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Tesla Stock Breaks $2K as High-Risk Tech Asset Sees Bitcoin Comparison

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Bitcoin price and Tesla stock have both been in the limelight recently, leading some retail investors to question if there are commonalities between the two assets. As Bitcoin (BTC) continues to hover around the $12,000 mark (as of publication time), in doing so, the largest coin by market capitalization is reaching year-to-date highs that haven’t been seen since June 2019.

Tesla stock has also set a number of benchmarks. On Aug. 20, Tesla’s stock price hit an all-time high, jumping over 45% in 10 days to close above $2,000 per share.

Furthermore, data suggests that Bitcoin was the most viewed asset after Tesla stock in the United States last month.

Is Bitcoin behaving like a tech stock?

The increasing interest in both Bitcoin and Tesla have some wondering if BTC is behaving more like a tech stock. Findings from London-based digital asset management firm CoinShares noted that in its growth phase, Bitcoin does indeed behave like a tech stock:

“Bitcoin’s risk profile is rather similar to that of a technology stock: if it reaches its potential, the value could be immense, but at the same time, there is a non-zero chance that it fails entirely.”

While this may appear to be the case, Phil Bonello, director of research at crypto fund Grayscale Investments, told Cointelegraph that it isn’t fair to simply look at returns when drawing conclusions between Bitcoin and Tesla, with BTC being up by about 63% year to date and TSLA with a 365% rise:

“Most risk assets have been correlated with each other because they have all been dependent on the strength or weakness of the denominator: the US dollar. Additionally, when assets sell off aggressively like they did in March, correlation approaches 1 as everyone needs liquidity.”

Bonello’s point is verified by Tesla stock dipping to a low of $361 on March 18. Bitcoin also reached a low of nearly $3,800 back in March. Bonello further commented that while he doesn’t watch the ins and outs of Tesla closely, there is currently a secular bull market. “I tend to believe we are in a secular bull market driven by monetary and fiscal stimulus,” he said.

Echoing Bonello, Natalia Karayaneva, advisor to Arrington XRP Capital and CEO of Propy — a blockchain-based real estate platform — told Cointelegraph that there are new bubbles emerging around the stock market and Bitcoin:

“Instead of buying tangible consumer goods, people are investing in these assets as a way to not hold fiat. Similarly, institutional investors are investing in everything related to digital assets.”

What are the similarities between Bitcoin and Tesla?

Market value aside, it’s interesting to consider the inherent similarities between Bitcoin and Tesla. According to Bonello, what Bitcoin and Tesla have in common is the potential for exponential growth, making them both especially volatile and reflexive.

This point is also valid for most cryptocurrencies, not just Bitcoin. Mati Greenspan, a crypto market analyst and founder of Quantum Economics, told Cointelegraph that he had been tracking a correlation between TSLA and Chainlink’s LINK token, which is now the world’s fifth-largest coin by market value. Greenspan’s findings highlight the volatility of both asset classes.

Tesla stock in comparison to LINK token

Millennial retail investors seem to be the most interested in volatile assets like Tesla and cryptocurrencies. Recent findings indeed prove this to be true, as CNBC noted in February that Tesla was the most held stock on the personal-finance company SoFi Invest, which is heavily used by millennials. Cointelegraph also previously reported that research from Stack Funds shows that 50% of Bitcoin investors are millennials.

Another interesting commonality between Bitcoin and Tesla is the revolutionary impact associated with the two assets, as Tesla is greatly disrupting the transportation sector while Bitcoin is aiming to revolutionize finance.

Bitcoin remains a unique asset

Yet, while disruptive technologies like Bitcoin and Tesla may drive mass interest from younger investors with similar behaviors, Bitcoin still remains a unique asset class. Grayscale’s Bonello commented that Bitcoin’s unique qualities may make it an appealing investment, but it has also been a challenge for traditional investors to make sense of its value, “particularly because Bitcoin doesn’t offer cash flows like other investments, such as Tesla,” he noted.

Michelle O’Connor, vice president of marketing at trading platform Uphold, told Cointelegraph that Bitcoin, unlike Tesla, has a more realistic point of entry: “There’s an appetite for risk or returns that have become fluid as the ability to buy these assets on a smaller scale (fractionally).” She concluded:

“Bitcoin is around $11,500 right now, if that was the point of entry it would be far less appealing to a wider audience. Because you can purchase fractions of Bitcoin, it’s point of entry is more realistic, the potential returns are instant and they’re not associated with a government.”

Source: https://cointelegraph.com/news/tesla-stock-breaks-2k-as-high-risk-tech-asset-sees-bitcoin-comparison

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Ethereum Transaction Volumes Hit $41 Billion in November

Decentralized finance platforms were responsible for 99% of Ethereum transaction volume last month, says DappRadar.

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In brief

  • Ethereum transaction volume amounted to $41 billion in November, according to DappRadar’s monthly report.
  • The total value locked in decentralized finance projects surpassed $13 billion.
  • At the same time, Ethereum users’ activity declined compared to October.

November has been a turbulent month for Ethereum’s (ETH) decentralized applications (dapps) as all public attention was riveted to the long-awaited launch of ETH 2.0.

On one hand, the total value locked (TVL) in dapps surged to more than $13 billion, on the other—user activity declined in comparison to October, according to DappRadar’s monthly report published yesterday.

Per the report, while the TVL surpassed $13 billion, it was in big part due to the price volatility of Ethereum and other altcoins. The adjusted TVL (where price increases weren’t taken into account) amounted to around $11 billion in November.

Ethereum transaction volume increased by 1,784% year-on-year (i.e. compared to the same time period in 2019) but have dropped by 12% since October, amounting to over $41 billion. Decentralized finance (DeFi) platforms were responsible for 99% of this volume.

Ethereum transaction volume reached $41 billion in November. Image: DappRadar

Simultaneously, the price of ETH token reached its highest level this year, rising to nearly $600 by the end of November. However, despite the positive backdrop on the eve of Ethereum 2.0 launch, gas prices remained a “major network issue” for Ethereum, averaging to around 55 Gwei, the report noted.

Likewise, the total number of active daily wallets dropped by 19% compared to October—from 54,000 to 45,600.

“While overall activity mostly decreased in the DeFi dapp ecosystem in terms of headline figures there were still important events taking place. Important mergers happened during November,” the researchers noted.

The number of daily active wallets decreased in November. Image: DappRadar

Namely, popular DeFi platform Yearn Finance partnered or merged with several other projects in the space, including SushiSwap, Akropolis, Cover, Cream, and Pickle. DappRadar asserted that “the merge might result in increased activity within the category in the future.”

Technical vulnerabilities proved to be another pain point of DeFi, “undermining confidence in the sector’s security.” As Decrypt has noted, several DeFi projects have become victims of hackers recently, including Pickle Finance (hacked for $20 million) and Value DeFi (hacked for $6 million). And such flash loan attacks will only get worse, experts warn.

DappRadar said, “To conclude, November was all about Ethereum 2.0 news and speculation, token price growth, and increased TVL. Although transaction volume and daily active wallets decreased during November. We believe that improved results lie ahead for Ethereum.”

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Audio Streaming Mogul Spotify Considering Cryptocurrency Payments

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Joining the tech and financial services bigwigs in the payments revolution, Spotify too is going the crypto way. The Swedish audio streaming and music services giant just put up a job offer for an Associate Director, Payments Strategy & Innovation. The desired candidate will play a key role in ‘navigating the company’s payments rudder’ through the cryptocurrency ecosystem.

Spotify Looking To Be A ‘Leading Player In The Cryptocurrency Space’

As per an official job opening that Spotify just posted, the company is looking for an Associate Director for their Payments Strategy & Innovation Team. The said individual would report to the Director of the same team. And will be instrumental in Spotify gaining a considerable foothold wrt integration of cryptocurrency payments. According to the description:

We are now looking for an outstanding Associate Director to join our Payments Strategy & Innovation team. This role will report to the Director, Payments Strategy & Innovation and will play a key part in defining and implementing Spotify’s payments strategy as well as leading Spotify’s activity within the Libra stablecoin project and wider digital asset & cryptocurrency space.

The objective is to address the company’s plan of ‘enabling new monetization opportunities’ for music creators. Also, Spotify wants its platform to become accessible to a larger section of potential users.

Spotify intends to inculcate all the latest fintech trends in their payments strategy, including cryptocurrencies. So that users from all sections of the society can access the music streaming platform.

Crypto Agenda Involves Libra As Well

One of the designated roles of the incoming Associate Payments Strategy Director would be to lead ‘Spotify’s day-to-day engagement with the Libra Association.’ This is due to the ongoing alliance of the company with Facebook’s digital currency project.

Along with this, the company is looking to leverage all the blue-chip aspects of the blockchain and cryptocurrency space. This includes stablecoins and Central Bank Digital Currencies (CBDCs). It is to streamline its transition to the most advanced payment methods available in finance at the moment.

The Associate Payments Strategy Director would be required to fulfill the above roadmap by making use of

Spotify’s global footprint to seek out innovation in the payments domain globally as well as emerging regulatory & market trends that could influence Spotify’s approach to payments.

Through all the above, the company actually intends to elevate its ‘reputation as a market leader in payments’, the website said. And give giant payments players like PayPal a run for their money.

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Source: https://cryptopotato.com/audio-streaming-mogul-spotify-considering-cryptocurrency-payments/

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India Reportedly Plans to Tax Crypto Investors As Bitcoin Price and Trading Activities Soar

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Barely ten months after the Indian Supreme Court lifted the RBI’s ban on cryptocurrency transactions, fresh reports from yesterday revealed that the country’s tax authority is now keeping a close watch on crypto traders as Bitcoin’s price continues its bullish trend.

Taxing Crypto Gains

According to local media, the Indian Tax Department is already in possession of data belonging to investors who invested in Bitcoin or cryptocurrencies through banking channels before the RBI’s ban in 2018. 

This development is coming after data shows a tremendous increase in crypto trading activities in India. Since the crypto ban was lifted earlier this year, retail investors between the ages of 25 and 40 have been spending millions of dollars on crypto trading every day. 

Over $25 Million Daily

Two of India’s largest crypto trading platforms, Binance-acquired WazirX and CoinDCX, saw a significant increase in activities over the last six months. According to an earlier report, WazirX recorded a massive 125% increase in user signups in the last two quarters. The exchange also has a daily trading volume of $19-26 million, with more than 85% of the transaction coming from Indian traders. 

Some experts believe it will be difficult for the country to tax crypto because there’s no regulation in place for crypto dealings. They feel a regulatory framework will provide the needed clarity to make taxation easier. While India is yet to release its crypto regulation, an earlier report suggests that the country may regulate crypto as commodities.

Declaring Bitcoin Profits As Capital Gains

Although it is unclear how India plans to implement the tax law, sources familiar with the matter claimed that the country’s taxman is already preparing to collect tax on the gains made from Bitcoin. And notice may be sent out to investors if “something goes out of this.”

Experts believe that the tax authorities may classify crypto gains as business income, and investors may have to pay up to 30% tax on profits made from selling cryptocurrencies. 

However, some tax experts are advising their clients to declare their Bitcoin earnings as capital gains, which is similar to profits generated from shares.

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Source: https://cryptopotato.com/india-reportedly-plans-to-tax-crypto-investors-as-bitcoin-price-and-trading-activities-soar/

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