Bitcoin on tablet with dollars

Bitcoin’s Top 4 Major Price Influencers

The Bitcoin price moves fast and furiously sometimes — but exactly what causes the ups and downs in the price of Bitcoin can seem like a mystery. While we can't know what's moving the Bitcoin price at all times, it's possible to pinpoint some of the contributing factors that can shift the tide in a bullish or bearish direction. Let's take stock (or better yet, take digital assets) of the most significant and identifiable influencers of the Bitcoin price

The Almighty Dollar

Oftentimes, investors over-focus on their asset of choice, while ignoring the other side of the coin (literally) — namely, the fiat currency against which the asset is measured. As a Bitcoin trader or investor (or even just a Bitcoin watcher), it's a good idea to get into the habit of thinking like a currency-pair trader. This means thinking about not only the currency in question (Bitcoin, in this case) but the other currency that it's being measured against (in North America, that would typically be the U.S. dollar). Thus, Bitcoin's relative value will largely depend on the movements of the U.S. dollar (or whichever fiat currency you happen to be using). And, there's an inverse correlation here: if the dollar drops in value, that's bullish for Bitcoin, and vice versa. March of 2020 provides a textbook example of this principle in action. At that time, traders were feeling panicky and wanted to keep cash on hand. The dollar's value went up, and this influenced the Bitcoin price to go down. The opposite effect can happen if the dollar's value declines, though. Some folks expect inflation, which is basically just the dollar's deterioration in value, to be a major factor in the near future. That's because the government might need to print up more dollars in order to fund stimulus and relief measures. So, if you're bearish on the dollar, you might also consider taking a bullish stance on Bitcoin.

The Bitcoin Whales

Besides the rise and fall of the U.S. dollar, another influencer is what you might call the "whales" of the financial markets: institutional investors. We're talking about multi-billion-dollar companies and individuals with enough fiscal clout to actually move the Bitcoin price. Stanley Druckenmiller and Paul Tudor Jones are examples of large-scale individual whales who have reportedly put money into Bitcoin. Meanwhile, financial companies like PayPal, Square, and MicroStrategy have reportedly added Bitcoin to their holdings or balance sheets. There are also numerical data to show that the whales are increasingly getting into Bitcoin. For the purposes of this discussion, let's say that we can define the whales as investors who bought at least 1,000 Bitcoins. According to data firm Chainalysis, towards the end of last year, those whales who bought at least 1,000 Bitcoins and had an account open for less than a year collectively purchased an astounding half-million Bitcoins in three months' time. During that time, the price of Bitcoin price more than doubled from around $10,000 to the $20,000 area. Could this merely be a coincidence? It seems possible, and even likely, that the whales had an influence on the surge in the Bitcoin price — and will continue to do so in the future.

The Musk Factor

You can call him the ultimate Bitcoin whale, or maybe just a famous influencer with clout. Either way, there's no denying that Tesla CEO Elon Musk has the power to sway opinions and move markets. In late January, Musk simply added the hashtag "#bitcoin" to his Twitter bio, and the next thing you know, the Bitcoin price shot up by 20%. There's no plausible way to call this a coincidence, as the price of Bitcoin spiked by $5,000 within the space of an hour after Musk added the hashtag to his bio. Musk also posted a tweet saying, “In retrospect, it was inevitable,” as if he somehow knew that Bitcoin was going to increase in price exponentially.  Then, in February, Tesla announced in an SEC filing it had purchased $1.5 billion worth of Bitcoin - whale status was clearly confirmed at this point. Along with that, Tesla revealed that it would start accepting Bitcoin as a payment method for its products. Moreover, on March 24, Musk tweeted, "You can now buy a Tesla with Bitcoin." What startling move will Musk and Tesla make next? It might be difficult to tell, but the man and the company are definitely worth keeping your eye on as they are major Bitcoin influencers.

Retail Investors

But don't get the wrong idea — just because whales like Elon Musk have the clout to move the Bitcoin price, amateur traders can also have a collective influence. Remember, Bitcoin is supposed to be the people's money. Together, the small-scale investors can influence where the Bitcoin price is headed. As reported by researcher CryptoCompare, cryptocurrency trading volumes soared by 17% in the month of February. Not only that, but cryptocurrency trading volumes at major exchanges increased by more than 35% during that time frame. And, crypto trading volumes hit an all-time high of $159.9 billion on February 23 — around the same time that the Bitcoin price was testing its own all-time highs. Of course, this wasn't entirely due to the whales' involvement. Due to Tesla and Musk's positive sentiment and actions, it's likely that retail interest spiked as a result. Furthermore, as Bitcoin gets mentioned more frequently in the mainstream media, retail-level awareness is poised to increase as well. This, in turn, can lead to a ramp-up in retail-level Bitcoin buying activity. We also have to consider the FOMO effect. That acronym stands for Fear Of Missing Out. As the Bitcoin price goes up, we might expect retail-level buying activity to increase as small-scale investors start to feel the FOMO.

One Coin, Many Influencers

As you can see, we can't just narrow it down to a single influencer. There are, in fact, many different factors that push the Bitcoin price up or down. But that's part of what makes investing in Bitcoin so exciting - and if you have the right tools, it can be profitable as well. Talk to a cryptocurrency specialist at Coin IRA to find out more about investing in Bitcoin and other cryptocurrencies. 
Pile of crypto currency

Top 6 Cryptocurrencies for your Retirement Account

In today’s investment landscape, investing in cryptocurrencies is a no-brainer. Even some of the most conservative experts are starting to admit that it would be unwise to pass up the opportunities available today. But when investing some of your retirement funds in cryptocurrencies, which ones are right for your strategy?  While there may be a dizzying array of choices out there, the good news is you’ll only need to focus on a handful of them because not all are eligible for IRAs. In this article, we’re going to go over what we think are the best choices for investing your retirement funds into cryptocurrencies.

1. Bitcoin (BTC)

It should come as no surprise that our top recommendation is the original cryptocurrency—Bitcoin. Since 2008, Bitcoin has proven itself to be completely secure, reliable, and has demonstrated consistent steady upward price growth. It's widely regarded as a hedge against inflation. It also doesn't move in step with the stock market.  With its sky-high price per coin, some are thinking they can’t afford to invest in it. The good news is that Bitcoin can be purchased in very small fractional amounts, so your minimum investment can likely be smaller than you might have thought.  Another concern is that it's too late to invest in Bitcoin. This is something people have been saying since the price first started to increase. A few years ago a single Bitcoin was worth around $3000. Imagine then how people felt knowing that Bitcoin used to be a few pennies each. The same advice is true now as it was then—the best time to invest in Bitcoin was yesterday, the next best time is today.

2. Ethereum (ETH)

Ethereum is an exciting and powerful cryptocurrency platform with nearly endless potential. While Bitcoin is digital money, Ethereum is more like a globally distributed computing platform. Ether, Ethereum's native cryptocurrency, is designed to be programmable money that can be used in electronic smart contracts and online payments.  It is the backbone to many thousands of other cryptocurrency tokens that rely on the Ethereum network. This reliance on the Ethereum network means that Ether will always be in demand.  Additionally, Ethereum is currently in the midst of upgrading its system to be one that doesn’t run on expensive and energy-intensive computational mining. Instead, it will be moving into a system called proof-of-stake, which allows Ether owners to earn regular rewards that function a lot like earning interest.  Ethereum has an enormous developer base that is creating countless exciting projects. That alone makes this coin a must-have for any long-term investor.

3. Litecoin (LTC)

Bitcoin is digital gold, and many are viewing it as a way of storing value over the long term and more. But when it comes to actually using the currency to buy things, many crypto owners are opting to use lighter, lower-cost, and faster coins. One of the longest-lasting leaders in this group is Litecoin.  Consistently ranked within the top 10 cryptocurrencies by market cap on sites like coincap.io, Litecoin is a reliable, secure, and respected cryptocurrency. In times when Bitcoin and Ethereum transaction fees get too expensive due to heightened demand, many individuals opt to exchange their Bitcoin for Litecoin. That's because it is so much cheaper and faster to send, even during periods of high demand. It is a good entry point to cryptocurrency investing since it's much more affordable for those working with smaller amounts.

 4. Ethereum Classic (ETC)

Years ago, the original Ethereum split into two separate projects, Ethereum, and Ethereum Classic. Today the Ethereum Classic project is an exciting alternative to Ethereum and is focused on low-cost, high-speed transactions with all the same robust computing power and app development capability as its bigger brother. Developers that can write code for Ethereum can easily do so on Ethereum Classic. Its lower price point per unit and vastly lower transaction fees make it exciting for projects related to the Internet of Things, autonomous microtransactions, and more. The coin has also received a hefty investment from Grayscale, one of the biggest cryptocurrency investment firms on the market. Ethereum Classic is also available for placement into self-directed Cryptocurrency IRAs.

5. Dash (DASH)

In the wake of the Venezuelan financial crisis, Dash made a name for itself as a popular, fast, and affordable alternative to untrustworthy national currencies suffering from inflation or liquidity shortages. It became such a popular choice for day-to-day use that many shops and restaurants accept Dash through mobile apps as a form of payment. Today Dash offers some of the fastest transaction speeds, privacy features, and a hybrid proof-of-work and master node network.

6. Chainlink (LINK)

There is a strong chance that smart contracts will be leading the way in how business is done in the near future. But in order to function correctly, smart contracts need access to reliable and verifiable outside information. Getting access to outside information on networks like Ethereum is done through what's called an oracle. The Ethereum-powered Chainlink is a decentralized network of oracles that can provide reliable information to smart contracts on any blockchain – even projects that don't support smart contracts yet but might in the future like Bitcoin and Litecoin. Recently, Chainlink has regularly found itself in the top 10 cryptocurrencies by market cap, demonstrating the crypto community's growing enthusiasm for this project and its digital asset, LINK.  Chainlink’s promise for the future makes it a great long-term investment. Younger projects such as Chainlink tend to focus on being more than just digital money, and usually offer unique features. Investing in these assets is not without risk, however. 

Choosing the Best Cryptocurrencies for Your Retirement Account

If you're having trouble deciding which cryptocurrencies you want to own in your IRA, it's a good idea to stick with the basics. Make your first investment in Bitcoin and perhaps Ethereum. Contact a cryptocurrency specialist at Coin IRA to learn more about emerging cryptocurrencies and the benefits of starting a Cryptocurrency IRA.
Bitcon and Dollars for investing

Bitcoin & IRAs: A Power Couple

Cryptocurrency is a more popular investment than ever before, with more than one-third of institutional investors in the US and Europe saying they have already invested in Bitcoin or some other digital asset. More investors say they want to join the crypto bandwagon, and 2021 promises to be a red-letter year for Bitcoin.

Bitcoin has long attracted the interest of hedge funds, but the new asset has been attracting a wider group of investors. Now, financial advisors and high net worth individuals are also buying up the digital currency, and its popularity is steadily growing among the general public.

Bitcoin also has tremendous potential for retirement savings, and a growing number of investors have been turning to Crypto IRAs to help them build and replenish their retirement accounts from past losses.  In much the same way as many turn to self-directed IRAs holding precious metals or real estate, independent-minded investors are using Cryptocurrency IRAs to buy Bitcoin in their retirement because of its explosive growth over the last few years and its potential to hedge their other investments against the fluctuations of today’s economy.  For many investors, this has been a powerful combination.

Still, many investors are hesitant to include Bitcoin in their retirement accounts. There’s often a certain element of anxiety about the unknown, and information is the best possible antidote to that anxiety. To that end, this article will address the history of Bitcoin, the cryptocurrency's potential as an investment, and its eligibility for IRAs.

Bitcoin’s History

Bitcoin is built on blockchain technology, an encrypted ledger of transactions that is maintained by a decentralized network of computers around the globe. While the underlying technology has been around for some time, Bitcoin, the first cryptocurrency, has existed since 2009.

The world was first introduced to the concept of a digital currency in 2008, when a Bitcoin whitepaper announced the development of a new, electronic currency that could be used to transfer value directly between people, bypassing banking institutions altogether. The paper, authored by an unknown figure by the name of Satoshi Nakamoto, is still relevant in cryptocurrency today.  Shortly after the whitepaper’s publication, Bitcoin itself appeared on the scene.

Bitcoin for Sale

The first Bitcoin purchase—a few pizzas—was carried out in 2010, and the value of Bitcoin has soared since that day. The 10,000 Bitcoins which a hungry man in Florida used to buy those pizzas would, today, be worth tens of millions of dollars.

In 2011, newer cryptocurrencies began to appear and half a decade later, companies began offering ICOs (initial coin offerings), allowing investors to buy into and receive a new cryptocurrency issued by the company. 

Is Bitcoin a Good Investment?

The technology behind Bitcoin is revolutionary, but the concept behind the digital asset is equally unique, taking financial controls out of the hands of banking institutions and governments to create a currency that is highly secure, transparent, and decentralized. 

As a digital currency, Bitcoin is not subject to the laws of inflation. It has its own, self-imposed supply cap and maintains a careful release schedule that ensures a steady demand for the asset, without the devaluation that occurs with traditional currencies. This makes Bitcoin a natural counterbalance to traditional investments, which are subject to inflation and to government controls.

Using Bitcoin as a Retirement Investment

In 2014, the IRS issued a ruling which declared that, for tax purposes, cryptocurrencies should be treated as property and not as currency.  The ruling read, in part, “For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.”

The IRS decision made digital assets eligible for inclusion in a Self-Directed IRA, with the same treatment as any other asset held in an IRA.  These Self-Directed IRAs are administered by a custodian, who handles the bureaucratic aspects of the IRA, including reporting contributions and distributions to the IRS. However, a Self-Directed IRA gives its owner (you) tremendous freedom in terms of deciding how to buy and trade assets and manage the account.

IRA vs 401K

Both IRAs and 401ks are types of retirement plans, with 401k’s sponsored by an employer,  while IRAs are set up by the individual investor.

The money that you contribute to a 401k is commonly invested in stocks or mutual funds. While you, the investor, have some input in terms of your level of risk tolerance, you may have little say in managing your 401k, or your employer may offer you only limited number of options from which to invest.

On the other hand, an IRA—especially a Self-Directed IRA—offers you far more latitude in terms of your investment choices. You can also take an active role in managing your IRA. This makes it ideal for investment in digital assets.

Bitcoin and Cryptocurrency IRAs

A Cryptocurrency IRA may be a Traditional, Roth, SEP, or SIMPLE IRA.  Once you determine which one is right for you, an experienced professional can assist you in the setup and funding.

It's a good idea to find a provider like Coin IRA, who not only allows you to trade in Bitcoin and other cryptocurrencies but who specializes in the intricacies of IRA rules regarding the transfer of funds between various different retirement accounts and can protect you from creating an irreversible accidental taxable event.

Can You Use a 401k to Buy Bitcoin?

A few employers are beginning to offer cryptocurrencies in 401k plans, but for the most part, you must transfer your eligible 401k funds into a Self-Directed IRA in order to hold cryptocurrencies in your retirement accounts.  Once your account is funded, you can buy Bitcoin immediately, adding it to your overall investment portfolio. You will have far more options for investment when you’re managing your own Self-Directed IRA.

Adding Bitcoin to Your Retirement Portfolio

Bitcoin investors are more bullish today than ever before, and people who invest in cryptocurrency are making digital assets an ever-greater part of their portfolios.  According to a recent survey, 25 percent of people who invest in Bitcoin are putting at least half of their investment dollars into the cryptocurrency, signaling their confidence in the new asset class. 

Those who invest in cryptocurrency say they value the ability to avoid inflation, steer clear of government controls, and diversify their portfolio, acting as a natural complement to their existing investments.

Transferring a portion of your IRA into Bitcoin will open up your savings to the tremendous potential that this new asset has to offer. The expert advisors at Coin IRA can talk you through every aspect involved in creating a Cryptocurrency IRA.  It’s a small step that can open up a world of possibilities.


US and Canadian Regulators Probing Cryptocurrency Scams

The prospect of regulatory crackdowns is one that all cryptocurrency businesses fear, and it’s the one thing that could really put a damper on the future development of cryptocurrencies and related businesses. That’s why a new international crackdown on cryptocurrency scams has many in the cryptocurrency world nervous. While everyone wants to see scammer, fraudsters, and thieves banished from the cryptocurrency sphere, that has primarily resulted from the cryptocurrency community policing itself and quickly spreading news of potentially fraudulent schemes. Many of the previous efforts to inform investors about cryptocurrency fraud were undertaken by federal regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The latest crackdown was the result of coordinated action among state and provincial regulators from the United States and Canada. The operation is called “Operation Cryptosweep,” and was announced at a meeting of the North American Securities Administrators Association (NASAA). Among the agencies taking part are the Tennessee Department of Commerce and Insurance and the Texas State Securities Board. With so much focus having been on how federal regulators would treat Bitcoin and other cryptocurrencies, state-level action has taken many people by surprise. Even though the action was coordinated through NASAA, it still results in state agencies launching their own investigations. With 50 different state regulators each potentially investigating cryptocurrency fraud, this could lead to potentially duplicative actions at the state and federal levels. Just when cryptocurrency businesses thought they had the regulatory lay of the land all figured out, along come the state regulators barging on to the scene. While many of the schemes they are investigating are definitely fraudulent, there is always the chance that, once the real cases of fraud have been rooted out, regulators will turn their attention to legitimate businesses and put pressure on them, as the state of New York has done. Cracking down on legitimate cryptocurrency businesses wouldn’t be a good thing for Bitcoin IRA investors, as Bitcoin investment companies could get caught up in any push for greater regulation. Thankfully regulators’ concerns at the moment seem to on combating legitimately fraudulent schemes, not on enhancing existing regulations. As long as that remains the case, Bitcoin investors should have nothing to fear.
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