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

Bitcoin mining, however, is becoming more energy efficient

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

Demand for bitcoin could single-handedly derail efforts to limit global warming because the increasingly popular digital currency takes huge amounts of energy to produce, scientists said on Monday.

Producing bitcoin at a pace with growing demand could by 2033 defeat the aim of limiting global warming to 2 degrees Celsius, according to U.S. research published in the journal Nature Climate Change.

Almost 200 nations agreed in Paris in 2015 on the goal to keep warming to “well below” a rise of 2°C above pre-industrial times.

Climate change, carbon
The Amazon Tall Tower Observatory stands in Sebastiao do Uatuma located in the Amazon rain forest in Brazil’s Amazonas state, Aug. 22, 2015. The tower, built by Brazilian and German governments, collects data on greenhouse gases. VOA

But mining, the process of producing bitcoins by solving mathematical equations, uses high-powered computers and alto of electricity, the researchers said.

“Currently, the emissions from transportation, housing and food are considered the main contributors to ongoing climate change,” said study co-author Katie Taladay in a statement. “This research illustrates that bitcoin should be added to this list.”

Mining is a lucrative business, with one bitcoin currently selling for about $6,300 (4,900 British pounds).

In 2017, bitcoin production and usage emitted an estimated 69 million metric tons of carbon dioxide equivalent, the researchers said.

It will trade Bitcoin futures in a principal, market-making capacity and will also create non-deliverable forward products.
Bitcoin, Pixabay

That year, bitcoin was involved in less than half of 1 percent of the world’s cashless transactions, they said.

As the currency becomes more common, researchers said it could use enough electricity to emit about 230 gigatons of carbon within a decade and a half. One gigaton is equal to one billion metric tons of carbon.

“No matter how you slice it, that thing is using a lot of electricity. That means bad business for the environment,” Camilo Mora, another co-author, told the Thomson Reuters Foundation.

bitcoin, climate change
Bitcoin is a cryptocurrency and worldwide payment system. Wikimedia Commons

Bitcoin mining, however, is becoming more energy efficient, said Katrina Kelly-Pitou, research associate at the University of Pittsburgh.

Also Read: Is Investing In Bitcoin Safe? Get the Basics First

She said bitcoin miners are moving away from sites such as China, with coal-generated electricity, to more environmentally friendly utilities in Iceland and the United States. (VOA)