Interest rates determine how much interest your money market account earns. The more money you have in your money market account and the higher interest rate you’re earning, the more money you’ll earn on your money in this account. When the Federal Reserve raises or lowers the federal funds rate, its benchmark rate, that tends to affect the yields on money market accounts. Since December 2015, the Fed has raised rates nine times, which has helped some money market account yields increase.
The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym, Satoshi Nakamoto. As of February 2019, there were over 17.53 million bitcoins in circulation with a total market value of around $63 billion (although the market price of bitcoin can fluctuate quite a bit). Bitcoin's success has spawned a number of competing cryptocurrencies, known as "altcoins" such as Litecoin, Namecoin and Peercoin, as well as Ethereum, EOS, and Cardano. Today, there are literally thousands of cryptocurrencies in existence, with an aggregate market value of over $120 billion (Bitcoin currently represents more than 50% of the total value).
Fund yields are typically somewhat higher than bank savings accounts, but of course these are different products with differing risks (e.g., money fund accounts are not insured and are not deposit accounts). Since Retail funds generally have higher servicing needs and thus expenses than Institutional funds, their yields are generally lower than Institutional funds.
The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed their use and trade, others have banned or restricted it. According to the Library of Congress, an "absolute ban" on trading or using cryptocurrencies applies in eight countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, and the United Arab Emirates. An "implicit ban" applies in another 15 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan. In the United States and Canada, state and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating "bitcoin scams" and ICOs in 40 jurisdictions.
There are several different types of cryptocurrency wallets that cater for different needs. If your priority is privacy, you might want to opt for a paper or a hardware wallet. Those are the most secure ways of storing your crypto funds. There are also ‘cold’ (offline) wallets that are stored on your hard drive and online wallets, which can either be affiliated with exchanges or with independent platforms.
“While it’s still fairly new and unstable relative to the gold standard, cryptocurrency is definitely gaining traction and will most certainly have more normalized uses in the next few years. Right now, in particular, it’s increasing in popularity with the post-election market uncertainty. The key will be in making it easy for large-scale adoption (as with anything involving crypto) including developing safeguards and protections for buyers/investors. I expect that within two years, we’ll be in a place where people can shove their money under the virtual mattress through cryptocurrency, and they’ll know that wherever they go, that money will be there.” – Sarah Granger, Author, and Speaker.
Money market funds seek to limit exposure to losses due to credit, market, and liquidity risks. Money market funds in the United States are regulated by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. Rule 2a-7 of the act restricts the quality, maturity and diversity of investments by money market funds. Under this act, a money fund mainly buys the highest rated debt, which matures in under 13 months. The portfolio must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements.
The semi-anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion. However, cryptocurrency advocates often value the anonymity highly. Some cryptocurrencies are more private than others. Bitcoin, for instance, is a relatively poor choice for conducting illegal business online, and forensic analysis of bitcoin transactions has led authorities to arrest and prosecute criminals. More privacy-oriented coins do exist, such as Dash, ZCash, or Monero, which are far more difficult to trace.
“If the trend continues, the average person will not be able to afford to purchase one whole bitcoin in 2 years. As global economies inflate and markets exhibit signs of recession, the world will turn to Bitcoin as a hedge against fiat turmoil and an escape against capital controls. Bitcoin is the way out, and cryptocurrency as a whole is never going away, it’s going to grow in use and acceptance as it matures.”
Take the money on your bank account: What is it more than entries in a database that can only be changed under specific conditions? You can even take physical coins and notes: What are they else than limited entries in a public physical database that can only be changed if you match the condition than you physically own the coins and notes? Money is all about a verified entry in some kind of database of accounts, balances, and transactions.
Bankrate regularly surveys approximately 4,800 banks and credit unions in all 50 states to provide you with one of the most comprehensive comparisons of rates. All of the money market accounts below, which are savings accounts that may let you write a limited amount of checks per month, are insured by the FDIC at banks or the NCUA at credit unions. When selecting the best money market account for you, look for the highest yield while also considering introductory rates, minimum balances and accessibility.
To understand the revolutionary impact of cryptocurrencies you need to consider both properties. Bitcoin as a permissionless, irreversible, and pseudonymous means of payment is an attack on the control of banks and governments over the monetary transactions of their citizens. You can‘t hinder someone to use Bitcoin, you can‘t prohibit someone to accept a payment, you can‘t undo a transaction.
In the 1970s, money market funds began disintermediating banks from their classic interposition between savers and borrowers. The funds provided a more direct link, with less overhead. Large banks are regulated by the Federal Reserve Board and the Office of the Comptroller of the Currency. Notably, the Fed is itself owned by the large private banks, and controls the overall supply of money in the United States. The OCC is housed within the Treasury Department, which in turn manages the issuance and maintenance of the multi-trillion dollar debt of the U.S. government. The overall debt is of course connected to ongoing federal government spending vs. actual ongoing tax receipts. Unquestionably, the private banking industry, bank regulation, the national debt, and ongoing governmental spending politics are substantially interconnected. Interest rates incurred on the national debt is subject to rate setting by the Fed, and inflation (all else being equal) allows today's fixed debt obligation to be paid off in ever cheaper to obtain dollars. The third major bank regulator, designed to swiftly remove failing banks is the Federal Deposit Insurance Corporation, a bailout fund and resolution authority that can eliminate banks that are failing, with minimum disruption to the banking industry itself. They also help ensure depositors continue to do business with banks after such failures by insuring their deposits.
All the features of a standard mutual fund apply to a money market fund, with one key difference. A money market fund aims to maintain a net asset value (NAV) of $1 per share. Any excess earnings that get generated through interest on the portfolio holdings are distributed to the investors in the form of dividend payments. Investors can purchase or redeem shares of money market funds through investment fund companies, brokerage firms, and banks.
An active investor who has time and knowledge to hunt around for the best possible short-term debt instruments offering the best possible interest rates at their preferred levels of risk may prefer investing on their own in the various available instruments. On the other hand, a less-savvy investor may prefer taking the money market fund route by delegating the money management task to the fund operators.
Money market mutual funds own a well-diversified pool of high quality, short-dated, interest-paying securities, and pass along the income earned on those securities (after fees) to the funds’ shareholders. When the yields on the securities in which money market mutual funds invest are quite low, the yields that the funds are passing along to their shareholders are also quite low. The interest rate policy of the Federal Reserve (the Fed) is a key driver for money market rates.