Fed, oil and record hash rate: 5 things to know in Bitcoin this week – Cointelegraph

Bitcoin (BTC) starts a new week in uncertain territory as $10,000 stays in place but fundamentals shift to bullish.

Cointelegraph highlights five things that could shape BTC price action in the coming days.

In what will likely become a frequently-quoted announcement, oil giant BP said this weekend that the world has hit peak demand for the black gold.

In a report quoted by Bloomberg, BP said that demand for oil would stay broadly flat for the next twenty years, with pressure coming from alternative fuels and coronavirus.

It subsequently recovers but never back to pre-Covid levels, Spencer Dale, the firms chief economist said.

It brings forward the point at which oil demand peaks to 2019.

Macro asset year-to-date returns. Source: Skew

The startling admission is yet another surprise to come out of the global economy, at the same time as central banks admit that unconventional monetary policy has become the norm in 2020.

With coronavirus at the helm and lockdown returning to at least one country on Monday, Bitcoin looks poised to benefit from oil and fiat currency weakness, as before.

As Cointelegraph reported, previous extreme volatility in the price of certain oil assets allowed BTC to shine as a hedge against losses.

Another week, another meeting for the United States Federal Reserve and a chance for safe havens to capitalize on its policy shifts.

On Wednesday, the Fed will outline how it plans to implement economic measures which will impact inflation something which previously sparked dollar weakness.

Maintaining a policy status quo in this context would be akin to throwing in a towel, which would undermine the credibility of the new framework right out of the gate, Aneta Markowska, chief financial economist at Jefferies told MarketWatch on Monday.

Any actions from the Fed could weigh on the U.S. dollar currency index (DXY) once again, something to which Bitcoin has shown significant inverse correlation since July.

Gold markets are already considering the likelihood of a shake-up, analysts say, betting on the Fed putting itself in an increasingly difficult position. The precious metal has formed a golden triangle and is ripe for a breakout.

For Bitcoin, its all about DXY a reversal of recent strength at the beginning of September would be a clear bull signal. Conversely, continued gains would likely keep selling pressure at $10,500 intact.

DXY 2-month chart. Source: TradingView

The coronavirus crisis is many times more destructive than the financial crisis of 2008, Steve Barrow, head of forex strategy at Standard Bank, meanwhile summarized to Bloomberg.

Theres every reason to believe that the move to tighter monetary policy will take as long - and probably much longer -- than the post-financial-crisis period.

In terms of central bank policy specifically, this year is seeing a seismic change similar to oil demand.

With Bitcoin as an antidote to central bank meddling with the money supply, any further devaluation in fiat is only to be welcomed by BTC proponents looking for a safety net.

Global central bankers are discovering that monetary policies they once viewed as unconventional and temporary are now proving to be conventional and long-lasting, Bloomberg summarized about the situation worldwide.

According to data from the publication, major central banks are employing crisis policies in 2020 that they have never used before.

As RT host Max Keiser often comments on his show, The Keiser Report, nothing is as permanent as temporary fiscal policy from a central bank.

Within Bitcoin, however, the future looks decidedly rosy. Hash rate a measure of how much computing power miners have decided to dedicate to validating transactions has broken out to hit yet another all-time high.

On Monday, data from Blockchain shows, the seven-day average hash rate stood at 135 exahashes per second (EH/s).

Bitcoin 7-day average hash rate 2-month chart. Source: Blockchain

Hash rate strength underscores miners continued faith in Bitcoins long-term profitability. Difficulty, perhaps the most essential measure of blockchain health, is set for a 5.4% increase this week something which will send it, too, to record highs.

Commenting on the general situation, Cointelegraph Markets analyst Michal van de Poppe suggested that zooming out was all that was needed for a bullish take on Bitcoin.

If you'd like to compare periods and market cycles, the current state of the market is comparable to 2016, he tweeted on Monday.

Slow upwards grind, with long sideways consolidation periods. In 2016, several were seen. In 2020, 2021, it's likely we'll see that too. Bullish.

Cryptocurrency commentators are also eyeing moves by stablecoin Tether (USDT) as a pointer for BTC price trajectory.

Specifically, Tethers burgeoning market cap, passing $15 billion in recent days, has historically spurred Bitcoin gains.

Bitcoin tether printer divergence. This story always seems to end the same way, analyst Cole Garner tweeted, highlighting how previous increases in the USDT supply positively impacted Bitcoin.

As Cointelegraph previously reported, stablecoin holders, including those of USDT, appeared keen to snap up cheap BTC at prices around $10,000.

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Fed, oil and record hash rate: 5 things to know in Bitcoin this week - Cointelegraph

Glen Oaks Escrow Announces It Assisted With Yet Another Bitcoin Transaction – PRNewswire

ENCINITAS, Calif., Sept. 16, 2020 /PRNewswire/ --Glen Oaks Escrow, one of Southern California's largest independent escrow companies, recently announced that it closed its second Bitcoin transaction.

The organization shared that the homebuyer contacted the Glen Oaks Escrow office in San Diego to inquire about using Bitcoin after hearing about previous Bitcoin transactions that were administered within the organization.

"We're thrilled that our organization has closed another transaction with Bitcoin. We made the decision in 2018 to start accepting Bitcoin payments, and we are glad that we did, given that consumers see the value and are taking advantage of this payment method. This transaction exemplifies that, while a young technology in our industry, blockchain, and cryptocurrencies have the potential to become a bigger part of real estate transactions. And, given the current economic climate, some experts are predicting that real estate, gold, and Bitcoin will perform strongly over the long-term. We look forward to being there for our clients and are very proud to be at the forefront to enable transactions in this way," shared Joe Curtis, COO of Glen Oaks Escrow.

Glen Oaks Escrow accepts Bitcoin payments through BitPay, which acts as the payment processor in the transaction and is used to verify the funds. The escrow company then sends out an invoice to the buyer, similar to wire instructions in a fiat currency transaction.

The buyer then has a fixed window of time to remit payment using Bitcoin or another accepted cryptocurrency. The funds go to escrow through BitPay, which converts the Bitcoin into cash and wires US Dollars into the escrow account. In summary, BitPay takes the Bitcoin and converts it to cash for the seller, so the seller never actually sees the Bitcoin payment, just the cash.

"While some people and companies are still trying to understand how cryptocurrencies fit into the real estate industry, we continue to see the growth of usage in other markets. From Crypto Startup Schoolsto large banks getting involved with cryptocurrencies, we are confident that this new way of doing business will increase in our industry. We're proud to be paving the way for this technology," explained Curtis.

About Glen Oaks Escrow

Glen Oaks Escrow is part of the Pango Group, a family of companies that include American Trust Escrow, CV Escrow, Escrow Trust Advisors, AV Escrow, VOI Insurance Solutions, and Document Archive Solutions.

Pango Group has been one of the leading independent escrow resources in California for over 20 years with locations from Los Angeles to Orange County to the Coachella Valley and San Diego and owns and manages over 30 offices and 300 employees.

The company's mission of running exceptional real estate service businesses that enhance the lives of the people, partners, and communities we serve has been an integral part of its success. It was recently named one of the Best Places to Work for the 5th year in a row in Los Angeles.

CONTACT:Lucia Asbury(760) 697-9146[emailprotected]

SOURCE Glen Oaks Escrow

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Glen Oaks Escrow Announces It Assisted With Yet Another Bitcoin Transaction - PRNewswire

India’s Crypto Bill Omitted From Parliament Agenda While New Ban Report Appears – Bitcoin News

Despite much anticipation, the Indian cryptocurrency bill is not included in the list of bills to be introduced in the current session of parliament. Meanwhile, a new report of Indias government planning to ban cryptocurrency trading has emerged.

The Indian government has been deliberating on how it will treat cryptocurrencies in the country after a draft crypto bill was submitted by an interministerial committee headed by former Finance Secretary Subhash Chandra Garg last year.

The government originally said that it planned to introduce this bill in the Winter session of parliament last year. When that did not happen, there were reports suggesting that the crypto bill could be introduced in the Monsoon session, which started Monday and will continue through Oct. 1.

Tanvi Ratna, CEO of blockchain policy and regulatory advisory firm Policy 4.0, explained on Twitter Sunday that the Monsoon session of parliament was disrupted due to the covid-19 pandemic, adding:

Cryptocurrency ban legislation does not appear in the list of 45+ bills on the agenda for the 18-day session. This is big news, though this could change & there are other routes for govt.

The Indian government has not made any announcement regarding its plans for cryptocurrency, which has led to rumors and speculation. Several reports indicate that the government is planning to ban cryptocurrencies as outlined in the draft bill submitted by the Garg committee.

The latest crypto ban news was published by Bloomberg on Tuesday. The publication claims that India is planning to introduce law to ban cryptocurrency trading. Citing people familiar with the development who asked not to be identified, citing rules on speaking with the media, the publication wrote:

The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament.

The federal government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading, according to two people, the news outlet added.

Since this is not the first time the Indian crypto community has had to deal with ban rumors, many people on Twitter were quick to point out that the sources of the news are anonymous, and previous ban rumors never materialized.

Blockchain lawyer Varun Sethi commented: Words like federal cabinet suggest its inspired from some western country. In India, we generally use central government. Also, no sources or quotes raise doubts.

Furthermore, Crypto Kanoon co-founder Mohammed Danish previously explained that if the Indian government decides to pass a law to ban cryptocurrency in some ways, this law can be challenged by crypto business, traders, or enthusiasts based on various rights available to them under the Constitution.

Despite multiple ban reports, the cryptocurrency community in India firmly believes that the government will not impose a full ban on cryptocurrencies since much has happened since the Garg committees bill was drafted.

Earlier this month, Begin India Think Tank founder Deepak Kapoor explained that bitcoin and other cryptocurrencies could have the same legal status as stocks. In July, Garg himself said that Crypto assets as commodities should be allowed, even though he stood by his recommendation that cryptocurrencies should be outlawed. He has since retired from government service.

Do you think India will ban or regulate cryptocurrency? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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India's Crypto Bill Omitted From Parliament Agenda While New Ban Report Appears - Bitcoin News

Can You Have Your Bitcoin And Eat It Too? – Forbes

Debating the opportunity costs of earning on your Bitcoin.

Crypto Twitter, like many Twitter-spheres, is as full of self-affirmation and choir preaching as it is of internal holy-wars (not too unlike those described on this post). We can characterize two camps within the crypto/digital asset space. This is a gross oversimplification to be sure, but paints a picture of the space where there are a spectrum of competing ideas.

One group is financial and technically more conservative; this group wants the hardest monetary policy, extremely high levels of computational security, and the ability to self-verify everything. They might see the benefit of more complex functionality, but think this functionality must be built on top of a highly reliable and trustworthy base layer. These folks value minimizing attack vectors, self-auditing, backwards compatibility, and privacy. The Bitcoin Maximalists fit into this group.

The second group is more liberal; they are interested in rapid innovation, maximal flexibility and functionality, and often have higher risk tolerances. While they still value security and decentralization, they are comfortable with a larger set of concepts and designs. There is substantial internal diversity among the members of this group, but many of them envision a future with many successful interconnected projects (rather than a single base layer).

As an example, we recently watched the Bitcoin Maximalists spar with the Ethereum community over issues such as cost to run a full node and auditing a networks total supply in a debate dubbed #supplygate (1, 2).

What if you could benefit from additional functionality without compromising on security?

There is a middle ground forming under the term Bitcoin Centrist. The centrist understands the benefits of both camps ideologies.

Putting Your Crypto to Work

DeFi, or Decentralized Finance, is arguably the hottest subject of 2020 within the crypto space. This new buzz word describes the broad set of protocols which enable decentralized financial product/service applications (acknowledging that there isnt complete consensus on what fits into this category). I aggregated and parsed unique documents mentioning the keyword DeFi using NTerminal in Splunk. We can see an increase in buzz over the course of 2020:

Sentiment Analysis for the Keyword "DeFi"

People are interested in DeFi both for its potential in Reinventing Global Finance, and as a way to make massive investment returns. DeFi applications include systems such as automated market making, derivatives, and lending. Yield Farming is the process of utilizing DeFi protocols to generate yield on ones digital assets.

YFI (the token for Yearn Finance), for example went from trading around $4,000 at the start of the month to a price of over $36,000, surpassing $1 billion in marketcap:

YFI-USD Reported Price & Volume on FTX and NLP mentions by Sentiment

These protocols, of course, are far from being risk-free, and this market activity does not appear to be sustainable. In some ways the DeFi craze mirrors what we saw in 2017 with the ICO boom, when projects were pulling millions of dollars before anyone had time to find the associated white paper.

Yam Finance Marketcap Aug 11-17

Yam Finance (with the symbol YAM) was an unaudited project started in just 10 days (start to finish according to them) which was launched on Aug 11th. According to Coingecko, it hit a market cap of almost $60 million on Aug 13th. Then, a bug was discovered which locked up ~ $750,000 in Curve y tokens and the price immediately plummeted.

But what about tokenized Bitcoin?

The amount of Bitcoin locked on Ethereum has exploded over the last month. The USD value locked in WBTC and RenBTC, the two leading methods of locking your BTC into Ethereum transactions have outpaced the production of Bitcoins earned by miners:

Total Value Locked (USD) in WBTC

Total Value Locked (USD) in RenVM

Each of these methods carry a unique set of risks. WBTC is an ERC20 token backed 1:1 with BTC which involves a custodian, and the KYC that comes with it.

The renBTC token uses the Ren Virtual Machine to mint BTC to an Ethereum smart contract. This method avoids the counterparty risk, but could be void of any way of retrieving trapped funds.

In addition to counter party and/or smart contract risks, users must pay outrageously high gas prices on their transactions (which could fail), navigate the various platforms which enable the minting of these tokens, and make sure they avoid scams and user errors along the way.

Conceptually, locking your assets into smart contracts which allow you to put your money to work is great. If it is possible to generate income without compromising the financial sovereignty offered by permission-less and censorship-resistant money like Bitcoin, it would benefit both the Maximalists and Yield Farmers alike.

Today, however, Bitcoin (as well as Yams and Sushi) still abides by the same rules as cake. While there are now various ways of putting your digital money to work, there are important risks and trade offs associated with them. I expect the Bitcoin Centrist camp to grow as these trade offs are reconciled by developers and users.

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Can You Have Your Bitcoin And Eat It Too? - Forbes

If Bitcoin Crashes Below $10,000 Its All OverHeres Why – Forbes

Bitcoin has declined sharply this week, losing over 5% in under 24 hours and causing traders to nervously eye the psychological $10,000 per bitcoin level.

The bitcoin price lost $1,000 in a matter of hours, falling under $11,000 per bitcoin on Thursday morning with the U.S. stock market posting its biggest sell-off since June by the close of play as stocks retreated from all-time highs, led lower by tech giants.

Bitcoin and cryptocurrency market watchers, who have enjoyed a prolonged bull market since the March coronavirus crash, are now focused on the $10,000 line, with a bitcoin futures trading gap set in late July still open just below it.

The bitcoin price lost almost $1,000 per bitcoin in under 24 hours, sparking fears among bitcoin and ... [+] cryptocurrency traders of a wider sell-off.

Bitcoin's 2020 bull market, which has seen the bitcoin price surge from around $4,000 to $12,000, could be brought to an abrupt end if the price moves lower than $10,000 per bitcoin.

"Moving forward, it is important to keep an eye on the last zone of defense between $10,000 and $10,500," Joe DiPasquale, the chief executive of San Francisco-based bitcoin and crypto hedge fund BitBull Capital, said via email. "As long as this range is respected, bitcoin is unlikely to see a prolonged bearish spell."

The bitcoin price fell as low as $10,455 per bitcoin on the Luxembourg-based Bitstamp exchange on Thursday before somewhat rebounding.

The open trading gap, set on July 27, saw bitcoin futures on the Chicago Mercantile Exchange (CME) open higher after the weekend close, something some analysts think causes a disconnect with the underlying market and appears to have set bitcoin on its path to recent highs of around $12,000. Technical analysis shows that 90% of such trading gaps are eventually closed, with the price sooner-or-later retracing back to the gap.

Elsewhere, bitcoin and cryptocurrency exchange data suggests there could still be "sell pressure to work through," according to Philip Gradwell, chief economist at blockchain intelligence firm Chainalysis.

"Bitcoin inflows to exchanges were 92,000 yesterday, highest in 37 days, as people rushed to sell at near $12,000 prices of September 1," Gradwell said via Twitter. "Trade intensity, how many times the inflowing bitcoin was traded, is low, suggesting there were not many buyers to match the sellers."

Meanwhile, bitcoin miners, those who secure the cryptocurrency's network in return for bitcoin rewards, "are moving unusually large amounts of bitcoin," according to analysts at data provider CryptoQuant, suggesting miners are looking to cash out their bitcoin rewards.

"The big level that everyone is watching is $10,000," Mati Greenspan, the founder of Quantum Economics, wrote in his popular daily newsletter, pointing to a U.S. dollar comeback as the reason for the recent move lower.

"The crypto market has broken a few psychological levels. When we broke above that level in late July, it was with such force that we never really got to test it as support. Well, this may just be our chance," Greenspan wrote, adding, "if things get really bad we may just get another chance to buy bitcoin below $10,000."

The bitcoin price has lost almost 6% over the last 24-hour trading period, with the bitcoin market ... [+] capitalization falling under $200 billion.

However, many in the bitcoin and cryptocurrency community remain upbeat despite the recent bitcoin price fall.

"$10,000 is the new $1,000," Charles Hayter, chief executive of bitcoin and cryptocurrency analytics platform CryptoCompare, said via email, adding: "2020 has seen leaps and bounds in terms of infrastructure, regulation and resilience across the ecosystem as it has evolved over the last three years."

The current bitcoin market is "similar to the first half of 2017," according to Hayter, who thinks "the perpetual dilution of fiat currencies is being challenged by bitcoins hard code cap" of 21 million bitcoin tokens.

Bitcoin, along with the wider cryptocurrency market and global stock markets, has been boosted this year by massive stimulus measures and unprecedented money printing that's carried out by the world's central banks, led by the U.S. Federal Reserve, in order to offset the economic damage wrought by the coronavirus pandemic.

"For most of 2020, short-term bitcoin price moves have been highly correlated to U.S. stocks," Cory Klippsten, the chief executive of bitcoin buying app Swan Bitcoin, said via Telegram, adding he expects "any dips under $10,000 to be bought up voraciously."

"Bitcoin has proven to be uncorrelated over the longer term. At a minimum it is a hedge against fiat inflation, but it also functions as a call option on a new global monetary system."

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If Bitcoin Crashes Below $10,000 Its All OverHeres Why - Forbes

First Mover: As Bitcoin Falls for Second Day, Long-Term Holders Probably Won’t Care – CoinDesk – CoinDesk

Youre readingFirst Mover, CoinDesks daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you dont have to. You cansubscribe here.

Price Point

Bitcoin was down early Thursday to about $11,250, extending Wednesdays sell-off and falling to its lowest price since early August.[Update: At press time prices had slumped further to around $10,850.]

The cryptocurrency tumbled 4.4% on Wednesday, the most in a month, leading to a heightened level of margin calls and position liquidations. Prices appeared to fall in sync withgold and silver prices, which tumbled as the dollar reboundedfollowing a recent slide.

Failure to hold at the $12,000 level has turned the milksour, the crypto trading firm Diginex wrote in a note to clients. Leveraged longs have been forced to drink it.

Market Moves

With stocks soaring to new records after a decade-long climb, traders in traditional markets are asking how much higher theycango in the midst of a global pandemic, openly discussing whether the market is justpropped up by government stimulus checks and Federal Reserve money injections.

The conversation around bitcoin is very different. The assumption among many digital-asset investors is the cryptocurrencys price will definitely, inevitably go higher, much higher. Its only a matter of time.

Cameron and Tyler Winklevoss, who run the cryptocurrency exchange Gemini, wrote last week thatbitcoin prices could reach $500,000, in an extensive analysis that somehow relates to adatabase of 600,000 asteroids.

Nobody really knows if any of that will pan out, of course. Whats clear is a lot of investors have bought bitcoin because they see it as a deep out-of-the-money option (with no expiration date) on financial Armageddon, severe currency debasement or at the very least an inflation rate well above the Federal Reserves 2% annual target. According toCoinDesk Researchs monthly review published this week, bitcoins price appears to be rising whenever the dollar falls in foreign-exchange markets.

Bitcoin costs $11,200 now, and it might be possible to lose it all, but it also might be worth $500,000 at some point. Thats the general gambit anyway.

Invented just 11 years ago, bitcoin is exceedingly difficult to value partly because it has such a short track record. Similar to gold and many other commodities, the cryptocurrency offers no yield,so bond math wont work. Bitcoin has no earnings or dividend, so stock analysis wont work either.

Philip Bonello, director of research for the money manager Grayscale (owned by CoinDesk parent Digital Currency Group), says his favorite chart for thinking about bitcoins price trajectory might be one showing holders versus speculators. A holder in this case is defined as a bitcoin that has not moved for one to three years, while a speculator coin has moved in the past 90 days.

An increase in holders is considered likely bullish, while an increase in speculators is likely bearish, according to arecent Grayscale report. The idea is that its positive for the market if more investorsappear to be holding the cryptocurrency for the long term, versus those who merely appear to be in it for a quick volatility ride.

Right now, the chart shows holders increasing and speculators decreasing. According to Grayscale, its a similar structure to that of early 2016, just before bitcoin went on a bull run toward its all-time high around $20,000.

Its reassuring, Bonello said Wednesday in a phone interview, that the sentiment of the investor base is growing day by day. The holders appear to have been unfazed by the volatility witnessed in March, when the spread of the coronavirus quickly sent bitcoin prices swooning from above $9,000 to below $5,000. Its probably unlikely that theyre going to sell right now at $11,000, Bonello said.

All of this might mean nothing for the future price of bitcoin. It just shows that a growing number of investors are holding onto their tokens in a bet that the cryptocurrencys price will or even that it might eventually go up. By a lot.

Bitcoin Watch

Token Watch

Ether (ETH):Open positions in Deribits ether options hitrecord high above $500 million.

Bitcoin Cash (BCH):Proposed changes by development team couldreduce rewards for miners, splitting community support.

OKB (OKB):OKEx CEO says foundation burned 3.8 million of its utility tokens, just over 1% of total supply, deepening commitment to deflation at time when central banks around the world are ceaselessly printing money.

Theta Network (THETA):Decentralized streaming network says DeFi could be used to pay content providers who arejust starting out, with few followers.

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First Mover: Buying Bitcoin’s Dip, Betting Against Tether and Weighing the Jobs Report – CoinDesk – CoinDesk

Youre readingFirst Mover, CoinDesks daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you dont have to. You cansubscribe here.

HOLIDAY NOTICE:First Mover will publish next on Tuesday, Sept. 8. Happy Labor Day to our U.S. readers.

Price Point

Bitcoin (BTC) was up in early trading to $10,500, rebounding after Thursdays 11% tumble, the biggest single-day declinesince March.

The sell-off,which took prices as low asabout $10,000, coincided with a rout in U.S. stocks, rekindlinglong-simmering discussionsover whether the largest cryptocurrency was a safe haven like gold or merely another risky asset. Prices for ether (ETH), the native token of the Ethereum blockchain, slid 13%, potentially a sign of anunwind of the recent fervor in decentralized finance, or DeFi. U.S. 10-year Treasury yields fell and the dollar gained in foreign-exchange markets, indicating a flight to safety by traditional investors.

Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital,told First Mover in an email that $10,000 still stands as a strong support and has absorbed selling pressure fairly well in the last two instances.John Kramer, a trader at crypto over-the-counter firm GSR, told CoinDesks Daniel Cawrey that many investors will see this as an opportunity tobuy the dip.

Market Moves

Afteryears of debatingwhether tether (USDT) is fully backed 1-for-1 with U.S. dollars, thestablecoins critics and defenders alike can now put their money where their mouths are.

Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The product, launched Thursday, insures the buyer in the event of default by Tether, the issuer of the worlds largest stablecoin andfifth-largest cryptocurrency overall.

As Opiums blog points out, USDT is the lifeblood of theborderless cryptocurrency marketplace. The oldest stablecoin, USDT remains the largest such cryptocurrency by market cap and a top-five coin overall with$13.8 billionin issuance.Traders often use it to move money in and out of exchanges quickly to take advantage of arbitrage opportunities.

You can use it to protect yourself against (or speculate on) a systemic failure of the most widely used stablecoin in crypto, Opium said of the new CDS contract, in a blog post to be published Thursday.

There are nagging questions about the issuers creditworthiness. The firm behind USDT isunder investigationby the New York Attorney Generals office for alleged misappropriation of funds, andTetherrevealedin April 2019 that only 74% of USDT was backed by cash and cash equivalents.

Paolo Ardoino, chief technology officer at Tether, said through a spokesman: Tether is solvent. Therefore, this solution is not really interesting to us or our community.

The solution might be interesting to traders who just want a little extra assurance.

Bitcoin Watch

Bitcoins options market has flipped bearish with the cryptocurrency registering its first double-digit decline in six months on Wednesday. Prices fell to a low of $10,006 before recovering to $10,500.

Token Watch

Ether (ETH):Vitalik Buterin, co-founder of Ethereum, released an improvement proposal to address soaring transaction fee ratesas network congestion rises.

Bitcoin (BTC):Supercycle thesis from Stack Funds predictsbreach of $14K in next 100 days.

Tether (USDT), USD Coin (USDC):Stablecoins are theclosest thing to digital cash that exists today, Castle Islands Nik Carter writes for CoinDesk.

Chainlink (LINK), Tezos (XTZ):BitMEX plans futures on LINK and XTZ, thefirst new coins to appear on the exchange in over two years.

Gnosis (GNO):Investment firm Arca calls for tender offer of prediction markets tokens asmarket value trades at 0.3% of projects treasury balance, the Block reported.

CoinDesk Researchs latest Monthly Review features 15 charts that highlight bitcoins performance relative to macro assets, its relationship to the dollar and other fiat currencies, and Ethereums growing congestion problem. Download the report.

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First Mover: Buying Bitcoin's Dip, Betting Against Tether and Weighing the Jobs Report - CoinDesk - CoinDesk

A Radical New Crypto Just Blew Past The Bitcoin Price All-Time HighUp A Shocking 3,500% In Just One Month – Forbes

Bitcoin and cryptocurrency markets have been dominated by decentralized finance, often shortened to DiFi, over recent months.

The bitcoin price, up around 40% since the beginning of 2020, has been left in the dust by the gains made some DeFi project tokensincluding yearn.finance (YFI) that's up a staggering 3,500% in just a little over a month and has surged past bitcoin's late-2017 $20,000 all-time high.

Bitcoin remains the biggest cryptocurrency by total value with a market capitalization of over $200 ... [+] billion, however, individual yearn tokens are now worth far more than single bitcoins.

The price of yearn.finance tokens have soared from under $1,000 per YFI since it was created in mid-July to over $30,000 this weekend, passing the bitcoin price on Friday. The yearn.finance price came close to $40,000 on some bitcoin and cryptocurrency exchanges before falling back.

YFI is the governance token of DeFi protocol yEarn, designed to aggregate yields from other lending protocols. DeFi is the idea cryptocurrency technology can be used to recreate traditional financial instruments such as loans and insurance.

YFI holders can use their tokens to vote on proposals for network upgrades and it can be earned by putting cash into yEarn, a practice known as yield farming.

"The yearn.finance coin has become the altcoin star recently," Alex Kuptsikevich, FxPro senior financial analyst, said via email.

"In a month it has shown twentyfold growth, living proof that 'unicorns' still exist, at least in crypto. The rapid growth of the coin also reflects the popularity of the decentralized financial sector. The creators of the project decided to follow the bitcoin path, limiting the issue of only 30,000 YFI coins. Such limited supply spurs rapid price growth."

This price growth was not something planned by the YFI creator, however. Yearn.finance tokens were described as "completely valueless 0 supply token," by its creator Andre Cronje.

The yearn price has jumped by 26% in just the last 24 hours, adding to massive gains through August ... [+] and leaving the bitcoin price in the dust.

"We reiterate, it has 0 financial value," Cronje wrote in a Medium post last month outlining the project.

"There is no pre-mine, there is no sale, no you cannot buy it, no, it wont be on uniswap, no, there wont be an auction. We dont have any of it."

But this warning hasn't stopped some of the biggest personalities in bitcoin and crypto from making outlandish predictions about the YFI price.

"One YFI [equals] $100,000," Arthur Hayes, the chief executive of the Seychelles-based bitcoin and cryptocurrency exchange BitMEX, said via Twitter, forecasting the yearn.finance price would continue to climb and hit $100,000.

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A Radical New Crypto Just Blew Past The Bitcoin Price All-Time HighUp A Shocking 3,500% In Just One Month - Forbes

Private Capital And Institutions Are Piling Into Bitcoin And Other Digital Assets But You Need To Know Where To Look – Forbes

Many in the crypto and digital assets markets have been claiming that institutions are moving into this space and are now banging down the digital door to get access to this asset class. They may finally be onto something.

By many measures, the market for digital assets is growing at a pace that appears primed for broader adoption by more sophisticated players in the markets like private capital, pensions funds, endowments, traditional hedge funds, and banks.

The crypto derivatives market is a leading example of this. It has been growing faster than the spot market over the past three years and is now estimated to be 40% of the top global exchange volume according to CryptoCompare in their July Exchange Review Report.

"In the last two years we have seen traditional pension funds likeFairfax Countys Virginias Police Officers Retirement System, traditional banks like JP Morgan, Signature Bank, and multiple billion dollar family offices across the country holding and investing in Bitcoin and other crypto currencies," says Kavita Gupta, visiting scholar at Stanford University.

Institutions often cite regulatory uncertainty as one of the main reasons for not allocating to crypto and digital assets, and they have a point. Most tokens and coins fall under a legal grey area that has yet to be clarified by most major securities authorities. Derivatives are a different breed.

The US Commodities Futures Trading Commission (CFTC) is considered one of the planets toughest regulators, and they have approved several crypto futures contracts for trading like CME's Bitcoin Options, NYSEs Bakkt, and LedgerX. This approval comes despite their refusal to approve a Bitcoin ETF as they judge the spot market as unreliable and manipulated to a much higher degree than most people realize.

The widespread availability of these derivatives has led to private capital and institutions allocating to them, seemingly setting or matching new records with each passing month. Open interest in Bitcoin contracts hit an all time high of $2.1 billion on July 31st and then nearly matched that mark with the August expiry that passed just last week.

In the U.S. alone, anyone with a TD Ameritrade or Robinhood account can invest in crypto options just as easily as buying a share of Apple AAPL or Tesla TSLA , and this has likely contributed to the explosive growth seen in options trading volumes this year. The rumour in the professional COVID-19 work at home community in the global financial services sector is that the vast numbers of new homeworkers has contributed to the retail volume of derivative trading.

It helps to have traditional heavyweights like the CME and NYSE behind these contracts, and while growth started slowly and intermittently, it is now moving at a steady pace. According to a recent research report by Tokeninsight, derivatives trading volume is rising steeply, up 100 percent from the same period one year ago as spot volumes have seen a drop, down 18% in Q2 but still have yet to pass spot trading volumes.

There are also venues like Huobi, Bitmex, and Deribit, and investors are flocking to them not only because they are seen as safer by some, but also because of the flexibility and creativity found in derivatives markets.

Denis Vinokourov, head of research for digital assets prime broker Bequant, recently commented in CoinTelegraph, Options are a very efficient way to hedge exposure to the underlying product, be that Bitcoin or Ethereum spot or even futures/perpetuals. In addition, it is easier to structure products that would offer yield, and it is this that has been particularly appealing to market participants, especially in the wake of sideways market price action.

Crypto assets are growing and the markets are maturing at a remarkably fast pace given their relative infancy. Bitcoin is increasingly gaining mainstream awareness as public companies and central bankers discuss it with stablecoins, central bank digital currencies (CBDCs), and the Digital Yuan, increasingly as a prolonged economic downturn caused by the COVID-19 pandemic looks increasingly likely.

Last month a publicly traded company MicroStrategy MSTR became one of the single biggest individual holders of Bitcoin when it bought about $250 million worth of BTC because it is a reasonable hedge against inflation that is superior to cash.

This led to a short-lived rally, but this was less important than the initial indications that larger firms are now starting to seek out alternatives to the US Dollar, and in this case, one was confident enough in Bitcoin to convert nearly all of its cash reserves into the cryptocurrency.

This phenomenon is global with Asian companies not to be outdone. This weeks announcement by the Singapore Exchange about its entry into digital asset products is a telling barometer for institutional interests globally.

This is no surprise as Asian institutions make up the lions share of trading volumes in spot, futures and derivative products, said James Harris, at CryptoCompare, expect more to come, especially in the Asia Pacific region, and soon.

A number of larger exchanges around the world are also long on digital assets including the London Stock Exchange Group, Nasdaq and the Swiss Stock Exchange (SIX-Group) who is building a full digital exchange, SDX, in partnership with R3 and are also exploring platforming the Swiss National Banks (SNB) digital currency.

Spot markets have since rallied sporadically but are struggling to stay above $12,000, trading mostly in a narrow range between $11,300 and $11,800 while DeFi coins like YFI have surged in unprecedented parabolic runs that have made instant millionaires overnight only to see some of those lose all their gains almost as quickly, as in the case of YAM.

A likely contributor to this tentative price action is the weariness traders have that another storm cloud is often on the horizon. Ethereum Classic (ETC) had three 51 percent attacks last month alone. This week saw South Korean regulators raiding the offices of BitThumb, one of the worlds largest crypto exchanges, over allegations of fraud related to an IEO and a potential buyout offer.

Bitcoin fell nearly five percent and other digital assets were dragged down with it. In an orderly market, circuit breakers would be triggered. Trading would be suspended, and investors would have been protected.

These measures dont exist in digital asset spot markets and flash crashes lead investors of all types to incur losses they otherwise wouldnt in traditional, fully regulated markets. Until the risk of this unpredictability can be better managed, it might be a while before more sophisticated investors look too far beyond traditional derivatives markets which are, after all, notionally the largest market in the world.

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Private Capital And Institutions Are Piling Into Bitcoin And Other Digital Assets But You Need To Know Where To Look - Forbes

Ethereum Soars 10% Overnight Implications For Bitcoin – Forbes

POLAND - 2020/06/15: In this photo illustration an Ethereum logo seen displayed on a smartphone. ... [+] (Photo Illustration by Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images)

Since last Friday, Ethereum has increased by over 20% further padding its 2020 gains. Ethereum has been one of the brightest stars in the current bull market for digital assets, gaining 261% in 2020 compared to 65% for bitcoin.

https://www.coinbase.com/price/ethereum

The principal driver for $ETHs growth has been the enormous boom in decentralized finance (DeFi) given the majority of the DeFi networks are built atop the Ethereum platform. For example, the alphabet soup of hot tokens $YFI, $YAM, and $SUSHI (to name a few), have experienced meteoric price increases, 107,761%, 446%, and 1,358%, respectively.

Most importantly, the DeFi boom has accrued value to Ethereum via greater developer interest, i.e. building the the next unicorn DeFi token on Ethereum rather than competitors. This dynamic can be visualized by the Total value locked-up (TVL) on DeFi, which has dramatically increased from less than $1 billion to over $9 billion in 2020.

https://defipulse.com/

Josh Olszewicz, Market Analyst at Brave New Coin, notes that the aforementioned dynamic is identical to the initial coin offering (ICO) boom in terms of organic demand driving $ETH price. For example, in 2017 if you wanted to launch an ICO, you needed to buy $ETH to do so, similarly with DeFi token launches today. Thus, until the speculative frenzy for DeFi cools, $ETH price could conceivable rise back to 2017 levels.

Additionally, former Quant Trader, Qiao Wang, notes since DeFi tokens are largely illiquid and traded on decentralized exchanges (DEXs) with $ETH as a trading pair when speculators take profits, they sell DeFi token $X and buy $ETH, thus boosting price.

The question for bitcoin is whether DeFi can find a legitimate use case for synthetic $BTC ($WBTC), i.e. bitcoin wrapped in a way to be compatible on the Ethereum blockchain?

If so, then bitcoin could begin to benefit from the same feedback loop as Ethereum, thus an additional boost to price beyond its current store of value utilization.

It is too early to state, but TVL trends of $WBTC in 2020 suggest that this process is already underway, thus a potential boon for bitcoin price could be in the making as long as the music continues to play for DeFi.

Glassnode.com

Disclosure: Author owns bitcoin and ethereum.

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Ethereum Soars 10% Overnight Implications For Bitcoin - Forbes

Bitcoin Down Almost 10% Today, You’ll Be Surprised to Hear What’s Next – FX Empire

RESEARCH HIGHLIGHTS:

Many of you are familiar with my teams advanced study of Fibonacci Price Theory and our use of our proprietary Fibonacci Price Amplitude Arc indicators. This technical analysis theory is a combination of Nikola Teslas Mechanical Resonance theory and traditional Fibonacci Price Theory. We believe the innate frequency of price action (once found), can be used to identify future critical inflection points in price. In this case with Bitcoin, three unique Fibonacci Price Amplitude Arcs aligned within 5 days to present a very real price inflection point. The recent collapse in the price of Bitcoin may be inherently related to the frequency of price from past peaks and troughs using our advanced Fibonacci Price Theory.

We found it interesting that Bitcoin prices stayed below $10k through most of June and July, when other Fibonacci Price Amplitude Arcs crossed price, then began to move higher after the last Price Amplitude Arc completed near July 20, 2020. After that Fibonacci Arc completed, the only Fibonacci Price Amplitude Arcs present in the future were the Triple Fibonacci Arcs shown on this Daily Bitcoin chart (below).

Our team also believes that once Bitcoin cleared the previous Fibonacci Arcs, a bit of a reprieve took place in price where a moderate upside price rally too place. As we neared the Triple Fibonacci Arcs, price activity muted and reversed. Could it be that price reacts to frequency levels we are not seeing on the charts?

The Weekly BitCoin chart, below, highlights many of the origination points (peaks and troughs) of the Fibonacci Price Amplitude Arcs. We anchor them to price peaks or troughs as a way to use and study them, measuring critical price waves (up or down) using Eclipse drawing tools, then drag them and anchor them to current or past peaks or troughs. Then we study the levels to determine if the frequency of price validity is accurate or not. If we believe we have drawn a Fibonacci Price Amplitude Arc that is valid, well keep in on the chart for future reference.

We believe this current Triple Fibonacci Arc pattern may be present in other symbols given how the US stock markets have reversed recently. It may be that these critical price inflection points operate across major indexes like tides in the ocean work across multiple ports and harbors. When a big or critical Fibonacci Price Amplitude Arc hits, we believe it results in a broad market reaction.

If this breakdown in Bitcoin Continues, the $8k level would be the next downside price target. Beyond that, possibly $7k and maybe as low as $6k. We will have to see how Bitcoin reacts to this Triple Fibonacci Price Amplitude Arc and how deep price corrects at this time. It is very likely that Bitcoin price levels will fall below the May through July levels, near $9k in an attempt to identify new support levels.

We also believe Gold and Silver will move lower as a price collapse in Bitcoin suggests general market fear it hitting all global assets. The US Dollar may attempt to form support as well because of this move. As other assets decline in valuation levels, some primary currency will likely be viewed as the strongest alternative asset this will likely be the US Dollar. Eventually, after what we believe could be a moderate downtrend in Gold and Silver, precious metals will begin to move dramatically higher as foreign currency and Bitcoin prices continue to fall. Capital will always seek out the best, least risky, investment solutions at times of chaos and risk. If Bitcoin becomes highly volatile and continues to fall, then alternate assets present very real opportunities.

Isnt it time you learned how I can help you better understand technical analysis as well as find and execute better trades? If you look back at past research, you will see that my incredible team and our proprietary technical analysis tools have shown you what to expect from the markets in the future. Do you want to learn how to profit from these expected moves? If so, sign up for myActive ETF Swing Trade Signalstoday!

If you have a buy-and-hold or retirement account and are looking for long-term technical signals for when to buy and sell equities, bonds, precious metals, or sit in cash then be sure to subscribe to myPassive Long-Term ETF Investing Signalsto stay ahead of the market and protect your wealth!

Chris VermeulenChief Market StrategistTechnical Traders Ltd.

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only.

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Bitcoin Down Almost 10% Today, You'll Be Surprised to Hear What's Next - FX Empire

So Far, a Nice Rise But Not a Wild Runup for Bitcoin Since the May Halving Event – Digital Transactions

In the nearly four months since it underwent a major downgrade in the incentive it offers miners, Bitcoin has seen its price rise nicely, but holders of the digital currency have not yet, at least, witnessed the wild upswing that followed the last such adjustment.

Bitcoin was trading at $10,483 as of Friday, according to CoinMarketCap.com, yielding a substantial 20% increase in price since May 10. On that day, the Bitcoin miners reward was cut in half from 12.5 Bitcoin to 6.25, the third such halving event in the digital currencys history.

The halving event is programmed into Bitcoins code and occurs every 210,000 blocks, or roughly every four years. The object is to help manage the flow of new Bitcoin into circulation by reducing the miners reward. The total supply of Bitcoin is programmed to cap at 21 million.

Previous halvings have led to huge surges in price. In the year following the last event, which occurred July 9, 2016, Bitcoins price surged fully 384%, according to data compiled by Coindesk, a newsletter that follows cryptocurrency. That surge then led to an epic collapse.

Time will tell whether the more modest rise since the May halving will yield a less traumatic outcome for investors. For users of the currency, merchant acceptance remains sparse. But the median fee users pay miners to enter transactions on the Bitcoin blockchain has softened somewhat over the summer. After climbing from $1.15 on May 10 to $3.92 on May 20, the fee stood at $2.79 on Sept. 3, according to BitInfoCharts.com.

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So Far, a Nice Rise But Not a Wild Runup for Bitcoin Since the May Halving Event - Digital Transactions

Bitcoin Will Be Accepted for Tax Payments in Swiss Canton Zug Next Year | Taxes – Bitcoin News

Bitcoin and ether can be used to pay taxes in the Swiss Canton of Zug starting next tax season. Zugs crypto valley is home to many cryptocurrency businesses, and by accepting bitcoin and ether for tax payments, the canton aims to promote and simplify the use of cryptocurrencies in everyday life.

Switzerlands Canton of Zug announced Thursday that it will start accepting cryptocurrency for tax payments. The Zug Department of Finance is collaborating with local company Bitcoin Suisse to offer tax settlement with cryptocurrencies, starting in the upcoming tax season which begins in February next year. The announcement details:

Beginning in 2021, taxes in the Canton of Zug can be paid using the cryptocurrencies bitcoin and ether.

Companies and private individuals can use BTC or ETH to pay their tax bills of up to CHF 100,000 ($109,900). Partial payments are not accepted. A pilot will take place in the coming weeks to ensure that everything is ready for the upcoming tax season.

Anyone wanting to pay their tax bills with cryptocurrencies may contact the cantonal tax office. They will be provided with the QR code for payment. Zugs Finance Director Heinz Tnnler clarified: We do not take any risk with this new payment method, as we always receive the amount in Swiss francs, even if payment is made in bitcoin or ether.

Founded in 2013, Bitcoin Suisse is a regulated Swiss financial intermediary that offers prime brokerage, custody, crypto payments, collateralized loans, staking, and other crypto-financial services for private and institutional clients. The company is currently in the licensing phase for the Swiss and Liechtenstein banking licenses.

Director Tnnler opined:

As the home of the Crypto Valley, it is important to us to further promote and simplify the use of cryptocurrencies in everyday life. By enabling the payment of taxes with bitcoin or ether, we are taking a big step in this direction.

In January, Zermatt, a Swiss municipality known for its ski resort, announced that it started accepting bitcoin for government services, including payment for local taxes. Meanwhile, the Chiasso municipality started accepting bitcoin for tax payments since January 2018.

Do you think all governments should accept bitcoin for taxes? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin Will Be Accepted for Tax Payments in Swiss Canton Zug Next Year | Taxes - Bitcoin News

The History of Bitcoin – WTOP

From humble beginnings in 2008 to its 2017 price peak, Bitcoin has taken investors and the world for quite the

From humble beginnings in 2008 to its 2017 price peak, Bitcoin has taken investors and the world for quite the ride. In just over a decade, its spiked and crashed and rallied and fallen again.

Bitcoin is following principles of economics and principles of market efficiency, says Hemang Subramanian, assistant professor in Florida International Universitys business information systems department. It is an asset that is not controlled by a central entity, that is secure, international and fungible, liquid and is available in a limited supply for trade. This demand at near-constant supply has caused prices to go up disproportionately in a short period of time, attracting more investors.

Some would say Bitcoins raucous journey has paved the way for the thousands of other cryptocurrencies used for financial and investing activities today, he says. Heres how Bitcoin did it.

When Did Bitcoin Start?

The idea behind Bitcoin was introduced to the world on Oct. 31, 2008, at the depth of the financial crisis by a pseudonymous person called Satoshi Nakamoto, says Chetan Chawla, assistant professor of entrepreneurship at North Central College in Naperville, Illinois, who studies cryptocurrencies and blockchain.

Nakamoto posted a message on a cryptography mailing list titled, Bitcoin P2P e-cash paper. In it was a link to a white paper called Bitcoin: A Peer-to-Peer Electronic Cash System. Both of these are still available online.

In these papers, Nakamoto laid out the concept for Bitcoin as a decentralized, digital currency. Being decentralized means there is no single administrator but rather a public ledger of transactions that anyone can store on their computer, says Kris Marszalek, CEO of Crypto.com. Coins can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries.

[Read: What Is Return on Equity: The Ultimate Guide to ROE.]

On Jan. 3, 2009, the blockchain was launched when the first block, called the genesis block, was mined. The first test transaction took place about one week later.

For the first few months of its existence, it was obtainable only by miners validating the Bitcoin blockchain, Chawla says.

At this point, Bitcoin had no real monetary value, says Mark Grabowski, an associate professor at Adelphi University who teaches a course on Bitcoin and author of Cryptocurrencies: A Primer on Digital Money. Miners computers that solve complex math problems to uncover new bitcoins and verify previous bitcoin transactions are legitimate and accurate would trade Bitcoin back and forth just for fun.

It would take more than a year for the first economic transaction to take place, when a Florida man negotiated to have two Papa Johns pizzas, valued at $25, delivered for 10,000 bitcoins on May 22, 2010. That transaction essentially established the initial real-world price or value of bitcoin at 4 bitcoins per penny, Grabowski says.

Fast forward to today, and that same transaction would have a value of $114 million, says Peter C. Earle, economist and research fellow at the American Institute for Economic Research. In honor of this pivotal moment, cryptocurrency fans and supporters call May 22 Pizza Day.

In the early days, the first transactions with Bitcoin were negotiated on internet forums with people bartering for goods and services in exchange for bitcoin, says Garrette Furo, partner at Wilshire Phoenix, a New York-based investment management firm. The value of bitcoin was originally arbitrary.

Then, in 2011, miners and coders started to build other networks like Ethereum and Litecoin and began to improve the code behind Bitcoins blockchain, adapting it for different uses, Furo says.

This wider base of applications brought in more individuals, which contributed partly to the increase in Bitcoins perceived value, he says. There was also an increase in the use of Bitcoin as currency once select businesses began to accept the asset alongside traditional currency.

Once Bitcoin became available on exchanges in 2010, it became easier to buy, sell, trade and store. Thanks to these exchanges, bitcoin could also be priced against the U.S. dollar, Chawla says. From a low of a few cents in 2010 to the all-time high of late 2017 when each bitcoin touched U.S. $20,000, Bitcoin has come a long way and continues to dominate the cryptocurrency markets.

Bitcoin Price History

Bitcoins history is largely one of astronomical growth punctuated by a few severe price retrenchments, Earle says.

In February 2011, bitcoins price crossed the $1 threshold. For its first few years as it grew, its price was under $2, Marszalek says. In June 2011, it hit its first bubble, rocketing to around $31 before sinking back down to the single-digit range.

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Almost two years later, in April 2013, Bitcoin reached $200. By the end of November that same year, it was worth more than $1,000. It then rose tenfold to $10,000 in November 2017.

Bitcoins highest price was about $19,650 in mid-December 2017, Earle says, noting there were different peak prices on different exchanges. It then fell tremendously over the next few years.

The 2017-2018 bubble was primarily led by a boom in initial coin offerings, or ICOs, Furo says. Some market veterans compare the Bitcoin bubble to the internet boom at the end of the 20th century.

Everyone from your next-door neighbor to the wealthiest hedge fund managers was talking about Bitcoin or some altcoin, new network or protocol, Furo says. The ICO craze brought in billions of dollars into the crypto space. Investors saw the value of coins fall dramatically in the early months of 2018 as prices crashed amid uncertainty, fraud and a lack of belief among other psychological and technical factors.

After the fall of bitcoins value, what you could call a more mature market arose around the cryptocurrency. Fidelity entered the custodian space (and) national banks were given permission to custody digital assets, Furo says. Today, Square offers Bitcoin trading in all 50 states.

Because of these developments, the market for Bitcoin has become relatively mature, he says. Smart and efficient exchanges exist, and core institutional-grade players are adopting the necessary measures to create a sustainable and viable market for the trading and investing of Bitcoin and other cryptocurrencies.

The 2020 global pandemic has also been a boon for the digital currency, reflected by its current price of more than $10,000, Marszalek says.

Bitcoin Today

Today, one bitcoin is worth a little less than $12,000. Its a far cry better than its post-peak lowest price of just more than $3,000.

To this day, no one knows who Satoshi Nakamoto is or was, Earle says. Its a subject not only for debate, but speculation and perhaps inevitably conspiracy theories.

These theories abound, from Bitcoin actually being a skunk work, or advanced and often secret project of Google or an intelligence agency like the National Security Agency, Earle says. Others believe that its a trapdoor project which, when it gets big enough, a malevolent party which has been lying patiently in wait for over a decade will suddenly seize control of.

[SEE: What Is a SPAC? 6 Best SPACs to Buy.]

To Earle, more important than Bitcoins price history is its testimony to two long-disputed views: First, that money is a good like any other, (and) second, that money can come about as a result of a market process.

While BItcoin is still growing into its role as a store of value and unit of account, cryptocurrencies, and especially Bitcoin, have largely buried the idea that money somehow isnt money unless it is accepted as payment for taxes, Earle says. (The IRS does not accept bitcoins.)

Bitcoin Tomorrow

So what is in store for Bitcoins future? No one can tell for certain, but Furo sees it being a bright and exciting place. Investment vehicles that are innovative, cost-effective and transparent are nearing reality and will help make investing in cryptocurrency even more accessible, he says. This access would rival that of traditional markets.

Just bear in mind that no investments particularly frontier investments are without risk. If there is one lesson to be taken from Bitcoins history, it is that what goes up can also come down, and it can come down fast.

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The History of Bitcoin originally appeared on usnews.com

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The History of Bitcoin - WTOP

Why Fusion’s DCRM is The Best Option for DeFi Users | Sponsored Bitcoin News – Bitcoin News

The race for blockchain interoperability was very much a trending topic during the bull market of 2017. Back then, we witnessed the birth of very promising projects like Fusion and Wanchain. Then the bear market started, and interoperability was no longer as hot as it once was, similar to every other topic related to blockchain development. However, these two projects continued to develop their respective ecosystems; they were even joined by a third project in this same niche, Ren.

However, there is still no single project that can be considered as the leader of the interoperability niche, and which links all blockchains and facilitates their communication despite the architectural differences between them. Needless to say, sooner or later, the blockchain space will need such a project!

This need arose even more during the recent DeFi boom, where the majority of the tools and applications used were limited to the Ethereum blockchain, with the involvement of only a small portion of Bitcoin (somewhat above 0.1% of the circulating BTC). At the same time, the other giant blockchains like Ripple and Litecoin are almost totally absent. Billions of dollars are locked in these blockchains and they cant be used in the DeFi space.

In this article, we will review Fusion, Wanchain and Ren, three potential projects that could solve these DeFi limitation issues, and take this space to the next level. The projects will be compared based on essential criteria and other aspects, then we will determine which project has the highest chance to become the blockchain that connects all the blockchains. But before that, lets just first explain why these three projects in particular were picked.

Why Fusion, Wanchain and Ren?

It is true that there are many projects that specialize in the interoperability niche, but having considered several factors like technology, a teams experience, a projects quality, its development, and its community; these three projects stand out as the main potential projects that could become the internet of blockchains.

Many people in the crypto space think that projects like Cosmos or Polkadot specialize in interoperability, while in fact, they use a compatibility model. The main difference between interoperability and compatibility is that the communication between parachains in the compatibility model is made possible through a central Hub which forces a certain standard, and other chains have to stick to it in order to be part of the ecosystem. It seems that the top priority of these two projects is more to replace Ethereum and attract new chains and projects to build on their platforms than it is to connect the different blockchains.

Fusion, Wanchain and Ren on the other hand, use a true interoperability model based on cryptographic concepts. These three projects aim to create ecosystems that facilitate a trustless decentralized communication between different blockchains.

These cryptographic solutions aim to use a decentralized technology for custody. The process of cross-chain communication is similar to existing models such as WBTC (minting assets with 1:1 ratio on other blockchains). However, unlike WBTC which keeps your original assets in a centralized entity (BitGo) and requires KYC, the three projects in our comparison use very advanced solutions to hold your assets in a fully trustless and decentralized way.

Fusion

Fusion is a fully decentralized smart contracts platform. The primary goals of the project are to become an ecosystem that links the different blockchains, allowing them to communicate with each other, and to connect global finance to blockchain technology. Fusion was founded by DJ Qian, one of the pioneers in blockchain research and mining in China.

The main component of Fusions technology is the DCRM Decentralized Control Rights Management. It uses the private key sharding concept to secure users assets. Fusion has also introduced the Time-Lock function. It is the first blockchain to use the concept of time in its smart contracts. This will open the door to complex financial transactions involving time such as derivatives, loans and mortgages.

The Fusion ecosystem is growing fast, with new projects joining the DCRM Alliance and decentralized applications being launched on the platform, such as WeDeFi and Anyswap.

WeDeFi: It is an easy-to-use wallet that is available on Android and iOS. It allows users to store and manage their assets. WeDeFi offers a no-loss lottery where users can deposit their FSN coins and participate in the lottery. They will get back their coins no matter if they win or lose.

Anyswap: It is currently the only swap protocol in the blockchain space that can carry out cross-chain transactions. Anyswap has its own automatic pricing and liquidity systems, and it uses Fusions DCRM as a cross-chain solution. Therefore, it will support all the coins and tokens that the DCRM technology can integrate, including: BTC, ETH, XRP, LTC, ADA, ERC-20 tokens and many other coins and tokens. Anyswap introduced its governance token ANY and has recently added USDT to the platform and announced a strategic partnership with Hotbit.

Wanchain

Wanchain is another smart contracts platform project specializing in blockchain interoperability. It allows the exchange of data and value between private, consortium and public blockchains. The platform supports private transactions based on ring signatures.

Wanchain uses secure multiparty computation and Shamirs Secret Sharing concepts to ensure the safety of users assets. This cross-chain solution has already integrated Bitcoin, Ethereum and EOS blockchains into its ecosystem, with future plans to create direct bridges between these different blockchains.

Earlier this year, two projects built on Wanchain were launched:

Rivex (RVX): It is an interoperable and scalable layer-2 solution that aims to combine the strengths of public and side chains to empower the next generation of decentralized applications.

FinNexus (FNX): It is a DeFi focused project specializing in building open finance protocols. FNX has released its first product which is a decentralized options protocol powered by a single liquidity pool on both Ethereum and Wanchain.

Ren

Ren is a protocol that enables permissionless and private transfer of values between different blockchains. The core product of the project is the virtual machine RenVM, a trustless custodian that brings interoperability to DeFi on Ethereum.

Cross-chain communication is handled by RenVM. It holds the assets that users want to transfer, and mints an ERC-20 wrapped token to be used within the Ethereum blockchain. RenVM allows the minting of Bitcoin, Bitcoin Cash and Zcash on the Ethereum blockchain, with future plans to mint coins on the Polkadot blockchain.

For example, if you want to use BTC in the Ethereum blockchain: You hand it to RenVM, it holds it and mints that BTC as an ERC-20 token (RenBTC) on Ethereum with 1:1 ratio. This process is secured by youve probably guessed it Shamirs Secret Sharing and secure multiparty computation.

RenVM can be used as a plugin for decentralized applications built on Ethereum. Once integrated to a smart contract, users will be able to benefit from cross-chain liquidity provided by Ren.

Ren cryptocurrency is an ERC-20 token. It is used to run the dark nodes that are entirely governed by code.

Comparative Analysis

Fusion, Wanchain and Ren are three projects that are focused on connecting siloed blockchains using cryptographic interoperability. However, there are some fundamental differences between these projects, starting with their nature.

Fusion and Wanchain are infrastructure projects. In addition to their interoperability components, each project has its own mainnet and its own smart contract platform for dApps development and token issuance, while Ren is an interoperability protocol built on Ethereum.

In addition to its cross-chain solution based on the DCRM technology, the Fusion team developed unique concepts to create a convenient ecosystem for DeFi. For example, the Time-Lock function allows users to perform complex financial transactions that involve time by using the Multi Triggering Mechanism, which is considered as the next generation of smart contracts. Fusion offers many other DeFi-oriented features such as quantum swap and USAN swap. Currently, there are two projects that are built on the Fusion platform. WeDeFi, and Anyswap.

Wanchain is also an interoperability project, it has already integrated Bitcoin, Ethereum and EOS blockchains into its ecosystem. So far, two DeFi projects have been built on Wanchain: FinNexus and Rivex.

Interoperability and Decentralization

Now lets talk about the interoperability of these three projects!

Through DCRM, Fusion has created an ecosystem that supports the integration of blockchains that have ECDSA (Bitcoin, Ethereum, Litecoin, etc) or EdDSA (Cardano, NANO, Stellar, WAVES, and even Facebooks Libra!) as signature algorithms. This means that almost every blockchain out there could be integrated into Fusions ecosystem.

DCRM has currently around 45 working nodes. Once a user locks-in his assets in the Fusion blockchain, these nodes will only receive shards of his private key, and will never have access to other shards, so assets are completely safe. The majority of DCRM nodes do not belong to the Fusion Foundation. Fusions cross-chain solution is therefore fully decentralized.

Wanchain is another blockchain that aims to create an ecosystem to connect all the blockchains. The process is somewhat slower, and blockchains are integrated one by one. However, according to the roadmap released recently, Wanchain started working on direct bridges between blockchains, and will launch their first two-way bridge later this year.

Wanchain interoperability uses storeman nodes (equivalent to Fusions DCRM nodes). These nodes still belong to the Wanchain foundation, but their decentralization is under testing and the full storeman nodes decentralization is planned to be finished in 2021.

Ren does not offer an ecosystem where it can connect all the blockchains. Instead it offers interoperability through its core product, RenVM. This virtual machine is used to create direct bridges between different blockchains. Currently, RenVM brings liquidity from BTC, BCH and ZEC to Ethereum applications, with possible support for ECDSA blockchains. Ren has future plans to bring liquidity to the Polkadot blockchain.

Currently in Mainnet SubZero, RenVM cross-chain technology is still centralized. The team claims to offer a semi-decentralized solution due to the fact that no KYC is required, however, Ren nodes (called Darknodes) are run by the Ren team and other partners from the Ren Alliance.

Another important point to mention is that Fusion and Wanchain code are open-source, and can easily be accessed. On the other hand, some important parts of Rens code are closed-source, and a lot of questions are being asked about the reasons behind this decision. No clear answer has been given by the team.

The use cases of a certain token are definitely an important factor to estimate its real value. Markets are not always rational, but sooner or later, tokens usually end up reaching their real value depending on the quality of the services they provide to users.

Fusion coin (FSN) has many use cases within Fusions cross-chain DeFi features and applications. FSN is used to pay network gas fees and to run DCRM nodes. It can be used in the different Time-Lock transactions: such as borrowing, lending, loans, etc. FSN holders can also stake their coins and earn passive income.

FSN coin can also be used within Fusion dApps. WeDeFi allows coin holders to use their Safebet no-loss lottery and to borrow Time-Locked FSN. The other dApp on Fusion is Anyswap, and Fusion coin was the only way to get its governance token ANY.

Wanchain coin (WAN) has similar use cases to FSN, it is used to pay gas fees for network transactions including Rivex and FinNexus transactions. It can also be used in the different dApps of Wanchain. Wan holders can stake their coins to earn passive income, or run nodes as validators. Wancoin will also be required to run the upcoming cross-chain storeman nodes.

Ren is a protocol, not a platform, therefore, Ren token has much less use cases than FSN or WAN. The main use case of the Ren token is to run a Darknode. Around 100k Ren tokens are required to run a node, this large number has been chosen to increase the amount of locked tokens, and the effect it could have on token price.

Speaking of price, lets take a look at the current prices and market caps of the three projects and determine which coin or token offers the best buying opportunity right now.

Of the three projects, Ren is the one that has been in the spotlight during the DeFi boom. Mainly because the DeFi space has been limited to Ethereum, a blockchain to which Ren provides liquidity. The current market cap of Ren is around $ 400 M, Wanchains market cap is around $ 54 M, and surprisingly, the market cap of Fusion is only around $ 26 M.

Yes, Fusion, the decentralized cross-chain platform that offers unique DeFi features such as Time-Lock, and dApps like WeDeFi and Anyswap is the one that has currently the lowest market cap. It is without a doubt the most undervalued project of the three, but even beyond our comparison, it is one of the most undervalued cryptocurrencies in the whole market. According to CoinStats, Fusion has the second highest adoption score in the crypto space. It is a score that compares the adoption of a certain project to its market cap, it helps investors to find the projects that could potentially take off at any moment.

Fusion, Wanchain and Ren are three interesting projects working on a fully decentralized cryptographic interoperability. The other solutions that are currently available in the market include centralized custodians such WBTC, or hub and zone models such as Cosmos and Polkadot that force new chains to adopt a certain standard.

The three projects in this comparison have a lot of features in common, but they are also different in some important aspects. Fusion and Wanchain are smart contracts platforms, they both have their own blockchains, and allow issuance of tokens. Ren is a protocol built on the Ethereum blockchain, with RenVM as a core product.

Fusions cross chain solution is based on the DCRM technology, it offers more integration possibilities. It is currently the only fully decentralized technology out of the three cross-chain solutions. The adoption of Fusion is increasingly growing after the launch of decentralized applications and platforms such as WeDeFi and Anyswap, and the implementation of convenient features for decentralized finance such as the Time-Lock function.

Surprisingly, Fusion has the lowest market cap out of the three projects. This can be seen as an excellent opportunity to invest in a project that offers a better technology than some of the top 30 cryptocurrencies by market cap.

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Wasabi Wallet Patches Flaw That Could Have Thwarted Bitcoin Privacy Feature – CoinDesk – Coindesk

Wasabi Wallet users need to upgrade to the latest version if they want to continue using the CoinJoin feature to keep their Bitcoin transaction histories private.

Thats because those running older iterations of the wallet can no longer use this feature to mix their coins with users who have the newest version.

The Wasabi Wallet team hard-forked the wallet Thursday to address a vulnerability discovered by a team member at Trezor, a leading maker of hardware wallets. A hard fork is a code change that makes older versions of a software incompatible with newer ones.

The flaws discovery is another example of the open-source communitys camaraderie and cooperation. Developers are constantly tinkering to improve their peers software, and many vulnerabilities have been responsibly disclosed during these processes to patch flaws before they can be exploited by bad actors. (Sometimes, however, the disclosures by rival teams are less-than-cordial, as evidenced by the long-running tensions between Wasabi and rival Samourai Wallet.)

According to a Wasabi Wallet blog post, Trezor hardware wallet developer Ondej Vejpustek responsibly disclosed the potential denial-of-service (DoS) attack to the Wasabi team on May 10 (a DoS attack entails an attacker spamming a network or protocol with the hopes of stymying its operations, hence denial of service).

Vejpustek has been very cooperative since the beginning and left us total freedom on how to manage the disclosure, both in terms of time and communication. This demonstrates the importance of proper communication between security researchers and dev teams. This is how a responsible disclosure should be, Wasabi Wallet contributor and marketing strategist Riccardo Masutti told CoinDesk, adding that Vejpustek was paid a bitcoin bounty for his efforts.

This hypothetical DoS attack, which Wasabi Wallet assumes has never been carried out, would have interfered with the wallets implementation of CoinJoin, a privacy protocol that allows users to mix their bitcoin with others to obscure the coins transaction histories.

Wasabi WalletsCoinJoin implementation requires each participant to take out as much as they put in. If, for instance, 10 participants join a mix for 0.1 BTC, then each user must send exactly that amount (plus a miner fee) and must receive that exact amount for the mix to be successful and to retain CoinJoins privacy protections. Mixing coins makes it harder for blockchain snoops and nosy parkers to pin bitcoin transactions to known addresses and their owners identities.

The disclosed DoS vulnerability would have halted the mixing process. The attacker would register bitcoin for a mix without that bitcoin being signed (verified) by the mixs coordinator, while at the same time submitting a real, verified transaction to the mix.

The result would be an incongruity between the total value of inputs made to the CoinJoin and the value of expected outputs. As a result, the coordinator would unwittingly build a transaction that cant be valid, since the sum of all inputs is less than the sum of all outputs, according to Vejpusteks analysis.

If the attack were pulled off, it would foil the CoinJoin, though it would not have given the attacker the ability to steal any coins nor could they deanonymize any peers in the mix.

Wasabi Wallet patched the fix with the hard fork deployed Thursday. This upgrade was applied to v.1.1.12of the wallet, which was released on Aug. 5.

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Bitcoin Will Break Out This Year, Says Devere CEO | News – Bitcoin News

The CEO of financial advisory firm Devere Group believes that 2020 will be a breakout year for bitcoin, fueled by the U.S. presidential election and the weak dollar. Amid political uncertainty and the Feds new inflation policy, investors will pile into safe-haven assets not tied to any specific country, such as bitcoin.

Devere Group CEO Nigel Green predicted last week that the U.S. presidential election and a weak dollar will drive the price of bitcoin for the rest of 2020. Following the Federal Reserves policy shift on inflation, he also warned about investing in the stock market. Devere Group, established by Green in 2002, describes itself as one of the worlds leading independent financial advisory organizations with more than $10 billion under advice from 80,000 clients in 100 countries.

Noting that Bitcoin is already one of the best-performing assets of the year, up around 70% year-to-date, Green asserted, We can expect the worlds largest cryptocurrency to be further fuelled for the rest of 2020 by the U.S. presidential election and the weakness of the U.S. dollar, which will serve as high-octane price drivers. The price of bitcoin stands at $11,613 at the time of writing.

A U.S. presidential election always stirs uncertainty but 2020 is seen by many as particularly important as not only will whoever wins be the CEO of the worlds largest economy, they will be in that role as the world economically readjusts following the global fallout of coronavirus, Green opined. As uncertainty heightens, investors will pile into safe-haven assets, in particular those not tied to any specific country, such as bitcoin and gold.

Recently, news.Bitcoin.com also reported that analyst and consultant Dan Popescu predicted how the outcome of the November presidential election could lead to a dollar collapse and a boost in the gold market. While the 2020 presidential election polls currently show Joe Biden in the lead, the analyst explained that the U.S. dollar stands to lose regardless of whoever wins the election and becomes the next president of the United States.

According to Green, Bitcoin is currently realising its reputation as a form of digital gold. Up to now, the precious metal has been perceived as the ultimate safe-haven asset, but bitcoin which shares its key characteristics of being a store of value and scarcity could potentially in the future knock gold from its long-held top spot as the world becomes driven by the tech revolution Decentralized, non-sovereign, secure digital currencies, including bitcoin, will become more attractive to investors as they will offer a hedge against turbulence in traditional markets.

Analysts have been questioning golds safe-haven status and Goldman Sachs recently warned that the U.S. dollar risks losing its status as the worlds reserve currency.

The Devere Group CEO added, Printing of historic sums of helicopter money thats pushed into the financial system has devalued the dollar and prompted inflation fears, emphasizing:

You cant just print bitcoin.

On Thursday, the Federal Reserve announced a major shift in policy to push up inflation. Many investors will pile into equities, Green noted, warning of the lack of balance in the stock markets. This will add fuel to global equities which are already on fire, Green described, adding that In this climate, holding bonds and sitting on cash will simply not provide the returns investors seek.

The market has been expecting this inflation policy announcement by the Fed, prompting some companies to move cash reserves into bitcoin to hedge against inflation. One of them is the Nasdaq-listed Microstrategy, which moved $250 million of its cash reserves into bitcoin. The Feds new policy is also expected to boost the price of bitcoin, which some predict could be driven past $500K.

As for the U.S. dollar, Green continued: The greenback could be in for a short-term boost, but in the longer term there are expectations its on a downward trajectory and that it could ultimately lose its global reserves status and this environment will provide a powerful boost for the price of bitcoin. The CEO concluded:

This explosive combination together with a growing number of millennials and Gen Z investors moving into digital assets could provide the perfect landscape for a multi-year bull market History will show that 2020 was a breakout year for bitcoin.

Do you agree with Green? Let us know in the comments section below.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Tax Implications For Donations Of Bitcoin – Forbes

WAN CHAI, HONG KONG, HONG KONG ISLAND - 2018/04/07: A Bitcoin ATM machine in Wan Chai, Hong Kong. ... [+] (Photo by Miguel Candela/SOPA Images/LightRocket via Getty Images)

Popular virtual currency Bitcoin has been a news fixture since its introduction in 2009. If fact, Bitcoin is the worlds leading virtual currency, with a market capitalization over $175 billion. This explosive growth has led donors and their advisors to explore various charitable giving opportunities using virtual currencies.

The Internal Revenue Service (IRS) describes virtual currency as a digital representation of value that functions as a medium of exchange, a unit of account, and / or a store of value. Its creators designed it to operate like legal tender, and as a medium of exchange, although very few governments currently recognize it as legal tender anywhere in the world.

Currently, Bitcoin and other virtual currencies, such as Ethereum and Ripple, represent a total market capitalization of over $250 billion. Many large charities, including large donor-advised funds and community foundations, are eager to tap into this market or have already received virtual donations. For example, United Way, American Red Cross, and the American Cancer Society accept donations of Bitcoins. Most major donor-advised funds accept Bitcoin, and some accept other cryptocurrencies as well.

Smaller nonprofits have begun accepting the currency as well. Technology and financial strategies involving the asset have only grown more complex with time, as concepts like proof-of-stake, forks, and decentralized finance (DeFi) all have become more prominent in the cryptocurrency world.

Ryan Raffin

With this explosion in value, many owners of Bitcoin and other virtual currencies have significant appreciation in these assets. This makes cryptocurrency a very appealing candidate for charitable giving. This article discusses the tax treatment of Bitcoin and other cryptocurrencies under current IRS rules. It has a particular emphasis on the tax results for donations of virtual currency.

2014 Bloomberg Finance LP

IRS Positions on Bitcoin The Internal Revenue Service was quicker than many organizations when it came to consideration of the financial and tax implications of virtual currency. In March of 2014, the IRS issued a Notice on the tax treatment of transactions involving virtual currency. This was its first official statement on cryptocurrency, although its published guidance since then has confirmed that treatment. Most importantly, the IRS stated that, for tax purposes, virtual currencies are property and not currency.

This property treatment means that traditional gain and loss principles will apply therefore treating these assets as securities or business property. A party selling, spending, or otherwise disposing of virtual currency may be subject to capital gains or ordinary income tax. Although the charity will be selling the currency, exempt organizations are not generally taxed on income, even from the sale of appreciated property.

The major tax implications for donations of virtual currency, therefore, involve the donor rather than the charity. The main consideration for donors is the charitable income tax deduction received. As a preliminary matter, note that in answering questions on donated cryptocurrency, the IRS refers multiple times to its general publication on charitable contributions. This supports the assumption that the standard noncash charitable deduction rules will apply.

The gain can be ordinary, or capital, depending on the source of the virtual currency to the donor. The determination on the type of gain or loss the taxpayer recognizes depends on whether that person held the virtual currency as a capital asset for investment purposes. If the donor did not hold the property as an investment, it would be subject to ordinary gain or loss treatment. This is more likely to be the case if the donor is a so-called miner or where the virtual currency is otherwise income paid for services rendered.

Results for Bitcoin and Cryptocurrency Donors These possibilities lead to three potential tax results for donors of virtual currency. First, a donor giving virtual currency held short-term (i.e., less than one year) as a capital asset will be able to deduct the lesser of cost basis or fair market value up to 50 percent of adjusted gross income. However, if the donor held the Bitcoin or other currency for more than a year as a capital asset, the deduction would be the fair market value of the gift up to 30 percent of adjusted gross income. Finally, if the currency is subject to ordinary gain or loss treatment in the hands of the donor, the donor may deduct the cost basis of the gift up to 50 percent of her adjusted gross income.

If the donor received Bitcoin as ordinary income as payment for services rendered or property sold, the donor may only deduct the cost basis under the ordinary income reduction rules. The IRS defines the cost basis of the virtual currency as its fair market value when the owner receives it. So if a third-party pays the donor Bitcoin worth $500 for professional services, and that Bitcoin later appreciated to $1,000 USD, the donors charitable income tax deduction would be limited to $500, or cost basis.

These rules are very favorable to donors holding appreciated virtual currency as capital assets, allowing them to avoid incurring a tax for capital gains on the Bitcoins or other currency. This is especially true following the Tax Cuts and Jobs Act of 2017, which limited Section 1031 exchanges to real estate only, meaning owners of virtual currency could not simply exchange them for other virtual currencies to avoid recognizing gain. Note that this donation would also allow the donor to avoid the potential 3.8 percent Medicare surcharge on investment income. The extreme appreciation in Bitcoin and other cryptocurrency makes the asset class a very strong candidate for charitable giving. Better still, IRS commentary has clearly laid out the tax results and requirements for substantiating such donations. Although there are some hoops to jump through to get a fair market value deduction, those difficulties can be minimal in comparison to the benefits of optimizing tax efficiency in giving. These tax items are of course not the only considerations for donations of Bitcoin or altcoins, but they can provide a powerful motivation for the right donor holding appreciated cryptocurrency.

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Protection Over Profit: What Early Mining Patterns Suggest About Bitcoins Inventor – CoinDesk – CoinDesk

When he first presented his research on Satoshis alleged treasure trove of untapped Bitcoin in 2013, Sergio Demian Lerner was met with a fair amount of pushback. Opponents felt that attributing some 1 million BTC to its creator would be prejudicial to the adoption of Bitcoin and anathema to the acceptive narrative of Satoshi as a benevolent creator, Lerner told CoinDesk.

Lest the image of Bitcoins immaculate conception be tarnished, Satoshis coins were better left untouched, both literally and empirically through research, the detractors argued.

That didnt deter Lerner, though, who didnt buy what he called the feeble arguments that these coins were simply lost to the wallet amnesia of early Bitcoin adopters.

So the IOV Head of Innovation and RSK designer has spent the past seven years decrypting the mystery of how many coins Satoshi may have mined and why his mining technique differed from his peers methods in Bitcoins early days. Lerners weekend project, as he calls it, has spawned a body of supporting research from anonymous community members, the research team at BitMex, Kim Nilsson and Jameson Lopp, among others.

Collectively, Lerner et al. have chipped away at the mysteries surrounding the hoard of some 1.1 million BTC mined in the first two years of the network and which remain stashed away, untouched. While most believe the $12.65 billion horde belongs to Bitcoins pseudonymous founder, Satoshi Nakamoto, Lerner ascribes it to Patoshi. Its Lerners way of signaling that, even with painstaking research, we cannot be 100% sure these coins belong to Satoshi.

Caveats aside, most researchers assume the Patoshi pattern, as its called, represents Satoshis mining activity. And while the total number of coins under Patoshis control has been subject to debate over the years as new evidence has come to light, this empirical researcher has led to other, more philosophical findings.

Principally, Satoshis mining activity in the early days was likely motivated more by ideology than by profit.

The miners time machine

Im looking for the truth, and with the forensic evidence we have today Im more convinced than ever that Satoshi cared about the network security much more than becoming bitcoin rich, Lerner wrote to CoinDesk over email.

His sentiment speaks to the results of his latest (and potentially final) research regarding the Patoshi pattern.

Most recently, Lerner decided to do something he originally wrote off: re-mine Bitcoins first 18,000 blocks with the hope of churning up new data on how Satoshi mined.

When he originally cooked up the idea in 2014, Lerner assumed that Patoshi would be using a software to mine Bitcoin similar to the public code in the first Bitcoin release. But as his (and others) research colored in the gray area of unknowns surrounding the Patoshi pattern, Lerner learned Patoshis mining software was nothing like the public [software] other early miners were using.

The degree of difference between Patoshis setup and everyone elses is at the core of Lerners recent research. One theory is that Patoshi was using 50 or so CPUs together in a less powerful, proto-form of the pooled mining that dominates Bitcoins ASIC-fueled mining landscape today. The other theory, which Lerners research corroborates, is that Patoshi was using a hashing technique known as multi-threading.

In Bitcoin mining, multi-threading is a process whereby a miner can search for multiple nonces at the same time (a nonce is the cryptographic number that miners are searching for when mining for a new block). This is accomplished either by using each core processor in a CPU individually to search for a blocks nonce or by processing multiple nonces through a Streaming SIMD Extensions (SSE) instruction, a technique for intensive computer processing.

Put simply, instead of using the CPU to do one sweep for the nonce, Patoshi used his CPU to conduct multiple sweeps.

Lerner came to this finding by re-mining the Bitcoin blockchains first 18,000 blocks. The idea is to re-scan the blockchain to find all of the nonces (solutions) that Patoshi did, while also discovering all of the solutions that they did not find (technical note: its possible that each block has more than one solution).

When this process is repeated thoroughly, Lerner explained, it gives you an idea of Patoshis own hashing patterns.

What I did is to uncover all solutions for every block in the first 18K blocks in order to detect the scanning direction of the algorithm Patoshi used, he explained.

More specifically, Lerner discovered Patoshis mining algorithm typically found higher value nonces rather than lower value nonces. This reveals the order in which the nonces were tested, Lerner said, lending credence to the theory that Patoshi was multi-threading to search for multiple nonces simultaneously given the pattern is unique to the blocks Patoshi mined.

Thats why we know Patoshi used a more powerful system than the rest. Not because he had a super-computer, but because he used his computer better, he told CoinDesk.

Mining for the common good, not for the goods

Lerner mentions in his research that Patoshis mining logic is the opposite [of] the Satoshi client version 0.1, the original mining software released with Bitcoin Core 0.1.0. In fact, the multi-threading Patoshi was using wasnt integrated into Bitcoins mining script until 2010, Lerner told CoinDesk.

So, assuming Patoshi is Satoshi, why did Bitcoins founder not bake multi-threading into Bitcoins initial client release? Looking back to Lerners second-most recent findings may help us find the answer.

In June, Lerner pointed out that Patoshi reduced his hashrate in several steps during the first year and that its likely he turned off his miner for five-minute intervals each time he mined a new block. Patoshi took these measures, Lerner posits, to foster healthy competition and to make sure he didnt hog all the new blocks.

Conversely, he may have multi-threaded in the early days to keep the network ticking, picking up the slack when blocks were not being mined on schedule, Lerner told CoinDesk.

I support Lopps thesis that Patoshi cared about the network security much more than the number of bitcoins mined. It seems he turned his miners only when the network wasnt producing blocks at the expected rate. It was also proven by OrganOfCorti that Patoshi reduced his hashrate on purpose on several occasions to let others mine more blocks, when he thought there was enough diversity of miners.

I conclude that the most plausible explanation is that he was protecting the network.

On Twitter Casa CTO Jameson Lopp pushed back against the notion that Satoshis mining advantage was leveraged in self-interest. Quite the contrary, Satoshis more sophisticated mining process likely protected the network in the early days when there were so few miners actively participating in block propagation. With so few actors on the network, Satoshi could have been playing watchdog to make sure the network was strong enough to sustain itself before allowing his mining activity to wane.

Lessons learned

Lerner agrees with this explanation, calling his recent research life changing for the understanding it has given him of Bitcoins founder and its earliest users.

The research on how Patoshi proceeded to decentralize Bitcoin taught me a lot about ideals. The first Bitcoiners were believers who cared a lot less about money that we all care now. Most of them mined to help the project see how far it could grow against all odds. Most of them donated bitcoins, received and paid with bitcoin to show its potential and never bother to speculate. Some of them mined just for fun.

The fun may be done for Lerner, though, who told CoinDesk that his years-long weekend project is drawing to a close with his recent findings. Hell instead turn his energy toward the work RSK and IOV are conducting in the realm of Bitcoin sidechains.

As for other outstanding mysteries his research didnt solve like the double-helix pattern Patoshis hashing strategy created from blocks 1400 to 1916 hell leave these to the community of gumshoes who have contributed to the Patoshi research thus far.

Because for Lerner, perhaps the most pressing question and the one that caused so much pushback when his research began has been answered: namely, why Satoshi mined so many coins in the early days, and why he had to use techniques that werent available to the rest of the fledgling Bitcoin community.

I think the discovery of the Patoshi pattern led to a more coherent conception of Satoshi as the person or group that was prepared to guard the network against 51% attacks during the first years, focusing on the long-term sustainability of the project and without selfish economic interest nor trading activity.

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Research: New Malware Employs Tor and Bittorrent To Steal Bitcoin and Ether | Security – Bitcoin News

A new trojan called Krypto Cibule uses infested computers power to mine cryptocurrency, steal crypto wallet files, and redirect incoming digital assets to a hacker address. The malware rides on the Tor network and the Bittorrent protocol to perform attacks, according to an extensive report by cybersecurity company, ESET.

Krypto Cibule is spread through malicious torrents for ZIP files whose contents masquerade as installers for cracked or pirated software and games, researchers Matthieu Faou and Alexandre Cote Cyr, detailed in their report published September 2.

The malware is mostly active in the Czech Republic and Slovakia where it has been responsible for hundreds of attacks. Most victims downloaded the malware from files hosted on a torrent site popular in the two countries called uloz.to.

The mining operations of the malware, which ESET researchers trace back to 2018, are written into XMRig, an open-source program that mines monero using the CPU, and kawpowminer, another open-source program that mines ethereum (ETH) using the GPU, with both programs set up to connect to a hacker-controlled mining server over the Tor proxy.

Researchers have attributed the little attention previously given to the trojan to the discretion of its operations. To keep the owner of the computer unsuspecting, the malware recalls the GPU miner when the battery is under 30% and stops operations altogether when the battery is under 10%.

The clipboard-hijacking operation masquerades as SystemArchitectureTranslation.exe. It monitors changes to the clipboard in order to replace wallet addresses with addresses of controlled by the malware operator in order to misdirect funds. The researchers noted:

At the time of this writing, the wallets used by the clipboard hijacking component had received a little over $1,800 in bitcoin (BTC) and ethereum.

Exfiltration works by walking through the filesystem of each available drive to look for filenames that contain certain terms. ESET researchers linked the trojan to terms mostly referring to cryptocurrencies, wallets, or miners, as well as more generic ones like crypto, seed, and password. Files that could provide data such as private keys are also targeted.

According to the research team, the use of legitimate open-source tools as well as a wide range of anti-detection methods is likely to have kept the malware under the radar this far. Krypto Cibule is still being actively developed, with new features having been added in its two-year-old life.

As news.Bitcoin.com reported recently, hackers have already been plundering bitcoin through the large-scale use of malicious relays on the Tor network. Tor is a privacy-oriented network popular with bitcoin investors throughout the world.

What do you think about the new malware exploiting Tor and Bit Torrent? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Research: New Malware Employs Tor and Bittorrent To Steal Bitcoin and Ether | Security - Bitcoin News