Bitcoin continued its unabated rally on the third day of 2021. The most popular cryptocurrency surged past $34,000 on Sunday, the day of Bitcoin Network's 12-year anniversary. The development came within 24 hours of Bitcoin crossing the $30,000 milestone.

With yet another above $1,000 surge, Bitcoin's value has increased around $5,000 in the within the first three days of 2021, bringing its year-to-date returns to 12 per cent, reported Coindesk.

On Saturday, Bitcoin had crossed the $30,000 mark for the first time. During early trade on Sunday, the digital currency reached an all-time high of $34,544.94. It later gave up some gains to hover around $33,000. At the time of writing this report, Bitcoin was trading at $33,900.50, up 10.59 per cent.

Bitcoin's continuous surge during the past three days comes in the backdrop of a historic year when the digital currency gave more than 300 per cent returns, surpassing even safe-haven investment avenues like gold and silver.

Last year, Bitcoin had fallen 25 per cent in March amid the coronavirus crisis. It managed to bounce back, breaching the $20,000 mark for the first time at the end of November. The cryptocurrency then continued to surge, rising 50 per cent in December alone. By the end of December 31, Bitcoin had risen $10,000.

The main reason behind the rise of Bitcoin may be bulk buying by big US investors. They expect to make quick gains amid some positive developments around the cryptocurrency, including speculations that it could become a mainstream payment method.

A major jump in Bitcoin price - from $5,000 to $25,000 - was seen after online payment major PayPal announced in March that it'll enable its account holders to use Bitcoin. This marks a colossal 400 per cent increase in the past eight months. ZebPay, one of India's largest cryptocurrency exchanges, has predicted that Bitcoin's value could hit over $135,000 by 2030.

As Bitcoin grows in popularity, Indian government is planning to impose 18 per cent GST on its transactions. The Central Economic Intelligence Bureau (CEIB), an arm of Finance Ministry, has put forward a proposal to impose 18 per cent GST, saying it could potentially gain Rs 7,200 crore annually on bitcoin trading. The CEIB came to the conclusion based on a study on levying GST on cryptocurrencies.

ALSO READ: Bitcoin surpasses $30,000 as rally continues in 2021

ALSO READ: Centre may impose 18% GST on bitcoin trading

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Bitcoin crosses $34,000 first time in 12 years, rises $5,000 in 3 days - Business Today

Kenny Malone and Alice Wilder

Kenny Malone and Alice Wilder

Note: This episode originally ran in 2018.

Plenty of people will tell you they're getting rich off of bitcoin. They could be right. But there's another group of bitcoin owners that aren't so ecstatic. Because they might be rich, too, but they lost the passkey that would let them get at their digital fortune. In the decentralized anti-governmental world of bitcoin, you can't file a claim for damaged or lost currency. You've either got the key, or you don't.

Syl Turner is in that second, less glamorous group. When he got around one-and-a-half bitcoins about a decade ago, they were nearly worthless. So worthless he bunked the hard drive that held the key somewhere and now he can't remember where.

We join Syl on a digital treasure hunt, as he ventures into his attic looking for what could be the key to his bitcoin wallet, and tens of thousands of dollars. Then Kimberly Grauer and Jonathan Levin of Chainalysis help us figure out how much bitcoin has been lost and why it's so difficult to track down, and try to figure out if there's any way to find Syl's vanished riches.

Music: "Wild Baby Rock," "Interstate 65," and "Optimist."

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Subscribe to our show on Apple Podcasts, Pocket Casts and NPR One.

It's anyone's guess what 2021 will hold for the economy, so stay informed by subscribing to our Newsletter.

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Billions in lost Bitcoin: the buried treasure that people can never get back : Planet Money - NPR

Investors ended one of Wall Streets wildest years on record by piling into everything from bitcoin to emerging markets, raising expectations that a powerful economic comeback will fuel even more gains.

The vast climb known as the everything rally accelerated late in the year, sending the S&P 500 to its 33rd record of 2020 last week. Following an early-year collapse, the broad U.S. equity gauge, global stocks and an index of raw materials each rose at least 35% from the end of March through the end of the year, only the third time in figures going back five decades that all of those investments have climbed so much in such a short time, according to Dow Jones Market Data. Both of the previous nine-month periods were in 2009 exiting the financial crisis.

The S&P 500 ended the year up 68% from its March lows, after losing more than one-third of its value in about a month. Government bond yields, which fall as prices rise, remain near all-time lows. Meanwhile, corporate bond yields also dropped after early-year turmoil. That means many bond investors ended the year with gains. And U.S. crude-oil prices are back near $50 a barrel after briefly dropping below $0 for the first time ever in April.

After the eye-popping rise during a global pandemic highlighted confidence that central banks and governments would prop up the world economy, many investors now expect the delivery of vaccines to buoy markets.

Gauges of sentiment from organizations including the American Association of Individual Investors show bearishness at multiyear lows. Meanwhile, tens of billions of dollars have recently plowed into exchange-traded and mutual funds that track stocks. Both of those trends have preceded past pullbacks, signaling excessive optimism to some cautious investors. Some are drawing parallels to the outsize gains late in 2017 and early 2018, before trade tensions and higher interest rates roiled markets.

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From Stocks to Bitcoin, Investors Bet the Everything Rally Will Continue - The Wall Street Journal

Bitcoin got the new year off to a scorching start as investors continued to pile on bets that the digital currencys price will keep rising.

The price of bitcoin rose as much as 19% over the weekend, trading as high as $34,452 on Sunday, according to CoinDesk. It finished 2020 at $28,966, more than quadrupling on the year.

Bitcoin has been on an extended rally since early September, part of the everything rally that has fueled gains in stocks, emerging markets and other assets.

In many respects, what has happened in the first few days of 2021 resembled a stock market short squeeze, said AvaTrade analyst Naeem Aslam. He was referring to the cascade of buying that can happen when investors respond to a price jump by buying back stock they have sold in an effort to keep their losses from mounting.

It wasnt just bitcoin that took a wild ride. The price of ether, the second-largest cryptocurrency, rose as much as 35% over the three-day weekend, trading above $1,000 for the first time since early 2018. Ether eased by 1% on Monday, closing at $998.

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Bitcoin Surges Into 2021, Rose Nearly 20% Over Weekend - The Wall Street Journal

The rally in Bitcoin and other cryptocurrencies hasnt run out of the steam despite the 500% surge in 2020, says Charles Edwards, founder, Capriole Investment a digital asset management company specializing in cryptocurrencies such as Bitcoin. In an interview with ET, Edwards says the reduction in supply of Bitcoin along with high inflation rates could auger well for digital currencies.

What is your 2021 outlook for Bitcoin? Any price target or estimate as to how the asset will perform in the year?2021 will is a special year in the Bitcoin cycle. A number of factors are aligning for Bitcoin right now:

I go into 2021 with great confidence the next 12 months will be no different.

I expect to see Bitcoin reach prices in the region of $100K-200K in 2021 and would be shocked if it doesnt hit at least $50K. Prices as high as $300K plus are definitely viable.

The return potential for Bitcoin in 2021 is incredible.

From there, each person will need to determine the appropriate amount and way to invest in Bitcoin. A time tested and successful approach to reducing risk and getting great returns over the long term is to dollar cost average allocate a percentage of your income each month to automatically buy Bitcoin. This approach reduces the impact of large downdraws and has historically achieved great returns.

What are the key challenges you see for Cryptocurrencies in the next one-two years?There are only two challenges I consider for Bitcoin over the coming years:

Sooner or later governments will realize that Bitcoin is not a gimmick. It is a fundamental challenger to all fiat currencies. I expect we will receive announcements over the coming years of Bitcoin replacing a number of small country currencies. As Bitcoin grows, into the multi-trillion-dollar market capitalization in 2021 and beyond, this perceived threat will grow clearer to larger countries. The only way an individual country can effectively ban Bitcoin here is to outlaw or excessively regulate Bitcoin to the point that it becomes unusable.

Hacking of the Bitcoin blockchain is also broadly a risk. Again this risk is small today.

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Bitcoin prices may skyrocket to $2 lakh this year: Analyst - Economic Times

Bitcoin could be headed for a breather in the new year.

The red-hot cryptocurrency continued its longest monthly win streak in more than a year on Monday after grazing a new all-time above the $28,000 mark on Sunday.

Based on the charts, that run might be put on pause come 2021, Mark Newton, founder and president of Newton Advisors, told CNBC's "Trading Nation" on Monday.

"It is still quite bullish on an intermediate-term basis given that it just broke out to new all-time highs," Newton said. "I think we have a ways to go. Near term, my cycle composite shows us peaking out in early January."

Bitcoin's weekly chart and relative strength index reflect rising interest in the world's largest digital currency, mostly from institutional investors, Newton said.

Google searches for bitcoin are up some 750% year over year, but still "nowhere near" their highs from 2017, the chart analyst said.

"[With] SPACs right now, you can make money at 10, 15, 20% a day," he said. "I just don't think that investors have quite the appetite for crypto while the institutions are certainly very much heading in that direction."

Newton's other chart which uses three different bitcoin cycles, the main one being 273 days, to track changes in the cryptocurrency's path hints at an upcoming turn in bitcoin's direction.

"All those years where we had a stellar Q4 we reversed course in trend back in late December, early January, and actually went lower," he said. "So, I think there will be some opportunity [for] investors to be able to buy dips in crypto and bitcoin particularly."

Newton, who is long bitcoin, ethereum, litecoin and several other digital currencies, said he would look to sell out of his positions "in the next one or two weeks."

"I think there will be some opportunity to buy dips into Q1 of next year," he said.

Boris Schlossberg, managing director of FX strategy at BK Asset Management, said the institutional interest in bitcoin "bodes well for the asset."

"Can it go to $50,000? Absolutely," he said in the same "Trading Nation" interview, cautioning that "if you are looking to trade or invest this asset, you have to have the mentality that it's going to have a huge amount of volatility."

"As to the ultimate valuation, it's impossible to say, but one interesting measure: If you look at the tulip mania, at the peak of tulip mania, one tulip was worth basically about one house," Schlossberg said. "If you do use that kind of valuation, then it still has a long way to go because its ultimate terminal valuation could be $150,000, $200,000 before the whole move kind of exhausts itself. So, as many people have said, there's still quite a lot of potential, but there's certainly going to be massive volatility while we get there."

Disclosure: Newton is long bitcoin, ethereum, litecoin and several other cryptocurrencies along with closed-end trusts for bitcoin cash and ethereum.

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Chart points to bitcoin peaking out in early 2021, trader says - CNBC

An illustration of bitcoin on Euro banknotes.

Nicolas Economou | NurPhoto via Getty Images

Bitcoin on Wednesday jumped to a record $28,599.99, after the digital currency almost quadrupled in value this year amid heightened interest from bigger investors.

The world's most popular cryptocurrency was last up 2.3% at $28,012. It has surged by nearly half since breaking $20,000 for the first time on Dec. 16.

Bitcoin has increasingly seen demand from larger U.S. investors in particular, attracted by its perceived inflation-hedging qualities and potential for quick gains, as well as expectations it would become a mainstream payments method.

Investors said limited supply of bitcoin - produced by so-called "mining" computers that validate blocks of transactions by competing to solve mathematical puzzles - has helped power upward moves over recent days.

Many recent entrants to the market are holding onto positions, they said.

"The supply side to the bitcoin market will remain tight," said Jacob Skaaning of crypto hedge fund ARK36.

The latest gains took bitcoin's market capitalization past $518 billion, according to industry website CoinMarketCap.

Other major cryptocurrencies, which tend to move in tandem with bitcoin, were flat. Ethereum, the second biggest, was down 0.4%, on track for a 2020 gain of around 465%.

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Bitcoin jumps to record $28,600 as 2020 rally reaches new heights - CNBC

Sitting on a growing bitcoin fortune? Consider giving away some of it to charity.

As 2020 draws to a close, the cryptocurrency has seen a massive surge in appreciation. The value of a single unit of bitcoin is now hovering around $28,000.

Though longtime holders of the virtual currency are rejoicing, they run the risk of winding up overweight in bitcoin. That is, the massive run-up in values could suddenly result in investors having more exposure toward bitcoin and its risks than they'd like.

Similarly, while cashing out of your holdings might seem attractive, it could come with a hefty capital gains tax bill on the appreciation.

More from Advisor Insight:How financial advisors say to use your $600 stimulus checkHere's who's likely eligible for a second stimulus checkCovid relief bill adds PPP tax breaks the Treasury opposed

That's where charitable giving comes into play.

"We believe in asset diversification, and because the price of bitcoin rose significantly, investors could be overallocated based on their targets for their portfolio," said Stefan Podvojsky, senior vice president of Fidelity Charitable.

"A donor advised fund provides a great outlet to remove that overweight and support the philanthropy that is important to the donor," he said.

Indeed, investors in bitcoin have been able to donate their holdings to donor-advised funds via Fidelity Charitable since 2015.

Benefactors have given close to $26 million in bitcoin to Fidelity Charitable's donor-advised funds year to date as of Dec. 29.

Donor-advised funds are accounts generous investors can fund with a variety of assets and use for making grants to their favorite charitable causes.

Nevertheless, giving away bitcoin and other crypto assets can come with a unique set of hurdles, including price volatility and additional tax reporting on the part of the investor.

Mykola Tys/ | LightRocket | Getty Images

Though you can convert cryptocurrency into dollars, the IRS regards it as property for income tax purposes.

This means you're subject to capital gains taxes if you decide to sell or exchange your virtual currency holdings.

The magnitude of the tax hit will depend on how long you've held your bitcoin if it's at least a year, you may qualify for the long-term capital gains rate of 0%, 15% or 20% and your cost basis in the asset.

Investors who snapped up bitcoin when it was especially cheap consider that one bitcoin was worth $7,220 Dec. 30, 2019 may face the harshest tax consequences when they sell or exchange it.

2020 income tax brackets

IRS

That's because the tax would be based on the difference between their cost basis and today's market price.

Meanwhile, donating an asset you've held for at least a year will allow you to claim a tax deduction based on its fair market value.

"Donating it could be incredibly tax-conducive," said Bryan Clontz, founder and president of Charitable Solutions, a firm that specializes in receiving and liquidating noncash assets for charities.

"It's the holy grail of charitable planning: a low basis, highly appreciated asset," he said.

We believe in asset diversification, and because the price of bitcoin rose significantly, investors could be overallocated based on their targets for their portfolio.

Stefan Podvojsky

senior vice president of Fidelity Charitable

Another reason why donating crypto via a donor-advised fund might make sense: Your favorite charity may be skittish about accepting direct contributions of virtual currency due to data security issues.

"The big issue for charities is the volatility and the risk that if you set up your own wallet, wallets can be hacked," said Greg Sharkey, senior philanthropy advisor at The Nature Conservancy, a charity in Arlington, Virginia.

The organization teamed up with BitPay, a bitcoin payment service provider, to accept donations and convert them to cash.

"If the donor calls this morning and wants to make gifts and does it through BitPay, the money would be at the charity's account tomorrow," said Sharkey.

What makes cryptocurrency so complex is the fact that not only are these assets subject to price volatility, but they also trade constantly.

Generally, the deduction a donor can claim is based on the price of the asset on the date they relinquish control to the donor-advised fund.

Fidelity Charitable only trades bitcoin during New York Stock Exchange market hours, or 9:30 a.m. to 4 p.m. Eastern, on weekdays, said Podvojsky.

"Depending on when during the day you might transfer the bitcoin to us, you would be subject to the price in the market and the liquidity we would be able to obtain at that point in time," he said.

Investors hoping to claim a tax deduction for their donation have extra legwork.

Because they're giving away a special asset, they must obtain a qualified appraisal from a third party and file Form 8283 with the IRS.

"Roughly $500 to $600 per appraisal would be the market for this space, and you'd have to have a larger donation to make it worth it," said Clontz. "There's a cost to the donor, and it's not just five minutes of work."

Giving away those appreciated bitcoin holdings and collecting a tax write-off isn't just a one-person effort. Here are a few considerations:

Correction: New York Stock Exchange market hours are 9:30 a.m. to 4 p.m. Eastern on weekdays. An earlier version misstated the times.

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With bitcoin ticking over $28,000, now might be a good time to give some of it to charity - CNBC

A worker uses a handheld cleaning tool to clean application-specific integrated circuit (ASIC) ... [+] devices and power units mounted in racks inside the BitRiver Rus LLC cryptocurrency mining farm in Bratsk, Russia, on Friday, Nov. 8, 2019. Bitriver, the largest data center in the former Soviet Union, was opened just a year ago, but has already won clients from all over the world, including the U.S., Japan and China. Most of them mine bitcoins. Photographer: Andrey Rudakov/Bloomberg

Decentralization means different things for different people. It can also be applied to a variety of different variables, from the technological to the cultural. How much of bitcoins cultural aesthetic is what keeps block size (within the network) or the number of bitcoins fixed? How much of decentralization is the technical balance between miners, nodes, and other stakeholders in the network that accords each different powers and responsibilities?

An increasingly common argument among those criticizing the decentralization of proof-of-work systems is the centralization brought by lower hardware and electricity costs and the high degree of mining hash rate concentrated in Chinese mining pools. This has, for example, been a long-standing thread that has been pushed by Ripple CEO Brad Garlinghouse, with the Ripple team also making allegations that both ethereum (in its current proof-of-work consensus algorithm) and bitcoin are controlled by China as a result of the mining pool concentration.

The first thing to understand about this argument is that mining pools command loyalty not based on geographic traits or even political ones, but rather, reward types, fees, and how the pool deals with bitcoin transaction fees.

Mining pools might have a geographic base, but miners that pledge their hardware and their hash rate might not and can switch their loyalty depending on a host of factors. Its important then to look at the hash rate of a mining pool not as one monolithic bloc that can be controlled and manipulated at will, but rather as a marketplace or as an aggregator that commands a fickle amount of loyalty. At any given time, if the rewards and technical conditions of mining pools change, there can be a shift towards mining pools based in Europe or North America or anywhere else in the world.

Mining pools based in China are also running contrary to state policy. The Peoples Republic of China has a skeptical view towards bitcoin and other cryptocurrencies. This included concrete policy such as the central government asking local governments to step out of bitcoin mining.

Everything from energy usage to dissident activity has been cited as reasons to cut down power supplies to bitcoin miners. Several bitcoin miners have actually left the country as a result and looked to seek refuge in countries like Canada. In a sense, this is a more philosophical and general argument, but it speaks to how peoples are not tied exclusively to their states despite what those states would lead you to believe.

Chinese bitcoin mining pools and bitcoin miners are acting as a sort of dissent within the Chinese political system. While some local governments may support them, the central government in China has strongly embraced blockchain and its own central bank digital currency (DCEP) while shunning cryptocurrencies. Miners themselves are highly nomadic within China, with many shifting from different regions depending on the weather and its implications for electricity rates.

While their incentives may not be bereft of financial interest (and in fact, are probably principally motivated by money), to blame the mining pools for being based in a certain nation and being controlled or blindly loyal to a government flies in the face of the facts on the ground. Mining pools are more loyal to whichever incentives help them make more value. Miners in turn are loyal to whichever pool supports their stance on bitcoin and their best rewards.

Bitcoin miners derive value from bitcoin and other proof-of-work cryptocurrencies if the health of these networks would decline, then the fixed investments they would have made in ASIC mining equipment would be worthless. Their interests are aligned to the bitcoin network and this plays a larger role in their decisions from what to do during a fork to where they put their hash rate.

Miners are also not the only institutions that matter in the balance of proof-of-work blockchains. Nodes are run around the world. The coders that build up the framework of cryptocurrencies are distributed around the world, with US-based institutions such as cryptocurrency exchanges and non-for-profits like the Human Rights Foundation providing funding.

Theres a careful checks and balance in any proof-of-work built from a cultural aesthetic towards decentralization that involves different stakeholders no one group can shape the complete destiny of proof-of-work based cryptocurrencies like bitcoin.

Yet, the idea of geographical centralization is a concern, albeit one that has been exaggerated by those who want to paint bitcoin and ethereum in a certain light. It is factually correct to say that Chinese bitcoin mining pools control a large amount of the hash rate that powers bitcoin, for example. A study in 2019 estimated that there was about 65% of the hash rate within China itself. This was largely due to cheap hydroelectricity (especially in areas such as Sichuan), and close connections between hardware manufacturers based in China and mining pools/miners with the best claim to established relationships.

Yet with the establishment of stable capital markets around bitcoin mining (with certain companies having gone public), bitcoin mining has the potential to be more globally distributed and decentralized from geographical risk. As hardware supply chains and global power distribution come into question with warnings of decoupling economies, its entirely possible that this shift will help auger a more distributed bitcoin and cryptocurrency mining network, helping allay the threat of centralized geographies.

In a debate mirrored from geopolitics, the idea of Made in China vs. elsewhere has come to rest with globally distributed proof-of-work networks. Yet the analogues are not perfect because miners tend to be more loyal to the network rather than the state, more loyal to electricity prices and fees than anything else.

An effort to solve the geographic centralization problem in mining hardware is to be applauded and is well under way and can be helped with stable regulations, capital markets, and lower electricity prices as well as changes in hardware supply chains from anywhere in the world.

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The Chinese Mining Centralization Of Bitcoin And Ethereum - Forbes

Bitcoin has surged past $29,000 to reach yet another record level on the last day of 2020, showing no signs of slowing down its torrid December rally. Bitcoin has almost quadrupled in value this year amid the global coronavirus pandemic. Will this rally continue? Experts see great going for the largest cryptocurrency in the world in future mainly due to the recent institutional adoption. "Bitcoin would cross 50K USD, There is a lot of institutional adoption happening over the past few months. The first trigger for that was Paul Tudor Jones, who was one of the legendary traders out there and post that the firms like Guggenheim, Fidelity, Blackrock, stated that Bitcoin has the potential to replace gold as a store of value," says Gaurav Dahake, CEO, Bitbns.

Crypto market experts say as the institutional investment in bitcoin increase, the currency will see stronger support during price dips." Bitcoin is different from established markets like stocks or commodities because a lot of new buyers are still coming in. As more companies and individuals shift savings into bitcoin, we may see stronger support during price dips. While a correction is inevitable, it may not be that deep. No one can predict the future, but Bitcoin could easily go to 30 lakh or more in 2021," says Rahul Pagidipati, CEO, ZebPay.

Also Read | The march of 2020 in 10 key long reads

At present, in INR terms a bitcoin is priced over 21 lakh .

However, wealth managers caution retail investors and ask them to strictly avoid investing in bitcoin. They believe the prices have been highly volatile, completely driven by speculative forces.

"The only thing real about bitcoins is that they are in limited quantities and are mined after a tech driven process. But beyond that, there is no underlying basis on what price should they be traded. Retail investors should definitely avoid such high risk bets as if mistimed they can lose substantial parts of their capital," says Raghvendra Nath, Managing Director, Ladderup Wealth Management.

While there are no clear fundamentals driving the price movement of bitcoin, regulation is another limitation, say the independent financial advisors.

"There are no clear fundamentals that drive the price movements of bitcoin. Demand and Supply drive the price. That's all. There is no underlying asset for bitcoin. So the valuation is fictitious. As there is no 100% regulation and acceptance, there is a lot of grey area in bitcoin investments," says Ramalingam K, Chief Financial Planner, holisticinvestment.in.

While the current trend in the price movement might be luring for investors, IFAs advise to avoid getting greedy and invest in real assets to avoid big losses in the short term.

"It is always advisable to invest in real assets where the volatility is controlled even though the returns may be more reasonable. At least the power of compounding can ensure that the retail investors' wealth grows over long term," says Nath.

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Bitcoin price soars four times in 2020. Key things to know - Mint