European Union lawmakers have signed the Markets in Crypto Assets Regulation (MiCA)— landmark legislation that hopes to regulate the digital asset space within the union. The MiCA bill asks those issuing crypto to publish a “crypto-asset white paper” containing information about their project.
The EU Parliament also passed an anti-money laundering bill that requests crypto transfers include data on the payer and payee.
Crypto prices today: Bitcoin down 1.7%, ETH falls 2.8%
Bitcoin is currently trading at $19,090.06, a decline of 1.71% over the previous day. Ethereum is down 2.77% over the last 24 hours to $1,281.75. Solana fell 4.2% to $31.55, while Cardano is trading lower by 6.17% at $0.396. Avalanche (AVAX) fell 5.4% to $16.01. The global crypto market cap stands at $919.65 billion, a 2.39% decline over the previous day.
Portugal plans to impose 28% tax on crypto gains
The Portuguese government has proposed a new crypto tax policy that would take effect as part of its 2023 national budget. It will impose a 28% capital gains tax on cryptocurrency gains made within one year. However, gains realized after one year of holding the crypto assets will be exempt from such a tax. The government also intends to impose a 4% tax on any free crypto transfers.
Coinbase gets Singapore digital payment token license
The Monetary Authority of Singapore (MAS) has granted Coinbase in-principal approval for a digital payment token (DPT) license to operate in Singapore. The central bank has given out 17 in-principle approvals and licenses for DPT platforms under the Payment Services Act.
Bitcoin mining difficulty rises 14%, hits all-time high
Bitcoin mining difficulty hit a new all-time high of 35.61 trillion hashes on Monday, rising over 13.55% from the previous measure. New miners continue to join the network while existing miners ramp up their operations. The climbing difficulty comes in response to a total network hash rate of 257 exahashes per second (EH/s), which is near the record high that was reached last week.
Linux Foundation announces open-source digital wallet initiative
The Linux Foundation announced plans to form the OpenWallet Foundation (OWF), a new collaborative effort to develop open-source software to support interoperability for a wide range of wallet use cases. The initiative has gained support from several technology companies, including Accenture and Avast. Wallets created under the OWF umbrella will support a wide variety of use cases such as identity verification, payments, and digital key management.
Crypto prices today: Bitcoin falls 9%, ETH down 5.6%
Bitcoin is currently trading at $20,295.57, declining sharply by 9.2% over the previous day. Ethereum is down 5.6% over the last 24 hours to $1,611.66. Solana crashed 12.92% to $33.47, while Cardano is trading lower by 5.8% at $0.473. Avalanche (AVAX) fell 10.4% to $19.10. The global crypto market cap stands at $997.68 billion, a 6.5% decline over the previous day.
Disappointing US inflation numbers have spooked traders across the globe. Markets are expecting another series of aggressive rate hikes by the US Federal Reserve to curb rising prices.
Charles Schwab, Citadel and Fidelity launch EDX crypto exchange
Investment firm giants Charles Schwab, Citadel, and Fidelity Digital Assets announced the launch of a new crypto exchange named EDX Markets (EDXM). The exchange will use technology built by stock exchange The Members Exchange (MEMX). EDXM will serve both institutions and retail investors, giving them a “safe entry point” to crypto.
Bitcoin mining difficulty reaches all-time high
According to data from BTC.com, Bitcoin mining difficulty rose by 3.45% on Wednesday, reaching an all-time high. The mining difficulty reading stood at 32.05 trillion. The difficulty level, which changes once every two weeks, has been on the rise since its Aug. 4 adjustment. It previously hit a high of 31.25 trillion on May 11.
Bitcoin mining difficulty is a measure of how hard a miner would have to work to verify transactions in a block to add to the blockchain, or “dig out” Bitcoins.
Indian citizen pleads guilty in crypto insider trading case in the US
A 26-year-old Indian citizen has pleaded guilty in the first-ever crypto insider trading case in the US. Nikhil Wahi, his brother, and their Indian-American friend made ill-gotten profits totaling over a million dollars. Wahi pleaded guilty to wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in crypto assets by using confidential Coinbase information.
Crypto lending platform Vauld reached out to its customers seeking their interest to be a part of a proposed Committee of Creditors (CoC) to whom it owes money. In an e-mail sent out on August 31 to its customers, the company responded to concerns of creditors planning to seek legal representation and withdrawal of allowances during Vauld’s ongoing restructuring process.
Over the last two months, Vauld has halted withdrawals and suspended operations due to financial troubles.
Crypto prices today: Bitcoin falls 1.7%, ETH down 2.9%
Bitcoin is currently trading at $19,940.82, a decline of 1.7% over the previous day. Ethereum is down 2.89% over the last 24 hours to $1,542.94. Solana fell 3.98% to $31.04, while Cardano is trading lower by 2.7% at $0.446. Avalanche (AVAX) has fallen by 3.6% to $18.94. The global crypto market cap stands at $972.06 billion, a 1.8% decline over the previous day.
California crypto licensing bill awaits Governor’s signature
California Governor Gavin Newsom is set to sign a recently passed bill that would require digital asset exchanges and other crypto companies to obtain a license to operate in the state. The Digital Financial Assets Law is also known as California’s “BitLicense”. The proposed law aims to foster responsible innovation by licensing and regulating the activities of crypto exchanges.
Bitcoin mining difficulty spikes
According to BTC.com, the mining difficulty for Bitcoin (the world’s biggest crypto) jumped by 9.26% over the last two weeks. The Bitcoin network’s mining difficulty is at the highest level since January. Mining difficulty refers to the level of complexity involved in the mathematical process behind mining. Miners need to solve complex equations to produce a valid block that can be added to the blockchain.
Paraguay’s President vetoes crypto mining law
Paraguay’s president, Mario Abdo Benítez, vetoed a bill that would have regulated various digital asset activities, including the commercialization of crypto mining in the country. The primary reason behind the president’s decision against the bill was that crypto mining uses high amounts of energy but brings relatively low employment benefits.
Bitcoin held on crypto exchanges reaches ‘multi-year lows’: Report
With Bitcoin (BTC) net outflows averaging 96,200 coins per month for the past two years, the cumulative BTC balances of exchanges have hit “multi-year lows,” as per crypto analytics firm Glassnode. More Bitcoin is heading away from exchanges and into addresses that periodically purchase BTC but don’t spend it. Glassnode pointed out that the amount of BTC being accumulated each day is much higher than the amount of new BTC being created.
Crypto prices today: Bitcoin falls 2.3%, ETH down 4%
Bitcoin is currently trading at $45,486.8, a 2.37% decrease over the previous day. Ethereum is down 4.2% over the last 24 hours to $3,369.64. Solana fell 3.93% to $127.2, while Cardano is trading lower by 3.44% at $1.16. Meanwhile, Dogecoin jumped 9% to $0.165. The global crypto market cap stands at $2.10 trillion, a 2.8% decline over the previous day.
New bill rakes aim at El Salvador’s ‘careless gamble’ on Bitcoin
The US is pressing legislation aimed at protecting its financial system from El Salvador’s Bitcoin Law. American lawmakers introduced a new bill asking the State Department to mitigate the risks of El Salvador’s adoption of Bitcoin. Congresswoman Torres said the bill was necessary to protect the US financial system from El Salvador’s “careless gamble.”
Dominance of public Bitcoin miners jumps nearly sixfold in 15 months
According to Blockchain.com, the dominance of public Bitcoin miners over network hash rate has increased more than sixfold in the last 15 months. Hash Rate is the rate at which Bitcoin miners generate possible answers for constructing Bitcoin’s next block. Comprising 19% of the network hash rate, public miners have a 19% probability of solving new blocks right now.
Coinbase to hire 1,000 people in India expansion
Crypto exchange Coinbase plans to quadruple the number of employees in India by year-end. The company will add 1,000 to the existing 300 staff at its Indian tech hub, which started last year. Coinbase will host a crypto community event in Bangalore to discuss the future of crypto and Web 3 in India.
Starbucks announces plans to get into NFT business
Starbucks CEO Howard Schultz has announced plans to get into the non-fungible token (NFT) business. The company is working on digital innovation through NFTs and plans for the continued evolution of partner benefits.
China’s crypto crackdown strengthens with potential fines, jail sentences
China’s years-long crackdown on crypto has stepped up another level. A new Supreme Court ruling paves the way for fines and potentially lengthy jail sentences for citizens found guilty of fundraising via crypto tokens. China previously banned crypto fundraising in 2017 amid the global surge in initial coin offerings (ICOs).
Crypto prices today: Bitcoin rises 11%, ETH up 12%
Bitcoin is currently trading at $38,552, an 11.25% increase over the previous day. Ethereum jumped 12.9% over the last 24 hours to $2,622.29. Solana rose 12% to $88.79, while Cardano is up 12.5% to $0.84. Polygon (MATIC) rallied 15% to $1.44. The global crypto market cap stands at $1.72 trillion, a 10.6% increase over the previous day.
Coinbase posts record revenue, user numbers in Q4
Crypto exchange platform Coinbase made nearly $2.5 billion in revenue last quarter (Q4 CY21), while its monthly active user base rose to 11.4 million. The company posted a profit of $840 million in Q4, which was double the previous one. The impressive numbers were driven by record-high crypto prices last October and November.
Bitcoin mining in Russia largely unaffected amid Ukraine invasion
Bitcoin mining in Russia remains mostly steady amidst the country’s invasion of Ukraine. Crypto industry participants are constantly checking for any disruptions to the network. However, sanctions imposed by various countries could affect miners. Bitcoin miners come into regular contact with exchanges and other entities connected to the traditional financial system as they exchange BTC for cash.
Over half of the Bitcoin network’s computing power comes from the US, Kazakhstan, and Russia.
Russia could use crypto to blunt the force of US sanctions: Report
As per reports, Russian entities are preparing to blunt/weaken some of the worst effects of economic sanctions by making deals with anyone around the world willing to work with them. They can use digital currencies to bypass the control points that governments rely on (mainly transfers of money by banks) to block deal execution. As per estimates, sanctions imposed by Western nations cost Russia $50 billion a year.
Russia proposes new crypto bill to regulate bitcoin mining
Russia’s Ministry of Finance has come up with the country’s first draft bill on the regulation of Bitcoin and other cryptocurrencies. While the central bank continues to demand a blanket ban on crypto mining in Russia, the Finance Ministry aims to regularise the sector with the newly proposed bill. The bill treats crypto as an investment tool and not a legal tender. It states that cryptos may not be used to pay for goods and services.
Crypto prices today: Bitcoin falls 6%, ETH tanks 8%
Bitcoin is currently trading at $36,819, a 6% decline over the previous day. Ethereum has fallen sharply by 7.9% over the last 24 hours to $2,522. Solana crashed 13.5% to $82.37, while Cardano is down 14.5% to $0.83. Polygon (MATIC) has tanked 13.3% to $1.38. The global crypto market cap stands at $1.65 trillion, a 7.36% decline over the previous day.
Universal Music to develop collectible NFTs in deal with Curio platform
Universal Music Group has entered into a partnership with NFT platform Curio to develop NFT collections for its record labels and artists. The deal is a major move into a potentially new revenue stream by the world’s largest music company. Universal plans to work with Curio to develop digital artwork and other collectibles for the company and its artists.
Joe Biden to issue executive order on crypto this week
As per a report from Yahoo News, US President Joe Biden is expected to issue an executive order on cryptocurrency this week. The order will direct a wide range of government agencies to study crypto and central bank digital currency (CBDC). It will also come up with a government-wide strategy to regulate crypto assets.
Since its ‘mysterious’ entry almost 12 years ago, Bitcoin has become one of the most highly discussed topics in the world. Let us take a look into the why’s and how’s of Bitcoin’s popularity.
Bitcoin is a digital currency that was created in January 2009.It provides secure global transactions very quickly and without third-party manipulations. The concept was introduced through an online document by ‘Satoshi Nakamoto’, which was an alias or pseudo-name. Till date, the identity of the person (or persons) who created Bitcoin is a mystery. People from all over the world have been trying to find out the brains behind this revolution in financial technology.
The document titled “Bitcoin: A Peer-to-Peer Electronic Cash System” explained a unique way to create transactions without a regulatory third party. This meant that people could exchange values or conduct transactions on the internet without having to rely on an entity to validate it. Unlike normal currencies, Bitcoin would not be issued by any government, and banks would not manage accounts or validate transactions. It would be based on a cryptographic system that uses certain codes and numbers to keep information safe and secure.
Bitcoins can be accepted as a means of payment for products sold or services provided. It also offers the promise of lower transaction fees, as compared to traditional online payment mechanisms.
How Does Bitcoin Work?
Bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain. A blockchain can be thought of as a collection of blocks. In each block, there would be a collection of transactions. There are specific computers (or nodes) that run Bitcoin’s code and store its blockchain.In simple terms, each transaction is a ‘block’ that is ‘chained’ to the code, creating a permanent record of each transaction.
A bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions. This ultimately helps in providing proof of authorization. More importantly, there are bitcoin miners that independently confirm the transaction using high-speed computers. Bitcoin mining is the process of creating new bitcoins by solving certain complex math puzzles. It is necessary to maintain the ledger of transactions upon which bitcoin is based.
Source: Praxent
There are no physical bitcoins, and all balances are kept on a public ledger that everyone has transparent access to. No one can hack into the network and alter records. Bitcoin developers often reveal security concerns to the public to produce robust solutions.
How Does a Person Obtain Bitcoins?
As mentioned before, people compete to mine bitcoins using high-speed computers to solve complex math puzzles. Basically, they sell their computing power to maintain the record for the chance to (maybe) earn bitcoins. This is how bitcoins are made.
There are bitcoin exchanges that allow people to buy or sell bitcoins using different currencies. Coinbase, Bitstamp, and Bitfinex are prime examples of such exchanges.
People can send bitcoins to each other using mobile apps or their computers. It is very similar to sending cash through digital payment apps (such as Google Pay). Internationally, this is done through tools such as Bisq, Bitquick, and LocalBitcoins.com.
High Volatility of Bitcoin
The price of a bitcoin is primarily determined by its supply and market demand. The important factor to be noted is that the supply of bitcoin is limited. There are only 21 million bitcoins that can be mined. The cost of producing bitcoin through the ‘mining’ process also affects its price. It can also be based on the reward issued to bitcoin miners for verifying transactions.
Given below is a graph showing the price of bitcoin over the past 10 years:
Source: TradingView
Historically, the value of Bitcoin has been very volatile. The first real price increase occurred in July 2010 when the valuation of a bitcoin went from around $0.0008 to $0.08 for a single coin. Bitcoin showed a huge rally in 2017. In October of that year, the price broke through $5,000 and doubled again in November to $10,000. On December 17, the price of one bitcoin had reached $19,783. However, just a few weeks later, the price fell rapidly- crashing down below $7,000 by April 2018 and below $3,500 by November 2018.
Since 2017, many people have started to show interest in using or obtaining bitcoins. Last year, we saw that prices started at $7,200 on January 1 and closed above $28,800 on December 31. As of January 8, 2021, its price had touched over $41,900! Bitcoin has gained more popularity and acceptance as a medium of exchange. Institutional investors have been pumping in millions of dollars into bitcoin over the past few months.
Many factors cause panic amongst bitcoin users, which ultimately leads to a fall in its price. This could include certain geopolitical tensions and the uncertainty of its future value. Cryptocurrencies are also prone to security breaches. Bitcoin could become volatile when the bitcoin community (or network) exposes security vulnerabilities.
Advantages & Disadvantages of Bitcoin
Advantages:
Bitcoinsare very accessible and have high liquidity. It is very easy to cash out and sell your bitcoin.
There is improved security– its users can check all transactions through the transparent public ledger. Bitcoin transactions are secure, irreversible, and do not contain any sensitive or personal information of customers.
Bitcoin can be transferred 24/7 to any person in any part of the world, without intermediaries in between. International money transfers with bitcoins can be faster and cheaper, as compared to traditional banking services.
The transaction fees paid by a user to make payments through bitcoin is very low.
Inflation has caused many currencies to get their value declined with time. There are only 21 million bitcoins released in the world. As the demand increases, its value will increase, which will keep up with the market and prevent inflation (in the long run).
Disadvantages:
The use of bitcoin is unregulated. Bitcoin has been used as a mode of exchanging money in a lot of illegal deals in the past. It is difficult for governments to track any bitcoin user or keep a tab on their data. Thus, various countries are very sceptical about their citizens investing and using such cryptocurrencies.
Bitcoin has limited use, as it is currently only accepted by a few online merchants.
As mentioned earlier, bitcoin prices are extremely volatile. It can drop very quickly and reach very low prices.
If a person forgets or loses their credentials to unlock a bitcoin wallet,their coins get locked away. There is no option to retrieve those bitcoins.
Mining bitcoins requires a lot of computational power and electricity input. This makes it highly energy-intensive.
Cryptocurrency exchanges are not very secure. Sensitive data that is stored on these exchanges can be stolen by hackers. Exchanges, such as Bitfinex or Mt Gox, have been hacked in the past years, and bitcoin has been stolen in thousands and millions of US dollars.
Is Bitcoin Legal in India?
Bitcoin has neither been authorized nor been regulated by any central authority in India. However, buying, selling, trading, or mining bitcoins is not illegal by any law. There are no rules, regulations, or guidelines for resolving any disputes that may arise while dealing with bitcoins. Also, cryptocurrencies are not legal tender in India.
Between 2017 and 2019, it has been estimated that Indian investors have lost more than $500 million (~Rs 3,668 crore) in cryptocurrency scams. Crypto scammers also engage in creating fake crypto wallets. Innocent investors often fall into their trap and lose their hard-earned income. In 2018, the Reserve Bank of India (RBI) prohibited any entity from providing banking services to anyone dealing with virtual currencies. Cryptocurrency Exchanges filed a lawsuit against RBI in the Supreme Court and won the case in March 2020. The central bank’s ban was overturned, as the RBI had not presented any empirical evidence that cryptocurrencies have negatively impacted the banking sector or other regulated entities.
In December 2020, a scam of nearly Rs 1,000 crore involving cryptocurrency trading through multiple exchanges came to light when the Enforcement Directorate (ED) arrested a cryptocurrency trader in Gujarat.
There are reports which suggest that the Union Cabinet will soon introduce a law to ban cryptocurrency trading in India. Many have invested in bitcoin and hold the cryptocurrency in our country. If a ban comes into effect, reports state that individuals may be given a period of up to three months to dispose off their assets.
