The SEC’s ‘crypto mom’ says it would be foolish for the US government to ban bitcoin since people can’t be stopped from trading in it

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Bitcoin advert on a London bus during the third lockdown of the coronavirus pandemic.

  • The SEC’s “crypto mom” Hester Peirce said it would be foolish for the US government to ban bitcoin.
  • It’s hard to stop people from trading digital assets even if the government restricts efforts, she said.
  • Peirce is optimistic that the SEC’s new chairman will make a key difference to crypto ETF approval.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

SEC commissioner Hester Peirce said at a virtual event on Wednesday that the possibility of a bitcoin ban has passed and governmental attempts to do so would be pointless.

“I don’t see how you could ban it,” she said at an “Investing in Crypto” event hosted by MarketWatch. “A government could say it’s not allowed here, but people would still be able to do it,” she added, saying it would be hard to stop anyone from trading in digital assets. “So I think it would be a foolish thing for the government to try to do that.”

Peirce, who hopes 2021 will mark a turning point for crypto regulation, said she wasn’t sure whether a bitcoin exchange-traded fund would be approved just yet since the SEC is in a period of transition. She won the nickname “crypto mom” in 2018 after disagreeing with the SEC’s decision to reject a bitcoin ETF application by the Winklevoss twins.

Regulatory veteran Gary Gensler’s nomination for SEC chairman was approved by the Senate Banking Committee last month. His confirmation will make a big difference to whether a crypto ETF gets approved, Peirce said.

Peirce thinks the US is behind the curve in regulating digital assets in comparison to other countries. But she’s optimistic about Gensler’s knowledge of crypto, and expects to have productive conversations about the space with other regulators soon enough.

“Our approach has been much more of a ‘say no and tell people to wait’ approach, so we need to turn that around, be willing to work to build a framework that is appropriate for this industry,” she said.

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The world’s largest crypto fund manager is offering new trusts that invest in 5 different cryptocurrencies

Photo illustration of visual representations of digital cryptocurrencies
  • Grayscale Investments is offering new trusts that invest in five different cryptocurrencies.
  • The new trusts will invest in Basic Attention and Decentraland tokens, Chainlink, Filecoin, and Livepeer.
  • Investor demand for digital currencies has never been higher, Grayscale CEO Michael Sonnenshein said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Digital currency asset manager Grayscale Investments announced Wednesday that it is offering five new investment trusts, bringing its single-asset lineup to 13.

The new trusts are launching into fairly niche segments of the crypto space, with three investing in Chainlink, Filecoin, and Livepeer, which are blockchain-based digital payment systems. One will invest in Ethereum-based Basic Attention tokens, while the fifth will hold coins in the virtual reality platform Decentraland. These trusts are among the first of their kind to solely invest in the digital currencies underlying each investment product.

“Digital currencies have reached an inflection point,” Grayscale CEO Michael Sonnenshein said in a statement. “Investor demand has never been higher, and every day we’re seeing new entrants to what has surely become a bona fide asset class.”

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Decentraland is an Ethereum-based blockchain platform where users can operate VR applications.

Grayscale said all five trusts are open for subscription by eligible individual and institutional accredited investors. The decision to launch them was based on assessment of investor demand and the integrity of each cryptocurrency, Sonnenshein told Bloomberg in an interview. The asset manager’s biggest product is still its $34 billion Grayscale Bitcoin Trust.

The new cryptocurrencies it has chosen have much smaller market values in comparison to bitcoin. Basic Attention tokens are known to track consumers’ time and attention on websites, with the goal of understanding how to efficiently distribute advertising money.

Chainlink runs on the Ethereum blockchain, with a technology that enables delivery of price feeds into decentralized finance applications. Filecoin is a storage service provider that enables anyone to rent spare storage space on their computer, creating a huge source of data storage.

Livepeer is a decentralized video-streaming network for those who wish to add live or in-demand video to their networks. Meanwhile, Decentraland tokens can be used to buy up virtual plots of land and goods and services within its virtual-reality space.

Grayscale said it plans to continue a tradition of creating “novel pathways” for investors to access the opportunities that digital currencies may offer.

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Bitcoin will eventually be a global currency – and a $1 million price target within the next 10 years is ‘very reasonable,’ Kraken CEO says

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Bitcoin will eventually be the world’s currency, because “you have to think it’s going to infinity,” Jesse Powell, the CEO of the cryptocurrency exchange Kraken, told Bloomberg on Wednesday.

He said that national currencies were “already showing extreme signs of weakness” and that people would soon start measuring the price of things in bitcoin.

“The true believers will tell you it’s going all the way to the moon, to Mars, and eventually it’ll be the world’s currency,” Powell said.

Kraken, based in San Francisco, is in talks to raise new funding that would double its valuation to over $10 billion, Bloomberg reported in late February.

The price of bitcoin fell on Thursday by 0.4%, to $50,175, but is up 70% year-to-date. The price slipped earlier this week after Gary Gensler, the nominee to lead the Securities and Exchange Commission, said at his confirmation hearing that making sure crypto markets are free of fraud and manipulation was a challenge. Gensler has been viewed as an advocate for cryptocurrencies, given his previous work and teachings on the subject at MIT.

“In the near term, people see it surpassing gold as a store of value, so I think $1 million as a price target within the next 10 years is very reasonable,” Powell said of bitcoin.

Bitcoin believers expect it to replace fiat money, and the market capitalization of all national currencies combined could make up its worth, Powell said.

Read more: UBS: Buy these 14 back-to-normal stocks now before a ‘sharp acceleration’ in consumer spending in Q2 as vaccinations pick up

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Bill Gates says he’s not bullish on bitcoin as it uses ‘a lot of energy’ – and warns people who aren’t as rich as Elon Musk against buying into the boom

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Bill Gates.


Bill Gates, the world’s third-richest person, is not a fan of bitcoin, partly for environmental reasons. 

According to the billionaire, not only does bitcoin use a lot of energy, it can also cause trouble for investors who may not have much money to spare, given how volatile its price is.

“Elon has tons of money and he’s very sophisticated, so I don’t worry that his Bitcoin will sort of randomly go up or down,” Gates told Bloomberg in an interview. “I do think people get bought into these manias, who may not have as much money to spare, so I’m not bullish on Bitcoin, and my general thought would be that, if you have less money than Elon, you should probably watch out.”

Bitcoin fell 13% on Tuesday, to around $46,817, tumbling from a record of $58,354 struck just two days ago, as investors took profit on the near-doubling in price since the start of the year.

Philanthropist and climate activist Gates, whose book “How to Avoid a Climate Disaster” recently went on sale, has previously said cryptocurrencies have caused deaths in a fairly direct way. He also thinks the anonymity behind bitcoin transactions isn’t a good thing.

“The Gates Foundation does a lot in terms of digital currency, but those are things where you can see who’s making the transaction,” he said in the Bloomberg interview. “Digital money is a good thing, that’s a different approach.”

Treasury Secretary Janet Yellen has also been vocal about her doubts on cryptocurrencies, and their environmental impact, given the amount of power used in mining digital tokens.

“I don’t think that bitcoin is widely used as a transaction mechanism,” Yellen told the New York Times on Monday. “It’s an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering.”

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Here are 5 things you need to consider when choosing a platform to invest in cryptocurrencies

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  • After Tesla’s $1.5 billion bitcoin purchase, more corporations seem poised to embrace cryptocurrencies.
  • Rather than submitting to Reddit-style “FOMO” buying, investors are looking to educate themselves more.
  • Insider compiled a list of 5 things a new crypto investor should watch for when considering an exchange.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Demand for digital assets is skyrocketing, as big-ticket names such as Tesla, Mastercard, and Bank of New York Mellon have shown their openness to transact in cryptocurrencies.

As the crypto market grows, corporates like Uber are considering how, and when, to begin accepting bitcoin as a form of payment. 

While global interest rates remain at historic lows, digital currencies have entered the mainstream and are increasingly seeing levels of mass adoption due to soaring interest from both retail and institutional investors.

In fact, the average amateur crypto investor can take comfort in knowing many banks are beginning to look at the burgeoning asset class more and more seriously. And experts believe the speed of growth in cryptocurrencies will accelerate much faster than that seen in the past few years.

Furthermore, with the world becoming more digitized, governments and central banks are exploring the launch of their own digital fiat currencies.

So how should someone that is new to the whole cryptocurrency market choose a platform on which to trade their exchange digital assets?

Insider compiled a list of five fundamental factors everyone should consider, according to Nigel Green, a cryptocurrency expert and CEO of financial services company deVere Group.

“Investing in cryptocurrencies remains highly speculative and it is not for everyone – but one of the keys to success would be selecting the right crypto exchange,” Green said.

Security

Crypto application.

A private exchange that stores confidential consumer documents and funds should be as decentralized as possible. If the data is available on a couple of web servers, that would expose them to easy hacks.

Two-step verification throughout the login process, such as a password and quick-expiry codes, is important.

Investors should avoid exchanges that offer cheap trading costs and services, or are based in parts of the world where investor security is weak. They must also do their due diligence and assess the business behind the exchange, just as they would with any other financial organization, in order to protect their money.

 

Costs

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Some exchanges are well-versed with the need to address costs in advance, while others are inclined to hide them. Choose wisely by going for exchanges that are upfront and transparent about how much it will cost to trade cryptos on their platform.

Simplicity and ease of use

pregnant woman making online payment with phone and credit card

Bear in mind that you may not always want to trade from your desktop. Finding an exchange that recognizes the use of ‘on-the-move’ trading via a secure app is often a better option.

 

 

Dependability

worried trader

Check whether the exchange runs efficiently when trading volume is high, or when currency rates are see-sawing. Some exchanges are notorious for system faults and trading halts.

Client Service

Client relationships

Confirm that the exchange has a chat, or quick communication service integrated.

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Bitcoin jumps 7% after Elon Musk posts an image of a crypto-themed ring and makes a vague reference to dogecoin

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The price of bitcoin rose by as much as 7% on Thursday after Elon Musk posted a vague tweet with a reference to dogecoin and an image of a crypto-themed ring.

The digital asset rose by $4,000 to trade around $48,000 at 9:40 a.m. ET, after it was stuck around $43,800 the previous day.

In his tweet, Musk said: “Frodo was the underdoge, All thought he would fail, Himself most of all,” seemingly in a reference to the Lord of the Rings trilogy. Dogecoin saw only a 0.8% jump to $0.07, but it’s still up 1300% year-to-date.

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Read more: A Ruffer portfolio manager invested a portion of his $4.8 billion fund in Bitcoin. Here’s what swayed him to bet on crypto – and the 2 other ways he’s hedging against worrying speculative bubbles

Earlier this week, the token got its biggest endorsement after Tesla disclosed a $1.5 billion bitcoin investment. That pushed bitcoin’s price to its record high of $48,000.

“These are just the early innings of corporate adoption, as digital currencies are beginning to play a larger role in robust balance sheet management,” said Nathan Cox, chief investment officer at investment firm Two Prime.

One analyst said Tesla’s decision was a massive win for the crypto crowd and acceptance within the financial community is what it has long sought – and this move ticks both of those boxes.

“It seems that one thing more powerful than Elon Musk’s Twitter account is the financial power of the company he co-founded and leads,” said Craig Erlam, senior market analyst at OANDA. “I’m a little surprised it wasn’t enough to push $50,000 if I’m honest, but it’s surely only a matter of time. There doesn’t appear to be much appetite to sell at this point.”

Read More: UBS says bitcoin is a bubble and too volatile to diversify a portfolio, unlike gold – here’s why the bank says it could end up ‘worthless’

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These are the top 10 US states where Dogecoin’s popularity shot up after a group of Redditors decided to make it the crypto equivalent of GameStop

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The meme-based cryptocurrency Dogecoin has seen an explosion in price, after a group of Redditors tried making it the cryptocurrency equivalent of GameStop.

A subreddit called SatoshiStreetBets, much like the Wall Street Bets gang that pushed up GameStop shares among others, helped the token gain 800% within 24 hours.

Billionaire Elon Musk’s tweets have also powered it higher as he has clearly showed his love for Dogecoin. Musk delivered a slew of endorsements for the digital asset, including a photoshopped Lion King meme of himself holding up a Dogecoin logo of a Shiba Inu dog. He also tweeted “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge.”

The coin isn’t as well known as Bitcoin or Ethereum, but it has seen short bursts of popularity in the last couple of years, with the latest Reddit frenzy pushing it to its highest price ever.

Its current price is around $0.045, but is still 300% higher than when the “Dogecoin movement” began in 2013.

Here’s a look at the top 10 states where the recent surge in Dogecoin popularity is occurring, according to cryptocurrency site bitreporter.com.

dogecoin map

Read More: Investors are flocking to trade Dogecoin and other hot digital tokens on Voyager, a platform with no Robinhood-style restrictions. Its CEO says Bitcoin will hit $100,000 this year – and shares 3 other cryptocurrencies to watch.

Tracking over a million tweets using trends software, an interest-map was created based on geotagged Twitter data in the last week, hashtags, and direct keyword phrases about buying Dogecoin.

Some hashtags and keywords that were tracked include: #dogecoin, #doge, #buydoge, #buydogecoin, “buy doge,” “buy dogecoin.”

1. Alabama

Alabama

2. California

Santa Rosa California

3. New Jersey

Tashmoo Restaurant & Bar in Morristown, New Jersey.
Tashmoo Restaurant & Bar in Morristown, New Jersey.

4. Florida

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Wyndham Club, in Pompano Beach, Florida.

5. Kentucky

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Louisville.

6. Arizona

Quartzsite, Arizona

7. Tennessee

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Printer’s Alley in Nashville, Tennessee.

8. Pennsylvania

downtown Pittsburgh Pennsylvania

9. Oregon

salem oregon

10. Texas

Austin Texas
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An early bitcoin investor says the best time to buy is when nobody’s talking about it – and warns this isn’t the first crypto bubble

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The ultimate time to buy bitcoin is when no one is talking about it, according to one early adopter.

“The best time to buy bitcoin is whenever blood is on the street, everyone’s panicking, and no one’s talking about it,” the investor, who prefers to remain anonymous, told Insider in a phone interview from Manila, Philippines. “That’s the ultimate time to buy.”

In 2013, he made an initial purchase of 2.5 bitcoins from a seller who went by the name “Mang Sweeney” on LocalBitcoins.com when the cryptocurrency was trading at $100 per coin. “Mang” denotes a sign of respect in the local language in the Philippines. 

At the time, the platform allowed face-to-face meetings, after which the seller would transfer the cryptocurrency on-the-spot via their laptop or mobile. Mang Sweeney was already trading bitcoin when it was worth $10 a coin since speculative buying and selling was popular even then, according to the anonymous buyer.

Still, online interest in bitcoin in 2013-14 was nowhere near current levels. A chart below shows how Google searches for “bitcoin” in the Philippines have risen steadily since that period, then hit a peak in late 2017 when its price shot to a record high. It declined throughout 2018, but has returned in the last year.

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Read more: We spoke to Winklevoss-backed crypto platform Gemini about bitcoin, how to use stable coins, and why regulation won’t kill the boom in digital currencies

“People forget this isn’t the first bubble,” the investor said. “Until people understand the technology of it, it will always be a speculative asset.”

The early bitcoin buyer said he doesn’t advise friends and family to trade the token when it’s stuck in bubble territory. “When no one wants to touch it, that’s when you buy it. Not when people are talking about it,” he said.

Bitcoin’s deflationary nature discourages using it as a real currency, according to him. He lost 16 bitcoins in the Japanese cryptocurrency exchange Mt. Gox, one of the few exchanges that early adopters could trade on. It closed abruptly in 2014 following its collapse after hackers apparently raided the exchange. Almost 850,000 bitcoins belonging to investors were lost. 

“Finance guys” who are talking up the $100,000-$150,000 level, according to him, are actually unloading their bitcoin investments bit by bit while saying it’ll get to a certain price because some of them have already accumulated large amounts. 

Read more: Bubbly behavior is brewing in markets and Big Tech is reeling from 2 major political events this month – Three investing heavyweights that jointly manage almost $1 trillion break down the impact on these stocks and how to position

“The only reason I would tell people to just dabble in it is because it’s important to understand how it works and how to take care of it. If you don’t know your way around passwords or simple two-factor authentication then you’re going to get creamed. People will steal your bitcoin,” he warned.

But there are voices cautioning investors who are beginning to view bitcoin as digital gold.

“For bitcoin to be considered in a portfolio and to become an investable asset, similar to gold, the asset would need to improve the risk-return profile of that portfolio,” said Gerald Moser, chief market strategist at Barclays Private Bank. “This seems a tall order.”

While it is near impossible to forecast an expected return for bitcoin, its volatility makes the asset almost “uninvestable” from a portfolio perspective, he said.

Separately, Janet Yellen, nominee for treasury secretary, suggested on Tuesday that lawmakers curtail the use of cryptocurrencies as they’re used “mainly for illicit financing.”

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Ethereum tumbles 8% after exploding to new all-time high past $1,430, still outperforms Bitcoin’s 26% year-to-date gain

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  • Ethereum tumbled 7% on Wednesday after hitting a new all-time high of over $1,430.
  • Directly tied to its explosive growth is the rise of projects built on Decentralized Finance, or DeFi.
  • Ethereum users receive over 4% in annual interest, while traditional banks offer less than 0.5%.
  • Sign up here our daily newsletter, 10 Things Before the Opening Bell.

Ethereum dropped 8% on Wednesday after shooting past $1,430 a day earlier, hitting a new all-time high for the cryptocurrency powering the world’s largest smart contract platform.

Its price fell to around $1,265 as of 1150 GMT, retracing the previous day’s record high.

Ether, the native cryptocurrency of Ethereum’s blockchain network, has soared 33% year-to-date to reach its latest peak, only a couple of weeks after its crypto cousin Bitcoin reached a new high near $42,000. 

Ethereum’s gain clearly shows it has outperformed Bitcoin’s 26% rally so far this year in their respective US dollar pairs. Its positive momentum indicates how projects built on decentralized finance, more commonly known as DeFi, are creating a more scalable infrastructure for smart contracts rather than relying on brokerages, exchanges, or banks.

The cryptocurrency has always been the lesser known rival to Bitcoin for a mainstream audience, according to Samantha Yap Founder & CEO at YAP Global. But an increased awareness and understanding of what it’s about shows it could get gradually adopted as the DeFi industry grows. 

That the world’s second-largest cryptocurrency by market capitalization hit a new high indicates the beginning of DeFi “eating traditional finance,” said Hsuan-Ting CEO of Furucombo, a DeFi money lego application. “More and more people adopting it signals a great future for the industry regardless of whether people are using ETH to pay for something or just holding it to capture the network’s value,” he said.

Over $25 billion worth of crypto assets have been locked into DeFi applications built on Ethereum over 2020, according to DeFi Pulse. The sector now offers loans, synthetic stocks, interest-earning assets, exchanges, derivatives, options, and credit systems.

Read More: The head of active equity at Wells Fargo’s $607 billion asset management arm shares how she worked her way up from the call center 29 years ago – and pinpoints 3 trends transforming the investment landscape today

Ethereum’s users are already able to receive more than 4% in annual interest, while traditional banks offer below 0.5% interest, as well as gaining exposure to various derivatives products that have an inherently global market due to the openness of public blockchain infrastructure, according to Sergey Nazarov, the co-founder of the world’s largest DeFi project Chainlink.

“When you consider the 10X growth in DeFi’s market size, the consistently higher rates of return from DeFi financial products when compared to banks and the inherently global nature of DeFi financial products, together with the devaluation of traditional assets through high inflation and unchecked money printing, anyone can begin to see that DeFi is where the next flight to safety will happen and is in fact one of the existing forces that’s driving adoption of cryptocurrencies like Bitcoin and Ethereum today,” Nazarov said.

Read More: GOLDMAN SACHS: Buy these 25 stocks best-positioned to juice profits in 2021 as stimulus and vaccine progress spur economic growth

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Bitcoin’s market cap could hit $1 trillion in 2021 as its growing reserve currency status drives adoption higher, a cryptocurrency expert says

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A chain of block erupters used for Bitcoin mining.

  • Bitcoin’s market cap could hit a trillion dollars as early as 2021, according to Blockchain.com’s head of research.
  • “My expectation is that bitcoin will become a trillion dollar asset as early as next year,” Garrick Hileman, who is also a visiting fellow at the London School of Economics, told Business Insider.
  • Although the 2020 bitcoin rally was largely driven by institutional investors, he expects to see continued buy-in more from retail and Wall Street investors going forward.
  • The researcher expects the US to digitize the dollar, but not too soon as he said “the Fed is happy with the way the world is.”
  • Visit Business Insider’s homepage for more stories.

Bitcoin’s market cap could reach $1 trillion sometime in 2021 as investors take its reserve currency status more seriously, according to Garrick Hileman, head of research at Blockchain.com.

Major institutional players like Stanley Druckenmiller, BlackRock, Bill Miller, and Jack Dorsey have acknowledged that bitcoin is not only going away, but is becoming a reserve asset and validating the digital gold thesis, Hileman said. 

Bitcoin has a current market cap of about $350 billion, while that of gold’s stands at roughly $10 trillion. This week the cryptocurrency gained 12% over two days alone, and was trading at $ on Friday.

“My expectation is that bitcoin will become a trillion dollar asset as early as next year,” the crypto researcher told Business Insider.

Blockchain.com observed a 39% growth in wallet creation year-to-date on its crypto exchange. That is about 17 million wallets created since December 2019. 

The exchange saw a broadening of adoption and ownership of crypto assets this year as more people continued to want in on acquiring the token. As many as 100 million people own crypto assets today, according to Hileman.

He noticed a lot of the recent price action was driven by institutional investors, based on transactions that occur on the chain, and is unlike the retail investor frenzy of 2017. On-chain demand and other metrics suggest that the 2020 rally was driven more by institutional hedge funds, family offices, and money managers.

Hileman expects to see continued buy-in from retail and Wall Street investors going forward, rather than corporates. That’s because it is harder for bigger players to participate than professional investors who already have accounts and easy access to major exchanges, he explained. 

For bitcoin’s market cap to reach $1 trillion, it would have to hit a price of $54,000 per coin next year – a 130% rally from where it’s at.

As for the US dollar, the researcher expects the world’s most popular reserve currency to be digitized sometime in the next five years. “At this point, the Fed is still taking its time because the Fed is happy with the way the world is,” he said. 

The status quo is working well for the dollar because it is dominant through the SWIFT mechanism and the corresponding banking system, he said. The US government can also raise debt at attractive interest rates, supporting the dollar’s status. But a competitive challenge lies in the crypto space and in the rise of stablecoins.

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