Bitcoin
Each Bitcoin is a computer file that is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain.
As of June 2021, bitcoin was legal in the U.S., Japan, the U.K., and most other developed countries. In general, it is necessary to look at bitcoin laws in specific countries. In the U.S., the IRS has taken an increasing interest in bitcoin and has issued guidelines for taxpayers.
MARKET UPDATE
Bitcoin (BTC) headed lower into the weekly close on March 6 with geopolitical tensions and associated macro weakness firmly in focus.
Could 2022 bring a “Greater Depression”?
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hit its lowest levels in over a week Sunday after volatility returned overnight. The pair was in the process of testing $38,000 support at the time of writing, with three-day losses approaching 12%.
Despite the “out of hours” trading environment, the trend was down for the largest cryptocurrency, as the mood on global equities wobbled among analysts. “Global equities have lost $2.9tn in market cap this week as war could trigger major stagflationary shock,” markets commentator Holger Zschaepitz warned on the day.
“Economists cut their growth forecasts & raise inflation projections. Global stock markets now worth $110tn, equal to 130% of global GDP, which looks expensive for the current situation.”
Shaky Crypto Market
Should a bigger TradFi correction set in, and the already shaky crypto market could fare just as badly, some argue — at least to begin with. Popular trader and analyst Pentoshi even went as far as to forecast a repeat of the worldwide meltdown, which triggered the Great Depression 90 years ago.
Some established pundits, however, held a decidedly different stance. In its latest crypto market outlook report on March 4, Bloomberg Intelligence remained bullish on Bitcoin and Ether (ETH).
Reversion of Crypto Assets
“Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the highest inflation in four decades, but this year may mark another milestone for Bitcoin,” it read.
“If risk assets don’t decline and reduce some of the price pressure, inflation measures are more likely to remain buoyant, leaving few options for central banks but to raise rates more aggressively.”
$36,000 Support May Step in for BTC
With trepidation still ruling the roost short term, the outlook for Bitcoin held few bullish cues, focusing on a continuation of the current trading range. “Bitcoin is at a critical level,” Yann Allemann and Jan Happel, co-founders of on-chain analytics firm Glassnode, summarized while introducing the latest edition of its “Uncharted” newsletter.
“RSI is oversold and trending up. If the price fails to break above $40k, we go down to support. Support: $34-$36k Resistance: $43-$45k.” The accompanying graphic showed just how historically good value BTC/USD was at current prices and the correlation between such RSI lows and price reversals.
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