Cryptocurrency Bitcoin price
Every four years, the rate at which bitcoins are produced is cut in half (an event called the “halving”). As fewer coins are available to mine, the expense and time it takes to produce them increases. Similar to supply shocks in commodity markets such as oil or gold, a decline in annual production of bitcoin may affect its price. In its short history, there have been three bitcoin halvings, and each has been followed by a price spike and a collapse. The next halving is expected to be in the first quarter of 2024. Why is bitcoin worth so much ● Cryptocurrency? Digital asset? What’s the accounting? In this podcast, we discuss what these terms mean and how they impact your financial statements.
Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics. Cryptocurrencies, Digital Dollars, and the Future of Money In addition, some investors may be able to do tax-loss harvesting with bitcoin, to offset profits with losses, as there is no wash rule. Basically, this means you could sell your bitcoin and immediately buy it back at a lower price, which could set you up for larger future gains.