukraine debacle has global markets in a frenzy, with investors in a “flight to safety” towards risk-off assets like gold. As a result; cryptocurrency prices across the board have seen major corrections following closely behind legacy coin – bitcoin – which was down more by more than 40% from its all-time high in November last year
Outperforming gold
This correction, however, was short-lived. Bitcoin on Tuesday posted its largest daily gain in over a year. The legacy coin was hovering around US$44Â 000 late on Tuesday, compared to $38Â 000 24 hours earlier. Bitcoin is now outperforming gold in the midst of this crisis. Gold generally fares well as a risk-off asset in the wake of macroeconomic uncertainty. And bitcoin is likened to gold by many as a result of its scarce supply.
Analysts have cited a short squeeze and a pick-up in demand from Ukraine and Russia (as they hedge against their bleeding currencies) as catalysts fuelling the move higher. Sam Bankman Fried, CEO of world’s largest crypto derivatives exchange, FTX, hit the nail on the head when he tweeted (only days earlier) that currency destabilisation in Eastern Europe meant investors in those regions would begin looking for alternatives – bitcoin being an obvious choice.
You can easily buy bitcoin at the click of a button with OVEX. Then you can deposit this bitcoin into a crypto interest account and generate yield on the coins that you hold. At this point, you should be up to scratch with where things are currently. And if a recovery is indeed imminent, you are going to want to get in now. But how? OVEX has put together a short guide which breaks down the six key things to consider before investing in cryptocurrency.
Instead of the traditional open order book system, OVEX developed the far more intuitive RFQ (request for quote) system
The biggest issue faced by crypto beginners is trying to make sense of buying or selling cryptocurrency on an “open order book”. In simple terms, think of an open order book as an online ledger of buy and sell orders. Imagine a bunch of people trying to sell their bitcoin for rand. Each person asks for a certain price, and then buyers bid on the price they’re willing to pay. Eventually, a match is made—or not. This is what drives the market price up or down. All of these bids and asks are usually displayed on a screen with tons of numbers—that’s the open order book. It can be confusing for newcomers to investing. A person new to crypto just wants to buy some cryptocurrency and know what they’re paying, like ordering in a store. More importantly, they want to buy knowing they are doing so at competitive prices.
The issue with instantly buying cryptocurrency in this fashion is something called “market taker” fees. Most exchanges “penalise” their users for taking liquidity off the exchange. This is when you instantly buy or sell a coin at the prevailing market price – rather than putting in an order to be matched on the open order book. This fee makes buying or selling cryptocurrency very expensive.
This is where OVEX stepped in. Instead of the traditional open order book system, OVEX developed the far more intuitive RFQ (request for quote) system where someone can simply type in how much rand (or any other currency) they want to spend, and get an immediate quote for what that will give them in terms of bitcoin or some other cryptocurrency. What’s more – on OVEX you do not incur any trading fees. OVEX does not believe in penalising market takers and charges zero fees. This way you can buy cryptocurrencies like the pros at competitive prices – even if you are just a beginner.
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