Category Archives: Bitcoin
Forget the Bitcoin price! Heres how Id invest in the best shares now to make a million – Yahoo Finance UK
The Telegraph
America's top disease control expert has questioned Britain's plan to delay giving follow-up shots of Covid vaccines in order to focus on a greater roll-out of first doses. Dr Anthony Fauci said he would "not be in favour" of the newly announced British strategy, which sanctions a time lag of up to 12 weeks between an initial dose of the vaccine and a follow-up shot. British health chiefs believe the move will allow them to give more people the initial dose, conferring greater overall protection. But some critics say the vaccine has only been reliably tested with a time lag of around three weeks. In an interview with CNN on Friday, Dr Fauci, who is director of the National Institute of Allergy and Infectious Diseases, appeared to side with the critics of the plan, saying America had no plans to follow Britains lead. I would not be in favour of that, he said. Were going to keep doing what were doing. Under the British plans, the Oxford University-AstraZeneca vaccine will be administered initially as one jab initially, with efforts focusing on giving a degree of protection to as many of the most vulnerable as possible. A second dose will then be administered four to 12 weeks later. The Pfizer vaccine, the first to gain approval in the UK, will also be given as a single dose initially. This is despite the fact it was given the green light on the basis of clinical trials of two doses, administered 21 days apart. In a statement Pfizer said that any "alternative" dosing regimens should be followed with surveillance by health authorities. Critics of the plan told the New York Times that widening the gap between vaccination shots could impair its effectiveness. Dr Phyllis Tien, an infectious disease physician at the University of California, San Francisco, said it was like going into the Wild West." Medics who have backed the British plan say that during vaccine trials, some patients were given second doses at different time intervals, which showed that the vaccine remained up to 80 per cent effective after a 12-week delay. The Astra Zeneca campaign will be rolled out on Monday with an initial four million doses. Another 16 million doses will be available by mid-January, with a total of 40 million being available by the end of March.
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Forget the Bitcoin price! Heres how Id invest in the best shares now to make a million - Yahoo Finance UK
With bitcoin ticking over $28,000, now might be a good time to give some of it to charity – CNBC
Sitting on a growing bitcoin fortune? Consider giving away some of it to charity.
As 2020 draws to a close, the cryptocurrency has seen a massive surge in appreciation. The value of a single unit of bitcoin is now hovering around $28,000.
Though longtime holders of the virtual currency are rejoicing, they run the risk of winding up overweight in bitcoin. That is, the massive run-up in values could suddenly result in investors having more exposure toward bitcoin and its risks than they'd like.
Similarly, while cashing out of your holdings might seem attractive, it could come with a hefty capital gains tax bill on the appreciation.
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That's where charitable giving comes into play.
"We believe in asset diversification, and because the price of bitcoin rose significantly, investors could be overallocated based on their targets for their portfolio," said Stefan Podvojsky, senior vice president of Fidelity Charitable.
"A donor advised fund provides a great outlet to remove that overweight and support the philanthropy that is important to the donor," he said.
Indeed, investors in bitcoin have been able to donate their holdings to donor-advised funds via Fidelity Charitable since 2015.
Benefactors have given close to $26 million in bitcoin to Fidelity Charitable's donor-advised funds year to date as of Dec. 29.
Donor-advised funds are accounts generous investors can fund with a variety of assets and use for making grants to their favorite charitable causes.
Nevertheless, giving away bitcoin and other crypto assets can come with a unique set of hurdles, including price volatility and additional tax reporting on the part of the investor.
Mykola Tys/ | LightRocket | Getty Images
Though you can convert cryptocurrency into dollars, the IRS regards it as property for income tax purposes.
This means you're subject to capital gains taxes if you decide to sell or exchange your virtual currency holdings.
The magnitude of the tax hit will depend on how long you've held your bitcoin if it's at least a year, you may qualify for the long-term capital gains rate of 0%, 15% or 20% and your cost basis in the asset.
Investors who snapped up bitcoin when it was especially cheap consider that one bitcoin was worth $7,220 Dec. 30, 2019 may face the harshest tax consequences when they sell or exchange it.
2020 income tax brackets
IRS
That's because the tax would be based on the difference between their cost basis and today's market price.
Meanwhile, donating an asset you've held for at least a year will allow you to claim a tax deduction based on its fair market value.
"Donating it could be incredibly tax-conducive," said Bryan Clontz, founder and president of Charitable Solutions, a firm that specializes in receiving and liquidating noncash assets for charities.
"It's the holy grail of charitable planning: a low basis, highly appreciated asset," he said.
We believe in asset diversification, and because the price of bitcoin rose significantly, investors could be overallocated based on their targets for their portfolio.
Stefan Podvojsky
senior vice president of Fidelity Charitable
Another reason why donating crypto via a donor-advised fund might make sense: Your favorite charity may be skittish about accepting direct contributions of virtual currency due to data security issues.
"The big issue for charities is the volatility and the risk that if you set up your own wallet, wallets can be hacked," said Greg Sharkey, senior philanthropy advisor at The Nature Conservancy, a charity in Arlington, Virginia.
The organization teamed up with BitPay, a bitcoin payment service provider, to accept donations and convert them to cash.
"If the donor calls this morning and wants to make gifts and does it through BitPay, the money would be at the charity's account tomorrow," said Sharkey.
What makes cryptocurrency so complex is the fact that not only are these assets subject to price volatility, but they also trade constantly.
Generally, the deduction a donor can claim is based on the price of the asset on the date they relinquish control to the donor-advised fund.
Fidelity Charitable only trades bitcoin during New York Stock Exchange market hours, or 9:30 a.m. to 4 p.m. Eastern, on weekdays, said Podvojsky.
"Depending on when during the day you might transfer the bitcoin to us, you would be subject to the price in the market and the liquidity we would be able to obtain at that point in time," he said.
Investors hoping to claim a tax deduction for their donation have extra legwork.
Because they're giving away a special asset, they must obtain a qualified appraisal from a third party and file Form 8283 with the IRS.
"Roughly $500 to $600 per appraisal would be the market for this space, and you'd have to have a larger donation to make it worth it," said Clontz. "There's a cost to the donor, and it's not just five minutes of work."
Giving away those appreciated bitcoin holdings and collecting a tax write-off isn't just a one-person effort. Here are a few considerations:
Correction: New York Stock Exchange market hours are 9:30 a.m. to 4 p.m. Eastern on weekdays. An earlier version misstated the times.
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With bitcoin ticking over $28,000, now might be a good time to give some of it to charity - CNBC
Associate Professor of Finance on Bitcoin rally: Blockchain technology is real and effective – Yahoo Finance
Bitcoin is currently on its longest winning run since 2019. Bryan Routledge, Associate Professor of Finance at the Tepper School of Business, Carnegie Mellon University, joins Yahoo Finance Live to break down how Bitcoin rallied to record levels this year and the outlook for crypto in 2021.
- Bitcoin at a record once again. It touched above 28,000 overnight. And it has had quite a run thus far in 2020. Hasn't had the end pullback that we saw, for example, in 2017. Let's talk more about what could happen next for Bitcoin as well as for the bigger cryptocurrency complex.
Brian Rutledge is joining us now. He's an Associate Professor of Finance at Carnegie Mellon University Tepper School of Business. He has written a lot about cryptocurrency, but about blockchain as well.
And it's actually there, Brian, that I want to begin because as Myles my co-host has pointed out frequently, the blockchain conversation is definitely not as prominent now as it was in 2017. The focus has really come in on Bitcoin and its rise. Do you think that that's sort of a mistaken perception? Do you think that there is still-- I mean, is-- is blockchain out there? Is-- how much is it being used? And what's sort of the use case as we move forward?
BRIAN RUTLEDGE: Wow. OK. Lots packed in there. I think the-- the thing-- the thing to appreciate about Bitcoin and its rise in price-- I mean, 28,000 is remarkable. 3,000 was remarkable for Bitcoin in the sense it is built on blockchain technology. And so I think the fact that you're not talking about it is, in some sense, an acknowledgment that blockchain technology is effective. So it is big dollars that are in Bitcoin that are built on this underlying-- underlying blockchain technology of competitive decentralized recordkeeping.
And if you had asked me in 2013 if this was going to be viable, I certainly wouldn't have said yes. And so I think the-- some of the price of Bitcoin is a bit of a mystery in the sense of why it has quadrupled over the year. But the fact that it is what it is I think is a validation that the blockchain technology is real and effective.
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And then the second half of your question, I think, is, what's the sort of killer app for blockchain technology that's waiting to happen? I think that is still unanswered. And it is a very good question in the sense of, where will blockchain technology go beyond just, say, record keeping on who owns Bitcoin?
- You know, Brian, the perspective that I have on Bitcoin is basically from Finance Twitter and public media, so it's everyone bragging about how smart they are because they own all these coins and they went up a lot. I'm curious how your students-- what your conversations with your students are like as it relates to the entire crypto space, what they're interested in right now.
BRIAN RUTLEDGE: I mean, it is-- an awesome thing to put on your syllabus is cryptocurrency, blockchain technology. You just-- you track students. It is-- I think it's a really interesting and attractive thing for a student in the same way it's an interesting, attractive thing just in general in the sense of, it is a mashing up of economics and business with the underlying technology of cryptography and distributed computing.
And so there is really interesting technology problems that are there. And then, there are really interesting business problems. And so it-- it-- it's a rich, fun topic to teach because the students are just-- they're keen.
- Brian, just based-- based on your understanding of Bitcoin and its history and where it's been this year, do you think what we're seeing in terms of price action reflects that at some point in our lifetimes, Bitcoin might be a viable replacement to the dollar?
BRIAN RUTLEDGE: That's a good question in the sense of, what is it people are buying Bitcoin for and the sort of speculation? But the two things that people might be thinking about-- one is it's an alternative to something like gold. And we think about-- gold is not sort of an alternative to the dollar, but people hold it in their portfolio as, say, a hedge against inflation. We don't use gold in our everyday transactions.
The price of gold is much higher then the intrinsic value of gold you would find. And so people moving into cryptocurrencies or Bitcoin as a, here is something that is commodity-like that is independent of, say, the Federal Reserve, and I want to hold that as a hedge against inflation. That-- that-- that is not a-- that's a sensible argument. It's belayed a bit by the fact that the price of Bitcoin is stunningly volatile. It's orders of magnitude more volatile than the price of gold or even the stock market.
And then, I think the second sort of reason that people might think about Bitcoin as something they want to own is, it is perhaps access to this blockchain technology in the sense of, I want to own a piece of this future technology. And there, I think-- you know, like all bets, it's risky.
And the bet there is twofold. One would be that blockchain technology indeed will be something new and useful. And then the second part of that is that Bitcoin would be relevant in that, I don't know, blockchain-enabled future.
And I guess-- when thinking about that one, if you go back to, I don't know, the internet in the 1990s and thinking about, gee, I want to-- I think this is going to be revolutionary, it was pretty hard to see where the internet was going, and harder still to pick, I don't know, Amazon over Pets.com or Netscape or somebody.
- Yeah. And most people-- a lot of people didn't do that correctly, certainly. I mean, but speaking of forecasting, Brian, you received a grant from the International Institute of Forecasters for your work on forecasting. When it comes to Bitcoin price, is there any way to even do it with any degree of accuracy?
BRIAN RUTLEDGE: The financial prices in general are hard to forecast in part because everybody is trying to forecast them, so the famous or book of Burton Malkiel of a random walk down Wall Street is still applicable in the sense that, for the most part, prices go up or down with almost equal probability per day. There's lots of people trying to sort of find some wedge of a signal in there to predict the price of Bitcoin.
The-- the-- if you do have some-- so, no. I have no forecasting ability. If you think you have some forecasting ability, Bitcoin prices are attractive in the sense that they are just so volatile, right? And if-- if you think you can forecast something, predicting, forecasting something that's volatile lets you make a lot of money.
- Yes, it does. And a lot of people certainly have done that even if their forecasts have been wrong. So we'll see what happens next year. Brian, thank you so much. Happy new year to you, and we'll see what ends up happening with those Bitcoin prices.
Brian Rutledge is an Associate Professor of Finance at Carnegie Mellon's David Tepper School of Business. Thank you so much.
Russell Okung to become first NFL player paid in Bitcoin – Local 5 – weareiowa.com
Carolina Panthers offensive tackle Russell Okung will be the first professional athlete in any U.S. league to receive Bitcoin as a form of payment.
WASHINGTON NFL Carolina Panthers offensive tackle Russell Okung will be the first player to be partly paid in Bitcoin.
In May of 2019, he tweeted asking to be paid in Bitcoin. On Tuesday, he confirmed that he will indeed be paid by the digital currency.
"Paid in Bitcoin," he tweeted.
Okung, who is had a $13 million salary in 2020, will receive half of it in Bitcoin, according to a press release from Strike, a company that helps users convert traditional money to the cryptocurrency. He will be the first professional athlete in any U.S. league to receive Bitcoin as a form of payment.
Money is more than currency; its power, the two-time Pro Bowler said in a statement. The way money is handled from creation to dissemination is part of that power. Getting paid in Bitcoin is the first step of opting out of the corrupt, manipulated economy we all inhabit.
NFL Network said Okung's U.S. dollars paycheck will go into an account that's controlled by Strike. There it will convert to Bitcoin before going to Okung.
HOW DOES BITCOINS WORK?
Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously. The coins are created by users who mine them by lending computing power to verify other users transactions. They receive bitcoins in exchange. The coins also can be bought and sold on exchanges with U.S. dollars and other currencies. Some businesses also accept bitcoin, but its popularity has stalled out in recent years.
HOW BITCOINS ARE KEPT SECURE
The bitcoin network works by harnessing individuals greed for the collective good. A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction. The blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional bitcoin. As long as miners keep the blockchain secure, counterfeiting shouldnt be an issue.
HOW BITCOIN CAME TO BE
Its a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention. But proponents say that doesnt matter: The currency obeys its own internal logic.
In 2016, An Australian entrepreneur stepped forward and claimed to be the founder of bitcoin, only to say days later that he did not have the courage to publish proof that he is. No one has claimed credit for the currency since.
The Associated Press contributed to this report.
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Russell Okung to become first NFL player paid in Bitcoin - Local 5 - weareiowa.com
Chart points to bitcoin peaking out in early 2021, trader says – CNBC
Bitcoin could be headed for a breather in the new year.
The red-hot cryptocurrency continued its longest monthly win streak in more than a year on Monday after grazing a new all-time above the $28,000 mark on Sunday.
Based on the charts, that run might be put on pause come 2021, Mark Newton, founder and president of Newton Advisors, told CNBC's "Trading Nation" on Monday.
"It is still quite bullish on an intermediate-term basis given that it just broke out to new all-time highs," Newton said. "I think we have a ways to go. Near term, my cycle composite shows us peaking out in early January."
Bitcoin's weekly chart and relative strength index reflect rising interest in the world's largest digital currency, mostly from institutional investors, Newton said.
Google searches for bitcoin are up some 750% year over year, but still "nowhere near" their highs from 2017, the chart analyst said.
"[With] SPACs right now, you can make money at 10, 15, 20% a day," he said. "I just don't think that investors have quite the appetite for crypto while the institutions are certainly very much heading in that direction."
Newton's other chart which uses three different bitcoin cycles, the main one being 273 days, to track changes in the cryptocurrency's path hints at an upcoming turn in bitcoin's direction.
"All those years where we had a stellar Q4 we reversed course in trend back in late December, early January, and actually went lower," he said. "So, I think there will be some opportunity [for] investors to be able to buy dips in crypto and bitcoin particularly."
Newton, who is long bitcoin, ethereum, litecoin and several other digital currencies, said he would look to sell out of his positions "in the next one or two weeks."
"I think there will be some opportunity to buy dips into Q1 of next year," he said.
Boris Schlossberg, managing director of FX strategy at BK Asset Management, said the institutional interest in bitcoin "bodes well for the asset."
"Can it go to $50,000? Absolutely," he said in the same "Trading Nation" interview, cautioning that "if you are looking to trade or invest this asset, you have to have the mentality that it's going to have a huge amount of volatility."
"As to the ultimate valuation, it's impossible to say, but one interesting measure: If you look at the tulip mania, at the peak of tulip mania, one tulip was worth basically about one house," Schlossberg said. "If you do use that kind of valuation, then it still has a long way to go because its ultimate terminal valuation could be $150,000, $200,000 before the whole move kind of exhausts itself. So, as many people have said, there's still quite a lot of potential, but there's certainly going to be massive volatility while we get there."
Disclosure: Newton is long bitcoin, ethereum, litecoin and several other cryptocurrencies along with closed-end trusts for bitcoin cash and ethereum.
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Chart points to bitcoin peaking out in early 2021, trader says - CNBC
Petition Launched To Extend Comment Period On Cryptocurrency/Bitcoin Self-Custody Regulations – Forbes
KRAKOW, POLAND - 2018/11/13: In this photo illustration, the Bitcoin wallet app is seen displayed ... [+] on an Android mobile phone. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
One essential trait of cryptocurrencies that make them fundamentally different from the conventional banking system is the ability for users to have custody over their own crypto-assets. There is no ability to freeze funds or censor transfer of them if you have control of your own private key. There is no third party that can come in and seize your funds or stop you from using them in any way you see fit. Put shortly: your keys, your funds.
In effect, when you own bitcoin or other cryptocurrencies, you control your own part in a distributed ledger rather than being a manipulable data point in the centralized ledger of a bank.
You express the degree of privacy you want and the level of security you need to conduct transactions. You can choose to have a trusted third party custody your assets for you (and in so doing, be able to identify who you are in exchange for easy access to your funds) or you can choose to have your cryptocurrencies in your own wallet, run on open source code that seek neither to identify you or to sell you anything.
Yet recent proposed regulations in the United States may lead to this critical trait, the ability to choose different transactions and ways of dealing with cryptocurrencies and their wallet holders, to be under threat.
FinCEN (Financial Crimes Enforcement Network), a portion of the Treasury Department which is responsible for enforcing transparency requirements around financial flows and the Bank Secrecy Act, is looking to impose regulations that force regulated entities to keep records on identity when theyre looking to transact in cryptocurrencies specifically a $3,000 threshold for when there is a transaction with an unhosted wallet a wallet of somebody who hasnt gone through formal KYC/AML and which isnt hosted on an exchange or bank, and which is oftentimes in self-custody.
Cryptocurrency exchanges and banks that want to deal in cryptocurrency will have to create the technical capability to verify the identity of those behind certain wallets a difficult task in a realm of financial privacy where preventing wallet reuse might among other things, stop the spread of public keys and strengthen the chain against theoretical future attacks such as large quantum computers being able to double-spend. There are also possible significant implications when it comes to certain decentralized exchanges.
Tying together peoples identities when they express a higher desire for privacy (as is the case with end-to-end encryption) ends up amounting to a sort of warrentless surveillance that runs directly counter to the tenets of financial liberty and privacy of cryptocurrencies.
In effect, if the proposed rule is implemented fully, this may have the effect of significantly burdening the self-custody of cryptocurrencies as well as banks that want to get into cryptocurrency or cryptocurrency exchanges.
The petition to extend the comment period on this proposed rule, had an original goal of 2500 signatures, but is now above that and seeking 5,000 signatures as of the time of publishing. It is being started by the Chamber of Digital Commerce, a cryptoassets trade association with members including leading cryptocurrency exchanges and certain banks.
Part of the urgency stems from the shortness of the comment period. Usually, comment periods can extend up to 90 days, with a norm of 30 days, and a period that can stretch up to 60 days when there is a significant issue at hand. FinCEN has proposed a 15-day comment period, and stacked many of those days during the holidays making it very difficult to get any significant replies.
An extension of the comment period would allow organization such as the Electronic Frontier Foundation and Coin Center to conduct deeper diligence beyond their initial thoughts, and provide well-thought out comments as to how this rule may create unintended effects that significantly damper cryptocurrencies and their ability to create consensual, financial flows.
FinCEN claimed the shortness of the proposed comment rule was because of a number of reasons, from the foreign affairs implications of the rule, to its previous engagement with cryptocurrency industry executives yet its not so clear, beyond the transition to a new Administration, why there is such urgency in the first place.
The proposed rule from FinCEN aims to be one of the Trump Administrations final actions on cryptocurrencies. The Trump Administration has not been very favorable to cryptocurrencies in many instances, from tax regulations/rulings, to President Trump tweeting about he was not a fan of bitcoin.
Extending the comment period to between thirty to ninety days would potentially place the rule-making process in the hands of the new Administration which while inclined to more banking regulations and conventional financial constraints, may not have the exact same aggressive view towards cryptocurrencies as the current administration or may not have the same rules.
While banks are given sometimes years to comment and consider similar issues, this particular issue is being rushed through in order to give the current administration its own space to create rules that may never be reversed in the short time before it no longer has any power and which may have effect for years or perhaps even decades, constraining innovation that is yet to come and freedom that is already here.
The proposed FinCEN rule is a potential bridge to the dystopian society previewed in Hong Kong and Nigeria: places where cash in the former or bitcoin in the latter are the only options for peoples who are subjected to a ruling political class in control with access to monitor and censor whichever financial flows they see fit. It deserves more consideration than a last-ditch attempt to make rules from an outgoing Administration.
Bitcoin Just Jumped. Its Near a Record High. – Barron’s
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Bitcoin has been surging again, leaving it close to its record high.
The cryptocurrency rose more than 17% to a record level of $28,220 between 4 p.m. on Friday and late morning on the East Coast on Sunday. The gains have moderated since then, but the price is still far above the level on Friday afternoon.
At mid-afternoon on Monday, it was just 3.8% below its high.
It isnt entirely clear why Bitcoin took off, but the price has been moving in line with those of riskier assets. That means that when investors are willing to take more risk for higher returns, theyll buy up Bitcoin.
Bitcoin hit bottom for the year on March 12, less than two weeks before the global stock market reached its low as the pandemic set in. Since then, Bitcoin is up more than 450%, while the S&P 500 has risen 67% from the low point it reached on March 23.
Since mid March, the U.S. Dollar Index (DXY), a proxy for interest in safe, dollar-denominated assets among international investors, has fallen 12% as the global economy has recovered. In mid March, the Federal Reserve said it would provide as much monetary stimulus as needed for the U.S. economy, which lowered interest rates and led to expectations they would remain at rock bottom.
Yields on long-term Treasury bonds are now below the expected rate of inflation, reducing interest in that debt, as well as in the dollars needed to buy it. Investors have moved into riskier assets, including Bitcoin, in search of higher returns.
Since the stock-market close on Dec. 22, the date that marked the end of a brief pause in the stock rally, the S&P 500 is up a tenth of a percent. Treasury prices are down since then, with the 10-year Treasury yield up to 0.94% from 0.92%. The Dollar Index is down 0.3%.
Buying Bitcoin on its fundamentals isnt a sure bet. One thing that has been for sure: When the market environment sets up for gains in riskier assets, Bitcoin can be a nice trade.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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Bitcoin Just Jumped. Its Near a Record High. - Barron's
Why MicroStrategy and Other Bitcoin Stocks Soared Today – The Motley Fool
What happened
The stock market closed at 2 p.m. EST on Dec. 24 and didn't reopen until 9:30 a.m. Dec. 28. During that time, the balance sheet for technology company MicroStrategy (NASDAQ:MSTR) increased in value by almost $300 million, thanks to bitcoin's meteoric rise over the Christmas weekend. No wonder MicroStrategy stock is soaring today. As of 2:30 p.m. EST, the stock was up 16%.
Other bitcoin-related stocks are also soaring today, but not all of these moves are as logical as that of MicroStrategy. Indeed, hype seems to be growing around bitcoin, underlining the need for investors to be discerning and selective with their investments.
Image source: Getty Images.
MicroStrategy is a technology company, but CEO Michael J. Saylor recently decided to convert all excess cash (not needed for running the business right now) into bitcoin. The company even issued debt to have more investable cash. So far it's used more than $1.1 billion and it now holds around 70,470 bitcoin tokens at an average price of $15,964. For perspective, bitcoin reached all-time highs over $28,000 during this past weekend. So far, Saylor's bold move is paying off big time.
The market capitalization for MicroStrategy is around $3.4 billion with today's upward move. Therefore, the stock's market cap gains today are roughly in line with the increased value on the balance sheet. With this perspective, MicroStrategy stock's move today appears completely rational.
Bitcoin has been hot over the last three months, greatly outpacing the S&P 500. Bitcoin Price data by YCharts
That's not the case for all bitcoin-related stocks. Consider bitcoin-mining company Bit Digital (NASDAQ:BTBT). As of 2:30 p.m. EST, the stock was up almost 100% for the day. This move is a head-scratcher. Like MicroStrategy, Bit Digital benefits from the higher price of bitcoin. However, the size of Bit Digital stock's jump seems excessive.
Here's why: Miners essentially provide the computing power for the blockchain technology that makes bitcoin work, and they're compensated for their efforts in bitcoin. However, they accrue expenses in the real world for which they need cash, not bitcoin. Therefore, miners earn bitcoin but have to sell it to pay the bills.
Last week, Bit Digital provided fiscal 2020 results. As of Nov. 30, the company only held 122 bitcoins. Assuming the company still holds this many tokens, the company's value over the Christmas weekend increased by less than $0.5 million. By contrast, it's added over $200 million in market cap today.
Of course, that's not to say bitcoin miners shouldn't be going up at least some today. In theory, as the price of bitcoin rises, they'll be compensated more for doing the same work -- good for revenue and profit margins. Accordingly, other bitcoin-mining stocks are increasing today by a more reasonable amount. As of 2:30 p.m. EST, Marathon Patent Group (NASDAQ:MARA) stock was up 16%, Riot Blockchain (NASDAQ:RIOT) stock was up 22%, and CleanSpark (NASDAQ:CLSK) stock was up 15%. These moves are far more reasonable than Bit Digital's.
Image source: Getty Images.
In summary, it appears all stocks that have something to do with bitcoin went up today because the price of bitcoin continues to rise. However, not all the moves are proportional. Some, like MicroStrategy, make sense. Others, like Bit Digital, seem overdone.
Critics will no doubt point out that Bit Digital is undervalued relative to its peers. For example, one way to value stocks is the price-to-sales ratio. According to Yahoo! Finance, Marathon and Riot Blockchain are trading at 406 times sales and 135 times sales respectively. By contrast, Bit Digital trades at only 38 times sales.
In my opinion, this merely points out how overvalued stocks like Marathon and Riot Blockchain are; it doesn't show how undervalued Bit Digital is.
Don't get me wrong. I believe the price of bitcoin could head higher in 2021. Bitcoin supply was cut in half earlier in 2020 during a periodic event called the "bitcoin halving." Furthermore, institutional demand from companies like MicroStrategy has surged. Low supply with high demand can lead to higher prices, and it's partly why I bought a little bitcoin.
However, that doesn't mean bitcoin or any of these bitcoin-related stocks aren't risky -- they are. Predicting the future price of bitcoin is anything but certain, making all of these businesses hard to envision three to five years from now. That's a big deal, because investing implies a long-term time horizon.
In conclusion, although there are plenty of flashy tickers out there and some (like Bit Digital) can even double in a single day, I remain resolute in my belief investors should identify quality businesses that can compound shareholder returns for years, buy their stocks, and hold until something changes.
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Why MicroStrategy and Other Bitcoin Stocks Soared Today - The Motley Fool
Deribit Adding Options to Allow Bitcoin Traders to Bet on Rally to $120K, $140K – Yahoo Finance
TipRanks
Semiconductors are one of the modern worlds essential industries, making possible so much of what we rely on or take for granted: internet access, high-speed computers with high-speed memory, even the thermostats that control our air conditioning there isnt much, tech-wise, that doesnt use semiconductor chips.With the end of 2020 in sight, its time for the annual ritual of evaluating the equities for the New Year. Wells Fargo analyst Aaron Rakers has cast his eye on the chip industry, tagging several companies as likely gainers next year.The analyst sees several factors combining to boost demand for chips in 2021, including cloud demand, new gaming consoles, and a market resolution to the future of the PC segment. Overall, however, Rakers expects that memory chips and 5G enabled chips will emerge as the drivers of the industry next year. The analyst expects that semiconductor companies, as a group, will see between 10% and 12% growth over the next 12 months.Thats an industry-wide average, however. According to Raker, some chip companies will show significantly higher growth, on the order of 30% to 40% in year ahead. We can look at those companies, along with the latest TipRanks data, to find out what makes these particular chip makers so compelling.Micron Technology (MU)Among the leading chip makers, Micron has staked out a position in the memory segment. The company has seen its market cap expand to $78 billion this year, as shares have appreciated 32% year-to-date. The surge comes on a product line heaving on computer data storage, DRAM, and flash storage.Look back at 2020, Micron has seen revenues increase each quarter, from $4.8 billion in Q1 to $5.4 billion in Q2 to $6.1 billion in Q3. Earnings came in at 87 cents per share, up from 71 cents in Q2 and 36 cents in Q1.The calendar third quarter was Microns 4QFY20, and the full fiscal year showed a decline due attributed to the COVID pandemic. Revenue came in at $21.44 billion, down 8.4% year-over-year, and operating cash flow fell to $8.31 billion from $13.19 billion in FY19. During this past quarter, Microns 1QFY21, the company announced the release of the worlds first 176-layer 3D NAND chip. The new chip promises higher density and faster performance in flash memory, and the architecture is described as a radical breakthrough. The layer count is 40% higher than competing chips.Looking ahead, Micron has updated its F1Q21 guidance, predicting total revenue of $5.7 billion to $5.75 billion. This is a 10% increase from the previous guidance.Wells Fargo's Aaron Rakers calls Micron his top semiconductor idea for 2021. He points out a deepening positive view on the memory, and in particular the DRAM industry. DRAM accounts for approximately two-thirds of Microns revenue and over 80% of the companys bottom-line profits. In addition, Rakers notes Microns technology execution 1Znm DRAM leadership; recently outlined 1nm ramp into 2021, as well as Microns move to 176-Layer 2nd -gen Replacement Gate 3D NAND to drive improved cost curve. We would also highlight Microns execution on graphics memory (e.g., GDDR6X), Multi-Chip Packages (MCPs), and High-Bandwidth Memory (e.g., HBME2) as positives.In line with these comments, Rakers rates Micron shares a Buy, along with a $100 price target. This figure suggests room for 41% growth in 2021. (To watch Rakers track record, click here)Micron has 24 recent reviews on record, breaking down to 19 Buys, 4 Holds, and 1 Sell, and giving the stock a Strong Buy from the analyst consensus. Shares are priced at $70.96, and recent appreciation has pushed them almost to the $74.30 average price target. But as Rakers outlook suggests, there may be more than just 4.5% upside available here. (See MU stock analysis on TipRanks)Advanced Micro Devices (AMD)With $6.5 billion in total sales last year, and a market cap of $110.7 billion, AMD is a giant company but it doesnt even crack the top five of the worlds largest chip makers. Still, AMD has a solid position in the industry, and its x86 processors provide stiff competition for market-leading Intel (INTC). AMD shares have shown solid growth this year, and are up 101% as 2020 comes to a close.The share growth rides on the back of steady revenue gains since the corona crisis peaked in Q1. AMDs Q3 top line came in at $2.8 billion, up 55% from the $1.8 billion recorded in the year-ago quarter and beating the forecast by 10%. Earnings, at 37 cents per share, were up 220% year-over-year. The company credited the growth to solid results in the PC, gaming, and data center product lines, and boasted that it was the fourth consecutive quarter with >25% yoy revenue growth.AMD announced last month a new product for the scientific research market, the Instinct MI100 accelerator. The new chip is billed as the worlds fasted HPC GPU, and the first such x86 server to exceed 10 teraflops performance.Covering AMD for Wells Fargo, Rakers wrote: We remain positive on AMDs competitive positioning for continued sustained gradual share gains in PCs We also believe AMDs deepening data center GPU strategy with new Instinct MI100 GPUs and the release of RoCM 4.0 software platform could become increasingly visible as we move through 2021. AMDs roadmap execution would remain an important focus 7nm+ Ryzen 4000-series, new RDNA Radeon Instinct data center GPUs (MI100 / MI120), and the 3 rd -gen 7nm+ EPYC Milan CPUsRakers stance supports his Buy rating, and his $120 price target implies a 30% one-year upside to the stock.The Moderate Buy analyst consensus view on AMD reflects some residual Wall Street caution. The stocks 20 recent reviews include 13 Buys, 6 Holds, and 1 Sell. AMD shares are selling for $91.64, and like Micron, their recent appreciation has closed the gap with the $94.71 average price target. (See AMD stock analysis on TipRanks)Western Digital Corporation (WDC)Closing out the Wells Fargo picks on this list is Western Digital, a designer and manufacturer of memory systems. The companys products include hard disk drives, solid state drives, data center platforms, embedded flash drives, and portable storage including memory cards and USB thumb drives. WDC has had a tough year in 2020, with shares down 19% year-to-date. Still, the stock has seen gains in November and December, on the heels of what was seen as a strong fiscal 1Q21 report.That earnings report showed $3.9 billion in revenue, which was down 3% year-over-year, but the EPS net loss, at 19 cents, was a tremendous yoy improvement from the 93-cent net loss in the year-ago quarter. The earnings improvement, which beat the forecast by 20%, was key for investors, and the stock is up 30% since the quarterly report. The company also generated a solid cash flow in the quarter, with cash from operations growing 111% sequentially.Wells Fargos Rakers acknowledges WDCs difficulties in 2020, but even so, he believes that this is a stock which is worth the risk.Western Digital has been our toughest constructive call of 2020 and while we believe calling a bottom in NAND Flash (mid/2H2021?) remains difficult and WDs execution in enterprise SSDs will remain choppy, our SOTP analysis leaves us to continue to believe that shares present a compelling risk / reward. We continue to believe that Western Digital can drive to a ~$7/sh.+ mid-cycle EPS story; however, we continue to think a key driver of this fundamental upside will not only be a recovery in the NAND Flash business, coupled with WDs ability to see improved execution in enterprise SSDs, but also a continued view that WDs HDD gross margin can return to a sustainable 30%+ level, Rakers opined.To this end, Rakers rates WDC a Buy along with a $65 price target. Should the target be met, investors could pocket gains of 29% over the next months Where does the rest of the Street side on this computer-storage maker? It appears mostly bullish, as TipRanks analytics demonstrate WDC as a Buy. Out of 11 analysts tracked in the last 3 months, 7 are bullish, while 4 remain sidelined. With a return potential of 9%, the stocks consensus target price stands at $54.44. (See WDC stock analysis on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that unites all of TipRanks equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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Deribit Adding Options to Allow Bitcoin Traders to Bet on Rally to $120K, $140K - Yahoo Finance
Centre may impose 18% GST on bitcoin trading – Business Today
The CEIB has conducted a study on levying GST on cryptocurrencies. It suggested finance ministry that bitcoin can be categorised under 'intangible assets' class and GST could be imposed on all transactions
Currently, bitcoin, as a medium of payment, has neither been authorised nor been regulated by any central authority in India
The Central Economic Intelligence Bureau (CEIB), an arm of the union finance ministry has put forward a proposal to impose 18 per cent GST on bitcoin transactions. The CEIB told the Central Board of Indirect Taxes & Customs (CBIC) that government could potentially gain Rs 7,200 crore annually on bitcoin trading.
The CEIB has conducted a study on levying GST on cryptocurrencies. It suggested finance ministry that bitcoin can be categorised under 'intangible assets' class and GST could be imposed on all transactions, according to a Times of India report. It added that cryptocurrency can be treated as currents assets and GST charged on the margins made in its trading.
Last year, the Supreme Court asked the government to come up with cryptocurrency regulation policies. The apex court in March, this year struck down the curb on cryptocurrency trade in India. The SC quashed an earlier ban imposed by the Reserve Bank of India (RBI) on trading in virtual currencies such as bitcoin.
The RBI had virtually banned cryptocurrency trading in 2018 and had directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating any person or entity in dealing with or settling those
Currently, bitcoin, as a medium of payment, has neither been authorised nor been regulated by any central authority in India. Further, no set rules, regulations, or guidelines have been laid down for resolving disputes that could arise while dealing with bitcoin. Hence, bitcoin transactions come with their own set of risks.
Early this month, the Enforcement Directorate (ED) arrested a Gujarat-based cryptocurrency trader in connection with a money-laundering probe linked to an online betting racket with Chinese operators. As per media reports, the scam was estimated to be worth Rs 1,000 crore and involved cryptocurrency trading through multiple exchanges.
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Centre may impose 18% GST on bitcoin trading - Business Today