This is possible but unlikely. Other currencies will likely follow the trend of the biggest leaders, as is common in the stock market. If Google, Amazon, or Apple go up or down, other technology stocks tend to follow. The same can be expected in the cryptocurrency markets. It is possible that Bitcoin will double in price, but it is also possible it will fall to zero.
Because they are not backed by a government or asset, Bitcoin and its cousins do not really represent anything. They are only worth what someone is willing to pay for them. Whatever you do, do not invest more than you can afford to lose. Cryptocurrencies are a risky place to invest, and you never know what tomorrow will bring.
The best crypto to invest in depends on your budget, your risk tolerance, and what you're looking to gain by investing in crypto. If you want something relatively well established for cryptocurrency , Bitcoin or Ethereum might make the most sense. For something that may be less volatile, a stablecoin that's backed by currency like Tether or USD Coin might be a good fit. While many cryptocurrencies have increased in value, they can be volatile and aren't backed by a government.
For some, the lack of government involvement is an advantage. Whether it's a good investment for you depends on your age, risk tolerance, overall financial strategy, and whether you can afford to lose what you put into cryptocurrency. Part of. Investing in Bitcoin. How to Mine Bitcoin. Other Cryptocurrencies. Table of Contents Expand. Table of Contents. What Are Cryptocurrencies?
Where Does Bitcoin Come From? Cryptocurrencies Are Risky. By Eric Rosenberg. Eric Rosenberg is a financial writer with more than a decade of experience working in banking and corporate accounting. He specializes in writing about cryptocurrencies, investing and banking among other personal finance topics. Learn about our editorial policies. Reviewed by Somer G. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years.
Tether is already in contact with the project that suffered the breach. Tether validate the freeze and programs reissuance of funds. Happened in the past with Kucoin hack and others. Payments, says Bruce Mizrach, an economics professor at Rutgers. The same is true of USDC, another stablecoin. Some of that delay is that Mars has to comply with anti-money laundering laws to exit cryptocurrency back into the US dollar.
Now, he could instead exit his Bitcoin trade into a dollar-pegged cryptocurrency. The relatively quick transaction would mean that his funds would be available to go into another investment right away. If Mars is trying to do rapid trading, he might choose to do this instead of moving back and forth between the traditional banking system and cryptocurrency.
Stablecoins can also be used for margin trading. Our buddy Mars can borrow money from an exchange such as Kraken, which will use its own funds to help execute the trade. But Mars has to put up some collateral for the loan, and stablecoins can be useful for that.
Margin trading is risky — it can lead to very big losses. It is! To the extent they are, we will apply the full investor protections of the Investment Company Act and the other federal securities laws to these products. Cryptocurrency regulation is kind of a hot topic right now, though, and Gensler used to teach courses on cryptocurrency during his last gig at MIT.
Well, stablecoins are huge. The most popular one, Tether, launched in and is pegged to the dollar. USDT tokens are involved in half of worldwide Bitcoin trades. And there have been questions about whether movements in Tether have created price manipulation in Bitcoin.
Apparently, this works. In , it was originally called Realcoin, and the idea was that it would be backed by the US dollar on a one-to-one basis. See, in , Tether also announced a partnership with cryptocurrency exchange Bitfinex. In , the leak of the Paradise Papers established that the same people control both Bitfinex and Tether. Anyway , Tether settled the case with New York state. In the settlement agreement , the office of the attorney general found that Tether had no reserves to back the stablecoins in circulation for periods of time.
Tether declined to comment on why money moves between Bitfinex accounts and Tether accounts. The settlement agreement, by the way, bars Tether from doing business with anyone in New York. Tether has always been fully backed and the assurance opinion made available today confirms it once again, and puts Tether ahead of the industry on transparency.
Mmmmmmm, well, the first move was pie charts! As of March 31st, about 76 percent of Tether was backed by cash and cash equivalents, including unspecified commercial paper, which is a kind of short-term debt issued by companies. The recent attestation is more detailed. A quarter of the assets are in Treasury bills, a significant increase from the last report — which may reassure some people, since T-bills have a reputation as very safe assets.
According to the accounting firm Moore Cayman, Tether has more money in its reserves than is required for redemption. At this time, we do not disclose the make-up of our commercial paper holdings. You can see the issuer, the specific identification code, how much money is invested, and the market value, among other things, for each holding.
So we got an attestation to its assets : 61 percent in cash and cash equivalents and 9 percent commercial paper. Of the top 10 stablecoins, the most transparent is Gemini , says Mizrach. Tether, naturally, would disagree. More or less, yeah. Yeah, according to Bloomberg.