Bitcoin hits new high of over $67,000
Bitcoin hit a new high this week, hitting $67,016, boosted by the launch of a new ETF that tracks the cryptocurrency’s price (see below). It has risen by more than 130% since the start of the year – though not without a lot of volatility. The new high leaves bitcoin as the world’s 13th biggest currency with a market cap of $18.85m, says the Independent, surpassing the Swiss franc and Russian rouble. In terms of the world’s biggest companies, it now ranks higher than Facebook and Tesla.
Bitcoin ETF launches with more in the pipeline
As you may have read in Dominic’s Money Morning this week, the ProShares Bitcoin Futures ETF launched on the New York Stock Exchange this week. The ETF will hold futures that track the bitcoin price. Two more ETFs from Van Eck and Grayscale are also set to launch.
The SEC’s decision not to oppose the fund is “a sign that major global regulators are becoming more comfortable with crypto-backed products, even if they remain cautious on the industry more widely” says the FT.
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Pennsylvania bitcoin miner debuts on Nasdaq
Stronghold Digital Mining (Nasdaq: SDIG), which mines bitcoin using energy from waste coal, made its stockmarket debut this week. It launched at $19 a share and quickly climbed to $31.90, ending its first day of trading at $28.90. The company went public via a traditional IPO rather than using a special purpose acquisition company as it gave investors more confidence, having been “been vetted by the SEC the regular way”.
The company takes spoil from Pennsylvania’s coal mines – co-founder Bill Spence reckons there are 840 slag heaps dotted around the state – and uses “fluidised bed boilers to remove toxins”, says CNBC, which helps produce the power used to mine bitcoin. The company made a loss of $3.5m in the first half of the year on revenues of $7.9m
Want free crypto? Just get your retina scanned.
In the hopes of getting some free cryptocurrency more than 100,000 people have had their retinas scanned by a startup called Worldcoin, reports the FT, as part of a project to distribute digital money to over one billion people worldwide.
The idea is to give the coins to everyone on earth free tokens, based on the ethereum blockchain which, the company says will “increase individual empowerment and equality of opportunity on a global scale”. The retina scanning is to prove you’re a human; once you’ve been eyeballed, you will at some point in the future receive your crypto.
The company has so far distributed 30 “orb” eye-scanning devices around the world, and hopes to “distribute 4,000 devices per month”.
The Orb “captures an image of a person’s eyes, which is converted into a short numeric code, making it possible to check whether the person has signed up already. If not, they receive their free share of Worldcoin”, the company says on its website.
HMRC to send “nudge” letters to cryptocurrency investors
HM Revenue and Customs is planning to send cryptocurrency investors “nudge letters” reports the FT, “warning them to check they have paid the right tax”. Investors will be urged to check they have paid the appropriate amount of capital gains tax or income tax on their holdings, but “it does not necessarily mean you have made an error on your tax return”.
HMRC says it is just helping people get their tax affairs right. “We regularly undertake activity to educate customers who might need help. Our letter asks cryptoasset holders to review their transactions to ensure that they are declared correctly”, it said.
FCA goes on TikTok to warn of cryptocurrency risks
The Financial Conduct Authority, the UK’s financial regulator, has launched a campaign on video-based social media platforms TikTok and Youtube to warn young cryptocurrency speculators of the risks they face, reports the i newspaper. The campaign, called InvestSmart, wants people to ask themselves five questions:
1. Am I comfortable with the level of risk? Can I afford to lose my money? 2. Do I understand the investment and could I get my money out easily? 3. Are my investments regulated? 4. Am I protected if the investment provider or my adviser goes out of business? 5. Should I get financial advice?
The FCA is worried that investors are buying high-risk products with little knowledge of the dangers. It surveyed 18-40 year olds and found 76% made investment decisions “driven by a sense of competitiveness with friends or family”, 43% saying they wanted to “beat their peers when it came to making returns”.
“We don’t want to limit choice”, said the FCA’s Sarah Pritchard, “we are just asking investors to pause and consider. Are you prepared to lose all your money? If the answer is yes, then fine.”
Cybercriminals have stolen almost £150m of cryptocurrency so far this year
Action Fraud, the UK's national reporting centre for fraud and cyber crime, says cybercriminals made off with £146m in cryptocurrency in the first nine months of this year, reports the Daily Mail. That’s 30% more than in the whole of 2020. A total of 7,118 reports of cryptocurrency fraud, with the average victim losing £20,500. One in ten victims were aged between 18 and 25, and more than half were under 45. Criminals create “fraudulent advertisements with photographs of unsuspecting celebrities and use made up quotes to offer fake testimonials to make their offer look legitimate”
Cryptocurrency markets this week
- Bitcoin rose 6.6% to $63,211
- Ether rose 8.6% to $4,108
- Dogecoin rose 8% to $0.24
- Cardano rose 1.5% to $2.19
- Solana rose 27.5% to $202
What to look out for
Iran set to pilot its central bank digital currency
The Central Bank of Iran is to pilot its own “national cryptocurrency” soon, says Bitcoin.com. The Islamic Republic is “studying potential risks and benefits” and will launch it “once the Money and Credit Council approves it”, said Ali Salehabadi, the governor of the central bank.
Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
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