Cryptocurrency news about Bitcoin, Ethereum, and other digital currencies. The fast-moving industry keeps investors, regulators, and observers on their toes.
For proponents, cryptocurrencies democratize finance, wresting power from central banks and Wall Street. Critics, however, argue that they empower criminals and terrorists, suffer from extreme market volatility, stoke inequality, and consume vast amounts of energy.
Bitcoin is the largest cryptocurrency, with a market value of over $1 trillion. It was created in 2009 and is governed by a decentralized system of rules, called blockchain, that records all transactions. Ownership of Bitcoins is distributed among many parties on the blockchain, though investment funds and hedge funds have become dominant buyers and holders.
Investors face significant risks in investing in cryptocurrencies, including hacking and fraud, regulatory crackdowns, and sudden price drops. Investors rely on exchanges and other third parties to store their cryptocurrency investments, meaning they could lose them all if those third parties are compromised. In addition, cryptocurrencies are not legally recognized as securities in most countries, making them hard to sell or trade.
The remittance economy is one of the most prominent uses of cryptocurrencies, which streamline money transfers by converting fiat currencies into Bitcoin (and sometimes other cryptocurrencies) and back again. The high price volatility of some cryptocurrencies, however, has discouraged users, and the bankruptcy of several exchanges in 2022 led to tens of billions in losses for traders and lenders. In response, a number of stablecoins have emerged, which claim to be backed by assets and offer a more stable price.