As celeb-fronted campaigns bring cryptocurrency into the mainstream, is it time for clearer regulation of ads?

A harsh spotlight was shone on cryptocurrency ads this month. The UK’s ad regulator the ASA has said that it now will better police cryptocurrency content while TikTok has issued a warning to creators that it will not tolerate promotion of the divisive digital currency. At the same time, Google and Facebook appear to be opening the gate to more advertising from crypto companies having previously banned all ads. And even ads that do make it to air on the big screen have been quick to face criticism from the general public, wiser to the pitfalls of the crypto boom.

When Spike Lee – the famed director behind films like ‘Malcolm X’ – appeared on screens last week extolling the benefits of why “old money is out, new money is in” in a campaign for crypto ATM operator Coin Base, he faced a swathe of criticism for failing to spot the hypocrisies.

Lauding Bitcoin et al as “the digital rebellion” against a financial system that “systematically oppresses” people of color and women, he marched through Wall Street denouncing archaic financial systems and encouraging the nation to cash in their dollars for cryptocurrency.

“Do your research,” Lee says between hyperbole. Is it a warning? If not, it should be.

According to the Federal Deposit Insurance Corporation, 5.4% of US households do not have a bank account, with the primary reason being a lack of sufficient funds to open one.

Yet these 20 million Americans appear to be the exact target audience that Lee was encouraging to rush to a Coin Base ATM to exchange their “old money” for a new currency that’s “inclusive and fluid”.

Critics were quick to highlight that this group, arguably more than any other, is susceptible to the promise of making a quick buck without proper consideration for the risks involved with investing in something as volatile as cryptocurrency.

According to Glassnode, between May 17 and May 24, Bitcoin holders realized net losses of $2.56bn. Glassnode says most of these sellers were new ‘bitcoiners’ who had acquired and subsequently sold the currency within the past three to six months.

In a survey of UK consumers conducted by behavioral finance experts Oxford Risk, 36% cryptocurrency investors admit their understanding of the sector was poor or non-existent.

But emotional factors such as the ‘fear of missing out‘ are driving growth, with around 35% of adults saying they have read a lot about huge price rises while 15% say they have been encouraged to buy by friends or family.

Spike Lee isn’t the only celebrity to lend his star-power to cryptocurrency ads.

In the past, crypto companies had been used to marketing their products on pockets of the internet – Telegram groups, online chatrooms and invitation-only forums. But as Bitcoin hit headlines, large investors like Tesla and Square backed various Coins, and financial giants like BNY Mellon, Visa and Mastercard revised their policies to support crypto projects, the crypto sector began to experiment with mainstream advertising. And their marketing pockets are deep if the calibre of celebs they've signed on to front major ad campaigns is anything to go by.

Actor Neil Patrick Harris has bragged of the benefits of being an early Bitcoin investo for a CoinFlip campaign, Alec Baldwin has mocked those who think trading crypto on Etoro should be anything other that quick and easy, while Tom Brady and Gisele Bündchen have become brand ambassadors for FTX to encourage adoption of the digital currency.

These companies are also spending big on digital advertising, specifically with social media influencers.

Internet sensation Kim Kardashian West promoted Ethereummax – a so-called alternative-coin, or ‘alt-coin’, to the more established Bitcoin – to her 228 million Instagram followers last month.

Over on TikTok, young stars Charli and Dixie D’Amelio turned their combined 169 million followers’ attentions to cryptocurrency exchange Gemini as part of a sponsored campaign. In fact, the use of influencers by crypto companies on TikTok was so widespread they were given the moniker ‘Fintok advisors’.

But concern has been mounting within the walls of advertising regulators over the lack of scrutiny given to cryptocurrency ads, especially those targeting a young and financially naive audience.

The Advertising Standards Authority (ASA) in the UK recently said that it would be taking a more serious look at any crypto advertising. It came following the ban of an OOH campaign from UK-based exchange Luno, which ran a series of ads reading: “If you’re seeing Bitcoin on the Underground, it’s time to buy.”

The watchdog said it plans to offer guidance for companies in the coming weeks, and is ”considering whether further action is needed” around social media influencers promoting investments in the space without disclosing enough about the risks.

Further afield, the Advertising Standards Council of India (ASCI) said this week that it was looking into the rise of crypto ads after identifying it as an “emerging area of concern”.

But it’s slow progress. Arguably too slow for the fast paced nature of this sector, where scams and fraud are all too common.

”It is inevitable that digital asset investments and crypto currency ads in particular will face greater scrutiny and tighter regulation. It’s really a case of slow regulators catching up with fast-developing technology and greater public awareness,” says Rafe Blandford, chief product officer at Digitas UK .

“Focus is sharper on this sector because of the associated consumer risk with any investment instrument, especially in what currently feels like a Wild West atmosphere. Because country by country legislation can be slow, we can expect to see ad networks enacting their own policies and self-regulation.”

Atomic London is an advertising agency that counts Etoro – a trading platform that lists numerous cryptocurrencies – among its clients.

The agency‘s chief executive Jon Goulding said he is in no doubt that a clamp down in crypto advertising is coming. However, he raised concerns over how effective it would be when there remains no official regulation by the Financial Conduct Authority (FCA), agreeing with Blandford that ultimately we’ll see a network-level stance taken, rather than anything government mandated.

"With most crypto currencies not regulated by the FCA, how are consumers really going to be protected?,” says Goulding. ”It comes down once again to whether digital and social media platforms will self-regulate and block crypto-advertisers from accessing their inventory and not simply whether there is an arbitrary ‘warning, you could lose all of your money’ as a small print alongside advertising messages.”

But rather than a move to stricter regulation of crypto advertising, it appears some digital and social platforms are slowly opening up to it.

Facebook – which owns Instagram – introduced a harsh crackdown back in 2018 with a blanket ban on crypto companies using its ad product. It has since lifted those restrictions to allow some adverts from pre-approved brands, and has no policy on its site in regards to influencers promoting crypto.

Like Facebook, Google had also previously taken a firm stance on crypto ads in an effort to clamp down on scams. But it appears to be loosening those restrictions for crypto exchanges and wallets, with reports emerging that it has invited potential advertisers to apply for commercial opportunities this month ahead of a change in policy in August.

“Given the track record of those platforms I don’t hold out much hope that they’ll suddenly start clamping down on it,” says Goulding. ”Ironically, when going on to digital publishers sites to look at articles relating to the ASA banning cryptocurrency advertising, the first pop up ad was for a cryptocurrency.”

TikTok, however, is getting tougher. Earlier this month it updated its content policy to ban – among other things – influencers from promoting cryptocurrency.

Aside from the platform, the ability for crypto brands to market to the masses may also come down to the ethical values of the advertising agencies they want to employ.

Many agencies have committed to AdNetZero to help the industry tackle the climate change emergency. Spearheaded by the Advertising Association, it‘s aiming to reduce the carbon impact of developing, producing and running UK advertising to real net zero by end 2030 and asking agencies to commit to make practical changes in the way they run their advertising operations.

”The environmental impact of crypto currencies is significant. Between start of 2016 and mid-2018 it’s estimated that crypto mining was responsible for up to 15 tons of carbon dioxide emissions. The most prominent crypto currencies – Bitcoin, Ethereum, Litecoin and Monero – used more electricity in 2017 than Ireland or Hong Kong,” says David Edwards, chief customer officer at AMV BBDO, suggesting that agencies may need to take a stand on bringing cryptocurrency brands on as clients.

“It’s estimated that for every $1 of Bitcoin value created it was responsible for creating $0.49 in health and climate change – otherwise known, I think, as cryptodamages. It seems sensible that there should be tighter advertising regulation until cryptocurrencies are subject to proper global regulations – with all the checks and balances in place regarding personal and environmental protections.”

The price of Bitcoin has been up and down all year, from an all-time high of $60,000 in April to under $30,000 in July. Meanwhile, Americans’ interest in Bitcoin and cryptocurrency has grown alongside, at least according to their Google searches.

We’ve taken an interest in crypto this year, too — especially after noticing the lack of guidance for long-term investors more interested in retirement savings than getting rich quick with some new meme coin. Amid the constant price fluctuations, we’ve shared how investors can incorporate crypto into their portfolio without risking their other financial priorities — and weather the volatility along the way. Whether you’ve already invested and want to find the best form of wallet storage or you’re only beginning to explore how cryptocurrency actually works, we’re here to help guide you through the world of crypto. 

Many of the topics we’ve covered are the same ones crypto-curious investors are asking about on Google. Based on Google autofill results, related search terms, and “people also ask” suggestions, we’ve rounded up some of the most common questions, along with the answers and expert advice that can help you be a smarter investor.

Cryptocurrency is a completely digital, decentralized form of currency. It can be used as a means of payment or exchange (though that’s not a very practical use today), or as a potential store of value. Since it’s a digital currency, you can’t carry Bitcoins around physically in bill or coin form; all transactions take place online. Cryptocurrency is also decentralized, meaning it’s not backed by government authority the way the U.S. dollar, for example, is. Instead, it’s maintained by its users.

When you buy, sell, or trade crypto, those transactions are recorded on a decentralized ledger called blockchain, which is a permanent, unchangeable record. Any changes to a blockchain must be approved by a majority of users, which also makes it a highly secure form of record keeping.

There are many different kinds of crypto, but the most popular (and largest by market cap) are Bitcoin and Ethereum. 

[READ MORE]: You Have Cryptocurrency Questions. We Have Answers

For true crypto novices, just knowing where to begin your research can feel like an uphill battle. 

The questions you should ask about crypto will depend largely on your financial situation and goals. If you’re just beginning to explore digital currencies, you may want to start by learning the important terms and getting more familiar with how crypto works as an investment. If you’ve covered the basics and you’re considering buying crypto, these are the four most important questions you should ask yourself before you begin investing, according to experts we’ve spoken to:Why do you want to buy crypto?What is your risk tolerance?Where — and how — do you plan to buy cryptocurrency?Which cryptocurrencies would you buy?

Have a strategy before you put money down: Clarify your intentions, evaluate your ability to take the risk, and then make a buying plan. 

[READ MORE]: Does Crypto Belong in Your Investment Portfolio? These 4 Questions Can Help You Decide

What is the purpose of cryptocurrency?

The original intention behind Bitcoin, the first cryptocurrency, was to create an electronic cash system people could use in daily transactions. You technically can buy and sell things with it, but Bitcoin’s price fluctuates quickly, which makes it a poor fit for spending instead of cash. You could spend $50 worth of Bitcoin on something today that ends up being worth $20 tomorrow. It’s also not widely accepted as a form of payment yet, so you’ll have very limited purchasing power. 

While it’s not a great means for exchange, Bitcoin and Ethereum have shown investors they can be potentially valuable — if speculative — as investment assets. In other words, people purchase crypto in hopes of cashing out for a profit after it increases in value, just like more traditional investments. Bitcoin, for example, has already shown growth over time: just eight years ago, in late 2013, the price of 1 Bitcoin was around $200, and it now hovers around $30,000 (with plenty of ups and downs between). 

[READ MORE]: You Can Buy More Things Than Ever With Crypto. Here’s Why You Shouldn’t

Is cryptocurrency taxable? 

Yes. But if all you do with crypto this year is use U.S. dollars to purchase crypto and then keep it in an exchange or your personal crypto wallet, you won’t owe taxes on it. In general, the more active a crypto trader you are, the more tax implications there might be. Taxable crypto events include things like selling your crypto back into U.S. dollars, trading one crypto for another (for example, Bitcoin to Ethereum), earning crypto income, and using it to make purchases. 

For tax purposes, the IRS treats cryptocurrency like other personal assets such as stocks or gold. If you sell or exchange your investment, that transaction’s capital gains are taxable. The complexity of your transaction history will determine how much you’ll need to do to prepare for tax season if you have crypto. While there are new companies that promise to organize your crypto for tax filing, it’s ultimately your responsibility to keep track of your crypto transactions and report them to the IRS; so if you’re making frequent crypto moves, you’ll want to stay on top of this. 

[READ MORE]: Your Crypto Is Taxable. Here’s How to Report Virtual Currency to the IRS

Who controls cryptocurrency? 

Cryptocurrency creators can set certain parameters when they make a new crypto — such as how much there will be or rules around buying and selling — and those typically cannot be changed. But because cryptocurrencies are decentralized, control of day-to-day operations is distributed among users, and any changes require majority approval from these users — known as nodes. 

Because cryptocurrency is so new and different from traditional forms of finance, the world is in unknown territory when it comes to regulation. There’s little existing legislation around the ownership and trade of digital currencies, although the U.S. government has expressed interest in establishing cryptocurrency regulation. 

[READ MORE]: Cryptocurrency Terms to Know Before You Invest: A Beginner’s Guide

Investing in CryptocurrencyHow to start investing in crypto?

If you’re new to investing in crypto, experts say Bitcoin or Ethereum are probably the best cryptos to start with. When you’re ready to buy in, here are a few of the first steps you should take:

: A crypto exchange is the online trading platform you’ll use to buy your crypto. Some details to consider include security, fees, and available coins. Fund your account: As you would with a traditional investment account, you’ll need to move U.S. dollars into your crypto exchange account. Place an order: This differs by exchange, but you’ll essentially trade the dollars in your exchange account for the cryptocurrency you want. Practice safe storage: Decide whether you want to keep your coins within your exchange account or move them into your own hot or cold wallet. 

[READ MORE]: How to Buy Bitcoin: A Guide for New Crypto Investors

How much of my portfolio should I invest in crypto?

If you’re able to tolerate the risk that comes with crypto investment, experts say it can be a good diversifier for your portfolio. But the crypto market is extremely unpredictable, so you’ll only want to invest a small portion of your portfolio — and only after your other financial priorities are in order (things like saving for emergencies, paying down high-interest debt, and investing in a conventional retirement account). 

Experts we’ve spoken to recommend investing anywhere from 1%-5% of your portfolio in crypto, depending on your financial situation. The volatility level of crypto is high, so you don’t want to risk more than you’re willing to lose. As personal finance icon Suze Orman puts it, the amount you invest in crypto “depends on how much money you are willing to lose.”

[READ MORE]: How Much to Invest in Cryptocurrency, According to 5 Experts

Should I invest in crypto or more traditional funds?

Considering how speculative crypto is, we would never recommend investing in it over traditional investment funds. Before you put any money in crypto, you should make sure you’ve set up a retirement fund, like a 401(k) or Roth IRA. Plan for your retirement by investing in an ETF or index fund —  low-cost portfolio investments with proven long-term records of building wealth. 

If you already have a healthy portfolio, you may look to diversify with crypto in addition to more traditional funds. It all comes down to your specific financial goals and how much risk you feel comfortable taking. If you do invest, here are some best practices experts recommend: 

Keep the percentage of your portfolio in crypto low — no more than 5%Be prepared to lose the money you investInvest for long-term growth, and avoid short-term fluctuations 

[READ MORE]: Curious About Crypto? What 10 Financial Advisors Are Telling Clients About Investing In It

Which cryptocurrency should I invest in?

In general, experts recommend beginner crypto investors stick with Bitcoin or Ethereum, the two largest by market cap and trade volume. They’re still highly speculative and volatile, but are a little less risky than the thousands of other coins available.

Non-Bitcoin cryptocurrencies (known as altcoins) are often designed for unique purposes, like being more energy efficient (and thus eco-friendly) than Bitcoin or as a potentially better means for transactions. But most of them have an even smaller chance of growing in value, and altcoins can put your investment at even more risk than with the comparatively more stable Bitcoin and Ethereum.

You can always take the gamble and consider an altcoin if you see promise in it. Just proceed with a healthy dose of skepticism —  investing in cryptocurrency is already extremely speculative, and becomes even more so when you choose an altcoin with little to no history. For most retirement-minded investors, experts emphasize Bitcoin or Ethereum are better options.

[READ MORE]: The 10 Most Popular Cryptocurrencies, and What You Should Know About Each Before You Invest

Can I be hacked? How do I protect myself?

Yes, the exchange you use to buy your crypto and the wallet you use to store it can be hacked. If you choose to hold your crypto in an exchange or on a software-based hot wallet, make sure you choose a platform that has robust security measures in place. The most secure protection from hackers is cold storage — because it’s completely offline, there’s zero chance for hacking. But that extra security isn’t without cost either: If you lose your USB-like cold wallet or the encrypted keys to get into it, you likely lose any crypto held on it, too.

Hacking is one risk, but as crypto’s value has grown, cryptocurrency crime has too. If you invest, be on the lookout for fraud. Recognizing common scams can help you protect yourself and your money. Here are a few crypto scams to watch for:

Someone who will only accept payment for goods or services in cryptocurrency Unsolicited offers to help you make money or increase your holdingsInitial coin offerings for fake cryptocurrencies Crypto pump and dump schemes 

[READ MORE]: Cryptocurrency Crime Is Booming. Here’s How to Invest Safely

The Future of CryptocurrencyWhat is the future of Bitcoin? 

Given cryptocurrency is still in its relative infancy, many questions regarding its future remain unanswered. Bitcoin has only existed for a little over a decade — amid constantly evolving technological advances and regulations. The value of both Ethereum and Bitcoin has steadily risen over the years (with plenty of dips along the way), but with so little historical record compared to the stock market, it’s difficult to make any concrete forecasts. 

More financial institutions are starting to hold crypto, and some large corporations are adding crypto to their balance sheets. Federal regulators have also taken an interest in more formal guidance and even the creation of a central bank digital currency (CBDC). Beyond that, many experts see the potential for innovation backed by blockchain technology that could transform our lives in the future. 

But there is also a long list of risks associated with crypto that could limit its potential value. From the concerns of cybercrime to high market volatility susceptible to celebrity influence and the environmental impact of crypto mining — there’s no shortage of reasons to remain cautious as we look to the future of crypto. 

Is there any potential for the widespread use of cryptocurrency as a currency? 

As of right now, there are few instances in which using cryptocurrency to buy things would make sense. Of the platforms that do accept crypto payment today, many only accept Bitcoin, which is especially ill-suited for payments, given its extreme price fluctuations. 

There is a chance that payment with digital assets could become more common in the future, especially as digital currencies like stablecoins — which are pegged to existing currencies and less volatile — become more popular and take on potential government regulation. 

The U.S. government is also considering a central bank digital currency (CBDC). It would operate using blockchain technology like other cryptocurrencies, making it faster and more secure than today’s digital transactions. Unlike crypto, a CBDC would be centralized and backed by the Federal Reserve — making it much more useful for purchases. 

[READ MORE]: Fed Chairman Says U.S. Might Need More Crypto Regulation. Here’s What That Means for Investors

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By Chelsea Ong

SINGAPORE — Cryptocurrency is gaining recognition and acceptance by Singaporeans, according to a survey commissioned by Independent Reserve.

This is among the findings of the inaugural 2021 Independent Reserve Cryptocurrency Index (ICRI) Singapore which polled 1,000 Singaporeans from end February to early March 2021, a statement on Monday (26 July) said.

About 43 per cent of Singaporeans surveyed owned cryptocurrency, and the ownership rate was highest at 66 per cent among those from 26 to 45 years old. This compares with a rate of 29 per cent for all the other age groups. By gender, 35 per cent of women own some cryptocurrency compared to 51 per cent of male respondents.

“The strong awareness and adoption of cryptocurrency among Singaporeans in the survey findings is probably a natural reflection of the country’s progressiveness and commitment to preparing for the future,” said Adrian Przelozny, chief executive officer of Independent Reserve, a digital asset exchange with operations in Singapore.

Forty-six per cent of respondents said they plan to buy cryptocurrency in the next 12 months, with those under 45 twice as likely to make the purchase, the survey showed.

With digital currency gaining momentum worldwide, Singapore continues to emerge as a key hub in Asia due to its robust and well-regulated financial markets infrastructure and openness to new technologies, Przelozny added.

Only 7 per cent of respondents believe Bitcoin is a scam. Close to 4 in 10 Singaporeans perceive Bitcoin as an investment asset, the results showed.

Overall, 59 per cent of Singaporeans polled believe that cryptocurrency will reach mass scale adoption.

Younger Singaporeans are more likely to believe that cryptocurrency will be widely accepted in the future. About 76 per cent of those between the ages of 26 and 35 believe cryptocurrencies will become widely accepted by businesses and people. This compares with 44 per cent for those over 46 years old.

On the whole, awareness of any cryptocurrencies among survey respondents increased steadily in line with higher incomes. In other words, the wealthier you are, the more likely you are to have heard of Bitcoin.

The survey also found one in five Singaporeans had planned to buy cryptocurrency in 2020, but didn't because of the direct impact of or uncertainty related to COVID-19.

However, the majority of Singaporeans still seem to maintain an optimistic attitude towards the benefits of adopting cryptocurrency.

About 40 per cent of respondents invested more than S$100 per month into cryptocurrency, with four per cent investing more than S$10,000 monthly. 

Overall, Singapore scored 63 out of 100 in the index, reflecting the country’s positive and progressive attitude towards cryptocurrency, compared to Australia’s score of 47 in the 2020 survey. The difference possibily highlights Singapore’s main role in the region as a leader in progressive financial instruments.

“While the survey showed that Singaporeans are receptive to adopting cryptocurrencies either as an investment or as a store of value, we strongly encourage all potential investors to fully understand the risks involved before trading,” Przelozny said.

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The U.S. government this week laid more groundwork for potential future cryptocurrency regulation.

Federal Reserve Chairman Jerome Powell spoke Wednesday, July 14 about the Fed’s interest in regulating stablecoins and the potential for a central bank digital currency (CBDC), while testifying before the U.S. House Committee on Financial Services.

Stablecoins (Tether and USD Coin, for example) are a category of cryptocurrencies that peg their value to an existing fiat currency, like the U.S. dollar. That helps stabilize their value, so they’re better suited for digital payments — unlike more volatile digital assets like Bitcoin. Ideally, these coins are underwritten by a reserve of the currency they’re tied to, but today there’s little official regulation enforcing that.  

Powell compared them to money market funds or bank deposits, which have a strong regulatory framework in the United States. “That doesn’t exist for stablecoins,” he said. “And if they’re going to be a significant part of the payments universe — which we don’t think crypto assets will be, but stablecoins might be —  then we need an appropriate regulatory framework, which frankly we don’t have.”  What Does This Mean for Crypto Investors?

Experts we’ve spoken to largely agree that long-term crypto investors should stick with well-known cryptocurrencies like Bitcoin and Ethereum. Unless you’re doing more active trading — and are comfortable with the risks of buying lesser-known coins — the two most popular currencies are the best options for most people.

Regulation like what Powell is talking about is more likely to impact stablecoins and other smaller altcoins, experts say. “They have different use cases,” says Mike Uehlein, founder and financial planner at WealthU Advisors, referring to Bitcoin versus stablecoins. 

If Bitcoin is “digital gold,” stablecoins are more comparable to the current money system, he says, having an infinite supply and centralization. Bitcoin is a store of potential value, while stablecoins are better suited for digital transactions and converting digital assets to and from “real” money.

“Investors buying Bitcoin as a store of value and buying stablecoins for a store of value are two different things,” says Tyrone Ross, a financial advisor and CEO of Onramp Invest, a cryptocurrency platform for other financial advisors. A central bank-backed digital currency would be a market competitor for stablecoins, but not Bitcoin, Ross says. 

Still, any new regulation has potential to affect your portfolio. 

While stablecoin regulation or a CBDC may not have a direct effect on Bitcoin — which is decentralized and operated by users across the globe —  it is likely regulation could bring more volatility to the crypto market. Already, we’ve seen crackdowns on cryptocurrency regulation from China play a role in Bitcoin’s recent $30,000 price drop. We’ve also seen how the price of coins often follow each other — when Bitcoin’s price takes a hit, altcoins often follow. Regulation could eliminate many cryptocurrencies available today, Uehlein says. 

Still, the regulations Powell mentioned would likely have a much bigger impact on the value of stablecoins or smaller altcoins, rather than Bitcoin. “DeFi, stablecoins, and other things are ripe for regulatory scrutiny,” Ross says. “Don’t make large bets in the space now, and stay educated on recent developments and news.”Why Regulate Stablecoins?

Because crypto trading and prices move very quickly, stablecoins can help traders move their funds within an exchange faster than if they were depositing cash from a bank account. Trading coins for actual dollars in and out of your bank account could take several days (and charge higher fees) than exchanging a coin for a stablecoin.

But without regulation, even these coins are risky. 

“Stablecoins are currently used as a replacement for the U.S. dollar, pegged 1:1 with the dollar,” Uehlein says. “Verifying this peg has been in question for many investors and regulators. Many investors would feel better knowing the dollars are backed by the U.S. treasury.” And that’s where a potential U.S. government-issued digital currency comes in — since it would have that backing.

What’s the Purpose of a Central Bank Digital Currency?

Powell’s testimony also reiterated the Fed’s interest in a central bank digital currency for the United States. A CBDC would make it easier to make transactions digitally. Because it would (hypothetically) work on a blockchain network, those transactions would also be secure and much faster than money transfers are today. 

While it’s generally unwise to use crypto to make a purchase, that’s exactly the purpose a potential central bank digital currency could serve. “A fed-backed CBDC could replace stablecoins such as Tether or USDC,” Uehlein says. 

As far as any real implementation of a CBDC, both Fed officials and the experts we spoke to believe there’s a long way to go before we reach that point, at least in the United States. While he says he’s very interested in seeing how CBDCs in countries across the world continue to evolve, Uehlein says “it is too soon to tell how serious the U.S. is about a CBDC.”

What’s Next In Crypto Regulation?

Now, all eyes are on a coming report from the Federal Reserve, which Powell expects to publish around early September.

“We’re going to address digital payments broadly,” he told the committee. “So that means stablecoins, it means crypto assets, it means CBDC. That whole group of issues and payment mechanisms, which we think we’re really at a critical point in terms of the appropriate regulation.” 

In addition, the Fed plans to ask the public about the risks and benefits of cryptocurrency and a potential CBDC, alongside consultation with national groups, including Congress. The purpose of the report, Powell said, is “to lay out the possible potential benefits and also the potential risks” of a central bank digital currency, and how regulators might weigh those costs and benefits. 

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Bitwise Asset Management CIO Matt Hougan on the price of Bitcoin climbing back above 30,000 and how ‘positive regulation’ could impact the crypto market.

Bitcoin was trading more than 4% higher early Thursday morning.

The price was around $32,180 per coin, while rival Ethereum was up 7% at 2,004 and Dogecoin was higher by15% at 24 cents per coin, according to Coindesk.

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Elon Musk's latest comments are helping to give bitcoin and other cryptocurrencies a boost.

The Tesla CEO says the electric-car maker will most likely restart accepting bitcoin as payments once it conducts due diligence on the amount of renewable energy used to mine the currency, according to Reuters.

Musk made the comments at the B Word conference on Wednesday sending the price of bitcoin as high as 8%.

It is another turnaround after Tesla said in May it would stop accepting bitcoin for car purchases.

"I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50%, and that there is a trend towards increasing that number, and if so Tesla would resume accepting bitcoin" Musk said.

ELON MUSK OWNS THESE 3 CRYPTOCURRENCIES

Musk added that he personally owned bitcoin, ethereum and dogecoin, apart from bitcoin that Tesla and SpaceX owned.

In other cryptocurrency news, Core Scientific Holding Co said on Wednesday it would go public through a merger with a blank-check company backed by BlackRock Inc, in a deal that values the cryptocurrency miner at $4.3 billion.

Core Scientific said it had mined 928 bitcoins in the second quarter and forecast revenues of $493 million and $1.1 billion for fiscal 2021 and 2022, respectively, according to Reuters.

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The company said it was 100% net carbon neutral and aims to remain so as it grows. 

Special purpose acquisition company (SPAC) Power & Digital raised $345 million in an upsized initial public offering in February.

Cryptocurrencies were all the rage earlier this year, with the prices of several coins surging to record highs and crypto exchange Coinbase making its public offering. Crypto enthusiast and Tesla CEO Elon Musk tweeted rocket and moon emoji, boosting the rallying cry “to the moon!” And investors big and small jumped into the market.

But after the spot price of bitcoin, the most popular coin, approached $65,000 in April, the boom turned bust: By early June, its value had dropped by nearly 50 percent. It’s likely that many of those new crypto investors felt the whiplash.

“It is very interesting that every time that bitcoin goes up, it gains all the hype, people get excited,” says Kiana Danial, author of “Cryptocurrency Investing For Dummies.” But Danial adds that the last person who buys when the price is at the top “is the person who’s going to panic when the price inevitably drops.”

So, what do you do when your digital assets like bitcoin crash? We asked several cryptocurrency experts to get their thoughts.

For those who have been investing in cryptocurrencies for years, dramatic gains and losses are nothing new. For example, bitcoin recorded a previous record high of nearly $20,000 in December 2017, but by December 2018 was trading below $3,500.

As bitcoin gains adoption, “the up moves and down moves can be breathtaking. Taking the long-term view puts these moves in perspective,” says Greg King, founder and CEO of Osprey Funds, an investment firm specializing in digital assets.

“For example, even though bitcoin was down 50% in April through May of this year, it is up 25 percent from those lows and still up 100 percent from Thanksgiving last year.” (Note: These comments were made on June 17, 2021. Who knows where the bitcoin price is by the time you read this.)

For seasoned bitcoin investors, the lower prices were welcome. “Then, you would actually see the drop of value in bitcoin as an opportunity to purchase,” Danial says.

» Learn more: But what is cryptocurrency?

When crypto is crashing, someone who’s been intrigued from the sideline might think this is the time to get in and “buy low.” But King recommends asking yourself two questions before deciding to invest in bitcoin or other cryptos.

“Consider whether an 80 percent to 90 percent down move in your crypto holdings would cause you to lose sleep at night or sell,” he says. “If the answer to either of those is yes, don’t invest.”

“Any asset has ups and downs — cryptocurrency has more ups and downs because of the amount of hype and FOMO involved,” Danial adds, alluding to a fear of missing out, “and the fact that people actually don’t know what it is. They buy it because they heard somebody talk about it … they are taking unmeasured risks.

“Ask yourself what amount of money you can actually afford to lose, because any investment has inherent risk,” she says. “If you are selecting your assets wisely and you have concrete reasons why you’re investing in it, you shouldn’t be swayed when the markets drop, and you will stay the course.”

Crypto experts suggest refraining from “all in” moves when deciding to invest. “Avoid buying large amounts of cryptocurrency all in one shot,” says Jake Yocom-Piatt, co-founder of Decred, a cryptocurrency with a $1.5 billion market share. “If you buy a whole bunch at once and the price drops, psychologically that’s very difficult for people.”

Instead, he suggests considering a common strategy from investing in stock markets: dollar-cost averaging. “Buy a small amount every month and then just keep doing it, as the price goes up or the price goes down, as opposed to buying it all in this one single crystalized cost which you’re going to have to deal with psychologically for the foreseeable future.”

Personal finance experts often say that any single asset, be it a specific coin or company’s stock or something else, should only be the sprinkling atop the parfait of an otherwise vanilla portfolio of stocks, bonds and mutual funds that mean to help you achieve your long-term financial goals.

“If crypto is the only asset you are investing in, you are probably taking on way too much risk,” Danial says.

—By Kevin Voigt

About the author: Kevin Voigt is a personal finance writer at NerdWallet. He has covered financial issues for 20 years, including for The Wall Street Journal and CNN.com. Read more

If you’ve heard of any cryptocurrency exchange, it’s probably Coinbase. Bitcoin early adopters have been buying and trading coins on Coinbase since 2012, but the platform gained mainstream attention in 2021 when it became the first crypto exchange to go public on the Nasdaq.

Today, more than 56 million users are trading over $300 billion worth of cryptocurrency on Coinbase each quarter. It has the third-highest trade volume of all exchanges, according to crypto data firm CoinMarketCap.

Here’s what you need to know about buying, selling, and holding cryptocurrency on Coinbase:

No matter where you buy it, cryptocurrency is a highly volatile , speculative investment. Only invest in crypto what you’re prepared to lose , and make sure you have other financial priorities in place first: save money in an emergency fund , contribute to retirement savings , and pay off any high-interest debt balances.

Simple interface for beginners

Educational tools

More than 50 cryptocurrencies to choose from

Strong security measures

High fees compared to some other exchanges

No control of your own private keys when you keep coins on your account

Coinbase supports more than 50 different cryptocurrencies. You’ll find each of the most common cryptos listed on Coinbase, including the following:

Different coins have different trading restrictions and minimum/maximum withdrawal amounts. Some can only be traded for certain fiat currencies like the U.S. dollar or converted to/from other cryptocurrencies. You may also be restricted from trading some coins based on the country or state you’re located in. Coinbase’s website offers an overview of these restrictions for each of its supported cryptocurrencies.

One of Coinbase’s biggest drawbacks compared to other exchanges is its pricey fee schedule. 

When you make a cryptocurrency transaction on Coinbase — like buying Bitcoin, or exchanging your Ethereum back into U.S. dollars — you’ll be charged both a spread and a Coinbase fee. 

The spread is the difference (or margin) between the market price and the price you actually pay for a purchase or receive for a sale. You can compare it to the commission or trading fee you might pay when you invest using a brokerage account. 

Coinbase’s spread is equal to about 0.50% of your crypto sales and purchases, though it can fluctuate based on the market. For cryptocurrency conversions — trading Bitcoin for Ethereum, for example — you may be charged a spread of up to 2.00%, based on market fluctuations. However, there’s no Coinbase Fee for converting your crypto coins to other cryptocurrencies.

The Coinbase Fee can also vary, depending on your payment method, location and other factors. It may be either a flat fee or a percentage of your transaction, but will always be the greater between the two.

Here’s a comparison of the flat vs. percentage Coinbase fee for U.S. users:

So if you buy $50 worth of Bitcoin on Coinbase through a bank transfer, you’ll be charged a spread of about $0.25, as well as the $1.99 flat fee (since that’s greater than the 1.49% alternative fee). That means you’ll actually end up with about $47.76 worth of Bitcoin. That may not seem like much, but it adds up the more you buy.

You can also choose to deposit cash into your Coinbase USD wallet, and buy crypto from that wallet later on (for the 1.49% fee described above). Because crypto prices move so quickly, keeping USD in your Coinbase wallet can help you avoid potentially lengthy bank transfers — like if you want to act on a sudden price drop, for example. Here are the fees associated with depositing USD into Coinbase:

Unlike cash in the bank, cryptocurrency is not protected under any federal regulations. 

Coinbase says it stores 98% of customers’ crypto offline, in cold storage (the remaining 2% is used to facilitate trading volume). The exchange also has an insurance policy to protect crypto holdings. Experts say robust measures such as this are why a mainstream exchange like Coinbase might be worth the extra fees.

Still, there’s no guarantee that your coins will be restored to your wallet if your crypto is stolen in a massive security breach. In that case, “we will endeavor to make you whole,” Coinbase says on its website. “However, total losses may exceed insurance recoveries so your funds may still be lost.” 

The insurance policy also does not cover losses that result from unauthorized access to your personal account. In other words, if your identity is stolen or someone figures out your Coinbase account password and steals from your wallet, you may not be able to recover it. 

Though it can be helpful for faster trades, most people don’t need to store cash on Coinbase (just as you wouldn’t keep uninvested cash in a conventional investment account). But any cash holdings you do keep on the exchange are pooled with other users in one of three ways: held in U.S. bank accounts, or invested in U.S. Treasuries or money market funds. You have no say in which method your cash is kept, but Coinbase says the money kept in bank accounts as cash is FDIC-insured up to the current maximum of $250,000. 

Other security measures include 2-step authentication, biometric logins (like fingerprint and Face ID), and data encryption. Always protect your own personal security by using strong passwords, not repeating passwords across accounts, enabling 2-factor authentication, and monitoring your accounts regularly for any unauthorized activity.

In general, experts say it’s smart to stick to cryptocurrency exchanges that are popular and already have a large customer base. Coinbase is arguably the most well-known of traditional cryptocurrency exchanges, and has been around for a long time compared to many others. Its recent appearance on the Nasdaq also means users can get a better glimpse into the health of Coinbase as a platform, since its financials are now public.

Education is a big part of investing in crypto, especially for beginners. Coinbase offers a Coinbase Learn hub with beginner’s guides to different coins and uses of cryptocurrency, regular updates about what’s going on in the market, and recommendations for more resources.

It also incentivizes users to actively learn through Coinbase Earn. You can watch short videos and take quizzes about specific altcoins, and Coinbase will deposit a small amount of that crypto into your wallet as a reward.

Coinbase offers different options when it comes to crypto storage.

First, you can store your crypto on Coinbase. This is the simplest option — just log into your account, buy your crypto, and leave it within your account. You won’t have access to your private keys by doing this; instead, your coins’ security will rely on Coinbase’s security measures (and your own account protections).

You can also choose to move your holdings onto Coinbase’s separate hot wallet software, Coinbase Wallet. This is a separate app that you would download, and unlike keeping your coins on Coinbase, does give you control over your private keys. That control means you can do more with your crypto, like move coins between wallets and participate in other decentralized finance activities that require crypto transfers and payments outside the exchange. But if you’re just looking to buy and hold Bitcoin or another crypto for its value as an asset, it’s not necessary.

Coinbase offers another free exchange platform called Coinbase Pro, which charges lower fees and additional features for people interested in actively trading crypto. 

If you’re just starting out and learning about cryptocurrency — or you’re interested in crypto as a long-term store of value — Coinbase Pro’s advanced features are probably not necessary. But if you’re looking to buy and sell coins more actively, Coinbase Pro offers additional tools and reports, as well as cheaper trades, that you might benefit from.

Coinbase’s easy-to-use interface, educational tools, and strong security measures make it a great choice for anyone looking to begin investing in cryptocurrency. 

If you’re just looking to put some extra cash into Bitcoin as a long-term investment, Coinbase simplifies the process. You can simply buy your coins, leave them on Coinbase, and track their value over time.

But it’s also a good option to grow with you as you learn more about crypto. It’s not lacking in any major services you would find elsewhere, between numerous different currency offerings and the Coinbase Wallet option. If you do eventually choose to invest beyond Bitcoin or hold your own private keys, Coinbase is still a great starting point. 

The biggest downside to Coinbase is its fees, which can be higher than some other exchanges. However, for most general investors, they’re a small price to pay for the convenience, range of features, and security you’ll get in return.

Investing in cryptocurrency is inherently risky, and your crypto is a speculative asset at best. But if you’re OK with the risk (and have your other financial priorities covered), Coinbase is a secure and legitimate exchange to use. 

You can’t protect your holdings from market fluctuations, but Coinbase has a relatively longstanding reputation and secure safety measures in place to protect the money you put into it.

You can withdraw your money from Coinbase back to your bank. You’ll just need to sell your cryptocurrency on the exchange. The money from the sale will enter your USD Wallet on Coinbase, and then you can withdraw the funds to your bank. 

You can also send crypto from your Coinbase account to your own wallet as long as you have your wallet address, though you may incur a fee.

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Investors are more interested than ever in cryptocurrency. Criminals are too.

Reports of cryptocurrency crimes have increased 312% per year on average since 2016, according to a report from Crypto Head, a cryptocurrency news outlet that used Federal Trade Commission data to analyze cryptocurrency crime trends in recent years. These crimes can include everything from hackers stealing investors’ coins to people falling for scams related to crypto investing.

A cold wallet — an offline device not connected to the internet— is the safest place to keep your crypto investment, according to experts.

Bitcoin has the most crime reports of any cryptocurrency, which makes sense since it’s also the oldest and most-widely held crypto. Beyond digital crimes, Bitcoin’s safety as an investment is often questioned thanks to the frequency and scale of its value fluctuations.

Despite an increase in fraud and theft, many experts tout the safety of Bitcoin investments — at least in terms of cybersecurity if not investment stability — thanks to secure blockchain technology. So, is investing in Bitcoin safe? Here’s what you need to know about Bitcoin’s safety as an asset and keeping your cryptocurrency secure if you invest.What to Consider Before Buying Bitcoin

First things first: The money you put into Bitcoin is not safe from value fluctuations.

Bitcoin is a volatile investment. If you’re looking for a “safe” investment with guaranteed returns, then don’t invest in Bitcoin — or any cryptocurrencies for that matter. Just over the past few months, the price of one Bitcoin has fluctuated between $30,000 and $60,000. Bitcoin isn’t the only volatile cryptocurrency, and other, smaller coins may be even riskier. 

“Understand that these are very volatile investments, so if big fluctuations cause you to lose sleep, this isn’t the space for you,” says Dan Herron, a CFP with Elemental Wealth Advisors in San Luis Obispo, California.

Experts recommend keeping any cryptocurrency investments to less than 5% of your portfolio for exactly that reason — and to make sure you’ve got a solid conventional retirement investment plan in the first place. It’s also recommended you have an emergency fund and pay down any high-interest debts before you put any money into Bitcoin or any other cryptocurrency.

(Read More: Here’s How Much of Your Investing Portfolio Should Be in Crypto, According to 5 Experts)

What Are the Risks Associated With Bitcoin?

The biggest security concern for many people when it comes to Bitcoin investing — like any other digital activity — is the risk of hacking and fraud. Cryptocurrency crimes are on the rise, according to data from the Federal Trade Commission, and resulted in a median loss of $1,900 per report between October 2020 and March 2021.

Often, reported crypto crimes involve scammers requesting payment in cryptocurrency, or sending unsolicited offers to help you make money or increase your holdings, according to the FTC. “One sure sign of a scam is anyone who says you have to pay by cryptocurrency,” the agency says. You should also avoid any unsolicited offers related to crypto; do your own research and buy your coins yourself using a reputable crypto exchange. Other types of scams to look out for

Initial coin offerings (ICOs) for fake cryptocurrencies

When a cryptocurrency is offered to investors before it’s launched to the market, it’s called an ICO (similar to a new stock’s IPO). But sometimes these new coin offerings can be fabricated, leading investors to put their money in a cryptocurrency that doesn’t actually exist. 

Always research any cryptocurrency before you invest. If it looks too good to be true, it probably is. Read the project’s white paper and check out the founders as part of your research. For most investors — and especially beginners — it’s smart to stick to established, popular coins like Bitcoin or Ethereum.

Crypto pump and dump schemes 

A small group of investors may pump a lot of money into a specific crypto, falsely inflating the price while convincing private investors to also invest. Then the original investors sell their shares for a profit before the price falls again. This type of scheme exists for more traditional investments, too.

Again, if an investment seems too good to be true, it probably is. Watch out for coins that have risen a lot in value without any clear reason why, the Crypto Head report recommends. This may be a sign of a pump and dump scheme.

How to Keep Your Bitcoin Safe

Hackers can gain access to individuals’ crypto wallets or breach entire cryptocurrency exchanges to steal their holdings. That’s why it’s essential to store your crypto in a safe place, and practice good digital security habits.

Cryptocurrency exchanges and third parties offer storage for your coins through hot wallets, which are secure, but still online (and therefore still susceptible to hacking). Crypto held on an exchange or in a wallet is not FDIC-insured like money in the bank. Make sure you trade and hold your crypto on a platform that offers robust security measures — including keeping a significant amount of holdings in its own cold storage and two-factor authentication for users. Some exchanges may even have private insurance policies in case of theft or hacking.

For the best protection against online fraud, many experts recommend cold storage through an offline device not connected to the internet, similar to a USB drive. But even cold storage comes with risks, like the possibility of losing access to your investment completely if you forget your password. 

(READ MORE: A Crypto Wallet Can Help Keep Your Coins Safe. Here’s How to Decide If You Need One)

Bitcoin Security vs. Privacy 

While you can take measures to secure your crypto holdings from hacking and theft, Bitcoin may not be any more effective at keeping your personal information private than any other traditional investment. 

“Security and privacy are two separate topics,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies” and the personality behind @Investdiva on Instagram.

While trades you make in Bitcoin may be harder to trace than credit card purchases or direct bank withdrawals, Bitcoin transactions are not private. Bitcoin trades are tied to a hash code — a string of letters and numbers —  that are unique to you, says Ollie Leech, learn editor at CoinDesk, a leading cryptocurrency news outlet.  

“You’re really not anonymous, more like pseudonymous,” says Galen Moore, director of data and indexes at CoinDesk. While your activity isn’t directly tied to personal details like your social security number, the blockchain is public and there are ways that people can identify you.  

But even though Bitcoin transactions aren’t private, that doesn’t mean every user can see exactly how much everyone else has bought or sold. 

“In order to download the Bitcoin blockchain you would need massive, massive, computing capacity, like a supercomputer,” says Danial. “The day-to-day average Joe can’t go in and see what transactions are happening in the Bitcoin blockchain.” 

If you want total privacy when you transact, then neither Bitcoin nor Ethereum — the second largest cryptocurrency by market capitalization — are for you. Other smaller cryptocurrencies are designed for this total privacy, though experts recommend avoiding these lesser known cryptos as an investment.

(READ MORE: Ethereum: What You Should Know Before You Invest)

“With Bitcoin and Ethereum, all those transaction details being open is part of how the network is maintained as people watch,” says Moore. The open system helps the blockchain retain accountability. 

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Two of the world’s most popular cryptocurrency exchanges announced on Sunday that they would curb a type of high-risk trading that has been blamed in part for sharp fluctuations in the value of Bitcoin and the casino-like atmosphere on such platforms globally.

The first move came from the exchange, FTX, which said it would reduce the size of the bets investors can make by lowering the amount of leverage it offers to 20 times from 101 times. Leverage multiplies the traders’ chance for not only profit, but also loss.

“We’re going to be the ones to take the first step here,” Sam Bankman-Fried, 29, the billionaire founder of the platform, which operates from Hong Kong, said on Twitter on Sunday. “Today, we’re removing high leverage from FTX. The greatest allowable will be 20x.”

About 14 hours later, Changpeng Zhao the founder of Binance, the world’s largest cryptocurrency exchange, echoed the move by FTX, announcing that his company had already started to limit leverage to 20 times for new users and it would soon expand this limit to other existing clients.

It had previously offered a maximum of 125 times, meaning that an investment of $1,000 could be turned instantly into a bet of as much as $125,000 on Binance. Now, with the new cap, the maximum in that transaction would be $20,000.

“In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks,” Mr. Zhao wrote on Twitter.

The announcements came after The New York Times, in an article published online Friday, detailed the risky trades offered on FTX and other global exchanges like Binance and BitMEX that accelerated a global crash in May. That month, more than $20 billion worth of those bets were liquidated on cryptocurrency exchanges worldwide.

Mr. Zhao and Mr. Bankman-Fried were both asked about the high-leverage offerings — and the risks they create — on several occasions over the past two months by The Times.

Mr. Bankman-Fried said on Sunday that lowering the leverage amounted to “a step in the direction the industry is headed, and has been headed for a while,” adding that “while we think that many of the arguments are high leverage miss the mark, we also don’t think it’s an important part of the crypto ecosystem, and in some cases it’s not a healthy part of it.”

Global platforms like FTX and Binance allow traders to borrow big when betting on price fluctuations. Traders do not buy and sell cryptocurrencies but instead predict where prices in the underlying assets will head.

Those bets, known as derivatives, allow investors to make a bet on the future price of a cryptocurrency rather than buying and selling the actual underlying cryptocurrency. They bet on Bitcoin price moves without actually purchasing it.

This type of transaction is not supposed to be available to nonprofessional investors in the United States, but in the past some amateur investors have found workarounds to trade on the sites.

Leverage leaves investors much more vulnerable to having their accounts liquidated as a result of an automated margin call if the price of cryptocurrency moves against their prediction, and they do not have enough collateral in their accounts to back up their bets.

That is what happened in May. Once prices of cryptocurrency began dropping based on market-moving events, like China’s announcement of a regulatory crackdown or the decision by Tesla to halt Bitcoin payments, it automatically prompted the exchanges to liquidate the accounts of the most highly leveraged investors before their collateral became insufficient to cover their positions.

“These liquidations are obviously a huge factor in the price crash,” Clara Medalie, the research lead at Kaiko, a cryptocurrency market data provider in Paris, said, recalling the sudden decline in cryptocurrency value in mid-May. “It is a vicious cycle.”

Mr. Bankman-Fried said on Sunday that only a small percentage of traders take advantage of the maximum available leverage. He also argued that FTX had fewer liquidations than other exchanges and he had long tried to “encourage responsible trading.”

Still, he had predicted in an interview last week that some investors might not welcome any move to cut leverage. “We would get consumer outcry if we got rid of it, and we’d get very bad press,” he said. “But it might be the right thing to do.”

Mr. Bankman-Fried also acknowledged that high leverage created a perception that exchanges like his encouraged risky trading, even though he asserted this was not a fair conclusion.

That perception is in part why regulators around the world are eying Binance, the world’s largest cryptocurrency exchange. Just since June, the exchange has faced increased scrutiny from financial regulators in Britain, the Cayman Islands, Hong Kong, Lithuania, Italy, Poland and Thailand, many of them critical of its high-leverage derivatives offerings or a new product line introduced this spring that allows customers to buy cryptocurrency-linked versions of stocks like Tesla and Apple.

Mr. Zhao, the Chinese-Canadian founder of Binance and a developer tracing his professional roots to Wall Street, has said that the extreme leverage figures were just a “marketing gimmick” and that most traders do not use them.

Timothy Massad, the former chairman of the Commodity Futures Trading Commission, which regulates derivatives in the United States, said that he embraced FTX’s decision and that he hoped other platforms would follow. Binance and FTX are two of the world’s largest exchanges, but others including Phemex and BitMEX, were still offering, at least according to their websites, 100 times leverage as of Sunday.

The move by FTX, Mr. Massad said, might be motivated in part by FTX’s success this past week in raising $900 million in venture capital, the most ever for a cryptocurrency exchange. The high-leverage offerings on FTX are more of a reputational liability as Mr. Bankman-Fried looks to expand his platform’s global reach, Mr. Massad said.

“Sam has bigger visions and this move eliminates a flash point that might get in the way,” Mr. Massad said. “Take it off the table.”

It is just after midnight in Hong Kong, and Sam Bankman-Fried stares at the trading data on his six monitors, watching a global cryptocurrency crash happening in real time.

Mr. Bankman-Fried, a 29-year-old from California, often works around the clock, as he was on that May evening. He naps on a beanbag set up near his computer. A folded up blanket sits on the floor. He’s worth at least $8 billion, on paper.

That is even after the downturn that started in the spring, where total global losses in the value of all cryptocurrency eventually topped $1.3 trillion. And as Mr. Bankman-Fried saw it play out, he knew his business played a role in the collapse.

Cryptocurrency — digital money not backed by any nation — is famous for its wild and frequent gyrations. But FTX, the cryptocurrency trading platform that Mr. Bankman-Fried runs, specializes in a kind of trade that was accelerating the global crash.

Most of his customers are betting on future cryptocurrency price fluctuations rather than buying and selling Bitcoin, and they are borrowing to make those bets even bigger.

It is a risky approach. But it can generate big wins.

Now, Bitcoin’s value was dropping — way down — crushing the highly leveraged bets of bullish traders on FTX and other exchanges, and forcing sales of their positions in wave after wave of account liquidations. These forced sales were helping undermine cryptocurrency prices.

“In terms of price movements, the biggest part of it is liquidations,” he wrote to The New York Times on May 24 from Hong Kong.

This is precisely the type of situation that United States regulators have tried to avoid by prohibiting cryptocurrency exchanges like FTX from selling high-risk futures to nonprofessional investors in the United States. And it is why Mr. Bankman-Fried moved to Hong Kong — as he wanted to offer these products, called derivatives.

Mr. Bankman-Fried is a crypto nomad: One of a group of industry leaders who once lived in the United States or Canada and have since set up companies with bases of operation where they are to some degree beyond the reach of American regulators.

Others include Changpeng Zhao, 44, the Chinese-Canadian founder of Binance, who now lives in Singapore, and Arthur Hayes, 35, a Buffalo-born trader who helped create BitMEX, which is based in the Seychelles islands.

It’s a tribe that never turns off — trading takes place 24 hours a day, 365 days a year. (Mr. Bankman-Fried said he sleeps when he has no meetings and works “the hours when this counterparty is awake and the hours when that counterparty is awake.”)

These crypto nomads have built a global playground, inspired by multiplayer online games, with “leader boards” for customers who go by aliases like Dark Crypto Lord and can win prize giveaways of Teslas or iPhones.

The highly leveraged form of trading these platforms offer has become so popular that the overall value of daily purchases and sales of these derivatives far surpasses the daily volume of actual cryptocurrency transactions, industry data analyzed by researchers at Carnegie Mellon University shows.

It’s all supposed to be off limits to U.S. investors, but it’s not. Trading data provided to The Times also shows that billions of dollars’ worth of investments from customers with ties to the United States have moved to at least one of these global sites, despite the ban.

“I am not saying this is going to cause the next financial crisis,” said Timothy Massad, a former chairman of the Commodity Futures Trading Commission, the federal agency that regulates derivatives trading. “But could this be something like the butterfly that flaps its wings in Brazil that sets off a tornado in Texas?”

Mr. Zhao, the founder of Binance, conceded, in an interview, that “volatility is amplified by the leverage. So that is for sure.”

But he and other industry advocates argue that highly leveraged futures trading is widespread on Wall Street and foreign currency exchanges. Some also say they had to relocate because U.S. regulators haven’t adequately embraced these creative investment opportunities.

“This is not going away,” said Mark Cuban, the billionaire entrepreneur, television personality and cryptocurrency enthusiast who is also a backer in a fund that is helping FTX raise capital. “But we’re losing a lot of jobs and a lot of financial depth by pushing it overseas.”

In fact, FTX just this past week raised $900 million in capital to help it expand its global operations, and it was valued at $18 billion. That transaction could push Mr. Bankman-Fried’s wealth to $16 billion, Forbes estimated, making him the “wealthiest known crypto billionaire,” given that he owns nearly 60 percent of the company’s shares.

Mr. Bankman-Fried was four years out of Massachusetts Institute of Technology when he entered the cryptocurrency industry.

He was still living in California — where both of his parents are law professors at Stanford — and he noticed that Bitcoin and other tokens were at times selling for different prices in different nations.

It was an open invitation for a creative player to make money, with a classic arbitrage maneuver: Buy it at the lower price in the United States and sell it at the higher price in Japan.

That ended up being complicated. As he tried to quickly transfer large sums of money, financial institutions moved to shut down his accounts. He also needed Japanese nationals to complete transactions in local banks. But he ended up making tens of millions of dollars on these early moves.

A three-day crypto conference he attended in China in 2018 led to two weeks of meetings and his effectively settling in Hong Kong. “I guess there’s a point at which I canceled my lease back in the Bay,” he recalled. He decided instead to create a new company, FTX, which specializes in derivatives.

In traditional markets, derivatives are used to help farmers or other businesses hedge against price changes in commodities like oil or grain.

There is some trading of cryptocurrency derivatives in the United States, on platforms like the Chicago Mercantile Exchange, which has long offered commodities options and futures in things as diverse as agriculture, energy and metals. But the CME is a classic exchange that has greater restrictions — and federal government oversight — with lower leverage caps available only to professional traders.

Cryptocurrency innovators like Arthur Hayes, one of the founders of BitMEX — short for the Bitcoin Mercantile Exchange — took this classic approach and turned it into a much more lucrative idea, at least for the platforms.

BitMEX began what Mr. Hayes called the perpetual swap — a bet on a future price change that does not expire — and eventually offered 100 times leverage. That meant a $1,000 investment could be instantly translated into a $100,000 bet on the future price of Bitcoin.

From inception, BitMEX was explicitly intended to attract not only professional traders but also retail investors with a taste for gambling and gamers inclined to risky play, as Mr. Hayes explained in an industry talk in 2016. “There are people who offer similar types of products but are focusing on degenerate gamblers, a.k.a. retail traders in Bitcoin,” he said. “So why don’t we do the same?”

The exchange targeted social media advertising to potential customers based in the United States and boasted that to “sign up takes less than 30 seconds.”

At least initially, there was minimal effort on the part of some exchanges like BitMEX to screen investors to determine their true identities, as banks and other trading companies in the United States are required to do, or to confirm their actual locations, despite the ban on U.S. participants. Many of the platforms, including BitMEX and Binance, have recently tightened enforcement to try to curb trades by U.S. investors.

This came after the Justice Department filed charges against Mr. Hayes late last year, with the government asserting that he and other BitMEX executives were illegally operating a cryptocurrency exchange that handled about $11 billion in transactions involving at least 85,000 user accounts with ties to the United States. He has since left the company.

But the business model he helped create has only grown in scale.

FTX and Binance are among more than a dozen global cryptocurrency platforms — most of them based in Asia — that now offer perpetual swaps. FTX alone has one million users across the world and handles as much as $20 billion a day in transactions, most of them derivatives trades.

Like their customers, the platforms compete. Mr. Bankman-Fried from FTX, looking to out promote BitMEX, moved to offer up to 101 times leverage on derivatives trades. Mr. Zhao from Binance then bested them both by taking it to 125.

Losses for traders can translate into big gains for exchanges.

The platforms earn a transaction fee based on the forced sales caused when the price of the underlying cryptocurrency moves against the trader. The crash in May was started by regulatory rumblings in China and a cryptocurrency move by Elon Musk. But liquidations then helped propel it.

Some executives, like Mr. Bankman-Fried, also own related companies that do algorithmic trading to instantly cash in on market distortions that occur during these sell-offs. Mr. Bankman-Fried said that he sees no conflict in his businesses playing the two roles, as these moves help keep the markets liquid during major declines.

FTX, Binance and BitMEX’s founders have each argued that only a small share of their customers actually use high leverage. But even for those making smaller bets, problems can crop up quickly if cryptocurrency prices start to fall. On May 18 alone, there were a total of $1.6 billion worth of liquidations on BitMEX, Binance and FTX, according to Bybt, a crypto derivatives data firm. Collectively, there were $20 billion in forced liquidations in mid-May.

“If you play poker, let’s say for futures trading, if you go all in on maximum leverage every single time, the markets are going to move at one time against you and you’re going to be wiped out,” said Mr. Zhao. “The professional futures traders, they manage risk.”

But Michael Green, a crypto critic and the chief strategist at Simplify Asset Management, said the derivatives market is inherently stacked against novice traders. “The math of highly volatile instruments is that the house almost always has to win,” Mr. Green said, adding that from his perspective, “these are unregistered casinos.”

Mr. Zhao is so focused on the branding of Binance that he has the company logo — two diagonal squares representing bids and asks in trading — tattooed on what he now calls his “crypto arm.”

He and his fellow crypto nomads have become global celebrities with millions of followers on Twitter, podcasts and even livestreams on YouTube of their poker games. They are the diplomats of a renegade industry, attached to no particular state.

Binance set up its offices in Shanghai in July 2017. But two months later, when the Chinese government announced a crackdown on crypto exchanges, the company moved to Tokyo.

Japan then announced new crypto exchange rules. “So we said, well, that doesn’t fit,” Mr. Zhao explained. “So we had to move again.”

The next stop was Malta, the tiny island nation in the central Mediterranean. Now Mr. Zhao does not identify any location as the company’s headquarters.

Binance’s shifting home base, in a way, reflects his own life story. Born in China to academics, he moved to Canada when he was 12, interned in Japan while studying computer science at McGill University and went on to jobs developing trading products in Tokyo, New York, Singapore, Hong Kong and Shanghai.

“I’ve been moving around quite a bit in my life,” Mr. Zhao said. This international exposure gives him “a broader worldview” that informs his business and its borderless mentality.

Other companies have also moved. The Dutch cryptocurrency exchange Deribit announced last year that it would be operated by a subsidiary company called DRB Panama, and several of its executives moved to Central America, company officials said. Palm trees and tropical vistas now feature in the executives’ social media posts. BTSE, another exchange that specializes in derivatives, moved its headquarters from Dubai to the British Virgin Islands.

But in some cases, the claimed offshore base of operations is little more than a ruse. BitMEX listed its headquarters as in the Seychelles, an island republic in the western Indian Ocean, yet federal investigators found that most of its employees worked in New York, Hong Kong and San Francisco.

Mr. Hayes, the founder, claimed it cost just “a coconut” to bribe Seychellois authorities — less than buying favors from regulators in the United States and elsewhere, federal prosecutors said when they charged him in late 2020. Mr. Hayes pleaded not guilty in April and his case is pending. He now lives in Singapore.

“Arthur Hayes and his co-defendants in this case are innocent and they look forward to defending themselves in court,” Nate Johnson, a spokesman for Mr. Hayes, said.

Until recently, Hong Kong was a gathering place for cryptocurrency gurus, who at least before the pandemic frequently met up at industry conferences held there or at local bars and cafes.

Mr. Zhao said the community was what sold him on cryptocurrency. What he found at conferences around the world, he said, “was a very geeky, honest community.”

These personal associations sometimes lead to financial ties. Mr. Zhao’s company was an early investor in Mr. Bankman-Fried’s exchange, while Mr. Bankman-Fried’s trading company is a client of Mr. Zhao’s platform. They talk to each other regularly.

“I think I met him in Taiwan, Hong Kong, Singapore and maybe even Europe,” Mr. Zhao said of his fellow crypto nomad. “But mostly in Asia.”

Mr. Bankman-Fried and Mr. Zhao said in separate interviews that they are committed to honoring United States regulations, even if their global exchanges are based abroad.

But globally, the cryptocurrency derivatives market continues to surge — and there are clear signs that major United States players are still pouring money into the game.

More than a dozen major private trading firms with U.S. roots have set up offices in the Cayman Islands and other offshore locations, creating new corporate entities to push money through Binance’s and FTX’s overseas derivatives platforms on a huge scale, traders involved told The New York Times.

“I’m not a U.S. person,” said one trader who has moved to the Cayman Islands on behalf of a major fund, and initially left his family behind in the Midwest to set up the operation. “But I’m still a U.S. citizen.”

The trader asked not to be named as he did not have authority to discuss the arrangement publicly.

This stateless approach to running these cryptocurrency exchanges — mixed with the constant introduction of new unregulated and often highly risky products — is now facing perhaps its most important test.

Just since June, Binance has been targeted by financial regulators with warnings or other enforcement actions in Britain, the Cayman Islands, Hong Kong, Lithuania, Italy, Poland and Thailand, many of them eying its high-leverage derivatives offerings or a new product line introduced this spring that allows customers to buy cryptocurrency-linked versions of stocks like Tesla and Apple.

Facing a backlash, Binance announced in mid-July that it was abandoning the new stock token products.

“The crypto industry is a very nascent industry and the landscape, including the way that cryptoexchanges are regulated, continues to evolve,” the company said in a statement to The Times. It attributed the recent scrutiny in part to mainstream embrace of crypto over the last year and said “it’s right” for regulators to examine the industry.

Mr. Bankman-Fried, toward the end of a three-hour series of interviews with The Times, said it may be time for the industry to pull back on its most extreme offerings, like leverage on derivatives trades as high as 125 times.

“It would just be easier to get rid of it than to keep having to talk about it,” he said, proposing a cap of perhaps 10 times, mostly, he added, to fight the perception that the industry is encouraging risky bets, a view he thinks is unfair.

Binance and FTX are also looking to secure a sanctioned space in the United States market. They have, within the last two years, opened United States-based platforms that do not offer derivatives but instead focus on the buying and selling of actual cryptocurrencies.

FTX also recently bought the naming rights to the Miami Heat arena and put its corporate logo on a patch worn by Major League Baseball umpires, as it works to build name recognition here. Mr. Bankman-Fried, via $5.6 million in donations, was also one of the biggest givers last year to help President Biden’s election effort — although he said in an interview that it was unrelated to his corporate endeavors.

For now, these operations in the United States generate little profit, compared to their overseas counterparts. They do follow U.S. rules, though. That does make a difference.

“It’s a much less exciting product,” Mr. Bankman-Fried said.

Fornite fans and Monero owners rejoice! Merchandise for the hottest online game around is now allowing its customers to purchase their merchandise with Monero.While no official statement has been released, folks on Reddit and Twitter have stated they are capable of purchasing the latest and trendiest merchandise, such as skull trooper pullover hoodie or a durr burger onesie, and pay it all with the help of Monero.If you check out our “Straight Forward Guide To Monero (XMR)“, you’ll understand why Monero has become one of the most popular cryptocurrency in the market at the moment, mainly due to its coveted privacy features that are included to its credibility.At the moment, users based in the United States and Europe are capable of utilizing this option of paying for the merch in Monero.The payment platform is used to facilitate this is the Swiss platform Globee, which has also provided similar options for Bitcoin, Ethereum, Bitcoin Classic, Litecoin, Dogecoin, Decred, and Ripple.This isn’t the first time cryptocurrency and gaming have united to help each other out. Cryptocurrency is incredibly popular among video game players, mainly due to many of them being advocates of cryptocurrencies, so it’s no surprise they’d take to it with open arms.Reaction throughout various social media has been highly positive towards this recent news, with many Monero users cheering this adoption.Too cool: the Fortnite merch store (https://t.co/KNL4IFCFHk) lets you pay in Monero, so now you can purchase that sweet Durrr Burger onesie without your friends / family / coworkers judging you. https://t.co/XYs1NjGvGp— Riccardo Spagni (@fluffypony) January 1, 2019Too cool: the Fortnite merch store (https://t.co/KNL4IFCFHk) lets you pay in Monero, so now you can purchase that sweet Durrr Burger onesie without your friends / family / coworkers judging you. https://t.co/XYs1NjGvGpWith Fortnite merchandise being purchasable with the use of Monero, the cryptocurrency will definitely see a significant boost in adoption during the coming weeks. For those of you who are thinking about adopting Monero into your growing portfolio, this might just be the time to do so!Are you planning to purchase Fortnite merch with Monero?

You can buy more things than ever with cryptocurrency these days, from video games to new furniture. But should you?

“I wouldn’t,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies” and the personality behind @Investdiva on Instagram. While there are a few circumstances where it can make sense, the practical answer for most people is no. 

Cryptocurrency markets are notoriously volatile, and the price you pay for an item today may not be what your purchase is worth tomorrow. Plus, many companies experimenting with crypto payments only accept Bitcoin, which experts say is one of the worst cryptos you could choose to pay for something. 

Nevertheless, people are interested in how crypto might work as a payment method. Nearly 20% of all U.S. adults say they’re likely to make a purchase using crypto, according to a recent report by PYMNTS.com, a news and research platform for payments and commerce. But before you cash in your Bitcoin to top up the balance on your Starbucks app, here’s what experts have to say about purchasing with crypto:Don’t Pay With Bitcoin

Bitcoin, the first cryptocurrency, was originally intended to be used exactly like money. Its white paper dubbed it a “peer-to-peer electronic cash system.” But Bitcoin’s frequent and volatile price fluctuations make that unrealistic in practice. 

“The price volatility kind of makes it useless as an electronic cash system,” says Ollie Leech, learn editor at CoinDesk, a leading cryptocurrency news outlet. “No person in their right mind would want to buy a coffee with Bitcoin. Say you pay $3 for the coffee, and tomorrow your Bitcoin could be worth $30. That’s a loss.” 

Just one year ago, in June 2020, Bitcoin’s value was under $10,000. Since then, it reached a high of more than $64,000 and, despite a recent price drop, remains close to $40,000. Imagine a video game that cost $50 worth of Bitcoin last June. If you waited until today to buy it instead, the same price in Bitcoin today would now cost you $200. 

People buy Bitcoin “not because they expect to be able to go to the store and spend it, but because they expect it to hold its value,” says Galen Moore, director of data and indexes at CoinDesk.

What About Other Cryptos?

Bitcoin has failed at its intended mission to become a new currency, but experts say there are other cryptocurrencies better for transacting. “Every one of them are optimized for certain things. For example, you wouldn’t go to the store and pay for groceries with gold,” says Danial — in the same way you shouldn’t spend Bitcoin on your morning latte. 

Some popular cryptos specifically designed to work better for spending include Dash, Manero, and XRP, according to Danial. Stablecoins, like Tether or USD coin, can also make better alternatives for purchasing, since their prices are tied to existing currencies. 

“There are coins that are more like cash,” says Pat White, co-founder and CEO of Bitwave, a company that helps businesses with crypto tax reporting. These coins are a better choice for spending, in theory, thanks to faster processing and lower fees. “They are designed to be spent and used very quickly.”

But in reality, there’s still a downside to using crypto developed to mimic cash to make payments. Take Bitcoin Cash (BCH), for example. BCH came about after the original Bitcoin proved itself too volatile to be used as a new kind of internet money. A group of creators decided to split off from the original crypto and create Bitcoin Cash, which was designed as a more stable version to be used for transactions.  But in practice, Bitcoin Cash is still highly volatile. In the last year its price has run from around $250 per coin to over $1,500, highlighting the risk of using it to buy something at the wrong time.

Taxes are another complication. While you don’t need to report your crypto purchases to the IRS, you do need to report when trading a cryptocurrency for goods or services. Each time you make a purchase using crypto, you need to track your cost basis, or the fair market value of the crypto when you bought it versus when you used to transact, and report that capital gain or loss.

Are There Other Real-World Uses For Crypto?

For American citizens in America, “There’s probably not going to be a good reason to buy things in crypto,” Danial says.  

That’s because the U.S. dollar fluctuates less than the vast majority of cryptocurrencies out there. However, when you consider a currency that’s less safe and stable than the U.S. dollar, the case for cryptocurrency payments increases, says Roger Aliaga-Díaz, principal and senior economist with Vanguard Investment Strategy Group.

Take a volatile currency like the Iranian Rial. “It loses value every single day,” Danial says. “I’m Iranian, my parents are as well, and whenever they go to Iran they try to never convert any money to Rial, because it just goes down.”

Would You Ever Buy Things With Crypto?

While it’s not the wisest financial decision, crypto payments can provide an alternative transaction method for those who don’t have the necessary requirements for opening a bank account, or can’t access traditional financing in a certain place. For example, unbanked people can transfer money to others, even internationally, using their crypto wallets, or make purchases using crypto with participating merchants using apps like BitPay, all without the need to go through traditional financial institutions.

Some people may also choose to buy goods with crypto to capitalize upon the speed of transaction. Globally, “a lot of deals are being made with crypto,” Danial says. “Like, maybe a prince in Dubai wants to buy a Lamborghini from Italy, and wants it immediately and doesn’t want to wait for deposits and bank information and everything, so they purchase it using crypto.”

Crypto transactions are also relatively anonymous — which is why they have a reputation as being used by criminals to buy and sell on online black markets. Crypto’s prevalence as a form of payment for illegal trades persists. It played a role in recovering the Colonial Pipeline — a key gas line servicing the U.S. Gulf and East Coasts — last month, after hackers shut down its computer systems until they were paid $4.4 million in Bitcoin. The U.S. government has since seized back $2.3 million of that ransom fee (most of what was originally paid, since the price of Bitcoin has dipped recently). 

As for businesses willing to accept payment in crypto, expect to see more as Bitcoin and other cryptocurrencies grow in popularity. Some companies may be looking to cash in on the latest craze, or take part in the novelty of a new payment form, while others believe cryptocurrency is the way of the future. A bullish perspective on the future of crypto was behind Tesla’s recent decision to begin offering the option to pay with Bitcoin, although the company declared it would stop accepting Bitcoin payments for cars last month, citing concerns about its environmental impact. 

There may be a future in which digital currencies become more commonplace forms of payments, but for the average American crypto investor considering paying for groceries in crypto, “I think we are not there yet,” says Danial. 

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OWNR Wallet's cryptocurrency system aims to provide the best tools on the market for using crypto

TALLINN, Estonia, July 13, 2021 (GLOBE NEWSWIRE) -- Cryptocurrency ecosystem OWNR Wallet announces its expansion to 216 countries, bringing its crypto-platform to more people all over the world. OWNR Wallet provides a range of ways for customers to receive transfers or make purchases using cryptocurrency, broadening access and removing barriers in the growing crypto market.

OWNR Wallet is the easiest way to purchase crypto using bank cards. It offers a prepaid Visa card so that customers can use Bitcoin, Ethereum and other currencies to pay in-store. Customers order a physical or virtual card and can use it at millions of locations to make payments or cash withdrawals from ATMs.

OWNR expanded its groundbreaking non-custodial wallet to more countries in Asia, including South Korea and Japan. The team worked to add more payment integrations to its platform so that all banks in these countries can work with OWNR's transactions.

OWNR also expanded to South America, Oceania and Australia, and prioritized Egypt, Nigeria, Tunisia, and 43 other African countries to ensure customers in those countries have access to the coin-buying platform.

OWNR Wallet is an all-in-one crypto tool that provides a range of ways to buy, sell, and trade using cryptocurrencies. In addition to providing the prepaid bank cards, it also offers a crypto-to-crypto exchange to trade or sell coins. This service allows users to customize fees to adjust for potential price spikes or to speed up transactions. Users can add OWNR's exchange engine to their platform or website.

OWNR also offers a payment gateway so that the clients of a company can make purchases using OWNR's system, streamlining the payment process. OWNR already provides this payment gateway to customers of Bitfinex, one of the world's largest cryptocurrency exchanges.

OWNR Wallet is constantly working to update and improve its multi-platform cryptocurrency ecosystem by adding new features. It aims to be the only wallet customers need, providing everything in one interface.

OWNR Wallet supports the following cryptocurrencies: BTC, BCH, ETH, LTC, DASH, DOGE, BCH-SV, OMNI USDT, EOS, and ERC-20 tokens. OWNR is available for Windows, macOS, and Linux operating systems and can be downloaded on the iOS App Store or Google Play. For more information about OWNR Wallet visit: https://ownrwallet.com/

Social Links

Facebook: https://www.facebook.com/ownrwallet/

Twitter: https://twitter.com/ownrwallet

Blog: https://medium.com/ownrwallet

YouTube: https://www.youtube.com/ownrwallet

Media Contact

Company: OWNR Wallet OU

Contact: Grygory Sytenko, Co-Founder & CEO

E-mail: press@ownrwallet.com

Website: https://ownrwallet.com

SOURCE: OWNR Wallet OU

If you’re new to the world of crypto, figuring out how to buy Bitcoin, Dogecoin, Ethereum and other cryptocurrencies can be confusing at first. Thankfully, it’s pretty simple to learn the ropes. You can start investing in cryptocurrency by following these five easy steps.

To buy cryptocurrency, first you need to pick a broker or a crypto exchange. While either lets you buy crypto, there are a few key differences between them to keep in mind.

A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have relatively low fees, but they tend to have more complex interfaces with multiple trade types and advanced performance charts, all of which can make them intimidating for new crypto investors.

Some of the most well-known cryptocurrency exchanges are Coinbase, Gemini and Binance.US. While these companies’ standard trading interfaces may overwhelm beginners, particularly those without a background trading stocks, they also offer user-friendly easy purchase options.

The convenience comes at a cost, however, as the beginner-friendly options charge substantially more than it would cost to buy the same crypto via each platform’s standard trading interface. To save on costs, you might aim to learn enough to utilize the standard trading platforms before you make your fist crypto purchase—or not long after.

An important note: As someone new to crypto, you’ll want to make sure your exchange or brokerage of choice allows fiat currency transfers and purchases made with U.S. dollars. Some exchanges only allow you to buy crypto using another crypto, meaning you’d have to find another exchange to buy the tokens your preferred exchange accepts before you could begin trading crypto on that platform.

Cryptocurrency brokers take the complexity out of purchasing crypto, offering easy-to-use interfaces that interact with exchanges for you. Some charge higher fees than exchanges. Others claim to be “free” while making money by selling information about what you and other traders are buying and selling to large brokerages or funds or not executing your trade at the best possible market price. Robinhood and SoFi are two of the most well-known crypto brokers.

While they’re undeniably convenient, you have to be careful with brokers because you may face restrictions on moving your cryptocurrency holdings off the platform. At Robinhood and SoFi, for instance, you cannot transfer your crypto holdings out of your account. This may not seem like a huge deal, but advanced crypto investors prefer to hold their coins in crypto wallets for extra security. Some even choose hardware crypto wallets that are not connected to the internet for even more security.

Once you decide on a cryptocurrency broker or exchange, you can sign up to open an account. Depending on the platform and the amount you plan to buy, you may have to verify your identity. This is an essential step to prevent fraud and meet federal regulatory requirements.

You may not be able to buy or sell cryptocurrency until you complete the verification process. The platform may ask you to submit a copy of your driver’s license or passport, and you may even be asked to upload a selfie to prove your appearance matches the documents you submit.

To buy crypto, you’ll need to make sure you have funds in your account. You might deposit money into your crypto account by linking your bank account, authorizing a wire transfer or even making a payment with a debit or credit card. Depending on the exchange or broker and your funding method, you may have to wait a few days before you can use the money you deposit to buy cryptocurrency.

Here’s one big buyer beware: While some exchanges or brokers allow you to deposit money from a credit card, doing so is extremely risky—and expensive. Credit card companies process cryptocurrency purchases with credit cards as cash advances. This means they’re subject to higher interest rates than regular purchases, and you’ll also have to pay additional cash advance fees. For example, you may have to pay 5% of the transaction amount when you make a cash advance. This is on top of any fees that your crypto exchange or brokerage may charge; these can run up to 5% themselves, meaning you might lose 10% of your crypto purchase to fees.

Once there is money in your account, you’re ready to place your first cryptocurrency order. There are hundreds of cryptocurrencies to choose from, ranging from well-known names like Bitcoin and Ethereum to more obscure cryptos like Theta Fuel or Holo.

When you decide on which cryptocurrency to purchase, you can enter its ticker symbol—Bitcoin, for instance is BTC—and how many coins you’d like to purchase. With most exchanges and brokers, you can purchase fractional shares of cryptocurrency, allowing you to buy a sliver of high-priced tokens like Bitcoin or Ethereum that otherwise take thousands to own.

The symbols for the 10 biggest cryptocurrencies based on market capitalization* are as follows:

*Based on market capitalization as of June 28, 2021

Cryptocurrency exchanges are not backed by protections like the Federal Deposit Insurance Corp. (FDIC), and they’re at risk of theft or hacking. You could even lose your investment if you forget or lose the codes to access your account, as millions of dollars of Bitcoin already has been. That’s why it’s so important to have a secure storage place for your cryptocurrencies.

As noted above, if you’re buying cryptocurrency via a broker, you may have little to no choice in how your cryptocurrency is stored. If you purchase cryptocurrency through an exchange, you have more options:

While buying cryptocurrency is a major trend right now, it’s a volatile and risky investment choice. If investing in crypto on an exchange or via a broker doesn’t feel like the right choice for you, here’s are a few options to indirectly invest in Bitcoin and other cryptocurrencies:

ETFs are extremely popular investment tools that let you buy exposure to hundreds of individual investments in one fell swoop. This means they provide immediate diversification and are less risky than investing in individual investments.

There is a huge appetite for cryptocurrency ETFs, which would allow you to invest in many cryptocurrencies at once. No cryptocurrency ETFs are available for everyday investors quite yet, but there may be some soon. As of June 2021, the U.S. Securities and Exchange Commission (SEC) is reviewing three cryptocurrency ETF applications from Kryptcoin, VanEck and WisdomTree.

If you’d rather invest in companies with tangible products or services and that are subject to regulatory oversight—but still want exposure to the cryptocurrency market—you can buy stocks of companies that use or own cryptocurrencies and the blockchain that powers them. You’ll need an online brokerage account to buy shares of public companies like:

As with any investment, make sure you consider your investment goals and current financial situation before investing in cryptocurrency or individual companies that have a heavy stake in it. Cryptocurrency can be extremely volatile—a single tweet can make its price plummet—and it’s still a very speculative investment. This means you should invest carefully and with caution.

OAK LAWN, IL -- The Children's Museum in Oak Lawn is now accepting cryptocurrency as donations, becoming the first children's museum in the country to accept such donations.

"We learned a lot from being closed most of 2020," the museum's executive director Adam Woodworth said in a news release. "The one thing we learned is that people want to support the museum through donations and volunteering; and we need to be able to meet those supporters where they are."

A cryptocurrency, or crypto, is a digital currency that can be used to buy goods and services, but is secured but uses an online ledger with strong cryptography that makes it nearly impossible to counterfeit or double-spend. The most popular form of cryptocurrency is Bitcoin.

Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions, according to NerdWallet.

The children's museum already offers multiple ways that people can contribute, by donating a vehicle, stock, including the museum in your will or as partial beneficiary of your life insurance policy, as well as donating by cash, check or credit card. Cryptocurrency offers another option, especially if you've already purchased some, to support the museum's mission.

"We partnered with Engiven, a platform that helps nonprofits easily accept donations of cryptocurrency," Woodworth said. "Within 24 hours of launch, we received our first cryptocurrency donation. It was exciting."

The cryptocurrency donation immediately goes through an exchange and the museum receives the cash equivalent of the value of that crypto at the time of the donation.

The museum is not accepting cryptocurrency to purchase admissions or memberships, yet, but Woodworth said that he doesn't rule out that possibility in the future.

"Cryptocurrency has been around a while, but it's new to a lot of people," Woodworth said. "I don't think any of us really know where it is heading. What we do know is that it is here, people are investing in it and there is a belief that this will take hold as a viable and well-recognized currency. We thought we should be part of it."

Visit Help-Us-Grow to learn more about supporting and donating to the Children's Museum In Oak Lawn.