Category Archives: Bitcoin

The European Union should ban the energy-intensive system used to mine Bitcoin, one of the bloc's leading financial regulators has said.

In an interview with the Financial Times, vice-chair of the European Securities and Markets Authority (ESMA) Erik Theden called for a bloc-wide ban on "proof of work" crypto mining, saying the industry's energy usage was becoming a "national issue" in his native Sweden.

"Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining," Theden told the FT.

"It would be an irony if the wind power generated on Swedens long coastline would be devoted to Bitcoin mining," he added.

Bitcoin now consumes 0.6 per cent of the world's electricity, according to figures from the Cambridge Bitcoin Electricity Consumption Index.

Bitcoin and Ether, the two largest cryptocurrencies, are minted via the proof of work system, which financially incentivises miners to use ever more computing power - and therefore electricity - to validate blockchain transactions and earn the tokens.

Theden previously called for a ban on proof of work crypto mining in November last year, in his capacity as director of the Swedish Financial Supervisory Authority.

From April to August 2021, the energy consumption of Bitcoin mining operations in Sweden rose by "several hundred percent," Theden said at the time.

In the interview published on Wednesday, the Swedish regulator emphasised that he was not calling for a blanket ban on cryptocurrencies, but rather that he was trying to promote a "discussion about shifting the industry to a more efficient technology".

"The solution is to ban proof of work," he said.

One potential avenue to explore could be a move to "proof of stake" mining, Theden told the newspaper.

While proof of work encourages competition between miners to keep the network secure, proof of stake mining is a less energy-intensive process where miners put their tokens up as collateral against errors in the validation process.

Ether, the second largest cryptocurrency by market capitalisation, is due to move to proof of stake mining in the second half of this year.

Rising concerns over the growing energy consumption of the crypto mining industry have already prompted governments to take action. Earlier this month, Kosovo banned crypto currency mining in an effort to tackle the country's worst energy shortage in a decade.

In November, Norwegian authorities told Euronews Next that they would consider backing a ban on proof of work and said the Nordic country was "considering potential policy measures" to address the challenges crypto mining posed.

"Although crypto mining and its underlying technology might represent some possible benefits in the long run, it is difficult to justify the extensive use of renewable energy today," Norway's local government and regional development minister Bjrn Arild Gram told Euronews Next.

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EU regulator calls for a ban on proof of work Bitcoin mining to save renewable energy - Euronews

Bitcoin (CRYPTO: BTC) has beenextending the lean patch it has found itself in since early November. An analyst at Ark Invest, however, sees the apex cryptocurrency resuming its uptrend and outperforming in the coming years.

Cryptos A Hit In Developing Countries: Crypto activity in Turkey and Brazil surged in the recent week, which highlightsincreasing adoption in developing countries, Ark's Yassine Elmandjra said.

Cryptocurrency trading volumes in Turkey increased 1,065% from $169 million on average per day during the fourth quarter of 2020 to $1.8 billion in the fourth quarter of 2021, buoyed by Turkish lira's depreciation, the analyst said, quoting Chainalysis data. Tether (CRYPTO: USDT), a controversial stablecoin, gained ground in Turkey, outpacing both the dollar and the euro, he added.

Ark Invest noted that Rio de Janeiro mayor Eduardo Paes announced during Rio Innovation Week that Rio de Janeiro would invest 1% of its Treasury in bitcoin and deduct 10% from all property taxes paid in bitcoin.

Related Link: 2022 Begins With A Whimper For Most Cryptos, But 2 Currencies Are Making Strong Gains

Bitcoin Market Cap To Triple: As an investment, bitcoin could become an important savings vehicle in emerging markets, so much so that businesses might prefer payments in bitcoin rather than in fiat currency, Cathie Wood-founded Ark Invest said.

"If so, the velocity of fiat currencies could increase, exacerbating inflation and currency devaluations," Elmandjra said.

In the worst-case scenario, hyperinflation could render dollar-denominated debt worthless, he added.

Demand for bitcoin in emerging markets could increase as its infrastructure scales and reaches critical mass, Ark Invest said. If bitcoin were to capture just 5% of the global monetary base beyond the four largest fiat currencies the US dollar, yen, yuan, euro its market cap could more than triple from $800 billion today to $2.8 trillion by 2027, the firm noted.

Ark Invest is bullish on Bitcoin. The firm said in late December that Bitcoin offers the most profound function of blockchain technology, the foundation for "self-sovereign" digital money.

Excerpt from:
Where Will Bitcoin Be In 5 Years? Why Cathie Wood's Ark Invest Predicts Massive Growth And Adoption - Ben - Benzinga

Bitcoin (BTC) starts a new week facing multiple hurdles but with strong internal support can old resistance below $50,000 finally fall?

A correction event now almost in its third month is frustrating many, but conditions may soon be right for a fresh charge against opportunistic bears, an increasing number of analysts are saying.

With inflation running hot and United States lawmakers set to make the Bitcoin mining debate public this week, there are plenty of potential pitfalls in store.

Nonetheless, its beginning to feel like Bitcoin is at the point where it is capable of producing a classic surprise when the majority of the mainstream economy least expects it.

Cointelegraph takes a look at five factors worth paying attention to when charting BTC price action over the coming week.

Bitcoin looks decidedly uninterested in tackling even local resistance levels as the week begins.

After a rangebound weekend with little unique price action, BTC/USD is putting in lower lows on short timeframes while avoiding key zones around $44,000.

With Wall Street closed for a holiday, Monday could shape up to offer more of the same before markets provide direction.

Bitcoin did, however, manage to close out the week at exactly the crucial point identified by trader and analyst Rekt Capital as useful for aiding bullish momentum.

A Weekly Close above ~$43100 (black) would be a good sign of confirmation for BTC to continue higher from here, he wrote Sunday alongside an accompanying price chart.

A subsequent dip took the largest cryptocurrency lower, with $42,337 on Bitstamp the local floor for Monday at the time of writing.

Also cautiously optimistic is fellow popular trader Crypto Ed, who is eyeing a potential replay of last weeks run above $44,000, something that bears subsequently quashed.

Although its early but this looks like the start of continuation of last weeks move. Fingers crossed! hesummarizedin part of his latest Twitter update.

Last week, meanwhile, Cointelegraph reported on sentiment favoring an upside breakout as an eventual outcome of the current ranging behavior.

The stage is being set in more ways than one this week as the topic of inflation returns to haunt U.S. markets and politics alike.

Amid a fresh flurry of headlines about how inflation is hitting consumers, the highest consumer price index (CPI) print in 40 years is already hitting President Joe Bidens approval ratings.

Reining in the 7% year-on-year CPI increase could see the Federal Reserve enact no fewer than four key rate hikes in 2022 alone, Goldman Sachs forecast last week. This, in turn, places more pressure on weary consumers.

The stage is being set in the coming weeks, Pentoshi argued.

Closer to home, this week will see U.S. lawmakers discuss the alleged environmental impact of cryptocurrency mining.

With a significant chunk of the Bitcoin hash rate now coming from the U.S., any hostile policies will matter more than most when it comes to sentiment. A repeat of the China exodus from May 2021 and its knock-on effect for hash rate and network security will not be welcomed by anyone.

The hash rate, as Cointelegraph noted, is nowback at all-time highs, fully recovered from last years events.

The Oversight and Investigations Subcommittee hearing is due to take place on Thursday and is titled Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains.

The hearing will be livestreamed in real time on the day.

Bitcoin volatility is plumbing multi-year lows encouraging for its acceptance as a mainstream asset, but not something many expect to last.

According to the Bitcoin Volatility Index, which calculates the standard deviation of daily BTC returns for the last 30 and 60 days, Bitcoin is at its least volatile since November 2020 at 2.63%.

Current price movements are thus similar to before BTC/USD entered price discovery after cracking its $20,000 all-time high from 2017.

For trader, entrepreneur and investor Bob Loukas, the stage is now set for a potential repeat of those events.

Remember when everyone was loading up BTC options in Sept/Oct for the super cycle. Those are probably down 80+%, he commented, noting that derivatives traders from before the current $69,000 all-time highs are likely more than disappointed.

While exciting price moves are yet to reappear after Decembers drawdown, however, they are now all the more likely thanks to Bitcoins supply becoming increasingly inaccessible.

With illiquid supply at ATHs for this cycle, Bitcoin is essentially a bonfire covered in gasoline, market commentator Miles Johalargued.

As Cointelegraph reported, BTC is being ferreted away into cold storage out of the grip of speculators.

Amid questions over the absence of retail investors even after a 40% price drawdown, new data shows that the sector has in fact had little interest in Bitcoin for an entire year.

Eyeing new entities appearing on the blockchain, Glassnode analyst TXMCshowed just how quiet Bitcoin has really been in terms of retail adoption since January 2021.

A look at the 30-day exponential moving average (EMA) of new entities coming on-chain reveals that the last major surge ended at the start of Q1 last year.

Since then, despite two new all-time price highs, new entity numbers have fallen and returned to standard rates normally seen after bull cycle peaks.

Bitcoin bull/bear markets have a distinct on-chain activity profile, TXMC explained on Twitter.

The data underscores how the average investor has all but forgotten Bitcoin, even as it swept new highs and institutional activity remained strong.

Interest levels from Google users have added to the trend, with search rates for Bitcoin worldwide at levels previously the norm in December 2020.

Miners, although being far from underwater at current price levels, are also getting less income from transaction fees than at any point since late 2020 just 1.08%.

This is an indicator that retail is not in yet... Although price is really similar to early 2021 When retail? Twitter-based on-chain analyst Blockwise queried this weekend, presenting further Glassnode data.

Bitcoins New Year extreme fear continues and if on-chain behavior is anything to go by, its set to remain the dominant sentiment force.

Related:Top 5 cryptocurrencies to watch this week: BTC, NEAR, ATOM, FTM, FTT

According to the Crypto Fear & Greed Index, which measures market sentiment via a basket of factors to assess just how traders are likely to act at a given price point, things have rarely looked bleaker.

Since late December, the Index has characterized the status quo as extreme fear, and so far, no price shifts have managed to alter it.

The same is true this week, with Fear & Greed at 21/100 well within the extreme fear bracket.

Similarly, data covering BTC moving at a profit or loss shows timidity among transactors, with precious little profiteering to be seen.

Such behavior is common during price dips and was seen last year during the summer as BTC/USD fell and bottomed at around $30,000.

This is the real Fear & Greed Index, popular Twitter account On-Chain College commented, uploading the data, which comes from Glassnodes realized profit/loss ratio indicator.

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BTC likely to repeat Q4 2020 move 5 things to watch in Bitcoin this week - Cointelegraph

Bitcoin didn't have the best start of the year but the stats suggest it has finally stabilized this week and it might even be on its way to another massive rise. After adding 1% since last Sunday, the biggest cryptocurrency on the market is slowly recovering after dropping 12% during the initial week of 2022. If we take the first week of 2021 and compare it to this one, we can see Bitcoin last year made a massive gain of 15% and traded above $50,000 per coin. Although this week's improvement look minuscule, experts on the matter are convinced Bitcoin will be on the rise again over the next couple of weeks.

Currently, Bitcoin price sits at a "low" $42,000 per coin but experts are suggesting it might jump between $50,000 to $60,000 in the next few weeks. The reason for this jump, according to CEO of Panxora Gavin Smith, is the looming inflation. It's all about a "real" interest rate that will be adjusted for inflation. When the figure is negative, it only means that consumer prices will keep on rising faster than benchmark bond yields. As investirs keep effectively losing value by holding bonds and other fixed-income instruments. This dynamic encourages risk-taking amid the function of ultra-loose monetary policies put in place by all central banks around the world.

According to the U.S. Labor Department, the Consumer Price Index had risen 7% in December compared to 12 months prior to that. It went up from the 6.8% that was registered during the month of November. This is actually the fastest annual increase since 1982. Even though Bitcoin has already recivered after going below $40,000 on Monday, ths rebound pales in comparison to bitcoin standards. It is believed that if the cryptocurrency breaks $45,500 this year, there might be another sharp move higher than ever before in modern history. It might all happen during 2022.

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Bitcoin price news: Will the cryptocurrency hit 'new highs' this year despite it's rough - MARCA.com

Aarika Rhodes, an elementary school teacher mounting a left-leaning primary challenge against California Democrat Brad Sherman, the most prominent critic of cryptocurrency in the House, is promoting the technology in her run. She said she has taken several thousand dollars worth of donations in cryptocurrency to date, having embraced it after talking to voters and hearing from crypto advocates who urged her to draw a distinction with Sherman on the issue.

More and more people of color, women, single moms are looking into Bitcoin, the largest cryptocurrency, Rhodes said. I never met anyone who was against it.

Roughly one in six Americans have personally traded, used or invested in cryptocurrency, according to Pew Research Center, including 13 percent of white, 18 percent of Black, 21 percent of Hispanic and 23 percent of Asian Americans.

So far, the political incentives around cryptocurrency are proving lopsided. More candidates have found reason to embrace a technology backed by legions of devoted users, a fresh crop of newly rich donors, and a growing number of lobbyists, than to vocally reject it.

Look, it just seems cool. Everybodys got a friend whos made some money on it. Theres a lobbyist who wants to take me to lunch, said Sherman, who has called for banning cryptocurrency outright, of the hype that has made it popular with his colleagues on the Hill. Shunning the technology, on the other hand, has brought the congressman few immediate rewards. In addition to facing a crypto-fueled primary challenge, he has inspired the creation of a new super PAC, Shut Down Sherman, dedicated to taking down Enemy Number 1 to Crypto.

Sherman bemoaned a lack of political interest in what he sees as the emerging threats from crypto, such as its potential to undermine U.S.-imposed financial sanctions and the U.S. dollars status as the global reserve currency.

That is worth hundreds of billions of dollars to American families, and theres no lobbyist in this city that protects it, he said. No lobbyist is fighting for the ability to go after criminals with sanctions.

Ron Hammond, director of government relations at the Blockchain Association and an advisor to the pro-crypto HODL PAC, said that rather than fielding concerns about crypto, he is more likely to receive requests for advice. Congressional staffers from both parties want help, he said, drafting pro-crypto tweets for their bosses, who see that the subject can generate frenzied social media engagement.

The website for the Congressional Blockchain Caucus, which was formed to foster the accounting technology underlying cryptocurrency, lists 18 Republican and 17 Democratic lawmakers. Sherman, though, is not alone in taking a hard line on the crypto boom.

Brock Pierce, a former child actor turned crypto entrepreneur, is exploring a run for the Vermont Senate seat being vacated by Democrat Patrick Leahy. | (Photo: Business Wire)

Massachusetts Sen. Elizabeth Warren has called for Congress to do more to regulate the industry. She is also among the Democrats calling for a crackdown on the carbon emissions associated with some cryptocurrencies, like Bitcoin, which relies on vast numbers of specialized computers competing to solve mathematical puzzles as part of an energy-intensive process that secures its network.

Hillary Clinton and Donald Trump have both spoken out against cryptocurrency on account of its potential to undermine the dollars global dominance.

In June, Trump likened Bitcoin to a scam, telling Fox Business Network, "The currency of this world should be the dollar. And I don't think we should have all of the Bitcoins of the world out there. I think they should regulate them very, very high."

Younger politicians are less likely to prioritize such concerns. I dont know a single Republican under the age of 50 whos critical of crypto, said Hammond, who previously worked for Republican Rep. Warren Davidson of Ohio. Hammond said that some older members of the party quietly oppose cryptocurrency adoption but have hesitated to express public opposition.

The technology has even split the Trump family along generational lines. Former first lady Melania Trump, 51, posted a tweet this month in honor of Bitcoins 13th birthday, as she launches her own line of non-fungible tokens, digital collectibles that rely on the same blockchain technology that enables cryptocurrencies.

While those who deal on the world stage are more likely to see crypto as a threat to the U.S.-led global financial order, many mayors like Eric Adams of New York and Francis Suarez of Miami have embraced crypto as a way to attract attention, and potentially jobs, to their cities.

The technology is also inspiring candidates who have made money from it to mount crypto-themed runs for office. In Oregons newly created 6th District, Matt West, a DeFi or decentralized finance, a new form of lending enabled by blockchain technology developer, is running as a pro-crypto Democrat. On the heels of a quixotic independent presidential bid, Brock Pierce, a former child actor turned crypto entrepreneur, is exploring a run for the Vermont Senate seat being vacated by Democrat Patrick Leahy.

As the total value of cryptocurrencies has exploded to more than $2 trillion in recent years, those made rich by the boom have begun to throw their weight around as donors, too. Last year, the second-largest individual donor to Joe Bidens presidential election efforts was Sam Bankman-Fried, the 29-year-old founder of cryptocurrency exchange FTX. Bankman-Fried gave more than $5 million but evinced little interest in scoring a meeting with the beneficiary of his largesse.

As Congress and the Biden administration begin to grapple in earnest with the implications of cryptocurrency on a range of policy fronts, crypto donors are becoming more strategic. On New Years Eve, Jesse Powell, the CEO of Kraken, another exchange, issued a public call for lists of candidates who support cryptocurrency and of crypto enemies. The next day, he announced he had made maximum allowable contributions to 15 politicians, including Rhodes, Mandel and West.

Sam Cooper, a former deputy chief of staff to pro-crypto Sen. Ted Cruz who now advises crypto clients in the private sector, said donors are still getting their bearings this cycle, before what he anticipates will be a more organized effort in the next presidential election.

By then, Cooper said he expects crypto will have gone from a niche issue to a campaign trail staple. Will Bitcoin become a core issue in 2022? No. Its going to be inflation and immigration and the things we see everyday, he said. But I do expect in 2024, especially on the Republican side, that this will be an issue.

Ben Schreckinger covers tech, finance and politics for POLITICO; he is an investor in cryptocurrency.

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Bitcoin crashes the midterms - POLITICO

Bitcoin (BTC) hovered near $43,000 on Jan. 17 as "boring" price action combined with signs that the market could be stabilizing.

Data from Cointelegraph Markets Pro and TradingViewshowed BTC/USD staying firmly within its established trading range between $40,000 and $45,000.

With few surprises expected thanks to the Wall Street holiday, traders took the opportunity to call for a level-headed approach on focus on altcoins.

Popular analyst William Clemente meanwhile highlighted Bitcoin bouncing along an ascending trendline this month, this soon to approach a turning point as part of a wedge construction.

"Should be an interesting week," he forecast.

Beyond spot price, data showed that market composition still employed near all-time high leverage, this only just beginning to reduce in week two of January.

Such leverage prevalence previously sparked concerns that a liquidity cascade could be made all the more real, with a significant move up or down hitting traders.

"The highly increased leverage ratio of Bitcoin that since some days remains at an all-time high is showing concerns that a massive volatility increase will follow up," commentator Vince Prince warned on the day.

On the topic of altcoins, meanwhile, some moves diverged from the flat performance seen more broadly.

Related:BTC likely to repeat Q4 2020 move 5 things to watch in Bitcoin this week

The top 10 cryptocurrencies by market cap were led by Cardano (ADA), which conspicuously bucked the sideways trend to post daily gains of almost 9% at the time of writing.This placed ADA/USD at a three-week high.

"Crucially, the market psychology is working on $ADA again," Cointelegraph contributor Michal van de Poppe summarized.

Further down, Litecoin (LTC) managed 4.5% gains in some brief respite for hodlers.

"Another bounce at strong support. A break of the blue resistance should send this flying. Not there yet," trader, analyst and podcast host Scott Melker added about the LTC/USD pair.

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Bitcoin stays in tight range as analyst eyes potential 'interesting week' in BTC - Cointelegraph

If you are planning to invest in a cryptocurrency, here is how to buy Bitcoins, then heres everything that you need to know.

Cryptocurrency has come a long way and the journey has been very much like a yo-yo ride! Bitcoin is the first decentralized cryptocurrency, which has seen all the developments in the crypto market since its hush-hush beginnings. In simpler terms, Bitcoin is an online currency system which can be used for the purpose of investment or as a method of payment. However, it is not controlled by any government or corporate for that matter. In fact, Bitcoin is not regulated or managed by any central authority. It allows users to trade money without the need for a third party such as a bank, credit card company, or other financial institutions. It is seen more as an investment option currently rather than a payment method although that is gradually changing. Furthermore, because money transfers do not require names, there is little risk of identity theft. However, as the Bitcoin price volatility indicates, it is a very risky business and those who do invest in it should know about. There are also innumerable scams that have been carried out by cybercriminals with Bitcoin. So, if you are still thinking of buying Bitcoin, here's how to.

Step 1: Store your Bitcoin

To buy Bitcoin, you must first create a Bitcoin storage site, which is the first stage in the Bitcoin purchasing process. There are two ways to store Bitcoins online right now:

Another way to store your Bitcoin is a paper wallet, which is one of the most popular ways to keep your Bitcoin safe. The wallet is small and compact, and it is composed of coded paper. One of the advantages of a paper wallet is that the wallet's private keys are not stored digitally. As a result, it is immune to cyber-attacks and hardware system failures. When you receive your Bitcoin paper, it will contain two QR codes on it: one for receiving Bitcoin and the other for paying Bitcoin.

Step 2: Choose exchange service

Obtaining Bitcoin through an exchange is the easiest way to buy Bitcoin. You simply need to create an account and convert your cash (rupees, dollars, pounds etc) into Bitcoin. There are hundreds of exchanges to choose from such as Cryptaw, CoinBase, Circle, Xapo and more. To register an account with an exchange service, you will need to provide your personal information or identity to the provider.

Step 3: Buy Bitcoin with an exchange account

Once your exchange service account is set up, you will need to link your existing bank account with it for the movement of funds. If you need to link a bank account in order to use the exchange service, it will very certainly only accept banks from the country where the exchange business is based.

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Want to profit from cryptocurrency? Heres how to buy Bitcoin - HT Tech

Bitcoin price reveals a bullish outlook albeit a slow one, providing altcoins with an opportunity to run free. The past week is a testament to the recent gains witnessed among many altcoins. While Ethereum continues to remain bullish, Ripple struggles to hold on.

Bitcoin price produced a lower low after the January 13 swing high at $44,439 but managed to set a higher low, keeping the uptrend somewhat intact. As BTC bounces off a 4-hour demand zone, extending from $41,843 to $42,707, investors can expect the pioneer crypto to make a run for the previous weeks high at $47,609.

This hurdle is present below the 200-day Simple Moving Average (SMA) At $48,590. BTCs upside potential, though, at least in the short-term, seems to be capped at the aforementioned level.

BTC/USD 4-hour chart

If Bitcoin price fails to see a bullish reaction off of the $41,843 to $42,707 demand zone, it will indicate weakness among buyers. This lack of interest could allow bears to take control and push BTC down to $41,762 a four-hour candlestick close below there will then invalidate the bullish thesis.

This development could lead Bitcoin price lower, to retest the $39,87 support level.

Ethereum price is in a similar situation to Bitcoin as it produced a higher low but failed to set up a higher high. As long as BTC remains bullish, ETH will follow suit. Market participants can, therefore, expect the smart contract token to make a run for the 200-day SMA at $3,475.

Clearing this hurdle will open the path for Ethereum price to revisit the daily supply zone, extending from $3,675 to $3,846. The upper limit of this hurdle coincides with the 50-day SMA, indicating that a further uptrend is unlikely.

ETH/USD 4-hour chart

Regardless of the optimistic scenario, Ethereum price needs to hold above the weekly support level at $3,061 to see a meaningful uptrend. A breakdown of this foothold will remove confidence and instill doubt among buyers.

A four-hour candlestick close below the demand zones lower limit at $2,927, however, will create a lower low, invalidating the bullish thesis.

Ripple price has been teetering on a daily demand zone, stretching from $0.693 to $0.753 since the December 4, 2021 crash. One can assume that this barrier has been weakening. Due to its correlation with BTC, however, XRP price is likely to rally 12% to retest the 50-day SMA at $0.844.

The weakened demand zone could face destruction by a short-term bearish momentum, however, so investors should exercise caution with the remittance token.

In some cases, Ripple price could overcome the immediate hurdle and make a run for the 200-day SMA at $0.954.

XRP/USD 1-day chart

On the other hand, if Ripple price produces a daily candlestick close below $0.693, it will create a lower low, invalidating the bullish thesis. This development could trigger a crash, where XRP price could revisit the $0.604 support level.

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Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Altcoins due for massive gains as BTC holds its ground - FXStreet

In March 2021, crypto entrepreneur and investor David Johnston moved his parents, wife, three daughters, and company with him to Puerto Rico. The 36-year-old, who has been involved in the crypto ecosystem since 2012, says the decision to relocate from Austin was kind of a no-brainer.

Beyond the fact that Puerto Rico offers a year-round tropical backdrop with picturesque beaches, the U.S. territory also has crypto-friendly policies, including huge tax breaks to those who spend at least 183 days on the island each year. Residents can keep ahold of their American passports while at the same time not having to pay any taxes on capital gains. It certainly helped seal the deal for Johnston, though for him, the bigger incentive was an overwhelming fear of missing out.

"That's where all my friends are. I don't have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico," he said, noting that many of his California friends have also made the move.

Johnston tells CNBC that after seeing his friends and colleagues decamp, he went to check it out himself in early 2021.

"I said, 'Wow, okay, I get it,'" Johnston recalled of his first impression of the small island territory, whose circumference can be driven in half a day. "The island has three million peopleThis is big enough to build a tech center."

Johnston says that Puerto Rico reminds him a lot of Austin in 2012. Back before Tesla, Samsung, and Apple helped turn the Texas capital into one of the country's hottest tech hubs, he says the city felt small. But similar to Puerto Rico today, Austin had a great energy and lots of passionate people moving there, which accelerated over time. So for Johnston, making the move to Puerto Rico feels a whole lot like getting in on the ground floor.

"That's where my community is. That's where the people I know and love are going, and they're going there to build something cool. Something that helps everyday people, and that's what I love about open source. That's what I love about blockchain. It's open to everybody," he said.

David Johnston's daughter at their home in the San Juan suburb of Guaynabo

David Johnston

Puerto Rico has fast become the new hot destination for the crypto contingent.

Facebook whistleblower Frances Haugen, who told the New York Times she bought crypto "at the right time," made the move from San Francisco to Puerto Rico last year, in part to hang with her "crypto friends" on the island. Controversial YouTube star and NFT investor Logan Paul set up shop there, as did crypto billionaire Brock Pierce, a child actor (of "Mighty Ducks" fame) turned 2020 indie presidential candidate.

Meanwhile, Johnston says his whole office building is filling up with start-ups and crypto companies.

"Pantera Capital (a crypto fund) is on the fifth floor and then there's a co-working space on the sixth floor. My company, DLTx, we took over the eighth floor, and NFT.com took over the twelfth floor. That's all happened in the last 12 months," Johnston tells CNBC.

Redwood City Ventures, a fund that invests in bitcoin and blockchain companies, has also opened an office in the American territory.

For many, the big draw to the island has to do with Act 60, which offers significant tax savings to qualifying residents.

In the U.S., investors pay as much as 37% on short-term capital gains and up to 20% on long-term gains, which applies to crypto and other assets held for more than a year. One of the tax breaks under Act 60, known as the Individual Investors Act, drops that tax obligation down to zero if certain qualifications are met. This is especially huge for entrepreneurs and crypto traders.

There is also a major tax incentive for business owners to set down roots in Puerto Rico. Mainland companies are subject to a 21% federal corporate tax, plus a state tax, which varies. If a firm exports its services out of Puerto Rico, to the U.S. or really, anywhere else, they pay a 4% corporate tax rate.

David Johnston's family celebrating Christmas in the hills of Puerto Rico

David Johnston

CPA Shehan Chandrasekera does caution that any gains realized before arriving to Puerto Rico are still subject to the standard capital gains tax rates on the U.S. mainland. It is just the gains that are earned after becoming a Puerto Rican resident that are excluded from taxes.

"That's the part that people are not talking about," said Chandrasekera, who heads tax strategy at crypto tax software company CoinTracker.io.

But there is a workaround.

If an investor has a certain amount of gain, they can go to Puerto Rico, establish residency, sell their stake, and then buy it back as a new position. That way, they avoid muddying the waters with any gains they carry over from the U.S.

Puerto Rico's almost too-good-to-be-true tax rules were dreamed up a decade ago to help bring in people and cash at a time when the island was hemorrhaging residents and money.

Over the last several years, the territory has suffered a string of bad luck earthquakes, hurricanes, a multi-year bankruptcy and a global pandemic. Much to the government's relief, investors are now coming in at a record pace.

Corporate and tax attorney Giovanni Mendez has been helping to onboard new Puerto Ricans. He tells CNBC that nearly half of his clients right now are either crypto companies or crypto investors, a number that's increased exponentially in the last six years.

Mendez, who was raised in a town two hours west of the Puerto Rican capital of San Juan, says that in March 2020, right as the Covid pandemic began to shut down countries around the world, he began speaking with clients about whether to move to Florida (a tax-free state) or Puerto Rico. In the end, many opted for Puerto Rico.

"I really wasn't expecting a lot of people to move with everything going on with the pandemic, but to the contrary, a lot of people actually just decided to pull the trigger," said Mendez. "That's certainly coupled with an increase in the value of crypto assets."

Crypto investor and entrepreneur George Burke in Puerto Rico

George Burke

Crypto investor George Burke had been thinking about making the move since 2018, but he finally went for it last year.

"With the performance of how 2021 was going with bitcoin, and the performance of my company, I knew I needed to make a change, so Puerto Rico became a really good option," said Burke.

Though Burke wouldn't share an exact dollar figure with CNBC, he did say that his crypto holdings rise to the mid-seven figure range. "I was in the crowd sale of ethereumThere were only like 6,000 people who were able to do that," said Burke, who tells CNBC that he also worked on the first bitcoin debit card back in 2013.

As for the move itself, Burke says the process was relatively straightforward.

"I got on a plane, I established my residency the same day that I got off the plane just by renting a room at my friend's house, and I started the clock," he said.

Burke added that he didn't have to apply before arriving. He put in an app for the individual investor's exemption himself, and he paid an attorney $15,000 to help with his business exemption.

It was a similar experience for Johnston, who says it took between six and nine months to go through all the perfunctory reviews, though it "didn't take a huge amount of effort."

"I mean, it's America," said Johnston. "You don't need a visa. You don't have to apply for residency. You don't need a passport. You can just grab a domestic flight and show up in San Juan, grab a driver's license, buy a house, and open an office downtown."

"It was pretty smooth," he added.

El Morro Fort in Old San Juan

Before making the move to Puerto Rico, Theodore Agranat tells CNBC that he knew little about Puerto Rico, aside from the fact that it was an American territory. He also recalled seeing images of former President Donald Trump throwing paper towels into a crowd when Hurricane Maria was happening.

But after speaking with friends who had made the move and making a scouting trip himself last spring, the 45-year-old felt like Puerto Rico could be the kind of place he had been searching for since his first son was born in 2003: A community of entrepreneur families with kids, comprised of open-minded people who embraced home-schooling and alternative diets Agranat himself is into raw foods while at the same time functioning much like a start-up incubator, bringing together business-savvy and creative minds. He found just that in the southeast Puerto Rican city of Humacao.

Agranat, who runs an early-stage blockchain investment fund that put money into over 225 projects last year, says the financial incentives were also a huge draw.

Thus far, island life is working out pretty well.

Agranat and his wife home-school their three children, and for their 14-year-old, they've customized the curriculum to include crypto-related topics, including NFTs, crypto games, and token swapping.

Johnston, who lives in the San Juan suburb of Guaynabo, has adopted a similar approach. He and his wife home-school all three of their children, and crypto has been a part of the lesson plan since day one.

"My kids have had crypto wallets since they were born," Johnston told CNBC. "When they did chores for grandma, grandma tried to pay them in cash once, and they said, 'No thanks, grandma. I prefer bitcoin.'"

Outside of the suburbs, many gather for Crypto Mondays, a weekly meet-up held at nice hotels and restaurants in the capital, as well as Crypto Curious, which draws people new to the space and covers topics like NFTs, DeFi, and how to open your own crypto wallet. Hundreds of locals have begun to partake in those gatherings, which are now also being offered in Spanish.

Burke, who says that his friends and crypto colleagues have been moving to Puerto Rico since the last bitcoin bull run in 2017, tells CNBC that every Thursday, he attends a luncheon with around 30 to 40 other crypto-minded folks who live in either Condado Beach or Old San Juan.

After first easing restrictions for vaccinated travelers, Puerto Rico is now moving closer to requiring vaccinations for visitors.

David Madison | Stone | Getty Images

Not everyone is happy about the influx of new residents.

For one, locals aren't thrilled about the fact that they don't qualify for the capital gains tax exemption, which is designed for non-Puerto Ricans.Mendez tells CNBC the local rate in Puerto Rico is 15% for long-term capital gains, and the disparity has strained relations between some locals and new residents. An organization that goes by #AbolishAct60 has pushed back on the tax breaks via social media.

There is also a question as to whether the tax breaks are achieving what the government set out to do, including, among other things, creating jobs, and sinking more cash into the local economy.Economist and Nobel-prize winner Joseph Stiglitztold a crowd in San Juan in Decemberthat he was skeptical of the economic benefits of the tax scheme.

The flood of the crypto rich into Puerto Rico has also helped to drive up real estate prices.

"The lack of inventory and the high demand has resulted in prices that we have never seen before in Puerto Rico," said Francisco Diaz Fournier of Luxury Collection Real Estate.

"I've been tracking the markets for several years, and I was not expecting thisYou have properties in Dorado Beach that have been sold for more than $20 million," said Fournier, who tells CNBC that there are other properties listed on the market right now for $27 million, $30 million, and $34 million, numbers which have increasingly become par for the course.

Rising real estate prices and the growing cost of living have fanned the flames of resentment.

But Keiko Yoshino, who was a government employee in Washington, D.C., for seven years before making the move to Puerto Rico, is trying to close this divide by running programs that pull the two groups together to facilitate a knowledge transfer. Which, in theory, is part of what the tax incentive program set out to do in the first place.

Yoshino, who runs thePuerto Rico Blockchain Trade Association, plays a major role in planning and running Crypto Curious meet-ups.But a big part of what she's trying to do is dispel stereotypes.

"I had been called a crypto colonizer," Yoshino said. "I'm not crypto rich. I was a government employee for seven years. I don't even have incentives.We need to work on stereotypes going both ways. That's what I really like about crypto: It's not a political issue. It doesn't need to be a social issue. It's an opportunity to build community."

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Bitcoin millionaires are moving to Puerto Rico for lower taxes and island living - CNBC

TheNorthwest Arkansas Council, a nonprofit organization, is offering remote tech professionals and entrepreneurs $10,000 in bitcoin to move to the region.

Bitcoin, the largest cryptocurrency by market value, is currently trading at around $42,893, according to Coin Metrics.

Why bitcoin? "Northwest Arkansas is experiencing explosive growth in the tech sector, specifically within blockchain-enabled technologies, and this incentive embraces the growing trend of cryptocurrency as a payment option by employers," its website reads.

The incentive is part of the NWA Council's "Life Works Here" campaign,which is funded by the Walton Family Foundation. When it first launched in 2020, the NWA Council initially offered $10,000 cash as an incentive program.It recently decided to add the option for remote workers to accept the amount in bitcoin instead, although they can still choose cash if they prefer.

"While we've had overwhelming interest in the initial incentive program, we're continuing to seek out unique and in-demand talent in the STEAM and blockchain professions," the website says.

In order to be eligible, applicants must relocate to Northwest Arkansas, which includes Washington and Benton counties, within six months of acceptance to the program and sign a one-year lease or buy a home.

Applicants also must be at least 24 years old, have at least two years of work experience, currently live outside of the state of Arkansas and be a U.S. citizen or have the credentials required to work legally in the U.S., according to the program's website.

In addition to the money, the NWA Council is also offering to gift remote workers a bicycle, highlighting the region's mountain biking trails, or a free membership to local theaters and museums.

So far, over 35,000 people have applied from more than 115 countries and 50 states, the NWA Council says.

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Arkansas is offering remote tech workers $10,000 in bitcoin to move to there - CNBC