Bitcoin saw another bounce last week to cap off a volatile year, dropping to its lowest level since May and then quickly rebounding.
But should we have seen bitcoin’s rebound coming? A report released earlier this month found the cost of creating new bitcoin, a process known as mining, now averages around $6,300 per bitcoin—something that could mean bitcoin is perhaps unlikely, but not guaranteed, to fall below this level.
This year, the price of bitcoin was all about China, and the trade war, and the progress of a trade agreement. Will the same be true next year?
Plus: This year, we saw the birth of several bitcoin products like Bakkt’s physically delivered bitcoin futures, Fidelity Digital Assets bitcoin custody solution and TD Ameritrade’s trading offerings. Will 2020 be the year of enterprise bitcoin?
RIPPLE’S BIG RAISE
Ripple, the company behind the XRP cryptocurrency, has revealed a $200 million funding round. The company is now valued at $10 billion. The announcement sent the price of XRP sharply higher to $0.19 per XRP token, a bump of about 4%.
According to the company, the new funds will be used to grow the number of banks and payments companies using the cryptocurrency XRP for international transactions.
CRYPTO ON THE HILL
As Congress prepares to recess for the holidays and lawmakers and regulators continue to grapple with the implications of Facebook’s libra, a new bill has surfaced that would provide a sweeping regulatory framework for digital assets, including cryptocurrencies.
The draft legislation is called the “Crypto-Currency Act of 2020,” and its goal is to clarify which Federal agencies regulate digital assets and to require those agencies to notify the public of any Federal licenses, certifications or registrations needed to create or trade in such assets.
CRYPTO FOR RETIREMENT
Cryptocurrencies are normally prohibited in regular IRAs, which can only hold securities like stocks, bonds, certificates of deposit and mutual funds or ETFs. However, the IRS has clarified that cryptocurrencies are taxed as property, and as such can be held in a self-directed IRA.
While IRAs are a somewhat complicated area of the tax code, they come with significant tax benefits.