(Bloomberg) --

Bitcoin pulled back to around $40,000 after climbing over the weekend to the highest levels since May.

The largest cryptocurrency fell about 4.8% to $39,280 as of 8:42 a.m. in New York after dropping as much as 5.6% Monday. Other virtual coins including second-ranked Ether also fell. Analysts suggested profit-taking lay behind the declines.

This is just a normal pullback following bullish action, said Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore.

The declines put Bitcoin back in the top end of a $30,000 to $40,000 trading range thats been in place since a cryptocurrency rout in May. It touched $42,605 on Sunday, the highest since May. It rallied almost 20% last week, the biggest increase in three months.

The token has been helped in recent weeks by supportive comments from billionaire Elon Musk and Ark Investment Management LLCs Cathie Wood, as well as speculation over Amazon.com Inc.s possible involvement in the cryptocurrency sector.

At the same time, scrutiny of the industry is intensifying. That includes a push by U.S. legislators for stricter rules on cryptocurrency investors to collect more taxes to fund a portion of a planned $550 billion investment into transportation and power systems.

Crypto traders are also awaiting a software upgrade expected this week to the Ethereum network. It could boost Ethers price by trimming the pace at which the tokens supply grows.

(Updates prices in second paragraph.)

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Bitcoin Drops After Posting Biggest Weekly Gain in Three Months - Yahoo Finance

Celsisus CEO Alex Mashinsky joins Yahoo Finance to discuss the latest in cryptocurrency and why he believes Bitcoin's value will more than triple to end the year.

ADAM SHAPIRO: We got to turn our attention to what's going on in the crypto corner because Bitcoin is trading lower right now but look, it's not far off of the $40,000 mark. But let's talk about what's going to happen in a greater context with crypto and we're going to do that with Alex Mashinsky. He is the CEO of Celsius. And the potential for crypto to be used on different platforms to pay for stuff, not necessarily a pure-play to just buy the crypto coin but to use it do you see that taking on greater relevance?

ALEX MASHINSKY: So crypto's main purpose is a store value, right? It is not an exceptional form of payment I think the dollar is the opposite, right? It's an exceptional form of payment but not very good store of value. So I think there are many, many other cryptocurrencies or digital assets that serve that purpose better. Mostly, Stablecoins and other forms of digital assets. So I don't think you want to take this pristine asset and try to use it to clean the windows or do something else with it. It is very good for one thing, store of value and that's what you should be using it for.

SEANA SMITH: Alex, we're looking at a chart here of Bitcoin right now, it's trading just below $40,000. I guess what do you think is going to be that next catalyst to get it above $40,000? We were briefly there last week, although it didn't hold for too long.

ALEX MASHINSKY: Yeah, so earlier this year I talked about it kind of resisting going below $29,000 and we've seen a big jump since. And I think we are hitting some resistance here in the 40,000 to 45,000 levels. And there is not a lot of resistance above that. So I think we're going to consolidate here and then break to new highs. I still stand by my prediction that this year we will see anywhere between $140,000 and $160,000 per Bitcoin.

Story continues

ADAM SHAPIRO: I think there are a lot of people cheering what you just said. Your platform, Celsius, deals with so many people who we refer to as the unbanked. Are they going to be able to get in on this, they can via the platform can't they?

ALEX MASHINSKY: Yeah, so most of what we do is enable the average person to earn a yield on their digital assets. We have almost a million customers in 170 countries, just over $17 billion in assets in total assets and we generate yield, we pay 8.8% on Stablecoins for example. So that's 30 to 40 times more than your bank pays you and we pay 6.2% on your Bitcoin.

So what Celsius does better than anyone else is give you that yield, give you that return on your capital. And we do it in three buckets, one is again, Stablecoins, we have 12 different forms of Stablecoins, three different forms of gold. So you can now earn 5.5% gold on gold or you can venture and choose between 32 different digital assets like Bitcoin, Ethereum, Litecoin, and so on. Those are the unique things that Celsius does better than anyone else.

SEANA SMITH: What about the infrastructure bill because it does include new crypto regulations for revenue? I guess do you view this as a headwind or how big of a challenge could this potentially be to crypto going forward?

ALEX MASHINSKY: Look, for those of us who pay taxes and report all of our transactions nothing in that legislation is new or different. I think Treasury and some of the other departments are trying to make sure that they collect all the taxes that are due. And at Celsius, for example, you do get a 1099 at the end of the year that tells you exactly how much you earned in yield and you do have to pay taxes on that. So I don't see-- there's no impact to us and we've been following regulation, we've been doing KYC and AML services since 2017. So none of these new regulatory requirements make any difference. And I think clarity on the regulatory side is a very good thing, it's a positive.

Now I heard some people talk about mining and how it's going to impact mining. Celsius has over $200 million invested in mining. We're one of the largest miners in North America and I can tell you that this new regulation does not hamper or slow down any of our activities. We do have to report income, we're going to pay taxes on it. And we're happy to do it running a profitable business.

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Celsius CEO still sees Bitcoin finishing the year between $140-160K - Yahoo Finance

Bitcoin rallied to an all-time high in April and brought a windfall to early investors. Those who had not invested in it until then began seeing a hope that they could pump their wealth securely and rapidly. But the early investments were also risky, as not much was known about digital assets then. However, those risk-takers were rewarded handsomely. That brought unmatched popularity to Bitcoin, which already had the distinction of being the world's oldest cryptocurrency. And despite being a volatile currency, it appears to have stabilised around $40,000 (roughly Rs. 29.7 lakhs), at least for now. Let's have a look at Bitcoin's more than a decade-long journey.

How and when was Bitcoin created?

There was a lot of mystery around Bitcoin after it was first proposed in 2008, the most prominent being its creator: Satoshi Nakamoto, a pseudonymous person whose real identity is still unknown. Nakamoto posted a paper, entitled Bitcoin: A Peer-to-Peer Electronic Cash System, on a mailing list on cryptography. This attracted a lot of attention and a huge discussion ensued about it. Bitcoin price in India stood at Rs. 29.18 lakhs as of 7pm IST on August 2.

In 2009, the Bitcoin software was made available to the public. Its mining, the process through which new Bitcoins are created and transacted on the blockchain, began.

The valuation of Bitcoin took place the next year. Until then, Bitcoin was only mined, nobody had traded it so the real value of the coin was undetermined. On May 22, 2010, programmer Laszlo Hanyecz traded 10,000 Bitcoins to buy two pizzas. Had he controlled his pizza craving, those Bitcoins would have been worth $389 million (roughly Rs. 2,890 crores) today. A least the episode gave us the "Bitcoin Pizza Day".

In 2011, the dominance of whatever market Bitcoin had captured by then was first challenged. Some alternatives to Bitcoin such as Namecoin and Litecoin began emerging. These rival coins offered improved services like better transaction speed, among some other claims. Today, there are more than 11,000 cryptocurrencies in circulation, according to CoinMarketCap, a market research website.

Bitcoin's middle years

These years were some of the most volatile periods in Bitcoin's history. In 2013, three years after Bitcoin was first valued, its price crashed for the first time. Bitcoin had breached the $1,000 (roughly Rs. 74,380) mark by then, but the price began to quickly slide to around $300 (roughly Rs. 22,310). In January 2014, the world's largest Bitcoin exchange, Mt.Gox, suddenly went offline. With it, 850,000 Bitcoins too vanished and those who owned them never found out what happened to their Bitcoins. On 20 March 2014, Mt. Gox reported that it found 199999.99 Bitcoins in an old digital wallet, which brought the total number of bitcoins the firm lost down to 650,000, from 850,000. Investigation into the matter is still on.

In 2015, Bitcoins regained the $1,000(roughly Rs. 74,380) value again. The next year, Ethereum posed a serious threat to Bitcoin's market leadership. However, Bitcoin had gained so much popularity that by 2017 it was getting closer to the $10,000 (roughly Rs. 7.4 lakhs)mark. More people were joining the ecosystem and putting money into it. This year, the market cap of all cryptocurrency coins rose from $11 billion (roughly Rs. 81,820 crores) to over $300 billion (roughly Rs. 22,31,640 crores). Ethereum price in India stood at Rs. 1.9 lakhs as of 7pm IST on August 2.

Bitcoin now

At the start of 2018, Bitcoin price again crashed and it lost more than 80 percent of its value as several countries took steps to tighten regulatory oversight around cryptocurrency. Even in India, the RBI issued a note to regulate banks from trading or facilitating cryptocurrency transactions. Also this year, one of the biggest cryptocurrency heists took place. The BitConnect scam siphoned off $2 billion (roughly Rs.14,880 crores)by duping investors.

The year 2019 started off quiet. But Bitcoin neared $8,000 (roughly Rs. 5.9 lakhs) by May. Then it lost nearly $1,000(roughly Rs. 74,380) in June only to reach $14,000 (roughly Rs. 10.4 lakhs)by July. This year was relatively good for Bitcoin. The next year, the pandemic year, Bitcoin was still considered a fringe investment by the likes of Warren Buffet, who said it has no value. By the end of the year, however, Bitcoin nearly quadrupled, reaching an all-time high above $28,000 (roughly Rs. 20.8 lakhs). The Supreme Court of India set the RBI circular aside on cryptocurrency in May 2020.

This year, Bitcoin has had a roller-coaster ride so far. During the initial months, it had the backing of the tech tycoon Elon Musk, who later began supporting Dogecoin after environmentalists raised concern about Bitcoin mining driving up energy consumption. Dogecoin price in India stood at Rs. 15.11 as of 7pm IST on August 2. After reaching its lifetime high of $65,000 (roughly Rs. 48.3 lakhs), Bitcoin crashed massively in May. It has now recovered to some extent and was trading around $40,000(roughly Rs. 29.7 lakhs) on Monday, August 2.

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Bitcoin History: A Beginners Guide to the Worlds First Cryptocurrency - Gadgets 360

Miami Mayor Francis Suarez on using cryptocurrency to expand the city's economy and its potential impact on residents.

Bitcoin crossed the $40,000 plateu late Tuesday night, before a slight pullback.

Early Wednesday morning Bitcoin was up more than 6%.

The price was around $39,7500 per coin, while rivals Ethereum and Dogecoin were trading around $2,300 and 20 cents per coin, respectively, according to Coindesk.

Bitcoins mining difficulty may be set to increase for the first time since Chinas crackdown on crypto mining in May, according to Coindesk.

MAYOR SUAREZ ON MIAMICOIN LAUNCH, SAYS CITY IS FOCUSED ON DIFFERENTIATING OUR ECONOMY

Being blamed are the rapid expansion of mining facilities in North America and the return of Chinese miners through overseas hosting sites.

Mining difficulty is a metric to describe how hard it is to mine a block and get rewards in bitcoin.

An increase in mining difficulty requires a miner to use more computing power to earn bitcoin, which reduces the miners profit margin.

Miami Mayor Francis Suarez discussed MiamiCoin, the citys newest cryptocurrency initiative, during an appearance on "Varney & Co." on Tuesday. The mayor says the city is focused on differentiating its economy by creating the new wave of technological products.

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Suarez calls Miami the bitcoin capital of the world.

"The City of Miami could end up earning millions of dollars as a result of the popularity of MiamiCoin," Suarez said. "We're focusing on differentiating our economy by creating the new wave of technological products that will incentivize people to move to Miami and be part of our tech ecosystem".

Whenever a MiamiCoin is mined, a percentage of the coin by virtue of the programing goes to the City of Miami.

Miami hosted the 2021 Bitcoin conference last month.

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Bitcoin price touches $40,000 - Fox Business

Ive never quite understood why cryptocurrencies are worth anything. Of course, the untraceable payments are worth a lot to ransomware hackers, cyber criminals and money launderers. But dollars, euros and yen are backed by nations respective treasuries. If someone invents a cryptocurrency, any value is based solely on convincing others it has value. But is it a usable means of exchange? International banking officials say cryptocurrencies such as bitcoin are speculative assets, not sustainable, usable money.

Yet the epidemic of hugely disruptive ransomware attacks in recent months on JBS Foods, a major meat processor; on Colonial Pipelines, our critical infrastructure, causing gasoline shortages for weeks; and on 1,000 or more U.S. businesses on July 4 highlights the enormous risks. Moreover, hundreds of small towns, hospitals, school districts and small businesses have been hit by the ransomware epidemic all enabled by cryptocurrencies.

How should governments respond? Besieged with cyberattacks, the Biden administration has been struggling with this question of cybersecurity with few clear answers. Cyber offense still seems to beat cyber defense.

As the eminent economic analyst Martin Wolf outlined in a recent Financial Times essay, the risks and chaos of a wild world of unstable private money is a libertarian fantasy. According to a recent Federal Reserve paper, there are already some 8,000 cryptocurrencies. Its a new mom-and-pop cottage industry.

How should governments respond? Wolf argues that central banks (e.g., the U.S. Federal Reserve) should create their own official digital currencies central bank digital currencies (CBDC) and make cryptocurrencies illegal.

Ive been asking the same question: Who needs cryptocurrencies? Apart from the nasty uses and wild speculative value swings, data mining to produce bitcoin is a serious environmental hazard, using huge amounts of electricity by rows and rows of computers.

Governments should guarantee safe, stable and usable money. Already, according to the Atlantic Council GeoEconomics Center'sCBDC Tracker, 81 countries representing 90 percent of worldgross domestic product are at various stages of researching and exploring the adoption digital currencies.

The four largest central banks the European Central Bank, the Bank of England, the Bank of Japan and the U.S. Federal Reserve are all exploring CBDCs, though the U.S. lags behind. Meanwhile, China is already digitizing its currency, the RMB, and allowing foreign visitors to use it for payments. Though China is still a long way from having an international reserve currency to rival the dollar, its digitized RMB is a step in that direction.

Nonetheless, caution is well advised, as there are important, complex issues that must be sorted out before launching an official digital currency. These issues include equity: Should the digital dollar be available to all or just used for certain business transactions? I would argue it must be for all. Should a U.S. CBDC augment cash or totally replace it, and would there be a transition period? Then there is the impact on private banks: Should individuals have bank accounts with the Fed rather than private banks? What should be the relation between private banks and the Fed with regard to currency? Should businesses have digital wallets? How would international payments work?

And not least, there is the question of privacy and surveillance. A digitized dollar would likely make it hard to dodge taxes with untraceable cash. But just how traceable would the public and Congress accept a CBDC to become? Would the fact of a CBDC making transactions safer, faster and cheaper be worth some trade-off?

Then there is the question of whether the worlds major powers would cooperate in outlawing cryptocurrencies and reach agreement on rules and regulations of CBDCs. China, always with an eye on control, has indicated skepticism, if not disdain, toward cryptocurrencies. Indeed, that was one driver in Beijings swift move to digitize the RMB. This could be an area of U.S.-China cooperation worth exploring.

If China were on board, the possibility of a U.N. Security Council resolution to ban cryptocurrencies could be in the cards. That would be a foundation for taking the issue to the Group of 20 to make it a global norm.

For now, there are a whole lot more questions than answers. But the insidious new industry of cyber hacking and ransomware is an unacceptable disruptive threat to American economic security. It is a problem that is growing, not subsiding. And the proliferation of do-it-yourself digital currencies is a serious and bad omen for global financial stability.

Yet amid an international order that is fraying and fragmenting, its an open question whether such threats are enough to catalyze sufficient international cooperation. But I suspect that with a little U.S. leadership, jump-starting financial diplomacy would go a long way. Certainly, its a good test for President BidenJoe BidenTrump hails Arizona Senate for audit at Phoenix rally, slams governor Republicans focus tax hike opposition on capital gains change Biden on hecklers: 'This is not a Trump rally. Let 'em holler' MOREs efforts to align democracies.

Robert A. Manning is a senior fellow of the Brent Scowcroft Center for Strategy and Security at the Atlantic Council. He was a senior counselor to the undersecretary of State for global affairs from 2001 to 2004, a member of the U.S. Department of State policy planning staff from 2004 to 2008 and on the National Intelligence Council strategic futures group from 2008 to 2012. Follow him on Twitter @Rmanning4.

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Bye-bye, bitcoin: It's time to ban cryptocurrencies | TheHill - The Hill