A Bitcoin ATM is seen at a subway station in Brooklyn Heights in New York City on June 13. Bitcoin and other cryptocurrencies have plunged in value in recent days. Michael M. Santiago/Getty Images hide caption

A Bitcoin ATM is seen at a subway station in Brooklyn Heights in New York City on June 13. Bitcoin and other cryptocurrencies have plunged in value in recent days.

The cryptocurrency world is in chaos.

Just months ago, crypto companies were advertising heavily during the Super Bowl after virtual currencies enjoyed a dizzying rally in 2021.

Today, Bitcoin and other cryptos are plunging, and companies such as Coinbase, which runs the largest crypto exchange in the U.S, are announcing layoffs.

"The crypto house is on fire, and everyone is just rushing to the exits because there is a complete loss of confidence in the space," says Ed Moya, a senior markets strategist at financial firm Oanda.

Here's what's going on.

Because they are being hit by the same factors impacting stocks and other assets.

Consumer prices are surging at the fastest annual pace in over four decades, and the Federal Reserve is hiking interest rates aggressively to bring down inflation.

On Thursday, the Fed raised rates by three-quarters of a percentage point and indicated it could raise them again by the same amount at its next meeting in July if needed to cool down prices.

Higher interest rates make borrowing costs more expensive for people and companies, and that's raising concerns about an economic recession.

Stocks have fallen dramatically from records set in January, with the broad S&P 500 index entering a bear market this week (when an index falls 20% or more from its recent high).

Cryptocurrencies have hardly been immune. Since Bitcoin hit an all-time high in November, the value of the world's most popular digital currency has fallen by about 70%, and its rivals are also suffering. Ether is down by around 70% this year, and so is Dogecoin.

Bitcoin's backers have always claimed the digital currency would be an "inflation hedge," but in fact, it hasn't behaved that way.

As shares of tech companies have plummeted, so has Bitcoin's value.

"What this episode, this crash in crypto prices, shows is that cryptocurrencies are by and large speculative financial assets that are subject to macroeconomic forces, such as changes in interest rates," says Eswar Prasad, an economics professor at Cornell University.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on Thursday. Fears about the Fed's aggressive actions against inflation have raised concerns about the impact on the economy. Spencer Platt/Getty Images hide caption

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on Thursday. Fears about the Fed's aggressive actions against inflation have raised concerns about the impact on the economy.

The sharp falls in cryptocurrencies are driving some companies into problems.

Celsius, which takes cryptocurrency deposits from individuals and lends them out, stopped withdrawals because it's facing financial trouble. Binance, a cryptocurrency exchange, halted Bitcoin withdrawals for several hours on Monday.

The problems at Celsius are undermining confidence in the broader cryptocurrency space just weeks after the collapse of a stablecoin called TerraUSD.

Crypto companies are responding by re-evaluating their plans for the future.

Coinbase, a cryptocurrency exchange platform, reduced its staff by almost a fifth.

In a memo to staff, the company's CEO said Coinbase "grew too quickly."

"We appear to be entering a recession," Brian Armstrong wrote.

Some backers of cryptocurrencies still believe a "crypto winter" could lead to a "crypto spring." In the past, deep downturns have led to strong rebounds.

But according to Moya, the analyst at Oanda, the economic landscape is different now, and so is crypto's outlook.

In fact, with the Fed continuing to raise interest rates aggressively and with inflation still high, there is likely to be more pain ahead across all markets, including cryptocurrencies.

Fed Chair Jerome Powell speaks during a news conference at the Federal Reserve Building in Washington, D.C., on Wednesday. The central bank raised interest rates by three-quarters of a percentage point, its biggest hike since 1994. Olivier Douliery/AFP via Getty Images hide caption

Fed Chair Jerome Powell speaks during a news conference at the Federal Reserve Building in Washington, D.C., on Wednesday. The central bank raised interest rates by three-quarters of a percentage point, its biggest hike since 1994.

It's been a rude awakening for the millions of people who bought cryptocurrencies, especially if they got into the craze last year.

Prasad says 2021 was "the height of crypto mania."

The total value of all the digital currencies in the world swelled to $3 trillion. Crypto companies inked sponsorship deals with professional sports teams, and Coinbase, Crypto.com, eToro, and FTX shelled out millions of dollars to buy ads during the Super Bowl.

Crypto.com hired actor Matt Damon as a spokesman, and an FTX ad featured the curmudgeonly comedian Larry David.

The message from these companies was that crypto represents the future of finance and it was best not to miss out.

"The technological razzle-dazzle of cryptocurrency swept in a lot of retail investors who didn't realize the sort of risks they were taking on," Prasad says.

Today, the total value of crypto market has been shaved to about $1 trillion. And if you bought Bitcoin on Feb. 14, the day after that Super Bowl ad bonanza, it is now worth about half of what you paid for it.

The exterior of Crypto.com Arena is seen in Los Angeles on Jan. 26. Many cryptocurrency companies hired celebrities to pitch their products and signed sponsorship deals. Rich Fury/Getty Images hide caption

The exterior of Crypto.com Arena is seen in Los Angeles on Jan. 26. Many cryptocurrency companies hired celebrities to pitch their products and signed sponsorship deals.

The increase in amateur investors, combined with the growing complexity of some of the cryptocurrency products, are worrying regulators.

Crypto markets are still fairly new, and there's a lack of clarity even about the most basic things, like who is in charge of overseeing the space.

Right now, both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) claim oversight of parts of the crypto market.

"If there is no guidance whatsoever, people will be taken advantage of, and we want to prevent that" says Cam Harvey, a finance professor at Duke University. "Right now, we have basically nothing."

The SEC is stepping up enforcement actions against crypto companies and considering new rules. Meanwhile, in an executive order, President Biden asked government agencies to make policy recommendations.

And in Congress, Sen. Cynthia Lummis (R-WY) has teamed up with Sen. Kirsten Gillibrand (D-NY), on the first comprehensive crypto legislation. The bill would give more regulatory authority to the Commodity Futures Trading Commission.

Still, for now, many analysts don't think the broader financial system is at risk. The total value of the cryptocurrency market is still less than the total market value of a big company like Apple.

But this recent downturn has raised some serious concerns.

Continued here:
Why cryptocurrencies have gone from the next hot thing to a full-on meltdown - NPR

Even by cryptos often-surreal standards, Tether has a peculiar history. The company was founded in 2014 by Brock Pierce, a cryptocurrency evangelist who, as a child actor, starred in the Mighty Ducks movies. He and his partner, Reeve Collins, later handed control of the firm to a former plastic surgeon named Giancarlo Devasini, who has stored some of Tethers assets in a bank in the Bahamas run by one of the creators of the Inspector Gadget cartoon.

Tether has grown rapidly. Last year, it issued roughly 50 billion stablecoins, more than tripling the worldwide supply. If we have to redeem till the last cent, we can do it, Mr. Ardoino said in the interview.

The company is operated by about 50 employees in Europe, Asia and Latin America. Its chief executive, JL van der Velde, is a Dutch businessman whose LinkedIn profile suggests he is based in Hong Kong; the company declined to confirm his location. He and Mr. Devasini, the chief operating officer, rarely speak publicly. Tethers public face is Mr. Ardoino, who describes his colleagues as normal people amazed by the companys growth.

They didnt think initially that it would maybe go so big, Mr. Ardoino said. They werent prepared to be public persons. Theres nothing bad about it.

At times, Tether has insisted that its stablecoins were fully backed by U.S. dollars. But last year, the New York attorney general, Letitia James, called those claims a lie.

A few years earlier, a cryptocurrency exchange affiliated with Tether had lost $850 million in a business deal gone sour. To cover the losses, the exchange, Bitfinex, took loans from Tethers reserves, leaving the stablecoin partly unbacked, according to Ms. Jamess investigation.

Originally posted here:
Tether: The Coin That Could Wreck Crypto - The New York Times

It seemed like there was nowhere to hide in the crypto market this week.

Forced selling and liquidity troubles have resulted in one of the worst quarterly price performances of the crypto space, Lucas Outumuro, head of research at IntoTheBlock, wrote Friday in his newsletter.

Overall, this week concludes a historic crash for crypto. We have witnessed record-level activity in multiple metrics as mayhem ensues throughout the market, Outumuro wrote. While it may still be too early to call the bottom, there are some evident similarities with previous bear markets.

Bitcoin, the largest cryptocurrency by market value, fell below $20,000 on Saturday for the first time since December 2020. Ether, the second-largest cryptocurrency, dropped below $1,000, a level not seen since January 2021. The overall cryptocurrency market cap is below $1 trillion, from an all-time high north of $3 trillion.

As they anxiously watch on-chain movement, investors are wondering whats ahead. Industry players are nearly certain that many projects will disappear, while adding that this reveals issues with centralization and leverage issues, but to some of them, theres a silver lining.

This is healthy, Corey Miller, growth lead at cryptocurrency exchange dYdX, told Fortune.

The domino effect within the cryptocurrency market will likely continue, at least in the short term, industry players predict. More pain is ahead for investors and projects exposed to excessive leverage or other operational issues. It seems to all trace back to Terra.

Though macroeconomic factors, including higher than expected inflation numbers in the U.S., set the stage for headwinds to come, the Terra ecosystem collapsewith failed algorithmic stablecoin TerraUSD (UST) and its original cryptocurrency Luna (LUNC) becoming nearly worthlesswas an undeniable big bang in the space.

At its height, UST and LUNC were worth $60 billion, and after they collapsed to about zero in May, the impact on connected institutions became apparent this week. One of the cryptocurrency markets biggest lending platforms, Celsius Network, paused its withdrawals on Sunday, sparking rumors of bankruptcy. Reports concerning the state of multibillion-dollar fund Three Arrows Capital followed soon after, fueling further fears of contagion and systemic risk. As days go on, more and more firms, companies, and platforms alike are coming forward with updates on their financial health or lack thereof.

Story continues

From big players to everyday investors, the impact is being felt far and wide. Even major cryptocurrency-related companies, like Coinbase, Gemini, BlockFi and Crypto.com, recently announced layoffs and headcount reductionsseveral of them having just spent millions on Super Bowl ads as cryptos market cap was near its peak.

Things are really shaky right now and its going to take a while for things to stabilize. People are watching and waiting to see if something else will topple, Michael Safai, managing partner at cryptocurrency trading firm Dexterity Capital, told Fortune. To be a trusted ecosystem, investors have to feel confident that when they put money in, theyre able to get it out. This is definitely setting back a lot of that trust.

Currently, were in a bit of a hangover, Jason Urban, co-head of Galaxy Digital Trading, told Fortune. In the near term, continued volatility is expected.

I think for the next three to six weeks, people are going to be figuring out what exactly has happened, and who is well healed and who is not. Thats the first step, Urban said. Subsequently, there are going to be projects that don't make it, and there are going to be projects that become wildly successful, he added.

What we are seeing now is excessive risk being wiped out from the ecosystem, Miller, growth lead at cryptocurrency exchange dYdX, told Fortune, which he says is a healthy development. While it does reveal many interconnected links within crypto, these wipeouts support the idea that crypto as a whole remains resilient to existential risks.

Coming out of this crash, major players in crypto say changes are all but certain in the space. There might be a hesitancy towards certain projects, depending on their code and pitch, or with platforms offering extremely high yield by over-leveraging. Regulation may also soon follow, but many in the space remain bullish on future innovation.

Urban compared the current state of the crypto market to the bursting of the internet bubble in 2000. Looking ahead, he predicts that alongside the distress, innovation will come out of this time period. Many others echoed his remarks.

In stocks and crypto, you will see companies that were sustained by cheap, easy moneybut didnt have valid business prospectswill disappear, Mark Cuban, avid cryptocurrency investor, told Fortune. Like [Warren] Buffett says, When the tide goes out, you get to see who is swimming naked.

While this will be a very bad period for poorly built or not very useful projects, things will be much less bad for valuable ones, Sam Bankman-Fried, chief executive officer of cryptocurrency exchange FTX, also told Fortune. I don't think we'll see sectors die out but we might see some rotate to more sophisticated versions.

In the long term, Safai sees less excessive yield and leverage.

Theres going to be a lot of shaking up to be done, Safai said. [T]his era of being able to get exceptional yield for nothing is over. This is when a lot of leverage is going to get pulled out of the system, and this will ultimately make the crypto ecosystem safer.

This downturn has revealed the crypto-related projects and funds that were utilizing more risk than what was prudent, Miller said. Similar to other downturns, many players become forced sellers and are subsequently washed out.

In response to the carnage this time around, government regulators have already signaled interest in furthering the development of a regulatory framework for the cryptocurrency market. Those within the space have mixed feelings about government intervention, but it might be happening whether they like it or not.

We believe that regulation is a positive development in our industry as it will force players to disclose more details on their activities so that clients can better assess the potential risks associated and how they vary across different companies, Adam Reeds, co-founder and chief executive officer at cryptocurrency lending platform Ledn, told Fortune.

While recent events, like the collapse of UST and LUNC, has posed a threat to crypto market sentiment and is a catalyst for regulation, it will ultimately not stop the growth of innovation in Web3, Isla Perfito, chief executive officer of Sator, a blockchain-based entertainment platform, told Fortune.

Though some industry veterans see similarities between this downturn and previous crypto winters, some lessons specific to this crash will carry extra weight going forward.

The biggest thing to come out of this downturn will be a focus on fundamentals, says Tom Dunleavy, Messari senior research analyst.

In the past, [t]he new and most interesting projects got the capital, and grew to unbelievably large sizes for what they were actually accomplishing (or could really accomplish), Dunleavy told Fortune. The focus going forward will be on strong protocols, strong teams, and strong use cases.

He also predicts that this downturn will essentially end the wars between Ethereum (ETH) competitors. There is going to be BTC [or Bitcoin] and ETH, and then a long tail of projects fighting for the remaining 20% to 30% of crypto market cap."

Major takeaways from this crash will also shape the future of the space, industry players say.

Everyone is having to take a good hard look at their risk management right now, but exchanges seem to be pretty inoculated from this madness. With less capital at everyones fingertips, the question for traders will be how to more intelligently deploy capital and optimize activity in a world where leverage is limited, Safai said.

This will be important because a handful of trading firms make up a significant amount of market activity, and the market doesnt want to be without them, he said. Shops that navigated other lengthy crypto downturns will lean on that experience and probably come out far stronger, to the benefit of the industry.

This story was originally featured on Fortune.com

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The get-rich-quick days of crypto are over. Investors are losing their shirts, but industry players say this is healthy - Yahoo Finance

Cryptocurrency investment scammers on LinkedIn are a significant threat to user safety, FBI special agent Sean Ragan said Friday.

In an interview with CNBC, Ragan said he believes LinkedIn has a problem when it comes to investment scams.

This type of fraudulent activity is significant, Ragan said. There are many potential victims, and there are many past and current victims.

The Microsoft-owned social network claims to have 830 million members in more than 200 countries.

These scammers arent lazy either, so they might seem very convincing.

They are always thinking about different ways to victimize people, victimize companies, Ragan told the network. And they spend their time doing their homework, defining their goals and their strategies, and their tools and tactics that they use.

The FBI has seen an uptick in investment-related fraud, according to Regan. The Federal Trade Commission reported that U.S. cryptocurrency traders lost $575 million due to investment fraud from January 2021 until March 2022.

LinkedIn emphasizes business news and relationships, which may create a false sense of security against the backdrop of common romance and online scams. The CNBC report notes that fake profiles often claim to be associated with legitimate and successful companies, or to represent people with entrepreneurial spirit.

LinkedIns director of trust, privacy, and equity Oscar Rodriguez acknowledged the number of scammers increasing on its platform.

Over the last few months, weve seen a rise in fraudulent activity happening across the Internet, including here on LinkedIn, Rodriguez wrote in a blog post Thursday.

The company said it has a track record of proactively removing suspicious content and accounts it suspects may lead to fraud. In 2021, LinkedIn removed over 136 million instances of spam and scam content on its platform, according to a recent company transparency report. It also removed over 31.6 million fake accounts last year.

Rodriguez told CNBC that more proactive education on the risks of using LinkedIn is something hed like to see going forward.

LinkedIn does not currently offer profile verification for notable users, unlike Twitter and Instagram. But not even verification is foolproof: Twitter has also seen verified accounts abused by crypto and NFT scammers.

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FBI Warns of Cryptocurrency Scammers on LinkedIn - Decrypt

As the use of cryptocurrencyhas grown, the IRS has initiated an investigation into taxpayers who are seeking to hide their cryptocurrency income. Cryptocurrency adoption is at an all-time high, and regulators are keeping a close eye on the digital asset market.

Authorities are attempting to regulate digital assets and determine whether or not they can be taxed. The goal of Operation Hidden Treasure is to catch investors who arent disclosing their cryptocurrency income and arent reporting it.

The Internal Revenue Service (IRS) report was detailed in a press release issued by the Tax Law Offices of David W. Klasing on 16 June 2022. The Internal Revenue Service (IRS) has initiated an investigation into taxpayers who try to conceal their crypto revenue.

The IRS has developed a task force made of professionals in tracking various sorts of crypto income, as well as integrating the civil and criminal divisions of the IRS to combat crypto tax fraud, in order to accomplish the initiatives goals.

According to the press release, one of the most prevalent methods used by investors to avoid paying taxes is to conduct repeated transactions of less than $10,000. Other investors use shell firms to conceal the name of the companys owner. By concealing the investors name and party, he or she is able to engage in several activities.

Operation Hidden Treasure is also investigating cloaking blockchain technology, which allows some exchanges to provide trading services to users while keeping their identities hidden. The report further stated,

Whether the unreported income was intentional, or a mistake is difficult to prove and the larger the amount of unreported income the less likely the IRS will be to believe your noncompliance was non willful or unintentional.

The programme would also investigate and track undeclared cryptocurrency profits generated through anonymous transactions. The IRS is now keeping a close eye on cryptocurrencies because investors believe it can help them remain anonymous.

Read the rest here:
Cryptocurrency Tax Dodgers Beware Of Operation Hidden Treasure - TronWeekly

As the adage goes, You dont have to run faster than the bear to get away. You just have to run faster than the guy next to you. In the world of economics, this is called the greater fool theory, which posits that it doesnt matter if an asset is risky, has a massively inflated price, or is worthless. All that matters is that someone else is willing to buy it from you for more than you bought it. Think: Beanie Babies.

The greater fool theory is usually applied to a market bubble. This is where a product or asset sees a huge increase in value usually with a speed and in a manner that looks unsustainable. Market bubbles are caused by overly optimistic (or hopelessly nave) investors who sign up to unlikely projections about the future. Its about fools buying foolish products at foolish prices. But, where there are fools, theres business to be done. Here are just two examples of how the greater fool theory works in the real world.

Art. In 2021, a Mark Rothko piece, No.7, sold for $82.5 million. Im not denying Rothko is good at his job, and Im not saying modern art is talentless or bad (au contraire), but thats a lot of money for oil on canvas. Some people buy art because they love it, and some do it to launder money but a whole lot of people make a whole lot of money trading in art. The idea is that, however inflated or eye-wateringly expensive you or I might think a work of art is, all that matters is that someone else will buy it for more. The trick to art dealing is not so much finding good art, but finding fools willing to see it as good art (and buy it as such).

Real estate. Cheap credit, loose lending laws, and subprime mortgages set up the financial crash of 2007-08. But one of the pins that burst the bubble was when the market ran out of fools. In the years before the crash, there was a widespread belief that real estate values always increased, so bankers and speculators were selling their (dodgy) loans to other banks for a profit, who often sold them on again. When the assets started going bad, a few banks the last fools standing went bust, and the rest is history.

In a conversation with TechCrunch, Bill Gates said that NFTs (non-fungible tokens) and digital currencies were, 100 percent based on greater fool theory. Or, as Warren Buffett said in 2020, Cryptocurrencies basically have no value. You cant do anything with it except sell it to somebody else.

The point Gates, Buffett, and various economists make is that crypto offers no real-world value. Thus, cryptocurrency is simply a bubble in which people try to out-fool each other. Its nothing more than a money-making scheme to buy and sell higher. When people get wise to this fact, crypto is going to collapse. But, how fair an analysis is this of cryptocurrency?

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While it is true that there are few real life applications for cryptocurrency, it is far too early to say for certain if Bitcoin or other digital currencies are practically useless. Today, people use crypto to move money across borders and to settle large transactions. At least a few major retailers will accept Bitcoin as they would a fiat currency. Matt Hougan, writing for Forbes, compares Bitcoin with oil in the 1850s. Back then, oil was used only for lamps and machine lubrication. Of course, with combustion engines and technological advancements, oil became one of the most valuable commodities in the world. Perhaps something similar will happen with crypto.

And when you think about it, the greater fool theory is how many markets work. Prices and value are not always determined by practical factors like utility. They are set by supply and demand. If people think a Rothko is worth $80 million, then thats how much its worth. If people are willing to pay a price, then that price determines value (at least in economic terms). Of course, the problem is that humans are notoriously fickle. What today we think is valuable, tomorrow we think worthless. Therefore, crypto is no more a bubble than any other often-inflated market, like art or jewelry.

The question about digital currency is still very much unanswered. While Gates and Buffet might be right to suggest its not as normal an investment as those found in other markets, its also not fair to say that its entirely unique. Regardless, the greater fool theory is a useful way to look at things. Whatever you do in life, just try not to be the biggest fool in the room.

See original here:
Cryptocurrency and the "greater fool" theory of economics - Big Think

U.S sanctions against Russia have played a role in the adoption of cryptocurrencies in the European country, causing oil companies like the giant Gazpromneft to look for new ways to exploit natural resources this time for cryptocurrency mining.

On June 16, Gazpromneft, a subsidiary of Russian oil and natural gas giant Gazprom, announced a 2-year collaboration agreement with BitRiver, a Swiss Bitcoin mining company, to supply them with energy resources to sustain their cryptocurrency mining operations.

According to information shared by the St. Petersburg International Economic Forum, the two companies will work together to harness surplus electricity from the carbon dioxide (CO2) released during Gazproms oil extraction operations in Russia. This is often a problem for many companies because they must burn it in the atmosphere, but what Gazpromneft is doing could be a better solution.

Igor Runets, founder and CEO of BitRiver, said that the company intends to eventually build a mining infrastructure in Russia with support from Gazpromneft. The infrastructure would reach up to 2 Gigawatts of electrical power much larger than the facilities built in Texas by U.S. mining company Riot Blockchain.

Over the next two years, BitRiver intends to implement projects to create its own data centers for power-intensive computing with power scaling up to 2 [gigawatts], including [petroleum gas], which will additionally provide high and stable power consumption.

This would be one of BitRivers most ambitious projects. BitRiver is the first cryptocurrency mining company to be sanctioned by the United States under the pack of sanctions against Russia. However, a month later, the company issued a statement arguing that the U.S. accusations were unfounded and false, saying that the business continued to operate as usual.

For a couple of years now, Bitcoin and cryptocurrency mining have become a topic of interest for conservationists due to their high energy consumption. However, efforts like this one could end up helping oil companies reduce CO2 emissions.

This is not the first time Gazpromneft has entered the crypto mining market. In late 2020, the company opened a venue for cryptocurrency mining on one of its oil drilling sites in Siberia, Russia; however, at that time, they did not intend to operate the mining farms but to supply electricity to the miners.

On the other hand, according to a CNBC report, the U.S. oil giant ExxonMobil has been working for more than a year on a confidential project to take advantage of Bitcoin mining to get rid of CO2 while simultaneously generating profits for the company.

So maybe initiatives like this could start changing the global view, portraying crypto mining as part of the solution instead of being part of the proble,

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Russia: Oil Company Gazpromneft To Launch a Cryptocurrency Mining Operation With BitRiver - CryptoPotato

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Investing in cryptocurrency is complicated and risky.

Some have made a lot of money buying in at the right time. Many more have lost nearly everything, most recently when the crypto market came crashing down in May losing nearly $2 trillion in value.

Through all the ups and downs, crypto has boomed in popularity over the past year, drawing waves of new investors who face a steep learning curve with potentially high stakes. Still, there are ways you can empower yourself to make the best possible decisions if youre interested in investing in crypto.

Thats why we created the NextAdvisor Investability Score, which uses a mix of quantitative and qualitative factors to give crypto investors a comprehensive view of a coins performance.

As a highly speculative, volatile investment, cryptocurrency prices fluctuate by the minute sometimes drastically driven by speculation, hype, and even the whims of social media. The recent crypto market crash is a prime example. Thats why the NextAdvisor Investability Score is also dynamic, changing daily as the performance of individual coins and the overall crypto market ebb and flow.

Bitcoin plummeted to its lowest price in more than a year in May, and other cryptocurrencies saw even worse sell-offs amid a broader stock market rout. The collapse of popular stablecoin TerraUSD and sister token Luna highlights why its important to proceed with caution when investing in cryptocurrencies. After TerraUSD de-pegged from its 1-to-1 exchange rate with the U.S. dollar, its sister token Luna quickly plummeted in value as well and many investors lost a lot of money. It highlights the uncertainty inherent in a market that is still in its infancy but also increasingly mainstream by many measures.

Whether its investing in crypto or any other big financial move, like buying a home or paying off debt, we want to help you make smarter decisions when it comes to your money. While we may present partner offers on our website, our Investability Score was created independently by our writers and editors, without any influence from partners or business interests.

Bitcoin has the highest score of all cryptocurrencies, with ethereum close behind. As the first and most established cryptocurrency, bitcoin has become the de facto standard for cryptocurrency investments. It has the longest track record and has shown itself to be a better fit for holding and increasing in value than other newer coins, which remain much more speculative and unpredictable.

Ethereum is the largest and most valuable altcoin by far, and along with bitcoin is one of the two cryptocurrencies many experts say represent the best starting point for new investors. Our score considers bitcoin and ethereum to represent a ceiling of sorts, so all other cryptocurrencies are in effect weighed against bitcoin and ethereum.

Heres how our score shakes out for 10 cryptocurrencies that are consistently among the top by market cap, excluding stablecoins, for reference:

Here is a deeper dive into what goes into NextAdvisors Investability Score:

There are thousands of different cryptocurrencies. We score the ones we believe can be most beneficial for readers and which we see most interest in. While our goal is to ultimately score and cover as many available cryptocurrencies as we can, we prioritize which coins or tokens we review based on consumer interest and notability.

Thats why we started by scoring the top cryptos by market capitalization. From there, we may also score coins based on public interest and other factors that could increase the likelihood of investors considering certain coins for their portfolios. We exclude stablecoins from our scoring model because theyre typically pegged to fiat currency, like the U.S. dollar, and as such arent typically considered investments.

We determine prospective investor interest in different coins based largely on our knowledge of the crypto market, but there are a few factors that help base our decisions on data and quantitative factors: the top cryptos by market cap; which cryptos consumers are searching for most often online; age, liquidity; value growth; experts recommendations; and use case, or the real-world problem it is trying to solve.

Notability also factors into our decision to review a cryptocurrency: When a cryptos market cap increases substantially, or when an industry-changing crypto project comes along, for instance. These wont always lead to full evaluations and ratings on NextAdvisor, but we use our knowledge of the overall industry and aforementioned measures of interest to determine when it makes sense to include notable cryptocurrencies in our evaluations.

Weve interviewed more than 100 experts over the past year to help us explain cryptocurrency to new investors. Weve talked with them about the risks, the upsides, and how to evaluate the investment potential of any cryptocurrency.

We asked a number of trusted cryptocurrency experts specifically about the NextAdvisor Investability Score, and how to make sure it accurately represents the crypto market. They shared what they look at when evaluating cryptocurrencies as potential investments, and what other investors should know. Here are some of these experts whose insights have been particularly helpful in our effort to create an Investability Score that provides an accurate reflection of different cryptocurrencies and the market as a whole:

Chris Chen is a financial advisor and CEO of Insight Financial Strategists, a Boston-based financial planning firm. Chen provides financial planning, retirement planning, investment management, and divorce planning services to help clients organize, grow and protect their assets. With the rise in interest in bitcoin and cryptocurrencies, Chen realized the importance of understanding this emerging asset class for the benefit of his clients. Chen regularly comments on the crypto markets and provides expert advice on crypto investing.

Wendy O is a crypto expert and educator who has amassed a large following of crypto enthusiasts across several social media platforms. O regularly provides expert commentary on the crypto markets, reviews crypto services, speaks at live crypto events, consults businesses on crypto, and more.

Kiana Danial is a personal finance expert and the founder of Invest Diva, a company that teaches women how to invest. She is the author of Cryptocurrency Investing for Dummies, and regularly talks about investing in crypto as a way to diversify your overall investment portfolio.

To create our Investability Score, we developed a framework to evaluate cryptocurrencies using a weighted average score between 0 and 100 based on a total of nine quantitative and qualitative factors. Quantitative factors are grouped in a performance bucket and qualitative factors are grouped in a trustworthiness bucket. Performance makes up 55% of the total score, while trustworthiness makes up 45%.

We do this because the quantitative factors that make up performance, such as market cap and liquidity, tell only part of the story for crypto investments. Smart investors should also take a coins trustworthiness, like use case or project backing, into account when considering crypto investments. The coins with the highest scores deliver on both performance and trustworthiness.

For performance, we also use a relevant peer group the top 85 cryptos by market cap as a basis for comparing cryptos, so our score is constantly and dynamically consistent with the fast-moving broader crypto market. The goal is to give you a comprehensive view of a coins performance. Higher weights are given to the criteria we determine to be most important.

Heres a further breakdown of all the factors we use to determine our Investability Score for different cryptos:

Market capitalization is the total value of a cryptocurrency, and experts say its a key factor when evaluating a cryptos investment potential. In general, the higher the value of the market cap the safer the investment. Coins that have larger market caps will have higher scores, because those coins have larger-scale buy-in and are less susceptible to short term-fluctuations.

Liquidity is a crucial component of market interest in a given coin. The more liquid a market is, the better. It reduces investment risk; and, importantly, helps define your exit strategy more liquidity makes it easier to sell or trade your investments when you are ready. To calculate liquidity, we compare each coins trading volume to its market cap. That ratio is a better representation of a coins relative demand, as opposed to trading volume alone, because some cryptocurrency exchanges have been accused of faking their volume numbers to raise the visibility of their businesses and bring in more customers.

Age is relevant when analyzing a coins past performance as it gives a view into its track record and tells you how long it has been trading in the market. For example, bitcoin is not only the largest cryptocurrency by market cap, but has also been around the longest. Just like decades of growth in the stock market gives everyday investors more confidence in future performance, cryptocurrencies with longer track records of growth give crypto investors more confidence than a coin thats only been around for a year.

Its important to have a clear picture about the growth potential of a crypto asset as it can have a big impact on your investments. Thats why we examine the value growth of cryptocurrencies over the past year. We base value growth on coins performance in the past year, since the crypto market is so dynamic and fast moving. Coins that have shown positive returns over the past year effectively receive higher scores, and vice versa.

We evaluate each coins volatility by looking at the standard deviation of its daily prices since the start of 2022. Standard deviation, which is the measure of the amount of variation across a set of values, is the typical statistic used to measure volatility. We take volatility into consideration because its an important metric to measure risk. Less volatile coins are generally considered safer investments.

A critical component of assessing a coin or tokens long-term value is the projects white paper and road map, which details its use case and details of its development. We thoroughly examine the white paper and road map of coins we rate to better understand the overall vision and timeline of the project, and what kind of problem it is trying to solve. Coins receive higher scores if their white papers explain things like: why the project was created; how it works; the projects real-world utility; how the initial coins were distributed; and technical analysis to back up its claims. Coins that have road maps and have shown a consistent history of meeting important milestones while growing and evolving will receive higher scores.

To measure transparency, we evaluate several different factors for every crypto we score:

To determine a coins credibility, we consider three important factors:

You cant buy crypto from your bank or investing firm, which is why our score incorporates availability across popular crypto exchanges. A cryptocurrency thats readily available to buy across multiple crypto exchanges is likely more credible and established, and therefore easier to invest in.

The best crypto exchanges for most investors combine security, ease of use, and insurance in the event of scams or other issues. To reflect a given coins availability, we look at whether it is available across the following popular mainstream crypto exchanges: Coinbase, Gemini, Kraken, eToro, FTX, Crypto.com, and Binance.US. Cryptocurrencies that arent as accessible across these top crypto exchanges receive lower scores.

Most financial advisors and other money experts still view cryptocurrencies with a healthy dose of skepticism. Because crypto is beyond the scope and reach of any central government or authority, some consider it more like gambling or buying a lottery ticket than investing.

Weve talked to dozens of experts about how to invest in crypto as smartly and safely as possible, and a few ground rules have emerged, whether youre investing in bitcoin or a new token that was created yesterday. They are true of all cryptocurrency investments, and especially for riskier and newer altcoins:

Once you have some money invested in crypto, the best thing you can do is ignore the hype around new record highs or lows. Like with traditional, long-term investing, the best thing you can do is set it and forget it until you are ready to sell.

The information contained herein is provided as is for educational and informational purposes only and is not intended to serve as investment advice or for trading purposes. Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities or any assets. The information has been authored from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Presenters may own the assets they discuss. You should not treat any opinion expressed by presenters as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their opinions. The information and content are subject to change without notice. We are not under any obligation to update or correct any information provided herein. Past performance is not indicative of future results. We do not provide any individualized investment advice. Accordingly, this material does not take into account your particular investment objectives, financial situation, or needs and is not intended as recommendations appropriate for any persons individualized circumstances. You must make an independent decision regarding any investment suggestions covered by the material. Before acting on any investment suggestions from the material, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. You should be aware of the real risk of loss in following any strategy or investment discussed.

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Cryptocurrency Investability Score | NextAdvisor with TIME - NextAdvisor

The current cryptocurrency market remains in an exceeding state of chaos. The liquidations are over $200 million on a daily scale once more as Bitcoin headed towards the $20k mark. Ethereum, the second-largest coin, suffered an identical fate. However, its like investors are shopping for the dip. And no, its not Bitcoin or altcoins-instead, investors leveraged this chance to shop for NFTs. Given the market crash, several NFT comes have suffered a major decline in price.

In popular collections adore, the revered Bored Ape gild (BAYC) werent spared either, and their floor costs have lost an important price in America dollars. BAYC born by -49% at press time. Different comes suffered as well-at press time, CloneX was at -57%, Meebits at -54%, and Azuki at -49%. However, per NFTGO, within the past week, over 85% of the pricey NFT transactions came from BAYC. Thus, indicating that investors tried to shop for BAYC in an exceeding bear market.

Well, the steep decline in floor value additionally helped investors to buy it cheaper. Per knowledge from NFT price floor, the ground price of Bored Apes has dropped below $100,000 for the primary time in nearly a year. At the time of writing, the BAYC was valued at $85,500, representing a 65% drop from the incomparable high.

The last time Associate in Nursing Ape was listed around this price vary was in Jan 2022. To feature further, the amount of NFT trades has exaggerated over the last twenty-four hours as crypto-markets plummeted.

per CryptoSlam, the NFT market saw a 40% increase in trading volume within the last 24 hours, compared to the previous 24-hour window. Different projects, adore MAYC, and Moonbirds went down the line.

However, the increase in volume saw investors capitalizing on the opportunity. For instance, Twitter user CryptoDonAlt remained upbeat on his BAYC losses, choosing, instead, to concentrate on the positive. Moreover, per DappRadar statistics, the NFT market hit $25 billion in trade volume in 2021. Its ascertained that it is on course to surpass that figure this year. Per the Nansen 2022 quarterly report, the NFT market outperformed the broader cryptocurrency market year-to-date, as proven by the NFT-500 Indexs value appreciation of 49.9% to date in 2022.

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Aren't NFT enthusiasts buying the dip? - The Coin Republic

CHICAGO--(BUSINESS WIRE)--BlockFills, a fast-growing global digital asset trading and financial technology company, today announced its partnership with TPAC Capital, LLC (TPAC) to offer institutions with cryptocurrency structured product solutions. TPAC is the cryptocurrency joint venture of Pack Creek Capital, LLC and Finance Michigan, Inc., both of whom are commodities industry leaders.

BlockFills will be one of the few global digital asset electronic trading firms to offer institutions with tailored cryptocurrency structured product options. In addition, institutions like banks, hedge funds and others in the financial services sector will have the opportunity to offer structured product solutions for their clients through this partnership.

Customized structured product solutions help institutions manage cryptocurrency exposure and develop solutions that assist with risk-return objectives, return enhancement, cost reduction, crypto pricing volatility and cash flow management.

"Institutions have sought increasingly customizable strategies to help maximize their cryptocurrency investments while hedging against or capitalizing on market volatility, said Nick Hammer, co-founder and CEO of BlockFills. This structured product solution is our answer for these institutions. Combining TPACs 40-plus years of experience tailoring such solutions for volatile commodities with our best-in-class electronic trading technology solutions like Vision and Phoenix, institutions now have more customization and control over their cryptocurrency investment strategies."

This integration with BlockFills will help shape the future of institutional digital asset and crypto trading, said Michael Ortiz, Founder of TPAC. Now, with our customizable structured product solutions available, BlockFills clients can structure the right cryptocurrency investment solution that works for them, combining nonlinear and linear options on a case-by-case basis that will benefit their business and investment strategies.

Based out of Chicago and founded in 2018, BlockFills is one of the fastest growing crypto liquidity and technology providers globally. Their digital asset technology is already serving over 800 institutional clients across 50 countries.

To reach BlockFills regarding business opportunities, please email trade@blockfills.com, or for more information, please visit http://www.blockfills.com.

To learn more about TPAC, email info@tpaccapital.com, or visit http://www.tpaccapital.com.

About Structured Products

Structured products are a combination of options (puts and calls) combined into a pre-packaged trade. These trades are not offered on legacy or decentralized finance (DeFi) exchanges at this time and are considered over-the-counter (OTC) in legacy markets. The pre-packaged trade is negotiated between BlockFills and the prospective institutional client.

The primary benefit of structured product solutions is customization. Specifically, these solutions give institutions the ability to define risk parameters by customizing size, timeframe, desired payout and duration of the trade. Structured products also offer an alternative liquidity source.

About BlockFills

BlockFills is a disruptive financial technology firm dedicated to the provision of end-to-end solutions for global crypto currency market participants. The Company has successfully built and deployed a cutting-edge multi-asset technology platform that solves major liquidity fragmentation problems in the marketplace. The platform provides price discovery, price aggregation, electronic order matching, smart order routing and trade reconciliation solutions for institutions in the digital spot, derivatives, and lending markets. In addition, BlockFills provides software-as-a-service (SaaS) solutions that simplify all aspects of the trade lifecycle for institutions in the sector.

About TPAC

TPAC Capital, LLC is a newly formed provisional swaps dealer by Pack Creek Capital and Finance Michigan, Inc. The traders at TPAC are leaders in structured products with extensive careers running some of the largest OTC desks in the commodities markets. TPAC focuses on bringing innovative structures and exotic options to the emerging markets of cryptocurrency starting with Bitcoin and Ethereum. As a dealer, TPAC offers competitive pricing, trades that suit the clients risk profile, and educational materials in order for all clients to trade structured products with a strong knowledge base. Please reach out to hear more about the library of cryptocurrency structured products that are ready to offer.

RISK DISCLOSURE AND IMPORTANT INFORMATION

This press release is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal, nor shall there be any sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

All investing is subject to risk, including the possible loss of all of the money invested. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.

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BlockFills Partners with TPAC Capital to Launch Cryptocurrency Structured Product Capabilities for Institutions - Business Wire