As of this writing, Bitcoin (BTC) is trading at $22,852.20, though an hour from now it could be trading at $18,000 or $28,000. To say BTC is volatile is an understatement. It is wildly so. This is how it has traded over the last 12 hours, for example:
And this is how it has traded over the last year:
One thing we know after Monday morning quarterbacking, is that one should have had at least a small amount of their investment portfolio five, even ten years ago. Although labeled an alternative digital currency to the U.S. Dollar, for tax purposes, the Internal Revenue Service treats BTC and all crypto currencies as assets, and one will be federally taxed on the capital gains or losses when one sells BTC.
Some of Bitcoin’s recent rise can be attributed to funds like the Grayscale Bitcoin Trust (GBTC) which make buying and selling BTC easier. And now, PayPal has made it as simple as a few clicks on your phone to buy crypto currencies, including Bitcoin and Bitcoin Cash, Ethereum, and Litecoin, with others on the way to being listed to trade. PayPal isn’t even charging transactions fees for crypto through the rest of this month. Bitcoin and other crypto currencies used to be too complex for the average person to purchase, which resulted in “lost” Bitcoins as people forgot their 12 word pass phrases, amongst other issues. Now, as things are going more mainstream for Bitcoin, there has been a rush of buy “orders” causing the price of these alternative “coins” to rise because of their limited supply.
BTC is not the most efficient means for transactions to take place. Mostly because there is a time lag in trading BTC. It could take 30 seconds or 10 minutes, so as a currency it is not very efficient. There are other cryptos that transact faster, like Bitcoin Cash (BCH) which transact in seconds almost like you were running a credit card at a Publix terminal. Bitcoin Cash has done well in value, though not nearly as well at the original Bitcoin; BCH has risen only 67 percent over the last 12 months.
As for where BTC goes from here is anyone’s guess. Now that mainstream Wall Street firms are dipping in their toes along with other billionaires from around the world, who knows? There are predictions it will all come tumbling down and Bitcoin will not be worth even one U.S. Dollar while others work their economic models saying it is worth $74,000 or $500,000 and more.