The volatility of cryptocurrencies affects banks, celebrities and investors every day

Most cryptocurrencies have collapsed in value in recent weeks, ending billions of dollars in wealth.

Instead of mainly harming cryptocurrencies, as in previous falls, the impact has been widely felt.

Cryptocurrencies have seen a massive increase in popularity during pandemic, attracting the support of innumerable celebrities and incorporating them into more and more assets of assets.

Cryptocurrencies and blockchain -based technology, such as non -fungible tokens (NFT), are now appearing everywhere, from night interview programs to Matt Damon's commercials. I include athletes like Odell Beckham Jr. and mayors like Eric Adams (D D) New York have chosen to turn their salaries into cryptocurrencies.

While banks and runners ever despised cryptocurrencies, an increasing number of them now offers purchase and custody services. The boom also helped boost several new companies, including Robinhood, a new prominence and even took someBlockchain -centered companies to look for national bank licenses.

This caused prices to drop last week, with Bitcoin and Ethereum falling more than 40 percent from their maximums, causing even more damage.

With the season of tax statements underway, many red investors are preparing to pay huge tax bills on the profits they will no longer have.

"One of the main erroneous concepts about cryptocurrencies is that people think they are anonymous and, therefore, regulators have no way of knowing what they are doing in cryptographic space," said Sheehan Chandrasekera, certified public accountant and head ofFiscal strategy in Coentracker.IO, a currency tax software company, coded, "but that is not reality."

Cryptocurrencies are discussed under the same fiscal regulations as shares, bonds and other investment products. Investors that bought cryptocurrencies in dollars last year will not have to pay taxes on those purchases to be able to sell or exchange those coins.Investors who bought digital currencies at a higher price than they are currently valid can even sell those coins now and apply the loss as a reimbursement in their 2022 taxes.

But it is possible that taxpayers who sold, extracted or exchanged cryptocurrencies in 2021 must pay taxes on capital earnings or income taxes in these transactions. Taxpayers who quickly spent their cryptographic earnings, reinvested them or lost much of their assetsNet during the recent fall may have trouble incurring these invoices depending on when these transactions and government tax rates occurred.

Chandrasekera said to break down the general tax burden on cryptocurrency transactions can be discouraging and sometimes impossible for unknown investors. He said that most cryptocurrency exchanges do not provide users with information on the annual tax declaration for theirTransactions such as other stockbrokers or commercial platforms. The frequency of cryptocurrency transactions between peers and exchanges of one currency for another are also unique tax issues for the cryptocurrency sector.

"It is practically impossible to liquidate these transactions, especially if you have several wallets," he said, referring to virtual storage systems that are used to store cryptocurrencies.

The generalized adoption of cryptocurrencies raises doubts about their viability as active in the future, due to its volatility and vulnerability to fraud.

The main cryptocurrencies suffered several sudden price changes before this week's collapse.

Bitcoin lost more than half of its value and Ether, the second most negotiated Token, fell more than 25 % in the first month of 2018.

While both collapses had some external causes (potential regulation in the United States and foreign restrictions on trade), part of volatility is due to the nature of assets.

Unlike traditional currencies such as dollar or euro, cryptocurrencies are not widely accepted in exchange for goods or services.

David Sacco, professor of finance at the University of New Haven, describes them as a "speculative deposit of wealth" instead of real currency.

"Cryptocurrencies are basically digital gold," he said in a telephone interview with The Hill.

@ForagerCotswold it didn’t turn yellow!! Must be a good ‘un 🍄 Great way to start the weekend - 4 hours of learning… https://t.co/m7XInzVfCf

— John Boyes 🧡🇪🇺🏴󠁧󠁢󠁳󠁣󠁴󠁿 Sat Jul 10 13:56:29 +0000 2021

Until cryptocurrency applications are widely adopted, either buying NFT or using blockchain technology for contracts, investors recognize that prices volatility is likely to remain a characteristic of cryptocurrency.

"The volatility will be there until the total adoption with specific use cases, and we do not see that at all," said Eloisa Marchesoni, founder of the cryptocurrency consultant Def.AI Inc.

Cryptocurrency defenders are rushed to point out that general growth trends have been positive in general, although it is unlikely that this fact provides much comfort to the waves of investors who have bought in the recent rebound.

The smallest coins can be more volatile. It seems that many of the thousands of tokens launched from Bitcoin have just emerged from nothing, just to expire after a few days.

The sources of volatility in this type of currency may be less related to the economic reality than the main ones. A only tweet of an outstanding figure in the cryptographic community can significantly increase the value.

Last October, Dogecoin's spin-off, Shiba Inu, jumped 30 percent after Tesla CEO Elon Muskinformed from Hill Morning-Democrats perceive an opportunity with the work vacancy of Scotus Musk says that 'the truck driversCanadians govern 'before drivers protest the money mandate of the COVID-19 vaccine: the economy achieves after recession in the recession in 2021 a photo of their dog with the legend "Floki Frunekpupy". A weeks later,He reduced the price by 20 percent when he reveals that he does not have any Shib.

Muchas otras llamadas monedas tienen saltos similares sin vínculos con cambios fundamentales.cuando delegado. brad shermanBradley (Brad) James Sherman Trazando nuestro futuro después de la crisis climática Defensa y seguridad nacional: el Congreso comienza a cuestionar Afganistán EE. UU. dice que unos 1.500 ciudadanos permanecen en Afganistán Más(D-California) mencionando en broma a hamstercoin durante una audiencia en diciembre, el token duplicó su valor y luego colapsó un día después de que los inversores se deshicieran de sus activos.

Cryptocurrency has also proven to be a fruitful scenario for computer scams and pirates.

The scammers obtained USD 14 billion in cryptocurrencies in 2021, according to a January report of the Chainysis block chain analysis company, which attributed most of the increase to the growing popularity of decentralized financial platforms.

Cryptocurrency scams are booming on social networks. Federal Commerce said in a statethat involve false investments in cryptocurrencies, an area that has seen a massive increase in reports ».

The space was also vulnerable to penetration. Hub more than 20 attacks last year in which more than 10 million dollars were seized in virtual assets, according to NBC news.

Just last week, more than $ 30 million were stolen in digital wallets of the Crypto.com exchange market, which recently acquired the names of name at the Los Angeles Lakers arena.

The company said it adopted new security measures due to the attack, but has not publicly shared how these measures are.

Cryptocurrency defenders say that potential buyers must follow the basic investment rules before participating: conduct a serious investigation, diversify their participations and focus over time in the market instead of in rapid yields.

JW Ferrett, Professor of Financial Law at the George Mason University and former main advisor of the Financial Services Committee of the House of Representatives, argued that the volatility of prices alone is not a reason to take drastic measures against the industry.

«It may be easier to support a sector during a bullish market.But that does not mean that a bearish market requires a regulatory solution, ”said Ferrett.

"If someone is buying tokens just for the support of celebrities, it is a stupid decision, but stupid decisions cannot be organized."

However, Verrett said that those responsible for formulating policies and regulators should provide more educational resources to potential investors, establish clear expectations and modify tax laws to facilitate the use of cryptocurrencies in transactions.

"The greatest interest in retail trade, the greatest demographic interest of young people and the greatest interest in the entire political spectrum has been exponential and this will have political implications," he said.

«Ya estamos viendo demócratas moderados interesados ​​en las criptomonedas. Creo que esto crecerá y creo que las voces anticriptomonedas se hundirán».