Bitcoin Was This Year's 'Worst Investment', FinExpertiza Consulting Claims

Francisco Memoria

Researchers from the FinExpertiza Consulting group have recently concluded that bitcoin, the flagship cryptocurrency, was this year’s worst investment, and that palladium, a precious metal used in autocatalysts, was the best.

According to a report published by Rossiyskaya Gazeta, FinExpertiza’s research saw it look into 14 different financial instruments and analyze what would’ve happened to a 300,000 ruble ($4,330) investment into each one of them this year.

If the money was invested in bitcoin, the researchers noted, it would have dropped by over 72.2%, as 213,000 rubles ($3,000) would’ve been lost. On the other hand, if the funds were invested into palladium, the 300,000 ruble investment would’ve increased by 30,000 rubles ($433), or little over 10%.

Nina Kozlova, the general director of FinExpertiza, was quoted as saying:

And if we look in retrospect, for example of two years, we will see that palladium, in general, has become the only metal with a positive return.

Bitcoin notably started the year at roughly $13,400 and has kept on dropping to a low of little under $3,200. This month the flagship cryptocurrency started recovering and, at press time, it’s trading at $3,670.

According to Mati Greenspan, a senior market analyst at eToro, it could still drop to under $3,000 although the $3,500 to $3,000 region is seen as a support zone. The cryptocurrency’s fall notably hasn’t seen development and adoption stop, as earlier this month its layer-two scaling solution, the Lightning Network (LN), surpassed the 500 BTC capacity.

Bitcoin's price drop this year

Last year, bitcoin went from $1,000 to a near $20,000 all-time high, which led some to believe its price was going to keep on growing. Tom Lee, a Wall Street analyst and the head of research at Fundstrat Global Advisors, maintained a $25,000 by year-end price prediction throughout most of the bearish trend, but lowered it to $15,000 last month.

Other long-term price predictions still see the cryptocurrency’s price surge in a small amount of time. One of the most bullish predictions is that of cybersecurity pioneer John McAfee, who has predicted BTC’s price will hit $1 million by 2020.

Palladium outperformed every other asset in the study as its price has been heavily influenced by the threat of a potential US-China trade war, and by demand that far surpassed supply this year, according to analysts.

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Chinese Court Rules Bitcoin Is Legally Protected Virtual Property

The Hangzhou Internet Court, in China, has recently ruled bitcoin is seen as virtual property in the country, and as such is legally protected.

The ruling came in a case in which the plaintiff, Mr. Wu, sued the Shanghai Technology Company, which allegedly operated the FXBTC cryptocurrency exchange on Taobao, a leading Chinese online marketplace, and sold bitcoin back in 2013.

Wu reportedly bought 2.675 BTC for 20,000 yuan, about $2,900, back in 2013 from the exchange. In 2017, during the cryptocurrency market’s bull run that saw bitcoin hit a near $20,000 all-time high, the buyer wanted to access the funds, but found out FXBTC closed and could no longer get to the BTC.

According to Beijing News, the plaintiff claims the Shanghai Technology Company didn’t warn it was closing the platform nor gave him a chance to access the funds afterwards. The store likely shut down as between 2013 and 2017, the Chinese government made it illegal to trade cryptocurrencies, which in turn forced Taobao to stop vendors from selling cryptos on its platform.

While the plaintiff failed to prove Shanghai Tech was the vendor that sold him the bitcoin and lost the case, the court did determine bitcoin is legally protected virtual property.

According to Dovey Wan, this was seen as a bullish signal in China and chatter on Weibo, a Chinese microblogging platform similar to Twitter, seemed to point to this as the reason behind bitcoin’s recent price surge.

According to CryptoCompare data, BTC rose 4.8% in the last 24-hour period, and is currently trading at $10,300. Earlier today, bitcoin jumped from a $9,400 low to as much as $10,500 before facing a small correction.

Notably, this isn’t the first time a Chinese court defends bitcoin. As CryptoGlobe covered late last year, an arbitration court ruled bitcoin should be protected as property by law, and clarified at the time Chinese law doesn’t forbid owning or transferring bitcoin. Earlier this year, a prominent Chinese lawyer argued owning and occasionally trading bitcoin is legal in the country.

On Twitter, Wan clarified that while holding bitcoin as private property is legal, trading the cryptocurrency “in a systematic way” isn’t.