Record valuations signal the arrival of cryptocurrency as an investment vehicle



2020 has been a year of transitions. A global crisis has accelerated changes that have accumulated for years. And the common thread running through many of these breaks from the past is technology. As the year draws to a close, a surge in cryptocurrency valuations has added another to the unprecedented tally of 2020.

Khurram Shroff is the Chairman of IBC Group, a substantial investment firm based in the United Arab Emirates since 2014

One of the early supporters of cryptocurrencies in the region, Khurram Shroff is one of the largest Bitcoin and Ethereum HODlers in the Middle East. Khurram is an award-winning global leader in banking and finance who was named to the prestigious list of “100 Most Powerful and Influential Muslims in Britain and the World” by HP100.

Khurram is the chairman of IBC Group, a substantial investment firm based in the United Arab Emirates since 2014, with a focus on private equity investing in Blockchain technology, real estate and art. Since its inception, IBC Group Limited has focused on investing with a strategic, ethical and innovative strategy, leveraging strong partnerships and cutting-edge technologies. Khurram shares his ideas.

A few days ago, Bitcoin hit its highest value on record, when it broke the $ 23,000 mark. At the same time, Ethereum, the world’s second largest cryptocurrency by market cap, has hit sky-high highs of $ 660. More than ever, the performance of decentralized digital currencies makes even the most conservative market watchers sit back and take note. And those investors who were ahead of the curve – such as Arab ‘whale’ Khurram Shroff and his Dubai-based IBC group, who hold one million Bitcoins – are being credited as trailblazers.

Soaring reflects cryptocurrency’s ability to thrive, in extraordinary time

The impact of the COVID-19 pandemic has been severely felt in global markets. Few disruptions could have had such a global effect, and investors are looking for alternatives to secure their holdings. As all human activity virtually came to a halt, governments around the world were forced to announce huge economic stimulus packages, to defeat industry and citizens. The money supply in the United States grew by a mammoth 33%, which was reflected in the inflationary pressure on almost all the traditional fiat currencies in the world.

In contrast, Bitcoin, which has already been capped at 21 million units, represents an extraordinarily inflation-resistant investment. Savvy investors everywhere have seized the opportunity to hedge against the depreciation of traditional currencies, using cryptocurrencies such as Bitcoin – an inherently deflationary asset.

Economic opportunism is probably one of the most compelling arguments that can be made for change. But the advantages of cryptocurrencies extend to their adaptability as well. Not that long ago, the power consumption of crypto-mining server farms – which consume more electricity around the world than some countries – was a bottleneck. But now a new model of crypto is solving this problem as well.

The emergence of environmentally friendly cryptocurrency models

The first generation of cryptocurrencies used a “proof of work” model – which rewards crypto “miners” for solving complex problems. Unfortunately, for this to be profitable, power-hungry server farms are the norm as crypto miners compete for profits. The newer “proof of stake” model retains the “decentralized consensus mechanism” that cryptocurrencies promise, but rewards on the basis of stakes, plus random selection.

The successful launch of Ethereum 2.0, which was developed by the co-founder and inventor Vitalik Buterin, indicates that the proof-of-stake model is generalizing. With a new, sustainable and greener model of cryptocurrency having been enthusiastically received by the markets, a major concern regarding digital currencies has been addressed. This is why Ethereum’s surge in value, while far less impressive as a valuation than Bitcoin, could be even larger in the long run than its better performing cousin.

Increased Regulation Shows Markets Are Adapting To Cryptocurrencies

So what about the reservations of many governments and market regulators just a few years ago? How will decentralized digital currencies engage financial authorities? The good news is that common sense prevails. Notoriously conservative economic powerhouses, which once viewed upstart crypto with suspicion, are starting to accept the black sheep of the family. And even warm up to its strengths.

Decentralized blockchain-based cryptocurrencies offer investors full and instant verifiable transparency and fairness. With every move, transaction and change recorded by immutable digital records, cryptocurrencies inspire unparalleled investor confidence – easily one of the most favorable factors for economic growth. In the new post-pandemic normal, with economic stability and recovery at the forefront of everyone’s concerns, these assets are particularly invaluable.

The use of the term “currency,” which once sounded the alarm bells in government circles, has been replaced with a more nuanced understanding of cryptography. Regulators have realized that decentralized digital currencies are just another way to hold and exchange value. Already accustomed to regulating countless variations in investment markets, they are making adjustments to include cryptocurrencies, along with their basket of options. And with their path increasingly clear of old-fashioned protectionism, the inherently innovation-friendly nature of cryptocurrencies will ensure their increasingly widespread adoption.


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