Category Archives: Cryptocurrency

The cryptocurrency industry is getting so big and enabling so much risk-taking that governments around the globe are taking notice.

Bitcoin traded above $50,000 Monday; its total value now exceeds $900 billion, more than all but a handful of companies. Digital currencies called stablecoins grease ever more trading and issuance. Giant crypto exchanges in Asia offer 100-to-1 bets, often serving traders in countries where their products arent legal.

After years of relative inattention, regulators and lawmakers are scrambling to catch upbut it wont be easy. They aim to rein in a rebellious industry that has adopted the tech worlds blueprint for aggressively deploying new products to quickly amass userswhile often leaving regulatory compliance as an afterthought.

Some of the largest crypto firms are under increasing pressure. In recent weeks, Binance, the worlds biggest crypto exchange, was barred from or warned about offering certain crypto investments in the U.K., Italy, Germany, the Netherlands, Japan and Hong Kong. It said Friday that all new users would have to provide an identification document and photo of themselves to verify their identity. BitMEX, another large exchange, paid $100 million to settle a U.S. regulatory investigation related to claims of illegally selling derivatives and lackluster anti-money-laundering compliance.

Yet few industry participants expect the crypto world, emboldened by a surge over the past 18 months in the value of and interest in their products, to suddenly change its ways. Regulators are scrutinizing the industry as never before, but so far coordination appears limited and key jurisdictions are pursuing widely divergent approaches.

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Cryptocurrencys Surge Leaves Global Watchdogs Trying to Catch Up - The Wall Street Journal

Global adoption of cryptocurrency has taken off in the last year, up 881%, with Vietnam, India and Pakistan firmly in the lead, according to new data from Chainalysis.

It is the second year the blockchain data firm has released its Global Crypto Adoption Index, which ranks 154 countries according to metrics such as peer-to-peer exchange trading volume, rather than gross transaction volume, which typically favors developed nations with high levels of professional and institutional crypto buy-in.

Chainalysis said the purpose of the index is to capture crypto adoption by "ordinary people" and to "focus on use cases related to transactions and individual saving, rather than trading and speculation." The metrics are weighted to incorporate the wealth of the average person and the value of money generally within particular countries.

Most of the top 20 countries are emerging economies, including Togo, Colombia and Afghanistan.

Meanwhile, the United States slipped from sixth to eighth place, and China, which cracked down on crypto this spring, dropped from fourth to 13th.

Chainalysis ascribes the rising adoption levels in emerging markets to a few key factors.

For one, countries such as Kenya, Nigeria, Vietnam and Venezuela have huge transaction volumes on peer-to-peer, or P2P, platforms when adjusted for purchasing power parity per capita and the internet-using population.

Chainalysis reports that many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don't have access to centralized exchanges.

The report also says many residents of these countries turn to cryptocurrency to preserve their savings in the face of currency devaluation, as well as to send and receive remittances and carry out business transactions.

Matt Ahlborg, a peer-to-peer data analyst, told CNBC that Vietnam is one of the top markets for Bitrefill, a company that helps customers live on cryptocurrency by buying gift cards using bitcoin.

"Vietnam stood out to me because it dominated the index," said Chainalysis' director of research, Kim Grauer, who compiled the report.

"We heard from experts that people in Vietnam have a history of gambling, and the young, tech-savvy people don't have much to do with their funds in terms of investing in a traditional ETF, both of which drive crypto adoption," Grauer said.

Nigeria is a different story, Grauer said. "It has a huge commercial market for crypto. More and more commerce is done on the rails of cryptocurrency, including international trade with counter parties in China."

These top-ranking nations have another thing in common, according to Boaz Sobrado, a London-based fintech data analyst. "Many have capital controls or a strong emigrant and immigrant population," he said.

Take Afghanistan, a country currently in turmoil due to the Taliban's recent overthrow of the government.

"Afghanistan on top makes sense from a capital controls point of view, given it's hard to move money in and out," Sobrado said.

The correction for purchasing power parity and gross domestic product may also have boosted its placement, given that Afghanistan is one of the world's poorest countries.

Analysts note that measuring cryptocurrency adoption at the grassroots level isn't easy.

"The methodology has a huge blindspot," Sobrado said. "Unlike many other countries, sanctioned nations don't have good and clear data on P2P markets."

Because of that, he said, he believes sanctioned nations such as Cuba will be underestimated, simply because it is harder to track those transactions.

Ahlborg said there is no perfect way to measure per capita global crypto adoption but that this index is "one of the best we have."

--CNBC's Nate Rattner contributed reporting to this piece.

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This map shows where cryptocurrency is taking off around the world - CNBC

Last week, the Senate approved a massive infrastructure package making serious investments in building out the USs roads and bridges. It would be the largest domestic spending bill in almost a decade, and nearly every powerful lobbying shop circled Washington for months trying to shape its language.

But one industry was surprisingly thrown into the fight last minute: cryptocurrency. When the Senate finally announced the bill text earlier this month, it included a provision that could impose devastating new tax requirements for wallet developers and miners. Suddenly, the cryptocurrency industry and its few lobbying shops faced one of its largest regulatory threats ever. They needed all of the digital foot soldiers they could get to help rally senators and fix the problematic language.

So, they turned to their vast and vocal online community of investors and posters.

We are at an advantage in grassroots organizing because were a structurally networked community, Neeraj Agrawal, director of communications for Coin Center, told The Verge. Everybody in cryptocurrency knows everybody else for the most part so information moves really fast across various social channels.

Advocacy groups and blockchain organizations were quickly able to direct their grassroots digital communitys energy toward the fight. Fight for the Future and the Electronic Frontier Foundation were able to prompt more than 40,000 calls to senators ahead of the bills final vote on the floor.

High-profile celebrities and influencers like Ashton Kutcher and Twitter CEO Jack Dorsey also came out in opposition of the bill, posting tweets prompting their followers to call on their senators to fix the language. These tweets inspired other community members to take part in the effort by making calls and posting their own tweets with information from Fight for the Future.

Senators who were probably not even paying very much attention to this section of the infrastructure bill suddenly saw their Twitter feeds swamped with messages from their own constituents, said Rainey Reitman, EFFs chief program officer. It was so much they couldnt ignore it.

The reason this even became a conversation in Washington was because of Twitter, Reitman continued.

Even crypto-focused YouTubers and TikTok accounts pivoted toward advocacy, informing their followers about the bill and how it could affect the industry. One TikTok user posted a video dancing behind text that said, Dance if ur an 87 year old senator single-handedly ruining the economy over a $50 billion military dispute, calling out Sen. Richard Shelbys (R-AL) objection to an amendment to fix the language.

Its a surprising shift for an industry that has typically been an outsider in Washington, often directly opposed to well-established players like law enforcement and the banking industry. But as digital assets companies have been drawn into regulatory fights, theyve had to engage with the process to defend themselves, whether against regulators calling for more authority over the industry or a growing concern over ransomware attacks.

The new push drew heavily on infrastructure from previous online organizing drives. The 2017 net neutrality fight was fought largely online with organizations like Fight for the Future and EFF using social media to prompt internet users to get involved in a policy battle that affected their favorite websites. Once the controversial language was added to the infrastructure bill, those same groups used the tactics theyd perfected in the net neutrality fight to push back.

Reitman says the shift to digital organizing has also been a factor, as cryptocurrency fans are using online platforms like Twitter and Hacker News to educate themselves, educate other people, and then start speaking out about regulation.

Even with the heightened political pressure, its too early to say where Congress will land on the new cryptocurrency rules. Cryptography groups failed to stop the provisions in the Senate, and all hopes now rest on stripping the language from the House version of the bill. As of publication, its unclear if congresspeople will have one last opportunity to amend the bill before it reaches its final vote.

House Speaker Nancy Pelosi (D-CA) faces an uphill battle in passing the infrastructure package at all. Progressive members say they wont vote for the Senate-passed $1 trillion package unless its tied to a broader $3.5 trillion social services bill. Some moderate Democrats pushed back, saying they wouldnt vote to begin writing the larger bill unless the infrastructure package is approved first. If the two bills get tied together, it could make it harder for any lawmaker to bring an amendment to change the cryptocurrency language to the floor.

Still, last weeks organizing efforts proved that the cryptocurrency community has grown into an impressive political force in Washington.

It was really amazing to see how quickly they were able to turn that functionality on and get so many people involved, Kristin Smith, executive director at the Blockchain Association said. Its definitely a turning point for the industry and I think one that will hopefully lead to better policy down the road.

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Cryptocurrency supporters are in the middle of their first big fight in Congress - The Verge

ROCHESTER, N.Y. (WROC) The IRS has a warning for people dealing in cryptocurrency pay your taxes!

CPA Dave Young discussed the emerging currency and what the IRS is doing to make sure people who deal in crypto pay their fair share Monday during News 8 at Sunrise.

The IRS is taking a keen eye on it, Young said of cryptocurrency. They have a very big interest if you have cryptocurrency. As a matter of fact, on the front page of your Form 1040 in 2020 the IRS is specifically asking at any time in 2020 did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency. The fact of the matter is if you have the virtual currency youll likely need to report it. Some exchanges are actually going to be sending the IRS a form and sending you a Form 1099-K saying hey, these are the transactions that you had.

Young explained what you need to know about reporting cryptocurrency transactions and profits or losses. Its going to come in a couple of different buckets. The IRS is going to treat it just as if youre basically selling a capital asset like a stock. So if you bought a cryptocurrency and held it for more than a year youre going to report it as a long-term capital gain. So your tax rate could be as low as zero percent or up to 20 percent depending upon your tax bracket. If its held less than a year its going to be a short-term capital gain. So its really important for people to realize you can trigger this by selling your crypto for cash. So you had crypto and you converted it to fiat currency cash thats going to be a taxable event. If you exchanged it from one cryptocurrency to another thats another taxable event. What we see a lot is people will take their cryptocurrency and buy something. If you took your crypto and you bought a good or service, youve just triggered a taxable event. So those three things could trigger you having to file short or long-term capital gains. Be very, very careful because in the background the IRS is getting this report and theyre not going to look too kindly on you if you did not report this transaction on your taxes.

Young noted that many people are getting into mining and there are considerations there too. So mining is going to have possibly two transactions A, the income you receive from mining the cryptocurrency. Thats going to be income. As a sidebar note, the expenses that you have related to mining will be deductible but when you sell that cryptocurrency after you mine it were back to triggering a capital gain, short-term or long-term. Also, what you see often is businesses are accepting crypto as a form of payment. So its no different than if someone pays you on a credit card or cash. Its income so you need to report that. Sometimes your currency will hit a hard fork. If youre into crypto youre going to know what a hard fork is. And airdrop is kind of like a free giveaway or winning the lottery, so you might get that or even getting crypto rewards. Those are just some examples of other transactions where you need to report that. The bottom line is the IRS is taking a very hard look. So if you have crypto you want to make sure youre reporting it and look at your 1040, page one, there should be no excuse for missing this. The IRS put it right there in plain sight. Youve got to make sure youre recording your cryptocurrency transactions or you will have a significant problem with the IRS.

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What you need to know about cryptocurrency and taxes - RochesterFirst

An illustration showing physical bitcoins alongside binary code displayed on a laptop.

Jakub Porzycki | NurPhoto via Getty Images

Japanese cryptocurrency exchange Liquid said Thursday it has been hit by a cyberattack that saw hackers make offwith a reported $97 millionworth of digital coins.

Liquid said some of its digital currency wallets had been "compromised," and that hackers were transferring the assets to four different wallets.

"We are currently investigating and will provide regular updates," Liquid tweeted. "In the meantime deposits and withdrawals will be suspended."

Liquid did not provide an estimate for the loss. It says it is regulated by Japan's Financial Services Agency. The watchdog was not immediately available for comment when contacted by CNBC.

Elliptic, a blockchain analytics company, said its analysis showed that about $97 million in cryptocurrencies have been obtained by the hackers.

Of the total haul, $45 million in tokens were being converted to ethereum through decentralized exchanges blockchain-based platforms that require no intermediaries like Uniswap and SushiSwap, Elliptic said.

"This enables the hacker to avoid having these assets frozen as is possible with many Ethereum tokens," Elliptic said in a blog post.

Liquid ranks among the top 20 crypto exchanges globally by daily trading volumes, processing more than $133 million of transactions in the last 24 hours, according to CoinMarketCap data.

It's the second major crypto heist to take place in little over a week. On Aug. 10, hackers stole more than $600 million of digital tokens from Poly Network, a so-called decentralized finance firm.

In an unusual turn of events, the hackers opened a dialogue with the organization they attacked and gave back nearly all of the funds. However, more than $200 million remains locked in an account that requires a password from the hacker.

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More than $90 million in cryptocurrency stolen after a top Japanese exchange is hacked - CNBC

Analytics Insight gets to your notice the top 10 trending cryptocurrency prices

The current cryptocurrency market is volatile, it is always on the edge. And so it is unpredictable for the investors to predict and invest in the cryptocurrency. Here is Analytics Insight with the top 10 cryptocurrency prices on August 23rd, 2021.

Bitcoin ( BTC)- US$50,196.20 (up by 2.59%)

Ethereum (ETH)- US$3,347.15 (up by 3.22%)

Cardano (ADA)- US$2.78 (up by 11.16%)

Binance Coin (BNB)- US$470.61 (up by 4.41%)

Tether (USDT)- US$1.00 (up by 0.06%)

XRP (XRP)- US$1.25 (up by 1.12%)

Dogecoin (DOGE)- US$0.3224 (up by 2.17%)

Polkadot (DOT)- US$28.27 (up by 1.49%)

USD Coin (USDC)- US$0.9999 (up by 0.07%)

Solana (SOL)- US$75.25 (up by 0.62%)

The cryptocurrency prices here are according to the CoinMarketCap, which is a global cryptocurrency market cap with US $2.15T with a volume of US $2,152,954,457,243 billion over the past 24hrs with an increase of 3.08% over the last day.

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Top 10 Cryptocurrency Prices on August 23rd 2021 - Analytics Insight

A regular feature of crypto crime has been the seemingly uphill struggle to establish who took the assets and where they are keeping them. There then follows the challenge of determining the best way to recover them.

The nature of cryptocurrency can make it much more difficult to trace and recover such assets than it is to regain more tangible assets. The limited amount of information available about those using cryptocurrency and its exchanges have posed obstacles to those who have lost such assets and are looking for a way to acquire them again.

Anonymity

Yet in a case that we are involved in, we have been able to go some way to dispelling the long-held belief that those involved in crypto-related crime can always rely on anonymity to help them avoid identification. Anonymity in the cryptocurrency world has not been as freely available as some may believe. Our case has gone a long way to confirming this.

Fraudsters hacked their way into our clients cryptocurrency accounts that were held on the Binance exchange. They could not remove the assets from the accounts due to safeguards, so they traded the assets to a third party linked to themselves at a fraction of their true value before then selling those assets at their proper value and taking their illegal gains out of the exchange. This left our client facing losses estimated at over $2.6m.

It is inarguable that both the lack of regulation surrounding cryptocurrency and the rapid rate of its development have ensured that it has become the tool of choice for many looking to make illegal gains. But what could always be argued against was the assumption that those involved in such activity would remain anonymous.

Making use of the right tools and the correct application of the most appropriate procedures ensure that it is possible to track, locate and recover cryptoassets that have been taken illegally. It is both inaccurate and misleading to assume that people can make legal or illegal use of cryptocurrency without there being any possibility of them being identified. While it is certainly the case that cryptocurrency-related activity can be conducted with no prospect of your identity being known in the immediate future, anyone looking for a permanent guarantee of anonymity will look in vain.

Principle

In our case, Fetch AI Limited, Fetch AI Foundation PTE v Persons Unknown, Binance Holdings and Binance Markets, the High Court in London ordered Binance to both identify those who carried out the hack and freeze their accounts. It is a case that establishes the principle that cryptocurrency exchanges should be doing what they can to identify those who are using their facilities to make illegal gains.

The $2.6mat stake in this case is in no way huge by the standards of cryptocurrency crime, although it is obviously a very significant amount to our client. But the fact that the court has ordered one of the largest cryptocurrency exchanges in the world to take steps to combat its rogue users and assist those who lost assets on it will be important whenever other such cases of cryptocurrency fraud come to court.

There will be many parties in the future who look to the law to help them locate and recover crypto assets that have been taken from them through illegal means. The challenge of trying to recover assets that are rightfully theirs can be incredibly difficult if there is no way of knowing who has taken them and where they are now held. But the High Court has now made it clear that anonymity is not something that those involved in such wrongdoing can take for granted.

This was a case that showed the highly sophisticated levels of planning that are being employed by those who aim to make illegal gains from cryptocurrency. The way they sought to steal the assets was not a practice that had come to light before, and it emphasises that the nature of such crime is constantly evolving.

Such a situation creates a need for more intensive oversight from regulators, better communication from crypto exchanges to their users and a willingness to learn from what has happened or a combination of all three. But this particular case has at least shown that the courts of England and Wales are prepared to do what they can to help those who have lost assets to crypto fraud, while ensuring that those responsible are not protected by a cloak of anonymity.

Syed Rahmanis a partner at Londonfinancial crime specialists firmRahman Ravelli

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Cryptocurrency and anonymity why the two do not necessarily go hand in hand - The Global Legal Post

Cryptocurrency payments are now being accepted by over 85,000 merchants in Switzerland from their customers through a collaboration between Worldline, a French payment and transactional services company, and Bitcoin Suisse, a crypto-financial services company in Switzerland. In a press release dated August 19, Bitcoin Suisse announced the integrated service named WL Crypto Payments. This omni-channel payment solution will allow all merchants using the Worldline payment services to accept payments in Bitcoin and Ether. The merchants will be able to accept payments in Bitcoin and Ether on point-of-sale (POS) and e-commerce services.

To use this payment service, merchants only need to download the WL Crypto Payments mobile app. They can also install the Worldline payment plugin for their online store.

Clients willing to pay through digital coins may use the mobile cryptocurrency wallet application for this purpose. Prices displayed in Swiss Francs (CHF) will be shown in real-time Bitcoin (BTC) or Ether (ETH) value, according to the options that a client chooses. The price, to be paid in cryptocurrency, can get confirmed to the merchant instantly.

The transaction is claimed to be safe from volatility risks, as it will be securely converted into CHF after payment is confirmed.

This payment solution was successfully tested in a pilot programme before being rolled out to all Worldline merchants in Switzerland. Worldline and Bitcoin Suisse first collaborated over crypto payments in November 2019.

According to a 2019 press release, the companies intended to reinforce the "leading position of Switzerland as a strong center in the crypto-financial services industry." Switzerland houses over 800 companies that offer services or develop solutions for crypto and blockchain companies and is a bustling hub of cryptocurrency growth.

Worldline Switzerland MD Marc Schluep said that this project stood up to their goal of bringing tangible value to merchants across the globe and to facilitate smooth and modern payments in all the markets" the firm operates in.

Bitcoin Suisse CEO Dr. Arthur Vayloyan called it a historic milestone for crypto adoption in Switzerland and beyond, and added that this step proved yet again that Switzerland was the leader in collaborative innovation and a pioneer in the crypto and blockchain industry.

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Cryptocurrency Payments Now Being Accepted by Over 85,000 Merchants in Switzerland - Gadgets 360

Cryptocurrency has made headlines throughout the last two years; whether its Bitcoin hitting all-time highs or even the creation of new currencies such as Dogecoin. But with the growing popularity of these digital currencies, it comes as no surprise that companies such as BGaming have started to incorporate cryptocurrencies within their titles.

Speaking to CasinoBeats, BGaming director Marina Ostrovtsova dissects the reasons why crypto is helping the game developer to meet the needs of its partners while also elevating the overall player experience.

CasinoBeats: BGaming has been labeled as the first slot developer to incorporate cryptocurrency within their titles, what made you make this decision? And how popular has it been with players?

MO: This label is tightly connected to our roots and the time when we started building games. So this is in our history already.

This is not a secret that we are a part of the group of companies that includes different platforms for online casinos, so when we decided to build the platform for crypto casino, this was the obvious choice to incorporate this into the games.

When everybody on the market was trying to flirt with cryptocurrency, we actually had a very serious affair and that is how it transformed into the label.

The interest in crypto is still growing and we, of course, keep abreast of the situation. BGaming expands its presence in crypto projects. For example, a few weeks ago BGaming started cooperation with BetBit, the worlds first bitcoin casino. We are going to widen the partnership with another crypto project Wagerx shortly.

CasinoBeats: Within your games, which cryptocurrencies have you implemented and what was the process in deciding?

MO: From the very beginning, the obvious choice was BTC, that is how it all started. Litecoin and Dogecoin jumped in straight after. This threesome was alive and kicking until Etherium started rocking. So we saw the demand from operators and this was just a matter of settings until we enabled this one. Further, this was already a process for us seeing this demand, and reacting accordingly.

It is always about feeling what your current clients need, about identifying it with what we have on the market. So this is the foremost. The second major would be the system itself from the very start we have built the system to be able to work with any currency out there even if this does not yet exist.

CasinoBeats: Cryptocurrency lives in a very volatile market with its value altering on a nearly hourly basis. Is this an issue when it comes to using digital currency?

MO: This is an excellent question, and for sure this is an issue. It is important to answer another question though what are these realistic use cases for our business?

For the game provider, this is just the currency players making their bets and using crypto in the whole portfolio of currencies supported is just broadening the audience and gives this audience more flexibility and freedom.

But here we can stumble upon another issue if our business has an effective system in place to balance and manage the risks. Speaking on behalf of a game developer, it is essential to have a flexible system to reflect all the changes.

Accepting cryptocurrencies makes game suppliers always be prepared to change (either the bets in the game, or the system itself) and this is challenging on its own. From the very beginning, we all do it manually, moving slowly to more automated versions of our systems and platforms.

CasinoBeats: In the past, weve seen changes in interest around cryptocurrency. Are current levels of enthusiasm here to stay? And how can slot developers make the most of the opportunities presented by the crypto space?

MO: Lets be honest millions of people around the world have been observing the hype around bitcoin lately, even those who have never used them before even a tiny bit. Many celebrities were tweeting it as if this is their regular basic staff to share, which can be true. So this is already something deeply rooted in society. And I am not only talking about our industry specifically, a lot more people nowadays want to be a part of it, want to understand the technology standing behind it.

Many people are already using blockchain technologies, sometimes not even realising it. So this is already an ecosystem we live in and yes, there will always be enthusiasm around it.

For the game provider we can try to use the technology to the fullest in our production life cycle as this one is one of the most progressive and flexible.

CasinoBeats: How significant is the transparency and efficiency of digital currency to boosting your players user experience?

MO: First of all you can play internationally, but not only play but withdraw faster from anywhere in the world without any restrictions. Also, you can feel more secure while using crypto and you can stay anonymous. All of that is already boosting player experience.

Still, this is the level of interaction with an operator. Now what is left is to pick your favourite place to play at and one of the BGaming titles and have a great time.

CasinoBeats: Moving forward, what do you envisage in the future collaboration with online casinos and the cryptosphere? Will we see more and more casinos develop their own wallets for crypto and see more titles incorporate various currencies?

MO: I envision the room the space for innovation.

With more restrictions and rules nowadays we can see some cryptocurrencies specifically created for online gaming (there are several examples already). Those tailored coins allow maintaining low transaction costs, immediate transfers, and more security.

From the developers point of view the process of being emerged into new technologies and processes can be even more fascinating than playing games.

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Marina Ostrovtsova: Why cryptocurrency is an integral part of the BGaming story - Casino Beats

Dogecoin (CRYPTO:DOGE) investors have been on a wild ride this year. Between January and May, its price skyrocketed over 15,000% to a little over $0.74, only to lose more than half of its value just weeks later. But as of this writing, Dogecoin is still up about 6,700% year to date, and the price has been climbing consistently over the past month.

Investors may see this as an opportunity -- perhaps the Shiba Inu is finally back on track to reach the moon! But before you make any decisions, it's important to consider the risks and weigh all of your options. For instance, there are ways to get Dogecoin exposure in your portfolio without actually buying any cryptocurrency. Let's dive in.

Image source: Getty Images.

Dogecoin started as a joke, but it has garnered a substantial following on social platforms like Reddit and TikTok. In fact, earlier this year, Dogecoin surpassed Bitcoin to become the most mentioned cryptocurrency on Twitter. And of course, Elon Musk added fuel to that fire with a series of amusing tweets mentioning Dogecoin.

But here's the problem: Dogecoin's value is based solely on its popularity, and popularity is fickle. The tide can quite literally turn overnight, and that's exactly what happened in May. More to the point, despite a huge social following, Dogecoin is still worth a fraction of Bitcoin's total market value, and it doesn't offer the programmability of other blockchains like Ethereum. In short, nothing significant differentiates Dogecoin from the thousands of other cryptocurrencies that now exist.

There's also another problem: Dogecoin is difficult to value. Investors use metrics like revenue, earnings, and discounted cash flows to value stocks. But Dogecoin isn't a cash-generating business, nor is it an interest-generating asset like a bond. For that reason, speculating on Dogecoin's future price is more akin to gambling.

Of course, that doesn't mean its price is going to plummet. Someone always wins the lottery, and a year from now, Dogecoin could be worth 10 times what it is today. Or it could be worth less than $0.01, just like it was nine months ago. Regardless, it's a very risky investment.

Image source: Getty Images.

Coinbase (NASDAQ:COIN) helps its clients participate in the cryptoeconomy, the burgeoning ecosystem that includes assets like Bitcoin and Dogecoin, as well as non-fungible tokens (NFTs), smart contracts, and decentralized financial (DeFi) applications.

The company serves 68 million users, including retail investors, institutions, and ecosystem partners. Its platform offers a range of products such as analytics software, developer tools, and mobile wallet services. However, Coinbase is primarily a brokerage, and 85%of its revenue came from transaction feesduring the most recent quarter.

Put another way, Coinbase thrives when the crypto market is volatile: Higher trading volume means more transaction fees, and that means more revenue for the company. So, if you're interested in Dogecoin -- or any other cryptocurrency -- Coinbase can help you capitalize on that volatility, whether the price is moving up or down.

For instance, consider the company's financial performance through the first half of 2021. As Dogecoin and the broader crypto market soared in the first quarter, then crashed in the second, Coinbase posted incredible growth on both the top and bottom lines.

Metric

H1 2020

H1 2021

Change

Revenue

$377 million

$4.03 billion

969%

Earnings per share

$0.15

$9.60

6,300%

Source: Coinbase SEC Filings. Note: earnings per share is based on diluted share count.

More importantly, Coinbase has differentiated itself from other brokerages through significant investments in cybersecurity and regulatory compliance. In fact, it secures clients' funds with the largest hot wallet crime program in the insurance market. And the company currently holds $180 billion in assets on its platform, or 11.2% of all existing crypto assets, making it a trusted brand name. As a result, some Wall Street analysts see significant upside for shareholders.

Here's the bottom line: Coinbase is by no means a risk-free investment. Since its initial public offering in April, the stock has plunged over 30% from its opening price. But I do think it's less risky than buying Dogecoin outright, simply because Coinbase is a cash-generating business that doesn't depend on the success of any single cryptocurrency.

That's why this stock looks like a smart way to get Dogecoin exposure in your portfolio without actually buying any Dogecoin.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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1 Smart Way to Invest in Dogecoin Without Buying Cryptocurrency - The Motley Fool