opinion

Crypto SWOT: The rally in Bitcoin is creating nearly 1,500 “millionaire wallets” daily

Kitco Media
By Frank E Holmes
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Crypto SWOT: The rally in Bitcoin is creating nearly 1,500 “millionaire wallets” daily teaser image

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was 0x Protocol, rising 144%.
  • Bitcoin hit a fresh all-time high for the fourth time in six days bolstered by record-breaking inflows into U.S. ETFs tied to the cryptocurrency. Bitcoin reached a high of $73,664 on Wednesday of this week, writes Bloomberg.  
  • Investors have poured over $200 million into VanEck’s spot Bitcoin ETF after it waived fees for the first $1.5 billion in assets until the end of March next year. The VanEck Bitcoin Trust which manages about $516 million has attracted a net inflow of $333 million since its launch in January, writes Bloomberg. 

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Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Shiba Inu, down 21%.
  • Bitcoin declined after setting a record high for the fifth time in seven days, dropping below $70,000 with investors pulling back from riskier assets across financial markets. The popular digital asset dropped as much as 6.3% on Thursday after climbing to an all-time high on the day, writes Bloomberg.  
  • Seventeen individuals acted as leaders in a $300 million Ponzi scheme involving CryptoFX LLC that targeted Latino investors, the SEC alleged on Thursday in a suit that has partially settled. Two of the defendants agreed to pay a total of more than $68,000 in disgorgement, interest, and civil penalties, the SEC said in a press release, according to Bloomberg. 

Opportunities

  • Thailand has waived personal income tax on capital gains from investment tokens, reports CoinTelegraph, to promote fundraising using investment tokens and establish the country as an investment hub.  
  • Bitcoin’s record-breaking rally appears to be creating around 1,500 new “millionaire wallets” daily. Data such as the number of tokens a wallet holds is accessible since the network is public and not controlled by any centralized intermediaries, Bloomberg explains.  
  • With nonfungible tokens attempting a comeback amid the latest crypto renaissance, Hivemind Capital partners is seeking to raise at least $50 million for a fund dedicated to the intersection of digital art and blockchain, writes Bloomberg.  

Threats

  • The founder of a cryptocurrency mixing service known as Bitcoin Fog was convicted in Washington federal court of helping to launder tens of millions of dollars from darknet markets known for selling illegal drugs. Roman Stelingov processed more than $400 million in untraceable transactions, including $78 million involving known darknet markets, writes Bloomberg.  
  • Crypto tax cheats just might have more to worry about this filing season as a newly confident IRS worked with the Department of Justic on the first standalone criminal charges for crypto tax fraud. The agency accused Frank Richard of Austin, TX, of underreporting the sale of $4 million worth of bitcoin in 2017 and 2019 and substantial capital gains that came from those sales, writes Bloomberg.  
  • Bitcoin extended a retreat from its latest record high amid an intensifying debate about whether the bull run in cryptocurrencies is evidence of speculative froth in global markets. Bitcoin dropped as much as 7.2% on Friday before paring some losses, writes Bloomberg. 
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Frank E Holmes

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the Global Resources Fund (ticker PSPFX), the World Precious Minerals Fund (UNWPX) and the Gold Shares Fund (USERX).

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