Investing in Cryptocurrencies and Digital Assets

KEITH BLACK, PHD, CFA, CAIA, FDP, CDAA is the Managing Director of Education at RIA Channel, where he creates web-based content on cryptocurrencies and alternative investments. He teaches courses on cryptocurrency investments and investment manager due diligence at the University of Massachusetts. He previously served as the Managing Director of Content Strategy at the CAIA Association, where he was a co-author of the second, third, and fourth editions of the Level I and II CAIA curriculum. At Ennis Knupp + Associates, Keith advised foundations, endowments and pension funds on their asset allocation and manager selection strategies in hedge funds, commodities, and managed futures. Prior experience includes commodities derivatives trading, stock options research and Cboe floor trading, and building quantitative stock selection models for mutual funds and hedge funds. Dr. Black has served on the faculty at Illinois Institute of Technology. Dr. Black has written or contributed to over 30 books and refereed journal articles, including The Journal of Wealth Management, The Journal of Trading, and The Journal of Alternative Investments. Dr. Black earned a BA from Whittier College, an MBA from Carnegie Mellon University, and a PhD from the Illinois Institute of Technology.

• Preface ixPart One Defining Cryptocurrencies and Digital AssetsChapter 1 Money, Banking, and Inflation 3Chapter 2 Centralized Finance (CeFi) and Traditional Finance (TradFi) Markets 15Chapter 3 Uses of Blockchains and Distributed Ledgers 31Chapter 4 Bitcoin Mining and Proof-of-Work Protocols 43Chapter 5 Ethereum Blockchain and Smart Contracts 57Chapter 6 Proof-of-Stake Protocols and Other Layer 1 Blockchains 71Chapter 7 Layer 2 Blockchains and Scaling Solutions 85Chapter 8 Stablecoins, Crypto Yields, and Central Bank Digital Currencies 93Chapter 9 Oracles and Insurance Tokens 109Chapter 10 Privacy Tokens 117Chapter 11 Decentralized Finance (DeFi): Borrowing, Lending, and Decentralized Exchanges 123Chapter 12 Composability, Stacking DApps, and Bridges 135Chapter 13 Blockchain Applications Beyond Financial Markets 145Chapter 14 NFTs, Metaverse, and Web 3.0 155Chapter 15 Decentralized Autonomous Organizations (DAOs) and Governance 169Part Two Investing in Cryptocurrencies and Digital AssetsChapter 16 Risks, Regulations, and Taxes 179Chapter 17 Tokenization of Off-Chain Assets 193Chapter 18 Fundamental Valuation Models 203Chapter 19 Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Tokenomics 217Chapter 20 Trading and Technical Analysis 233Chapter 21 Investing Directly in Crypto: Wallets, Custody, and Security 251Chapter 22 Derivative Markets: Futures, Options, and Perpetual Swaps 261Chapter 23 Building Portfolios of Stocks, Bonds, Crypto Stocks, and ETFs 277Chapter 24 Investing Through Private Equity and Hedge Funds 289Chapter 25 Due Diligence and Technology Risks: FTX, Terra Luna, Hacks, and Scams 301Notes 315About the Author 329About the Companion Website 331Index 333