The forecast looks wonderful for bitcoin, as it surged to a record high today, surpassing the $5800 mark on Friday. This is sign of fresh new progress for the cryptocurrency, which entered the financial market with quite a rocky start.
This means that bitcoin traders, investors and miners alike are breathing a sigh of relief, and if Twitter is any indication, having a big celebration. The response in the US market has been very strong and positive, as talks about Amazon warming up to accepting the cryptocurrency have been circulating.
Naeem Aslam, Chief Market Analyst of ThinkMarkets, says of the impact of the move: “If Amazon successfully implements and brings bitcoin on their platform, it would only be a matter of time before we hear eBay making a similar announcement.”
Though the bitcoin is still relatively new, its ubiquitous presence in economic discussions is unmistakable.
Still, a few questions remain unanswered about its future:
• How can bitcoin mining remain fair and open, yet beneficial to traders?
• To what extent will bitcoin evolve independently?
• Is regulation of the products for bitcoin purchase a viable or realistic possibility?
• What are the true motivating factors for regulators to engage with cryptocurrency?
• Have the pros and cons of its anonymous transactions been made explicitly clear?
• Will the government take a stance of passive tolerance or active engagement with the cryptocurrency?
The good news is that Bitcoin is taxable in the US market. The extra responsibility, besides reporting, is for traders to keep accurate and detailed records. Tax attorney Tyson Cross, who works in the area of virtual currency specialization, said, "Every bitcoin transaction is taxable," adding about the responsibility of users, "Bitcoin users will have to calculate their gain or loss every time they purchase goods or services with bitcoin."
What’s more, many critics believe that the hostility from the banking sector is largely motivated by preventing Bitcoin from moving in on its territory. Silencing banking sector critics and advocating for the cryptocurrency has been the mission of many Bitcoin investors.
There was a heated exchange recently between JPMorgan Chase CEO and President Jamie Dimon and Bart Stephens, co-founder and managing partner of Blockchain Capital.
Following accusations the CEO made referring to it as a ‘fraud’, Stephens responded:
"I would encourage Jamie Dimon and others to do some homework first. It is not a fraud. It is not a Ponzi scheme. It's a robust technology that is going to impact multiple industries. Don't discount it."
Jon Moulton, the founder of private equity firm Better Capital, says of its future: “It’s going to be a very volatile asset for a long time...the Bitcoin in 10 years will have to evolve[,as] the current structure for manufacturing Bitcoins simply cannot survive for ten years,” quieting the critics with, “It’s very interesting to have something unattached to governments and to central banks[,] but gold does roughly the same.”
Though it seems that the jury is still out in terms of whether or not the bitcoin will stick, or the full extent to which it can transform the financial market, today’s numbers show a slow, but steady approach is definitely in the works for the fledgling currency.