This Week in Cryptocurrencies-3/16/18

By Matthew Zeman | March 16, 2018

Bitcoin and numerous other cryptocurrencies have had another trying week, with Bitcoin set for a weekly drop in the double digits. The markets are being weighed down by many of the same influences that have brought prices lower in recent months. The idea of further and tighter regulation has been a major catalyst for the selling seen in recent months, and there could be more downside to go before the cryptos find a long-term base.

Cryptos drawing IRS attention

According to a recent article from wsj.com, the IRS last year took steps to clamp down on crypto investors. The article stated:

“Pay your taxes on bitcoin…or else.

Late last year, the Internal Revenue Service persuaded a federal judge to require Coinbase, a San Francisco-based digital-currency wallet and platform with about 20 million customers, to turn over customer information. Driving the IRS’s decision was its belief that few bitcoin investors appear to be paying taxes due on sales. The court order is one of the agency’s first moves as it clamps down on cryptocurrency scofflaws.”

It is important for long-term investors to keep in mind that regulatory action as well as interest from the IRS should come as no surprise. In fact, these steps are necessary for cryptos to eventually become a widespread, mainstream and legitimate form of currency.

In addition,the recent downside and volatility in crypto prices may even shake out some of the larger speculators in these markets, paving the way for a more sustainable run higher in price. Although holding currencies through such volatility may not be the most pleasant thing, long-term investors must view the market with patience and “see the forest through the trees.”

Could Cryptos Take Over for Cash?

On the plus side, a recent article from nbcnews.com suggested that cryptos may take on a much larger role. It stated:

“As popular as they have become, virtual currencies may soon play an even bigger role in our financial lives. In part over fears that existing cryptocurrencies (which operate independently of governments) will make it harder to detect tax evasion, Sweden, Canada, China and other nations have announced plans to launch their own official virtual currencies. In the case of Sweden, that could come as soon as 2020.

Though recent research suggests there’s not yet a shift away from cash, experts say a mix of independent and national cybercurrencies could eventually displace the coins and paper notes that people have been using for thousands of years.”

The Week in Cryptocurrency Prices

BitcoinBitcoin is down some 10% on the week, but is seeing a nice bounce on Friday to end the trading week, up nearly 5%. The market seems to have found a range between 8k and 10k, and has been oscillating between these two levels. Eventually, however, the market will breakout one way or the other, and when it does it could potentially see a substantial move.

Bitcoin Cash: This crypto has been on a roller-coaster ride this week. The market saw a decline from well over $1100 down to about $880 before seeing a substantial bounce higher. The market is up over 14% on Friday, trading around the $1050 level. Today’s powerful move could potentially be indicative of more buying next week.

Ethereum: This crypto saw a drop from over $730 to around the $600 area, where it has spent the last few sessions. The currency is up slightly on Friday, but has thus far not put together a powerful rebound like some other cryptos. A lack of buying could keep it vulnerable to further selling pressure next week.

Ethereum ClassicThis crypto declined from almost $23 to about $16 before finding some buyers. The market has since bounced back to over the $18 level, but is not showing much excitement.

Litecoin: This crypto has seen more of a slow downtrend this week, finding a bottom under $160 before seeing a bit of a bounce. It is having a decent showing on Friday to end the trading week, back near $170 and up nearly 5%.

Ripple: This crypto has spent much of the trading week moving sideways, first around the $.80 level then around the $.70 level. Although it is up over 4% on Friday, there does not appear to be a lot of enthusiastic buying taking place. The currency may stay sideways to lower in the next few sessions.

 

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