Category Archives: Bitcoin

CryptoQuant analyst, Greatest_Trader, revealed that there was possible selling pressure from Bitcoins [BTC] long-term investors. This opinion may not be surprising, especially as BTC led its investors into losses after falling from $22,000 on 13 September.

Since then, the king coin has failed to recover and has been trading below $20,000 for the past few days.

According to the analyst, the current market direction was responsible for this take. He pointed out that several long-term holders recently sent a sizable number of their holdings into exchanges.

This unusual move signaled massive selling pressure at the holders end. A look at the exchange inflow CDD showed that the analyst raised some valid points.

As of 18 September, the exchange inflow CDD was 97,770.62, according to CryptoQuant. At press time, it had increased remarkably to 1,495,425.57, indicating that long-term investors may run out of patience.

While referring to the decrease in the fourteen-day moving average, he added that the selling pressure, if sustained, could lead BTC to $16,000.

Additionally, it may seem that the earlier talks about Bitcoin getting stronger may already be in the drain. This was because the analyst mentioned above was not the only one who shared the opinion about a possible price fall.

Another CryptoQuant analyst, BaroVirtual, noted that recent institutional investors inactiveness might also send BTC further down. Citing the state of fund market volume of Grayscale Bitcoin Trust (GBTC), BaroVirtual said that the decrease might mean BTC could not increase parabolically.

While assessing the GBTC fund market volume, CryptoQuant data showed that there was no signal for improvement. The last time there was a significant increase was on 23 June, when the volume went up to 31,277,925.39. Since then, it had followed some stagnancy and a decline till it was 4,125,627 at the time of writing.

But was there any sign that BTC could at least rise above this stalemate?

The opinion of Nicholas Merten did not agree. The experienced analyst and founder of crypto YouTube channel, DataDash, predicted that BTC was heading lower than the forecast of Greatest_Trader. In fact, Merten predicted a price plunge to $14,000.

In his video uploaded on 19 September, Merten cited the 200-Week Moving Average (WMA) position. According to him, the indicators revealed more resistance than support, highlighting that it was a similar scenario that led to the capitulation in June.

At press time, BTC was trading at $19,327 a 2.72% increase from the last 24 hours. Despite the uptick, expecting a rally from the current point could be unlikely.

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Bitcoin [BTC]: Is this the point where investors call it quits - AMBCrypto News

Bitcoin (BTC) falling lower to the $18,500 level has struck the market by surprise while retail and institutional investor interests are taking a peculiar turn.

Bitcoin has maintained its rangebound price movement under the psychological barrier at the $20,000 mark. As long-term trends presented a rather skewed picture of the larger cryptocurrency market certain trends pointed towards higher volatility and market skepticism in the near term.

Over the last few weeks, the anticipation of the Ethereum Merge largely overshadowed the diminishing institutional interest in the top crypto asset as significant price swings became a norm.

On Sept. 19, BTC traded at a daily low of $18,232 but managed to make a recovery above the $19,000 mark. However, a worrying sight was that the market volume of the Grayscale Bitcoin Trust (GBTC) fund garnered very low interest from institutional investors.

GBTC is the leading player in the Bitcoin market among similar institutions. GBTCs fund market volume shows almost no interest among corporate (institutional) players. Usually, such diminishing interest trends highlight that BTCs price is prone to fall or is in a distribution phase.

On the contrary, a sudden rise in the fund market volume could lead to a parabolic price rise. For now, though, the number of large transactions, as per data from IntoTheBlock, also made a downward slope highlighting that large entities and bigger transactions were on a decline alongside the BTC price.

Fewer large transactions happening on the network further point toward lower activity from institutional investors or large market entities.

Bitcoin charted an uptick in price towards the upper $22,700 price level on Sept. 13 as investors and traders anticipated further gains. However, a quick u-turn amid lower retail volumes brought BTCs price back to the $19,000 range.

At press time, BTCs next solid resistance levels stand at the $20,000 and $21,500 mark. Bitcoins price would need a quick push from bulls to establish itself comfortably above these key resistance levels.

Nonetheless, a positive sight in investors eyes is the high trade volumes on exchanges, indicative of continued retail interest in BTC. However, for long-term price growth, BTC would need additional support from institutions which is lacking at the moment.

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How the Bitcoin Price Might React as Institutional Interest Diminishes - BeInCrypto

Data shows the public Bitcoin mining companies have been spending more excessively on administration, compared to other industries like gold mining.

According to a new blog post by Arcane Research, most BTC miners have only focused on minimizing direct production costs, and neglected indirect expenses like administration.

The administrative costs here refer to the expenses incurred by companies that arent directly related to revenue generation. Examples of such costs include stock compensation and executive salary.

The direct production costs, on the other hand, include mining farm staff salaries and electricity-related costs. These two expenses make up for the two main types of expenses suffered by Bitcoin miners.

Here is a chart that shows how the BTC mining production margin has been like since 2021:

As you can see in the above graph, public Bitcoin mining companies have maintained their margins around 60% to 80% during recent years, suggesting that they have been good at minimizing their direct production related costs.

The report notes that these margins should be able to cover depreciation and amortization of mining assets, administrative costs, and some profit on top.

Since the first of these is unavoidable, it would appear that the best way for miners to improve their profits is to reduce the administrative costs.

However, as the below chart shows, the public Bitcoin mining companies have been spending big on these expenses since 2021.

From the graph its apparent that public miners have been spending an average of 50% of their revenues on administrative costs alone.

Marathon spent even higher than the rest of the market, paying off administrative expenses with 97% of their total revenues in the last couple of years.

The companys generous executive stock compensation program is behind why the firm has been dropping nearly all of its revenues on administration.

Some companies, however, have been much better at minimizing these costs. Argo managed to keep these expenses at just 16% of its total revenues.

A look at a comparison with other industries like oil and gas industry, and gold mining reveals that Bitcoin mining firms have been spending much more excessively on these costs.

The report explains that the main reason behind this discrepancy lies in the fact that the Bitcoin mining industry is still relatively immature, and as such, their revenues are still quite low.

Companies have been hiring experienced executive teams keeping future growth goals in mind, and hence have needed to offer highly competitive packages.

However, the post points out that the mining industry is still massively overcompensating these executives. The source of this overspending is likely because of mining being a capital intensive industry, which makes it easier to finance costs like these, and the fact that shareholder oversight is weaker in these firms due to the immaturity of the sector.

At the time of writing, Bitcoins price floats around $19.4k, down 13% in the past week.

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Report: Bitcoin Mining Companies Spend Excessively On Administration Compared To Other Industries | - Bitcoinist

What happened: A Bitcoin BTC/USD whale just sent $20,081,001 worth of Bitcoin off Coinbase.

The BTC address associated with this transaction has been identified as: 18qLsm4y9CcX5myZYsA7QxeAo5QvrdeRcB.

Why it matters: Bitcoin "Whales" (investors who own $10 million or more in BTC) typically send cryptocurrency from exchanges when planning to hold their investments for an extended period of time. Storing large amounts of money on an exchange presents an additional risk of theft, as exchange wallets are the most sought-after target for cryptocurrency hackers.

The best way to secure Bitcoin is through holding it on a hardware wallet, which can't be done through holding digital assets on an exchange. Hardware wallets store one's private keys in an offline device, making it impossible for funds to be hacked via the internet.

According to Glassnode, only 12.49% of the total supply remains liquid across all centralized exchanges.

The removal of BTC from an exchange reduces potential sell side pressure, allowing the price of Bitcoin to increase more easily.

See Also: Best Crypto Apps 2021 and Best Crypto Portfolio Trackers

Price Action: Bitcoin is down -4% in the past 24 hours.

See Also: How To Buy Bitcoin

Public Blockchain data sourced from Whale Alerts Twitter.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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Bitcoin Whale Moves 1000 BTC Off Coinbase - Bitcoin (BTC/USD) - Benzinga

Bitcoin (BTC) is currently the biggest cryptocurrency in the world and has been for some time. And with its massive popularity comes an enormous electricity consumption. A recent BanklessTimes.com data presentation shows that BTC accounts for as high as 77% of the electricity consumed on cryptos.

The Bitcoin network currently uses between 90 to 145 billion kWh annually, of which the U.S. accounts for 38% of the total hashrate. By mid-August 2022, estimates put the U.S' share of global BTC electricity usage at between 33 and 55 billion kWh per year, which is comparable to the consumption of some nations, states, or critical energy services.

This could have serious environmental consequences. The American Crypto industry currently emits between 25 and 50 million metric tons of CO2 annually, of which the BTC network accounts for the most emissions. Growing BTC popularity threatens to escalate these emissions to dangerous levels.

Bitcoins high electricity consumption can be attributed to its proof-of-work algorithm and the block size limit. The proof-of-work algorithm requires miners to solve complex mathematical problems to verify transactions.

This process consumes a lot of energy since miners must use powerful computers to solve these problems. The block size limit also contributes to high electricity consumption since it requires more transactions to be verified.

Recently, there have been calls for new forms of mining that dont require such a large amount of electricity. There are also plans to abandon proof-of-work mining altogether and move towards more sustainable models like proof-of-stake mining. If these changes are made, it could go a long way towards alleviating some of Bitcoins environmental concerns.

As climate change continues to be a pressing global issue, it is important to discuss its potential risks and consequences. One major consequence of climate change is its financial impact. In 2021, climate disasters set back the United States $145 billion.

This number is only expected to rise in the coming years as climate change becomes more severe. Moreover, climate change risks reducing the U.S. GDP by 3% to 10% and U.S. federal revenue by 7% annually by the end of the century.

The United States is committed to reducing greenhouse gas emissions by 50% to 52% below 2005 levels by 2030 and achieving a carbon pollution-free electricity grid by 2035. This will put it on track to reach net-zero emissions no later than 2050.

The U.S. must focus its crypto-asset policy on several key areas to meet these objectives. First, the policy should aim to reduce GHG emissions from crypto-asset operations. Second, it should avoid processes that will increase the cost of electricity to consumers or reduce the reliability of electric grids.

Thirdly, the policy should aim to support a clean energy transition that equitably benefits communities across the country. Likewise, it should target reducing electronic waste and pollution and resolve data gaps to manage electricity demand better.

By focusing on these key areas, the United States can develop a comprehensive crypto-asset policy to help it meet its climate objectives.

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Bitcoin Accounts for as High as 77% Of the Total Electricity Consumed by Cryptocurrencies - Bitcoin Accounts for as High as 77% Of the Total...

Michael Saylor, the former CEO of MicroStrategy and long-time admirer of Bitcoin, recently took to Twitter (NYSE:) to once again convey his unshakable faith in the cryptocurrency, stating that he believes there are a significant number of individuals all over the globe that need Bitcoin.

Saylor has been tweeting constantly about his strong trust in Bitcoin since the Merge, which saw the second biggest cryptocurrency transition from a proof-of-work consensus mechanism to a proof-of-stake one.

In one of his tweets, the MicroStrategy chair said, There is no other alternative to Bitcoin. This was barely a few hours after the Merge. He has also said that Bitcoin is a digital currency that acts as a railway for the transfer of money across both time and place.

Saylor also boasted on Twitter that MicroStrategys share price had increased by 67% since the firm began using the Bitcoin Standard, even though many other shares have seen either significant drops or flat growth this year.

The Bitcoin advocate has already said, in a previous video posted on September 17 while attending a conference in Australia, that the king crypto is becoming stronger following the Ethereum Merge. Saylor believes that proof-of-work is the only mechanism that is successful in the production of digital commodities.

Saylor thinks that the Bitcoin blockchain is the cleanest and most efficient use of power in the industry. The firm has recently revealed plans to sell $500 million in MSTR shares to increase its holdings of bitcoin. At the moment, Microstrategy (NASDAQ:) has 129,699 bitcoins in its possession.

The post Theres Awful Lot of People That Need Bitcoin, Says Michael Saylor appeared first on Coin Edition.

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'There's Awful Lot of People That Need Bitcoin,' Says Michael Saylor By CoinEdition - Investing.com

While Bitcoin (BTC 2.75%) is still the No. 1 cryptocurrency in the world as measured by market capitalization, there are plenty of reasons to think other cryptocurrencies could eventually surpass it. Before this year's crypto market retreat, the conventional wisdom was that Bitcoin was a hedge against inflation and a long-term store of value. Some even called it "digital gold." But those assumptions are now very much in doubt.

So which cryptos could might displace Bitcoin at the top of the crypto heap? Right now, the two best prospects are Ethereum (ETH 3.47%) and Solana (SOL 2.43%). Both cryptos offer more utility than Bitcoin, and both are innovation leaders in the blockchain industry, with promising growth prospects.

Ethereum stands out as an innovation leader. The most recognizable developments of the past few years -- including smart contracts, decentralized applications (dApps), and non-fungible tokens (NFTs) -- originated on the Ethereum blockchain.

By nearly any metric, Ethereum is the dominant force in the blockchain industry. For example, Ethereum is the No. 1 player in the NFT market, with an estimated 80% share. In areas such as decentralized finance (DeFi), blockchain gaming, and the metaverse, Ethereum dwarfs every other blockchain in the world.

Image source: Getty Images.

And with The Merge, a broad system upgrade, Ethereum will only become stronger. The current complaint about Ethereum is that it is too slow and too expensive. That is largely because it has been based on a proof-of-work consensus mechanism. With The Merge, Ethereum will transition to a proof-of-stake consensus mechanism, reducing transaction fees and boosting transaction processing speeds. Eventually, when Ethereum 2.0 is complete, it should be able to handle 100,000 transactions per second. In contrast, Bitcoin for now can only process five to 10 transactions per second.

The path to market dominance is more complicated for Solana because it is a direct rival to Ethereum. Both are Layer 1 blockchains offering users the same functionality and utility. Ethereum has smart contracts, and so does Solana. Ethereum enables the creation of NFTs, and so does Solana. The key selling point is that Solana can do everything Ethereum can do, only faster and cheaper. Solana already offers the capability to process 65,000 transactions per second, and transaction fees are near zero.

While Ethereum has been bogged down in all the technical steps needed to become a proof-of-stake blockchain, Solana has been on an innovation tear. Solana has launched everything from a new merchant payment network (Solana Pay) to an entirely new mobile crypto platform (Solana Mobile). In 2023, Solana plans to debut Saga, the first-ever "crypto phone."

At the same time, Solana is making serious forays into both blockchain gaming and Web3. More than any other crypto, Solana is taking steps to build a recognizable brand for crypto early adopters.When you can layer this brand experience on top of a super-fast, super-inexpensive blockchain, that is a very powerful value proposition.

This might be an imprecise analogy, but you can think of what is happening in the crypto industry as similar to what happened in the tech industry a generation ago. Until the 1980s, IBMwas the biggest name in the tech industry, and then along came Microsoftand Apple. The rest, as they say, is history.

In many ways, Bitcoin is today's crypto IBM, Ethereum is the new Microsoft, and Solana is the new Apple. There is definitely room for all three to co-exist. The only real question is who gets to sit on top. Big institutional investors may prefer Bitcoin, while everyday investors might prefer Ethereum and Solana.

Right now, Ethereum is about half as big as Bitcoin based on market cap and Solana's is equal to just 3%. So a lot would have to change for either of them to overtake Bitcoin. But again, look at what happened with IBM, Microsoft, and Apple in the tech industry. Microsoft launched in 1975, and it took nearly two decades for Microsoft to pass IBM in market capitalization. Then, after that happened, it took nearly another two decades for Apple to pass Microsoft in market capitalization. So obviously, this is not going to happen overnight, and there will be many twists along the way.

But Ethereum and Solana now offer too much utility to ignore. And they are both innovation leaders, making them both long-term plays if you believe in the future of the crypto industry. If you can handle crypto's volatility, you can put these two cryptos in your portfolio and hold onto them forever.

Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Apple, Bitcoin, Ethereum, Microsoft, and Solana. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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2 Cryptocurrencies That Could Overtake Bitcoin - The Motley Fool

This is an opinion editorial by Jesse Willms, a Canadian Bitcoin reporter.

In a stunning win, Pierre Poilievre received 68% of the first ballot points to become the leader of Canadas Conservative Party, becoming the first outspoken Bitcoiner to do so.

The win not only exceeded the wildest expectation of the Poilievre campaign, but with the notable exception of the 2013 leadership race that elected Justin Trudeau as Liberal leader it ranks as one of the most commanding leadership victories among any major party in Canadian history, the National Post noted.

It was only a day after being elected leader of Canadas Conservative Party that Poilievre sustained his first attack from Canadas current prime minister, Justin Trudeau. Likely referring to Poilievres support of Bitcoin as irresponsible, Trudeau tweeted:

Weve made every effort to work with all Parliamentarians over the years, and well continue to do so. But well also call out questionable, reckless economic ideas because Canadians deserve responsible leadership. Telling people they can opt out of inflation by investing in cryptocurrencies is not responsible leadership.

Although its clear that theres a no-holds-barred, knock-down, drag-'em-out fight coming between Poilievre and Trudeau, the exact timing is unclear.

Prime Minister Trudeau is doubtlessly getting lots of advice on when to go to the polls. If he chooses to sooner rather than later exercising his power to call a federal election before the October 4, 2025 deadline, per the Canada Elections Act the stream of scandals that has followed him could come to a quicker end. And if the vote comes sooner rather than later, Trudeau could avoid having to go before a judicial inquiry on his use of the Emergencies Act to control what turned out to be a peaceful protest.

Its generally considered better for incumbents to call elections when the economy is on the mend and inflation is going down, but those trends may be hard to predict. In any case, the Liberals have a deal with the socialist NDP for support on any no-confidence votes until Spring 2025, if they need to use it.

Trudeau may decide to wait to call an election, as he may believe theres a possibility that Canadians could tire of Poilievre and his members of parliament.

No matter when the vote is called, in my opinion, the winner will likely be Poilievre.

Canadian federal politics isnt always a race for the centre, but it usually is, noted national newspaper The Globe And Mail. Mr. Poilievre got to be leader by unabashedly aiming for something other than a moderate middle. Unlike his predecessor Erin OToole, he has given every sign thats where he plans to continue to reside.

Conventional wisdom suggests that the majority of Canadians are moderate, middle of the road voters and so it only makes sense for political parties to aim for the middle. All parties reason that hugging the political center as much as possible, and thus matching opinion polling data, is the strategically smart thing to do.

With his resounding win, Poilievre has ignored the polling data and simply gone for a program, which includes bitcoin adoption, that he believes in, giving voters something to aspire to.

Poilievre ran on a campaign of freedom from government, but also on free money that people should be free to invest in and use bitcoin has been his position.

The campaign timing of the six-month campaign from March to September coincided with a slide in the price of bitcoin that opponents have used to paint Poilievre as irresponsible (in a televised debate, one leadership rival accused him of deceiving vulnerable seniors who stood to lose money from his advice).

Against advice from party members, Poilievre, to his credit, never waivered, despite taking a battering from conservatives who felt that they could easily win without complicating things with bitcoin, especially in the current bear market. (Even the most dedicated bitcoiner might say, well maybe this isn't the time or place.)

He has refused to equivocate and this may have earned him respect with potential voters who are thinking that they might not agree with him, but at least he sticks to his guns.

Conservative party organizers were more than surprised by the thousands of young people who took out memberships and voted for Poilievre.

Canadian politics, as in many countries, is typically for retirees with lots of time on their hands and is the last place youd expect to find crowds of young people.

A source close to the Poilievre campaign remains surprised to see that Poilievres social media engagement translated into real-life interactions especially with a younger age group.

Polls in recent months have been showing that younger voters have been increasingly abandoning the Liberals for the Conservatives for the first time, even before Poilievre became the Conservative leader.

I think were just scratching the surface on how his ability to access young people ultimately contributed to his victory, said Michael Solberg, partner at Canadian public relations firm New West Public Affairs, per the National Post. His digital media game is stronger than even the prime ministers and the government of Canada, with all of their resources and their money.

Canadian federal politics is complicated by the fact that many votes come from francophones living in Quebec, meaning that it's not impossible, but is unlikely, that a unilingual candidate could win in that province.

Although he grew up in Alberta, Poilievre, with a francophone name, is fluent in French, almost a requirement to win a nationwide vote in Canada.

Despite not being from Quebec, Poilievre won the majority of votes in Quebec and stands to win big in any future election.

Its hard to picture a scenario where the Liberal party can recover its previous lead in the polls. Even without the acrimony around the truckers convoy and questions about the use of the Emergencies Act, the upcoming campaign will be the fourth in a row for Trudeau.

The next campaign will almost certainly be Trudeaus last. History suggests it will be an uphill battle. Sir Wilfrid Laurier was the last incumbent prime minister to secure a fourth consecutive term (in 1917), said one observer.

The NDP is generally seen as the party of the working class but fundraising is suggesting a shift in support among some working Canadians.

According to some observers, by making a deal with Trudeau to keep the government in power until 2025, the NDP leader has sealed his own and likely his partys fate in any upcoming vote.

Alienation from Central Canada has been growing in Canadas Western provinces, particularly in Alberta, which has its own political party running for independence from Canada.

Because of Poilievres support for the truckers convoy and the perception that the Trudeau Liberals are a party of Eastern Canada, there was probably more than the usual amount of interest from Western Canada in the recent campaign.

Western voters showed an almost unprecedented interest in the recent vote and that will likely continue into the next federal election.

In politics, as in life, the obvious strategy isnt necessarily the winning one.

By taking the high road instead of the middle of the road and running on what he believes in, Poilievre is upending the normal in Canadian politics.

How will this affect the outcome of the upcoming federal election?

In my opinion, it would be safe to bet your bitcoin on Poilievre.

This is a guest post by Jesse Willms. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Pierre Poilievre Will Be Canadas First Bitcoin Prime Minister - Bitcoin Magazine

About 145 million American adults say that they own or have owned cryptocurrency. Statistically, thats more than half of your co-workers, neighbors and friends.

Its also about the number of Americans who own stocks.

Even though its not regulated by a government agency, cryptocurrency is becoming mainstream. However, President Biden recently signed an executive order to address cryptocurrency risks with a whole-of-government approach that could make cryptocurrency even more attractive to investors as well as traditional banks and credit unions.

For the near term though, cryptocurrency remains a volatile, speculative asset that will likely continue its gut-wrenching booms and busts. Thats not to say that cryptocurrency doesnt belong in a well-diversified portfolio, but I recommend that my clients first educate themselves about cryptocurrency before deciding whether or not to invest.

As Warren Buffet said about investing in cryptocurrency: I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I dont know about?

Here are some important concepts to get comfortable with.

Say you order a new set of patio furniture online. A credit card company or payment processor like PayPal acts as a middleman between you and the seller.

However, if you want to buy that patio set with cryptocurrency, theres no middleman. You conduct transactions directly with the merchant. The cryptocurrency network assigns a public and a private key that becomes your unique address. You then use your private key to digitally sign the transaction.

Theres no bank or third-party fees. You store your cryptocurrency in either a hot or a cold digital wallet. You can get a software-based hot wallet from an exchange like Coinbase or a provider like Electrum or Mycelium. A cold wallet is a small, encrypted portable device from providers such as Trezor and Ledger Nano.

Its unclear which cryptocurrency names will survive, but the true value is likely in the underlying blockchain technology. Initially created to power Bitcoin, the granddaddy of cryptocurrencies, today theres thousands of blockchains for digital currencies like Ethereum, Litecoin, Dogecoin, Tether and many others.

(As a side note, Dogecoin began as a joke referring to 2013 meme with a Shiba Innu dubbed Doge.)

The blockchain uses a digital ledger to duplicate and distribute your patio furniture transaction to computers across the blockchain. Peer-to-peer computer networks verify and time-stamp each transaction. Instead of a central authority like a bank with the associated costs and infrastructure, a network of users verifies the data.

The growing list of records, called blocks, are linked together using cryptography. Crypto mining verifies the next block on the blockchain. Miners are rewarded with cryptocurrency tokens plus any fees paid by the exchanging parties.

Because the transaction appears across the entire network of computers on the blockchain, its extremely difficult to change, hack or cheat the system. For countries with poor or corrupt financial institutions, cryptocurrencies based on blockchain protect against criminal activity. Theres also an element of integrity since users can rate each other, weeding out unscrupulous users.

That doesnt mean that blockchain is totally hack-proof. Hypothetically, if a group of miners was able to take control of more than 51% of the blockchains mining hash rate or computing power, they could halt payments, reverse transactions, or double-spend coins.

Blockchain does have a few negatives. All those computers and the processes involved in mining cryptocurrency are energy hogs, making it environmentally unfriendly. Cambridge University found that Bitcoin mining takes more electricity annually than it takes to run Argentina.

And because blockchains require huge amounts of computing power over a distributed network, they are slower than centralized databases. The Bitcoin blockchain can only process 4.6 transactions per second, so it takes about 10 minutes to process a Bitcoin transaction. In contrast, the Visa network can process more than 1,700 transactions per second.

Blockchain is a transformative technology and has applications outside of cryptocurrency in healthcare, art, travel, legal, insurance and countless others. Think of any transaction that requires a central clearing authority, such as wire transfers or settling trades.

Here are just three possible uses of blockchain:

The IRS classifies crypto as a type of property rather than a currency. If you use digital currencies to buy or sell goods and services, you have to pay taxes. Using cryptocurrency can leave you with an unexpected tax bill.

For example, the patio furniture seller that receives your Bitcoin as payment has to pay taxes on its current value. You may owe capital gains taxes if the realized value of the sales transaction is greater than the price you paid for the cryptocurrency.

Buying crypto with cash and holding it isnt a taxable event, but if you acquire digital currency from mining, you have to pay tax on the value immediately. Getting paid in crypto also triggers tax liability. Transferring crypto from one digital wallet to another isnt taxable, but converting from one cryptocurrency to another is.

Investing in crypto also has tax implications. If you sell crypto at a profit, you have to pay tax on the difference between what you bought it for and the sale price.

If this sounds like a lot of recordkeeping it is. The IRS requires you to maintain records sufficient to establish the positions taken on tax returns. That means documenting receipts, sales, exchanges and the fair market value of your crypto assets. But unlike stocks, you dont receive a Form 1099-B that shows you the cost basis of your transaction. If you use cryptocurrency for day trading, transactions could total in the thousands.

One bit of good news tax-wise is that it is possible to use tax loss harvesting to write off some losses. Like equity losses, you can deduct up to $3,000 of crypto losses against ordinary income per tax year and carry losses beyond $3,000 forward until death.

The value of cryptocurrency is largely driven by supply and demand. Unlike government-backed (fiat) currencies, in which governments have the option of printing more money to increase supply, the majority of cryptocurrencies have published supply limits according to their token minting and burning plan. There will only ever be 21 million Bitcoins. When demand outpaces supply, cryptocurrencies rise in value, sometimes dramatically.

Stablecoins aim to provide a less volatile type of cryptocurrency by pegging the coins value to another currency, commodity or financial instrument. For instance, the USDF Consortium, a membership-based association of FDIC-insured financial institutions, is trying to further the adoption of a bank-minted tokenized deposit (USDF) that is pegged to the U.S. dollar and will be insured for up to $250,000 by the FDIC.

A stablecoin that turned out to not be stable at all rattled the markets. TerraUSD, which relies on algorithmic coin supply management, lost its peg to the U.S. dollar, and its Terra cryptocurrency lost 98% of its value in just 24 hours.

Unlike other assets that have built-in protections like FDIC-insurance, you are responsible for protecting your crypto assets. Youll want to use two-factor authentication with a strong password and additional verification, such as fingerprint or facial recognition. Dont buy crypto at the local coffee shop; use a secured internet connection.

Your digital key a 256-bit long string of alphanumeric characters is the only way to access your crypto assets. Hopefully, you wont ever lose your private key. If you lose the key or throw away your cold wallet, the crypto is lost forever.

Seems unlikely? Tell that to James Howells, who accidentally threw an old hard drive into the trash, which was taken to the local landfill. He was never able to recover about $181 million in Bitcoin. Or Mark Frauenfelder, who wrote down his key for his hardware wallet on a piece of paper which the cleaning people threw in the trash. Or Stefan Thomas who would have over $100 in cryptocurrency if he could remember his password.

James, Mark, and Stefan are not alone: One analysis found that of the 18.9 million Bitcoins in circulation, 3.7 million have been lost by owners.

If you die, your cryptocurrency is treated as a probatable asset. But because its decentralized, your beneficiaries may not be able to access it unless you include your cryptocurrency assets in your estate plan with instructions on how to access them.

In 2009, when Satoshi Nakamoto (a pseudonym for an individual or group of individuals) released a white paper detailing Bitcoin, the coin had no value. By February 2011, it hit $1. A decade later, it hit $68,000. A few months after that, it lost half its value.

Lots of investors panicked and sold. Historically, a bear market is the best time to invest since you are buying low with the hope of eventually selling the asset for more than you bought it for. Should you employ the same strategy with cryptocurrency?

Possibly. But first, think long and hard about your risk tolerance. Do bear markets give you angst? Do you feel compelled to sell equities and turn to the perceived safe haven of fixed income when economic news is bad? If yes, then investing in cryptocurrencies may not be right for you.

However, if you are willing to ride the highs and lows and already have a healthy emergency savings fund, have paid off all your high-interest debt, and are on track with your retirement savings and other financial goals, you can consider adding cryptocurrency as an alternative asset to a diversified portfolio.

If you are interested in investing in cryptocurrencies or even the underlying blockchain technology and dont want to invest directly, companies are beginning to offer ETFs and mutual funds that offer exposure to companies involved in blockchain technology and cryptocurrency. This certainly makes investing much easier, but if the value skyrockets, youll have to share in the spoils.

Also understand that the SEC does not insure cryptocurrency against exchange failures or theft. Some exchanges offer insurance, but it doesnt protect against breaches or someone stealing your private key.

It can be easy to get caught up in crypto excitement especially when you hear about overnight millionaires and day traders making incredible profits but the lows can be excruciating. Just as you would with any speculative asset, set a maximum threshold for cryptocurrency in your portfolio and stick to it.

Senior Vice President, Financial Planning, Carson Group

ErinWoodistheSenior Vice President of Financial Planningat Carson Group, where she develops strategies to help families achieve their financial goals. She holds Certified Financial Planner, Chartered Retirement Planning Counselor andCertified Financial Behavior Specialistdesignations.

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Should I Invest in Bitcoin or Other Cryptocurrency? - Kiplinger's Personal Finance

Digital currency markets, precious metals, and stocks dropped another leg down on Monday following the drop markets saw last Tuesday. Last weeks fall was one of the worst weeks in more than three months as market strategists believe a sizable Fed rate hike is coming this week. Bank of Americas analysts led by Savita Subramanian believes the U.S. Federal Reserve has more work to do, and an aggressive central bank may be anathema for stocks that have benefited from low rates and disinflation.

A hawkish Fed may be like repellent or kryptonite to assets that profited from easier monetary policy and stimulus, Bank of Americas market strategists led by Savita Subramanian said in a note this past weekend. Global assets are having a rough start on Monday as all four major stock indexes on Wall Street started the day (9:30 a.m.) lower following a gruesome week of trading activity last week. By 3:00 p.m. (ET), benchmark stocks saw a slight rebound showcasing extreme market volatility and uncertainty.

Subramanian and his team predict the S&P 500 will lose another 8% this year, and he further stressed that the summer rally is over. On Monday, digital currency markets slid 1.61% in the last 24 hours, and the crypto economy is now just above the $900 billion mark at $933.17 billion. Bitcoin (BTC) has lost 1.67% and ethereum (ETH) shed 1.79% against the U.S. dollar during the past 24 hours.

Precious metals like gold and silver saw losses as well on Monday, as gold shed 0.12% and silver dipped by 0.74% against the greenback. Bitcoin markets have been extremely correlated with U.S. equities, but some BTC market analysts believe bitcoin is a very different animal.

[Bitcoin] and S&P 500 are correlated, the pseudonymous analyst Plan B tweeted on Monday. However, in the same period that S&P increased from ~$1K to ~$4K, [bitcoin] jumped from ~$10 to ~$20K. 4x versus 2000x completely different worlds. Short-term moves are noise, long term trends are the signal.

In the meantime, economists and analysts suspect the U.S. Federal Reserve will raise the target federal funds rate by 75 basis points this week. Bank of Americas Subramanian detailed that the Fed has more work to do and lessons from more than four decades ago can tell us a lot about combating inflation.

A hawkish Fed may be anathema for stocks that have benefited from low rates and disinflation (i.e. most of the S&P 500), but lessons from the 70s tell us that premature easing could result in a fresh wave of inflationand that market volatility in the short-run may be a smaller price to pay, the Bank of America strategists note explains. Subramanians opinion follows the report Bank of America economists revealed in mid-July.

At the time, the banks economists said it previously expected a growth recession, but the summer forecast suggested a mild recession in the U.S. economy this year. On Monday, market analyst Sven Henrich quoted Fed chair Jerome Powells statement during a press conference last June, when Powell said: Clearly, todays 75 basis point (bps) increase is an unusually large one, and I do not expect moves of this size to be common. Henrich then mocked the Fed chair by noting the central bank is proceeding to execute the third 75bps rate hike in a row.

While nearly every asset class under the sun is showing a strong connection to inflationary pressures and the Feds monetary policy, the U.S. dollar has continued to skyrocket against other fiat currencies. The U.S. Dollar Currency Index (DYX) tapped 109.756 on Monday afternoon (ET) and the euro has met parity with the greenback once again. A single Japanese yen equals $0.0070 per yen, and 10-year U.S. Treasury notes tapped an 11-year high at 3.518% on September 19.

What do you think about the Bank of America market strategists opinion about an aggressive Fed and the S&P 500 shedding another 8% by the years end? Let us know what you think about this subject in the comments section below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Bank of America Market Strategist Says 'Summer Rally Is Over' as Crypto and Stocks Slide Ahead of Fed Rate Hike This Week Economics Bitcoin News -...