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Bitcoin stack up and down arrows

Why Did Crypto Crash?

The value of crypto markets reached trillions of dollars in about a decade after the launch of Bitcoin, which was crowned as the best performing asset of the decade in terms of annualized returns in 2021. Still, it is hard to make sense of Bitcoin’s victory through our traditional narratives.  Bitcoin’s rise to the top hasn’t been "slow and steady" like the tortoise’s victory in Aesop’s famous fable, nor has it been "swift and capricious" as the hare. The history of crypto evokes a far more mythical animal.  Every few years, the cryptocurrency market crashes and burns, evaporating millions of dollars from the market, only to be reborn from its ashes and fly towards even higher peaks than before, just like the mythical phoenix. In this guide, we will explore the reasons behind some of the biggest crashes in the history of Bitcoin and cryptocurrencies and try to shed light on how the crypto market has managed to recover every single time.

Why Does Cryptocurrency Drop in Value?

The price of cryptocurrencies swings up and down due to supply and demand dynamics. When demand for a cryptocurrency like Bitcoin rises, the prices also increase as there is only a limited supply of Bitcoin on the market. When demand falls for some reason or another, the prices also go down. In other words, the dynamic relation between supply and demand causes Bitcoin prices to swing from one end to the other, just like a pendulum. There are many forces that affect this dynamic. The value of any cryptocurrency depends on the public’s perception of its usefulness and desirability as an asset. Positive news and content about crypto, developments that make it accessible to large masses, and backing from institutional actors, all renew people’s faith in the crypto economy, while delays, hacks, negative news, scams, and disruptive government regulations create distrust and cause a fall in the overall demand. Sometimes, a sudden surge in demand can also cause an inevitable crash: When prices increase too swiftly, people become less incentivized to buy, and holders are tempted to sell-off in order to make huge profits. This is partly the reason why crypto price peaks are often followed by weeks or months of decreasing prices. But once the falling prices stabilize, the climb to the peak starts anew.

Why Did Bitcoin Crash in 2017?

The first major crypto market crash took place in December 2017, triggering Bitcoin’s fall from grace that would continue up until December 2018. But before we look into why the crypto market crashed so hard, let’s discuss why crypto bloomed during 2017, crowning Bitcoin with a new all-time high price. You might be surprised to learn that the price of Bitcoin was less than 1,000 USD at the beginning of 2017. Bitcoin’s value rose steadily in the following months, surpassing the 2,500 USD mark in June 2017. Then, things took a dramatic turn: prices doubled within the next two months and then quadrupled again reaching almost 20,000 USD per BTC in December 2017. The dramatic rise of cryptocurrency prices was attributed to several reasons: Bitcoin had expanded from “OGs” (a small group of early investors) to larger audiences; more cryptocurrency exchanges were established globally; and a slew of ICOs (initial coin offerings) has created a lot of excitement, drawing millions of dollars from investors in assets that promised to be the new Bitcoin, at least in terms of investment returns. The ICO boom in particular is an oft-cited reason for the eventual collapse of the crypto market. Research shows that most tokens rolled out in ICOs (around 80%) during 2017 were little more than scams and Ponzi schemes. Though the scope of fraud hadn’t been clear by then, many expected the ICO bubble to burst towards the end of 2017. Researchers also think Bitcoin price manipulation might have contributed to the infamous crash. Economists studying Tether-Bitcoin transactions identified a pattern that shows USDT/BTC transactions by a single trader on Bitfinex exchange propped up Bitcoin prices when the prices were dropping on other exchanges, creating an artificial price bubble that popped once the year ended.

Why Did Crypto Crash in 2018?

After reaching its all-time high on December 17, 2017, within 5 days, Bitcoin lost almost half of its value, falling to 11,000 USD. The fall would continue up until January 2019, with Bitcoin settling at around 3,500 USD. These days, the crypto crash of 2018 is regarded as almost inevitable: As a growing and completely unregulated market, crypto is more than vulnerable to frauds and thieves, and evokes FOMO like no other, partially because the promised returns are impossibly high. The combination of these factors reached its peak in the ICO boom, creating an unsustainable bubble growth that could only pop, washing away millions of dollars of investment. The falling crypto prices and lack of any development from many token projects, or outright disappearance of project managers, caused a sell-off panic that created a snowball effect on crypto prices. Add the alleged effects of Bitcoin price manipulation by large Tether holders to the equation, and you get the 2018 crypto crash.

Causes of the Biggest Dips in 2021

Bitcoin surpassed its all-time high not once but twice in 2021. In April 2021, Bitcoin prices reached  $64,000 per BTC. But the peak didn’t last long and Bitcoin lost more than half of its value in May 2021, falling as low as 30,000 USD. Elon Musk’s announcement that Tesla would no longer accept Bitcoin payments due to Bitcoin’s environmental impact, the Chinese ban on cryptocurrency mining that evaporated half of the Bitcoin network’s hashing power, the US Department of Justice investigation of stablecoin Tether, and remarks by government officials that new crypto regulations are on the way are all thought to have contributed to Bitcoin crash. But the asset recovered and began to rise again in September, and reached an all-time peak in November by surpassing 66,000 USD before prices began falling once again, sliding down for weeks. There is ample cause for the latest price dips. Just as crypto mining recovered from the Chinese government’s earlier ban, another regulation from China’s central bank outlawed all cryptocurrency transactions (which had continued through foreign markets after the government’s previous regulations), crippling one of the largest crypto markets in the world and decreasing Bitcoin price. Another blow to the Bitcoin market came with the announcement that the now-defunct Mt.Gox exchange would re-distribute 140,000 BTC among the former Mt. Gox customers who lost a staggering amount of Bitcoin to an infamous hack. These newly-released 140,000 BTC would not only increase Bitcoin’s supply drastically but could also drain the little liquidity in the market if investors decide to cash out.

Final Words

All the factors above are contributing to Bitcoin’s downward slide, but of course, as you might have realized by now, peaks and crashes are actually a normal part of Bitcoin’s growth. Price peaks are often, in time, followed by crashes that give way to new peaks, as the causes of these nerve-wracking drops work themselves out, and Bitcoin believers hold on for the next higher high or buy more at a bargain price. In other words, Bitcoin grows cyclically, and price drops can be an excellent time to delve into the crypto market. If you are interested in investing in Bitcoin but find yourself wondering and worrying about recent prices, you can reach out to one of our Coin IRA specialists to get the latest market news and learn how to take advantage of “buying the dips”.
Bitcoin upward arrow chart

How Does Cryptocurrency Gain Value?

As the cryptocurrency market continues to outgrow itself with each passing year, more and more people and investors are drawn to crypto assets as a lucrative opportunity for making money. In the past few years, both small-time investors and high-rollers like investment banks have been attracted to the growing crypto market with the belief that the future of finance is unfolding on the frontiers of crypto space. But even in the midst of unparalleled growth, certain aspects of the crypto economy remain somewhat obscure. In this article, we will tackle one of the most important questions relating to cryptocurrencies: how does cryptocurrency gain value?

Why Do Cryptocurrencies Have Value?

In order to pinpoint how cryptocurrencies gain value, we should first take a look at why cryptocurrencies have any value in the first place. As you know, fiat currencies have value because they are sanctioned by state authorities that guarantee their purchasing power. Basically, a currency has value because you can exchange it to purchase goods and services. On the other hand, stocks and securities have value because they represent the goods and services that are available for purchase on the market. Company stocks, for example, gain value because there is a demand for the products produced by the company. Cryptocurrencies are a relatively new asset class that occupies the middle ground between regular currencies and stocks. They are not currencies in the regular sense of the term, because the purchasing power of a cryptocurrency is not guaranteed by any authority. They are also different from stocks because there may not necessarily be a product or service behind the cryptocurrency. For example Bitcoin, the most valuable cryptocurrency in the market, doesn’t represent anything but itself. It is an asset that has value because people think it is valuable. Of course, there are thousands of cryptocurrencies in the market with different specifics so it is hard to extrapolate why cryptocurrencies gain value in general. But it is possible to make sense of why certain digital currencies gain value whereas some others are considered less valuable than penny stocks if we take into account the most basic and foundational principle underlying most modern economies: supply and demand.

What Fuels the Demand for Cryptocurrencies?

In order to understand what fuels the demand for cryptocurrencies, let’s look at two of the biggest and most developed cryptocurrencies on the market: Bitcoin and Ethereum. Bitcoin and Ethereum are good examples because they are two very different types of cryptocurrency.. 

Why Is Bitcoin Valuable?

Bitcoin is generally considered an asset that is akin to currencies or gold because it is considered to have both exchange value and store of value. That means that Bitcoin can be used to purchase goods and services around the globe, but it is also considered an investment that keeps its value over a long period of time without being affected by economic ups and downs that can wreck the traditional asset markets, much like gold. In other words, Bitcoin gains value because people and institutions think the digital asset is - and will continue to be - valuable as a medium of exchange and as a store of value. That is mainly because Bitcoin has characteristics that make it useful and also valuable. Bitcoin is the first and the largest cryptocurrency, which means its network is wide enough to withstand hacks that threaten other smaller cryptocurrencies. It provides instant and fast value transfers across the globe that make it tremendously useful in a world where sending money across borders can be an economic and bureaucratic nightmare. In other words, Bitcoin has value because it emerged as an original solution to a widespread problem. Other altcoins with similar characteristics and goals as Bitcoin, on the other hand, struggle to gain as much value as Bitcoin because they are in competition with the original. Any one of these cryptocurrencies can beat Bitcoin to the top, if and when they provide better alternatives to it. In addition, there is a limited supply of Bitcoin.  There will only ever be 21 million Bitcoins, so as demand increases, the value of each Bitcoin rises.

Why Is Ethereum Valuable?

Ethereum represents another variety of cryptocurrencies because Ethereum has a different promise than Bitcoin. Whereas Bitcoin is considered as an exchange and storage method for value, Ethereum is a platform for different services. Ethereum introduced smart contracts, the concept of executing automatic and direct transactions between parties without an intermediary, giving start to a flourishing DeFi industry. In other words, people think Ethereum is valuable because it offers a product that is valuable. It is another unique solution that opens new avenues for growth. While Bitcoin and Ethereum have different mechanisms, goals, and products, they both have something in common: these cryptocurrencies offer value to the world because they establish new ways of making things happen. They are innovative. They promise usefulness and they back it up with strong development teams and clear plans for the future, even though their roadmaps differ a lot due to their unique visions for the future. At the moment, these cryptocurrencies constitute the blueprint for many other crypto projects that try to follow in their footsteps, and luckily for us, they also provide a blueprint for us to understand why and how other cryptocurrencies gain (or lose) value.

How Does Demand Factor In?

For any cryptocurrency to gain value, there has to be a demand for that cryptocurrency. In the previous section, we explored how Bitcoin and Ethereum create such demand by offering unique methods to overcome the restraints of our current financial systems. But while vision and usefulness are the most fundamental components for a cryptocurrency to gain value, there are also other factors that play into cryptocurrency valuation. One of the most important aspects of valuation is information. There can be no demand for a product or a cryptocurrency if the public doesn’t have the necessary information regarding the value a cryptocurrency promises. That is why educational materials and marketing play a very important role in cryptocurrency valuation. News about the cryptocurrency industry, including news about crypto hacks, new regulations, crypto-related crimes and new business partnerships between cryptocurrency projects and established companies have a direct effect on cryptocurrency valuation, i.e. the value of cryptocurrencies. When companies like PayPal, Twitter or Tesla embrace cryptocurrencies, they signal institutional trust in these assets, increasing the reach of digital coins and increasing their value. In short, cryptocurrencies gain value based on both general and specific considerations related to the crypto industry as well as the specific cryptocurrency. Crypto-related news, opinions of prominent figures and industry leaders, and regulations on cryptocurrencies set the broader trends regarding crypto valuation, but each specific cryptocurrency gains value based on its own real or perceived merit. While some cryptocurrencies create demand by providing unique services and products, others take advantage of hypes and other marketing tactics to promote themselves and their value.

A Few Words Before You Go... 

Investing in cryptocurrencies can be risky mainly because the cryptocurrency ecosystem is still in its infancy in many ways. There are many valid cryptocurrency projects that offer valuable products, but there are also numerous others that take advantage of the FOMO mentality to create artificial demand, which can result in great economic loss for many people. Learning about cryptocurrencies with an open mind while keeping a critical outlook is a must when it comes to crypto investments. If you are interested in cryptocurrencies, we invite you to contact our Coin IRA specialists who can help you make informed decisions about crypto ownership and investments so that you can sail ahead without worrying about scams and missed opportunities
Crypto coins side stacked

Why Are There So Many Cryptocurrencies?

If you have yet to get your feet wet in crypto, we are here to tell you that the crypto market is a vast space. It is inhabited by millions of users who operate with a seemingly endless variety of assets. As most new users delve into the crypto market, they are immediately astounded by the sheer number of offerings available to them. There are dozens of assets, exchanges, and platforms with all kinds of purported use cases and promises of profit potential. Thousands of cryptocurrencies are vying for the liquidity and attention of users while striving to become the top crypto coins, each attracting users with anything from elaborate tech-focused advancements to simple investing tactics that aim to convince users of revolutionary specs. While this is the case, there are only a select few, for example, Bitcoin and Ethereum, who have proven their performance and utility over time. But why are there so many? If there really is value in crypto, then shouldn’t there just be a couple of main competitors? As it turns out, not so much. The diversity of cryptocurrency offerings isn’t actually a sign of their inherent purposelessness, but rather of the very reason why they are so transformative.

The Technology of Cryptocurrency

One of the main reasons there are so many cryptocurrencies is because of the puzzle that Bitcoin left to the world after the infamous Satoshi Nakamoto dropped the blockchain bombshell in 2008. With the onset of Bitcoin came the introduction of blockchain technology to the world. While Bitcoin was controversial due to its ties to the dark web and anonymous payment concerns, the real value was in the trustless system that worked in the backend. All blockchains are limited by three main factors – scalability, security, and decentralization. Blockchain service offerings have made incremental progress in these areas over the years, but the tech is still in its infancy. The existence of these limitations has been stimulating developers in the industry to create their own blockchains, each offering varying degrees of advantages over others. The limited throughput of the Bitcoin network led to the development of Ethereum, whose limitations, in turn, have led to the development of other blockchains like EOS, TON and others. This new digital currency offered a way for ordinary people to conduct transactions outside of any third-party regulation. It showed how efficient a transaction could be, in addition to inventing a new mode of recording these transactions and improving privacy and security. The concept of “trustless transactions” was completely new to our way of dealing with the world. It used technology as a way to ensure that two parties can exchange value without relying on trust alone in a genuinely intriguing manner (see description of blockchain here). This technology, however, is complex and not easy to master. This is why so many cryptocurrencies have been developed - because they believe they are adopting the proper approach and methodology to this intricate future tech.

The Market Factor

Another important factor that has led to the increase in the number of blockchain cryptocurrencies is human nature, which was encouraged by entrepreneurship and the search for profit by market demand. The law of supply and demand governs the crypto market like any other, so when Bitcoin made its first major debut in late 2017, people rushed to start buying the new asset in order to try their hand at this mysterious new technology. Many of these people understood the basics of Wall Street assets and applied the same methodology, while others saw more utility and wanted to bring real value to the world (such as Ethereum’s Vitalik Buterin). Satoshi knew that the technology itself was still not fully developed - which is actually one of the main reasons many people speculate that he released it. Blockchain and the concept of worldwide digital assets is a deep, complex, and nuanced problem. It requires new and creative approaches. It needs to go through the gauntlet of capitalism in order for the most powerful, scalable, and efficient version to be created.

Proving Their Worth

Cryptocurrencies, while relatively volatile, are an important progression for humankind. The advent of smart contract technology along with the Internet of Things (IoT) is poised to revolutionize every industry on the planet ranging from logistics to banking. It has the capability to help developing nations more easily develop their GDP while also helping us to better track and optimize our resources. The sheer number of cryptocurrencies is a natural byproduct of this new, exciting development in society. Many of these projects, unfortunately, exist just to make money off of the space. But, importantly, many of them exist to help contribute to pushing the science of digital currency forward. Ethereum is pioneering smart contracts; Grayscale is helping to establish trust in the space, and Coinbase was even listed on NASDAQ this year! With that being said, don’t let the massive number of cryptocurrencies fool you. Cryptocurrencies are a serious asset class, and the large number of digital assets that are available is simply a byproduct of the space fleshing itself out and finding its place in our fast-moving and rigid technological world.

Ready to invest in Crypto?

If you are ready to invest in cryptocurrency, look no further than our cryptocurrency specialists at Coin IRA. They can help both newcomers and more adept participants in crypto learn more about how cryptocurrency can add value to long-term retirement plans. Buying, selling, trading, and storing Bitcoin and other cryptocurrencies inside a Crypto IRA is safe and easy with the help of Coin IRA’s experts.
Bitcoin in shopping cart

Who Accepts Bitcoin: The Growing Retail Acceptance

Bitcoin is the most popular cryptocurrency on the market, and its reputation as a digital currency is growing as time goes by. There are many businesses and nonprofits around the world that accept Bitcoin (BTC)  payments and donations. We put together a list of reputable companies that accept BTC, in order to give you a sense of the digital currency’s reach, and how it is shaping the future of money:

Major Companies and Retailers that Accept Bitcoin

Overstock

Overstock is the first major US retailer that started accepting Bitcoin. Overstock is an online market where you can find everything you need for your home, from furniture to clothing, jewelry, and pet supplies. Overstock invested in blockchain technology early on, blazing the trail for many other stores that would follow its footsteps to a cryptocurrency retail revolution.

PayPal

It’s only natural that the internet's favorite payment processor company, PayPal, joined the crypto-sphere, considering it has always been one step ahead of the competition when it comes to digital payments. PayPal allows US customers to make payments with Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. PayPal provides an advantage to business owners as well, since it offers lower cryptocurrency transaction fees than the fees credit card companies charge.

Venmo

Our favourite social payment app now supports digital currency purchases! Following in the footsteps of its parent company PayPal, Venmo rolled out a crypto program earlier this year, in collaboration with the trading service provider Paxos. All verified US users can buy Bitcoin, Bitcoin Cash, Litecoin and Ethereum with the Venmo App. Venmo credit card users also have the chance to use their cash backs to buy crypto without paying any transaction fees. The program is being rolled out gradually, so don’t worry if you haven’t seen the option on your app yet!   

BitPay

BitPay is a payment processing company that facilitates payments with Bitcoin. You can buy gift cards with BTC for several companies on the BitPay website, including Amazon. BitPay also has its own cryptocurrency wallet and offers a BitPay prepaid MastercCard. You can connect BitPay Mastercard to your BitPay crypto wallet and convert your Bitcoin funds to USD to load the prepaid card and spend your funds on anything you want to!anywhere that accepts MasterCard.

Twitter

Social media darling Twitter announced in September 2021 that it is rolling out a new tipping feature on its app, allowing users to send bitcoins to their favorite creators as tips! Twitter has been testing its tips feature since May 2021 and the feature will roll out globally in the upcoming weeks. Apple iOS users are expected to be able to send Bitcoin tips as early as October 2021, and Android users will quickly follow suit. Thanks to Twitter's integration with the Strike Bitcoin Lighting wallet, users will be able to add Bitcoin addresses to their profiles and send BTC to support each other.

American Red Cross

The American Red Cross is a non-profit organization that provides disaster relief and emergency aid during natural and man-made disasters such as hurricanes, accidents, and explosions. You can donate Bitcoin to the American Red Cross through BitPay, one of the biggest cryptocurrency payment services in the world. BitPay also facilitates payments with Ethereum, Bitcoin Cash, and a few other altcoins.

Newegg

International electronics supplier Newegg is one of the first companies that started accepting Bitcoin and other digital currencies as payment. As the American Red Cross, Newegg uses the BitPay infrastructure to accept Bitcoin payments. While you can’t use BitPay for subscription orders or pre-orders, pretty much everything else is available. Just keep in mind that all sales through BitPay are final. You can read about its terms and conditions here.

NordstromFlexa

The Gemini-supported Flexa app allows cryptocurrency users to spend their Bitcoins on more than 40,000 locations across the US. Users can download the Flexa app from Google Play or Apple Store and integrate their cryptocurrency funds to Flexa’s wallet in order to make purchases simply by scanning QR codes on their mobile phones. Whole Foods did a test run on the app, and you can use digital currencies to shop from Nordstrom and Dunkin Donuts. You can download the Flexa app to see the full list of locations where you can spend your Bitcoins.

Etsy

The independent trading platform Etsy allows sellers to accept cryptocurrency payments if they wish to do so. If you see that your favorite handcrafts store allows “other” payment methods, there is a chance that they accept Bitcoin payments too. Message the seller to inquire whether they accept digital currencies and they can easily provide you with a Bitcoin address.

Rakuten

Rakuten launched its own cryptocurrency payment service in 2021. Rakuten customers in Japan can trade Bitcoin, Ethereum, and Bitcoin Cash for Rakuten Cash without paying fees, and use their Rakuten points to shop for online and offline services throughout Japan. Previously, Rakuten charged 300 Yens on bank transfers.

AirBaltic

AirBaltic Airlines started accepting Bitcoin for their services back in 2014 and they are still going strong. The airline offers cheap flights across Europe and the Middle East. You can buy flight tickets from AirBaltic with your Bitcoin through BitPay.

ExpressVPN

ExpressVPN is a popular virtual private network service that ensures your online privacy. It is also one of the rare subscription services that accept Bitcoin as payment. ExpressVPN accepts Bitcoin for yearly subscriptions. You can get a 12-month plan that comes down to an average of $8.32 per month. Payments can be made through BitPay. 

Wikipedia

We can’t praise the world’s largest open-source encyclopedia enough, but those who really appreciate this free resource can support it by making Bitcoin donations! Wikimedia Foundation, the parent company that runs the free encyclopedia accepts Bitcoin donations through BitPay.

Gyft

Gyft is a digital gift card platform that accepts Bitcoin. You can buy gift cards from over 200 retailers with Bitcoin through the platform, including Target, Starbucks, and Whole Foods. Gyft doesn’t charge additional fees for Bitcoin payments.

AMC

AMC entertainment owns the world's largest movie theater chain. The AMC CEO, Adam Aron, has announced plans for accepting Bitcoin payments for movie tickets. AMC’s US theatres are expected to start accepting Bitcoin towards the end of 2021.

Amazon Gift Cards

While Amazon itself doesn’t accept Bitcoin, you can still use BTC to buy Amazon gift cards at Purse.io. Purse is a marketplace that meets Bitcoin owners with gift card sellers. The platform has a handy search engine that allows you to search for any Amazon product, or better yet, allows you to copy the product link directly to the search bar.

Walmart

Finally, Walmart recently posted a job opening on its website back in August, seeking to hire a blockchain expert responsible for developing a cryptocurrency project for the US based retail giant. The position will be responsible for planning ‘crypto-related investment and partnerships,’ opportunities for Walmart. The official posting is now closed, presumably because they already hired the expert they are looking for! We think a cryptocurrency future for Walmart might be on the horizon very soon.

Here’s an important tip

If you are looking for a specific product to buy with your cryptocurrency, or if you are merely curious about whether your favorite brands are available to buy with Bitcoin, check out the spendabit search engine to discover the wealth of available options for spending your BTC.

A Few Words Before You Go…

New ways of incorporating blockchain and digital currencies into retail structures are emerging every day, encouraging retailers to consider accepting Bitcoin as the technological infrastructure evolves and the public demand increases. The numbers are already growing and we will make sure to update you when that happens.  Hopefully, now you have a better understanding of where you can use Bitcoin as a digital payment method. There are thousands of online and offline retailers around the world that accept these payments and the numbers are growing every day.  If you want to learn more about Bitcoin and how it can change the way you handle your finances, get in touch with our Coin IRA crypto specialists who can help you put together a cryptocurrency portfolio.
bitcoin and piggy bank savings

Who Can I Trust to Open a Crypto IRA?

Saving and investing are as old as the capital markets. They have existed in different forms since man learned how to trade. Whether for a house, kid’s college, a new car, general comfort, or even a weekend party, financial planning is a crucial part of our financial lives. How well we execute our savings and investment plans are the backbones to sustainable living and a happy future.

Introduced in the United States in 1974, Individual Retirement Accounts (IRAs) are tax-advantaged accounts you can use to save and invest for retirement. IRAs are provided by Internal Revenue Service (IRS) approved financial institutions, including brokerage firms, mutual advisors, mutual funds, and banks. They include a wide range of options, limitations, dividends, and penalties depending on the type of IRA or action performed within or outside the specified period.

Understanding IRAs and How They work

In planning for your retirement, you’re very likely to be familiar with or come across retirement plans with different names. For example, IRAs specifically refer to Individual Retirement Accounts that aren’t tied to an employer; you establish these types of accounts yourself with the help of a financial institution of your choosing acting as custodian or trustee. On the contrary, 401(k) plans are employer-sponsored plans offered by for-profit companies that you would open through your employer, and 403(b) plans are U.S. tax-advantaged retirement savings plan available for public education organizations, some non-profit employers, cooperative hospital service organizations, and self-employed ministers in the United States

Types of IRAs

No matter your income level, you should always keep your retirement plan in mind when making your current financial decisions. Obviously, an earner with higher income usually has more disposable income, and can take full advantage of the funding options, but anyone can contribute any amount up to the allowable limit. Let’s take a look at four main types of IRA and how they work.

Traditional IRAs Contributions to a Traditional IRA defer income tax on the amounts you contribute until they are distributed to you after age 59 ½. The IRS sets the allowable annual contribution limits based on your age. Contributions are usually tax-deductible (consult your tax preparer) and withdrawals will result in a 1099 at the end of the year in which you took the distribution. You’ll then claim that income on your tax return for that tax year.

Roth IRAs: In Roth IRAs, contributions are made with after-tax dollars, and if left in the IRA for the requisite time period, withdrawals after retirement are tax-free. Eligibility to contribute is based on your income level (consult your tax preparer), and contribution limits are the same as for a Traditional IRA.

Simplified Employee Pension (SEP) IRAs: SEP IRAs are typically used by small business owners, freelancers, and entrepreneurs to make retirement contributions for themselves and their employees. SEPs have higher contribution limits and other requirements that make it necessary for you to consult your tax professional before moving forward.

Simple IRAs: In a Simple IRA, employees make direct contributions, and employers are required to make a matching contribution for the employee.

Cryptocurrency IRAs: The astronomic rise of Bitcoin and cryptocurrencies during the past couple of months has been ascribed to many variables. From institutional investor acceptance and investment, rapid digitization, mainstream acceptance, and even the pandemic, one thing is certain — the Bitcoin revolution is no longer a Generation Z or Millennial euphoria. It has transcended age groups. By outperforming stocks, bonds, and the most traditional asset classes like gold and oil, cryptocurrencies have continued to break and set new all-time highs in 2021.

Of course, the aim of having an IRA is to plan for the future by saving and investing in the best interest-yielding reserve assets. Historically, stocks, bonds, annuities, and mutual funds have been the go-to assets. However, with many more people now favoring Bitcoin as a reserve asset, digital assets are increasingly popular in retirement accounts. Cryptocurrency IRAs are self-directed IRAs that allow individuals to invest in cryptocurrencies inside their retirement portfolios.

Are Cryptocurrencies IRAs Legal?

In 2014, the IRS classified cryptocurrencies as property, qualifying them for IRAs.

Choosing a Cryptocurrency IRA

Some people are skeptical about a Bitcoin investment because of its perceived volatility However, there are two questions you should be asking: First, is the rapid adoption of cryptocurrencies by the biggest companies in the world a coincidence? And second, how much scrutiny would a sizeable company do before investing in this new digital asset class?

Choosing a Cryptocurrency IRA is a decision that requires proper research, education, and some degree of familiarity with the asset. However, its never too late to start planning for your future, and you can start now.  Before trusting a Crypto IRA provider with your retirement funds, here are a few questions you might need to ask yourself and the IRA provider:

  • Does the Crypto IRA provider have experience and a strong reputation?
  • Do they provide excellent customer service?
  • Do they provide expert assistance with the transfer from my existing retirement account?
  • Can they answer all my questions to my satisfaction?
  • Can I quickly trade in or out of a crypto investment?
  • How secure is the crypto stored inside my IRA?

Coin IRA

Coin IRA is one of the pioneering companies in the United States offering Cryptocurrency IRAs.

There are many advantages to working with Coin IRA, but primarily is the wealth of experience they bring to each and every customer and the professional relationships they have established that customers benefit from – from reputable custodians to the top cryptocurrency exchanges. The Coin IRA website offers users and potential customers key information about cryptocurrencies, setting up an IRA account, and proactive customer support to answer questions and guide you through the process.

Coin IRA allows you to fund your IRA from an existing 401(k), Traditional, Roth IRA, SEP or Simple IRA, or to establish a custodial non-IRA account. With Coin IRA, cryptocurrency assets are securely locked away in military-grade cold wallets, protecting your digital assets from malicious attacks or loss.

Ultimately, Coin IRA saves you time, stress, and money by offering you an expert-assisted self-directed Cryptocurrency IRA, guiding you each step of the way. Coin IRA has built genuine trust with partners and account holders over the years. Visit coinira.com today to find out more!

The Undeniable Future of Blockchain Cryptocurrencies

It has been almost 15 years now since the inception of cryptocurrencies from the Bitcoin revolution back in 2008. Since then, the crypto space has gone through a roller coaster ride of regulatory issues, price fluctuations, and new innovations. Throughout this time, though, many institutions have begun to catch on to the underlying value that these digital currencies bring to the table.

This value comes from the revolutionary innovations that blockchain created. While many people are focused on the different cryptocurrency investment options and trading possibilities, the real driver of value has always been the underlying blockchain technology. Leading institutions such as Goldman Sachs and other major financial players are now all-in on cryptocurrencies and blockchain technology, with one representative stating “We’ve crossed the line now…because of the underlying technology that’s coming.”

In order to understand why cryptocurrencies are here to stay, it is important to understand the basics of this underlying tech:

Blockchain and Decentralization

Bitcoin’s value stems from the overall bias of society that desires to keep strangers away from their personal data and assets. Currently, banks operate under a single, centralized ledger that is owned and operated under a single corporation, governed by a small group of individuals. As you can tell, this requires some serious trust in these strangers.

In 2008, the weakness in this approach was laid bare for all to see, and the housing market crash ruined the United States’ economy. If you haven’t learned about how this occurred, the flaw was trusting small groups of people and individuals to verify transactions and ensure they were able to be executed. Houses were bought with money that didn’t exist, and the homeowners could not afford their monthly payments. With this happening consistently, the market was bound to snap – and it did.

Enter Bitcoin

After this crisis, Bitcoin brought with it the concept of “trustless” transactions, among other innovations. This simply means that there is no trust involved in a bitcoin transaction, as the exchange of value is stored, publicly visible, and verified by multiple parties with an incentive to ensure its proper verification. Therefore, blockchain enables two “untrusting” parties to engage in a transaction without the need for a moderator. Additionally, it distributes the control of the system to the entire community, removing centralized power structures and essentially creating the “decentralized” system it has become known for.

Mass Adoption Is Happening

As you can see, blockchain has the ability to radically reform the way in which our society handles and approaches money. At its core, it provides the rails for which many current fintech innovations are able to operate at their highest level – digital wallets, DeFi exchanges, encrypted data, smart contracts, etc. These tools all have the ability to comprehensively modernize supply chains across the world in industries such as logistics, finance, healthcare, investing, real estate, and much more.

Huge corporations have been actively researching this technology, and recently, have begun serious efforts to implement blockchain into their current infrastructure. According to a 2021 survey conducted by the Bank of International Settlements, 86% of central banks are actively researching the potential for CBDCs, or central bank digital currencies. This includes Sweden’s Riksbank, The Bank of Canada, and even the European Central Bank.

The cracks in our current infrastructure have been exposed, and many big players are realizing that this technology is going to be a part of our future for a long time to come. Cryptocurrencies are here to stay,  and they are only going to continue to gain mass adoption as an investment asset as the underlying technology continues to revolutionize the world we live in.

If you are ready to invest in the asset class of the future, you can reach out to a cryptocurrency specialist at Coin IRA to learn more about how you can add cryptocurrency to your long-term retirement plan. Buying, selling, trading, and storing Bitcoin and other cryptocurrencies inside your IRA is safe and easy with the help of Coin IRA’s experts.

Bitcoin, calculator and tax statements.

Tax Benefits of a Cryptocurrency IRA

Cryptocurrencies make a great investment but just like stocks and bonds, they are subject to capital gains tax. However, if you invest in the cryptocurrency inside a Cryptocurrency IRA, and depending on whether you establish a Traditional or Roth IRA, your tax liability is limited to income tax, not capital gains.

There is no question that cryptocurrencies have been booming in 2021, with their overall market valuation now over $2.3 trillion. That's a nearly three-fold increase from a market that was worth less than $800 billion at the end of 2020. A similar boom occurred back in 2017, and while the market suffered a mild retraction afterward, it was soon back in the green.

Large rallies such as these are often criticized for their sharp corrections, but in the long-term, prices have been shown to enjoy exponential growth. In fact, over the past ten years, Bitcoin has been proven to be more profitable than any other investment on the market. For this reason, cryptocurrencies like Bitcoin look set to make great long-term investments, particularly as a retirement hedge against deflationary fiat currencies.

Death and Taxes

When speaking of retirement investments, one can't help but think of Benjamin Franklin's famous quote: "Nothing is certain but death and taxes". That’s certainly applicable to both cryptocurrency and almost all retirement plans, as both are subject to taxation.

Back in 2014, the IRS officially declared that Bitcoin and certain similar digital assets would be deemed property, and therefore subject to capital gains tax. This gives the government the right to claim a percentage of any profits made through cryptocurrency investing, just as it would with stocks and bonds.

Fortunately, the same rule also deems that you can reduce these taxes by investing in cryptocurrencies using a self-directed IRA, and either defer the taxes until distributions from the IRA are taken, or in the case of a Roth IRA, potentially eliminate taxes on gains entirely. This can be done in a number of different ways, each providing significant tax benefits which we will discuss here.

Taxes on Cryptocurrency

Reducing or eliminating the amount of income tax you have to pay on your cryptocurrency investments is the key advantage of using a Cryptocurrency IRA. Many new investors in the cryptocurrency space are unaware of the amount of capital gains tax they have to pay on their investments, and often get caught out at year-end for not properly reporting their profits.

If you intend to hold your crypto investments for a long time in order to maximize profits, then a cryptocurrency IRA is the ideal way to reduce your tax overhead. In addition to the handsome tax savings, you aren't required to report any individual transactions made within your IRA, eliminating the need to keep detailed records of your investment activity.

With the tax deferral benefits of a Traditional Cryptocurrency IRA, you can maximize the profits you make by deferring the distributions from the IRA until you are no longer working, and earning substantial income, when you most likely would then be in a lower tax bracket.  Having your cryptocurrency inside your IRA also helps you to avoid panic selling or spending on frivolous purchases, although buying and selling cryptocurrency inside your IRA can be accomplished quickly with a simple phone call.

Cryptocurrency IRA Taxes

With a self-directed Cryptocurrency IRA, you can choose either a Traditional IRA or a Roth IRA. These are the two most common types of IRAs, and they each offer significantly different tax benefits. 

In short, with a Traditional IRA, you make investments with pre-tax dollars but pay income tax when you take distributions.  If you wait until you are at least 59 1/2, you will avoid the penalties associated with early withdrawals.  With a Roth IRA, you contribute after-tax dollars and are not taxed on the growth provided the Roth IRA is held for the required period of time (talk to your tax professional about that). Depending on your investment strategy, these options offer different advantages.  

As long as you are working and earning income, you can contribute to your Traditional, Roth, SEP or SIMPLE IRA.  The IRS sets the amount you are eligible to contribute annually each year.  For a Traditional or Roth IRA, the amount of your eligible annual contribution is based on your age.    For 2021, if you are under age 50, you can contribute $6,000 annually, and $7,000 annually if you are 50 or older.  You can also rollover funds from an existing qualified plan, or transfer funds from an existing IRA, without limit.  SEP and SIMPLE IRAs have different rules and contribution limits, so it would be a good idea to talk to your tax professional if you are interested in these more complex options.  In any event, you can truly capitalize on the early growth of cryptocurrencies by getting started as soon as possible, and ultimately mitigate the tax liability by utilizing a Cryptocurrency IRA, generational wealth is entirely possible by investing now and investing wisely.

Diversification

Another one of the key reasons that some investors choose a Cryptocurrency IRA is diversification. While traditional stocks and bonds may seem like safer options, they typically offer relatively conservative returns compared to cryptocurrencies. If you look at the investment portfolios of some of the world's most famous investors, you'll see that they always rely on diversification to ensure they have an equal balance of risk and safety. This requires keeping a large percentage of funds in a low-risk fund while also taking advantage of riskier investments that offer potentially higher returns. 

By diversifying a portion of your existing retirement fund into a Cryptocurrency IRA, you can take advantage of Bitcoin or other crypto's spectacular returns while keeping the majority of your investment in a less volatile environment. Additionally, new evidence suggests the cryptocurrency market is becoming less correlated to traditional stocks, offering a potential safe haven in the event of a financial crisis.

Reduce Your Taxes Today with a Cryptocurrency IRA

Investing in cryptocurrency has proven to be a highly profitable choice for thousands of companies and individuals around the world. When investing through a safe financial product like an IRA, you not only receive beneficial exposure to the price gains but also the security of a well-trusted and licensed custodian.

Coin IRA provides an easy method of investing in cryptocurrency via an IRA. You can do this in several ways: by rolling over all or part of an existing 401(k) into a Cryptocurrency IRA; transferring all or part from an existing IRA into a Cryptocurrency IRA; or making your allowable annual contributions to your Cryptocurrency IRA.

Call a Coin IRA cryptocurrency specialist today at 888-998-COIN to find out how you can benefit from this promising new investment opportunity.

Bitcoin token with blue SUV car

A Motorist’s Guide to Investing in Cryptocurrency with Tax Benefits

Let's look at the possibilities of using a Cryptocurrency IRA to ensure security for your retirement and gaining benefit from the remarkable profits that are available to those who invest in Bitcoin and other cryptocurrencies like Ethereum or Litecoin.  These are not just a new asset class - they are part of a new technology that has vast potential. In 1885 Karl Benz invented the first motor car: a three-wheel, tiller-steered vehicle powered by a ¾ horsepower single-cylinder engine. Despite many naysayers and its obvious shortcomings, the idea immediately caught on. In 20 years, motor vehicles were commonplace, starting a giant new industry. We are completely familiar with them, but every motor vehicle can trace its ancestry back to that 1885 prototype. New technologies need to go through an acceptance process to become normalized in society. Advances like this take time. Some people don't want to get involved with unfamiliar technology. In 1885 horses were the norm, and gasoline-powered vehicles were a strange circus act. Bitcoin is as revolutionary in financial circles as the motor car was to transport. It has started a "gold rush" to invest in cryptocurrency.  Are you ready to dip your toe in the water? Let's say you are a person who needs to save for retirement. Perhaps your previous IRAs have not delivered sufficient returns. Interest rates are low, and conventional asset classes are underperforming. You need to ensure that your money and assets are safe for your family's future in an unstable economy. Bitcoin and other cryptocurrencies have delivered staggering profits in the last ten years, beating all other assets in the same way as a Formula One car outperforms a family sedan. Recently, major companies from institutional investors to Tesla have invested in cryptocurrencies and reaped the benefits.

What Are the Benefits of a Cryptocurrency IRA Account?

By investing in a Cryptocurrency IRA with a reputable company, you enable the best protection of your investment, as well as having experts on board to ensure tax efficiency under IRS rules. The cryptocurrency in the IRA will be stored safely in a best-in-class, hybrid, multi-signature digital wallet with military-grade encryption. Rest assured you will not need to master all of Bitcoin's intricacies to get started in the same way it is not necessary to know how to fix your car's engine to obtain the benefits of personal transportation. The Crypto IRA experts at Coin IRA will take care of that. What is important to know is that the backbone of cryptocurrencies is the blockchain, which is a ledger or "Decentralized Ledger Technology" (DLT) that is validated by many computers in a peer-to-peer network, making it very robust and tamper-proof, and leaving the confines of banks as "trusted third parties" behind. Long-term investors, retirement investors, passive investors, and early adopters of new technology, whether young or old, can benefit from their investing a part of their retirement into cryptocurrency.  Here are just a few great reasons:

6 Reasons to Invest in a Crypto IRA

 
  1. Diversification of your investment portfolio

Many people are unaware that they have alternative investment options in IRAs.    A few select qualified custodians offer cryptocurrency self-directed IRAs in both pre-tax (Traditional) and post-tax (Roth) accounts,           which increase diversification and thereby reduce risk.
  1. Return on Investment

Bitcoin and other cryptocurrencies have outperformed every other investment class over the past few years, and experts forecast this as a continuing, long-term trend.
  1. Hedge against inflation and financial turmoil

Bitcoin has a fixed number of coins designed into its protocol. That means there are only 21 million Bitcoins that will ever be mined, restricting the supply.  Unlike conventional currencies like the dollar, Bitcoin cannot be devalued by overinflating the supply.
  1. Privacy and Security

Every Bitcoin transaction is recorded and visible on the blockchain by entering the public key, also known as the wallet ID, which is a series of letters and numbers that keep the parties to the transaction anonymous. There is also a private key, known only to the sender, which is necessary in order to authorize buy or sell transactions.
  1. Disengagement from the conventional financial system

The decentralized peer-to-peer nature of blockchain transactions means that "trusted third parties", e.g., banks, stockbrokers, lawyers, etc., are not needed to transfer value in the cryptocurrency ecosystem. This innovation is the most significant departure from conventional financial technology pioneered by Bitcoin.
  1. Tax advantages

With a Roth cryptocurrency IRA, you can invest post-tax money into an investment vehicle, your gains accrue tax-free, and you pay no taxes when you take your distributions. If you choose to invest in a conventional Cryptocurrency IRA, you can invest with pre-tax dollars, your gains accrue tax-free, and you only pay taxes when you take a distribution. In either case, a Cryptocurrency IRA offers you tax advantages that you can’t get by investing in cryptocurrency anywhere else.

Navigating Temporary Detours

Cryptocurrencies are very volatile.  Although the basic trajectory of the two biggest—Bitcoin and Ethereum—has been steadily upwards for a decade, sudden dips are typical.  Some authorities are negative towards cryptos, and some countries have banned them.  The decentralized design of these currencies makes it unlikely that banning them would succeed globally.

How a Cryptocurrency IRA Can Help You Through This Process

Coin IRA is a fully compliant and licensed institution working with the most experienced cryptocurrency IRA custodians.  We will walk you through the process of setting up and funding your new Cryptocurrency IRA, guiding you every step of the way to safe trading and secure storage of your Bitcoin and other cryptocurrencies.

Take the Next Step

You can contact us to find out more about how we can help you with tax-efficient cryptocurrency investing. This is a whole new field of technology, and you should be excited to be an "early adopter". With economic turmoil starting to emerge, and the fallout from the pandemic being an unknown factor on the horizon, you need more than ever to ensure that your future and the future of your family are protected by having various advantageous investments. Starting a Cryptocurrency IRA is like choosing another quality “vehicle” to add to the journey to your retirement.  
Hand holding an ethereum coin

How High Will Ethereum Go?

Ethereum is more than just “an altcoin” in the Bitcoin and other altcoins phrase. As graphs suggest, it remains strong in spite of going through a turbulent 2020. Isn’t this a positive signal that Ethereum (ETH) has set solid grounds for potential investors? If you’re still hesitant when it comes to the legacy of Ethereum or maybe feel reluctant to shift your focus from “the one and only” Bitcoin, no worries.  Investors’ reluctance arises mainly from Ethereum’s native settings and the fact it’s been associated with a more technical background. It’s true, this blockchain-based representative is nothing similar to what you’ve already come to know of Bitcoin (BTC), Litecoin (LTC), or Stellar (XLM). The blockchain technology behind Etherum is far more robust than all listed examples, which makes Ethereum more than just a regular cryptocurrency. It’s been utilized to serve as the basis for building new, decentralized applications on top of it. In this respect, Ethereum has great support from Enterprise Ethereum Alliance, an association consisting of Fortune 500 companies that have entered a strong partnership in developing cross-industry projects and innovations based on Ethereum smart-contract technology. We’ll discuss the core ETH principles to see to what extent BTC and ETH differ and whether Ethereum has the slightest chance of surpassing the unquestioned crypto champion BTC. We’ll support this with a short history of Etherum and near-future predictions, which will potentially serve as a valuable guide for you as a potential investor.

What Is Ethereum?

The idea of Ethereum as a decentralized, open-source platform for the use of its native cryptocurrency Ether was presented to the public in 2015. The coin itself is often referred to as Ethereum, and such interchangeable use of both terms has been widely accepted in the crypto jargon. The Ethereum software is run by Distributed Apps and Smart Contracts allowing safe and anonymous transaction execution without employing a third party to control the process. Ethereum is also a programming language used by software developers to create new applications that are run on Ether, as a basic cryptographic token and a moving wheel to the Ethereum software. This trading model has the ambitious goal of creating an entirely private environment resistant to cyberattacks and scams since there is no personal or bank information to be recorded on the blockchain ledger. Contrary to popular belief, Ethereum doesn’t have a limitless supply. The supply limit does exist but it increases at an estimated rate. As we mentioned above, Ether is a medium of exchange like all other cryptocurrencies and can be traded commercially. It’s the second-largest cryptocurrency, found on all well-established crypto marketplaces that allow trading with multiple assets other than Bitcoin. However, unlike other altcoins, Ether and the Ethereum-based tokens can be used only for dApps’ facilitation. That being said, you can trade another crypto in exchange for Ether, but Ether cannot be replaced with another crypto to supply computing power on the Ethereum blockchain.

Short History of Ethereum

According to one of the cofounders of Ethereum, Vitalik Buterin, the idea behind this blockchain technology arose from the flaws of the already existing Bitcoin network concerning full liberation from centralized authorities. This idea was described for the first time in the white paper Buterin released in 2013. The next year, he and the other co-founders created a crowdsourcing campaign selling Ether to participants through which they managed to raise $18 million. The first Ethereum release called Frontier was officially established in 2015. And then, in a relatively short period, Etherum massively grew to gather hundreds of contributing developers. Expectedly, Ethereum went through severe growth issues mainly due to the concern of security, pretty similar to what Bitcoin faced in its early stages. In 2016, there was a critical cyber-attack resulting in a loss of $50 million worth of Ether, which raised the question of Ethereum security in general terms for the first time. The theft started a dispute in the Ethereum community followed by a separation into two separate blockchains Ethereum Classic (ETC) and Ethereum (ETH). Expectedly, it didn’t go without drastic price fluctuations. The price of $75 in May 2017 managed to hit $1066 by December the same year, following a dramatic drop to $411 only several months after, with no considerable recurrence of the 2017 success. This negative trend lasted until 2020, when the price of Ethereum started growing again, a trend that is still going strong at the time of writing this article.

Ethereum Price Prediction

The crypto market is in constant flux and many relevant predictions have failed to come to fruition. However, based on the unlimited operational model, experts see endless potential in the future development of Ethereum apps. When we also take into account that it was Bitcoin that led the way in general adoption, we find that we have a chronological pattern to rely on even though both crypto products differ at numerous levels. These enthusiastic predictions are further supported to some extent by the impressive figures that indicate a massive acceptance of digital assets and their rapid transformation into mainstream finance. Wallet investor’s technical analyses consider Ethereum a profitable investment opportunity predicting a long-term increase in Ethereum price. More specifically, by the end of next year, the price of Ethereum is estimated to rise to $6220, and in five years, it is expected to reach $11471. The Italian analysis service Previsioni Bitcoin goes even a step further, predicting an outstanding ETH value of $10,029 by the end of 2021. Long Forecast expects a drop in price under $3,000 soon this year, but the prediction is that it shouldn’t last longer than a month or two. They predict that by the end of 2021, Ethereum will hit $10,000 and continue to reach a new all-time high each following month for the years to come. So, the most relevant factors in the crypto industry share the general impression that Ethereum has a bright future. We’ve nothing else to do but conclude that Ethereum is worth our attention as a long-term investment. The question that remains is, can it surpass Bitcoin?

Final Thoughts

Ethereum is the most prospective candidate for outshining Bitcoin but it’s still a young player on the crypto scene. So, it’s quite unfair to compare both cryptocurrencies on equal terms. However, we must agree that Ethereum can be perceived as a more advantageous asset in several respects. First, the Ethereum network enables trading more than just one crypto. Second, Ethereum isn’t limited to a single cryptocurrency exchange method, offering smart contracts and Ethereum Virtual Machine options as well. Moreover, giant investors like Microsoft and IBM have chosen Ethereum as a wise investment. And finally, Ethereum is eligible for Cryptocurrency IRAs so that’s a perfect opportunity for your investment portfolio. As one of the crypto veterans, Coin IRA can provide all the support and guidance you need towards a rewarding crypto experience. Don’t let another historical price boom pass by unattended Contact Coin IRA’s experienced team and get started securely in your next chapter of life savings.
Cryptocurrency Candlestick Chart

How to Read Crypto Charts

Learning how to navigate and read cryptocurrency charts is of utmost importance when users are starting off as traders. It usually takes them a while before they familiarize themselves with the crypto lingo and terminology. Cryptocurrency charts aren’t vastly different from other standard charts that you are used to seeing, however, there are some aspects in which they differ, especially when it comes to tool features. Traders have to learn to navigate the stock screen and trades in real-time. Sometimes, data will be arriving at a breakneck pace, so taking some time to focus on chart reading will go a long way, especially when the numbers start piling up. So, are all crypto charts the same? Are they all created equal? Not necessarily. Let’s take a closer look.

Crypto Candlestick Charts and How To Use Them

Crypto charts can be navigated by following the movements that occur when a cryptocurrency changes its market value in relation to its price during a certain period of time. Charts can help predict in which direction a cryptocurrency will go, based on its history. There is no sure way of knowing, but it gives traders an insight into where the price has been and how it has developed. This way, even though they don’t tell us for sure what tomorrow will bring, traders can try to base their decisions on something tangible. There is really no way around it: if you are serious about engaging in crypto trades then you’ll have to learn how crypto charts function. By learning how to navigate crypto charts, you will be able to recognize and act on market shifts and alterations, research the trajectory of any coin, and dive into the technical analysis (TA).

The Two Types of Candlesticks

There are bearish candlesticks and bullish candlesticks. Candles are indicated by rectangles, known as the real body, along with a point, known as the wick. The wick’s color depends on the market trend at the moment. The candle’s color is determined by the market's direction. If the candle is green, then the current price is higher than what it used to be during the opening of the trade - which is categorized as a bullish candlestick. If the candle is colored red, then the current price, or closing price, is lower than the opening price. Red signals a bearish candlestick. Should both the opening and the closing prices remain the same, then the candle will appear as a horizontal line in the time selection. Cryptocurrency candlesticks can be customized according to preference so that users can make them as wide or as narrow as they like when calculating their moves. The charts can display any timespan you’d like to see - be it the past 5 minutes, the previous month, or the currency’s trajectory in the whole of last year.

Volume

Volume bars indicate the amounts of trading volumes that have gone down during a certain period. The higher the number of trades and the more lucrative the deals, the longer the bar representation volume will be. Green volume bars represent a growing interest regarding a certain digital asset, while red volume bars represent a drop in interest regarding the cryptocurrency in question.

Cryptocurrency Analysis Tools

Candlestick prices are used as tools to navigate how the market is going to move so that traders can settle for a certain approach or trading strategy.  Analysis tools, on the other hand, provide an analysis of a given data set. When prices and volumes are on the move, the user can take advantage of such tools to read the market and decide whether now is a good time to pull the trigger by making an informed decision. At first glance, you might feel like they’re asking you to fly the Millennium Falcon because most crypto chats do appear intimidating. It’s easy to get lost in the endless parameters, analysis tools, charts, and portfolios, especially when you’re trading through multiple exchanges at the same time and switching between various accounts. However, most crypto trading platforms will offer the option for chart customization, so make sure to set up a chart that suits you and to remove all the unnecessary parameters that would otherwise distract you. Don’t worry, you can always bring them back should you need to in the future. If you happen to be a new trader, you might be asking yourself which of these parameters to keep and which ones to hide. This is where chart trading tools come in handy. We’ll give you a head-start with our favorite - TradingView.

TradingView

TradingView is essentially a social media platform where traders from all over the world gather to take a look at the raging ball of fire that is cryptocurrency. TradingView is available as a desktop chart or as a mobile app for those that make quick moves and like to keep their business hub in their pocket. The platform began its journey as a stock scanning chart, but it soon expanded to accommodate the seemingly infinite number of digital currencies. TradingView offers users insight into multiple cryptocurrency exchanges, so that they can compare and analyze in great detail.

The Crypto Fear and Greed Index

There is also the Fear and Greed Index. This is a very interesting metric that displays how invested traders have been in a trade by charting their fear and greed. It has an overview that informs traders which emotion is dominating the market at any given time and provides a database of archived charts that can be set to display specified days, weeks, months, and even years. The platform collects, stores, and integrates data from a myriad of sources and then draws conclusions from trader actions and reactions. The extreme fear metric shows how concerned investors are in regards to a certain digital asset. This usually intensifies when the currency in question will start dropping in value in a short time span. Should many currencies start dropping in value, users will notice that the graph line on the platform will rise above a value of 80. A steady climb is an indication that the market is driven by greed. The Fear and Greed Index has found its legs because the market is driven by emotions. Although it seems like a nebulous metric at first, it definitely has its place when navigating the latest market developments that unravel on an hourly basis.

In Closing

Knowledgeable crypto traders will always have the upper hand, no matter the circumstances. Luckily, it looks like there will be more and more opportunities for traders to try out new approaches and become well-informed traders with some time and practice. It all comes down to who wants to put the work in. As a trader, you don’t have to know absolutely everything under the crypto sun in order to make a profit. However, knowing how to read a chart or two might be the difference between having a long career as a crypto trader and losing all your assets to the point of throwing in the towel. If you want to learn more about Cryptocurrency IRAs and the ways that investing in crypto can benefit your retirement savings, contact Coin IRA today. Our representatives have plenty of experience helping investors like you make cryptocurrencies part of their investment portfolios. What are you waiting for? Start your cryptocurrency journey by contacting Coin IRA today.
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