President Trump wants to “open up workers’ retirement plans to his pet industries,” said Sam Gustin in The New Republic. The Labor Department recently proposed a long-awaited rule that would shield 401(k) plans investing in crypto and private equity and credit markets from getting sued over excessive risk—no minor concern since crypto prices have cratered in the past six months. “The stakes are enormous.” A 1% shift of funds would flood “more than $100 billion in new capital” into troubled sectors in desperate need of a bailout. This is just another way for Trump, whose family has billions of dollars in crypto, to use the presidency as a “giant ATM for himself, his family, and his cronies.”

Actually, the Labor Department’s proposal will make “retirement better for millions of Americans,” said Charles E.F. Millard in The Wall Street Journal. The idea is to let “fiduciaries be fiduciaries” and protect them from “frivolous litigation” when they seek the best investments. If the plan goes ahead, 401(k)s will look “more like traditional defined-benefit pension plans,” in which investment management and risk management was left to the employer, who could then “use the actuarial law of large numbers to pool longevity and investment risk and provide an income that retirees could count on.” Critics on the Left say the little guy will get bamboozled” as huge swaths of people’s hard-earned savings get shoved “willy-nilly” into risky assets. But “that’s just politics.” This proposal “is all about retirement security” and freeing professionals to find “lifetime income solutions” for their clients.

Retirement plans are long overdue for an update, said The Washington Post in an editorial. Most existing rules date to 1979, long before cryptocurrencies and other digital assets existed, and they have deprived employees of the “chance to gain more of a stake in the entire U.S. economy.” The private capital market grew from “$2 trillion in 2008 to $13.7 trillion in 2023”—why shouldn’t workers get a piece of that? Sure, investing everything in such assets “would be a bad idea,” but diversifying portfolios with 5% here and there reduces portfolio risk as opposed to adding to it.

This is no time to expose retirement funds to the private credit market, said Alan Rappeport and Colby Smith in The New York Times. “Cracks have begun showing” in the $3 trillion market as funds start to cap investors’ redemption requests. Private loans are already at risk of defaulting at rates not seen since the pandemic, and the situation will only get worse as AI scrambles the prospects for software firms. Some economists now see “echoes of the run-up to the 2008 financial crisis.” If Americans’ wealth gets bound up in the fate of these funds, a “broader private credit meltdown could become a political liability for Trump.”

A British computer scientist who pioneered a forerunner of cryptocurrencies has denied reports that he is Satoshi Nakamoto, the pseudonymous creator of Bitcoin.

An investigation by The New York Times used biographical details and writing style comparisons to make the case that Adam Back was the cryptocurrency’s enigmatic founder.

Who is Adam Back?

Back, a 55-year-old computer scientist from London, “has long been seen as a potential candidate to be Nakamoto”, said The Times. “A pioneer of early digital asset research in the 1990s”, he “has a long-standing background in cryptography, the techniques used to secure and verify digital information”. This includes developing Hashcash, “a proof-of-work system that later influenced Bitcoin” and was referenced by Nakamoto in his Bitcoin “white paper”.

Back dismissed The New York Times’ use of writing analyses to link him to the elusive Nakamoto as “a combination of coincidence and similar phrases from people with similar experience and interests”. In reference to the claim that he disappeared from Bitcoin message boards when “Satoshi” was at his busiest, Back insisted that he “did a lot of yakking” on the forums at the time. “I’m not Satoshi,” he said.

Why is Nakamoto’s identity a secret?

Since Bitcoin launched in 2008, Nakamoto has chosen to stay anonymous. All their communication was written under their pseudonym and no verifiable personal details have ever been released or revealed. Since 2011, they have given no public statements at all, their seeming disappearance giving them a “cult-like status among crypto enthusiasts”, said The Times.

This anonymity was very on-brand for Bitcoin. The cryptocurrency was designed to have no central authority; if the identity of a real person were known they could become a leader or figurehead, which might contradict the founding principle of decentralisation. There is a security element, too: Nakamoto is thought to own $78 billion worth of bitcoin, so remaining anonymous lessens the risk of extortion or kidnapping.

It’s also possible that the mysterious founder is not one person, but rather a team of developers or cryptographers. Either way, the years of speculation have added to Bitcoin’s profile and acted as a useful indirect marketing tool.

Has anyone else been suggested?

In 2014, Newsweek identified a Japanese-American systems engineer called Dorian Satoshi Nakamoto as the creator of Bitcoin. He disputed this, and the claim has “largely been debunked”, said the BBC.

The following year, Wired suggested Nakamoto could be a pseudonym for Australian computer scientist Craig Wright. Unlike Back and Dorian Nakamoto, Wright went public to assert he was indeed Nakamoto, until a UK High Court judge ruled he was not the Bitcoin founder and barred him from continuing to claim he was.

In 2024, an HBO documentary claimed that Canadian crypto expert Peter Todd was the real Nakamoto, a suggestion he described as “ludicrous”.

Crypto is supposedly the currency of the future, but it is not doing so well presently. The sector has lost more than $1 trillion in value over the last few weeks.

The crypto industry is having a “terrible, horrible, no good, very bad month,” said USA Today. Bitcoin has lost more than 10% of its value for the year, dropping from a high of $126,000 in October to under $90,000 last week. The drop in digital currency values is due to a “whirlwind of factors” that include shaky showings for artificial intelligence and technology stocks amid growing concerns about the overall economy. “No one can say” when the dust might settle.

“It was supposed to be crypto’s year,” said The Wall Street Journal. Since 2025 brought a “crypto-loving White House, Wall Street adoption and friendly legislation,” it seemed poised to erase the industry’s regulatory obstacles. Instead, the “sky-high expectations of a golden age” have foundered. Cryptocurrency’s original reputation was as an “antiestablishment asset” coming out of the Great Recession. Now the sector is trying to “go legit” but having trouble shedding its standing as the “deranged, foul-mouthed little sibling of Wall Street.”

What did the commentators say?

“Brutal” selloffs in the crypto sector happen “every few years, or whenever sentiment snaps,” said Emily Nicolle at Bloomberg. But those previous cycles did not match the “speed and scale” of crypto’s collapse in recent weeks. The difference this time is that crypto is now “woven into the fabric of Wall Street and the broader public markets.” That means its fate is now “tied to AI-fueled market optimism.” Amid growing fears of an AI bubble, though, it does not take much prompting to “spook investors into selling.”

Crypto in recent years has gone from an “object of mockery” to “broadly accepted, even encouraged” by mainstream financial institutions, said The Economist. That victory actually poses a problem. The “wider acceptance” has deepened crypto’s links to the broader financial markets, so that the “pain from a crypto crash will be felt more widely than in the past.” A government intervention seems remote, but “surprises can never be ruled out” in politics and in crypto.

What next?

Crypto believers see it as a “safe store of value against inflation and rising national debt,” said Marketplace. But the current instability comes amid “sticky inflation and a rising national debt.” The sector’s growing acceptance on Wall Street means your 401(k) probably includes some crypto stock. If the downturn lasts, that would produce “some knock-on effects on spending” in the broader economy, said Columbia Law School lecturer Todd Baker to the outlet.

There are now some fears of a “crypto winter,” said MarketWatch. But other observers say the sector is likely still in solid shape for the long term, thanks to its integration with financial markets. Banks like J.P. Morgan now accept crypto assets as collateral. We are not seeing a crypto winter, said Frontier Investments CEO Louis LaValle. “I think we’re watching bitcoin grow up.”

The Governor of the Bank of England, Andrew Bailey, has softened his sceptical views on the future of stablecoins in the UK, saying it would be wrong to dismiss the cryptocurrency “as a matter of principle”. Writing in the Financial Times, Bailey recognised their potential for “innovation in payments systems” but warned that the new technology “must still answer old central banking questions” to maintain public trust in money, which is “critical” to all economies.

What are stablecoins?

Stablecoin is a form of cryptocurrency, the digital currencies operated by private companies or individuals rather than central banks like the Bank of England (BoE) or the European Central Bank. Crypto, which is currently unregulated in the UK, has seen a major rise in recent years, based on risky “speculative trading”, according to the Financial Conduct Authority.

The most popular and well-known stablecoin is Tether (USDT), with other leading stablecoins including USD Coin (USDC-USD) and Stasis Euro (EURS-USD).

How is it different from other cryptocurrency?

Unlike cryptocurrencies like Bitcoin or Ethereum, which are completely detached from centralised financial institutions, stablecoins are “pegged” to tangible assets, like US dollars, the British pound, or gold prices.

They are designed to hold a steady value, only rarely dipping above or below a designated ratio. For example, a stablecoin with perfect efficiency to the US dollar, would consistently value one “coin” as one dollar. Some stablecoins have a reserve controlled by an algorithm to generate more coins or remove coins according to supply and demand.

Why is the UK government interested in it?

The market for this category of cryptocurrency is already valued at $200 billion (£148 billion) globally. With London responsible for 40% of foreign exchange turnover, the prospect of formal UK participation in stablecoins is an attractive one, according to a report by Innovate Finance.

The attraction of stablecoin is considerable. It bypasses traditional currency conversions, and facilitates “more predictable” and “lower-cost” payments internationally, said Yahoo Finance.

The government is intent on driving forward “developments in blockchain technology”, including stablecoins, Chancellor Rachel Reeves said in her Mansion House speech in July.

The BoE aims to publish a consultation paper, setting out a blueprint for the “UK’s systemic stablecoin regime”, to ensure the UK will “reap the benefits” of the new currency, said Bailey in the FT. The BoE had previously proposed that stablecoin holdings would be capped at as little as £20,000, with no interest offered to customers.

The European Union, Hong Kong, Japan (since 2023) and the United States have all implemented rules to make trading more transparent, a step which has been broadly welcomed by the crypto community.

What are the concerns?

Stablecoins can still be risky, even when pegged to tangible assets. If a stablecoin strays too far from its target value and this cannot be corrected, it can be “depegged”.

On a larger scale, if stablecoins were left unregulated, central banks could be caught on a tightrope. If a stablecoin crashes, the fallout could trigger “fire sales” – rapid sales at significantly low prices due to financial distress – to establish an equilibrium, said Bloomberg.

Conversely, if stablecoins “prove their worth”, allowing users to exchange and store vast sums of money, the “monetary monopoly” of the banks would be undermined.

And as with other cryptocurrencies, an unregulated system can be exploited for illegal activity. Trading is “anonymous, fast and cheap”, making stablecoins highly attractive for criminals to use to conduct scams or launder funds.

Quantum computing, the prospect of advanced computations beyond the binary limitations of ones or zeros, may be the harbinger of advancements to come. But cryptocurrency adherents are starting to wonder if their digital monetary system is ready for what this new age of data processing might bring.

Preparing for a 'potential catastrophe'

The "technological leap" of quantum computing could "pose new risks" to cryptocurrency users and potentially "undermine the cryptographic backbone of blockchain," said quantum computer developer Yuval Boger at Forbes. Although the "immediate risks are low," the future could see "large-scale, error-corrected quantum computers" capable of running algorithms that could break the elliptic curve cryptography (ECC) used by bitcoin as one of the industry's main security protocols.

While current quantum computers "aren't yet powerful enough," the "risk is real in the long term," said Isaac Kim, a computer science professor at UC Davis, in a recent interview with the crypto research firm Presto Labs. Despite "slight differences" between the levels of risk for each different type of cryptocurrency, "any blockchain that uses ECC, like bitcoin and ethereum, are vulnerable."

"Crypto is underprepared," researcher Rick Maeda said in an interview with CoinDesk on Monday. "The biggest risk is just waiting too long."

Although some members of the crypto community are willing to "shrug off" the looming threat posed by quantum computing, "behind closed doors," a number of leading figures in the field are "concerned about a potential catastrophe," said Decrypt. Experts now believe the industry has "less than a decade, even a handful of years" to enact "contingency plans." And even that might be optimistic: A new paper published last month by Google Quantum AI researcher Craig Gidney suggests that the RSA encryption used by bitcoin could be overcome using "20 times fewer quantum resources than previously estimated," Benzinga said.

'Post-quantum' protections

Given how serious the threat to cryptocurrency from quantum computing is, a "proactive approach" is "critical" to preempt disruption to an industry worth hundreds of billions of dollars annually, researchers from the University of Kent's School of Computing said in a late 2024 study detailing what such an approach might look like. The only way to prevent wide-scale quantum disruptions for an asset like bitcoin, the authors said, is "to upgrade — replace — the currently used public-key cryptosystems" to ones that have "no known vulnerabilities to quantum attacks." This is known as "post-quantum cryptosystems."

That type of complete "protocol update" would "take the cryptocurrency offline for 76 days," Fortune said. More "realistically," bitcoin could dedicate just a quarter of its server space to the upgrade — allowing users to "continue to mine and trade at a slower rate" — in which case the downtime would last an estimated ten months.

Broadly, that downtime risk speaks to what Maeda said is a "key barrier" to addressing the looming challenge. "It's difficult to create a way to monetize this," Maeda said to CoinDesk. But those preparations need to happen sooner rather than later, he added. "We can't wait until the threat is real to start taking it seriously. By then, it's already too late."

The relentless "mechanical howl" of a cryptocurrency mining facility has become "the soundtrack to life for hundreds of residents" in Granbury, a small rural town in Texas, said The Guardian.

"It echoes across agricultural land and forests, chasing away deer. It seeps into walls, vibrating bedrooms and dinner tables." One resident said it was as though a "jet engine is forever stationed nearby".

Bitcoin mining has exploded in the US over the past decade, particularly in the wake of Donald Trump's re-election to the White House and his embrace of cryptocurrency. But it's an energy-intensive process: the powerful computers that create and protect the cryptocurrency need fans on the go constantly to cool them down. And across rural, mostly Republican towns, residents are getting sick of the noise – and getting sick, full stop.

The 'mental and physical' toll

Much of America's Bitcoin mining industry is in Texas, said Time, "home to giant power plants, lax regulation, and crypto-friendly politicians". In Granbury, where Marathon – one of the world's largest Bitcoin holders – has a mine, a group of people are being "worn thin from strange, debilitating illnesses". Some were experiencing fainting spells, chest pains, migraines and panic attacks; others were "wracked by debilitating vertigo and nausea. The mine is causing "mental and physical" health issues, said one ears, nose, and throat specialist based in Granbury. "Imagine if I had vuvuzela in your ear all the time."

Their "singular grievance": the "dull aural hum" of the nearby Bitcoin mining facility. According to local law enforcement, it was "exceeding legal noise ordinances on a daily basis" when it first opened in 2024, said Time. Similar medical complaints were registered near facilities in Arkansas and North Dakota. However, a separate third-party study commissioned by the county in November 2024 showed that sound levels stayed below legal limits.

While there are not yet any major medical studies on the impact of living near large Bitcoin mines and data centres, scientists are increasingly linking "prolonged exposure to noise pollution with cardiovascular damage".

The political battleground

Bitcoin mining "boomed in the US" partly due to China's "crackdown" in 2021 over environmental concerns, said the BBC. Now at least 137 Bitcoin mines exist across 21 US states, and there are reports of "many more planned", attracted by "record-high cryptocurrency prices and cheap and abundant energy" to power the computers.

Trump said he wants to turn the US into the world's leading crypto-miner, but this has "implications for rural communities". In some places, his crypto-friendly policies are "meeting resistance" from the very voters who "drove his return to the White House".

This conflict between Republican allegiance and Bitcoin resistance is "being played out nationwide", which could spell trouble for Trump's pro-crypto agenda. Officials in Republican-voting areas are "likely to find themselves coming under continued pressure" from local residents who oppose Bitcoin mining expansion. "If this happens, could Trump's crypto dreams be derailed in his own backyard?".

The first legal battles around the health impacts of Bitcoin mining are "bringing home the realities of an industry" that at first glance seemed "removed from the real world".

In 2021, El Salvador caught the world's attention by becoming the first country to make cryptocurrency legal tender, alongside the US dollar.

Last December, as the price of bitcoin broke $100,000 (£77,765) for the first time, the young president Nayib Bukele posted on social media that the Central American nation's crypto holdings had more than doubled in value. But now – as the price for securing a $1.4 billion (£1.1 billion) loan deal from the International Monetary Fund – the country has had to roll back its controversial bitcoin policies.

Salvadoran businesses are now free to decide whether or not to accept bitcoin, and taxes are no longer payable in the cryptocurrency. "The potential risks of the bitcoin project will be diminished significantly, in line with Fund policies," the IMF said. Effectively, bitcoin's days as legal tender in El Salvador are over.

'Cryptocurrency paradise'

Bukele's embrace of bitcoin was part of an attempt to "rebrand the tiny and impoverished" nation as a "surfing and cryptocurrency paradise", said the Financial Times. He announced plans to build a "Bitcoin City" in the jungle, "powered by geothermal energy on the slopes of a volcano".

The president claimed cryptocurrency would bring the "70% of Salvadorans who do not use traditional banks into the financial system", said France24. "Swatting away warnings about volatility risks", he ploughed an "undisclosed amount of public money into cryptocurrencies".

But the IMF always opposed Bukele's adoption of bitcoin, said the BBC, and warned that it would be an obstacle to any financial assistance. For a long time, the Salvadoran economy has "teetered on the edge of default", as the IMF stayed "wary" of lending to the country while the volatile currency – with its "potential use in money-laundering and other crimes" – was legal tender, said The Economist.

'More costs than benefits'

El Salvador is still "a focal point for the global bitcoin community", said Forbes. But the mood is now "somewhat subdued" among crypto enthusiasts, one local journalist told the news site.

"A lot of international bitcoiners moved to El Salvador for the Bitcoin Law; some Salvadorans returned," said Joe Nakamoto. "Now, doubt about the country's future with regards to bitcoin has crept in."

But bitcoin's "demotion may be more of a blessing than a concession", said The Economist. Crypto has brought El Salvador "more costs than benefits". The much-promised investment and tourism "have been small beer", while financial gains have been "meagre at best", because the currency "never really caught on". According to a poll published in January by Universidad Centroamericana, 92% of Salvadorans didn't use it at all last year.

Overall, the policy has cost $375 million (£291 million), according to estimates by rating agency Moody's – a sum that "far exceeds the profits on bitcoin holdings, which could still evaporate". There is still no Bitcoin City.

Bukele's "obsession with cryptocurrency has done little to ease El Salvador's economic woes", said the magazine. He is "just the latest crypto-utopian to see his wild ideas dissolve on contact with reality".

What happened

Bitcoin topped $100,000 for the first time Wednesday, hours after President-elect Donald Trump said he would nominate cryptocurrency advocate Paul Atkins to chair the Securities and Exchange Commission.

Who said what

Wednesday's high-water mark — $103,713 for a single bitcoin — capped an "extraordinary rally since Election Day," when the world's largest cryptocurrency was trading at $69,374, The Wall Street Journal said. A "wave of campaign spending" by crypto firms helped send 298 pro-crypto lawmakers to Congress and Trump to the White House. Trump in turn promised to make the U.S. "the crypto capital of the planet" and create a "strategic reserve" of bitcoin.

The crypto industry wants legislative and regulatory changes that, "generally speaking, aim for an increased sense of legitimacy without too much red tape," The Associated Press said. Atkins, a former SEC commissioner who co-chairs the Chamber of Digital Commerce's Token Alliance, is expected to be much friendlier to the industry than outgoing SEC Chair Gary Gensler.

What next?

Bitcoin, worth about $5,000 in early 2020, "now stands as arguably the most successful investment product of the last 20 years," The New York Times said. It also "remains prone to extreme volatility," significantly "contributes to climate change" has "long been used by scammers and thieves." But "who can prohibit it?" Russian President Vladimir Putin asked Wednesday, according to Reuters. "No one."

Donald Trump's relationship with the tech industry has oscillated over the years, and now that he is on his way to a second term, Big Tech is bracing itself for what that could mean for their businesses over the next four years.

After he became president for the first time, the tech industry "mobilized quickly to resist some of his anti-liberal policies," Bloomberg said. But this time around, "things in the Valley feel different." Eight years after the 2016 election, it is "unclear what appetite for resistance remains." In fact, on the morning after the election, a "procession of tech CEOs" all lined up to "digitally kiss the ring." They posted "unnervingly similar messages" congratulating him and "pledging to work together to boost American innovation." The cautious messaging greatly contrasts the response to his first term, signaling a shift in Silicon Valley.

Elon Musk and crypto could win big

No matter who they voted for, "nearly everyone in tech will feel the consequences of a second Trump term," said Kevin Roose at The New York Times. His first term was "wild and unpredictable," creating a chaotic environment that "even the biggest tech companies struggled to navigate." It is likely that "more chaos and uncertainty lie ahead." Of all the leaders in Big Tech, no one stands to benefit more from Trump's win than Elon Musk, "who will become the most powerful businessman in America (if he wasn't already)." Trump has suggested he might make him the head of a new department of government efficiency that would cut the federal workforce, putting Musk in the "enviable position of getting to pick who regulates his companies," including Tesla and SpaceX. It is also safe to assume that the "crypto industry will get most of what it wants in Washington," said Roose, beginning with the ouster of Gary Gensler, the head of the Securities and Exchange Commission, who has become a "villain among crypto companies for his tough regulation efforts."

Though he previously rejected Bitcoin as a "scam," Trump seemed to embrace crypto on the 2024 campaign trail. While speaking at the Bitcoin 2024 conference, he promised to "cement the U.S. as the foremost Bitcoin mining powerhouse, establish a national Bitcoin stockpile, and appoint a Bitcoin advisory council if reelected," said Wired. The cryptocurrency's prices soared to a record high above $82,000 on Monday as traders anticipate a "favorable regulatory environment" under Trump, said Reuters.

Trump has also promised to commute the sentence of Ross Ulbricht, creator of darknet marketplace Silk Road, who is currently serving life in prison. The severity of Ulbricht's sentence is "widely considered to be disproportionate by Bitcoiners, who have long called for his release."

Meta, Google, and AI regulation might take a hit

Trump may have publicly cozied up to Musk, but other tech leaders are "in his crosshairs," said Business Insider. While campaigning, Trump "threatened retribution against some tech companies, including jailing Meta's chief, Mark Zuckerberg." In an August post on Truth Social, he threatened to imprison "election fraudsters" if he was elected in November, name-checking the Meta CEO. Still, it is "unclear whether Trump will follow through on his threats." Google was also heavily criticized by Trump throughout his campaign. In another Truth Social post, he accused the platform of being biased in favor of his opponent. He threatened to use the Justice Department to prosecute Google "at the maximum levels" during his second term.

The effects of a second Trump administration "will be acutely felt in the AI industry," which has "largely rallied against federal policymaking," Kyle Wiggers said at TechCrunch. While campaigning, Trump repeatedly said he plans to dismantle Biden's artificial intelligence policy framework and has "aligned himself with kingmakers who've sharply criticized all but the lightest-touch regulations." Trump also promised policies that would "support AI development rooted in free speech and human flourishing," though he did not detail what that would look like.

On top of deregulation, "Trump's trade policies could significantly affect AI development," Benj Edwards said at Ars Technica. His proposed 10 percent tariff on U.S. imports and a 60 percent tariff on Chinese products might "impact the AI industry's access to necessary technology and capital," potentially "interrupting the supply of GPUs that are necessary to accelerate AI training and inference tasks." Trump "rarely discussed AI during his campaign," but his "other platform positions could influence the industry." His plans to restrict H-1B visas and expand oil and gas development may "affect AI companies' ability to recruit talent and access computing resources."

From bitcoin and ethereum to tether and dogecoin, there are a wide variety of cryptocurrencies to choose from. For many who have opted in, crypto has yielded impressive returns. However, for others, it has led to devastating losses, not to mention encounters with scams and fraud in the industry.

So is this buzzy digital currency worth adding to your investment portfolio, or is it better to steer clear? We lay out the pros and the cons to help you decide.

What exactly is cryptocurrency?

Cryptocurrency "is a digital currency, such as bitcoin, that is used as an alternative payment method or speculative investment," meaning an investor hopes to profit from a change in value when they go to sell, said NerdWallet.

Typically, "cryptocurrencies exist on decentralized networks using blockchain technology — a distributed ledger enforced by a disparate network of computers" — and "are generally not issued by any central authority," said Investopedia.

What are the upsides of investing in crypto?

Depending on the type of investor you are and your tolerance for risk, crypto can offer upsides as an investment, including:

It is a decentralized currency. For many, a major upside of crypto is that it is a "decentralized currency, meaning it's not regulated by a single government or central bank," said Credit Karma. In other words, "governments can't control [crypto] like they can with centralized fiat currency such as the U.S. dollar."

It offers diversification. One potential benefit of crypto for your portfolio is that owning some "can increase your portfolio's diversification since cryptocurrencies such as bitcoin have historically shown few price correlations with the U.S. stock market," said The Motley Fool. Diversification is key when investing, as it spreads your portfolio across a number of different types of assets, buffering against market volatility.

It may provide sizable returns. Though it is far from guaranteed this will happen, "several cryptocurrencies have seen their prices skyrocket since first being introduced," said Bankrate. This translates to "the potential for large gains on your investment." Plus, since "the sector is quite new," there are "potentially many more changes that may come down the line to make investing in cryptocurrencies even more attractive," said Corporate Finance Institute, a financial education website.

It is accessible. Another benefit of crypto is that it "can be easily accessible to everyone around the clock, even those without access to traditional banking," whether due to a checkered banking history, lack of documentation or lack of proximity to bank branches, said Fidelity. Further, "crypto transactions can have lower fees and faster transfer times than some traditional bank transactions." One caveat: If you lose your password to your digital wallet, there is no recovery process like for other financial products and accounts. Instead, "if you lose your password, you lose access to your bitcoin (and other cryptocurrencies stored in it)," said AARP.

Are there risks or drawbacks to crypto?

While past tales of people making bank on crypto may seem tempting, it is important to heavily weigh the downsides of this investment as well:

It is extremely volatile. While risk of loss is possible with any type of investment," crypto's elevated volatility makes it an even bigger risk factor," said Forbes. As just one example, "Bitcoin has experienced rapid surges and crashes in its value, climbing to nearly $65,000 in November 2021 before dropping to just over $20,000 a year and a half later," said Investopedia. Further, said Bankrate, since cryptocurrencies "aren't backed by anything," that means "the price they trade at is determined by the whims of traders."

It is susceptible to hacks and scams. Fraud and hacks are both common with crypto. That is because "though cryptocurrency blockchains are highly secure, off-chain crypto-related key storage repositories, such as exchanges and wallets, can be hacked," said Investopedia. In the past, many exchanges and wallets have been hacked, "sometimes resulting in the theft of millions of dollars in coins." Further, there are "websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus," which can deceive less experienced investors, said Charles Schwab.

It lacks government regulation. While some may see it as an upside that crypto is largely unregulated, that can bring downsides as well. "Governments around the world have not yet fully reckoned with how to handle cryptocurrency, so regulatory changes and crackdowns have the potential to affect the market in unpredictable ways," said NerdWallet. Leaving crypto unregulated also puts "investors at risk of market manipulation and fraud," said The Wall Street Journal.

It has a major environmental impact. Crypto is often made through mining, which "involves solving complex mathematical problems to verify transactions and create new blocks in the blockchain," said Credit Karma. This "requires lots of computational power, which in turn requires a large amount of energy." In fact, according to "a comparison by the University of Cambridge," said NerdWallet, "worldwide bitcoin mining consumes more than twice as much power as all U.S. residential lighting." That said, not all types of crypto have the same level of carbon intensity, and "many crypto mining companies are using renewable sources of power and have committed to carbon offsetting," said Morgan Stanley.

"If bitcoin is going to the Moon, I want America to be the nation that leads the way."

Channelling his inner JFK, Donald Trump marked his full conversion to the cult of cryptocurrency by vowing to turn the US into a "bitcoin superpower" if he is returned to the White House in November.

Using what The New York Times called the same "rhetoric of persecution" that he has applied to himself and his supporters to appeal to cryptocurrency enthusiasts who want to see less regulation, the Republican presidential nominee told a sell-out conference in Nashville that he would end Joe Biden and Kamala Harris's "anti-crypto crusade".

The speech capped a "complete about-face" by the former president towards "an asset class he considered a crime-riddled scam while he was in office", said Bloomberg. It also marked what is "more and more looking like the merger of a once-outsider political machine with an outsider financial movement that is also punching its way into the mainstream".

Why has he changed his view?

"Conventional wisdom has it that this gambit is simply a classic Trumpian transactional relationship," said Bloomberg.

With November's presidential election likely to go down to the wire, both sides are looking to pick up money and votes wherever they can. But with the Democrats still sceptical of the famously unregulated crypto market, Trump and his team have sensed a wedge issue they can exploit. 

His dramatic U-turn from bitcoin sceptic to one of its most vocal cheerleaders has already won him the backing of influential figures such as Tesla and X owner Elon Musk as well as a growing army of online fans.

Yet something else has also played an important role in Trump's conversion to crypto believer, said Bloomberg: "flattering images of himself". "Simply put, he fell in love with Trump-themed nonfungible-tokens (NFTs) – and the supporters who bought them – and that passion has turned into a broader appreciation for the industry."

What has he promised to do?

Despite previous warnings that bitcoin could undermine the position of the US dollar in the global economy, Trump has now promised a series of measures to deregulate and grow the cryptocurrency market.

He vowed to end efforts by the US government to create a central bank digital currency, an initiative that cryptocurrency enthusiasts have "long been critical of", said the NYT, vowing instead to establish a "bitcoin and crypto presidential advisory council". He said he will order the government to not sell the crypto it has seized in criminal cases and instead use it as the basis for what he called a strategic national bitcoin reserve.

He also announced that on his first day in office he would fire US Securities and Exchange Commission chairman Gary Gensler, who has cracked down on the crypto market after the FTX exchange collapsed in 2022 and its founder, Sam Bankman-Fried, was convicted of fraud. Trump also promised to commute the life sentence of Ross Ulbricht, the mastermind behind the dark web Silk Road marketplace, who has become "something of a martyr" among cryptocurrency enthusiasts, said the NYT.

What impact could this have on the election?

Trump has sought to convey his new-found support for crypto to both working-class voters and in the context of super-power politics, said Quartz. He described bitcoin as "the steel industry of 100 years ago" and warned that if it was not mined, minted and made in the US then it could leave the door open for the likes of China to lead the way.

But while it may seem a canny realignment, there is "political risk" for Trump to be so closely associated with such a notorious asset class, said Bloomberg, "should another FTX-like situation arise – or even a simple downturn in prices that sours sentiment".

There is also a risk for the crypto industry itself to be so ideologically aligned with the Republican Party, said Hilary Allen, a professor at American University's Washington College of Law. "That may prove to alienate some users, given that crypto itself is a pretty ideological thing to invest in," she added. Trump's involvement "may increase appeal among Republican users, but it may alienate Democrat users".

Paraguay is no stranger to "drug busts and bank heists" but in recent years the South American country has become a "mecca" for a very different type of crime: illegal Bitcoin mining.

Power worth around $60m a year, "enough to light up a city", is being stolen by unlicensed cryptocurrency miners, said The Economist, and there is heated debate over how to tackle the issue.

Rotting food

Besides "soybeans, timber and a massive cow population", Paraguay has "very cheap electricity", said El País, and this is why "more and more Bitcoin generators" are heading here.

Paraguay's massive Itaipú and Yacyretá hydroelectric dams, powered by the "very long and mighty" Paraná and Paraguay rivers, theoretically generate plentiful energy. Looking to capitalise on the excess supply, the government has encouraged cryptocurrency operators to set up in Paraguay in exchange for paying a tariff to ANDE, the state energy firm. Local laws offer mining companies other benefits, including "tax exemptions and a light regulatory framework".

However, the licensed crypto generators who have set up shop in Paraguay have been joined by dozens of cowboy operations that don't pay the tariff, and engage in energy theft that "annoys many Paraguayans", which is now starting to impact the country's energy security. The country’s "creaking transmission lines" are "increasingly overloaded" and Asunción, the capital, suffers from regular power cuts, causing "food to rot and office workers to broil in the sub-tropical heat", said The Economist.

Alarming outlook

The government had declared what it calls an "all-out attack" on crypto cowboys. Earlier this month, the Senate approved jail sentences of up to 10 years for energy thieves.

Authorities recently confiscated 450 Bitcoin mining machines  – bringing the total number seized from illegal operators this year to over 10,000. During a raid in May, police and prosecutors found more than 2,700 computers in a criminal crypto compound that had been operating less than two miles from an ANDE substation. The energy firm is investigating claims that seven of its engineers illegally installed crypto farms, complete with their own power transformers.

The recent raids mean that Paraguay is now "keeping pace" with a regional crackdown which has seen Venezuela take similar steps, said Cryptonews, but the country's future relationship with crypto remains unclear. Advocates claim that, properly regulated, crypto mining could benefit the Paraguayan economy "greatly" but the central bank has warned that it could be used to launder drug money and finance terrorism.

A group of "industrial players" has advised against moves that could "kill off" the sector, claiming that a clampdown could hurt Paraguay's standing in the international business community, cost the nation $1.5 billion and jeopardise "hundreds" of jobs.

Just like the nation's soya bean and cattle industries, hydroelectric output is "vulnerable to climate change". As drought and heatwaves worsen, Itaipú will produce less energy and the cooling systems required by crypto farms will demand more. Official projections suggest Paraguay's electricity surplus will be used up by as early as 2030. "The outlook is alarming," Lis García, co-author of a report by Tedic, a local think-tank, told The Economist.

The price of bitcoin this week topped $50,000 for the first since the end of 2021, marking a dramatic return for the world's most popular cryptocurrency. 

The rise was fuelled by "a rush of new-investor enthusiasm" and growing hype about a "cryptic-sounding" event known as "the halving" said CNN Business. Bitcoin's comeback has been "one of the more surprising market stories" of recent months, said Yahoo Finance, and followed an "epic" collapse that "burned many investors and took down some of the industry's biggest names".

'A remarkable comeback'

Since its 2009 launch, bitcoin has amassed an army of "loyal proponents who only see it rising in price over long timeframes", said The Times Money Mentor. These fans include some of the world's most respected trading firms, despite the digital currency's many ups and downs.

Bitcoin currently remains a "way off its all-time high" of almost $69,000, in November 2021 said The Independent. But this week marked a "major milestone" in its recovery from below $20,000 at the start of last year.

Bitcoin's resurgence has has been "remarkable", agreed CNN Business, with the price surging by more than 200% from a 2022 low of $16,000.

The latest rise has been driven by an influx of demand and by new money from investors in newly launched bitcoin exchange-traded funds. In January, the US Securities and Exchange Commission (SEC) approved the first ever spot exchange-traded funds (ETFs) for bitcoin, opening up the asset to billions of dollars' worth of institutional investment.        

For Wall Street to finally start trading ETFs of bitcoin represents a "new era in the world of cryptocurrencies" said New York magazine. ETFs are "part of the finance industry's lifeblood". And crypto ETFs make it easier for financial institutions and pension account holders to trade and profit from digital currencies "without having to worry about encryption keys, or getting hacked, or anything like that".

'Not for the faint-hearted'

Some analysts believe the current rally could see the price of bitcoin climbing to a record new high, driven in large part by an upcoming "halving", in April. The event is "hard-coded into bitcoin's underlying network", said The Independent, and takes place roughly every four years, when rewards for mining the cryptocurrency are "slashed in half". This reduces the rate of new coins entering circulation, pushing the price of bitcoin higher.

Previous halvings have preceded record-breaking price rallies, and the next promises to deliver another "scorcher for crypto", said Antoni Trenchev, the co-founder of crypto lender Nexo Capital. “Now that $50,000 has been topped, $69,000 followed by $100,000 look achievable in 2024," he told CNN Business. 

Investment bank Standard Chartered is also predicting that the bitcoin price will reach the $100,000 mark by the end of this year.

Yet experts warn that bitcoin remains hugely volatile. January was "crypto in a nutshell", said Trenchev. Following the endorsement of a spot bitcoin ETF, the cryptocurrency’s price soared to $49,000, but then dipped to $38,500. New investors who endured that "baptism of fire" may now be celebrating this week's gains, but crypto is "not for the faint-hearted".

The legend of Satoshi Nakamoto, the anonymous bitcoin founder, is a mystery built for the digital age. His true identity has become mythologized, and while no one knows who he is, he's become a symbol of a new era of freedom in finance and technology. The heat is now on an Australian scientist, who has claimed for years to be the enigmatic founder. 

The hunt for Satoshi Nakamoto and the Craig Wright problem

The murky history of bitcoin began in 2008, in the "shadow of a global financial meltdown," when someone under the name Satoshi Nakamoto released a white paper outlining the vision for "a new electronic money and peer-to-peer payment system that would obviate the need for troublesome intermediaries like banks," Wired said. The enigmatic creator sent the first bitcoin transaction in 2009, and little more than two years later, they disappeared from the internet. "The hunt for Nakamoto began," said Wired. 

The absence of a leader has helped bitcoin flourish since Nakamoto disappeared, making it "robust" by forcing it to evolve unfettered in an anarchistic system, software developer and early bitcoin adopter Jameson Lopp said to Wired. "Free from the overbearing influence of a founder, anyone that volunteered their time to work on bitcoin could have a say in its direction," Wired said. But one man's claims threaten to complicate that ecosystem. 

Nakamoto's name has been linked to many people, including Australian computer scientist Craig Wright, who orchestrated an "elaborate but unconvincing demonstration" that he was the mysterious creator in 2016, Billy Bambrough said at Forbes. Since then, Wright has spent years "dragging naysayers through the courts in a largely unsuccessful attempt to legally be recognized as bitcoin's creator." With the help of former gambling billionaire Calvin Ayre,  Wright has sued bitcoin developers, social media users, podcasters, and anyone else who doubted the credibility of his claims. However, last year, a leaked email hinted that Ayre's faith in Wright was waning.

The high-stakes lawsuit that could finally solve the mystery

Three years ago, a nonprofit coalition of crypto and tech companies called the Crypto Open Patent Alliance brought a lawsuit against Wright, asking the court to officially declare that he is not Nakamoto. Wright has leveraged his "substantial financial backing" against crypto developers based on a lie, "many of whom cannot even afford to present the most basic defense," Coinbase Chief Legal Officer Paul Grewal said on behalf of COPA. "This is the exact opposite of the vision that animated Satoshi's white paper in 2008," he said. "It's a drain on the talent and spirit of the crypto economy as a whole, and it needs to stop — now." The case finally went to trial in the U.K. on Feb. 5. 

Unlike other recent crypto-related lawsuits, like Sam Bankman-Fried's fraud trial, "the COPA v. Wright case has attracted little attention," Joel Khalili said in Wired. The case has drawn a small crowd of photographers, journalists, and crypto enthusiasts. "But the case has the potential to be highly consequential." 

A week into the case, the ongoing courtroom tension has "left onlookers astonished," Forbes' Susie Violet Ward said. "Each revelation seems to cast ripples of uncertainty and produce more questions than answers, further muddying the waters." So far, the trial has been a "showcase of detailed technical evidence," Ward said, "punctuated by moments of drama." At one point, Wright exclaimed, "But I AM Satoshi!" The declaration happened when he was cross-examined by Jonathan Hough, who represented COPA. 

In a surprise twist, Wright admitted to the court that some of the documents he presented to prove he was Nakamoto were indeed forgeries, "a revelation that once again sent a wave of disbelief through the courtroom," Ward said. The admission came after COPA's "meticulous" presentation of evidence highlighting "time discrepancies in the documents, such as fonts that were not available when the documents were supposedly created." 

The trial is expected to last about six weeks.

US regulators have approved the country's first investment products set up to directly track the price of Bitcoin.

The US Securities and Exchange Commission (SEC) last week approved the launch of 11 exchange traded funds (ETFs), which follow the price of Bitcoin, and are known as spot ETFs.

The SEC has previously opposed these products, explained MoneyWeek, "claiming the asset is open to fraud and manipulation" but it has given the go-ahead after courts queried its opposition.

Gary Gensler, chairman of the SEC, remains cautious though. He said that while listings from investment providers such as BlackRock, Fidelity and Grayscale were approved, "investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto".

What is Bitcoin?

Bitcoin is the world's oldest and best-known cryptocurrency.

It is a digital token that was launched in 2008 by someone calling themselves Satoshi Nakamoto, explained BBC News, and "remains the most valuable and famous".

The price of Bitcoin and other cryptocurrencies is very volatile though, depending on supply, demand and sentiment. The Bitcoin price hit $70,000 or £50,000 in 2021, before falling to $16,000 in 2022 "as scandals shook the industry", but in recent months it has risen "steadily" to around $44,000.

What is a Bitcoin ETF?

An ETF aims to replicate the performance of a broad index such as the FTSE 100 or individual assets such as shares or bonds.

A Bitcoin ETF gives investors a "regulated way to gain exposure without needing to hold it directly", said The Times.

Cryptocurrencies such as Bitcoin are unregulated, so there is no investor protection if a trading platform collapses or your money is stolen.

A Bitcoin ETF gives you exposure to the cryptocurrency's "huge swings in value", added The Times, but in theory you are still protected by the Financial Services Compensation Scheme if the investment firm behind the ETF were to fail.  

The SEC approval doesn't remove the volatility of Bitcoin though, added MoneyWeek, as the price is "still subject to wild price swings depending on sentiment and there are risks of big losses".

Who can invest in a Bitcoin ETF?

The latest Bitcoin ETFs are only available to US investors. 

There would be "regulatory hurdles" to selling a Bitcoin ETF to UK investors, said Financial News. US-based ETFS are "not permitted" to be sold to UK investors, so asset managers would have to launch "specifically tailored" products for the UK or European market.

The Financial Conduct Authority (FCA) has already "cracked down" on crypto marketing and banned the sale of crypto-backed exchange traded products to UK investors, added ThisIsMoney, and has "made it clear" that it thinks there are risks that come with cryptocurrency investing. This makes the path to any UK approval "a long one".

There are other ways for UK crypto fans to get exposure to Bitcoin.

One option is to invest directly in Bitcoin through an FCA-regulated platform, said Morningstar, or "for those feeling somewhat more cautious", you could buy shares of companies involved or exposed to cryptocurrency mining or blockchain.

Existing crypto investors may also benefit from more money going into Bitcoin, added MoneyWeek, "but it also risks making the value more volatile".

The smartest insight and analysis, from all perspectives, rounded up from around the web: 

Sam Bankman-Fried tried to warn everyone, said David Streitfeld in The New York Times. As he "partied with stars and big shots," the onetime crypto king "always looked awkward, embarrassed and as if he would rather be playing a video game." He frequently conveyed "contempt for what he was doing," appealed for regulation and "seemed to implore the authorities to take a closer look at his companies," FTX and Alameda Research. Still, everyone kept insisting Bankman-Fried, or "SBF," was "off-the-charts brilliant, the entrepreneur who would create the future." Investors, customers and journalists "saw the genius they were told was there." In reality, as we know by now, FTX was "run by a group of hapless young people." Those who actually "sensed something was wrong soon peeled off," leaving a core crew led by Bankman-Fried, who will spend a long time in prison after being convicted last week of seven counts of fraud and conspiracy.

Bankman-Fried represents "the deceit fundamental to the crypto market itself," said Michael Hiltzik in the Los Angeles Times. He expertly "exploited the vacuity of crypto by slathering it over with what sounded like profundities." His marks had nothing to weigh them against, because "there is nothing real about crypto." What’s real is that FTX’s investors have lost as much as $10 billion and SBF is facing a prison term as long as 110 years. This won’t be the last crypto fraud, said Lionel Laurent in Bloomberg. In fact, the market already "is stirring again," and the price of Bitcoin, despite all the negative attention, is back above $35,000.

Bankman-Fried is exactly why crypto needs regulation, said Megan McArdle in The Washington Post. It’s an "ecosystem of people who think they’re far smarter than boring bankers or bank regulators." Bankman-Fried was "better at calculating odds" than most people, "but he still miscalculated a lot — including, on the odds that he might go to jail." Instead of pleading out, he "gambled on a trial" — then doubled down by "opening himself up to cross-examination." As soon "as the prosecutor confronted Bankman-Fried with evidence of his alleged guilt, it seemed obvious that he belongs in jail." Oddly, Bankman-Fried’s downfall might actually restore trust in crypto, said Anita Ramaswamy in Reuters. The swift conviction should be a wake-up call. It may even "cause a collective sigh of relief" from firms using digital currency technology "to solve real problems like streamlining cross-border payments and remittances."

This story isn’t really about crypto or arcane financial instruments, said Josie Cox in The Guardian. It’s about our urge to believe in the next big thing. Too many of us keep "stumbling into the trap of mythologizing shiny new technology and the people who push it," be that SBF or Theranos’ Elizabeth Holmes or WeWork’s Adam Neumann or Nikola’s Trevor Milton. This trial was a good counterweight: In the end, it was about "good old fashioned fraud and conspiracy." We’re looking "for an innovation that would actually change our ailing world," so we ignore all the clues that "things might actually be too good to be true."

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

Sam Bankman-Fried, who ran one of the world's biggest cryptocurrency exchanges, faces decades in prison after he was found guilty of fraud and money laundering.

The trial in New York of the 31-year-old "tousle-haired mogul", who founded the FTX cryptocurrency exchange, "laid bare the hubris and risk-taking across the crypto industry", said The New York Times.

The verdict "capped what prosecutors called one of the biggest financial frauds in American history", said Politico. But commentators are at odds over exactly what it means for the future of the crypto industry.

What did the papers say?

For the "broader cryptocurrency business", the conviction "could provide a long-awaited chance to move forward", said Reuters.

For some in the sector, Bankman-Fried's conviction on seven counts of fraud and conspiracy "points to the end of an era of risky and wrongful practices", and "a more regulated future", said Bloomberg.

But others outside the industry are "taking a much tougher line", arguing that the verdict "confirms crypto as a sector riven with weaknesses that attract criminals, hackers and rogue states".

Bankman-Fried, who was arrested last year after his firm, FTX, went bankrupt, has "done irrevocable damage to this industry", said Sky News, "reinforcing the narrative of a Wild West where consumers have no protection". So it will "take years for the crypto world to rehabilitate its image, if it ever does at all", added the broadcaster.

Jordan Estes, a former prosecutor, told Wired that the US Department of Justice will consider the conviction a "signature victory" and its first high-profile crypto scalp. He was "crypto royalty", which "lends his conviction a symbolic importance".

But "despite widespread predictions of cryptocurrency's demise", there is "still a market for virtual assets", said Reuters, noting that the price of bitcoin has more than doubled this year as "large financial institutions" like BlackRock "seek to make the virtual currency more respectable". 

What next?

Further legal headaches are expected for crypto. After Bankman-Fried "met his fate" with the justice system, "much of the rest of the industry is facing its own legal showdowns with the [US] government", said Politico.

"Crypto giants" like Binance, Coinbase and Gemini are "still heading for courtroom clashes" with regulators that could "prove an even greater peril to the market's future" than FTX’s collapse in 2022.

Closer to home, the UK government unveiled plans earlier this week to regulate the crypto industry in a similar way to traditional financial investments that would require all crypto companies to be authorised by the Financial Conduct Authority (FCA).

But this plan has already come under attack by a former head of the regulator, noted the Financial Times. Charles Randell, who quit as chair of the FCA last year, warned that "investors risked being harmed if crypto assets were labelled as regular investments".

We can expect some within the sector to try to position themselves as non-crypto projects, said The New York Times. Several crypto companies have "tried rebranding", it said. Autograph, an NFT start-up co-founded by former American football star Tom Brady, "quietly removed some of the crypto language from its marketing", and Paradigm Capital "erased mentions of the word 'crypto' from its website", instead describing itself as a “research-driven technology investment firm".

Meanwhile, the broader tech industry has "done what it does best: move on to the next thing", it added. Silicon Valley is "no longer fixated on crypto" and although crypto firms "may come back around in a few years", for now "they are out of style and therefore irrelevant".

As for Bankman-Fried, it is unclear whether he will appeal against the verdict. He had pleaded not guilty to all the charges, insisting that he had acted in good faith. His sentencing has been set for 28 March next year.

Texas has declared itself open for Bitcoin mining, an energy-intensive endeavor that involves warehouses of powerful computers trying to solve complex mathematical problems to unlock valuable cryptocurrency tokens. Texas also has an increasingly strained power grid that serves only Texas and keeps failing or threatening to overload during winter storms and summer heatwaves.

This combination of Bitcoin miners' voracious appetite for energy and the finite and capricious quantity of power produced in Texas has led to massive cryptocurrency mines earning money for agreeing to shut down in emergencies, raking in more money for shutting down for brief periods, and leaving Texas residents to foot the bill, The New York Times reports. Here's what you need to know about how Bitcoin mining is hurting — or helping — Texas energy customers.

How much energy do Bitcoin mines use?

A lot. The biggest Bitcoin mine in the U.S. — operated by Riot Platforms in an abandoned Alcoa aluminum smelting plant in Rockdale, Texas, about an hour outside of Austin — uses the same amount of electricity as the nearest 300,000 homes, the Times reports. Add in the Bitdeer mine about a mile away, and Rockdale's Bitcoin mines use more power than all the houses in a 40-mile radius.

A 1 megawatt mine consumes more energy per day than a typical U.S. home does in two years. Lee Bratcher, president of Bitcoin lobbying group the Texas Blockchain Council, estimates that Bitcoin miners use about 2,100 MW of power in Texas each day, while the Texas state comptroller's office said cryptocurrency mining operations consume 3,000 MW.

The Electric Reliability Council of Texas (ERCOT), which manages the Texas grid, "projects that mining operations could rise by 6,000 MW in the next couple years and potentially increase to 17,000 MW by 2030," or nearly what Houston — America's fourth-largest city — uses during peak demand, the comptroller's office said in an August 2022 report.

On top of that, "prospective crypto mining businesses have requested to put approximately 33,000 more megawatts in the ERCOT interconnection queue over the next few years (enough to power the whole state of Florida)," The Texas Observer reports, though nobody expects all of those requests to come to fruition.

Worldwide, in July 2022 Bitcoin mining used the annualized equivalent of 132 terawatt-hours of electricity, "comparable to the power consumption of Argentina," the Texas comptroller's office said. "A single bitcoin transaction used nearly 1,452 kilowatt-hours (kWh) of electricity, equal to the power consumption of an average U.S. household for nearly 50 days."

How have Bitcoin mines turned that into cold hard cash?

"Their massive energy consumption combined with their ability to shut off almost instantly allows some companies to save money and make money by deftly pulling the levers of U.S. power markets," the Times reports. A significant portion of the revenue large Texas crypto mines rake in comes from their participation in ERCOT's Responsive Reserve Service program, designed to protect the power grid during periods of heavy use.

The program pays them for their participation and their promise to power down if the grid approaches blackout levels. "In practice, they rarely are asked to shut down," the Times reports. "Several of the companies are being paid through these agreements a majority of the time they operate. Most years, they are asked to turn off for only a few hours, at which point they are paid even more."

Bitcoin miners can also avoid fees Texas charges to maintain and bolster the power grid by strategically powering down during peak demand, when those fees are assessed. And when power prices are high, the miners can also shut down and resell their allotted electricity — which they prepurchase at low rates — for hefty profits.

The Times gave two examples of how this works. During 2021's Winter Storm Uri, during which about 40 Texans froze to death during extended blackouts, ERCOT paid Bitdeer's Bitcoin mine in Rockdale an average of $175,000 an hour for not operating, earning the company more than $18 million over four days — "from fees ultimately paid by Texans who had endured the storm," the Times adds. Another Bitcoin company made tens of millions reselling electricity during Uri.

During one day of a June 2022 heatwave, when Riot was earning $342,000 a day mining Bitcoin at its Rockdale facility, it also earned $42,000 from midnight to 4 a.m. for participating in the Responsive Reserve Service program and saved $5.5 million in fees by shutting down from about 4 a.m. to 6:30 a.m. In July 2022, The Texas Observer adds, the same Riot Bitcoin facility earned more from curtailing energy use, $9.5 million, than the $5.6 million in profit it earned mining Bitcoin.

For all of 2022, the Times reports, Riot made $9.3 million from participating in the blackout-prevention service (despite being asked to reduce power for only about 3.5 hours), saved about $27 million in potential fees, and earned roughly $18 million from reselling electricity to other customers. Riot earned $156.9 million from Bitcoin mining last year.

Is this how the Texas grid is supposed to work?

ERCOT told the Times it "does not discriminate based on the type or activity" of the companies that sign up for its Responsive Reserve Service program. "We want to be able to serve any business that wants to do business in Texas," Pablo Vegas, ERCOT's new CEO, said in November. "And that includes crypto miners."

"There's a set of rules that exist," Carey King, assistant director of the Energy Institute at The University of Texas at Austin, told the Observer. And the crypto miners do "fit the definition of being able to provide ... emergency response services."

"I think they're exploiting the system," Severin Bornstein, a professor at the University of California, Berkeley, told the Times. "But they will say, 'You know, the system was already there,' and I'm sympathetic to that in some ways."

How does this make energy more expensive for regular Texans?

The cost of Bitcoin miners reselling electricity during peak demand falls on consumers, University of Houston energy economist Ed Hirs tells the Times. "Ironically, when people are paying the most for their power, or losing it altogether, the miners are making money selling energy back to Texans at rates 100 times what they paid."

There's also a cost from the miners' enormous power consumption. Bitcoin miners say they set up camp in areas where they can use otherwise unusable renewable energy, but their energy needs are so great they actually get 85 percent of their energy from coal and natural gas plants, causing "as much carbon pollution as adding 3.5 million gas-powered cars to America's roads," the Times reports, citing an analysis by tech nonprofit WattTime.

The 1,800 MW used by the 10 Bitcoin mines connected to the Texas grid require more expensive power generators to come online, and this "increased demand has caused electric bills for power customers to rise nearly 5 percent, or $1.8 billion per year," the Times reports, citing a simulation performed by energy research and consulting firm Wood Mackenzie. "In West Texas, where several Bitcoin mines have settled, bills have increased by nearly 9 percent."

A group of seven federal lawmakers, including Sen. Elizabeth Warren (D-Mass.) and Rep. Al Green (D-Texas), asked ERCOT about the state's cryptocurrency boom and power consumption last fall. "Given the impacts of crypto-mining on the climate, the grid, and to ratepayers, ERCOT's support for this industry is irresponsible and highly concerning," they wrote.

"It's a massive financial burden to Texans," Wood Mackenzie's Ben Hertz-Shargel told the Times. And because of how the Texas market operates, the increases are steepest for residential customers. Riot, for example, told investors that due to its various strategies, it paid 2.96 cents per kilowatt-hour last year. "By comparison, the average price for other industrial businesses in Texas was 7.2 cents," the Times reports. "For residents, it was 13.5 cents."

What do Bitcoin proponents say?

Bitcoin miners and their supporters highlight the benefits they bring to rural communities and argue that their sizable energy usage will encourage the construction of more power plants, especially wind and solar generation that isn't yet able to circulate on the grid due to a lack of transmission lines. The Bitcoin companies also say the criticism of them is unjust.

The analysis cited by the Times "could be used to attack any industry that consumes power," said David Fogel, the chief executive of Coinmint. "I think the entire notion of singling out specific industries like this is unfair."

"The thing about crypto is that they're really not doing anything that is useful," counters Molly White, a software engineer and cryptocurrency researcher. "It is primarily used for speculation. I think that's important to realize. And that is somehow worth the electricity usage of small countries? That blows my mind."

Is Texas doing anything to addresses Bitcoin mining's power consumption?

Yes. The Texas Senate unanimously passed legislation in April that would cap Bitcoin miners' participation in ERCOT's demand response program at 10 percent, require them to shut down during peak demand anyway, and eliminate tax incentives — and the Bitcoin lobby is working hard to make sure it fails in the House. Bitcoin boosters are pushing a "Don't Mess With Texas Innovation" campaign aimed at stopping this "anticompetitive" bill, SB 1751.

The Texas Senate also sent the House a bill that aims to stabilize the power grid by building natural gas–powered power plants that could generate up to 10 gigawatts of electricity in emergency situations. The Senate touted estimates that it would cost $10.8 billion to build the plants, but an estimate by the quasi-government Lower Colorado River Authority said it could cost $18 million. It isn't clear if the state would pay for the backup power generators with reserve funds or have ERCOT pass the costs onto energy customers.

The proposal, a priority for Lt. Gov. Dan Patrick (R) "has many opponents," KUT Austin reports. "Environmental groups are concerned with the amount of extra carbon dioxide-emitting fossil fuel generation it would lock into the state's energy mix. Existing power plant companies say it would destroy the Texas competitive energy market. Meanwhile, consumer advocates point out it would greatly increase already-rising Texas electricity bills."

How did Texas end up with all these Bitcoin mines in the first place?

Basically, Texas invited Bitcoin miners in, and they accepted, drawn in by cheap energy and comparatively few regulations. They need to go somewhere. Bitcoin mines used to be centered in China, but due in part to the industry's massive energy consumption, Beijing declared crypto mining "undesirable" and banned it in 2021. Many miners moved to Iran and Kazakhstan, which also cracked down. Texas rolled out the red carpet.

"Texas will be the crypto leader," tweeted Gov. Greg Abbott (R), who also hosted the Texas Blockchain Council at the governor's mansion. ERCOT's former chief declared himself "pro-Bitcoin." For the Bitcoin miners, "the main attraction is cheap wholesale electricity prices," said UT's King.

"Cryptocurrency mining can operate from anywhere in the world," the Texas comptroller report noted. "It is not bound by transportation networks or access to raw materials or a specialized workforce. What its data centers do require is a massive amount of electricity to cool and operate the mining machinery, and Texas provides an attractive draw for such needs." And if that ever changes, they can move on to somewhere else, leaving Texas with a whole lot more power.

Sam Bankman-Fried, the self-styled ‘King of Crypto’, is to plead not guilty to criminal charges relating to cheating investors and looting billions of dollars at his now bankrupt FTX cryptocurrency exchange.

Forbes said “it’s a stunning fall from grace for Bankman-Fried, who had been heralded as a modern J.P. Morgan for swooping in to save troubled crypto firms before his own firm blew up.”

What is his background?

Born in 1992 in California, where both his parents taught as professors at the Stanford Law School, Sam Bankman-Fried, known as SBF, attended the prestigious Massachusetts Institute of Technology, where he graduated with a bachelor’s degree in physics and a minor in mathematics.

In 2017, he co-founded Alameda Research, a quantitative trading firm, before launching FTX, a cryptocurrency derivatives exchange, in 2019.

The Guardian said the “30-year-old crypto mogul rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the United States”.

He poured hundreds of millions of dollars into mainstream marketing to promote his exchange, including the naming rights to leading esports league TSM and the NBA Miami Heat’s arena. It was also reported he offered to help Elon Musk part-fund his takeover of Twitter.

His wealth peaked at $26 billion in early 2022, when he was ranked the 60th richest person in the world by The World's Billionaires. However, by October 2022 his fortune had dropped to an estimated $10 billion and was wiped out almost overnight when FTX collapsed in early November after a wave of withdrawals. He was freed on a $250 million bond following his extradition in December from the Bahamas, where he lived and where the exchange was based.

He faces charges of wire fraud, commodities fraud, securities fraud, money laundering and campaign finance law violations, and could serve up to 115 years in prison if convicted.

A man of ‘striking contradictions’

“Bankman-Fried is marked by striking contradictions”, said Yahoo! Finance, which ran a profile of him in 2021.

“On the one hand, he is a classically driven businessman who sleeps four-hour nights, famously catnapping in a beanbag chair at the office so subordinates can wake him at any hour for guidance,” said the news site. “Yet Bankman-Fried is also disarmingly reflective, candid, and almost academic in his apparent effort to give dispassionate and truthful answers.”

A self-described “Benthamite,” “effective altruist” and vegan, he was reported as having “a Robin Hood-like philosophy” by Bloomberg in April last year, after the billionaire vowed to give away his fortune.

Yet there is another, darker side to him which manifested in the way he ran his companies, according to John Ray, who oversaw the $23 billion bankruptcy of Enron and took over as CEO of FTX after Bankman-Fried stepped down in November.

In what Forbes described as “a scathing rebuke of Bankman-Fried’s leadership”, Ray said, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

“From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.

“Looming over our whole conversation,” said Kelsey Piper in Vox after Bankman-Fried began an exchange with her on Twitter in November last year, “was the fact that people who trusted him have lost their savings, and that he’s done incalculable damage to everything he proclaimed only a few weeks ago to care about.”

“The grief and pain he has caused is immense, and I came away from our conversation appalled by much of what he said. But if these mistakes haunted him, he largely didn’t show it,” she concluded.

El Salvador has put an estimated 2% of the country’s adult population – roughly 100,000 people – behind bars as part of its war on gangs.

President Nayib Bukele’s crackdown has put the nation in an extended state of emergency with important constitutional rights set aside, as part of a mano dura, or “iron fist”, anti-gang policy.

The measures have drawn criticism from human rights groups but have won the backing of the majority of the Salvadorean public. But could a free trade deal with China unravel Bukele’s soaring popularity?

Why have so many people been arrested?

El Salvador is home to two of the world’s most notorious gangs: Barrio 18 and MS-13. Prior to the clampdown, around 70,000 active gang members had made it “virtually impossible” for politicians and other officials to “avoid engaging with them”, said the Crisis Group.

This year’s crackdown was “prompted by a bloody killing spree by gangs that saw dozens of people killed in March”, said CNN. During the country’s “bloodiest weekend in more than two decades”, more than 80 people were killed, added Al Jazeera. The MS-13 gang was blamed.

How have laws and rights been changed?

In the wake of the deadly weekend, a “state of exception” was imposed, which suspended key civil liberties and led to mass incarceration.

A report by Human Rights Watch and the NGO Cristosal found that there have been widespread abuses, including arbitrary arrests, due process violations, enforced disappearances, torture and deaths in state custody.

At least 90 people have died in custody since March, according to government statistics, and several of those who have been released from jail reported inhumane conditions and harsh treatment, including beatings and waterboarding.

In one incident earlier this month, the government of El Salvador sent 10,000 soldiers and police to seal off a town on the outskirts of the nation’s capital to search for gang members. “Starting now, the township of Soyapango is completely surrounded,” Bukele wrote on Twitter, as he shared videos showing ranks of soldiers.

The anti-gang measures were “supposed to be temporary”, said The New York Times, but, eight months on, “the military patrols the streets, mass arrests are a daily occurrence and jails are filled to the brim, edging El Salvador toward what is effectively a police state”.

Bukele has given the NGOs’ claims short shrift. Writing on Twitter, he said that “their fear is that we are successful, and that other governments will want to imitate us”.

What has public reaction been?

Public opinion appears to be mostly on his side: some 75% support the crackdown, according to a recent survey by the Public Opinion Institute at San Salvador’s Central American University.

Bukele himself is still basking in an 86% approval rating found during an October survey of 12 Latin American countries by CID Gallup, making him the most popular leader in the region.

He also points to encouraging crime figures: between January and the end of October, 463 people were killed in El Salvador, a 50% drop on the same period last year.

Why has the bitcoin crash hurt El Salvador?

Last month FTX, one of the largest cryptocurrency exchange platforms, filed for bankruptcy, prompting a dramatic fall in the price of bitcoin.

This “caused all eyes to turn to El Salvador”, explained DW, because Bukele had made bitcoin legal tender in 2021 and also invested a large part of the country’s fiscal reserves in the digital currency.

On the day the insolvency was announced, the vice-president, Félix Ulloa, said that China had offered to buy the country’s $21bn of foreign debt as part of a free trade agreement. A deal with Beijing could benefit El Salvador economically but there are fears that it “puts the country’s sovereignty up for sale”, said the news site.

Therefore, said DW, “uncertain” is “perhaps the word that best describes the current situation in El Salvador”.

More than 100 people have been arrested in the UK’s biggest ever fraud investigation into what the Metropolitan Police described as “an international one-stop spoofing shop”.

The Met began investigating the iSpoof website in June 2021. The site allowed users, who paid for iSpoof’s services in bitcoin, to make it look as though calls they made to individuals were coming from trusted sources, including “banks, tax offices and other official bodies as they attempted to defraud victims”.

iSpoof “turned ordinary crooks into cyber criminals”, said The Sun, using “slick videos to advertise would-be lawbreakers through encrypted messaging apps”. The website was set up in December 2020 and amassed 59,000 user accounts.

The Met’s Operation Elaborate involved the National Crime Agency, Europol, Eurojust, Dutch authorities and the FBI working with Scotland Yard’s cyber crime unit. The investigation found that around 10 million fraudulent phone calls were made through iSpoof globally in the 12 months from August 2021; just over a third of those were made in the UK.

With more than 200,000 potential victims in the UK alone, people are thought to have lost millions of pounds overall. The Met said that the average loss from people who have reported being targeted is thought to be £10,000, while “one victim was scammed out of £3m”, said The Guardian. The paper added that “those running the scam shop made about £3.2m over a 20-month period, it is estimated”.

Met Commissioner Mark Rowley described “the exploitation of technology by organised criminals” as “one of the greatest challenges for law enforcement in the 21st century”. Working with international partners, Rowley said UK police “are reinventing the way fraud is investigated”.

Police are asking anyone who thinks they have been contacted as part of a spoof number scam to make a report online through Action Fraud.

1. Shockwaves spread after FTX implosion

Fallout from the FTX crypto exchange's collapse and bankruptcy continued on Monday, with digital currencies resuming the declines. Bitcoin, the biggest cryptocurrency, dropped to $16,500 and is now down 65 percent in 2022, according to CoinDesk. Analysts say it could drop below $10,000. Ether, the No. 2 digital currency, has fallen more than 20 percent this year and was trading around $1,230 on Monday. Some industry experts are calling FTX's implosion a "Lehman moment," in reference to the investment bank's 2008 collapse. FTX said over the weekend that it was investigating a potential hack after more than $370 million worth of crypto funds disappeared, according to crypto analytics firm Elliptic Enterprises Ltd.

CNN The Wall Street Journal

2. Morgan Stanley: U.S. could avoid 2023 recession, but Europe won't

The United States might narrowly dodge a recession next year, but Britain and the euro zone economies probably won't be so fortunate, Morgan Stanley analysts said in a series of reports published Sunday. China, which is expected to relax three years of COVID-19 restrictions in 2023, is expected to lead a recovery in Asia, the investment bank's analysts said. Morgan Stanley estimated that the global economy will grow 2.2 percent in 2023, under the 2.7 percent growth projected by the International Monetary Fund. Central banks around the world are hiking interest rates to fight high inflation, bringing down growth. U.S. rates are expected to peak in the fourth quarter of 2022 but remain high in 2023.

Reuters

3. Farmland prices soar to record high

Farmland prices have soared to the highest level on record this year, pricing out many small farmers, The New York Times reported Sunday. Nationwide, prices have jumped 12.4 percent to $3,800 per acre, with cropland reaching $5,050 an acre and pastureland at $1,650 an acre. High prices for corn, soybeans, wheat, and other commodity crops have contributed to rising land values, as have the robust housing markets and interest rates, which were historically low until recent months. A September survey by the nonprofit National Young Farmers Coalition found that finding affordable land was the top challenge cited by young farmers this year. Government subsidies to farmers have contributed to rising land costs, the Times reported.

The New York Times

4. Stock futures fall after gains sparked by easing inflation

U.S. stock futures fell slightly early Monday after lower-than-expected October inflation triggered big gains, with the S&P 500 posting its best week in five months. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.3 percent and 0.4 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were down 0.7 percent. The S&P 500 jumped 5.9 percent last week. The Dow gained 4.2 percent and the tech-heavy Nasdaq jumped 8.1 percent. Federal Reserve officials signaled that the softer-than-expected inflation data didn't mean it was safe yet for the central bank to ease the aggressive interest-rate hikes it is using to cool the economy. "We're at a point we can start thinking maybe of going to a slower pace," Fed Governor Christopher Waller said Sunday, but "we're not softening."

CNBC

5. 'Black Panther: Wakanda Forever' sets record for November debut

Marvel's Black Panther: Wakanda Forever grossed an estimated $180 million domestically in its opening weekend, leading the box office. That's a bit below the $202 million opening of the 2018 original, but it's still the second biggest domestic debut of 2022 behind Doctor Strange in the Multiverse of Madness, which brought in $187 million. This is also the biggest domestic opening ever for a movie released in November, a record previously held by The Hunger Games: Catching Fire with $158 million, and the 13th biggest of all time. It's a major success for a movie that faced a significant uphill battle on its way to theaters, as Chadwick Boseman, who starred as Black Panther in the acclaimed original film, died in August 2020 from cancer.

CNN Entertainment Weekly

Tesla has sold off most of its bitcoin holdings, sparking another crisis in the cryptocurrency market.

The electric car firm revealed in February 2021 that it had invested $1.5bn in bitcoin, prompting a surge in demand for the currency.

Now Tesla’s boss, Elon Musk, who has been one of the cryptocurrency’s strongest advocates, has said that the company sold off 75% of its bitcoin holdings in the last quarter, freeing up $936m (£783m) to shore up its cash reserves.

Currently involved in a lawsuit over his decision to pull out of a deal to buy Twitter, “the mercurial tech billionaire has offered excuses”, said Markets Insider, “but it seems likely that plunging asset prices and a bleak economic backdrop played a role in both decisions”.

Tesla announced yesterday that its second-quarter profits fell by nearly a third from the first quarter due to Covid shutdowns in China, which accounts for about 40% of its global sales.

Tesla’s problems are mostly short term, and profits should improve in months to come, Laura Hoy, an equity analyst at the investment firm Hargreaves Lansdown, said in an email to The New York Times. “But she expressed concern about Tesla’s exposure to Bitcoin,” said the paper.

“The Bitcoin losses point out an important part of the Tesla investment case – its eccentric owner,” Hoy said. “While Musk’s impressive innovation has served the company well, his personal flair is starting to raise governance questions.”

BBC technology reporter James Clayton said: “The move is yet more bad news for Bitcoin and crypto more generally.”

Barron’s said the crypto market cap “topped out near $3 trillion in November 2021 – when Bitcoin was almost three times more valuable than it is now – and bottomed near $800 billion in the depths of a sell-off that reached its most severe point last month”.

Last year Tesla stopped accepting bitcoin as payment for its cars, citing concerns about the climate impact of energy-intensive bitcoin mining. And while Musk said the move to drop most of Tesla’s bitcoin was not a reflection of the currency but rather about the need for cash, his description of crypto as a “side show to the side show” is “not exactly a ringing endorsement”, said Clayton.

The price of Bitcoin dropped below $20,000 on Saturday for the first time since Nov. 2020 and dropped below $18,000 before recovering Sunday morning to around $19,500.

Bitcoin has lost more than 70 percent of its value since it peaked in Nov. 2021 at nearly $69,000, the Financial Times reported. These losses are tied to a larger downward trend in the stock market, driven by inflation and the Federal Reserve's decision to raise interest rates.

Federal Reserve governor Christopher Waller said Saturday that he supports raising interest rates by another 0.75 percent at the Federal Reserve's July meeting. The Fed previously raised rates by 0.75 percent on Wednesday, bringing the federal funds rate up to between 1.5 and 1.75 percent.

"The Fed is 'all in' on re-establishing price stability," Waller said at a conference in Dallas.

A report from the Bureau of Labor Statistics released earlier this month showed that consumer prices jumped 8.6 percent between May 2021 and May 2022, the fastest rate of increase in four decades.

The cryptocurrency market has shed two-thirds of its value in seven months, compunded by a “brutal bout of selling” on Monday.

According to data site CoinMarketCap, the overall market reached as low as $892bn yesterday, a large drop from its peak of $2.9trn in November last year.

The largest and most well-known cryptocurrency, bitcoin, fell to an 18-month low of $23,750, and was down by 50% so far this year.

What is going on?

Investors have “ditched riskier assets in the face of high inflation and fears that interest rate raises by central banks will hamper growth”, said Reuters.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told the news agency that bitcoin and Ethereum, the second most popular cryptocurrency, are “prime victims of the flight away from risky assets as investors fret about spiralling consumer prices around the world”.

What happened yesterday?

After another report of high inflation in the US on Friday and further fears of interest rate hikes, “both the stock market and cryptocurrencies tumbled” on Monday, said Fortune.

Crypto was “hit hard” after lender Celsius announced that it was suspending transactions and withdrawals on Sunday, citing “extreme market conditions”, explained the magazine.

It added that the “world’s largest crypto exchange, Binance, also briefly paused withdrawals, but has since resumed activity and called the interruption a result of ‘several minor hardware failures’”.

What next?

The “blow-up shows risky investing and capital preservation are mutually exclusive”, said the Financial Times’ Lex team. Platforms such as Celsius, which had advertised an annual percentage yield of 18.63%, appeared to “offer the best of all worlds to crypto enthusiasts”, but the lender “cannot lay on free lunches indefinitely or immunise against depositor runs”, they continued.

Most crypto traders are “relative newbies, making them the largest and hardest-hit group in Monday’s brutal bout of selling”, added Bloomberg. It is those retail investors “who rode the crypto hype train over the past year” who are now “getting hammered”.

Tony Edward, who hosts the Thinking Crypto podcast, admitted that the market is “not pretty”, but he is convinced it is a case of “market cycles playing out”. He described the cryptomarket as a “pendulum” that “swings very high” but he said “the crashes also are brutal”.

Scott Melker, a crypto investor and analyst, told Forbes that it is “difficult to predict what comes next” for the market as it will “largely be determined by contagion from potential platform collapses, inflation numbers, Fed tightening and other factors”.

He concluded: “Now is not a time to make guesses, but rather to batten the hatches and ride the storm.”

The smartest insight and analysis, from all perspectives, rounded up from around the web:

The collapse of the cryptocurrency market is testing the faith of those who drank the Kool-Aid, said Katie Martin in the Financial Times. "A trickle in the price of Bitcoin from its peak of $68,000 turned into a flood" last week "in part because of cracks in the so-called stablecoins that glue the market together." Stablecoins, which are generally pegged to the dollar, let digital currency investors move in and out of currencies like Bitcoin without converting their investments into cash. They can also be lent out, often at high rates of interest. A run on these tokens has cast a much wider chill on the crypto market, including Bitcoin, which fell as low as $27,000. Investors were "lured in by claims that these lines of code could become serious rivals to the dollar and the basis of a new financial utopia." Now investors large and small have gotten a serious reality check. Hedge fund manager and crypto evangelist Michael Novogratz has lost $6 billion of his $8.5 billion fortune since November, while New York City Mayor Eric Adams, who converted his first three City Hall paychecks into Bitcoin and Ethereum, would have lost about $5,800 of his pay.

The trigger was a stablecoin that suddenly became very unstable, said Alexander Osipovich and Caitlin Ostroff in The Wall Street Journal. Unlike stablecoins that are backed by stores of dollars, an experimental stablecoin, TerraUSD, took "a more complex approach that relies on financial engineering to maintain its link to the dollar." Once touted as a stroke of financial wizardry that "could ultimately supplant the dollar itself," Terra lost its anchoring last week in a panicked sell-off. Crypto enthusiasts love to "throw around alleged millions and billions," but those numbers are "fictions built on fictions," said David Gerard in Foreign Policy. The trouble with stablecoins, obscure as they may be to outsiders, is a sign of broader vulnerability; they are like "the money-market funds that played such a critical part in the 2008 crash." There's "plenty of pain" in the crypto world now, but "the real danger is contagion from cryptocurrency to the wider economy."

If regulators don't act now, this could end in disaster, said Bloomberg in an editorial. Despite the efforts to rename stadiums and run Super Bowl ads featuring celebrity endorsers, "this stuff isn't ready for prime time." The technology "hasn't found much practical use" as an alternative currency, an inflation hedge, or a new asset class. President Biden has laid out a sensible framework for regulation that lawmakers should act on so that the next boom-and-bust cycle doesn't trigger a bigger financial crash.

Have we reached the bottom yet? asked Andy Kessler in The Wall Street Journal. "It's certainly less bubblicious out there," but we haven't witnessed capitulation from the diehards who are still, in Reddit parlance, HODLing, "holding on for dear life," as crypto collapses — along with the speculative stocks, from DraftKings to Carvana, that found favor in the latest boom. In these kinds of meltdowns, the path is "rarely straight down." There will be survivors here. But not everyone. "From the dot-com demise, Pets​.com and eToys.com are both still very much dead."

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

An armed gang stole passwords giving access to millions of euros in bitcoin after breaking into the Madrid home of a technology tycoon, according to the alleged victim.

American entrepreneur Zaryn Dentzel, a co-founder of Spain-based social media platform Tuenti, “told police that a gang of four or five men forced their way into his flat” close to the Spanish’s capital Prado art museum on Tuesday afternoon, The Times said.

He claimed that “after covering the security cameras, they tied, bound and gagged” him and “squirted a spray in his eyes”, the paper reported. Dentzel said he was then tortured with a knife and Taser during a four-hour ordeal.

Police sources told Madrid-based newspaper El Pais that the social media mogul was “left with a cut to his chest and was beaten” by the gang to force him into revealing the passwords for his bank accounts and electronic wallets holding cryptocurrency.

Dentzel reportedly told investigators that the thieves also took laptops, several phones, a tablet computer and a USB stick. But their primary target was said to be the passwords to an online account containing “millions of euros’ worth of bitcoin”, according to Newsweek.

Police “were alerted by a neighbour who heard cries for help coming from the apartment”, The Times reported. Witnesses also “told police that they saw a group of masked men clutching bags run out onto the street”.

Dentzel first “made Spain his home in the mid-2000s”, when he founded Tuenti – dubbed the “Spanish Facebook” – “after having spent time as a student in the Extremadura region learning Spanish”, said El Pais. The platform became popular with young people, gaining millions of users, before being bought by Spanish telecoms giant Telefonica in 2010 for €70m.

Bitcoin has also proved popular since being created in 2009, with advocates lauding the digital currency as a secure way to store and send funds. But since bitcoin can “be created, moved and stored outside the purview of any government or financial institution”, as The New York Times noted, tracing the funds that Dentzel has reported stolen could be challenging for investigators.

However, “each payment is recorded in a permanent fixed ledger, called the blockchain”, the paper added, so using the stolen funds could prove even more tricky as “all bitcoin transactions are out in the open”.

Chinese burn

“When crypto prices fall, the lurches lower can be rapid,” said Adam Samson and Katie Martin in the FT. We saw as much when the price of bitcoin plunged by 12% in a day on Tuesday, taking the price below $30,000 for the first time since January and dragging down many other “alt-coins”, including ethereum and dogecoin, with it.

The “dominant driver”, according to Michael J. Saylor of MicroStrategy, was further regulatory pressures from China – once the centre of bitcoin production – which has banned the “mining” of bitcoins in major provinces. The country’s central bank has also warned several of the largest state-owned banks and Jack Ma’s Alipay to “identify” and “block” bitcoin transactions.

Death crosses

Bitcoin recovered some ground midweek, said Bloomberg, rising to $34,000 on Wednesday. But it is still down by almost 50% since its April peak of $65,000 – and that has got some “chart-watchers” nervous. “Any meaningful break below $30,000 is going to make a lot of momentum players throw in the towel,” said Matt Maley of Miller Tabak + Co. According to Sean Rooney of Valkyrie Investments, “bitcoin traders could find themselves in choppy waters for weeks to come”.

Traders are muttering about “death crosses” (an ominous chart pattern), said The New York Times. But crypto supporters are still looking “past short-term pain”. Some are optimistic that mine operators will move to the US – particularly Texas, where the governor, Greg Abbott, is promising to make the state a “crypto-leader”, said the Daily Express. There’s also hope in El Salvador, which has adopted bitcoin as legal tender. “China doesn’t have the moral character to mine bitcoin,” said pundit Max Keiser. “America and El Salvador do.”

Harsh lessons

One of the more remarkable findings of the UK financial regulator’s report on cryptocurrencies is that 2.3 million adult Britons are now invested – up from 400,000 a year ago, said Nils Pratley in The Guardian. “The most extraordinary”, though, is that 12% of consumers think crypto investments are “protected”. Nope. “If you lose your shirt on bitcoin, you are not going to be compensated.” There may be some harsh lessons learned this week.

A computer scientist who claims he invented bitcoin has won a landmark court case, allowing him to keep a cache of the cryptocurrency worth billions of dollars.

A jury in Miami found that Craig Wright, an Australian academic first linked to the development of the digital currency by Wired in 2015, should not be forced to hand his former business partner half of his digital assets.

The invention of the world’s most popular cryptocurrency was first described in a 2008 white paper, published under the pseudonym Satoshi Nakamoto. So does the decision mean Wright is Nakamoto – or does it cast more doubt over his true identity?

Uncertain origin

Nakamoto claims to have started developing the digital currency that would become known as bitcoin a year before the publication of the 2008 white paper. In August of that year the bitcoin.org website was registered, before the paper appeared a month later.

First circulated on a cryptography mailing list, the white paper – entitled Bitcoin: A Peer-to-Peer Electronic Cash System – described how the cryptocurrency would work. The first bitcoin software was released by Nakamoto in January 2009.

Embedded in the code of the original software was a headline from The Times: “Chancellor Alistair Darling on brink of second bailout for banks.” This has been widely interpreted as both a timestamp for the release and a critique of centralised banking systems.

The identity of the mysterious Nakamoto has never been publicly revealed, with some suggesting that the alias must represent multiple developers.

In 2013, Dan Kaminsky, a US security researcher who read the bitcoin code, told The Observer that there is “either a team of people” who worked on the cryptocurrency or “this guy is a genius”.

Laszlo Hanyecz, a US programmer who exchanged emails with Nakamoto, also told Wired that he “always got the impression it almost wasn't a real person”, adding: “I’d get replies maybe every two weeks, as if someone would check it once in a while.

“Bitcoin seems awfully well designed for one person to crank out.”

Who’s who?

For his part, Nakamoto has claimed to be a 37-year-old male who lived in Japan. But Wired said as early as 2011 that it always “seemed doubtful that Nakamoto was even Japanese”, adding that “his English had the flawless, idiomatic ring of a native speaker.”

Some speculated that “the name might be a sly portmanteau of four tech companies: SAmsung, TOSHIba, NAKAmichi, and MOTOrola”, the magazine added. Others believed that he represented “a team at Google, maybe, or the National Security Agency”.

In 2014, Forbes data security reporter Andy Greenberg suggested that the true developer could have been US computer scientist Hal Finney, one of the first people to use the bitcoin software other than Nakamoto.

In the same year, Newsweek reported that Dorian Prentice Satoshi Nakamoto, a Japanese American man living in California, whose birth name is Satoshi Nakamoto, could be the real Nakamoto.

Other names cited include computer scientist and legal scholar Nick Szabo, who was linked to the Nakamoto alias in 2013 by blogger Skye Grey, Finnish economic sociologist Dr. Vili Lehdonvirta and Irish cryptographer Michael Clear. Lehdonvirta and Clear were jointly named in 2011 by The New Yorker.

Wright is unusual among those linked to the alias in that he “has claimed that he is Nakamoto” since 2016, the BBC said, despite his claim being “disputed”.

He was first linked to the pseudonym in 2015, when Wired said he “either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did”.

Around the same time, technology website Gizmodo published information obtained by a hacker that claimed Nakamoto was a joint pseudonym for Wright and Dave Kleiman, the former business partner with whom Wright would later enter a legal battle.

The family of Kleiman, who died in 2013, claimed the pair “created and mined the first bitcoin in existence, and that Wright had stolen it”, the BBC said.

The Miami jury rejected that claim, but ordered Wright to pay $100m for intellectual property infringement. So is that the end of the mystery?

Lingering doubt

According to CNN, Wright’s victory in the court battle means the computer scientist has “largely prevailed” in the dispute over the $57bn fortune.

He has been cleared “on nearly all issues in the dispute, including that half of the 1.1m bitcoin in dispute belonged to the family of Kleiman”, his former partner. Responding to the judgment, Wright that he had been “completely vindicated”.

But “the jury however found no evidence that the two created bitcoin”, The Wall Street Journal (WSJ) said, meaning he did not prove that he is Nakamoto.

If the jury had been convinced of Wright’s claim to have invented the cryptocurrency alongside Kleiman, he “could have been legally compelled to sell” a portion of his one million bitcoin “to help pay any monetary awards” to his former partner’s family.

Wright’s various claims that he truly is Nakamoto have been “dissected, and rejected, in the bitcoin community”, while his promises to prove his identity are yet to come to fruition, the WSJ added.

Rather than producing evidence, he has instead attempted to “litigate his claim”, filing various patents on bitcoin’s software and suing a podcast host “who publicly ridiculed his claim” to be the brains behind the digital currency.

All of this means that, for now, the mystery over Nakamoto’s true identity lives on.

The Wild West

The price of bitcoin has returned to near record highs of around $64,000 on news that the US Securities and Exchange Commission has given the green light to “the first widely available investment funds” to track the cryptocurrency, said Kellie Mejdrich on Politico. Three bitcoin futures exchange-traded funds (ETFs) are to go live this month, including one pitched by ProShares, which began trading on the New York Stock Exchange on Tuesday. This is “a landmark moment” for the booming crypto market: the new funds address growing demand from mainstream investors for exposure to an asset that has risen 440% in a year. But bitcoin’s entry into the investment establishment is fraught with controversy. SEC chair Gary Gensler, who once described the crypto market as the “Wild West”, is now under fire from investor advocates for exposing individuals to financial danger.

Suckers, beware?

Bitcoin critics such as Peter Schiff – the CEO of Euro Pacific Capital who doubles as a financial commentator and radio personality – are up in arms, said Jeffrey Gogo on Beincrypto.com. Schiff reckons the SEC deserves to be “abolished” for approving these ETFs. “My beef is that bitcoin pumpers will now use the approval to sucker in more buyers based on the government’s supposed endorsement,” he said. Punters certainly seem to like the look of the ProShares product, said Tanaya Macheel on CNBC. Shares in the fund (which tracks contracts speculating on the future price of bitcoin, rather than the crypto itself) rose 4.8% on their debut. Encouraging news for Invesco, which plans a similar product.

Barometer of exuberance

The euphoria may not last, said John Detrixhe on Quartz. Indeed, “if history is any guide”, this launch “could mark a peak” in bitcoin’s recent ascendancy. Past events that were seen as legitimising crypto – such as the listing of the Coinbase exchange in April – “turned out to be high-water marks”. Ultimately, bitcoin isn’t nearly as “uncorrelated” with stock markets as its boosters claim, said Lex in the FT. The price “roughly halved” last year when the S&P 500 “fell by a third”. Bitcoin is “a good barometer of exuberance”. But it’s a moot point how it would fare in “a prolonged bear market”.

Olly Mann and The Week delve behind the headlines and debate what really matters from the past seven days.

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In this week’s episode, we discuss:

TikTok purchases

The social video platform TikTok is teaming up with the Canadia payment company Shopify to create ads with built-in online stores, making it easy - perhaps too easy - for app users to spend their money. Or, given the youth of the TikTok user base, to spend their parents’ money.

Crypto gets a job

In two cryptocurrency-related stories, Paypal that users will be able to buy Bitcoin on its platform - although not to use it directly in purchases - and the investment bank JPMorgan said its own digital currency, JPM Coin is now being used commercially by a big client for the first time. Both developments seem like a step into the mainstream for digital currencies - but both come with heavy caveats.

Green investments

The “Attenborough effect” has reached the world of personal finance, where it is reportedly driving a significant increase in interest in environmentally responsible investments. The asset manager Liontrust, for example, said its sustainable funds had trebled from £2.5bn to £7.5bn since 2017. And it’s not just about doing good: financial advisers say environmentally responsible companies are more likely to be resilient and could have better prospects for long-term growth.

You can subscribe to The Week Unwrapped on the Global Player, Spotify, Apple podcasts, SoundCloud or wherever you get you get your podcasts

Elon Musk has put his money where his mouth is after adding the hashtag “#bitcoin” to his Twitter profile just over a week ago.

The price of the cryptocurrency surged following his apparent endorsement on 29 January. And despite removing the hashtag from his profile a couple of days later, the tycoon has continued to “talk up” bitcoin to his 46.2 million followers, the BBC reports.

Now, Musk has announced that his electric car firm Tesla pumped $1.5bn (£1.1bn) into the cryptocurrency last month - sending the price of the digital currency soaring to an all-time high. On Tuesday morning, one bitcoin was worth more than $46,400 (£33,700), according to CoinMarketCap.com.

The latest price hike leaves bitcoin up by almost 50% this year, following gains of more than 300% in 2020.

A ‘game changer’ for bitcoin

In a regulatory filing to the US Securities and Exchange Commission (SEC), Tesla said the decision to invest in bitcoin was part of a broad investment policy aimed at “diversifying and maximising returns on our cash that is not required to maintain adequate operating liquidity”.

Tesla also revealed plans to accept bitcoin as a form of payment - a move that analysts say could prove to be a “game changer” for the cryptocurrency, Sky News reports.

Eric Turner, vice president of market intelligence at cryptocurrency research firm Messari, said: “I think we will see an acceleration of companies looking to allocate to bitcoin now that Tesla has made the first move.

“One of the largest companies in the world now owns bitcoin, and by extension, every investor that owns Tesla (or even just at S&P 500 fund) has exposure to it as well.”

‘Stick to electric cars’

While soaring bitcoin share prices mean big returns for Tesla, Musk’s enthusiasm for the digital currency also brings “more immediate risks”, of which “one is to Tesla’s reported profitability”, says the FT.

Pointing to these risks, The Guardian’s Nils Pratley argues that Tesla should stick to what the firm is good at: “electric cars, energy-storing batteries and so on. Leave punting on bitcoin to the devotees.”

Meanwhile, Bloomberg’s Liam Denning says that Musk’s “preoccupation with crypto has now been taken to its logical conclusion”.

Denning writes that “having witnessed Gamestonk” - a reference to the recent GameStop trading frenzy drama - “we surely all knew that this Venn diagram eclipse of the most speculative car company in the world and the most speculative ‘currency’ in the world was coming.

“Tesla sells stock because it can and then uses some of the proceeds to buy Bitcoin because it can. It’s as simple, and disconcerting, as that.”

Bitcoin values are slowly gaining pace after last week falling to their lowest levels since May.

The price of the virtual currency had risen steadily during the first six months of this year, after a tumultuous 2018 that saw prices plummeting from the record high of $20,000 (£15,500) recorded at the end of 2017.

But after nearing a value of $13,000 (£10,080) this June, values gradually slipped towards the $10,000 (£7,750) mark in September and then fell to a six-month low of $6,630 (£5,140) on Sunday, figures from ranking site CoinMarketCap reveal.

However, prices are creeping up again, with bitcoin trading at $7,530 (£5,840) as of 9:00am UK time today.

Bitcoin’s rivals are also fairing better. Over the past five days, Ethereum has risen from from a low of $134 to $154 today, while banking-focused coin Ripple has climbed to $0.23 (£0.18) from Sunday’s price of $0.21 (£0.16).

So is now the time to buy?

China’s crackdown on illegal cryptocurrency trading was blamed for last week’s plummeting prices. But while the Asian superpower is still in the processes of closing down illicit trading platforms, investors seem to be regaining confidence in the market.

Bloomberg says bitcoin has risen by “about 95%” in 2019, which investors are taking as “a sign cryptocurrencies are maturing”.

Although the declines will probably cause short-term investors a few headaches, many experts believe this is the perfect time to buy into bitcoin, The Independent reports.

“Once again the value of bitcoin has plummeted – due to the nature of cryptocurrency, this is not the first, nor will it be the last time this occurs,” Peter Wood, head of trading platform CoinBurp, told the news site.

“However, new-time investors can be comforted by the fact that its value will most likely rise again, and newcomers to cryptocurrency should see no better opportunity that to invest now,” he added.

Bitcoin and rivals Ethereum and Ripple have suffered their biggest declines in six months, wiping billions off the cryptocurrency market.

After surpassing the $13,000 (£10,100) mark in June, bitcoin quickly ran out of steam and entered a state of decline, according to data on ranking site CoinMarketCap.

Prices briefly rose at the end of October, leaping from $7,500 (£5,830) to $9,900 (£7,700) in a matter of hours, but then began falling once again.

In the past week, bitcoin has sunk from a high of $8,680 (£6,750) to around $7,130 (£5,550) as of midday on Friday.

Bitcoin’s rivals have also suffered big declines in recent days. Ethereum sank from a high of $187 (£145) on Sunday to today’s price of $146 (£113) per coin, while banking-focused coin Ripple has slipped to $0.23 (£0.18) from Sunday’s high of $0.27 (£0.21).

A total of around $170bn (£132bn) has been wiped from the market since June, following mass sell-offs across the three digital currencies, reports Forbes.

What’s behind the declines?

A fresh crackdown on illegal cryptocurrency exchanges in China may have triggered this week’s price drops.

Earlier this month, Chinese state-run newspaper Xinhua ran a front-page article hailing bitcoin as a success, after President Xi Jinping described plans to launch China’s own digital currency as an “important breakthrough”, The Independent reports.

The superpower has taken a hard line towards cryptocurrencies and banned bitcoin in September 2017.

But Beijing’s change of tone “seemed to fuel an increase in trading activity on illicit platforms”, resulting in “a fresh crackdown on illegal exchanges”, says the news site.

The People’s Bank of China (PBOC) has warned that it will take decisive action against any illegal activity around virtual currency trading, while cautioning investors not to confuse bitcoin with blockchain - the technology that underpins cryptocurrencies.

Jamie Farquhar, a portfolio manager at London-based crypto investment firm NKB Group, told Reuters that the PBOC’s crackdown on illicit digital currency trading suggests that China’s acceptance of the technology is unlikely to include bitcoin.

“It’s the realisation that the positivity over Xi’s blockchain announcement was exaggerated,” he told the news site. “It may not include bitcoin at this point.”

Bitcoin’s turbulent summer has been followed by an equally rocky autumn - and it could have major repercussions on the cryptocurrency industry as a whole.

The virtual coin made continual gains throughout the first half of the year, rising from a low of $3,400 (£2,600) in January before peaking at around $13,800 (£10,700) in June, according to ranking site CoinMarketCap.

But values quickly tumbled in July, slumping to $9,500 (£7,380) until falling a further $1,100 (£855) by the beginning of October, the ranking site notes. As of 2pm UK time today, bitcoin was trading at $8,000 (£6,210).

The market’s immediate future looks bleak, too, with trading news site U.Today claiming that investors are bracing for values to drop towards the $6,000 (£4,660) mark.

Is a “perfect storm” brewing?

Quite possibly. Not only have bitcoin values slumped in recent weeks, but trading volumes - the amount of bitcoin traded in a given period - are down to less than $200m (£155m) per day, a “20-fold” drop on the $4bn (£3.1bn) per day peak recorded a few months ago, says Forbes.

Low trading volumes and stagnated bitcoin values could mean the industry is headed for a “perfect storm”, the news site says. This is because cryptocurrency trading platforms rely on regular trades to make money, as they charge users a small fee for each transaction.

When cryptocurrency values begin to decline over extended periods of time, trading volumes tend to follow suit. The knock-on effect is that trading platforms “get into trouble” as they make less money, which puts pressure on the “nascent” industry, Forbes adds.

Mati Greenspan, a senior analyst at online trading platform eToro, described the state of the market in a tweet as “dismal”.

However, he conceded that bitcoin is “one of the best performing assets this year”.

“After all this action a period of stabilisation is more than welcome,” said Greenspan on Twitter. “Bitcoin is not dead. It’s just resting.”

Bitcoin values are in a state of “chaos” after prices plummeted by almost £1,000 in the space of an hour.

The virtual currency market experienced a “dramatic crash” on Tuesday afternoon, causing bitcoin prices to “plunge” in a matter of “minutes”, The Independent reports.

The cryptocurrency began trading at $9,790 (£7,950) mark on Tuesday morning, before slipping to $9,490 (£7,700) at about 7.30pm, according to ranking site CoinMarketCap.

Prices then fell sharply to $8,420 (£6,830) an hour later, and values have continued to decline, the ranking site notes. As of 2.30pm UK time today, bitcoin was trading just above the $8,000 (£6,490) mark.

As if often the case in the crypto world, bitcoin’s declines sent shockwaves through the rest of the market. The Independent says Tuesday’s crash resulted in 20% being “wiped off all of the biggest digital currencies”.

Is Libra coin to blame?

Facebook’s upcoming cryptocurrency, Libra coin, was widely regarded as being one of the key drivers of bitcoin’s resurgence after its grand unveiling in June.

However, the digital coin has faced intense scrutiny from banks and regulators over competition and privacy concerns. It now appears that Facebook chief, Mark Zuckerberg, may not release the coin in 2020, as had been originally planned.

Speaking to Japanese newspaper Nikkei Asian Review, Zuckerberg said: “Obviously we want to move forward at some point soon [and] not have this take many years to roll out.

“But right now I’m really focused on making sure that we do this well… A lot of people have had questions and concerns, and we’re committed to making sure that we work through all of those before moving forward.”

Zuckerberg’s comments came after Tuesday’s price crash, so it’s unlikely to be the driver behind the crash.

However, Forbes hints that Zuckerberg’s comments may have dampened the spirits of investors, resulting in bitcoin prices dropping by a further 5% since Tuesday.

So what caused the value slump?

Analysts are blaming a “a number of technical issues” for the crash, the Independent reports. This includes problems with Bakkt, a trading platform for institutional investors, which has seen “lower than expected” trading volumes since its launch on Monday.

“Pessimism over the level of activity on Bakkt sparked this most recent sell-off,” Simon Peters, an analyst at online trading firm eToro, told the news site.

However, he said the cryptocurrency’s “fundamentals such as hashrate”, the speed in which computers crunch the bitcoin code, are looking “strong” and “adoption of crypto is still moving forward at pace.

“With those conditions in mind, we could see the price rise back up to $10,000 within the space of the next month,” Peters concluded.

Bitcoin values continue to hold steady in spite of rival coin ethereum gaining ground following months of declines.

Shortly after reaching its 2019 high of about $12,200 (£9,750) in August, bitcoin quickly slumped below $10,000 (£7,980) and has been trading a few hundred dollars above or below the mark ever since, reports ranking site CoinMarketCap.

As of 10.30am today UK time, the virtual coin was trading at $10,200 (£8,150), some $300 (£240) up on yesterday’s high, the ranking site notes.

Bitcoin’s movements often send waves through the market and typically bolster - or weaken - the values of its rivals.

However, ethereum, which sits second in the cryptocurrency market rankings behind bitcoin, has bucked the trend as prices have gradually climbed over the past two weeks.

The virtual currency’s 2019 peak of $350 (£280) per coin in late June was followed by sharp declines that saw prices tumble to lows of $168 (£134) by the end of August, CoinMarketCap notes. But values have since gained traction, driving prices to today’s value of $218 (£174).

What’s driving ethereum’s gains?

As is often the case with the cryptocurrency market, there’s no consensus on why ethereum is making up for lost ground.

According to NewsBTC, analysts believe that “improving fundamentals”, such as upgrades to the ethereum platform, are behind the surge in values.

Some experts, however, claim that the digital currency is being “accumulated by investors”, the news site says. When investors buy cryptocurrency in vast quantities, it often spurs on others to up their stash.

In a series of tweets, cryptocurrency analysis firm Santiment said there were a number of signs that ethereum investor activity was ramping up.

These include the virtual coin’s “token circulation” - the amount of coins available for purchase - has continued to decline over the past five months, as well as an increase in the number of investors holding in excess of 10,000 coins, the company said.

So what’s next for bitcoin?

While ethereum appears to be heading on a bull run, bitcoin’s immediate future looks bearish.

CoinDesk claims that bitcoin needs to surpass and maintain a position “above $10,458” (£8,350) to “negate the immediate bearish case”, while a drop below $9,450 (£7,545) could send prices down further.

Google searches for bitcoin have surged to an all-time high over the past ten days, but some experts are suggesting that may be the result of a ploy to manipulate prices.

As reported by cryptocurrency news site Cointelegraph, searches for bitcoin’s trading abbreviation “BTC” shot up from a value of two on 29 August to 100 - the maximum level of interest - just three days later.

Interest gradually fell earlier this week, with the most recent result being a search rating of 74 recorded on 3 September, the news site says. It’s particularly perplexing when “BTC” is compared with the term “bitcoin”, as the latter has “stayed virtually level” at a value of eight.

Bitcoin values are often tied to search activity, so prices tend to increase when a critical news story breaks. As the digital coin is trading at a lower price compared with its 2019 high of $13,000 (£10,550), there’s a chance the jump in BTC searches is the result of foul play.

Who - or what - is behind the search spike?

Given that there has not been any major news around bitcoin in recent weeks, it seems unlikely that the recent surge in BTC searches is legitimate.

Therefore, says Bendik Norheim Schei, of cryptocurrency news site Kryptografen, it’s “reasonable to assume that someone is behind these radical changes.

“That the same pattern can be seen all over the world may indicate that VPN [virtual private network] services have been used to distribute the search across the world, thus achieving a global trend,” he said.

Glen Goodman, a financial adviser and crypto trader, agrees with Schei, telling Forbes that “somebody’s trying to game the trading algorithms”.

Cointelegraph, however, poses an interesting counter theory. It claims that BTC not only represents bitcoin, but it is also the abbreviation used by the Bahamas Telecommunications Company. As Hurricane Dorian is currently “wreaking havoc” across the Bahamas, there’s a strong chance the search activity is linked to the event.

While that may be true, the country with the highest search interest in BTC is Slovenia.

What’s more, Schei notes that Google Trends, the website that monitors activity on the search engine, indicates that “changes have been relatively large in Romania”.

Have values increased because of it?

If the spike in BTC search interest is in fact an attempt to bolster bitcoin values, it hasn’t had a major effect on the cryptocurrency market.

Bitcoin prices have gradually increased during the first week of September, starting the month at around the $9,600 (£7,790) mark and rising to a high of $10,890 (£8,840) earlier today, according to CoinMarketCap.

As of 2.30pm today UK time, bitcoin was at $10,860 (£8,810) per coin, the ranking site notes.

Bitcoin analysts are positive that the cryptocurrency’s value will soon see a much-needed boost, despite prices plummeting by almost $2,000 (£1,600) since the beginning of August.

The virtual coin entered the month just above the $10,000 (£8,200) mark before swiftly rising to its August high of $12,200 (£10,000) six days later, according to ranking site CoinMarketCap.

But in the ensuing weeks, the cryptocurrency gradually slipped back towards $10,000 before sharply falling to $9,450 two days ago, the ranking site says. Bitcoin was trading at about $9,600 (£7,870) as of 2.30pm UK time today.

It’s not all doom and gloom, though. While values may be the lowest they have been in August, analysts believe that bitcoin is showing signs of stability.

Are prices set to rise?

Possibly. As reported by The Independent, one investor noted on Twitter that bitcoin has risen 175% since the start of the year through “slow, organic price increases”. She also claimed that the cryptocurrency’s steady climb over the past eight months “is better than quick pumps”, which are often followed by significant losses.

It’s also believed that bitcoin’s recent declines may simply be the result of “a batch of bitcoin futures contracts”, which safeguard investors against volatility, that are due to expire, the news site says.

Speaking to the Independent, Simon Peters, an analyst at eToro, said: “Chicago Mercantile Exchange Bitcoin futures contracts are set to expire tomorrow, which historically has prompted trading activity within the cash market.

“It’s possible that investors are selling off now to insulate themselves from greater losses in the coming days,” he said. “Furthermore, this downward momentum has been exacerbated by low trading volumes over the last week, which has meant that a relatively small number of big trades have been able to move the needle sharply.”

Peters’ comments were backed up by Mike Novogratz, founder of the digital coin-focused merchant bank Galaxy Digital. He told trading news site FXStreet that bitcoin “has had a huge run, and so I think this is a bit of consolidation”.

Meanwhile, McAfee anti-virus founder and long-time bitcoin advocate John McAfee told his 1.1 million Twitter followers that any investor panicking over the virtual coin’s value slump is “a fool”.

Bitcoin has gone from strength to strength during the first half of the year, but the virtual coin has shown signs of its infamous volatility over the past few weeks.

Following a tortuous 2018, when values slumped from an all-time high of $20,000 (£16,470) per coin in December 2017 to just $3,870 (£3,190) 12 months later, prices have gradually climbed over the course of 2019.

But after peaking at $13,040 (£10,740) in the middle of July, prices then fluctuated wildly in the ensuing weeks, according to figures from ranking site CoinMarketCap.

As of 2.30pm today UK time, bitcoin prices sit at $9,980 (£8,220), some $1,000 (£820) off yesterday’s high and almost $2,500 (£2,060) down on the virtual coin’s August high, the ranking site reports.

What’s causing prices to stagnate?

Uncertainty appears to be the key factor behind bitcoin’s current volatility.

Some analysts have speculated that falling bitcoin prices may be the result of the ongoing trade war between the US and China, while others claim that uncertainty about Britain’s future after it is due to leave the European Union on 31 October, Forbes reports.

Another factor may be the US Securities and Exchange Commission (SEC) opting to delay its decision on three bitcoin exchange-traded fund proposals, the news site says. The ruling isn’t expected until the end of September or even mid-October, meaning investor activity in the US may stall until a decision is made.

But Mati Greenspan, a senior market analyst at eToro, believes that there’s little to suggest that recent global events are affecting the market.

“Many analysts have been doing their best to tie in the latest moves in the crypto market to the uncertainty in geopolitics but it’s difficult to say exactly how much connection there really is,” he told Forbes.

Where will bitcoin values go next?

The Daily Express claims that similar market trends occurred in 2018, when bitcoin “spent much of the second half of the year unwilling to stray north or south of $6,400 (£5,280)”. This year, however, it predicts that bitcoin will arrive at a “crossroads” and prompt more radical price movements over the coming months.

“Cryptocurrency being what it is means that an array of curious market forces is always at work and anything could happen,” the newspaper says. “There are few certainties here.”

In the meantime, though, the bitcoin market appears to be building a “bearish momentum”, potentially sending values downward over the coming days, according to cryptocurrency news site FXStreet.

Bitcoin values could reach record highs if Britain leaves the European Union without a deal, according to analysts.

The cryptocurrency has made solid gains over the past week, rising from its August low of $9,930 (£8,200) to a high of $12,670 (£10,460), according to ranking site CoinMarketCap.

Its gains still put the virtual currency some way off its all-time high of $20,000 (£16,510), recorded in December 2017, but bitcoin’s value has risen throughout the year and values look set to climb further in August.

That’s in spite of Boris Johnson pledging to leave the EU with or without a deal on 31 October, which appears to have been a factor in the pound plummeting to its lowest point against the dollar since January 2017, The Guardian reports.

Speaking to The Independent, Nicholas Gregory, head of blockchain tech firm CommerceBlock, said that bitcoin has “rediscovered its mojo” this year and the prospect of a no-deal Brexit “could see a massive and unprecedented breakout.

“Not only will a no-deal departure from the EU create turmoil and volatility across two major fiat currencies, it will also trigger an identity crisis for the global system as the contingency and vulnerability of major global fiat currencies is laid bare,” he said.

Is bitcoin now a back-up plan for currency investors?

Despite its volatility, which can see values fluctuate wildly on an hourly basis, investors appear to be turning to bitcoin as a means to offset uncertainty in traditional fiat currencies.

Simon Peters, an analyst at eToro, told the Daily Express that bitcoin’s recent gains are partly the result of Chinese investors turning to the cryptocurrency as a result of yuan values tumbling against the dollar.

“It’s no coincidence bitcoin’s surge over the weekend has coincided with Donald Trump’s announcement of tariffs on $300bn [£247bn] worth of Chinese goods,” he said.

“The yuan has fallen against the dollar to levels not seen since the 2008 financial crisis and Chinese investors are casting around for alternative assets for their wealth… Given that Chinese investors make up a large proportion of crypto investors, there’s a strong possibility some are backing bitcoin’s chances against the yuan,” Peters concluded.

Falling values in the pound may also be enticing investors over to bitcoin. Nigel Green, chief of financial consultancy firm deVere Group, told the Independent that bitcoin serves as a “flight-to-safety asset during times of market uncertainty”.

Where is bitcoin trading today?

Bitcoin was trading at $11,840 (£9,760) as of 10am UK time today, according to CoinMarketCap.

Ethereum, which sits in second place in the cryptocurrency rankings, is having a rockier month than its rival. The ranking site says the digital coin is currently trading at around $214 (£176), down from its value of $218 (£180) per coin at the beginning of August.

Behind ethereum sits the banking-focused coin Ripple. Its value has slipped from $0.32 (£0.26), on 1 August, to today’s price of $0.30 (£0.25), CoinMarketCap reports.

The Financial Conduct Authority (FCA) has warned cryptocurrency investors that the technology has “no intrinsic value” and provides “few protections” to customers.

The UK watchdog has released a set of regulatory guidelines for areas of the virtual currency market that fall under its jurisdiction.

The move has been hailed by Reuters as “a milestone” in Britain’s regulation of this small yet highly popular part of the financial sector.

The FCA said that “a combination of market immaturity, volatility, and a lack of credible information or oversight raises concerns about market integrity, manipulation and insider dealing within cryptoasset markets”, the news site reports.

It’s not the first time the watchdog has sent a warning to would-be cryptocurrency investors. Last year, an FCA study revealed that the majority of subjects interviewed about the virtual coins believed that it was “highly likely or inevitable” they would make money, The Daily Telegraph says.

The watchdog likened the “distorted thinking” of investors to “people believing they can out-smart a slot machine”, the newspaper adds.

Is bitcoin in trouble?

While the FCA’s review doesn’t explicitly say that bitcoin and its rivals, such as ethereum and Ripple, are under threat from tighter regulation, some analysts believe that the report is a sign of a possible cryptocurrency ban in Britain.

“Although not a ban, [the FCA warning is] a move in that direction,” Herbert Sim, business development chief at Broctagon Fintech Group, told Forbes.

“This lack of enthusiasm is shared by several countries; the US with its scrutiny of libra [Facebook’s own digital coin], and India, who are looking to implement a similar ban on cryptocurrencies which are not state regulated”, he said. “These movements could end up coming back to bite.”

However, Christopher Woolard, strategy and competition director at the FCA, said the watchdog’s warning was simply aimed at clarifying “which cryptoasset activities fall inside our regulatory perimeter”.

“This is a small, complex and evolving market covering a broad range of activities,” he said.

The FCA followed Woolard’s comments by advising customers to “be cautious when investing in such cryptoassets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value”.

It’s worth noting that most aspects of cryptocurrency investment are unregulated and do not fall under the FCA’s Financial Services Compensation Scheme, a “lifeboat fund” that provides compensation when “some types of investment collapse”, the Telegraph says.

Has the news affected prices?

Not at the moment. Bitcoin’s volatility means prices can fluctuate wildly on the back of regulatory news, though values have remained stable in the hours following the FCA’s announcement.

At 10.30am UK time today, bitcoin values were around $10,000 (£8,260) per coin, according to ranking site CoinMarketCap. The digital coin has traded around the $10,000 mark over the past week, after tumbling from its 2019 high of $13,000 (£10,730) earlier this month.

After months of gains and investor interest, bitcoin is on course to end the month at a loss for the first time since January.

Bitcoin values have frequently dipped below the $10,000 (£8,050) mark over the past few days, just two weeks after prices surpassed the $13,000 (£10,460) threshold for the first time this year, according to ranking site CoinMarketCap.

Despite trading close to the $11,000 (£8,850) mark at the start of the month, values may continue to sink below $10,000 over the coming days, the website reports. Bitcoin is currently trading at $9,820 (£7,900), as of 2:30pm UK time.

As is often the case in the cryptocurrency market, bitcoin’s price fluctuations have also had an impact on its rivals.

CoinMarketCap’s figures show that Ethereum, which ranked second behind bitcoin in the market, has slumped from its July high of $317 (£255) to today’s price of $217 (£175).

Ripple, a banking-focused cryptocurrency that sits third in the rankings, has also endured a difficult month. It’s currently valued at $0.31 (£0.25), down from the month’s high of $0.41 (£0.33), the ranking site says.

What caused prices to tumble?

The losses appear to have occurred shortly after a hearing where David Marcus, president of messaging products at Facebook, fielded questions about the social media giant’s upcoming cryptocurrency, called Libra, from US lawmakers.

According to The Independent, one of the senators told Marcus that Facebook was “delusional” to believe people would trust it with their money, while another said the company’s agenda promotes “flagrant displays of bulls***”.

Other senators, meanwhile, raised concerns about the cryptocurrency being exploited by “criminal organisations to facilitate money laundering, or even finance terrorist activities”, the news site says.

The hearing appears to have “spooked” bitcoin traders, the Daily Express says, prompting mass sell-offs that saw the cryptocurrency’s value plummet.

Can values recover?

Possibly, but the next few days could be crucial for the virtual coin.

If bitcoin values are able to surpass and - critically - stay above the $10,000 mark over the next few days, the bull run that has propelled the digital currency throughout the year may be back on track, says cryptocurrency news site CoinDesk.

But all signs point to a “bearish” trend, the site adds, with prices looking set to slide as the month comes to a close.

The bitcoin bull run is back in full swing, bringing to an end the brief period of turbulence during which the cryptocurrency’s value declined sharply.

Bitcoin was trading at $12,970 (£10,400) as of midday UK time, approaching the highest value it has achieved so far in 2019, according to figures from CoinMarketCap.

The virtual coin broke through the $10,000 (£8,020) mark - a psychological threshold that, once surpassed, drove investors to up their stash of bitcoin - in June and prices continued upwards for several weeks, the ranking site reports.

However, values began plummeting from a high of $13,770 (£11,040), a record for the year, at the end of June to a low of $9,810 (£7,820) a week later. While values have yet to return to the $13,000 mark, the steady price increase over the past week means it may not be long before bitcoin matches its 2019 high.

It’s a critical move, too. Cryptocurrency news site FXStreet said last week that the market was entering a “mostly bearish” period, as it would be difficult for bitcoin to gain traction after falling below the $10,000 mark.

Bitcoin’s strong performance over the past week has also had an impact on rival coins.

Ethereum, ranked second behind bitcoin, rose from a monthly low of $230 (£184) per coin to today’s value of $310 (£249), CoinMarketCap notes.

Behind ethereum in the charts sits the banking-focused coin Ripple, which has yet to recover from the severe market swings that occurred at the end of June. It’s currently valued at $0.39 (£0.31) per coin, down significantly from its 2019 high of $0.48 (£0.38).

What’s been the reaction from analysts?

Despite bitcoin being some way off its all-time high of $20,000 (£16,370), recorded in December 2017, the cryptocurrency has “more than quadrupled in value” since the start of the year, according to The Independent.

While many attribute the virtual coin’s gains to larger companies announcing their own cryptocurrencies, including J.P. Morgan and Facebook’s Libra coin, some analysts believe that bitcoin’s dwindling supply may be spurring investor interest, the news site notes.

Although bitcoin is a virtual asset, the nature of the blockchain – the encrypted technology that underpins cryptocurrencies – means there is a finite amount, 21 million to be precise, that can be mined, which in itself is a difficult and costly process that unlocks more bitcoins.

“We may see further steep rises for bitcoin as it is slowly nearing its maximum supply of 21 million [coins],” said Christel Quek, commercial head for digital currency firm BOLT.Global. “Currently, there are nearly 18 million in circulating supply.”

Meanwhile, Edward Moya, a market analyst from foreign exchange firm Oanda Corp, told Bloomberg that bitcoin “could be coiling for a big breakout as institutional interest for blockchain technology shows no signs of slowing down.

“The bubble-like gains this time are driven on solid institutional interest and while security is still a big risk, it appears Bitcoin has overcome many of its initial growing pains,” he said.

Bitcoin investors are bracing for another rocky ride as the volatile cryptocurrency takes a dip following weeks of gradual gains.

The digital coin reached its highest value in 15 months last week after breaking through the $10,000 mark (£7,970) - a psychological barrier that once surpassed, spurred investors on to grow their stash of digital coins.

But after peaking at $13,780 (£10,980) on 26 June, bitcoin plunged by around $3,000 within the space of 24 hours, before tumbling further to $9,810 (£7,820) on 2 July, according to ranking site CoinMarketCap.

Although values had climbed back to $11,230 (£8,950) as of midday today, prices are still well below their recent highs.

Is the bull run over?

Bitcoin certainly seems to have lost the momentum that sent values slowly climbing in recent weeks, but it’s not yet known whether the recent price fluctuations are a sign of imminent declines or just the latest swing in the virtual coin’s ever-changing fortunes.

According to cryptocurrency news site FXStreet, the near-future outlook for bitcoin values is “mostly bearish”, suggesting that more declines may be on the horizon.

But Forbes argues that bitcoin’s recent swings are merely signs of the digital coin’s “loony-tunes volatility”, and predicts that prices could surpass $20,000 (£15,940) before the year is out.

That said, the news site admits that its predictions are “just a crude sketch” based on similarities between bitcoin’s price fluctuations in 2017, when prices came within touching distance of the $20,000 mark, and the virtual coin’s patterns in 2019.

Some experts argue that the volatility could ignite interest among investors, who may use the period of uncertainty to build their stash of bitcoin.

Arthur Hayes, head of cryptocurrency exchange BitMEX, told attendees at the Asia Blockchain Summit in Taiwanese capital Taipei this week that “bitcoin is fun, but it’s a hell of a lot more fun at 100 times leverage”, Bloomberg reports.

“That’s what people want to see in crypto, they want that high volatility,” he said. “At the end of the day, we’re all in the entertainment business of traders.”

That view is shared by Charlie Lee, creator of bitcoin rival litecoin, who says that the cryptocurrency market’s current volatility will “definitely bring more people into the space”.

Have bitcoin’s rivals faced similar declines?

Yes. In the cryptocurrency world, rival coins often lose momentum when bitcoin values start sliding.

Ethereum, the market’s second largest cryptocurrency behind bitcoin, has slipped from a high of $353 (£280) last Wednesday to around $293 (£230) today, according to CoinMarketCap.

Banking-focused coin Ripple has suffered similar declines. The digital currency, which sits in third place, has plunged from $0.49 (£0.39) on Wednesday to $0.39 (£0.31), figures on the ranking site show.

The world’s most widely traded digital currency fell $1,800 in a matter of minutes, virtually wiping out a month of gains, in a drop that underscores the volatility of digital currency.

Bloomberg reports that “Bitcoin soared as much as 39% this week to $13,852, the highest since January 2018. But it hit a brick wall around 4:30 p.m. New York time Wednesday, plunging more than $1,800 within about 10 minutes. Moments later, prominent cryptocurrency exchange Coinbase Inc. reported an outage on its consumer site, which was resolved in under an hour. Swings continued Thursday, with the coin anywhere from down 15% to up 4.8%.”

Genesis Global Trading CEO Michael Moro told CNBC that “even the most optimistic crypto bulls would tell you that a 50%+ move in a week is too much too fast.” He said a “key driver” behind the price whiplash was leverage — borrowing money — to make a trade. “The presence of leverage exacerbates the moves in both directions and affects the speed dramatically.”

Investor’s Business Daily raises the prospect that another cryptocurrency bubble could be about to burst, adding that other digital currencies “also fell sharply Thursday. Ethereum, Bitcoin Cash and Ripple (also known as XRP) all suffered double-digit losses after strong gains Wednesday.”

Factors determining the general increase in demand for digital currencies include geopolitical tensions involving Iran and the US-China trade war, dovish monetary easing by central banks, and the recent trend for large institutions trying to enter the cryptocurrency market.

As the Financial Times reports, “Analysts said the bout of enthusiasm for virtual currencies had been stoked by a confluence of factors. Among the most significant is Facebook’s move into the world of crypto, launching its own currency called Libra in an attack by big tech on the payments industry. Analysts are optimistic that Libra could help cryptocurrencies generally gain more mainstream acceptance, as means of payment and as a store of wealth.”

Speaking to the FT, Alistair Milne, chief investment officer of the Altana Digital Currency Fund, said that the rapid correction was “inevitable — you simply don’t go up this quickly and sustain it forever, followed by consolidation”.

“There are several things a trader needs to do in this volatile environment,” reflects Clem Chambers in Forbes. “Lower their leverage and keep their stops mental and away from round numbers and the platform’s awareness. It is and always has been a sad fact that leverage kills and the more you have the faster the demise.”

Bitcoin prices have reached their highest value in 15 months. Experts claim that news of Facebook’s new Libra coin, which was unveiled last week, has renewed investor interest in cryptocurrencies.

The original virtual coin leapt past the $11,000 (£8,620) mark on Saturday, according to the ranking site CoinMarketCap. The leap is the cryptocurrency’s highest value since March 2018.

After a weekend of continuous price hikes, bitcoin values now rest at $11,355 (£8,900) as of 11:30am UK time, the ranking site reports.

It’s understood that Facebook’s foray into bitcoin territory last Tuesday has been a key driver in the cryptocurrency’s seemingly-unstoppable bull run.

According to The Guardian, digital currency traders believe that Facebook’s Libra, which aims to provide seamless money transfers through the firm’s chat apps, will be a vital step in legitimising the industry.

Craig Erlam, a senior market analyst at the American trading firm Oanda, told the newspaper that bitcoin had been slowly rising in recent months but the launch of Facebook’s Libra had been “a catalyst for the recent surge.”

Is Facebook the sole reason for the bitcoin boom?

That’s a matter of debate. While Erlam claims that Libra has been a catalyst for the surge, other experts believe there are multiple factors behind the ongoing bull run.

In an interview with the American broadcaster CNBC, Bart Smith, head of digital at the trading platform Susquehanna, argued that the main driver that sparked bitcoin’s price hike was when values surpassed the $10,000 (£7,850) mark on Friday.

Once the psychological barrier had been broke, values “shot up” at a faster rate than they did following the announcement of Libra, he said.

Smith believes that Libra is a positive step for bitcoin. It has the potential to engage two billion Facebook users with the world of cryptocurrencies, he says.

The analyst told CNBC that a percentage of Facebook users may be tempted to look at Libra and try to understand how it is different and similar to bitcoin.

How are bitcoin’s rivals faring?

When bitcoin’s values start climbing, the cryptocurrency’s rivals typically follow suit.

Ethereum, which is the second largest cryptocurrency behind bitcoin, gradually rose from a low of $269 (£211) on Friday to today’s value of $313 (£246), according to CoinMarketCap.

Meanwhile, values in the banking-focused virtual coin Ripple, which is ranked third, rocketed over the weekend.

Prices were recorded at a low of $0.43 (£0.34) on Friday, before leaping to a high of $0.49 (£0.38) the following day, says the ranking site. Values have slowly declined since, though, with prices coming in at $0.47 (£0.37) today.

Facebook is poised to launch a cryptocurrency that offers a “faster, cheaper and more secure” alternative to traditional ways of making payments on the internet, according to reports.

The Daily Telegraph says the Libra virtual coin is designed to streamline the process of transferring money over the company’s social media platforms. The upcoming digital currency is expected to launch in the first half of 2020 and is being backed by 27 other firms and organisations, including Uber, Spotify, Mastercard, eBay and Vodafone.

Like bitcoin, Libra will be based on blockchain technology. However, Facebook says that a number of key differences will set its virtual coin apart from the world’s first cryptocurrency.

What is Libra?

The cryptocurrency will be used to transfer money between users on the social media giant’s messaging platforms and is based on a Facebook-created new version of the blockchain - “the encrypted technology used by bitcoin and other cryptocurrencies”, explains The Guardian.

This tech is powered by a series of computers, which means it is not controlled by one central authority and therefore offers users more privacy.

Facebook says that the virtual currency is aimed in particular at the the 1.7 billion people worldwide don’t have access to a bank account, such as women in developing nations, the BBC reports.

What does “Libra” mean?

According to The Guardian, the Libra name comes directly from “the basic Roman measurement of weight”.

“The abbreviation lb for pound is derived from Libra, and the £ symbol originally comes from an ornate L in Libra”, the newspaper says.

How is it different to bitcoin?

Although Libra and bitcoin both fall under the cryptocurrency umbrella, they serve different purposes in the wider market.

Facebook plans to develop Libra into a “global coin”, pegging it to “well-known currencies” such as the US dollar and British pound in a bid to prevent the “wild swings” of conventional cryptocurrencies such as bitcoin and Ethereum, says the BBC.

Initially, the virtual currency will be available only through Facebook’s chat apps, including WhatsApp and Facebook Messenger, but the other companies backing the digital coin may also begin accepting Libra payments shortly after its release next year.

The Verge reports that Facebook is also planning to install physical cashpoints for people to manage their Libra coins while out and about. And shopping outlets that accept the company’s cryptocurrency as payment may be offered “sign-up bonuses”.

By contrast, bitcoin was designed so that people could store and manage their money without going through a bank or larger corporation. As the cryptocurrency isn’t pegged to a real-world currency, its value is far more volatile than traditional money.

Although a limited selection of outlets accept bitcoin as a form of payment, the cryptocurrency is primarily used as a digital asset in which to invest.

Can anyone buy Libra?

Sort of. Facebook users will be able to swap their real-world money for Libra digital coins, in a similar manner to exchanging money for foreign currency.

As the Libra is pegged to a real-world currency, it doesn’t offer the same level of investment opportunity - or risk - as a more conventional cryptocurrency such as bitcoin or Ethereum.

Where can you store and spend Libra coins?

Although Facebook won’t be distributing any physical Libra coins, users will still need somewhere to store their virtual currency.

To that end, the company has developed a virtual wallet called Calibra. Not only will Calibra store Libra coins, but it will also be the app that people use to transfer money to other Facebook users, Calibra��executive Kevin Weil told The Verge.

Elements of Calibra will also be embedded into Facebook Messenger and WhatsApp, which should further streamline the payment process.

The cryptocurrency market’s bumper year showed no signs of stopping at the weekend as bitcoin and its rivals saw considerable gains.

According to the ranking website CoinMarketCap, bitcoin values sat at around $7,850 (£6,200) on Friday morning, before comfortably trending above the $8,000 (£6,310) mark over the course of the weekend.

However, values leapt by some $500 (£394) between 8pm and 9pm on Sunday evening, bringing the bitcoin’s price per coin up to $8,670 (£6,850) during the early hours of Monday morning, the ranking site reports.

As of 9am UK time, CoinMarketCap puts bitcoin values at around $8,730 (£6,890) per coin.

The cryptocurrency is on a 12-month high thanks to the gains it made over the weekend. Values have also risen by 70% since the beginning of May and by a “whopping” 120% compared to prices at the start of this year, says Forbes.

Sunday’s spike, meanwhile, saw the digital coin’s market capitalisation (the combined value of all bitcoins) rise by $15bn (£11.8bn), resulting in gains of $20bn (£15.8bn) across “the wider cryptocurrency market”, the news site says.

Despite the gains, bitcoin is still some way behind its all-time peak value recorded in December 2017. At the time, the virtual currency came close to hitting $20,000 (£15,770) before suffering continual losses over the 12 months that followed.

Is the ‘crypto winter’ over?

Perhaps. Although bitcoin is still some way behind its record highs, the market’s gains over the weekend has led one expert to believe that the market’s struggles in 2018 are unlikely to be repeated any time soon.

In an interview with the Financial Times, Manuel Ernesto De Luque Muntaner, founder of the Luxembourg-based crypto investment fund Block Asset Management, said that many people thought that cryptocurrencies as a whole were “gone” following last year’s “crypto winter”.

But he said that an increased demand among “institutional buyers and venture capital funds” has helped boost the market in recent months.

Meanwhile, The Daily Telegraph says that bitcoin is becoming more widely accepted by retailers, with US-based supermarket Whole Foods and mobile network company AT&T confirming in recent weeks that they are “prepared to accept” the cryptocurrency.

It’s also believed that the reward for creating bitcoins – known as mining – will decrease next May, which “will squeeze the supply of the cryptocurrency and in theory push up its price”, the newspaper says.

How did bitcoin’s rivals fare?

Well. It’s not only bitcoin that has benefited from the bull market.

The second largest cryptocurrency behind bitcoin, Ethereum, leapt from a low of $235 (£185) on Friday to today’s value of $270 (£213), according to CoinMarketCap.

The banking-focused digital coin Ripple, which is ranked third, also saw prices climb over the weekend. Values were recorded at around $0.38 (£0.30) on Monday, before rising to a high of $0.47 (£0.37) today, says the ranking site.

The bitcoin bull run is back on course after a temporary crash on Friday that wiped out the cryptocurrency’s gains over the past seven days.

Bitcoin values were recorded at just under $7,000 (£5,500) per coin on Monday morning before rocketing up to $7,920 (£6,220) on Thursday evening, according to the ranking site CoinMarketCap.

The following day, values tumbled by nearly $1,000 (£785) in the space of an hour, bringing prices “back down to the $7,000 level it shot past earlier this week”, The Independent says.

Thankfully for bitcoin investors, the dive in values appears to be only temporary. Prices fluctuated around the $7,300 mark for most of Friday and Saturday, before gradually climbing on Sunday.

Today’s price, as of 1:15pm UK time, sits at $7,900 (£6,200), notes CoinMarketCap.

Bitcoin’s strong start to the year is almost a mirror image of its movement in 2017, says the cryptocurrency news site CCN.

The virtual coin started 2017 with a 40% quarterly gain, followed by an 80% rise in the second quarter, the news site says. Bitcoin peaked at nearly $20,000 (£15,700) per coin in December 2017, a rise of 219% in the final quarter alone.

Although the digital currency started this year in similar fashion, in the wake of continual losses last year bitcoin still has a long way to go before it can match its record highs of December 2017.

What caused Friday’s fall?

According to Forbes, bitcoin values took a tumble because of a large sell-off on the Luxembourg-based Bitstamp exchange that prompted other investors to sell their digital assets in a panic.

The sell-offs could also have been triggered automatically. Investors can set their accounts on cryptocurrency exchanges to automatically sell their bitcoins when values fall below a specified threshold.

If a large sale were to take place on an exchange, causing values to drop considerably, a chain reaction of automated sell-offs could then be sparked.

What about bitcoin’s rivals?

Bitcoin isn’t the only virtual currency on a bull run.

Ethereum, which is the second largest cryptocurrency behind bitcoin, has risen from $188 (£144) per coin on the morning of 13 May to today’s price of $243 (£191), CoinMarketCap reports.

Ripple, which is ranked third, has also seen a valuation boost. Prices for the banking-focused digital coin sit at about $0.38 (£0.30) today, a step above its valuation of $0.31 (£0.24) on 13 May, the ranking site adds.

Bitcoin’s price reached a nine-month high over the weekend as the virtual currency’s strong start to 2019 continued.

The value of the cryptocurrency surpassed the $7,000 (£5,380) mark early on Saturday, before peaking at $7,475 (£5,739) the following day, according to ranking website CoinMarketCap.

While prices briefly dropped to below the $7,000 threshold yesterday afternoon, the upward trend continued into the early hours of this morning, the site reports. Bitcoin values were at $7,020 (£5,395) as of 9.30am UK time.

Bitcoin is “on a tear” after trading nearer $5,000 (£3,483) at the start of the month and prices have “more than doubled” since the December, says Bloomberg.

Although this bull run will be welcomed by bitcoin investors, the virtual currency is still some way behind its record high of nearly $20,000 per coin achieved in December 2017, the news site notes.

Still, this comes as a surprise given that the cryptocurrency market has endured a turbulent week.

Binance, one of the world’s largest digital currency exchanges, was attacked by hackers on Tuesday, resulting in about 7,000 bitcoins - equating to about $42m (£32.3m) - being stolen from the platform.

Though the number of stolen coins was far from insignificant, the Chinese-based exchange announced that they accounted for only around 2% of the firm’s holdings in bitcoin and that it would be compensating any investors who had been affected.

Despite the hack, investors seemed unfazed and bitcoin values continued to climb throughout the week.

What’s causing the bull run?

Bitcoin’s rising values may be a sign that cryptocurrency investors are using the “digital asset” as a “haven in times of uncertainty” following increased tensions in the ongoing US-China trade war, the Financial Times says.

Last week, the US confirmed that it would increase tariffs on $200bn (£154bn) worth of Chinese goods from 10% to 25% after Donald Trump accused the country of backtracking on commitments made during negotiations, The Daily Telegraph reports.

This resulted in a pull back from the stock markets, seemingly prompting investors to move their money back into bitcoin, the FT notes.

What about bitcoin’s rivals?

Bitcoin gains often send waves through the cryptocurrency market given that it reignites investor confidence in virtual coins.

Ethereum, for instance, has risen from a low on Friday of $171 (£131) per coin to today’s high of $188 (£144), CoinMarketCap reports.

Ripple, which sits third in the cryptocurrency market rankings behind ethereum and bitcoin, has also seen a significant boost. Prices for the banking-focused digital coin sit at about $0.32 (£0.25) today, up from Friday’s valuation of $0.29 (£0.22), the ranking site adds.

Hackers have stolen around $42m (£32.3m) worth of bitcoin from one of the world’s biggest cryptocurrency exchanges.

Binance, which handles the buying and selling of virtual currencies, was attacked by cybercriminals who took 7,000 bitcoins in a daring online heist on Tuesday afternoon.

Company chief Changpeng Zhao, who goes by the nickname CZ, said in a statement that the hackers “had the patience to wait and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time”.

“The transaction is structured in a way that passed our existing security checks,” he added. “Once executed, the withdrawal triggered various alarms in our system.”

The company has suspended withdrawals on the platform, possibly until next week, the BBC reports.

Zhao has also requested that other exchanges block bitcoins linked to the hack from being transferred to different online wallets or cryptocurrencies, rending the stolen virtual tokes “largely useless”, the broadcaster says.

Speaking on live video-streaming app Periscope, Zhao encouraged Binance users to change their user names and passwords as a further precautionary measure, TechCrunch reports.

What happened?

At 6:15pm UK time on Tuesday, hackers used “a variety of techniques” to steal both vast sums of bitcoin, along with login and two-factor authentication password details, said Zhao.

The methods used include phishing, where attackers spoof people or systems into handing over sensitive information, as well as viruses and other forms of cyberattacks, the Binance boss added.

According to Wired, the hackers were able to “compromise several high-net-worth accounts” that were storing bitcoin in one of the exchange’s “hot wallets”, an online cryptocurrency storage system.

Although $42m worth of cryptocurrency is a substantial figure, it accounts for only 2% of the company’s holdings in bitcoin, the tech news site adds. Binance has promised to compensate the owners of the stolen digital coins by tapping into its Secure Asset Fund for Users (SAFU), which is essentially an emergency reserve.

Have bitcoin prices been affected?

Despite the scale of the hack, bitcoin prices have actually increased since Tuesday.

Cryptocurrency ranking site CoinMarketCap puts bitcoin values at $6,085 (£4,680) as of 9am UK time on Wednesday, up from Tuesday’s high of $5,971 (£4,595).

Bitcoin investors’ hopes have been hit by a sudden slump in values of the cryptocurrency following months of continual gains.

Prices dropped from highs of around $5,530 (£4,280) on Thursday evening to $5,180 (£4,010) a few hours later - a drop of some 6% - according to ranking site CoinMarketCap.

The drop came after New York State Attorney General Letitia James accused Hong Kong-based cryptocurrency exchange owner iFinex Inc of an ongoing fraud, The Wall Street Journal reports.

The firm allegedly “raided” the reserves of its virtual currency Tether to pay customers who wanted to make withdrawals from its Bitfinex digital coin exchange, says Fortune.

The attorney general’s report claims that $850m (£658m) was taken from Tether, a cryptocurrency touted as being pegged to the dollar.

That amount is believed to account for around 27% of Tether’s dollar reserves, according to Chad Cascarilla, who runs rival cryptocurrency Paxos.

Word of the allegations quickly spread to the visual currency markets, affecting both bitcoin values and rival digital coins Ethereum and Litecoin.

What is today’s bitcoin price?

Following yesterday’s tumble, bitcoin is slowly creeping back up. CoinMarketCap puts today’s value at $5,280 (£4,090) as of 10am UK time, down from a high of $5,630 (£4,360) on 24 April.

Are the Bitfinex allegations likely to affect future values?

Probably not, given that prices are already recovering.

Prior to Thursday’s slump, Simon Peters, an analyst at online trading site eToro, told the Daily Express that “the stars are aligning for a Bitcoin bull run”.

Values are beginning to edge closer to the $6,000 (£4,650) mark, which has traditionally been a “major support level”, he said. That could lead to a wave of investors selling off their virtual assets, prompting another price drop.

But “if that sell-off is overcome, and the price remains consistently above $6,000, there would be some serious momentum and belief that we could see the price carry on rising over the next year to around 60% to 70% of the all-time high” of almost $20,000 (£15,500) recorded in December 2017, Peters argued.