Category Archives: Bitcoin

Jun 24th 2021

THIS WEEK the price of bitcoin briefly dropped below $30,000, more than 50% off its April peak of almost $65,000. Investors are worried by a growing regulatory crackdown against the cryptocurrency. On June 21st China ordered several state-owned banks and Alipay, a fintech giant, to track and block transactions linked to it. Among other things, regulators worry about the environmental damage caused by the mechanism bitcoin uses to verify transactions and put new coins into circulation, known as proof of work (POW). In periods of high activity, as witnessed during much of 2021, bitcoin burns more energy than the whole of Argentina. The glaring inefficiencies of that process also explain why payments in bitcoin are slow and costly, and thus a rarity. That has fed appetite for alternative mechanisms, the most popular of which is dubbed proof of stake (POS). Ether, the second-most popular cryptocurrency after bitcoin, is preparing to switch to it; smaller coins already use it. What is POS, and can it solve bitcoins problems?

The Economist Today

A daily email with the best of our journalism

POWs raison dtre lies in that of bitcoin itself. As a decentralised currency, bitcoin lacks a trusted central authority that validates transactions. Instead it relies on a public consensus mechanism where each block of transactions is validated by someone on the network and then verified by everyone else. Miners put blocks together by picking pending transactions from a pool, ascertaining they are legitimate by checking, for example, that bitcoins are being spent by their true owner. To earn the right to add their block to the blockchainthe database that records transactionsminers compete to be the first to solve a complex numerical problem using super-fast computers. The one who does gets rewarded in new bitcoins. This sucks up huge amounts of energy, making POW both an ecological disaster and a crummy verification method (bitcoin can only process around seven transactions per second).

POS is an alternative consensus mechanism which doles out rewards based not on who first solves a mathematical puzzle but how much has been staked by competing validators. To earn the chance to validate transactions, network users must place coins in a specific digital wallet, where that sumthe stakewill remain frozen until the block of transactions is processed. Instead of paying out to those with the most computing power, POS picks winners randomly, with the probability of being chosen linked to the amount staked. Unlike POW, which pays miners with both a reward every time they create a new block and a fee per transaction, POS only does the latter. All this means the process requires far less equipment and energy than POW. Validators are incentivised to keep the network secure: the more they stake, the more they earn, but the more they also stand to lose if they try to hack the network or validate fraudulent transactions.

But POS has downsides too. It is less effective at putting new currency into circulation. It also encourages hoarding, since the probability of earning big fees rises in tandem with how much is held in escrow wallets, rather than spent in transactions. That is bad for a currencys availability and liquidity, which limits its usefulness and makes its value even more volatile. It could also end up concentrating validating powers in fewer and fewer hands, defeating the purpose of decentralisation. In POW, by contrast, miners are encouraged not to cling on to their crypto, since to engage in the mining arms race they constantly need fresh real-world funds to upgrade their hardware. This unsatisfactory state of affairs has led to a mushrooming of hybrid protocols, such as proof of activity or proof of burn. Others, such as proof of capacity, which rewards users based on how much space they have on their hard drives, use different methods. But none of them has yet managed to steal POWs crown, and with it knock bitcoin off the top spot.

Dig deeper:The boundary between crypto and fiat money is becoming more permeableIs the financial establishment coming round to bitcoin?Special report: The future of banking

Read more:
The Economist explains Can bitcoin be bettered? - The Economist

Chesnot/Getty

Bitcoin broke in the New Year in a particularly powerful way: By breaking the $30,000 price barrier for the first time. That was a sign of the good times to come, as by March its price was popping over $60,000. But, as they say, what goes up...

On Tuesday morning, Bitcoin dipped under $30,000 for the first time this year. It followed Monday's news that China, which has long had a softly enforced ban on cryptocurrency, is getting serious about cracking down on cryptocurrencies. Social media was awash with observers pointing out that 2021's price gains have for now been neutralized.

Subscribe to CNET Now for the day's most interesting reviews, news stories and videos.

The price has since rebounded, to just under $34,000 at the time of writing.

Bitcoin wasn't alone, however. Ether, the second biggest cryptocurrency, fell to $1,730, its lowest price since the end of March. DogeCoin dipped to 17 cents, under a quarter of its all-time high of 73 cents. Both have also rebounded slightly, with Ether at $1,975 and DogeCoin at 19.8 cents. For reference, Ether's all-time high is $4,132.

It's the second slump caused by China's regulators this year. In May, Chinese officials reaffirmed an old ban that forbids financial firms from actively aiding in the mining and selling of cryptocurrencies. It caused a big dip, but crypto enthusiasts shrugged that the ban is nothing new. It was enshrined in 2013 and then sparsely enforced.

Now playing: Watch this: Why cryptocurrency took a hit

3:37

On Monday, however, moves made by China indicated the law would be enforced much more seriously. Key banks and financial services companies like Alipay attended a meeting by China's central bank, the South China Morning Post reports, where they were told to crack down on cryptocurrency trading. It came days after regional authorities ordered the closure of 26 mining operations in Sichuan.

"Virtual currency transactions and speculative activity have disrupted the normal order of the economy and financial [system]," thecentral bank said in a statement on its website. "They increase the risks of illegal cross-border transfers of assets and illegal activities such as money laundering. "

The decentralized nature of cryptocurrency is anathema to the Chinese Communist Party's focus on stability -- and control. Though shunning Bitcoin, Ethereum and other cryptocurrencies, China is working on rolling out its very own digital currency, the e-yuan.

Bitcoin enthusiasts are comparing the cryptocurrency to Google, whose share price continued to flourish after being banned in the People's Republic in 2010. They say that China neglects cryptocurrencies at its own peril, and that this will be a long-term positive for the US.

Dogecoin holders are less tranquil. The memecoin entered the year being valued at less than a cent and was pumped by Elon Musk and an ironic internet movement hoping to boost it to 10 cents -- similar to the movement trying to get GameStop's stock to $1,000. The 10-cent target was met in April, and then thoroughly eclipsed in the month that followed. With hype building around a potential announcement from Musk at SNL, the memecoin hit 73 cents. After Musk referred to Dogecoin as "a hustle" on the show, its value plummeted, a trend that's continued for the past month.

More here:
Bitcoin falls below $30,000 after China's crackdown: Everything you need to know - CNET

Illustration by Sjoerd van Leeuwen

Text size

Canada is planting 30 million trees this season. The purpose is to build a powerful carbon sink.

Carbon is not the only thing that modernity produces in excess. There is a surfeit of capital. Absorbing it has become a major challenge and threatens financial stability. There are more than $13 trillion of negative-yielding bonds in the world. Despite claims of exorbitant privilege, the U.S. government pays about 1.5% interest to borrow for a decade, historically low and below the Federal Reserves inflation target. Japan and Germany, the next largest market economies, can borrow at considerably lower rates. Germany charges investors nearly 20 basis points, or 0.2%, annually for the privilege of lending to it. It is not coincidental that cryptocurrencies were born in an age in which savings are abundant.

Capital is subject to the same law of supply and demand as other sectors of society. Capital is cheap because it is abundant. Large companies have more money than they know what to do with, so they return it to shareholders in stock buybacks and dividends. The drive to improve returns fuels mergers and acquisitions.

Equity valuations are stretched. House prices in many countries are rising quickly. Credit spreads, which measure how much one is paid for a unit of risk, are historically tight.

Excess capacity is another expression of surplus savings, that is, overinvestment. The U.S. economy is roughly the size it was on the eve of the pandemic. Yet around 7.5 million fewer people are working. Despite a booming economy, the U.S. is using a little more than three-quarters of its industrial capacity. Even at the end of 2019, it was just above 76%.

Capital is abundant because market-based economies are huge wealth creators. By applying science to production and finance, capitalism has been incredibly successful. And it turns out that to succeed, capitalism does not need to permit slavery, employ children, or deny women the right to vote. It can provide unemployment insurance, social security, and head-start services without being dictated to or sacrificing personal liberty. Its plasticity confounds critics. It can be reformed.

However, capitalisms biggest weakness grows out of its most powerful strength, one that cannot be reformed away. It produces wealth on levels heretofore inconceivable. We live in an epoch that King Midas would recognize. We are choking on our wealth. Even if one does not recognize the disease (the idea of surplus capital is still controversial in some circles), the symptoms are undeniable. The return to capital is low, whether it is interest rates or profit margins. Redundant investment (excess capacity) is another symptom. Efforts to rationalize industries are part of the M&A wave. Corporations have become net providers of capital, no longer net borrowers. Speculation is extensive, and the gamification of investing began long before Robinhood and the legalization of sports betting in the U.S.

If we will not address the underlying distributional issues and the disparity of income, wealth, and power, then we need to channel the surplus savings away from those expressions that help fuel economic and political instability. What is needed is a vehicle that does to savings what trees do to carbon. Voil! Enter crypto.

Some diehards continue to insist that crypto is money. El Salvadors President Nayib Bukele recently pushed through plans to recognize Bitcoin as legal tender. More than two-thirds of the nations population lacks bank accounts or credit cards. Bitcoin rose about 270% from mid-December to mid-April and has since been halved. Volatility makes this a dangerous experiment. Lets see if it lasts longer than Teslas offer to sell cars for Bitcoin.

Perhaps the function of crypto is to redirect savings from lifting equities to even more stretched values, or pushing nominal and real rates lower, or creatively destroying goodwill in acquisitions. Some have said that blockchain was a solution looking for a problem. The problem that crypto may attempt to address is the need for a new asset to absorb the wealth in a nonthreatening, ideologically safe way.

Crypto was born during a period of great concentrations of wealth, and it cannot help but reflect that origin. Despite the talk of decentralized finance, ownership of crypto, let alone trading, appears highly concentrated. One recent study found that more than 72% of Bitcoins (now about $33,000 each) are owned by those with 100 or more Bitcoins, along with miners and brokers. Nearly 32% are owned by those with 1,000 or more Bitcoins. A recent survey by Gemini, a crypto exchange, found that the average crypto trader was a 38-year-old male whose household made about $111,000, roughly 60% more than the median family income in the US.

The volatility and environmental issues of some models (proof-of-work) suggest that even as a centralized store of value, cryptos role as a savings trap may be limited. It will not solve the challenge of capitalisms unparalleled ability to produce wealth. The current steep decline in the face of strong price pressures weakens arguments of a hedge against inflation and as store of value. Ultimately, crypto is another expression of the surfeit of capital.

Marc Chandler is chief market strategist, Bannockburn Global Forex.

Visit link:
Bitcoin Wont Solve the Problems of a Society That Is Overproducing Capital - Barron's

Bitcoin, the worlds No. 1 cryptocurrency, fell to its lowest level since January on Tuesday, extending a price drop that has wiped out more than $1.3 trillion in market value for the broader crypto complex since a peak in May.

After falling as low as $29,083 on Tuesday morning, bitcoin BTCUSD, -0.07% was changing hands at nearly $32,000 by Tuesday evening, according to CoinDesk data. The days nadir marked its lowest price and its first breach of the psychologically significant $30,000 level since January, according to Dow Jones Market Data. Bitcoin is down more than 50% from its mid-April peak, paring its year-to-date gain to 10.4%.

Ether coin ETHUSD, -0.59% on the Ethereum blockchain, the No. 2 most valued crypto, was deepening a slide below $2,000 and trading at $1,874 on Tuesday evening. Ether is down about 60% from its peak, though it is up 150% on the year to date.

Bitcoinhas violated an important support level and it is likely that we may see more panic in the market as investors will think that it may be the end ofBitcoin, wrote Naeem Aslam, chief market analyst at AvaTrade in a Tuesday note.

But investors should remember thatBitcoinis a kind of asset which has fought many similar pessimistic views many times. The current sell off could be the opportunity for many investors to load their portfolio withBitcoinwhich is selling at a huge discount, the analyst wrote.

Meanwhile, dogecoin DOGEUSD, -0.69%, the popular meme asset, was changing hands at around 19 cents, 2 cents above its daily low and down 75% from its early May peak.

The decline for the crypto has been attributed to regulatory action by China, where regulators have imposed restrictions on digital mining and trading of crypto in the Peoples Republic.

Cryptos price correction also comes as traditional markets are trying to recover from a brutal selloff last week. The Dow Jones Industrial Average DJIA, -0.44%, the S&P 500 index SPX, +0.23% and the Nasdaq Composite Index COMP, +0.98% saw a powerful rebound from last weeks slide on Monday as digital assets sank, leading some analysts to speculate that bitcoin might be experiencing a rotation out of the crypto and into equities.

Read the original:
Bitcoin breaks below $30,000 for first time since January and 'it is likely we may see more panic in the market' - MarketWatch

Longtime crypto bull Meltem Demirors reiterated her confidence in the cryptocurrency Tuesday, telling CNBC she believes the correction in bitcoin is simply weeding out the investors with "paper hands."

Paper hands is a term used in the crypto community to characterize people who sell a digital asset such as bitcoin when turbulence strikes markets. It's the opposite of so-called diamond hands, or ardent believers who say they will hold for the long term.

"We had 200 days of market expansion. You can't have a number go up forever. That doesn't happen in any market," Demirors said on "The Exchange." "What we're seeing is a correction, a contraction, and a lot of what is getting shaken out is what we call the 'paper hands,' the 'weak hands.'"

Demirors, the chief strategy officer at digital asset investment firm CoinShares, pointed to transaction activity on the bitcoin blockchain to support her view.

"There's a lot of retail that entered, didn't do their research, and is now selling. There are not a lot of long-term holders selling," she said. "If we look at on-chain activity, wallets that have been holding for a long time have actually been using this opportunity to accumulate."

Demirors' remarks on CNBC follow a wild ride for bitcoin Tuesday, which began with a heavy drop below the key $30,000 support level beforebouncing back into positive territoryin the afternoon. Analystshad been watchingthe $30,000 level after the cryptocurrency experienced a series of losses in May.

Earlier Tuesday morning, Wall Street strategist Tom Lee hadtold CNBCthat the world's largest cryptocurrency by market value faces a rough technical picture in the near term but that he still believes that bitcoin by market value could reach $100,000 per token by the end of 2021.

Like Demirors, Lee said he believes a lot of the recent selling has been from retail traders who jumped into bitcoin earlier this year when the cryptocurrency was marching higher toward its all-time high near $65,000 in April.

"I think we're going to continue to see consolidation here," Demirors said. "There is a lot of macro-uncertainty. Obviously, there's a lot of uncertainty around policy. There's also a lot of negative headlines."

China has recently been intensifying its crackdown on cryptocurrency.

"I think part of this is just the cycle we go through every several years with crypto, but we are seeing a lot of new inflows. We are seeing a lot of activity, in particular, on the market side," Demirors said.

While Demirors said "bitcoin has always been volatile," she explained that during the steep pullback in May, there was "a bunch of leverage coming off across the board. Now, we're done deleveraging. Now we're seeing a lot of cash selling."

View original post here:
Crypto strategist says bitcoin pullback is shaking out investors who have 'paper hands' - CNBC

Well, that was fast. Bitcoin has gone from a death cross to nearly a bull market in just a few short days.

Bitcoin formed that death crosswhat market technicians call the moment when the 50-day moving average drops below the 200-day moving averageover the weekend. It was a sign that more selling could be on the way.

And selling happened for a couple of days. Bitcoin went from more than $36,000 to less than $29,000 between Sunday and Tuesday, and had lost more than half its value from its all-time high.

Newsletter Sign-up

A morning briefing on what you need to knowin the day ahead, including exclusive commentary fromBarron's and MarketWatch writers.

Then the selling stopped. Bitcoin is back near $34,000 Wednesday, an 18.5% bounce. Another 1.5 percentage points and Bitcoin will have gained 20%, which would qualify as a bull market.

Although with all the volatility, maybe typical bull and bear market designations dont apply to the cryptocurrency.

Al Root

*** Join Barrons senior managing editor Lauren R. Rublin, healthcare reporter Josh Nathan-Kazis, and RBC analyst Luca Issi Thursday at noon to discuss gene therapy and other innovations in biotechnology. Sign up here.

White House chief medical advisor Dr. Anthony Fauci called the Delta Covid variant the greatest threat to U.S. efforts to defeat the virus, with infections doubling about every two weeks.

Whats Next: Fauci said studies have shown that the Pfizer - BioNTech vaccine is 88% effective against the Delta variant two weeks after the second dose, and he urged Americans to get fully vaccinated to crush the outbreak.

Janet H. Cho

Investment bank Morgan Stanley told its staff on Tuesday that employees, clients, and visitors will have to prove they have been fully vaccinated before being allowed access to the firms offices in New York.

Whats Next: Morgan Stanley could follow Goldman Sachs in requiring employees to disclose their vaccine status. Such disclosure is voluntary at Morgan Stanley, as it is at JPMorgan.

Pierre Brianon

The Federal Trade Commission will review Amazon.coms planned takeover of the Hollywood studio MGM. The regulators new chair, Lina Khan, has been critical of the online retailers size and influence.

Whats Next: FTCs Khan, confirmed to the commission last week, made her name in antitrust circles by criticizing Amazon and broadly has argued that U.S. antitrust enforcement needs major changes to rein in dominant companies.

Liz Moyer

The median existing home price rose 23.6% to a record $350,300 in May, the highest year-over-year jump in at least 22 years, the National Association of Realtors said Tuesday. More buyers, lower borrowing rates, and fewer available homes pushed prices up.

Whats Next: Homes spent only about 17 days on the market in May, and sellers are getting multiple offers, fueled by low mortgage rates. More than half of homes sold above their list price in May, real-estate brokerage Redfin said.

Shaina Mishkin and Janet H. Cho

Peloton Interactive, once a stay-at-home darling, is shifting gears for the return to the office.

Whats Next: Some analysts have questioned whether Peloton can keep up its pandemic-fueled growth. Offering programs for large corporations could be one area for the company to attract new customers.

Connor Smith

Dear Quentin,

My fiance and I are currently in the process of planning a wedding, reassessing where wed like to buy a house. She is about to begin her 10-month unpaid internship in order to complete her Masters degree.

Throughout all of this, the biggest issue were facing is the wedding. We have been together for close to 11 years, and have been engaged for one year.

For the longest time, I thought we were on the same page---small wedding, no engagement photos, save the money, get a house, why go into marriage in debt?

As we begin to peel the layers of the onion, her thoughts have changed dramatically. She now envisions a wedding with 80-plus guests in a rented venue. She wants engagement photos. She wants to provide either plated or buffet food.

All of these things are adding up, even though we set a hard budget at $15,000, and we dont even have a quarter of that saved. I have money in stocks and I have savings, but I am strongly refusing to touch either of them for the sake of this joyous occasion.

Her parents have offered close to $10,000 to help, but I have insisted that money is better suited for a downpayment on a house when the time comes.

Im being looked at as simply someone who is unwilling to budge, and shes asked if I truly even want to get married.

How do I go about approaching this? I dont want to stonewall her at every turn. I want her to have an amazing day we remember for the rest of our lives, but shes yet to propose a plan on how we can save this money. I am beginning to feel as though shes looking at me to foot the bill almost entirely by myself.

Marriage sure does make love suck. Please tell me if Im pinching my pennies a little too tightly, or if Im right on the money.

Frustrated With Financials

Read The Moneyists response here.

Quentin Fottrell

Newsletter edited by Liz Moyer, Mary Romano, Matt Bemer, Ben Levisohn

Read this article:
Bitcoin Prices Wild Ride: From Death Cross to a Near Bull Market. - Barron's

Like most economists, I have always been a Bitcoin skeptic. The question has always been, What purpose does it serve?

The idea that it would be a useful alternative currency is laughable on its face. How can you have a currency that wildly fluctuates year to year and even hour to hour? Imagine if you had a wage or rent contract written in Bitcoin. Both your pay and your rent would have more than tripled over the last year, likely leaving you unemployed and unable to pay your unaffordable rent. Economists often exaggerate the problem of inflation, but having currency that has large and unpredictable increases and decreases in value is a real problem.

So, Bitcoin may not be very useful as a currency, but maybe we can just treat it as an outlet for harmless speculation, like baseball cards or non-fungible tokens. Well, it turns out that Bitcoin is not entirely useless. It is the currency of choice for those engaging in illegal activities like dealing drugs and gunrunning, and, of course, extorting companies with ransomware. (Its value for this purpose took a major hit when the FBI was able to retrieve much of the money paid by Colonial Pipeline to the hackers who infiltrated its system. Apparently, Bitcoin transactions are not as untraceable as advertised.)

But Bitcoin cannot be dismissed as just fun and illegal games; it turns out it is also a major contributor to global warming. Bitcoin mining, the process by which new bitcoins are brought into existence, uses up an enormous amount of electricity. According to ananalysisby researchers at Cambridge, Bitcoin mining uses more energy in a year than the country of Argentina.

This means that a lot of greenhouse gases are being emitted for essentially nothing. Most greenhouse gas (GHG) emissions are due to things like heating and cooling our homes, transporting our food and ourselves, and also producing our food. These are all real needs. We can find ways to emit less GHG, for example, by traveling less or switching to an electric car that will hopefully be fueled by clean energy, but these involve some sacrifice or some expense.

Doing with less Bitcoin should be easy by comparison. That is the logic of taxing Bitcoin transactions; we tax the items of which we want to see less.

First and foremost, a tax on Bitcoin transactions would raise revenue. I would propose a substantial tax on transactions of 1 percent annually. This compares to the tax 0.1 percent on stock trades that has been put forward by Representative Peter DeFazio in the House and Senator Brian Schatz in the Senate.

The reason for suggesting a higher tax on Bitcoin is that there would be little consequence for the economy if the Bitcoin market were seriously disrupted. People engaged in ransomware attacks might see somewhat more volatility in the value of their payments, and may find it slightly more difficult to change them back into traditional currencies, but otherwise there would be little economic impact.

By contrast, even with all the speculative trading on financial markets, they do still serve a productive purpose, so we would want to be cautious about imposing a tax that could be destabilizing. As it is, a tax of 1 percent is hardly without precedent. The United Kingdom currently has a tax of 0.5 percent on stock trades. It had been 1 percent until 1986. Nonetheless, the UK had one of the largest stock exchanges in the world.

Clearly, a 1 percent transactions tax on Bitcoin will not shut down the market. However, it will substantially reduce the volume of transactions. It also is likely to make the currency less attractive to anyone who doesnt need it for illicit purposes, which will reduce its value. This should mean that people will devote fewer resources to mining Bitcoin, which is a real win for the world.

There is also the issue of how much revenue a Bitcoin tax would raise. Currently,trading volume is around $1 billion a day, or $350 billion a year. A tax of 1 percent would get us $3.5 billion a year, if there were no decline in trading volume. But, of course, the whole point of the tax is to reduce trading volume and interest in Bitcoin. If we see volume cut in half, due to both less trading and a lower Bitcoin price, then we would raise $1.75 billion a year, or $17.5 billion over the course of a ten-year budget horizon.

This is not huge money in terms of the whole budget. The Center for Economic and Policy Researchs Its the Budget, Stupid budgetcalculator tells us that is would be equal to 0.03 percent of the total budget. Thats not a huge deal, but not altogether trivial. The annual take is equal to roughly 110,000 food stamp person-years.

But there is another benefit of going the Bitcoin transaction tax route. We can experiment with enforcement mechanisms with little downside risk.

It is often claimed that financial transactions taxes are unenforceable. The evidence suggests otherwise. The UK raised an amount equal to 0.2 percent of GDP annually (roughly $44 billion in the US economy) from its tax on stock trades. (Other financial assets are not subject to the tax.) There are manyother countriesin the world that raise substantial revenue from financial transactions taxes.

We also have a modest financial transactions tax in the United States already. Stock trades are subject to a tax of 0.0042 percent. The tax raises roughly $500 million annually, which is supposed to finance the operation of the Securities and Exchange Commission.

Clearly, financial transactions taxes are enforceable, but there are certainly many trades that escape taxation. Evasion is likely to be an even bigger problem with Bitcoin, where many of the transactions involve illegal activity.

This is why we have a great opportunity to innovate. In addition to the other mechanisms available for enforcement, we can also offer a reward to people turning in tax evaders. We can, for example, give them 20 percent of the tax collected from their lead.

To take an example, suppose someone trades $200 million in Bitcoin. With a 1 percent tax rate, they would owe $2 million. If they chose not to pay their taxes, and an employer reported this person to the IRS, they would stand to collect $400,000, which would be a pretty payday. This sort of reward system would give workers a strong incentive to report the tax evasion of their bosses.

A tax on Bitcoin transactions would be a great place to test run this sort of incentive. Since there is little reason to care if the Bitcoin market is disrupted, there is not really a downside. If the reward system proves effective in cracking down on evasion, we have a new tool that can be applied elsewhere if we choose to tax financial transactions. We also can see any problems that might appear in this system and make the necessary adjustments so that we are better prepared to implement a financial transactions tax to larger financial markets.

In short, the Bitcoin market gives a great laboratory for experimenting with financial transactions taxes. While there is enough experience both here and elsewhere in dealing with financial transactions taxes that we can be reasonably confident that one can be implemented without great difficulty, until there is the political will to put in place a broadly based tax, we can use the Bitcoin market as a place to practice.

The rest is here:
We Need to Start Taxing Bitcoin - Jacobin magazine

The cryptocurrency aficionados mantra that Bitcoin is equivalent to digital gold is winning converts among the worlds biggest holders of the precious metal.

In India, where households own more than 25,000 tonnes of gold, investments in crypto grew from about $200 million to nearly $40 billion in the past year, according to Chainalysis. Thats despite outright hostility toward the asset class from the central bank and a proposed trading ban.

Richi Sood, a 32-year-old entrepreneur is one of those who swerved from gold to crypto. Since December, shes put in just over 1 million rupees ($13,400) some of it borrowed from her father into Bitcoin, Dogecoin and Ether.

And shes been fortunate with her timing. She cashed out part of her position when Bitcoin smashed through $50,000 in February and bought back in after the recent tumble, allowing her to fund the overseas expansion of her education startup Study Mate India.

Id rather put my money in crypto than gold, Sood said. Crypto is more transparent than gold or property and returns are more in a short period of time.

Shes part of a growing number of Indians -- now totalling more than 15 million -- buying and selling digital coins. Thats catching up with the 23 million traders of these assets in the U.S. and compares with just 2.3 million in the U.K.

They find it far easier to invest in crypto than gold because the process is very simple, said Sandeep Goenka, who co-founded ZebPay and spent years representing the industry in discussions with the government on regulation. You go online, you can buy crypto, you dont have to verify it, unlike gold.

However, authorities show no signs of embracing cryptocurrencies. The nations central bank says it has major concerns about the asset class and six months ago the Indian government proposed a ban on trading in digital coins though it has been silent on the topic since.

I am flying blind, said Sood. I have a risk-taking appetite, so Im willing to take a risk of a ban.

The official hostility though means many bigger individual investors are reluctant to speak openly about their holdings. One banker Bloomberg spoke to who invested more than $1 million into crypto assets said with no clear income tax rules at present he was concerned about the possibility of retrospective tax raids if he was publicly known to be a big-ticket crypto investor.

Hes already got contingency plans in place to move his trading to an offshore Singapore bank account if a ban was to be introduced.

To be sure, the value of Indian digital asset holdings remain a sliver of its gold market. Still, the growth is clear, especially in trading -- the four biggest crypto exchanges saw daily trading jump to $102 million from $10.6 million a year ago, according to CoinGecko. The countrys $40 billion market significantly trails Chinas $161 billion, according to Chainalysis.

For now, the increasing adoption is another sign of Indians willingness to take risk within a consumer finance sector thats plagued with examples of regulatory short falls.

I think over time everyone is going to adopt it in every country, said Keneth Alvares, 22, an independent digital marketer who has invested more than $1,300 in crypto so far. Right now the whole thing is scary with regulation but it doesnt worry me because Im not planning to remove anything for now.

More here:
Bitcoin becoming the new gold as Indians pour billions into crypto - Economic Times

In 2020, the Film & TV industry experienced unprecedented growth. Amidst the global pandemic, audience demand for streaming services surged, production spending grew, and TV series budgets reached all-time highs.

The industrys growth isnt likely to slow down anytime soon and with the recent slew of media mergers, even more change is on the horizon.

What key developments in the Film & TV industry are worth paying attention to? Based on research compiled by Purely Streamonomics, heres a look at the four emerging trends that could revolutionize the industry as we know it.

As worldwide lockdown measures drove people indoors, audience demand for home entertainment surged.

Between 2019-2020, the number of global online video subscriptions increased by 26%, reaching 1.2 billion subscriptions. This growth is expected to continue in the coming yearsin fact, by 2025, subscriptions are expected to reach 1.6 billion worldwide.

In tandem with this growing audience demand, new streaming platforms are entering the market at an accelerated pace. 2020 welcomed four new subscription video on demand (SVOD) platforms: Apple TV, HBO Max, Peacock, and Disney+.

New SVOD platforms have garnered large audiences in a short amount of time. For example, Disney+ has already gained over 100 million subscribers since its launch in November 2020.

In addition to SVOD services, advertising video on demand (AVOD) platformswhich generate revenue through ads instead of subscribersare also gaining popularity. Some of these ad-funded services have built up larger audiences than their SVOD counterparts. For instance, IMDbs free platform IMDbTV has 55 million monthly active users, which is more than Hulus number of paid subscribers.

As more platforms emerge and audience demand grows, spending on content production continues to ramp up as well.

In 2020, a record-breaking $220.2 billion was spent on making and acquiring new feature films and TV programmingthats a 16.5% increase compared to production spending in 2019.

Where in the world is all this production spending coming from? Perhaps unsurprisingly, over two-thirds of global spending in 2020 came from the U.S. and Canada.

Despite Hollywoods dominance, its worth noting that smaller markets in regions such as Latin America, Africa, and the Middle East experienced significant growth in 2020.

With overall content spending at an all-time high, the independent film (indie) market is experiencing growth as well. In fact, of the billions spent on content production, over half went to indie filmmakers.

Keep in mind, this estimate includes direct spending on indie content, along with indirect funding through licensing and co-financing agreements with big studios. In other words, players like Disney and Warner Bros. still technically produce the most contenthowever, they often outsource production work to independent filmmakers, or buy the rights to indie content, to distribute on their streaming platforms.

All in all, global spending on indie content increased by 25.3% in 2020, year-over-year. And this indie growth could continue into 2021 and beyond, as distributors and streaming giants rush to fill their content pipelines that have run dry because of production challenges and delays caused by COVID-19.

As more competition enters the streaming market, producers are facing pressure to up their production value so they can keep their audiences attention. In other words, because the stakes are getting higher, the cost of production is risingespecially for TV.

In 2020, the budget for an average TV series in the U.S. was $59.6 million, a 16.5% increase year-over-year. One of the most high-cost TV shows last year was WandaVision, a Marvel Cinematic Universe series that cost Disney approximately $200 million (which breaks down to around $25 million per episode).

As series budgets rise, the line between film and TV has started to blur. For instance, characters and narratives from WandaVision will have direct ties to the upcoming Doctor Strange sequel, which gives fans an extra incentive to watch the Disney+ series.

Despite months of disruptions caused by COVID-19, the Film & TV industry showed resilience in 2020. But its only just the beginningas audience demand continues to grow, and budgets keep rising, growth has become the new normal.

This graphic is brought to you by Purely Streamonomics, a monthly newsletter that provides key insights into the global Film & TV market.

See the article here:
Visualizing the Carbon Footprint of Gold and Bitcoin - Visual Capitalist

A customer uses a bitcoin automated teller machine (ATM) in a kiosk Barcelona, Spain, on Tuesday, Feb. 23, 2021.

Angel Garcia | Bloomberg | Getty Images

Bitcoin was originally created to be like digital cash, but it's real-world use case has evolved since its inception. More than anything, investors are buying it now as a speculative investment.

The price was sitting at $37,100 asof Friday afternoon and has been struggling to rebound to its May highs after Tesla CEO Elon Musk began moving crypto markets, sending bitcoin lower. The cryptocurrency is the largest by market cap, which is $693 billion as of Friday, according to Coin Metrics.

Historically, bitcoin's demand has been driven largely by retail investors, but that narrative changed late last year as big investors and institutions began reconsidering their positions on it. Bitcoin has always and continues to suffer from reputational issues that are hard for it to shake, mostly because of its newness and therefore the lack of data or history to support its raison d'tre.

If you've gotten caught in the confusion and misinformation around bitcoin, here are the key things to focus on if you're considering bitcoin for your portfolio.

Read the original:
If you're thinking about investing in bitcoin, consider these risks first If you've gotten - CNBC