It has become very obvious to all and sundry how cryptocurrencies e.g. Bitcoin, Ethereum, BCH, LTC, XRP, and others have made millionaires of those who dive into buying/mining it as recently as a year ago. They have possibly gained 1,000% or more.
Someone who bought Bitcoin in Feb 2016 at $500 or less than, would have had a gain of 45,000% or more just after 5 years. Then over the past few days, we saw Bitcoin soaring higher to $50,000, and Ethereum moves close to $2,000 so it would be a massive understatement to say these cryptocurrencies are volatile.
Since the inception of Bitcoin far back in 2008, a lot of people including government and financial bodies have been skeptical of cryptocurrencies’ ability to survive, and it presents a very clear threat to governments since they could not see nor tax all transactions.
Although many people are still very cautious about cryptocurrencies, we are very aware of the potential of the underlying technology that powers these digital currencies. And some persons believe that this technology might be a significant disruptor in how data is managed and that it may impact every sector of the global economy, just like how the internet impacted media.
Getting Started With Cryptocurrencies
Investing in cryptocurrency market space or trading Crypto Currency can be a little daunting for traditional investors because investing in this digital Currency directly requires the use of new tools and adopting some new concepts.
So once you make up your mind to dip your toes in the cryptocurrency market, it is good you have a very good idea of what to do and what may be the outcome.
Buying and selling Crypto Currencies requires you to choose an Exchange that deals in the products you want to buy and sell, be they Bitcoin, Ethereum, BCH, or any of the over 1000 other digital coins in play.
There are many Exchanges with different offerings to choose from and they all do things in their way. Somethings that will matter to you, for example, are:
- Methods of operation, Deposit policies, and costs of each method
- Withdrawal policies and costs
- Costs for transactions
- Where this Exchange located is (based)? (USA / UK / South Korea / Japan…)
- Are they dealing with fiat currencies and which one do they accept for deposits and withdrawals?
The Exchangers will generally want to know a lot about you so, expect the exchange setup procedure to be detailed and lengthy.
Virtual Currency Games
Playing video games to make a living is edging closer to reality as every little boy’s (and many grown men’s) dream of making a living by just playing the game.
The release of HunterCoin and another coin as well as the in-development VoidSpace, games which reward players in digital currency point towards a future where one’s ranking on a scoreboard could be rewarded in dollars, and sterling, euros, and yen.
Digital currencies have been gaining maturity slowly both in terms of their functionality and the financial infrastructure that enables them to be used as a credible alternative to non-virtual fiat currency.
Though Bitcoin, the 1st and most well-known of the crypto-currencies was created in 2009 there have been forms of virtual currencies used in video games for more than 15 years.
BlackRock enters the bitcoin futures game
BlackRock is the world’s largest asset manager, Securities and Exchange Commission (SEC) recently released that BlackRock authorized two of its funds to invest in bitcoin futures.
This asset manager is worth $8.7 trillion, in their filed paperwork, BlackRock acknowledged that its funds ‘may engage in futures contracts based on bitcoin. ‘This would allow it to hold bitcoin derivatives, among other assets, in the BlackRock Income Opportunities fund and the BlackRock Global Allocation Fund.
This fund was a channel to the trading of cash as well as settle bitcoin futures, meaning that the holder will receive cash credit once the contract expires.
Speculation had it that some community members saw the move coming since November, when Rick Rieder, BlackRock’s CIO of Global Fixed Income told CNBC he thinks cryptocurrency is here to stay and that he believes it’s durable.
When asked if he thinks it will take the place of gold to a large extent? His response was; “Yeah, I do because it’s so much more functional than passing a bar of gold around.”
According to a remark by Larry Fink’s BlackRock CEO, he believes crypto could evolve into a global asset.
In a statement by Marc Bernegger, who is a board member at digital asset manager and broker Crypto Finance, he told the Financial Time that Bitcoin is a global macro asset and I think more and more traditional asset managers are realizing its value as a portfolio hedging tool – he said. This to bitcoin means more liquidity and a healthier market and it’s a good one.
When Will Crypto & Blockchain Explode?
More and more news keep coming up every day about what can, may, and should happen in the world of CryptoCurrencies and Blockchain.
There is a lot of improvement in the investment in crypto, including research, and lots of chatter, despite all of this, the coins and the projects are still not mainstream. Crypto has still not delivered the explosive changes envisioned.
Different ideas have been discussed and more and more are still discussed and developed, yet the big game-changing results have not yet be delivered.
What may be needed is for big industry players, like IBM, Microsoft, and the large financial services corporations to continue forging ahead in developing useful Blockchain applications – one that the whole world can NOT live without.
Blockchain projects should target Financial services because today’s banking systems are still based on archaic ideas that have been faithfully and painfully digitized and because these systems are expensive and archaic to maintain and operate.
Will the Crypto Bubble Burst? Should I Invest in cryptocurrencies?
Should I invest in Bitcoin or which coin should invest in?
Bitcoin is worth considering! Whatever I say is not to be used as financial advice.
And with bitcoin crossing the $50k threshold earlier this week, it’s no wonder people think it’s a bubble. It dropped below $40,000 in January this year and has skyrocketed ever since.
Investors tend to poopoo cryptocurrency for its incredibly volatile markets. With volatility, though, comes drastically increased profit margins.
The price of bitcoin gain over the past six months is about 360%. Before the recent surge, the digital asset has never traded above $20,000. The increasing adoption of bitcoin by major investors and companies is what fueled it.
To many, it’s a sure sign of a bubble. To others, it’s a unique chance to make a fortune within a short period.
But let’s imagine it a second, the terms of economics that show a supply and demand graph, pictured that when supply increases, demand decreases. And as supply decreases, demand increases.
The term that created Demand is called “scarcity”. Scarcity means to be in short supply. Let’s step back for a second and think about it again like water in a draught. Since there’s little water available, the demand drastically increases.
On the other hand, when there is an extreme excess of rain. The people want nothing to do with more water. It is the same examples we see in real life, but let’s look at scarcity, in terms of crypto.
21 million bitcoins will only and ever be mined. Presently, there are roughly 33 million millionaires worldwide.
Even if each millionaire wants the whole bitcoin, it’s not possible. Simply because there are not enough bitcoins that can go round.
Scarcity builds demand.
For instance, in the United States and some other countries, people only see bitcoin as an investment and nothing else. However, this mindset never takes into account economic crises that affect some nations.
Venezuela for example faces more than 4,000% of inflation some years back. Their fiat currency becomes useless. In fact, as of August 2015, about 450 companies accepted bitcoin. By November 2016, more than 85,000 were accepting cryptocurrency.
Since then Venezuela continues to be plagued with an economic death spiral. And I am sure the number must have gone higher by now.
According to some reports, more than 100,000 miners have started as well in the country. Currently, Bitcoin is more stable the Venezuela’s company to fiat and thus is seen as a viable form of currency.
From the above paragraph, we’ve seen bitcoin’s value in the eyes of those in economic crises and we’ve seen its value in the eyes of the wealthy. Hence, the answer to the question is ‘yes’. Cryptocurrencies are worth considering as an investment.
What Is Government Going to Do About Crypto?
Many nations are actively considering what to do about cryptocurrencies, this is because they don’t want to miss out on tax revenue, and to some degree, they think they need to regulate crypto market space in other to protect the consumer.
Consumer protection is the purpose of the Securities Exchange Commission (SEC) and they have already put some regulations in place for CryptoCurrencies Exchanges and transactions.
Every other nation have their regulatory bodies similar to this and most of them are working away at devising appropriate regulations, and the “rules” will likely be dynamic for a few years since governments are trying to discover what will work well and what does not.
One benefit of Cryptocurrencies is that they are NOT controlled by any government or Central Bank, so there could be an interesting disagreement for many years before governments can impose much regulation and control.
Most government’s biggest concern is the potential for increasing revenue by taxing the profits being generated in the Crypto Currencies market space.
But the major question is whether to treat Crypto Currencies as an investment or as a currency. Some governments lean towards treating CryptoCurrencies as an investment, like every other commodity where profits are taxed using a Capital Gains model.
Most governments see cryptocurrencies as a currency only, though it fluctuates in daily relative value, and they will use taxation rules similar to foreign exchange investments and transactions.
It is worthy to know that Germany has straddled the fence in this aspect, deciding that since it is used directly to purchase goods or services, it is therefore not taxable.
This is a bit chaotic in the sense that all our investment profits could not be non-taxable even if we used them to directly buy something. Germany might re-think it as they go along.
Governments find it more difficult to enforce taxation rules reason is that there are no consistent global laws that require the Exchanges of cryptocurrencies to report transactions to the government.
The decentralized nature of cryptocurrencies makes it almost impossible for any government of a nation to know about all the transactions of their citizens.
Bitcoin miners raked in +$800m revenue in January 2021
In January 2021 Bitcoin mining revenue has already surpassed December 2020, reaching its highest level since January 2018.
As of 25 January 2021, Miners have generated $888.46m with a couple of days left to go. Compared to December 2020 when miners brought in about $692 million.
The high revenue increase was attributed to the high increase in the price of bitcoin, currently trading at $57,048 as at the time of this write-up. Notably, BTC hit an all-time high earlier this month, surpassing $50,000.
Tesla buys $1.5bn in bitcoin and plans to accept it as payment
According to a filing with the SEC, Tesla has bought $1.5 billion worth of bitcoin.
The company spoke man said it bought bitcoin for more flexibility to further diversity and maximize our returns on cash.
Moreover, the electric car company CEO and crypto-advocate Elon Musk, said it would also start accepting bitcoin payments in exchange for its products. And the price of BTC has surged since the announcement.
Also, recent analysis shows that PayPal’s transaction revenue jumps to 11.8% since adding crypto.