BITCOIN and other cryptocurrencies have had a rough start to the week — and one top investor has said they are ‘crashing’.
THE price of Bitcoin dramatically dropped more than 10 percent on Tuesday as El Salvador suffered problems in the rollout of the cryptocurrency as its legal tender.
Bitcoin’s value crashed suddenly from $52,500 to below $44,000 on Tuesday, according to CoinMarketCap.
The price has since recovered to just over $46,700 as of 11.30am EST.
The drop still wiped billions off people’s investments.
Ethereum (ether), Cardano (ada), and Binance Coin also suffered heavy drops in value.
On Wednesday, “Wolf of All Streets” podcast host and trader Scott Melker tweeted: “URGENT! BITCOIN & ALTS ARE CRASHING. WHAT’S NEXT?”
Read our cryptocurrency live blog for the latest news and updates…
WHAT IS TETHER? CONTINUED
Tether claims to keep values steady by holding reserves in that currency in a bank.
However, keen investors should know that cryptocurrencies are volatile, and you risk losing all your money.
In other words, don’t invest more than you can afford to lose, or into anything you don’t understand.
There’s scant regulation for cryptocurrency firms, meaning you’ll have no protection if and when things go wrong.
WHAT IS TETHER?
The price of Tether has remained stable after soaring to a 2021 high in mid-April.
The Tether cryptocurrency, which is also known as USDT, was officially launched as Realcoin in 2014, but has since changed its name.
It’s described as a “stablecoin”, which is a type of cryptocurrency that aims to keep crypto values stable.
Tether aims to do this by pegging the price to a regular “fiat” currency, like US dollars, Euros or the Chinese yuan.
BITCOIN VALUE CRASH
Bitcoin’s value crashed suddenly from $52,500 to below $44,000 on Tuesday, according to CoinMarketCap.
The price has since recovered to just over $46,700 as of 11.30am EST yesterday.
EXPERT OPINION OF ALCHEMY PAY
Shaun Heng, vice president of growth and operations at CoinMarketCap told The Sun that it’s challenging to assess the risk of many crypto projects like Alchemy Pay.
And while he isn’t a fan of Alchemy Pay’s crypto-linked cards, he did tout one its partners Binance, which is the largest crypto exchange by trading volume globally.
Heng said: “The partnership with Binance is most definitely a good sign of validation for the project.”
CARDANO’S PROS AND CONS
While Cardano has some advantages, it’s still much less valuable than the other two cryptocurrencies.
In terms of market capitalization, Cardano is valued at under $90billion.
Bitcoin commands a market capitalization of nearly $1 trillion, whereas Ethereum is valued at around $372 billion.
However, the gains Cardano has experienced this year have far exceeded Bitcoin and Ethereum.
Year-to-date, Cardano is up more than 1,400%, Ethereum has risen 330%, and Bitcoin has climbed 67%.
Cryptocurrencies are highly volatile, meaning their values often make large swings with no notice.
Other cryptocurrencies, such as Ethereum and Dogecoin, also dropped on Tuesday.
Ethereum, the second-largest cryptocurrency, is down by about 4.76% over the past 24 hours at $3,767, while Dogecoin is down 7.61% at $0.2882.
Dogecoin’s rival, Shiba Inu, is also down 7.78% at $0.000006873.
WILL ALCHEMY PAY REACH A DOLLAR?
Since the cryptocurrency first began trading nearly 12 months ago, it has skyrocketed by more than 250%, according to Coinbase.
To hit $1 in a few months, Alchemy Pay would have to rise by around 10 times or 1,000%.
By the end of the year, Alchemy Pay is expected to hit just $0.10536, according to Coinarbitragebot.
By 2024, Alchemy Pay is forecast to reach $0.51321, representing a nearly 400% increase from its current levels.
BABY DOGE PRICES THIS YEAR
Plenty of experts and crypto fans have made price predictions for Baby Doge, although they’re nowhere near guaranteed.
Given it only launched at the beginning of the summer, it’s especially important to take the forecasts with a pinch of salt.
And fans hoping for a $1 value will likely be waiting a long time given its current price of $0.000000000469.
For example, Wallet Investor has set a one-year forecast of Baby Doge at $0.000001.
While DigitalCoinPrice expects the crypto to hit $0.0000000007 this year and $0.0000000021 in 2028.
OUTSOURCING TO BITCOIN
Jeff Bandman, a cryptocurrency and digital assets expert, told Forbes: “For some countries seeking an alternate path to pegging their currency to the dollar, sterling or euro, an intriguing choice is whether to outsource monetary policy to the Bitcoin algorithm.
“Since Facebook introduced the Libra proposal for a global stablecoin over two years ago, policymakers have focused considerable attention on the risks of a stable coin issuer with billions of potential users conducting or exercising undue influence over monetary policy.
“Because of Bitcoin’s price volatility, it has been largely discounted by sovereigns until recently, missing the potential benefits for consumers and businesses who rely on its transparent algorithm, which in some instances, maybe more predictable than another country’s central bank.”
MEXICAN OFFICIALS PUSH BACK
Mexico has previously held discussions regarding the adoption of some form of digital currency.
Earlier this week, Grupo Elektra, a leading banking and retail company in Mexico, threw its support behind Bitcoin by introducing the Bitcoin Lightning Network as a payment method.
But Mexico’s central bank quickly shot down the plans, warning: “The country’s financial institutions are not authorized to carry out and offer to the public operations with virtual assets, such as Bitcoin, Ether, XRP.”
Many of the country’s lawmakers remain opposed to Bitcoin, despite grappling with high inflation rates due to the continued devaluation of its currency.
WHAT IS DIFFERENT ABOUT LITECOIN?
As the name indicates, the cryptocurrency is small.
But Litecoin, which was established in 2011 by Google engineer Charlie Lee, operates similarly to Bitcoin.
Mr Lee on occasions refers to Litecoin as the “silver to Bitcoin’s gold.”
The two cryptocurrencies act similarly in how their global payment operations are set up. Both are not controlled by financial institutions.
WHAT IS VECHAIN?
VeChain is a cryptocurrency and blockchain platform with an aim to streamline supply chain management.
The network has two tokens – the VeChain Token (VET) and the VeChainThor Energy (VTHO).
VET is the main cryptocurrency powering VeChain and can be used for holding, spending, sending or staking, Myron Jobson, personal finance campaigner at Interactive Investor, told The Sun.
Meanwhile, the VeChainThor blockchain is built on existing technologies that the founders claim are created for achieving mass adoption.
VeChain launched in 2018.
PANAMA FLOATS BITCOIN ADOPTION
Like Paraguay, Panama has introduced a bill to regulate the use of Bitcoin within the nation. The bill would recognize Bitcoin as a national alternative payment method.
Panamanian Congressman Gabriel Silva, who authored the bill, tweeted on Tuesday: “Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets, and the internet.
“This has the potential to create thousands of jobs, attract investment and make the government transparent.”
WHAT IS AN NFT?
An NFT is an asset purchased with online cryptocurrency.
Owning an NFT means possessing an original work posted to the internet, which can include memes, art, or photos.
NFTs digitize a piece of work and get stored on the blockchain.
That means it cannot be replicated and is unique to whoever owns it.
Cardano uses just six gigawatt hours of energy per year.
Meanwhile, Bitcoin and Ethereum use a combined 180-terawatt hours annually.
Specifically, one terawatt equals 1,000 gigawatts – meaning the energy used when compared with Cardano is substantially higher.
Cardano uses a proof of stake system, which restricts the amount of devices when verifying transactions. This helps keep energy relatively low.
In addition, Cardano processes as many as 257 transactions per second, compared to around five and 15 for Bitcoin and Ethereum, respectively.
WILL PARAGUAY LEGALIZE BITCOIN?
Paraguay is viewed by many as the next likely candidate for Bitcoin adoption.
That belief comes, in part, as a response to local congressman Carlos Rejala drafting legislation to make the nation more attractive to the crypto market.
Rejala’s plans will allow crypto firms to finance their operations in Paraguay using digital currency, as well as remit dividends abroad and capitalize any crypto profits into local banks, ProactiveInvestments.com reports.
CAN YOU TRADE CRYPTO ON ROBINHOOD?
Unlike most of its discount rivals, Robinhood offers 24/7 crypto trading through its platform.
That means you’ll have access to trade major cryptocurrencies including, Dogecoin, Ethereum, and Bitcoin.
Its crypto investors can buy or sell with a market order, which means it’s executed at the current market price.
Alternatively, you can do limit orders, which are only executed at your specific limit price or cheaper.
Logan Paul has described his new project, Cryptozoo, as an autonomous ecosystem where zoo owners can breed, collect, and trade exotic hybrid animals as NFTs (non-fungible tokens).
Cryptozoo claims that it will allow its users to make hybrid NFT animals that can yield tokens and in return, yield them profit.
Users can use the crytocurrency’s native token, $ZOO, and wETH to purchase “NFT eggs” needed for breeding new animals, which would be considered the NFts.
Paul says he and his team have invested $1million to ensure its success.
RISKS OF INVESTING IN BITCOIN
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
VENEZUELA UNVEILS ITS OWN CRYPTOCURRENCY
Venezuela unveiled its own cryptocurrency – the Petro – back in 2018 but efforts to get the currency off the ground have stalled.
That’s partly due to ongoing US sanctions against the oil-rich, but volatile country.
Bitcoin may be adopted by the country as a stable alternative to Petro, as it’s already a widely accepted and proven blockchain payments network.
WHAT IS ALCHEMY PAY?
The cryptocurrency was co-founded by payments industry veterans Molly Zheng, Shawn Shi and John Tan.
Trading for Alchemy Pay first began in September 2020.
According to Alchemy Pay, it is the “world’s first” hybrid crypto and fiat payment gateway.
Through Alchemy Pay, users are allowed to receive payments in the local currency of their choice, regardless of how it is sent.
EL SALVADOR MAKES BITCOIN LEGAL CURRENCY
Proponents of El Salvador’s decision have hailed the move as the progressive future of money.
Critics, however, have derided it as little more than a publicity stunt by Bukele.
More troublingly, they say the move poses substantial financial risks to ordinary Salvadorians and their country, as cryptocurrency is an infamously volatile market.
Indeed, the nation’s cryptocurrency rollout got off to a rocky start yesterday with Bitcoin plunging more than 10 percent, seeing its value drop from $52,5000 to $44,000, on its first day as El Salvador’s official currency.
FACEBOOK TO LAUNCH ‘CRYPTO WALLET’ FEATURE
In an interview with The Information, David Marcus said that company leaders “feel pretty committed” to launch the tool called Novi this year.
Marcus, head of Facebook’s crypto unit, said he would have preferred to release the digital wallet alongside Diem.
Diem is a digital currency tied to the dollar that the California company is also developing.
WHAT IS POLKADOT?
The Polkadot project was founded in 2017, but the cryptocurrency only launched in May last year.
It allows cross-chain transfers of any type of data or asset, not just tokens, making a number of blockchains interoperable with each other.
In essence, it’s an interchange and translator between multiple blockchains – most of which weren’t built to communicate with others, Myron Jobson, personal finance campaigner of Interactive Investor, told The Sun.
He added: “To put this into context, developers have a choice from a variety of blockchains to build applications on – each with their own strengths and weaknesses that they have to mull over when deciding where to develop.
“Polkadot aims to solve that problem by enabling interoperability between chains.”
CRYPTO IS HIGHLY VOLATILE
Before you invest money, if anything at all, keep in mind that cryptos are very risky and you may lose all the cash you put in.
This is due to their high volatility. You should never put cash into anything you don’t understand either.
Newer cryptocurrencies are also riskier than those that have been around for a while, such as Bitcoin, and make you more open to scams.
Plus, there’s scant regulation for cryptocurrency firms, so you’ll struggle to get help if and when things go wrong.