Despite the pandemic, 2020 has been a good year for investors. Part of this is due to retail investors expanding into the market — many of whom have had the time to use simple interfaces now available on computers, tablets, and smartphones. But that isn’t the reason for all that has happened — especially in the cryptocurrency market.
Bitcoin has been on a bull run for the last half of 2020. For the whole year, its price has increased more than 400%. But at the start of 2021, after a jump it, its price went down slight. So traders wonder if 2021 will be as bullish as 2020 or if it will see a crash as it did three years ago.
What is Bitcoin?
Bitcoin is a cryptocurrency. Cryptocurrency is a digital currency. Bitcoins are not carried around with us like regular currency. They are stored in a database or transparent ledger known as a blockchain.
Similarly, Bitcoins aren’t minted but rather they are mined. Bitcoin miners use sophisticated software to solve complex math problems. When a math problem or puzzle is solved, the miner is awarded Bitcoins. As of late 2020, the reward is 6.25 Bitcoins.
Holders of Bitcoins keep them in digital wallets. When they want to use Bitcoin for a purchase, it is all done digitally. Founded in 2009, during the Great Recession, Bitcoins are not backed by any government or banks.
Bitcoin promises that it cannot be manipulated by government actions or central banks and is immune to inflation. Another advantage to Bitcoin is there are fewer transaction fees since there are no middlemen. However, as with most things related to Bitcoin, there are disagreements and things are usually more complicated than they seem.
Bitcoin Price History
In October 2009, Bitcoin was almost worthless since no one was willing to buy it. A Finnish developer who helped with the origination of Bitcoin sold 5,050 Bitcoins for $5.02. This gave Bitcoin a value of 0.09¢.
Another pivotal day in Bitcoin history occurred on May 22, 2010. On this day, a Florida programmer purchased two Papa John’s pizzas for 10,000 Bitcoins. It was more of a novelty than anything else, however.
Today, in late December 2020, the Bitcoins spent on those pizzas are worth approximately $289 million. In between, Bitcoin has seen some dramatic ups and downs in price movement. Cryptocurrency enthusiasts call May 22 Pizza Day.
In February 2011, Bitcoin closed above $1.00 for the first time. During the first few years, Bitcoin meandered in the single digits with a brief pop to $31 in June 2011. It then began an impressive rise in price.
Bitcoin hit $200 in April 2013 and then jumped to more than $1,000 by November of that year. In November 2017, it crossed $10,000 on the way to a then all-time high of $19,783 on December 17, 2017.
At that point, it fell back down to $3,441 by January 2019. The peak in price is believed to have been caused by possible manipulations. Others say it was just investor fervor. Many have compared that Bitcoin bubble to the internet boom of the 1990s.
By June 2019, Bitcoin had recovered to around $12,000. It fell into 2020 and then took another hit because of the COVID-19 pandemic. Then it started to take off. In October 2020, it was trading at $13,500, and at the close of the day on December 30, 2020, it reached an all-time high of roughly $29,500.
How to Trade Bitcoin
There are a variety of ways traders can speculate on Bitcoin, like:
- Day trading
- Contracts for difference (CFDs)
- Trend trading.
Day trading refers to short-term trading that occurs over seconds, minutes, hours, or a few days. The trader can make small but consistent gains by taking advantage of the volatile price movements of Bitcoin each day.
Basic options trading is the buying of call or put options. A trader will buy a call option if they believe the price of Bitcoin will go up in a certain time frame. A put option is bought when a trader believes the price will fall by the option’s expiration date. There are more complex option trading strategies like straddles and butterflies that involve the buying and selling of options at the same time.
Traders can profit from the price movement of Bitcoin by using CFDs (contracts-for-difference).. Traders will buy a CFD if they believe the price is going up, and they will sell or go short when they think the price of Bitcoin will drop. CFDs involve leverage and margin, which means they can be risky if the trade starts to go against them.
Trend trading involves understanding the price movement of Bitcoin. This usually involves charting and technical analysis. When certain patterns develop on the chart, the trader will buy or sell Bitcoin, depending on what the chart tells them.
What’s Next for Bitcoin?
Now that bitcoin has gained roughly 400% in 2020, can it continue higher? Will Bitcoin go to $100,000, or is there a chance of a repeat of the 2017 crash?
“Bitcoin Will Rise”
Today, there is more trust in Bitcoin. A recent announcement by PayPal stated that they will allow users to draw from Bitcoin and other cryptocurrency accounts to pay for products using PayPal at over 28 million merchants.
Unlike 2017, major investors including, Harvard University and billionaires like Paul Tudor Jones, have been adding cryptocurrencies to their portfolios. Some public companies are also adding Bitcoin to their balance sheets. At the same time, normal Bitcoin skeptics have been quiet.
One argument has been that Bitcoin will catch up to gold in market capitalization once Bitcoin is widely accepted as the digital version of gold. Currently, the market cap for gold is $9 trillion. Could Bitcoin rise to 20% to 25% of gold in the next year? If so, Bitcoin would be at $80,000 to $110,000.
“Bitcoin Will Crash”
Bitcoin enthusiasts promote the idea it is “sound money” — in other words, it is durable, accessible, divisible, scarce, and verifiable. If any one of those characteristics is compromised, the basic foundation of Bitcoin will either erode or disappear.
Another risk for Bitcoin is the concentration of mining power. It is believed that 65% of the hash power or mining computer power is in China. Theoretically, groups of miners could create fake coins through double-spending or manipulate transactions. Another risk is whales or investors manipulating the market.
Given the increasing interest from institutional investors, the long-term future for Bitcoin — and other digital assets — seems positive. In the short-term, recall that all cryptocurrencies are volatile and Bitcoin is famous for its roller-coaster moves.
Australian Crypto Exchanges Partner With Koinly To Simplify Tax Reporting
Koinly is a fast growing cryptocurrency tax solution that promises to help Australian bitcoin investors prepare their crypto tax reports in a fast and efficient manner. By linking exchange accounts and public wallet addresses with Koinly, investors can get a detailed capital gains report within a matter of minutes.
“If you trade or invest with any regularity, compiling transaction records into a single ATO-friendly document can still present challenges, especially if you’re operating across a number of wallets and cryptocurrencies. That’s why for this tax season, we have officially partnered with Koinly to implement direct connectivity to your CoinJar account. This means if you choose to link both accounts, your trading data from your CoinJar will be seamlessly processed.” said Ashter Tan, CEO at Coinjar.
“With the ATO contacting up to 350,000 individuals earlier this year to ensure cryptocurrency trades are reported, it’s great to see Koinly support the Australian market. Combined with Cointree’s monthly holding statements, our members have saved a lot of time calculating their tax.” said Jessica Renden, Head of Operations, Cointree.
“Swyftx are delighted to partner with a Koinly a proven industry leading tax software provider. We love the ease in which our customers can integrate their trading history directly into Koinly via CSV or API key for instant profit and loss calculations and instant access to full detail tax reports to present to their accountants at tax time.” said Tommy Honan of Swyftx.
“Even though there is a lot of guidance around cryptocurrency taxes, it is simply too difficult to calculate taxes by hand especially if you traded on multiple exchanges. With our new partnerships we will be able to help Australian investors reconcile all their transactions in one place and generate tax reports seamlessly” said Robin Singh, founder of Koinly.
ATO began sending out warning letters to some 350,000 cryptocurrency investors in June, the letters make it clear that the ATO knows about the recipients cryptocurrency activities and wants them to amend or declare their taxes accordingly. Other countries such as the US, UK and Denmark have also sent out similar letters in the past.
As cryptocurrency becomes more and more mainstream, it comes as no surprise that tax agencies all over the world are trying to ensure taxpayers are aware of the tax liabilities that arise from cryptocurrency trading.
This News has been Published in Partnership with PR Newswire
Initial Coin Offering(ICO) and making informed decisions through ICOUP
Crypto Currency has garnered the attention of almost everyone who can access the internet! Another buzzword in the recent times is “ICO“. ICO is the abbreviation of Initial Coin Offering. It is an alternative fundraising mechanism in which blockchain startups issue their own crypto tokens and sell them in exchange for BTC and ETH. Users, in their turn, can either spend digital tokens on the platform or sell them later on exchanges at say, 3 times to 100 times the price. Tokens are basically like vouchers that you can exchange for goods or services on a certain platform.
In this article we will understand how the entire ICO process works and also, how platforms like ICOUP will help the developer and the investor community.
STEPS BEHIND AN ICO
Announcement : ICO typically begins with the announcement of making the project by the developers. It helps in generating hype and interest in the project.
White Paper : Developers then create a white paper. A white paper is typically a document issued by the developers which highlight their project and the specific features of that project so that it attracts the attention of the potential investors. Whitepapers are generally written in an academic manner and the specific purpose is to entice the investors by showing its potential and features.
Run the white paper in the community : The developers will then run the white paper through prominent members in the blockchain community to get their backing.
Tokens : Developers will create the tokens which they are going to exchange for Bitcoin or ETH in the token sale. Developers decide the limit to the number of tokens and the amount that they want to charge for each token. Also, Setting a cap on the number of tokens is necessary.
Timing: Developers also need to decide a time at which they want to hold their ICO. Selecting the time, and the amount of time it runs for is very important.
Last but not the least, the developers choose a platform where they can advertise their ICO. Soon to be launched, ICOUP is one such platform where developers can advertise their ICOs and investors can make an informed decision and choose from the best.
There are a ton of ICOs out there, with every single one of them promising huge returns and useful perks for potential investors. But before you get carried away and start sending your hard earned money to every single project out there, remember that many, if not most of those projects will inevitably fail or will turn out to be a scam.
ICO investment can be really tricky for many. ICOUP will try to solve the problems of an investor by listing hand curated ICOs on the ICOUP platform after doing thorough technical, financial and social analysis. Moreover, the platform will also have the option of taking user votes into consideration for each ICOs. In order to provide quality analysis to the users, ICOUP will provide a score for the listing.
Moreover, every ICO accepted by ICOUP can be analyzed by potential investors based on various parameters.
For Developers, many a times, promoting your own cryptocurrency can be very difficult. Moreover, the cost of promotion can be prohibitive. ICOUP will provide crypto currency enthusiasts launch their ICO and get noticed immediately. They can also promote themselves on the platform through banners, posts and mentions on the newsletters after paying a nominal charge. And obviously, they can use crypto currency to make their payment.
ICOUP connects all the information related to blockchain projects and allows the members to rate any project. ICOUP gives the power to the investors to make the most informed and smart investment decision.
It is important to note that unlike an Initial Public Offering , investing in an ICO won’t result in you having an ownership stake of the company. You’re basically gambling that the currency you pay for now will increase in worth later and ultimately make you money.
From an investor’s point of view, it is important to be cautious before making an investment. They should make sure that the developers are not anonymous. If they are, that is as red of a flag. They should also know about the development team and the advisory board. ICOUP will, in a bid to protect investors from fake ICOs will ensure that the the projects listed on the website are thoroughly checked.
At an individual level too, one can focus on relevant cryptocurrency experiences of the developers, previous ICOs they took part in and the impact they had on the project.
ICOs over the last few years have attracted many investors. Undoubtedly, currently, ICO is the rockstar of the investment world. The concept is extremely seductive and has garnered the attention of investors, big or small. The idea that anyone anywhere can get the financial backing they need in an unregulated manner is a welcome idea for all. However, for both the investor and developer community it is important to remain alert as it is an evolving field and platforms like ICOUP will try to help both these communities through the various safety mechanisms they will offer.
Bitcoin Toro, a plaform that provides live trends, news and knowledge base on Bitcoin and Altcoins
Bitcoin has remained a buzzword since the advent of this digital currency and chances are that the sheen isn’t going to get away soon. However, crypto-currency as a concept and the trends that go with it can be a bit hard to follow given the lack of expertise in the subject.
Founded by Isaac Arnault, Phd, Bitcoin Toro is a new crypto website that helps people interested in Bitcoin and Altcoins get live trends in a daily, hourly and weekly basis. It also provides knowledge base to get familiar with the concept behind Bitcoin and the Blockchain. Resources are listed according to Beginners, Intermediate and Advance levels. For example, the website wonderfully displays the vocabulary around digital currency and explains the esoteric words surrounding digital currency in a very lucid manner.
Terms like Addresses, Agreement ledgers, Altcoin and Attestation Ledgers which are very specific to the Bitcoin technology are explained in a very crisp manner so that even a beginner can understand them without any expert guidance. Moreover, Bitcoin Toro has a section specifically designated for the purpose of bringing sorted news items related to Bitcoin so that Bitcoin enthusiasts do not have to hunt for Bitcoin related news.
According to Steve Chiavarone, a portfolio manager at Federated Investors, a US-based investment firm, blockchain technology will drive the fourth industrial revolution. Big banks like JPMorgan, Goldman Sachs, and Bank of America are already investing heavily in this sector(Bitcoin) which has total market capitalization (market cap) over $100 billion(January 2018).
According to experts, Bitcoin and Blockchain technology is expected to benefit many industries. Time is ripe for various organizations, private or state managed to invest in understanding and assimilating the latest financial revolution in the world of digitization. Bitcoin Toro as a platform which provides live trends, news and knowledge base on the subject can definitely be a big help to Bitcoin enthusiasts.
Feel free to follow BTCtoro on Twitter @BTCtoro.
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