Check out this week’s Bad Crypto podcast.
Bitcoin was down a bit this week, stopping just above $11,000. That increase in volatility is only to be expected, say some experts, as we approach the end of some BTC futures and options contracts. Other contributors to increased volatility include Bitcoin’s long period of consolidation and a key resistance level.
But what happens next? World leaders have been discussing the role of cryptocurrencies during The Great Reset, the time that will follow the end of the pandemic and the reopening of world economies. As some leaders look for a new kind of capitalism, the cryptocurrency industry is hoping for more decentralization and greater personal control.
That will require a greater uptake of cryptocurrencies. Investment firm Bitcoin Capital is trying to do its bit. The company is rolling out an exchange-traded product that can allocate funds to up to fifteen digital coins. altFins is trying to help too. The cloud-based platform is releasing an app to enable investing across multiple exchanges. The move should make trading more mature.
And even the SEC is trying to help, at least indirectly. The commission has changed its definition of an “accredited investor” to include “professional certifications, designations or credentials, or other credentials issued by an accredited educational institution.” Previously, the designation requires a million dollars in net worth or a stable income of at least $200,000 a year. The new designation might help crypto traders.
It’s possible, though, that lots of Americans have already used cryptocurrencies. The new IRS forms should make that clear. The income tax forms for 2020 will ask Americans whether they received, sold, sent, exchanged, or acquired “any financial interest in any virtual currency?” When the IRS takes crypto seriously, you know it’s arrived.
The moves to broaden the use of cryptocurrencies might be too late though. Chris Larsen, co-founder and chairman at Ripple, has warned that US regulation is causing it to lose the technological Cold War. China’s digital currency, he says, could replace the US dollar as the world’s reserve currency.
Meanwhile, other countries are already moving forward. Canadian restaurant chain Tahini’s has decided to convert all of its cash reserves into Bitcoin. And in India, the crypto peer-to-peer market has tripled since the beginning of the year. No wonder Binance has launched a new hackathon in the country and is setting up an accelerator for the country’s decentralized finance ecosystem.
It’s not all good news, though. Inner Mongolian miners are going to have to do without cheap electricity.
In better news, Deepak Chopra has been talking about using the blockchain to help fight mental health problems caused by Covid-19. And an interesting simulation has found the Satoshi Nakamoto used a single PC to mine 1.1 million Bitcoins. That was a different era.
Check out the audio version here:
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