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As Bitcoin Turns 10, Its Investors Face Year-On-Year Loss

Investors who bet early on bitcoin and have stuck with it have faced a roller-coaster ride in its first decade.

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virtual currencies, bitcoin, investors
Bitcoin.com buttons are seen displayed on the floor of the Consensus 2018 blockchain technology conference in New York City, New York. VOA

Bitcoin was heading towards a year-on-year loss on Wednesday, its 10th birthday, the first loss since last year’s bull market, when the original and biggest digital coin muscled its way to worldwide attention with months of frenzied buying.

By 1300 GMT, bitcoin was trading at $6,263 on the BitStamp exchange, leaving investors who had bought it on Halloween 2017 facing yearly losses of nearly 3 percent.

A year ago, bitcoin closed at $6,443.22 as it tore towards a record high of near $20,000, hit in December.

virtual currencies, bitcoin, investors
People use a bitcoin ATM in Hong Kong. VOA

That run, fueled by frenzied buying by retail investors from South Korea to the United States, pushed bitcoin to calendar-year gains of over 1,300 percent.

Ten years ago, Satoshi Nakamoto, bitcoin’s still-unidentified founder, released a white paper detailing the need for an online currency that could be used for payments without the involvement of a third party, such as a bank.

Traders and market participants said the Halloween milestone was inevitable, given losses of around 70 percent from bitcoin’s peak and the continuing but incomplete shift towards investment by mainstream financial firms.

virtual currencies, bitcoin, investors
Transactions in cryptocurrencies occur the same way that you make transactions using any other fiat currency. pixabay

“The value mechanisms of crypto and bitcoin today are based more on underlying tech than hype and FOMO (fear of missing out),” said Josh Bramley, head trader at crypto wealth management firm Blockstars.

Growing use of blockchain – the distributed ledger technology that underpins bitcoin – is now powering valuations of the digital currency, he said, cautioning that some expectations for widespread use have not yet materialized.

Others said improvements to infrastructure such as custody services may allow mainstream investors who are wary of buying bitcoin to take positions.

virtual currencies, bitcoin, investors
Bitcoin is a cryptocurrency and worldwide payment system. Wikimedia Commons

“We see behind closed doors financial and non-financial institutions beavering away to create the infrastructure,” said Ben Sebley, head of brokerage at NKB Group, a blockchain advisory and investment firm.

Bitcoin has endured year-on-year losses before, according to data from CryptoCompare, most recently in 2015.

Also Read: Climate Change Efforts Can Be Nullified Due To Bitcoin Production: Scientists

Retail investors still account for a strong proportion of trading, market players said.

Investors who bet early on bitcoin and have stuck with it have faced a roller-coaster ride in its first decade. Many told Reuters they are optimistic that they are still onto a winner. (VOA)

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Only 1 in 10 People Understand How Cryptocurrency Works, Reveals Survey

Criminals also create fake e-wallets to attract people to unwisely invest their money, and 15 per cent of consumers have been victims of cryptocurrency fraud

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Cryptocurrency, virtual currencies
The value of cryptocurrency rises and falls daily. Pixabay

Only one in 10 people understand how cryptocurrencies work while 29 per cent have some knowledge about digital currencies, a new Survey by Russian cybersecurity firm Kaspersky has found.

The rate at which cryptocurrencies are being adopted by global consumers is slowing down, despite celebrities like Johnny Depp and YouTube influencers such as PewDiePie embracing the technology.

“To date, four in five people (81 per cent) have never purchased cryptocurrency, highlighting just how far away we are from it being accepted as a common form of payment or investment,” the findings showed.

Although there is a desire among many consumers to use cryptocurrency, a knowledge gap is getting in the way of taking the plunge.

In addition, many people who thought they knew with what they are dealing with, later decided against using cryptocurrency. Nearly a fifth (18 per cent) stopped because it became too technically complicated.

Nearly a third (31 per cent) of respondents stated that they believe cryptocurrencies are quite volatile and they need to be stable before they are prepared to use them.

Avoid making decisions based on emotions and find reliable sources for information as it will become a trader’s best asset.
Avoid making decisions based on emotions and find reliable sources for information as it will become a trader’s best asset.

There is also a common perception among consumers that cryptocurrency will not be around forever.

A third (35 per cent) believe cryptocurrencies are a fad that is not worth bothering about.

“It is clear that mainstream adoption and growth of cryptocurrency is being held back due to the vulnerable nature of the technology. While there is a high appetite to use it, giving your hard-earned cash to something you don’t fully understand, or trust, is a hurdle,” explained Vitaly Mzokov, Head of Commercialization at Kaspersky.

While widespread interest in cryptocurrencies may have already peaked, there is still a demand to use the technology. A fifth (20 per cent) of those surveyed said that while they are not using cryptocurrency at the moment, they would like to in the future.

Also Read- YouTube Experimenting with Hiding Comments on Videos in India

Fraudsters can use cryptocurrencies to their advantage, with around one in five (19 per cent) of those surveyed saying they have experienced hacking attacks on exchanges.

Criminals also create fake e-wallets to attract people to unwisely invest their money, and 15 per cent of consumers have been victims of cryptocurrency fraud. (IANS)