It’s no doubt that 2017 was a remarkable year for Bitcoin, with a single Bitcoin valued at almost $20, 000. That said, Bitcoin’s movements over the last year have certainly paved the way for up-and-coming altcoins.
Alternative coins refer to any other cryptocurrency that isn’t Bitcoin. Based on price growth and market cap, Fortune Jack analysed the top performing altcoins from 2017, to find out where these altcoins will be headed in 2018.
Quick View: The Fastest Growing Altcoins of 2017
|2017 PERFORMANCE OF TOP ALTCOINS|
|Currency||Percentage Growth||Market Cap|
|1. Ethereum||9 162%||$119,952,919,813|
|2. Ripple||36 018%||$79,398,972,323|
|3. Litecoin||5 046%||$13,161,359,753|
|4. Bitcoin Cash||501%||$43,522,892,183|
|5. NEM||29 842%||$12,785,579,999|
All stats as of 18 Jan 2018
Seeing a massive 36 018% return in 2017, Ethereum is first on Fortune Jack’s list of altcoins to watch in 2018. In 2017, the coin overtook Bitcoin, which grew 9 162% compared to Bitcoin’s 1000%. Ethereum is a well-known contender to Bitcoin, not only for its leading growth over the last year, but also for its functionality built on a blockchain with several applications and for being a remarkable investment tool.
The second coin to watch in 2018 is the much talked about Ripple, which has a total market cap of more than $79 billion. The price of Ripple appeals to many, with one token costing as little as $2.05 at the time of writing, compared to $2,574.19 for Bitcoin Cash. Ripple has made remarkable progress in 2017, having the highest growth compared to all coins on this list – growing an unbelievable 36 018% last year. And in December, Ripple overtook Ethereum for the number two spot by market cap.
Launched in 2011 by a former Google engineer, Litecoin has been referred to as the silver to bitcoin’s gold, with a market cap of $13,161,359,753 and a total circulation of more than 54 million tokens. Popular for drastically reducing the time needed to confirm new transactions while insuring more inclusive use of the coin, this alternative to Bitcoin has a growing following of loyal supporters around the globe.
- Bitcoin Cash
Having only been on the market since August 2017, and created as a result of a hard fork, Bitcoin Cash has earned the fourth spot on this list of coins to watch in 2018 – with an impressive total market cap of about $43 billion. Each coin costs around $2 574.19 and investors are looking forward to seeing this newer coin outperform some of the bigger altcoins on the market.
Having gained the nickname as ‘China’s Ethereum’, NEM is the currency popular for its POI (proof-of-importance) rather than a proof-of-work system. NEM grew 29 842% in 2017, three times the amount than Ethereum did, with a market cap of more than $12.5 billion.
Investing in Altcoins in 2018
With each coin offering something unique to the blockchain user, here’s a breakdown of what makes each coin a good investment this year:
- While Bitcoin has had a volatile 2017, Ethereum’s growth has been consistent, and it’s expected to reach new heights this year. Not only will its value grow, but so will the number of Dappson its platform – leaving many excited about the prospects for ETH this year.
- Ripple is known for being the centralised, bank-focused digital currency – but it’s not just a currency, it’s also a system on which any currency, including bitcoin, can be traded. Founded by a fintech start-up, the number of XRP circulating is about 7 billion out of a maximum supply of 100 billion – larger than the other currencies on Fortune Jack’s list of coins to watch.
- Heavily influenced by bitcoin during its development, Litecoinis also one of bitcoin’s biggest global competitors. But, it’s also popular for having four times the total number of bitcoins that can be mined, with a lifetime cap of 84 million coins. On top of that, it has a faster block generation rate, thus offering a faster transaction confirmation. And it’s not just for developers or peer-to-peer transactions – LTC can be widely used, from purchasing a can of soda to buying property.
- Bitcoin Cash is said to take over bitcoin this year since prominent Bitcoin figure, Craig Wright, recently announced his backing for BTH over BTC in 2018. Many investors are now looking to altcoins like BTH for better returns, with Bitcoin Cash already beating bitcoin’s slow transaction times and high costs.
- Similar to what Bitcoin does with payments, NEMlevels up with its “smart assets” – taking the appeal of bitcoin and applying it to all technological infrastructures. From loans to health records, businesses see the need to invest more into their company’s digital structure. And since anyone is able to use NEM, (yes, you don’t need to be a programmer to use it and NEM allows coding in any language!) the coin has fast-tracked its way onto the list of coins to watch this year.
If you’re looking to invest in one of the currencies on this list, market growth for altcoins in 2018 looks great. Bitcoin’s “dominance” factor is currently only 37.5% – 52.5% down from a year ago when it exceeded 90%.
Remember that no currency is protected from investors pulling out, laws changing, or the growing adoption of altcoins. At the time of writing, the crypto market was in the middle of a huge crash amid a major selloff. And even though most of those values have bounced back, the market is well known for its fluctuating nature, because, like any investment, values are subject to change based on uncontrollable and unpredictable factors.
What to Know Before You Expand Across Borders
By Sean King, Director of International Tax at McGuire Sponsel
The American retail giant, Target Corporation, has a market cap of $64 billion and access to seemingly limitless resources and advisors. So, when the company engaged in its first global expansion, how could anything possibly go wrong?
Less than two years after opening its first Canadian store in 2013, Target shut down all133 Canadian locations and terminated more than 17,000 Canadian employees.
Expansion of an operation to another country can create unique challenges that may impact the financial viability of the entire enterprise. If Target Corporation can colossally fail in its expansion to Canada, how might Mom ‘N’ Pop LLC fare when expanding into Switzerland, Singapore, or Australia?
Successful global expansion requires an understanding of multilayered taxes, regulatory hurdles, employment laws, and cultural nuances. Fortunately, with the right guidance, global expansion can be both possible and profitable for businesses of any size.
Any company with global ambitions must first consider whether the company’s expansion outside of the U.S. will give rise to a taxable presence in the local country. In the cross-border context, a “permanent establishment” can be created in a local country when the enterprise reaches a certain level of activity, which is problematic because it exposes the U.S. multinational to taxation in the foreign country.
Foreign entity incorporation
To avoid permanent establishment risk, many U.S. multinationals choose to operate overseas through a formal corporate subsidiary, which reduces the company’s foreign income tax exposure, though it may result in an additional level of foreign income tax on the subsidiary’s earnings. In most jurisdictions, multinationals can operate their business in the foreign country as a branch, a pass through (e.g., partnership,) or a corporation.
As a branch, the U.S. multinational does not create a subsidiary in the foreign country. It holds assets, employees, and bank accounts under its own name. With a pass through, the U.S. multinational creates a separate entity in the foreign country that is treated as a partnership under the tax law of the foreign country but not necessarily as a partnership under U.S. tax law.
U.S. multinationals can also create corporate subsidiaries in the foreign country treated as corporations under the tax law of both the foreign country and the U.S., with possibly two levels of income taxation in the foreign country plus U.S. income taxation of earnings repatriated to the U.S. as dividends.
Under U.S. entity classification rules, certain types of entities can “check the box” to elect their classification to be taxed as a corporation with two levels of tax, a partnership with pass-through taxation, or even be disregarded for U.S. federal income tax purposes. The check the box election allows U.S. multinationals to engage in more effective global tax planning.
Toll charges, transfer pricing and treaties
When establishing a foreign corporate subsidiary, the U.S. multinational will likely need to transfer certain assets to the new entity to make it fully operational. However, in many cases, the U.S. multinational cannot perform the transfer without recognizing taxable income. In the international context, the IRS imposes certain outbound “toll charges” on the transfer of appreciated property to a foreign entity, which are usually provided for in IRC Section 367 and subject to various exceptions and nuances.
Instead, the U.S. multinational may prefer to license intellectual property to the foreign subsidiary for a fee rather than transfer the property outright. However, licensing requires the company and foreign subsidiary to adhere to transfer pricing rules, as dictated by IRC Section 482. The U.S. multinational and the foreign subsidiary must interact in an arms-length manner regarding pricing and economic terms. Furthermore, any such arrangement may attract withholding taxes when royalties are paid across a border.
Are you GILTI?
Certain U.S. multinationals opt to focus on deferring the income recognition at the U.S. level. In doing so, they simply leave overseas profits overseas and delay repatriating any of the earnings to the U.S.
Despite the general merits of this form of planning, U.S. multinationals will be subject to certain IRS anti-deferral mechanisms, commonly known as “Subpart F” and GILTI. Essentially, U.S. shareholders of certain foreign corporations are forced to recognize their pro rata share of certain types of income generated by these foreign entities at the time the income is earned instead of waiting until the foreign entity formally repatriates the income to the U.S.
The end goal
Essentially, all effective international tax planning boils down to treasury management. Effective and early tax planning can properly allow a company to better achieve its initial goal: profitability.
If global expansion is on the horizon for your company, consult a licensed professional for advice concerning your specific situation.
Pandemic risks eclipse treasury priorities as businesses diversify investments to mitigate impact
The Covid-19 pandemic has shunted aside existing challenges to sit atop treasurers’ priority lists, according to “The resilient treasury: Optimising strategy in the face of covid-19”, a survey run by the Economist Intelligence Unit (EIU) and sponsored by Deutsche Bank.
The results show that treasurers are looking to diversify their investments in a bid to mitigate the pandemic impacts, including heightened liquidity, foreign-exchange and interest-rate risk. As many as 55% plan to increase investments in long-term instruments, with 48% increasing investments in bank deposits, another 48% in local investment products, and 47% in money-market funds.
“The Covid-19 pandemic has drastically altered business plans in 2020. It has placed a certain level of strain on treasury processes, but the challenge it presents has been managed by traditional treasury skills. It is clear that pandemic risk will be on the treasury checklist for years to come, but it is one of many risks the department faces and will continue to manage,” says Melanie Noronha, the EIU editor of the report.
Despite Covid-19 looming large, other challenges wait in the wings. Notably, the replacement of the London Interbank Offered Rate was identified by 38% of respondents as the main challenge of their function.
Technology, meanwhile, continues to be a pressing issue, with treasury teams becoming increasingly reliant on IT solutions. Here, data quality is rising up the list of concerns. Already highlighted as very or somewhat concerning in 2019 by 69% of respondents, the figure rose to 78% in 2020. Acquiring the necessary skill sets to realise the full benefits of this data and technology is also a continuing priority – with some progress registered from last year. In 2020, 30% of respondents say they have all the skills they need to manage technological change, up from 22% in 2018.
“Treasury’s focus on technology is not only helping teams operate more efficiently in a remote-working environment, it has long played – and continues to play – a key role in realising their long-term priorities,” notes Ole Matthiessen, Head of Cash Management, Corporate Bank, Deutsche Bank. The survey shows that
Release 1 | 2 managing relationships with banks and suppliers (highlighted by 32% of respondents) and collaborating with other functions of the business (also 32%) remain top of the agenda – and seamless digital systems will help give treasurers the bandwidth and insight to be more effective partners for both internal and external stakeholders.
Based on a global survey of 300 treasury executives, conducted between April and May, the survey explores stakeholders’ attitudes among corporate treasurers towards the drivers of strategic change in the treasury function – from the pandemic through to regulation and technology – and their priorities for the next five years.
Digital collaboration: Shaping the Future of Finance
By Ryan Lester, Senior Director of Customer Experience Technologies at LogMeIn
With heightened economic uncertainty and increased customer expectation becoming the norm in the banking industry, it is understandable that the sector is struggling to keep afloat. Due to its precarious nature, banking institutions are trying their best to ensure they remain relevant in the competitive landscape and guarantee that their customers continue to be a priority.
When it comes to the first half of this year, the pandemic has shown how easy it is for industries to fail. Customers and companies alike had to get used to the new normal, as physical locations started to close. The banking industry felt this first hand, as banks were made to restructure how their business ran, with restricted opening hours and a wider push to motivate people to use online banking.
While some had already embraced digital options prior to the pandemic, this proved to be a stark contrast to the elderly population, who frequently visited branches to access their finances. Moving forward, banks have to adopt new methods to ensure customers get the most out of our their accounts, without their experience suffering.
Heightened Customer Expectations
When the pandemic reached its peak, people were encouraged to use online banking, as telephone contact was under strain with long waiting times and pressure mounting on contact centre agents. According to Fidelity National Information Services (FIS), which works with 50 of the world’s largest banks, there was a 200% jump in new mobile banking registrations in early April, while mobile banking traffic rose 85%.
With branches remaining closed, customers were continuously being urged to limit the amount of calls they made to the most urgent cases and consider whether they could solve their answers through mobile online banking or checking the company website. Although already being adopted in pockets of the industry, this was a real catalyst that spurred banks to up their game on digital channels and with self-service tools.
Banks are challenged with precariously balancing customer needs with the cost of personalised support. With the demographic of customers changing over the last few years, customers are becoming increasingly younger and more comfortable with technology. Influenced by the “Amazon Effect”, their expectations have raised to an all-time high, placing record strain on the sector
Customer experience isn’t just about support anymore, it’s about serving your customer at every point in the journey. Companies have an opportunity to elevate the experience they provide by moving beyond one-and-done interactions to create continuous engagements with their customers. It is starting to become a primary competitive differentiator in the market and one that doesn’t have a lot of variation. Deploying AI chatbot technology will be able to strategically help banks improve customer experience and raise the level of support that agents provide.
Digital collaboration: Working around the Clock
The benefits of adopting digital channels and self-service tools are second to none. By implementing chatbots, fuelled by conversational AI, banks will be able to help serve a wide range of customer queries and ensure they are protected from fraud and scams.
Conversational AI is exactly what it sounds like: a computer programme that engages in a conversation with a human. When it comes to service delivery, conversational AI can be deployed across multiple channels to engage with customers in ways that effectively address evolving customer needs. At a time defined by COVID-19, self-service tools such a conversational chatbots can work around the clock to solve customer queries in a concise and timely way. Of course, self-service tools won’t completely replace human agents in the banking industry, but they will help companies re-distribute customer traffic and workflows in ways that enhance customer experience. Self-service tools fuelled by conversational AI can also improve employee experience because service employees can handle fewer, but higher-level service tasks that chatbots might escalate to them.
Adopting new tools to help facilitate consistent and concise answers and help maintain customer experience is on the forefront of many industry minds. Banks such as the Natwest Group have seen this first-hand and are testament to the benefits that a good digital experience can provide. Simon Johnson, Capability Consultant, Digital at NatWest Group highlights NatWest’s use of digital tools during lockdown, “Over the last few months, we’ve learnt how to use digital tools to help our employees remotely. From a banking perspective, there have been a lot of changes including base rates, waive fees and the best ways of contacting our vulnerable customers, ensuring we keep them protected from frauds and scams.
“By introducing our Bold360 chatbot interface, Ella, we’ve been able to get relevant information out quickly, apply the best practice and ensure that our customer journeys are being developed correctly. Due to the volume of questions, some of our customers were finding themselves waiting longer than usual. So digital channels become essential to helping reduce the wait time. Using Bold360, we were able to mitigate issues and answer questions in a more timely way through our chatbot.
“Moving forward, as we open more digital services, we are analysing our data to see if customer will return back to their usual way of banking, now that they’ve seen what a good digital experience can provide. Either way, with Ella, we are ready.”
Chatbots and Humans: The Best Option for Customer Service
Over the last year, banking institutions have recognised the power that digital collaboration can have to their success. Delivering exceptional customer service and support is key for any business wanting to stay competitive in today’s market and banks are especially challenged with precariously balancing customer needs with the cost of personalised support. Leveraging the right technology, such as AI-powered chatbots, will enable the banking industry to provide better support and a more robust customer experience in the long term. Other institutions must follow suit, or risk becoming obsolete.
What to Know Before You Expand Across Borders
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