Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional StimulusInvestors appear to be locking in profits and jumping off unregulated crypto-asset Bitcoin and other cryptocurrencies following the official declaration of Joe Biden as the President-Elect of the United States.Bitcoin plunged by over $8,000 to $33.781 per coin, down from over $41.457 per coin it traded a few days ago. The company is positioned to benefit. But if cryptocurrencies fall, PayPal has other businesses to cushion things. Increased demand from institutional, corporate, and more recently retail investors has powered cryptocurrency surge this year. According to JPMorgan strategists, the digital currency has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset. If you’re thinking of investing in cryptocurrency here are some … The IRS taxes you if you make profits on these five cryptocurrency related transactions. The U.K.’s financial regulator on Monday issued a very blunt warning about the rise of bitcoin and other cryptocurrencies. LTC/USD is moving in sync with the rest of the cryptocurrency market and the coin may find support on approach to $160.
The leading U.S cryptocurrency exchange company, Coinbase, has acquired Routefire, a trade execution startup, in an effort to expand and improve its exchange business.
In a blog post by Jason Victor, the Chief Executive Officer, Routefire, the company can executive $1mm+ orders with 50 basis points or more in price improvement.
The blog read in part, “After an incredible journey that began in early 2018, it is with pride and a deep sense of gratitude that today we are announcing we will be discontinuing Routefire’s services and our team will be joining Coinbase to continue developing best-in-class execution services for digital assets.
“We’ve had an incredible few years serving this community. When we entered the space, crypto market infrastructure was in its infancy, and traders were sorely in need of a solution that allowed them to execute quickly and efficiently across venues without suffering the market impact common to large block orders.
“Our mission was to enhance trading infrastructure in crypto markets, and we developed one of the most performant tools in the space, routinely filling $1mm+ orders with 50 bps or more in price improvement. Most of all, we enjoyed listening to and partnering with our customers to build the Routefire platform.”
A spokesman for Coinbase confirmed the transaction but refused to comment on the details.
Author: Published 3 hours ago on January 11, 2021
By Samed Olukoya
PayPal Stock: A Good Way to Play the Crypto Bull Run?
For the new year, PayPal (NASDAQ:PYPL) stock has been somewhat choppy. Note that PYPL stock is off marginally.
But of course, last year was particularly strong. PayPal stock was able to benefit from the surge in interest in digital payments, which have propelled other fast-growing operators like Square (NYSE:SQ). For 2019, PayPal stock went from $110 to 235%, with the market capitalization coming to a hefty $275 billion. The company is now one of the world’s largest financial companies.
So then, what now? Can we expect a strong performance in 2021? I think so. Although, the returns may not necessarily be as robust. Let’s face it, things have gotten a bit bubbly lately — and it seems likely there will be a correction at some point.
But then again, PayPal is a more mature player and should be better able to handle the volatility. The company is also is leveraging its platform into growth areas like cryptocurrencies. This is perhaps the most interesting long-term driver for the company.
So let’s take a look.
Early last year, the prospects for bitcoin looked grim. The price hit about $5,300 as the Covid-19 pandemic emerged.
But with the aggressive fiscal stimulus from the U.S. government and the low interest rate policy of the Federal reserve, bitcoin saw a spike in interest. There were fears of inflation and economic stability. The investment thesis was that the bitcoin could be a haven versus the dollar.
By the end of last year, some of the world’s savviest investors started to ramp their buying of this cryptocurrency, such as Paul Tudor Jones and Stanley Druckenmiller. It was a big-time validation. The expectation was that this would be only the start of the institutional interest in cryptocurrencies.
As for PayPal, the company launched its own service to buy and sell bitcoin, Ethereum, Bitcoin Cash and Litecoin. The minimum amounts were only $1. And all of this could be done with the convenience of the PayPal app.
No doubt, the company has various core competencies to make this effort a big success. For instance, PayPal will leverage its base of 26 million merchants across the world. This will be essential in making cryptocurrencies mainstream.
According to the CEO of PayPal, Dan Schulman: “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly. Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”
A key part of the strategy is to forge partnerships with central banks and regulators. Based on research from the Bank for International Settlements, about 10% of the world’s central banks expect to issue digital currencies within the next three years. In other words, the market potential is enormous – and PayPal is positioned nicely to get an outsized portion of the benefit.
The company has also been working to evolve the cryptocurrency ecosystem through its PayPal Ventures fund. In 2019, there was an investment in TRM Labs, which helps with preventing fraudulent transactions. There was also a recent deal for TaxBit. This startup is focused on tax automation systems for cryptocurrencies.
In terms of revenue generation, cryptocurrencies will remain a small part of the business for PayPal for the next few years. Keep in mind that the company is known for taking a methodical approach to new market opportunities. A prime example is its work with Venmo.
But cryptocurrencies will need a strong infrastructure. And PayPal has all the right capabilities and assets to help build it. Thus, for those looking for a play on the growth of cryptocurrencies, this stock looks like a good bet right now.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the author of courses on topics like the Python language and COBOL.
Tom Taulli, InvestorPlace Writer & IPO Playbook Editor
Five cryptocurrencies to consider investing in this year
Increased demand from institutional, corporate, and more recently retail investors has powered cryptocurrency surge this year.
According to JPMorgan strategists, the digital currency has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.
If you’re thinking of investing in cryptocurrency here are some pointers:
XPR is the third-biggest cryptocurrency by market value. It’s an open-source and decentralized blockchain technology that can settle transactions in 3-5 seconds.
Ripple, which often moves in tandem with Bitcoin, had rocketed in November to hit its highest level since 2018 as a rally in cryptocurrencies gathered pace.
Bitcoin at $100,000 in 2021? Outrageous to some, a no-brainer for backers
The coin offers a low exchange rate and instant confirmation for your transfers due to the validation process that bypasses the central bank.
The best time to invest in Ripple is now with its price low and affordable in comparison to other coins available on the market today.
Ethereum is the second most popular blockchain in the cryptocurrency space after Bitcoin, in recent months its price has surged; it now costs $579 as of 28/11/2020.
The success of Ethereum can be attributed to its decentralized finance system; it supports smart contracts and allows for decentralized mobile applications, dApps, reports European Business Review.
Surging interest sends bitcoin to peak above $23,000
Litecoin was an early bitcoin spinoff or altcoin. It is a cryptocurrency that allows instant payments to anyone in the world and that can be efficiently mined with consumer-grade hardware.
The cryptocurrency has a great number of followers, the price of Litecoin is 68 dollars, as of 28/11/2020.
Litecoin offers a higher block reward compared to other competitors and is incredibly fast and its transaction speed is faster, the average time to mine a block is just 2 minutes.
As of May 2020, Bitcoin’s market cap is just under $128 billion, while Litecoin’s is under $3 billion, reports Investopedia.
Basic Attention Token (BAT)
BAT was developed by the co-founder of Mozilla Firefox and it became incredibly popular in 2018. The cryptocurrency is the favorite coin of content writers, web developers, PR and marketing people, and some IT sector professionals.
BAT eliminates the middlemen from the advertising process and instead rewards the users for watching ads, and publishers receive the majority of the ad revenue directly. This helps advertisers gain a better ROI and more accurate data to analyze using BAT.
The platform currently has 22.2 million monthly active users, 7.4 million daily active users, 1 million verified creators accepting BAT.
Bitcoin jumped more than 5% since Friday to fresh record highs of $41,530, reversing losses from earlier in the session.
The world’s most popular cryptocurrency climbed as high as $40,402.46 and was last up 6.1% at $39,100. It crossed $30,000 for the first time on January 2 and $20,000 on December 16.
Interest in the world’s biggest cryptocurrency soared last year, with investors viewing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.
“We are seeing a continued demand spike driven largely by sustained and unprecedented institutional interest, showing no sign of abating as we move into 2021,” said Frank Spiteri of digital asset manager CoinShares.
According to Billionaire investor, Chamath Palihapitiya bitcoin’s price could soar to $200,000 in as soon as five years as the “fabric of society is frayed” and investors realize they need an uncorrelated hedge in their portfolios, reports Business Insider.
Author: News Bureau
How Are Cryptocurrencies Taxed?
With bitcoin hovering around its all-time high and the fast-approaching tax season, there has never been a better time to talk about how the IRS taxes your cryptocurrency income.
Cryptocurrencies are treated as property per the IRS Notice 2014-21. Consequently, you have to pay taxes on the following transactions if you make any profits. (Losses are deductible on your taxes subject to certain limitations and exceptions)
Say you purchased 1 bitcoin (BTC) for $4,000 in January 2020 and sold it for $20,000 in December 2020. Your profit from this transaction is $16,000 ($20,000 – $4,000). This $16,000 is considered short-term capital gains because you only held your coin for less than 12 months. Consequently, $16,000 will be taxed as ordinary income and subject to your income tax bracket which ranges from 10% to 37%.
Alternatively, if you were to sell the BTC after holding it for more than 12 months, the $16,000 profit will be subject to long-term capital gains which offer you more favorable tax rates (0%, 15%, or a maximum 20%).
Say you purchased 1 BTC using 40 ether (ETH) valued at $40,000. You purchased this ETH a few years ago for $10,000. During this transaction, a profit of $30,000 ($40,000 – $10,000) will be subject to capital gain taxes. Here, the logic is that by the time you spend 40 ETH to purchase 1 BTC, your wealth has increased by $30,000. This IRS taxes this delta. Receiving cash or not is irrelevant for tax purposes (A15).
Note that buying cryptocurrency using USD is not a taxable event.
Earning cryptocurrency via compensation or a revenue stream similar to interest income, mining income, and staking income are taxed as ordinary income, at the time of the receipt.
Say you earned 1 BTC as interest (or mining or staking income for this matter). At the time of the receipt, this is worth $10,000. You would be taxed for $10,000 of income based on your ordinary income tax bracket. Say you later sold this coin for $18,000. Here, the delta of $8,000 ($18,000 – $10,000) will be taxed as capital gains.
Finally, based on IRS Rev. Rul. 2019-24, cryptocurrency received through airdrops and hard forks are taxed at the time of receipt, as ordinary income. Ex:- Spark and $UNI airdrop occurred in 2020. It’s quite common to see that the coin value going down after you receive the airdrop. Unfortunately, you can not get any tax relief for this unless you sell the coin to claim the loss.
Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional
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Author: Shehan Chandrasekera
‘Prepare to lose all your money’ — regulator’s blunt warning on bitcoin and other cryptocurrencies
The U.K.’s financial regulator on Monday issued a very blunt warning about the rise of bitcoin and other cryptocurrencies.
The warning was prompted by firms “offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns,” the Financial Conduct Authority said.
The regulator said it had five concerns: Consumer protection, price volatility, product complexity, charges and fees, and marketing materials. “There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market,” the regulator said.
Author: Steve Goldstein
Litecoin Price Prediction: LTC/USD Hovers at $171 as Bullish Sentiment Fades Away
LTC Price Prediction – January 10
LTC/USD is moving in sync with the rest of the cryptocurrency market and the coin may find support on approach to $160.
Resistance levels: $200, $210, $220
Support levels: $150, $140, $130
LTC/USD, which is the fifth-largest digital cryptocurrency in the world with the current trading volume of $11.4 billion, lost nearly 3.4% as the market opened today amid global correction on the cryptocurrency market. Litec, off today’s high, registered at $186.34. The coin may settle below the 9-day moving average at $160, which now serves as an initial support level.
If the nearest support of $160 gives way, the sell-off may come to play and it may be extended towards the psychological $155. At the moment, the bearish scenario is even more dominant as sellers continue to post firm commitments. Therefore, we could see a sharp drop in support of $150. Breaking the aforementioned support could further weaken the market to $140 and $130 support levels.
On the other hand, a higher possible swing may likely retest the previous resistance levels at $180 and $185. However, if the bulls manage to fuel the market with the mentioned resistance levels, traders may expect a further increase to $200, $210, and $220 resistance levels. Meanwhile, the technical indicator RSI (14) is now showing a downward trend, indicating the latest selling pressure on the market.
Against Bitcoin, the market has evolved for a while in a very different way. At the moment, bears and bulls are in a tug-of-war about who will dominate the market but currently moving under the 9-day and 21-day moving averages while the RSI (14) is suggesting a sideways movement.
Looking at the daily chart, the bulls are making effort in building the confidence to increase their entries. More so, if the bulls succeed in the broken above the moving averages, one would expect the market to reach the resistance level of 4900 SAT and 5100 SAT. Meanwhile, a retest could bring it down to 3900 SAT and 3700 SAT support levels.
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