US bitcoin investors saw quadruple the gains of their Chinese peers in 2020, even though China has the world’s highest crypto transaction volume, new study shows

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  • US investors gained $4.1 billion in bitcoin profits last year – nearly four times more than the Chinese, said Chainalysis.
  • This, despite the Asian superpower having the highest volume of cryptocurrency transactions in the world.
  • The disparity in gains stemmed from the huge inflows that US-focused exchanges saw in 2020.
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Investors in the US saw $4.1 billion in bitcoin profits last year – nearly four times more than Chinese investors – even as the Asian superpower has the highest volume of cryptocurrency transactions in the world, new data from Chainalysis shows.

The disparity in gains stemmed from the huge inflows that US-focused exchanges saw in the latter part of 2020. Most of the activity came from Coinbase, the largest cryptocurrency exchange in the US, which debuted on the Nasdaq on April 14.

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To arrive at the figures, Chainalysis tracked cryptocurrency exchange transactions, although it did not account for gains on coins yet to be withdrawn. The New York-based blockchain analysis company also acknowledged that the decentralized nature of the technology makes it difficult to determine with certainty where the deals transpired.

Looking closely, the sharp rise can be seen from October to December, the timeframe when the price of bitcoin more than doubled – and kept rising to new all-time highs.

The steepness of the US curve may also suggest that many investors in America sold at higher prices compared to those in other countries who may have held on to their cryptocurrencies more.

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Chainalysis

The price of bitcoin exploded in the past year, catapulting into the mainstream as institutional investors from Tesla to MicroStrategy adopted the cryptocurrency. It peaked to $64,829 ahead of Coinbase’s listing before losing nearly 50% of its value in the following month.

Bitcoin is trading lower Tuesday by 11.68% at $31,781.

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A 33-year-old Dogecoin investor says he became a millionaire in 2 months after Elon Musk inspired him to pile into the meme currency

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Glauber Contessoto.

Glauber Contessoto, a 33-year-old Los Angeles resident, claims to have become a Dogecoin millionaire on April 15.

He said he invested over $180,000 into Dogecoin when its price was about $0.045 cents, on February 5. He detailed his reasons for buying the meme currency in a YouTube video and posted on the Dogecoin subreddit two months later about his new millionaire status.

“Hey guys I just became a Dogecoin millionaire,” he wrote, attaching a screenshot of his holdings on Robinhood.

Insider could not independently verify Contessoto’s Dogecoin holdings.

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Contessoto, who works in the music business, said the billionaire Elon Musk was a key inspiration behind his decision. He claimed in his YouTube video that the Tesla boss owned about a third of the Dogecoins in circulation.

Retail investors have pumped up Dogecoin’s price this year, taking their cue from Musk’s tweets describing it as “the people’s crypto.” It’s unclear whether his tweets were in jest or whether he was being serious.

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“I think the guy is a genius,” Contessoto said of Musk in a CNBC interview last week. He said that he strongly believed in Dogecoin’s potential and that it could help him build wealth to pass on to his family.

Contessoto told CNBC that he grew up poor and that his gain from the meme currency was a “huge deal” for him. He said that he took a huge risk to buy Dogecoin by using all his savings and sales from his shares of Tesla and Uber and that he invested on margin from Robinhood.

Read more: A 29-year-old self-made billionaire breaks down how he achieved daily returns of 10% on million-dollar crypto trades, and shares how to find the best opportunities

He said that he stuck to his plans despite warnings from friends and that he’d decided to take out 10% of his holdings once he hit $10 million.

Dogecoin surged by 8,000% last week, trading near $0.42. It was trading at $0.28 on Monday, with a market cap of about $36 billion.

Several experts recently told Insider why they thought the meme asset had been surging in popularity. “Bitcoin is for the wealthy, Ethereum for the middle class, and Dogecoin is for the people,” one said.

Despite the slide in Dogecoin’s value, Contessoto said his investment was still worth just over $1 million.

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JPMorgan could make its first bitcoin fund available to private rich clients as soon as this summer, report says

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JPMorgan CEO Jamie Dimon.

JPMorgan is in the process of offering an actively-managed bitcoin fund to its private wealth clients for the first time, CoinDesk reported on Monday.

The fund could roll out as soon as the summer of 2021, the report said, citing two sources. Crypto-focused financial services company NYDIG is said to serve as the bank’s custody provider.

An actively-managed fund implies that money managers would supervise specific decisions about how the fund’s investments are carried out. Passively-managed funds, like those offered by Pantera Capital and Galaxy Digital, simply track a crypto market index without being touched by a money management team.

JPMorgan, the largest US investment bank by assets, has gradually shifted its stance on cryptocurrencies after labelling them as fraudulent four years ago.

CEO Jamie Dimon said in a 2018 interview he doesn’t “really give a s–t” about the digital asset and didn’t expect it to rival fiat currency. More recently, he listed fintechs as one of the “enormous competitive” threats to banks in an annual shareholder letter released this month.

The bank now frequently publishes research reports about bitcoin, and said last week the worst of the recent liquidation have likely passed. “Bitcoin liquidity is likely to remain robust and resilient; depth on major exchanges has continued to drop less and recover faster than other asset classes,” JPMorgan strategists said in a note.

Bitcoin rose 10% on Monday to trade near $53,000 after tumbling to its lowest level in nearly two months.

JPMorgan declined to comment on the report when contacted by Insider.

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Bitcoin’s momentum will end and it will be ugly – regulation will kick in and countries likely won’t ignore its huge carbon footprint, an investment advisor says

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Bitcoin has ushered in a movement hailed by investors for its ability to decentralize the financial system.

But one investment advisor just highlighted two key factors that pose big risks to bitcoin’s momentum: the threat of regulation and its impact on the climate.

The world’s most popular cryptocurrency broke its mini-slump on Wednesday by rising 1% to above $55,000. It tumbled as much as 17% over the weekend, partly driven by an unverified report that said the US Treasury may soon crackdown on financial institutions using digital assets to launder money.

“We’ve got a whiff over the weekend of what could happen if regulation comes to this product – I’m not going to call it an asset class,” Stephen Isaacs, chairman of the investment committee at London-based advisory firm Alvine Capital, told CNBC on Monday.

“I don’t know where it will end, or how it will end, but it will end,” he said. “And when it ends, it will be ugly, because there will be nothing there.”

Isaacs further added that bitcoin’s energy usage will be its downfall “if anybody’s serious about climate change.”

“This is a very dirty product, and it’s getting dirtier by the minute, because the amount of energy that is required to mine additional supply is going up,” he said.

Analysis by Cambridge University shows bitcoin consumes more electricity annually than the whole of Argentina, BBC reported in February. Energy consumption is said to have a linear relationship with its price.

Research by Bank of America shows each $1 billion in inflows is equivalent to the same amount of energy used by 1.2 million cars. Conversely, digital currencies proposed by central banks are believed to not have the same negative impact.

Isaacs said the currency is rising in value because of speculation and a “buy-everything” inflationary environment, but it has no fundamentals, or intrinsic value.

“It’s almost a victim of its own success, that if this product allows the transfer of vast amounts of money between individuals who have complete anonymity, it goes against a whole generation of regulation,” he said.

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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

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  • 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

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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

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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

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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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