Bitcoin
Bitcoin, altcoins, meme coin differences explained
But before considering investing in cryptocurrencyIt’s important to understand the difference between meme coins, altcoins and bitcoin.
Bitcoin is the original cryptocurrency and the largest in market capitalization, with more than US$ 1.3 trillion, according to CoinMarketCap. It was created by Satoshi Nakamoto, a person or group of people whose identity remains a mystery. Nakamoto envisioned bitcoin as an alternative version of virtual money that would not rely on a government or financial institution, such as a bank, to function and facilitate payments.
Like many cryptocurrencies, bitcoin is powered by blockchain technologywhich functions as a decentralized digital ledger that tracks transactions made on the network.
Bitcoin also has a built-in feature limited supply of 21 million coins. This means that no new bitcoins will be issued after 21 million coins have been mined. The scarcity is on purpose; The supply limit ensures that bitcoin remains a scarce good, so theoretically, as demand increases and supply remains the same, the value of bitcoin also increases.
Altcoins, also known as alternative currencies, refer to any cryptocurrency other than bitcoin. While some of these digital tokens may operate similarly to bitcoin, they are built on different blockchain networks.
There are thousands of altcoins, which are typically created with a specific purpose in mind. To take stable coins, for example. A stablecoin is a type of altcoin that pegs its value to another asset, such as gold or the US dollar, with the aim of stabilizing its price.
Outside of stablecoins, many altcoins derive their value from market demand and traders’ preferences. However, this can make them particularly vulnerable to rapid and unexpected price changes, says James Royal, chief investment and wealth management analyst at Bankrate.
“If demand dries up, you’re just left with useless digital assets and a good story,” he told CNBC Make It.
Furthermore, with so many altcoins available, it is important to be aware of possible scams. One of the most common types of crypto investment scams encourages you to purchase a large amount of a certain coin and then transfer it to the scammer’s wallet.
“Before investing in crypto, search online for the name of the company or person and the name of the cryptocurrency, as well as words like ‘review,’ ‘scam,’ or ‘complaint,’” the Federal Trade Commission it says on its website.
Under the umbrella of altcoins are meme coins. These virtual tokens are often created for fun and are named after Internet memes or pop culture references. And while every meme coin is an altcoin, every altcoin is not necessarily a meme coin.
While all cryptocurrencies pose risks, meme coins can be especially treacherous for traders, says Royal.
“Meme coins are among the riskiest cryptocurrencies because they seem to appear out of nowhere and information about them can be scarce,” he says. “They are expected to rise and fall as public sentiment shifts from one side to the other. Meme coins can attract public attention today and disappear tomorrow.”
Aside from stablecoins, most cryptocurrencies are not backed by an underlying asset such as gold, other commodities, or fiat currencies. Many cryptocurrencies are only worth what the next trader is willing to pay for them, which is why they are considered highly volatile and subject to unpredictable price swings.
“While well-established cryptocurrencies like bitcoin and ethereum may have trader sentiment in their favor now, they are still ultimately driven solely by sentiment,” says Royal. “If traders decide these coins are no longer worth it, there will be no fundamental business to support the price of the coins like there is with stocks.”
Ultimately, Royal says to “avoid cryptocurrency entirely.” But if you are interested in “trying your luck” in the crypto market, try a bitcoin exchange traded fundhe says.
An ETF is a type of investment fund that aims to imitate and track the price movement of an asset or basket of assets. You would purchase a bitcoin ETF through your brokerage account, rather than purchasing and storing bitcoin on a cryptocurrency exchange or the bitcoin blockchain network.
“The annual fees are reasonable, cheaper in most cases than buying the crypto yourself, and you are buying a coin that has interest from institutional investors, so demand can remain robust,” says Royal. “You will also avoid the security, fraud and theft issues that have plagued cryptocurrency exchanges in recent years, while paying lower fees.”
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Bitcoin
‘This is huge’ — Billionaire Mark Cuban issues ‘incredible’ Bitcoin and crypto prediction amid price slump
Bitcoin has surged again this year under former President Donald Trump Cryptocurrency boosts US presidential election in November with ‘revolutionary’ plan.
The price of bitcoin has surged to more than its all-time high in recent months, surpassing $70,000 per bitcoin and triggering a wave of mega-optimistic predictions about the price of bitcoinalthough it fell again this week to below $65,000 after the Federal Reserve kept interest rates steady.
Now, as Elon Musk suddenly breaks his silence on bitcoin and cryptocurrenciesBillionaire investor Mark Cuban called a California plan to digitize 42 million car titles using blockchain an “incredible step forward” and “huge” for cryptocurrencies.
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Mark Cuban, famous Shark Tank investor and billionaire owner of the NBA team Dallas Mavericks, has… [+] called a cryptocurrency update “amazing” amid bitcoin’s price slump.
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The California Department of Motor Vehicles (DMV) has digitized 42 million car titles using blockchain, it was reported by Reuters, through technology company Oxhead Alpha on the Avalanche blockchain and designed to detect fraud and facilitate the securities transfer process.
“This is an incredible development for crypto,” Cuban, best known as an investor on TV’s Shark Tank and owner of the Dallas Mavericks NBA team, posted on X, joking that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could sue the state as part of his hostility toward cryptocurrencies and blockchain technology.
“The reason this is huge for crypto is because people who hold the tokens will have an app with an Avalanche wallet,” Cuban said. “Tens of millions of Californians having and using a crypto wallet in the next five years, or however long it takes, normalizes the use of wallets and crypto.”
John Wu, president of Avalanche developer Ava Labs, told Reuters that California’s DMV is “creating a wallet that you can download on your phone.”
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Bitcoin’s price has rallied this year, triggering a wave of bullish bitcoin price predictions from… [+] people like billionaire Mark Cuban.
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Last month, Cuban predicted that if the US dollar falls as the global reserve currency, bitcoin could become “a global ‘safe haven’” and a “global currency.” potentially sending the price of bitcoin to a much higher level.
According to Cuban, bitcoin could become what its most ardent supporters “envision” — a means “of protecting our economies… This is already happening in countries facing hyperinflation.”
The price of bitcoin has skyrocketed over the past year, largely due to the world’s largest asset manager, BlackRock, leading a bitcoin attack on Wall Street.
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U.Today – Renowned economist and cryptocurrency critic Peter Schiff has criticized Michael Saylor’s recent hype about the growing adoption of cryptocurrencies as a strategic treasury asset by corporations.
Michael Saylor, a well-known Bitcoin advocate and president of MicroStrategy, recently shared his enthusiasm on X about the growing adoption of Bitcoin as a strategic treasury asset.
Citing a comment made by Bitcoin investor Bill Miller in a recent interview with CNBC, Saylor tweeted: “We now have more companies coming forward and saying we will put Bitcoin on our balance sheet as a strategic treasury asset.”
However, not everyone shares Saylor’s enthusiasm. Schiff, a vocal Bitcoin critic and gold bull, was quick to respond with his usual skepticism. In a pointed tweet, Schiff argued: “Bitcoin is neither strategic nor appropriate as a treasury asset. Companies should not risk shareholder funds. They should pay dividends and let shareholders risk their own money.”
Bitcoin enthusiasts are not intimidated
However, Schiff’s criticism shouldn’t deter Bitcoin enthusiasts, who often take Schiff’s words with a pinch of salt. To put things in context, Michael Saylor began buying Bitcoin in 2020 as an inflation hedge and alternative to money. Saylor’s company, MicroStrategy, is among the largest public holders of Bitcoin in the world. As of June 20, it held 226,331 BTC, purchased for around $8.33 billion at an average price of $36,798.
Over the weekend, Schiff was surprised when 87% of the more than 11,000 Bitcoin holders who responded to his X survey said they would not sell any of their Bitcoin even if the price dropped more than 99% to $120. They said not only would they not sell, but that they would continue to buy even when prices dropped.
Schiff unexpectedly revealed that “the main selling point for investors to buy Bitcoin is its excellent past performance record.”
At the time of writing, Bitcoin is trading at $66,067, having reached all-time highs of nearly $74,000 in mid-March.
In a week of drastic fluctuations, the price of Bitcoin (BTC) has retreated from its highs and is currently trading at US$66,250, down 0.9% in European trading.
This volatility comes on the heels of a significant surge above $70,000 earlier in the week, fueled by former President Donald Trump’s ambitious cryptocurrency plans announced in a Bitcoin Conference in Nashville.
Trump’s announcement to fire Securities and Exchange Commission Chairman Gary Gensler and establish a strategic Bitcoin reserve if elected president has temporarily sent the cryptocurrency market into a frenzy.
However, the excitement was short-lived as a series of events unfolded which caused investor sentiment to sour.
A significant sell-off of about 8% was triggered when the US Marshals Service moved $2 billion in Bitcoin for new wallets.
This move has reignited fears of a potential large-scale liquidation, compounded by lingering concerns over a possible Bitcoin liquidation from Mt. Gox. Early this morning, Mt. Gox administrator transferred US$2.2 billion value of your BTC assets in a new wallet.
Meanwhile, the US Bitcoin ETF spot market is showing signs of fluctuation, according to data from SoSo Value. On July 30, Bitcoin spot funds experienced their first net outflow in five days, totaling $18.3 million.
The Grayscale Bitcoin Trust (GBTC) saw outflows of $73.6 million, while the BlackRock iShares Bitcoin Trust (IBIT) attracted $74.9 million in inflows. But outflows from other funds left the category in the red at the end of Tuesday’s trading session. The total net asset value of spot Bitcoin ETFs currently stands at a substantial $58.5 billion.
In other crypto news, Ripple (XRP) is up 8.6% in the past 24 hours, hitting over 64 cents – its highest point since March 25, according to CoinGecko. data.
This rally comes amid a scheduled token unlock and growing optimism around a potential deal in the long-running SEC vs. Ripple lawsuit.
The crypto community is closely watching the SEC’s actions, particularly its intention to amend its complaint against Binance regarding “Third-Party Cryptocurrency Securities,” which some interpret as a positive sign for Ripple.
On a market analysis noteSingapore-based cryptocurrency trading desk QCP Capital wrote that while election headlines continue to dominate, several crucial macroeconomic events loom on the horizon.
“Election headlines will continue to be a key focus, but several key macroeconomic events are also on the horizon. Key events starting with the FOMC meeting on Wednesday, megacap tech earnings (Apple, Amazon, Meta) throughout the week, and unemployment data on Friday,” QCP Capital wrote.
Edited by Stacy Elliott.
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