Coming off their best week since early February, digital currencies were slightly lower Monday, with many pundits eyeing the U.S. tax deadlines that loom a day away.
Bitcoin, the No.1 digital currency, hit a three-week high earlier in the day, trading to $8,407.72, before slipping back below $8,000, giving up some of last week’s gains. A single bitcoin BTCUSD, +0.33% was last valued at $7,988.63, down 4.4% on the day.
Tax day looms
After surging as much as 20% last week, many pundits now believe a medium-term low is in place, blaming the recent selloff on tax related selling — digital currency owners who made money in 2017 are having to convert crypto into fiat money to pay their taxes.
To some, blockchain is a potential game-changing innovation that could disrupt and replace traditional payment and information-recording systems.
Created around 2009 by Satoshi Nakamoto, the pseudonym ascribed to the anonymous originator, or originators, of bitcoin, as the underpinning for a new-age, 21st-century payment structure on an immutable, publicly distributed ledger; however, the revolutionary blockchain hasn’t yet lived up to the hopes and dreams of advocates, who are aspiring to put it to use.
And a blockchain sea change isn’t expected soon, according to at least one bank.
“Despite tremendous hype over the potential for crypto technologies in money and finance—specifically, blockchain and distributed ledger technology—we see little likelihood of widespread adoption in any area in the near future,” wrote analysts at Barclays in a note dated April 10.
Citing lack of trust, sovereignty disputes, privacy and irreversibility, the Barclays analysts sought to assess the hype against the realities for near-term blockchain usage.
Putting a value on your cyptocurrency and other crypto assets can be tricky for an adviser, experts told an Investment Adviser Association webinar Friday.
The wide range of factors come into play in putting an accurate value on the assets are important because valuation helps determine the performance of the cryptocurrency accounts and fees charged investors, attorneys from the law firm of Seward & Kissel told the audience.
One factor complicating valuation they said is the aggregate trading volume of the top five Bitcoin exchanges accounts for only 26% of the global trading volume.
Additionally, since most cryptoasset trading is not done in U.S. dollars, exchange rates can complicate valuations, the attorneys pointed out.