Monthly Archives: May 2021

(Bloomberg) -- Bitcoin rallied back Monday as investors took advantage of the lowest levels in seven weeks to pile back in.

The largest cryptocurrency rose as much as 13% to above $54,000, the biggest intraday gain since early February.

The move comes as JPMorgan Chase & Co. is preparing to introduce an actively managed Bitcoin fund to some clients as soon as this summer, Coindesk reported, citing unidentified people familiar with the matter. The rebound reverses a two-week slump that had pushed Bitcoin below its 100-day moving average amid technical warnings from Wall Street and fears of a growing crypto bubble.

Some pinned Mondays move on a tweet Saturday from billionaire Elon Musk, who in the past has affected prices with his comments on the social platform.

In a potential reference to cryptocurrencies, the Tesla Inc. founder asked What does the future hodl?, using a term often seen as meaning hold on for dear life that supporters use to refer to buying and holding their digital assets.

After markets closed in New York on Monday, Musks Tesla Inc. quarterly results revealed that it spent $1.2 billion on Bitcoin in the first quarter and made $101 million selling it during that period. Musk had disclosed the crypto investment in February and the announcement subsequently helped fuel a red-hot rally for the digital asset.

Cryptocurrency-exposed stocks also rose. Monex Group Inc. gained 7.1%, while Remixpoint Inc. increased 7% and Ceres Inc. added 6.1%. In the U.S., Coinbase Global Inc. gained 4.4%, while Riot Blockchain Inc. jumped 6.3%.

Bitcoin has retained a gain of about 80% year-to-date as big-name investors endorse it and institutions from Goldman Sachs Group Inc. to Bank of New York Mellon advance their offerings around cryptocurrencies. JPMorgans John Normand reiterated in a note Friday that Bitcoins ascent has been steeper than any other financial innovation or bubble of the past 50 years.

Crypto bulls breathed a sigh of relief as last weeks deep rout across the space failed to extend, Steen Jakobsen, chief investment officer at Saxo Bank, wrote in a note. However, it has quite a wall to climb to fully neutralize the recent selloff

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(Updates to add Teslas Bitcoin sale in sixth paragraph)

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Bitcoin Rebounds After Hitting Lowest Level Since March - Yahoo Finance

Bitcoins domination of total cryptocurrency market value is declining as its next-biggest rival Ether reaches the $3,000 milestone.

The rise of Ether suggests theres room for more than one winner among digital tokens as the sector evolves. Bitcoin now accounts for about 46% of total crypto market value of $2.3 trillion, down from roughly 70% at the start of the year, according to tracker CoinGecko. Ether is up to 15% and a group of others outside the top few has doubled its share to 36%.

Bitcoin remains the biggest cryptocurrency but the momentum in other tokens is drawing increasing interest. Crypto proponents argue investors are getting more comfortable with a variety of tokens, while critics contend the sector may be in the grip of a stimulus-fueled mania.

Ethereum is rising and not much seems to be in its way, Edward Moya, a senior market analyst at Oanda Corp., wrote in a note Friday, adding that other tokens were also seeing fresh interest.

The current distribution of market share also reflects an April shakeout in the cryptocurrency sector. Bitcoin has yet to recover all the ground it lost after tumbling from a mid-April record of almost $64,870.

Last months listing of crypto exchange Coinbase Global Inc. in the U.S. is the latest sign of how more investors are embracing the sector despite risks from high levels of volatility and expanding regulatory scrutiny.

Ether is currently occupying the limelight. An upgrade of the affiliated Ethereum blockchain as well as the networks popularity for financial services and cryptocollectibles are among the factors cited for the rally.

Evercore ISI strategist Rich Ross has set a target of $3,900 for the token. Ether rose 6.6% to $3,167 as of 10:29 a.m. in London on Monday.

Other cryptocurrencies have jumped too. The price of Binance Coin is up 3,460% over the past 12 months, according to CoinGecko. Dogecoin, a token started as a joke in 2013 but now a social-media favorite touted by the likes of Elon Musk, has surged 15,000% to a market value of around $50 billion.

Before it's here, it's on the Bloomberg Terminal.

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Bitcoin Crypto Dominance Declines as Ether Soars Past $3,000 - Bloomberg

Bitcoin has beaten the stock market, but you might be shocked by how much.

It's been a wild ride for Bitcoin throughout its 11-year history, and that's been especially true over the past year. Not only did the COVID-19 pandemic drive Bitcoin's price lower initially, but it also seems to have helped accelerate investor interest in the leading cryptocurrency.

Here's a look at how Bitcoin has performed for investors over the past year and what has driven its performance.

I won't keep you in suspense. Bitcoin has increased in value by 612% over the past year, as of this writing. This means that a $1,000 investment in Bitcoin made one year ago would be worth just over $7,100 now.

During the same period, the S&P 500 index, which is generally considered to be the best gauge of overall stock market performance, has delivered a 50% total return. Several stocks have doubled and tripled over the past year as the market rewarded companies that benefited from the stay-at-home economy. But there are very few stocks that have delivered returns in the same ballpark as Bitcoin. So, it's fair to say that Bitcoin has been a big success as an investment over the past year for buy-and-hold investors.

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Obviously, we can't go through every positive Bitcoin news item that has happened over the past year. But there have been three big themes that seem to have driven Bitcoin higher.

Here's the billion-dollar question. If Bitcoin ultimately gains mainstream adoption as a currency or ends up becoming a mainstream store of value (digital gold), there's a solid case to be made that Bitcoin could ultimately rise to $500,000 or even more. On the other hand, if the mainstream-use case doesn't pan out, or if investor interest starts to fade, it could go the other way just as easily.

The bottom line is that no investment that can deliver 7x returns in a year is without significant volatility and risk. If you're looking to buy Bitcoin or other cryptocurrencies, make sure you know what you're getting into.

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If You Bought $1,000 Worth of Bitcoin a Year Ago, Here's How Much You'd Have Today - The Motley Fool

It seems safe to say that Berkshire Hathaway Inc. Vice Chairman Charlie Mungers cryptocurrency skepticism hasnt been softened by the rally in prices for bitcoin and other digital assets.

Of course, I hate the bitcoin success and I dont welcome a currency thats useful to kidnappers and extortionists, and so forth. Nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air. So I think I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization. And Ill leave the criticism to others.

Mungers remarks came in response to a question at Berkshires BRK.A, -1.29% BRK.B, -0.95% annual shareholder meeting on Saturday. Munger and Chairman Warren Buffett were asked about their feelings regarding rising cryptocurrency values given Mungers previous characterization of bitcoin as worthless, artificial gold.

Read: Berkshire Hathaway returns to quarterly profit on insurance and stock-market gains

Buffett, who over the years has previously described the crypto as rat poison squared and a delusion, with no unique value at all, said he would dodge the question, reckoning that the vast majority of investors watching the meeting online were likely bitcoin holders.

We probably got hundreds of thousand of people watching that own bitcoin, and we probably have two people that are short. So we got a choice of making 400,000 people mad at us and unhappyor making two people happy, and thats just a dumb equation, Buffett joked.

Munger, in contrast, was in no mood to hold back, saying that the question was like waving a red flag in front of a bull:

Bitcoin BTCUSD, +2.52%, which is notoriously volatile, has rallied over the past year, topping $60,000 for the first time in March before a pullback that took it briefly below $50,000 earlier this month. The digital asset was trading near $56,700 at midday Sunday, down around 1.7% over the last 24 hours, according to CoinDesk. Bitcoin traded at around $29,000 at the beginning of 2021 and for around $8,000 a year ago.

See: Ive learned how much I dont know about bitcoin, says investor Howard Marks

While this years event was the second in a row to be held virtually due to the COVID-19 pandemic, Buffett and Munger tackled a range of queries in a 3 1/2-hour question-and-answer session.

Barrons on MarketWatch: Berkshire Hathaways Earnings Show Warren Buffetts Company Is on a Roll

Many of the questions were specific to Berkshire, with Buffett pushing back against criticism of the companys sale of its stakes in airlines during the height of the pandemic. Other topics, included rising short-term trading activity by individual investors, the impact of special-purpose acquisition vehicles, or SPACs, on the deal-making environment, signs of inflation in the economy and the morality debate around share buybacks.

Read: Warren Buffett warns investors not to gamble on stocks

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Charlie Munger 'hates' bitcoin's rise: 'disgusting and contrary to interests of civilization' - MarketWatch

Bitcoin has exploded this year, with long-awaited institutional adoption being bolstered by retail investors pouring cash into all manner of cryptocurrencies (some looking like better bets than others).

The bitcoin price has soared as millions of potential bitcoin buyers get access to bitcoin markets via the likes of PayPal, Robinhood, Square's Cash App and Revolut.

Now, as PayPal and Robinhood continue to prevent bitcoin bought on their platforms from being moved elsewhere, a leaked blog post has revealed London-based banking app Revolut is gearing up to allow some of its users to transfer their bitcoin holdings off its app.

A leaked Revolut blog post revealed the banking app is gearing up to permit bitcoin withdrawal from ... [+] its app.

In a blog post that was deleted shortly after being published on Thursdaybut not before being spotted by eagle-eyed AltFi reportersRevolut announced that its top-tier paying users will next week get beta access to transfer their bitcoin off its platform.

"We're launching next Thursday, unfortunately the blog went up a little too soon," says a Revolut spokesperson, speaking over email. The blog post, uploaded "due to a scheduling error," sported a URL that includes "bitcoin withdrawals have landed" but now directs to a 404 error page.

"We're starting with bitcoin, but well be adding more tokens and upgrades in the near future," the post read. Revolut users, including in the U.S. where the banking app was launched in March 2020, can currently buy and sell 22 different cryptocurrencies, including bitcoin, ethereum, litecoin, and Ripple's XRP.

Meanwhile, it was reported Revolut employees were told of the pending update ahead of the leaked blog post's publicationwith management thanking bitcoin "for making all our dreams come true."

"Huge Revolut milestone to announce," Revolut staff were told in a company-wide communication, according to the Financial Times. "Our public beta for crypto withdrawals has now soft launched for all eligible users."

Meanwhile, restrictions on PayPal and Robinhood accounts preventing them from moving their bitcoin off the platforms have continued to grate on bitcoin and cryptocurrency devoteesmany of whom espouse the cryptographic mantra: "not your keys, not your coins," warning that if you let a bank hold your cryptocurrency for you it's vulnerable to loss or theft.

The bitcoin price bull run took off in October last year following PayPal's announcement that it ... [+] would begin supporting bitcoin and a handful of other cryptocurrencies.

"Buying bitcoin on Robinhood is not owning bitcoin. Buying bitcoin through PayPal is not owning bitcoin," NFL pro footballer and staunch bitcoin advocate Russell Okung said via Twitter this week.

PayPal's support of bitcoin and a handful of other cryptocurrencies, announced in October 2020, kickstarted the current bitcoin price bull run and sent bitcoin soaring well past its previous all-time high of around $20,000 per bitcoin set in late 2017.

However, PayPal immediately attracted criticism for failing to allow users to transfer the cryptocurrencies they bought off the platform.

Square, led by bitcoin believer Jack Dorsey, enabled bitcoin withdrawals via its Cash App in 2019 while investing app Robinhood has said it plans to do so in the future.

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Leak Reveals Millions Of PayPal And Robinhood Bitcoin Buyers May Soon Want To Make A Surprising Switch Amid Bitcoin Price Mania - Forbes

Albert Einstein reckoned the only reason we have time is so that everything doesn't happen at once.

If he was around today, he may have been forced into a rethink. Last year we saw one of the sharpest falls in financial markets ever, followed by one of the quickest recoveries.

Despite the globe still in the grip of a dangerous pandemic, the price of assets, commodities and financial instruments have continued their meteoric rise fuelled by massive amounts of stimulus, from governments and central banks.

The more they inflate, the higher pundits believe they'll go.

Analysts are sceptical of Bitcoin's meteoric rise. Here's why some are predicting a crash, and what that would mean.

It's the everything boom. Real estate, stocks, metals, agricultural products; almost anything you care to name. Except for debt instruments like government bonds that collapsed from record highs in February and March. And gold, the ultimate store of wealth during uncertain times for several millennia.

Nothing, however, can quite match the boom in cryptocurrencies. In the past year, led by Bitcoin, they have soared to ever greater levels, despite warnings from monetary authorities about their highly speculative nature, their use in criminal transactions and the ongoing threat of regulation.

They've been largely dismissed by the establishment until recently. Lately, there's been a surge of interest from institutions that have taken a fresh look at Bitcoin and the vast array of competing cryptocurrencies, and a reluctant acceptance. There's money to be made, after all.

But the vast bulk of the interest, and perhaps the driving force behind the huge price surge in the past year, has come from households; ordinary people who have jumped aboard the rapidly accelerating train in a quest for riches.

Source: Coindesk

Laszlo Hanyacz became an internet sensation for all the wrong reasons. Back in 2010, he bought two pizzas from a Jacksonville Florida pizza joint and paid in Bitcoin; the first time anyone ever used the electronic currency as payment.

As bitcoin passes its latest milestone, 'FOMO' has led to crypto sceptics piling in, as Tesla boss Elon Musk warns digital currencies should be treated as "speculation".

That alone should have been enough to put him in the history books. But his fame extends well beyond being a trailblazer. Poor old Laszlo forked out 10,000 Bitcoin for the doughy delight. In Australian dollar terms, based on yesterday's price, that would now be worth $753,510,000.

Let's hope he ordered the supreme. Or at least, the extra anchovies.

But Laszlo's misfortune has become one of the great obstacles in the acceptance of Bitcoin and other cryptocurrencies as a medium of exchange.

Consumers are unwilling to spend their Bitcoin;fearful they may end up like Laszlo. And merchants are nervous about accepting payment, given the incredible volatility around its pricing.

He was far from the first, but it was Elon Musk who kicked along the most recent boom when in February, he announced that Tesla, his electric car company, would be accepting Bitcoin as payment for vehicles.

Not only that, Tesla stumped up $US1.5 billion ($1.94 billion) for a slice of Bitcoin. In filings to the New York Stock Exchange last week, that investment now was worth $US2.48 billion.

Increasingly, cryptocurrencies are being seen as an investment, or a store of wealth with other big players adding Bitcoin to their balance sheets.

As the price of the cryptocurrency continues to skyrocket, Bitcoin miners are tapping fossil fuels across the planet. But can Bitcoin go green, or is climate change embedded in Bitcoin's code?

Payment systems Paypal and Square are exploring the currency as both a payment system and an investment while Twitter has debated whether to hold some on its balance sheet.

With big names dipping into the market, investment banks like Bank of NY Mellon have taken the plunge, forming a crypto division while JP Morgan has dipped its toe into the water in an effort to keep its clients happy.

For much of the past decade, crypto devotees have predicted the demise of fiat currencies; the system by which individual nations run separate currencies. They've argued the rise of the internet and the arrival of digital currencies would bypass traditional payment methods and undermine the network of central banks that regulate and run the global financial system.

There's no doubt the rise of these new cryptocurrencies will radically alter and dramatically improve the way we pay for goods and services. But central banks and governments are more likely to become players than victims of the revolution.

It was exactly 50 years ago that gold was abandoned as the official foundation for global currencies.

For thousands of years, gold was used as a means of exchange, in coins, and as a store of wealth. Up until World War II, most countries fixed their currencies to a specified amount of gold. But the chaos of the period between the wars forced a shake-up and in 1944 the Bretton Woods system was instituted.

The US dollar became the global currency standard and all other currencies were priced against it. Gold, however, remained the foundation as the US dollar was fixed to the precious metal at $US35 an ounce.

Disgraced US president Richard Nixon called an end to the system in 1971 and abandoned the gold standard as inflation took hold in the aftermath of the Vietnam War.

But gold never really went out of fashion. Central banks continued to hold large stores of it, cementing its reputation as the bedrock for the financial system. Not surprisingly, investors would flock to it at the first hint of inflation or any other political or economic upheaval.

Gold always has been the ultimate store of wealth.

Why? For a start, it is rare. It also is attractive. And it has a relatively rare molecular structure that makes it incredibly stable. That makes it useful, not just in jewellery, but in high level industrial applications including electronics.

There are some uncanny similarities between Bitcoin and gold.

Like gold, Bitcoin is rare. The total supply has been limited to 21 million tokens. And the pace at which the tokens are released periodically is slowed, so that the final coin won't be minted until around 2140.

As a result, it becomes increasingly more difficult and more expensive to "mine" new Bitcoin. That has raised concerns about the impact on the environment, where the computing power required to "mint" new coins chews through enormous amounts of energy.

Professor Jason Potts from RMITs Blockchain Innovation Hub explains how digital money works.

Unlike gold, however, Bitcoin is virtual. It exists in the ether and has no utility or use other than as a means of exchange.

What it does have is an underpinning ledger system known as blockchain that enables data storage to be decentralised so that it cannot be controlled or manipulated.

Blockchain technology has applications far beyond cryptocurrency with potential uses in cars, financial services, voting, polling and even healthcare and is being widely adapted and adopted by a range of industries.

It's not just blockchain that unites cryptocurrencies. In recent months, a vast number such as Ethereum, Ripple XRP and even a joke currency called Dogecoin, all have soared on the back of the huge lift in Bitcoin.

Gold in contrast, has been on the decline since peaking in August last year. Even the chaotic slide on global bond markets in February and March this yearfailed to fire it up. Government bond prices cratered on fears of a return of global inflation, the kind of news that ordinarily would see gold spike.

The precious metal reacted as expected through most of last year though. It gathered strength from January on as the pandemic rippled around the globe.

Bitcoin, in contrast, tanked as stocks and most risky assets plummeted. It only gathered steam once vaccines were developed and as the US election result lit a fire under global stock markets.

Perhaps cryptocurrencies will replace gold as the ultimate store of wealth at some point. They may even become the currencies of the internet, enabling safe and secure transactions.

Judging from movements over the past year, they remain yet another speculative, volatile and risky investment. But their time may be rapidly approaching.

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Will Bitcoin replace gold as the ultimate store of wealth? - ABC News

Jack Taylor | Getty Images

LONDON Ether hit an all-time high Thursday as bitcoin's dominance of the cryptocurrency market declined.

The world's second-largest digital currency by market value surged to a fresh record of $2,800 on Thursday morning, according to data from Coin Metrics. Bitcoin, the top digital coin, was slightly lower at a price of $54,471.

The move comes after the European Investment Bank announced Wednesday that it had issued its first ever digital bond on the Ethereum blockchain, ether's underlying network. This led to speculation that the currency is gaining traction among mainstream financial institutions.

Most major cryptocurrencies were trading higher Thursday, boosted by ether's rise. Bitcoin, the most valuable digital coin, is down about 16% from its all-time high of almost $65,000 earlier this month. It has still had a stunning rally, though, climbing almost 90% so far this year, on the back of increased interest from institutional investors and corporate buyers like Tesla.

At the same time, some investors have warned of froth in the crypto market. Dogecoin, a meme-inspired digital token, rallied Wednesday after supportive tweets from celebrities like Elon Musk and Mark Cuban.

And plenty of other "altcoins," or alternative currencies, have also rallied this year. This led to bitcoin's dominance of the crypto market falling below 50% last week for the first time since August 2018, according to CoinMarketCap.

The first time bitcoin's share of the market sank below that level was in 2017, before a huge slump in crypto prices now referred to as a "crypto winter." But bitcoin bulls contend things are different this time, as the rally is being driven by institutional demand rather than retail investors.

"There's just so much hype from the institutions coming in," Carol Alexander, professor at the University of Sussex Business School, told CNBC last week. "Bitcoin is almost like a sort reference point, the numeraire of crypto. I think there's going to be sustained demand as institutional investors become more confident about the market."

"Having said that, on the more retail side that used to be in bitcoin, it's not cool anymore," Alexander added. "Everyone knows about bitcoin and we want things to talk about. We don't want to talk about Covid all the time. So much of this is about market psychology. We've been shut inside and haven't had any news to talk about."

Skeptics of cryptocurrencies say that bitcoin and other digital coins are a speculative bubble. Stephen Isaacs, chairman of the investment committee at financial consultants Alvine Capital, told CNBC earlier this month that he thinks bitcoin is in a "bubble" that will burst, citing risks around regulation and climate change.

Ethereum may be coming afterbitcoin, but there are some key differences between the two.For one, Ethereum has several software developers building apps on its network. Ether is the native token of the Ethereum blockchain.

One popular trend in the so-called decentralized app space is NFTs, or nonfungible tokens, digital assets meant to represent ownership of rare virtual items like art and sports memorabilia.Many NFTs are based on Ethereum.

Ethereum is also going through a major upgrade that will push it further from bitcoin, in theory allowing for faster transaction times and reducing the amount of power required to process transactions. Both bitcoin's and ether's networks have attracted criticism from environmentalists over the impact of crypto mining on the climate.

"Post the network upgrade, Ethereum in particular is proving its use-case, and with developers piling on to the platform, it is little wonder it is gaining so much traction with investors," said Simon Peters, cryptoasset analyst for online trading platform eToro.

"Underlying this is demand from institutional investors. While they may now have some exposure to bitcoin, institutions are now diversifying their exposure and Ethereum is the natural next pick, and that leaves the second biggest cryptoasset by market cap well placed to benefit further."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," which features Mark Cuban as a panelist.

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Digital currency ether hits a record high, stealing bitcoin's limelight - CNBC