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  • When is bitcoin halving in 2024? – MoneySense

    When is bitcoin halving in 2024? – MoneySense

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    What is “bitcoin halving”?

    “Bitcoin halving,” a preprogrammed event that occurs roughly every four years, impacts the production of bitcoin. Miners use farms of noisy, specialized computers to solve convoluted math puzzles; and when they complete one, they get a fixed number of bitcoins as a reward. Halving does exactly what it sounds like—it cuts that fixed income in half. And when the mining reward falls, so does the number of new bitcoins entering the market. That means the supply of coins available to satisfy demand grows more slowly.

    Limited supply is one of bitcoin’s key features. Only 21 million bitcoins will ever exist, and more than 19.5 million of them have already been mined, leaving fewer than 1.5 million left to pull from. So long as demand remains the same or climbs faster than supply, bitcoin prices should rise as halving limits output. Because of this, some argue that bitcoin can counteract inflation—still, experts stress that future gains are never guaranteed.

    How often does bitcoin having occur?

    Per bitcoin’s code, halving occurs after the creation of every 210,000 “blocks”—where transactions are recorded—during the crypto mining process. No calendar dates are set in stone, but that divvies out to roughly once every four years. The latest estimates expect the next halving to occur sometime late Friday or early Saturday.

    Will having impact bitcoin’s price?

    Only time will tell. Following each of the three previous halvings, the price of bitcoin was mixed in the first few months and wound up significantly higher one year later. But as investors well know, past performance is not an indicator of future results.

    “I don’t know how significant we can say halving is just yet,” said Adam Morgan McCarthy, a research analyst at Kaiko. “The sample size of three (previous halvings) isn’t big enough to say ‘It’s going to go up 500% again,’ or something.”

    At the time of the last halving in May 2020, for example, bitcoin’s price stood at around USD$8,602, according to CoinMarketCap—and climbed almost seven-fold to nearly USD$56,705 by May 2021. (All figures in this article are in U.S. dollars). Bitcoin prices nearly quadrupled a year after July 2016’s halving and shot up by almost 80 times one year out from bitcoin’s first halving in November 2012. Experts like McCarthy stress that other bullish market conditions contributed to those returns.

    When is the next bitcoin halving?

    This next halving also arrives after a year of steep increases for bitcoin. As of Thursday afternoon, bitcoin stood at just over $63,500 per CoinMarketCap. That’s down from the all-time-high of about $73,750 hit last month, but still double the asset’s price from a year ago.

    Much of the credit for bitcoin’s recent rally is given to the early success of a new way to invest in bitcoin as an asset—spot bitcoin exchange traded funds (ETFs), which were only approved by U.S. regulators in January. A research report from crypto fund manager Bitwise found that these spot ETFs, short for exchange-traded funds, saw $12.1 billion in inflows during the first quarter.

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    The Canadian Press

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  • How to talk to your parents about crypto  – MoneySense

    How to talk to your parents about crypto  – MoneySense

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    While younger investors tend to be more optimistic about and willing to invest in crypto, according to the Chartered Financial Analyst (CFA) Institute, their family members may have concerns about it—especially given the fall of a few major crypto firms, including FTX—last November, its founder was found guilty of stealing from customers. Crypto is a highly volatile asset type with wide-ranging risks, so it can be a divisive topic. How can you have conversations about crypto with your family members so that both sides feel comfortable? 

    Before you explain cryptocurrencies to anyone, make sure you understand them yourself. Here’s a quick guide.

    1. Start with crypto basics 

    Start with the basics: Crypto is both an asset and a new technology. It is meant to be a digital currency. (Some companies and contractors will get paid in bitcoin, for example.) However, at the moment, it’s more of a tradable asset, whether on crypto exchanges or as part of crypto exchange-traded funds (ETFs) listed on stock exchanges.

    2. Explain how it’s used

    Then, you can get into the more complicated bits. Cryptocurrencies are built on blockchain technology, which is a digital ledger (your parents should know what that is). It logs the ownership of the crypto, and it’s spread across a network of computers that permanently and transparently records transactions. No one can alter the blockchains, and anyone can view them. See, simple enough.

    3. Be open to their questions

    Don’t get flustered when questions come up. “Why the need for new money?” they might ask. What sets cryptocurrencies apart from traditional fiat currencies, besides being virtual, is that they’re not backed by a central bank or government. Explain that cryptocurrencies carry both benefits and risks. Crypto transactions can be faster and cheaper, but if something goes wrong—say, your digital coins end up in the wrong wallet—there’s no one to intervene (get back your money). And investors treat them more like assets than as actual currencies.

    Your parents might also ask about the differences between virtual coins. There are thousands of cryptocurrencies on the market, available via crypto exchanges and crypto trading platforms. Keep it simple by explaining that the three largest coins by market capitalization are bitcoin, ethereum and tether. (We cover more questions below.)

    4. Be aware (and communicate that you’re aware) of its volatility and risk

    For your own financial literacy and credibility with the fam, you need to know that crypto isn’t instant growth. There may be stories of investors who “got rich quick,” but there are many more stories of those who lost their money. If you express you understand how serious investing in crypto is, it’s more likely your parents will trust your knowledge.
    Taub cautions that cryptocurrencies are “alternative” investments, and even within that broad category, they are considered extremely volatile and high-risk. 
    And Simmons suggests researching Canadian crypto trading platforms and demonstrating how to use one. Showing your parents how you plan to invest may help ease any anxiety they feel about crypto scams, which are common (more on this below). Read our tips on choosing a crypto trading platform.

    5. Explain how you will (and won’t) use crypto

    Once you’ve started a family dialogue about crypto, Taub says, “As with any investment, the conversation should be about how it fits into your existing portfolio(s) and how it aligns with your goals and investment objectives, your time horizon and your appetite for risk.” 

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    Sandy Yong

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  • 10 common crypto scams and how to avoid them – MoneySense

    10 common crypto scams and how to avoid them – MoneySense

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    In just the first half of this year, investment scams conned Canadians out of $161 million—most of it lost to cryptocurrency scams, according to the Canadian Anti-Fraud Centre (CAFC). “Crypto investments are the top type of investment scams reported to CAFC,” says Jeff Horncastle, the organization’s acting client and communications outreach officer. He adds that fewer than 5% of scams are reported, so the actual numbers are likely much higher.

    Scammers often find victims on social media

    Cryptocurrency scams are often intertwined with other types of scams—and the criminals behind them cast a wide net. “Unfortunately, everyone is targeted,” Horncastle says.

    Con artists frequently find potential marks on social media. According to an analysis by TradingPlatforms based on FTC data, nearly one-third of social media crypto fraud happens on Instagram, and one-quarter on Facebook. 

    “In some cases, the scam starts as a romance scam and quickly turns into an ‘investment opportunity,’” says Horncastle. “Because suspects have gained the victim’s trust, it can lead to a high-dollar loss for the victim.”

    10 types of crypto scams

    There are many types of scams to watch out for, and unfortunately, as investors get savvier, the cons evolve and become trickier to spot. To protect yourself, always know where your money is going, understand the crypto advertising rules in Canada, and only use trusted and compliant crypto trading service providers. (As a starting point, see MoneySense’s picks for the top crypto platforms in Canada, which are all registered with Canadian securities regulators.) An exhaustive list of crypto scams is likely impossible, but to protect yourself, here are 10 to watch out for.

    1. Pump-and-dump, or rug pull

    In a “pump and dump” or “rug pull” scheme, promoters of a cryptocurrency hype it up to boost demand, and when the price soars, they sell all their coins for a quick profit. Because they sell in large volumes, other investors get nervous and sell their coins, too. As panic sets in and the selling spreads, the coin’s value plunges. The promoters get rich and small investors are left “holding the bag,” faced with huge losses. 

    A notorious example of an alleged crypto pump-and-dump scheme is a coin called Squid Game. Launched in October 2021, it rode the popularity of the Netflix series of the same name—despite having no affiliation. Less than two weeks later, Squid Game’s crypto developers suddenly sold their holdings when the coin’s price hit $2,800, making themselves $3.3 million richer (all figures in U.S. currency). Today, one Squid coin is worth about a tenth of a penny.

    The pump-and-dump scam is not unique to crypto, of course. It’s what high-flying stockbroker Jordan Belfort—the subject of the Hollywood film The Wolf of Wall Street, starring Leonardo DiCaprio—engaged in during the 1990s. His firm was accused of artificially inflating the price of penny stocks before selling their shares to make lots of fast money—costing investors up to $200 million. In the early 2000s, Belfort served 22 months in federal prison for securities fraud. He’s now marketing himself as an investment guru. 

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    Aditya Nain

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