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Call it deja vu. Bitcoin topped $19,800 on Monday to reach a record and its highest level since 2017.

The digital currency has been on a tear this year and has nearly doubled since September, driven in part by new institutional support and low interest rates stemming from Covid-19.

Still, bitcoin's surge hasn't been without its trademark volatility last week, it rallied to more than $19,000 before falling to about $17,000 per coin on Friday. And, after hitting the record on Monday, it swiftly dropped again Tuesday to less than $19,000.

Even though it's become more commonplace and popular as an investment since 2017, financial advisors are still wary of the digital currency.

"It's critically important to understand the risks associated with it," said certified financial planner Douglas Boneparth, founder and president ofBone Fide Wealth, adding that it's a highly speculative asset despite encouraging headlines.

"You don't need to look too far back in time to see how volatile it can be," said Boneparth, who is also a member of the CNBC Advisor Council.

Most advisors would caution clients who want to invest in bitcoin, or any other buzzy trend.

It can be easy to have FOMO, or fear of missing out, on the latest hot investing trend, according to Roger Ma, CFP and founder of New York City-based financial planning firmlifelaidout.

It's best to keep your goals in mind before putting money into a fad investment, which could be something like bitcoin, a commodity like gold or the latest hot stock that's taking off.

That includes understanding your net worth, living expenses and credit score, said Ma. From there, he recommends assessing where you are with other prerequisites to investing do you have an emergency fund, are you paying down debt, contributing to retirement and on track for other financial goals?

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"What does your portfolio need to do to be able achieve your short- and long-term goals and for you to be able to lead your rich life?" said Ma. "If your plan relies on your portfolio returning 50% to 100% a year it might make sense to rejigger your plan to make it a little more feasible."

Also keep in mind that once something is making headlines or breaking records, it could be at the end of its run and be relatively expensive meaning it's not a good time to buy in.

"The problem is that everyone wants to buy when things are at all-time highs," said Anjali Jariwala, a CFP and CPA and founder of Fit Advisors. "We should have investment decisions driven by things that we can control versus having it driven by emotion or feeling towards certain investments."

To be sure, some people will still want to invest in bitcoin or other trendy things.

Before putting money into bitcoin, it's important to do your research and understand as much as you can about the asset class.

"Bitcoin produces no earnings, it pays no dividends, it pays no interest, so it's not really an investment in the traditional sense, it's value is purely dependent on what someone else is going to pay for it in the future," said David Oransky, CFP and founder of Laminar Wealth in St. Louis. "It's very different than investing in stocks, where you're investing in the future earnings of the company that produces goods and services."

In addition, investors should research how to actually buy into bitcoin and withdraw money, as it's not something they can get through a traditional brokerage account.

"It's still kind of the wild, Wild West out there and that should scare people that don't know a lot about it," said Oransky.

We should have investment decisions driven by things that we can control versus having it driven by emotion or feeling towards certain investments

Anjali Jariwala

founder, Fit Advisors

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Dont get caught up in the hype as bitcoin hovers around $19,000 - CNBC

As bitcoin surpassed its 2017 all-time high on Monday morning, a few hours later 5,045 BTC or $97 million worth of bitcoin from the 2016 Bitfinex hack was transferred. The hackers that stole the funds four years ago have moved the bitcoins numerous times this year.

The hackers that stole 119,756 BTC from the cryptocurrency exchange Bitfinex on August 2, 2016, have moved a number of stolen coins in 2020. The coins that were taken over four years ago are now worth around $2.3 billion using todays exchange rates.

Following the Bitfinex hack, the breach crippled trader confidence that day as BTC slid more than 22% across global exchanges on August 2, 2016. The coins did not move for three years until the summer of 2019, the stolen coins started moving again.

On Monday, November 30, 2020, the Bitfinex hackers transferred a large sum of bitcoins as approximately 5,045 BTC were moved. The action was caught by the blockchain parser Btcparser.com, a platform that crawls the BTC blockchain to catch old coinbase reward awakenings and addresses that stem from the Bitfinex hack.

Using todays exchange rates, the 5,045 BTC is worth more than $97 million. Bitcoin (BTC) touched an all-time high on the exchange Bitstamp reaching $19,864 per coin.

Data from Btcparser.com and the blockchain explorer Blockchair shows the 5,045 BTC was separated into separate addresses and some were combined. 14 transactions were sent and confirmed in blocks 659,373 and 659,374.

Blockchairs Privacy-o-meter shows the transactions sent by the Bitfinex hackers were not very private, receiving a low score of 55. The tool shows whether or not a transaction is susceptible to some of the heuristics used by numerous transaction tracing tools. The bitcoins moved on Monday from the Bitfinex hack look as though if they were simply swept into a different address.

What do you think about the Bitfinex hackers moving 5,045 bitcoin stemming from the 2016 breach? Let us know what you think in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Over 5000 Bitcoin Worth $97 Million from the 2016 Bitfinex Hack Spring Into Action - Bitcoin News

If you're cashing in some of your Bitcoin this year, the IRS wants to know about it.

On Monday, the cryptocurrency's value hit new heights, surging beyond $19,800 for a unit of Bitcoin. The asset's appreciation has skyrocketed this year, rising by 160% in 2020.

Understand that if you want to take a few of those holdings off the table, you'll need to share that information when you file your individual income tax return next spring.

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In fact, the IRS gets right to the point, asking on the first page of the income tax return, or Form 1040, "At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"

You'll have to check yes or no.

"The first thing with cryptocurrency is that, if you have crypto transactions, you'll need to report them," said Andy Phillips, director of the Tax Institute at H&R Block.

"The question is front and center the first thing that they touch on Form 1040," he said.

People who transacted with virtual currency aren't the only ones who'll be checking the yes box on their 1040 next year.

If you received any crypto for free, you're still expected to check yes on the front of your tax return, according to newly released draft instructions from the IRS.

Exchanged some virtual currency for goods and services or for other property including different cryptocurrency? You still need to answer yes.

You'll also need to keep records of your transactions, which can get tricky if you're using multiple exchanges or different types of cryptocurrency.

"People have multiple exchanges and the more spread out the cryptocurrency is, the more challenging it is to gather it together and do your calculations," said Kirk Phillips, CPA and member of member of the American Institute of CPAs' Virtual Currency Task Force.

The IRS considers virtual currency to be property the same way it treats stocks or other investments.

This way, if you bought some Ethereum and then sell it or if you swap it for something else, you've incurred a capital gain or a capital loss. If you captured a gain, then you're responsible for taxes.

Here's where things can get confusing: Major cryptocurrency exchanges may provide taxpayers with a Form 1099-K with these details if they've had gross payments exceeding $20,000 and they've made more than 200 transactions.

Once you know the IRS has access to the information, it's better to come into compliance before they come calling.

Mark Luscombe, CPA

principal federal tax analyst at Wolters Kluwer Tax & Accounting

"That threshold is so high," said Phillips at H&R Block.

"A lot of taxpayers either don't do a lot of transactions," he said. "Or if they do many of them, they use multiple exchanges and don't hit the threshold on any one exchange."

Even if you're below the threshold, you're still required to report the transaction and pay taxes owed.

Virtual currency from an employer is treated like wages.

That means federal income taxes and FICA taxes apply. It will be reported on your Form W-2, which you shouldreceive from your employerby the end of January.

If you mine cryptocurrency, you're also required to include it in your taxable income. You would include the fair market value as of the date you received it.

The IRS has been cracking down on unreported transactions in recent years. Last year, the agency sent letters to more than 10,000 taxpayers with virtual currency transactions, telling them to pay back taxes and file amended returns.

Failing to report income can carry hefty penalties and interest. In the worst case, you could go to prison and be fined up to $250,000.

krisanapong detraphiphat | Moment | Getty Images

Transacted in virtual currency this year? Know three key points: the fair market value of at the time of the transaction, your basis the amount you originally paid when you acquired the asset and the holding period.

"If the holding period is greater than one year, it's considered long-term capital gains," Mark Luscombe, CPA, principal federal tax analyst at Wolters Kluwer Tax & Accounting. "If it's less than one year, it's ordinary income."

The difference in tax treatment is stark: Long term capital gains are subject to rates of 0%, 15% or 20%, while ordinary income rates can be as high as 37%.

Several software providers have emerged including LukkaTax and Bitcoin.Tax to help individuals keep track of their transactions and basis.

Expect the taxman to take a hard line with compliance around crypto.

"Once you know the IRS has access to the information, it's better to come into compliance before they come calling," said Luscombe.

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Bitcoin hit the $19,800 mark. What the IRS wants to know about your holdings - CNBC

VANCOUVER, British Columbia--(BUSINESS WIRE)--Mogo Inc. (TSX:MOGO) (NASDAQ:MOGO) (Mogo or the Company), a financial technology company focused on empowering consumers with innovative digital financial solutions through its mobile app, today reported a 135% month-over-month increase in the dollar value of bitcoin traded on the Mogo platform from October 2020 to November 2020. This follows on the Companys previous announcement that Mogo bitcoin accounts increased 237% year over year in Q3 2020.

The strong performance of bitcoin and its growing credibility as an asset class have fuelled rapid growth in transaction volume and new bitcoin accounts on the Mogo platform, said David Feller, Mogos Founder and CEO. Although bitcoin has now been around for just over 10 years, its still early days for this new asset class as most Canadians have yet to own it. The introduction of bitcoin trading by leading digital players in the U.S., combined with the overall rise of digital currencies, has significantly increased the interest in bitcoin among Canadian consumers.

Greg Feller, President and CFO of Mogo, added: As one of the pioneers in Canada and the only well-established publicly traded Canadian company offering a simple and low-cost way to buy and sell bitcoin, we are in a unique position to meet this rising demand through our award winning app that offers a number of innovative products to help Canadians manage their financial lives.

MogoCrypto1, launched in 2018, is the easiest way to buy and sell bitcoin in Canada. It enables members to buy and sell bitcoin at real-time prices instantly through the Mogo app, 24/7 from their mobile device, bringing a new level of convenience and accessibility to bitcoin ownership for all Canadians. Users can sign up for free and in three minutes open an account, have the account funded in as little as 30 minutes with no funding fee, and begin buying and selling bitcoin. As part of the Companys current promotion, new Mogo members get $5 just for opening their account. MogoCrypto is available through the free Mogo app, on iOS or Android or at mogo.ca. Mogo was recently named Best Cryptocurrency App by savvynewcanadians.com and featured by Apple as one of the apps we love.

Forward-Looking Statements

This news release may contain "forward-looking statements" within the meaning of applicable securities legislation, including statements regarding the growth of Mogos revenue as a result of increased bitcoin transaction volume. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Mogo's growth, its ability to expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Mogo's control. For a description of the risks associated with Mogo's business please refer to the Risk Factors section of Mogos current annual information form, which is available at http://www.sedar.com and http://www.sec.gov. Except as required by law, Mogo disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

About Mogo

Mogo a financial technology company offers a finance app that empowers consumers with simple solutions to help them get in control of their financial health and be more mindful of the impact they have on society and the planet. Users can sign up for a free account in only three minutes, begin to learn the 4 habits of financial health and get convenient access to products that can help them achieve their financial goals and have a positive impact on the planet including a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, free monthly credit score monitoring, ID fraud protection and personal loans. Members can also easily buy and sell bitcoin 24/7 through the Mogo app, as well as participate in Mogos new bitcoin rewards program. The Mogo platform has been purpose-built to deliver a best-in-class digital experience, with best-in-class products, all through one account. With more than one million members and a marketing partnership with Canada's largest news media company, Mogo continues to execute on its vision to gamify financial health and become the go-to financial app for the next generation of Canadians. To learn more, please visit mogo.ca or download the mobile app (iOS or Android).

Original post:
Mogo Reports 135% Increase in Bitcoin Transaction Volume in November - Business Wire