Bitcoin
What is Bitcoin? Top Cryptocurrency Terms and What They Mean
- By Brandon Drenon, Joe Tidy and Liv McMahon
- BBC News
December 13, 2022
Updated April 23, 2024
Image source, Getty Images: We are
After the price of Bitcoin reached a new all-time high in March, the sensitive subject of cryptocurrencies is back in the spotlight.
And while cryptocurrency market-moving events like the Bitcoin halving or the launch of “spot ETFs” may be familiar to cryptocurrency fans, their significance is less obvious to many.
Whether you’re hearing this for the first time or just need a refresher, here are some keywords and what they mean.
Bitcoin
While many may struggle with the ins and outs of cryptography, almost everyone has heard of its most famous product: Bitcoin. But what really is this?
Bitcoin is a cryptocurrency, that is, a type of digital currency. Unlike traditional currencies – the dollar or the pound, for example – Bitcoin is not controlled by centralized financial institutions. This makes it popular with people who think decentralization can bring financial freedom, but it also makes it extremely volatile – rising and falling in value at the whim of Bitcoin buyers and sellers.
Throughout February and March 2024, its price rose rapidly and briefly reached a new all-time high. But its value can bob as quickly as it increases – a pattern that has repeated itself several times since the cryptocurrency was launched.
Bitcoin ‘Halving’
The blockchain, the system that supports Bitcoin, is supported by rewarding so-called “miners” – whose job is to validate transactions – by paying them with cryptocurrency.
However, unlike some other digital currencies, there is no infinite supply of bitcoins. The amount that can be mined is limited to 21 million and most are already in circulation.
Thus, approximately every four years – or when the Bitcoin blockchain reaches a certain size – the number of bitcoins rewarded to those who successfully validate transactions is halved. Bitcoin’s most recent “halving” (or “halving”) event occurred on April 20, 2024, reducing the reward for miners from 6.25 bitcoins to 3,125.
This ensures that the supply of Bitcoin extends longer, while demand, in theory, increases over time. But with fewer rewards for miners, it may also lead some to consider whether it is financially worth it for them to continue the expensive operation of running their powerful computers.
Blockchain is the technology that underpins all cryptocurrencies and many related products such as non-fungible tokens (NFTs). In essence, it is a virtual spreadsheet in which all crypto purchases and sales are recorded. They are arranged in blocks linked together in a giant chain – hence the name.
Each cryptocurrency transaction is individually recorded on the blockchain by a huge network of volunteers who verify its authenticity using computer programs.
The incentive for doing this for the Bitcoin network is that the first person to validate transactions is rewarded in Bitcoin. This potentially lucrative process, known as mining, is also controversial due to the incredible amount of energy used as people around the world race to be the first to successfully upgrade the blockchain.
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Video caption: Are cryptocurrencies the future of money?
Crypto Exchange
A crypto exchange is the digital platform where investors can buy, sell and trade cryptocurrencies. Similar to traditional investing, a crypto exchange acts as a broker where people can transfer traditional money, such as pounds or dollars, from their bank to cryptocurrencies such as Bitcoin or Ethereum. Most transactions are accompanied by fees.
Crypto wallet
A crypto wallet is a place where investors store their cryptocurrencies. It stores virtual assets in the same way a traditional wallet stores money. There are two types, a hot wallet and a cold wallet. Hot wallets are connected to the internet and therefore more accessible for quick and easily accessible transfers. Cold wallets are physical devices, such as specially designed USBs, that store crypto offline, typically for more secure, long-term storage.
Ethereum
Ethereum is used to describe the second largest cryptocurrency after Bitcoin, represented by the Ether token, and the blockchain that supports it. This supports a variety of different applications and digital assets, such as non-fungible tokens.
Exchange Traded Funds (ETFs)
ETFs are portfolios that allow investors to bet on various assets without having to buy any. Traded on stock exchanges like stocks, their value depends on the overall performance of the portfolio in real time. They may include a combination of gold and silver bars, for example, or a combination of shares in technology and insurance companies.
A spot Bitcoin ETF buys the cryptocurrency directly, “on the spot”, at the current price, throughout the day. Although some ETFs already held Bitcoin indirectly, the U.S. approved several spot Bitcoin ETFs in January 2024. This allowed new investors, such as investment management firms like Blackrock and Fidelity, to enter the speculative world of Bitcoin without having to worry about digital wallets or navigating crypto exchanges.
Bitcoin
RIOT, MARA and CLSK shares at risk
Bitcoin (BTC) Mining stocks like Riot Platforms (RIOT), Marathon Digital (MARA) and CleanSpark (CLSK) retreated in pre-market trading as BTC retreated.
RIOT, MARA and CLSK all fell more than 2%, while other crypto-related stocks such as MicroStrategy (MSTR) and Coinbase (COIN) fell 1.5%.
Bitcoin sell-off continues
Crypto-linked stocks retreated as Bitcoin resumed its downtrend on Wednesday. After rising to $63,750 on Monday, BTC is hovering at $60,0000 and it is unclear whether it will recover.
More importantly, Bitcoin is dangerously close to the crucial support at $58,273, which is the 200-day Exponential Moving Average (EMA). The next support level for Bitcoin is $56,426, representing its lowest level in May.
Bitcoin Price Chart
If Bitcoin drops below this price, it will be a sign that the bears have prevailed, which could take it to the $50,000 level, if not below.
This decline happened after a whale deposited nearly 2,000 Bitcoins to Binance in two separate transactions. While this isn’t always the case, deposits to exchanges often happen when holders are exiting their positions.
The whales’ action coincided with a period in which the German government continues to sell off its Bitcoin holdings. It transferred $52 million worth of coins to exchanges on Tuesday.
As a result, data from CoinGlass shows that the volume of Bitcoin balances on exchanges has started to increase. The volume rose to 2.49 million on Tuesday, from last month’s low of 2.47 million.
Bitcoin balances on exchanges
Bitcoin Mining Companies at Risk
If the Bitcoin sell-off continues, it will put Bitcoin mining companies like Marathon, CleanSpark, and Riot Platforms at risk. These companies have tended to have a close correlation with Bitcoin in the past.
This drop is happening a few months after the halving event, reducing the amount of Bitcoins that miners receive.
To compensate for this drop, most of these companies have added their mining equipment. CleanSpark has reached a hash rate of 20 EH/swhich helped her mine 445 coins in June after mining 417 coins the previous month. She did this after purchasing 5 mining sites in Georgia.
Digital Marathon mined 590 coins in June, down 40% from the same month in 2023 and flat from May.
Riot Platforms, on the other hand, focused on acquiring Bitfarms, a company that mined 189 coins in June.
Bitcoin
Michael Saylor Issues Statement on Bitcoin Amid Crypto Market Sell-Off by U.Today
U.Today – Amid an ongoing sell-off in the cryptocurrency market, Michael Saylor, a prominent advocate and president of MicroStrategy, made a statement on X (Twitter) that reverberated across the crypto space: “Just Bitcoin.”
This two-word tweet comes as the cryptocurrency market faces significant sell-offs as the price of Bitcoin plummets.
Bitcoin, the largest cryptocurrency by market value, began its decline in Tuesday’s trading session, hitting $63,223 at one point before falling further.
Losses deepened on Wednesday as investors considered remarks from Fed Chair Jerome Powell, with Bitcoin hitting intraday lows of $59,509. At the time of writing, BTC is down 2.85% over the past 24 hours to $60,274.
According to data from CoinGlass, the sell-off has resulted in a significant amount of cryptocurrencies being liquidated in the past 24 hours, totaling over $166 million. However, this has not deterred Saylor’s confidence in Bitcoin, as he reiterates his longing for the crypto asset in his tweet.
Cryptocurrency market crashes
Cryptocurrencies fell on Tuesday after Fed Chairman Jerome Powell said the central bank needs to see more progress on inflation before cutting interest rates, which are now at 5.25%-5.50%. Powell revealed at a monetary symposium in Sintra, Portugal, that the United States is moving closer to a disinflationary path.
“We want to be more confident that inflation is moving sustainably downward toward 2% before we begin the process of tapering or easing policy,” Powell said.
Market losses deepened after Wednesday’s economic releases that indicated the labor market is cooling. Recent data showed weaker-than-expected private payroll growth in June, but weekly jobless claims were higher than economists had forecast. The latest figures come ahead of the highly anticipated June nonfarm payrolls report on Friday.
As the cryptocurrency market goes through a period of uncertainty, the coming days and weeks will be crucial in determining the direction of BTC’s price.
Bitcoin
Bitcoin and Ethereum in GTA 6? Still rumors — for now
Rumors that the long-awaited Grand Theft Auto 6 will use cryptocurrency that has been circulating for more than a year now—and they’re spinning again.
On Wednesday, a pseudonymous Crypto Twitter influencer named Gordon — apparently named after Gordon Gekko from the iconic 1987 film “Wall Street” —shared to his nearly 500,000 followers that “GTA 6 will allow cryptocurrency payments” and that “so far only Bitcoin, EthereumIt is USDT [are] confirmed.”
But in reality, no cryptocurrency has been confirmed for Grand Theft Auto 6, despite ongoing chatter about the rumors. Rockstar Games and parent company Take-Two have made no such announcements this week on the subject, nor have they made any prior announcements, and official trailers and announcements have made no mention of cryptocurrency being included.
However, the tweet — which also included a fake trailer for the game — quickly went viral, with over 500,000 views as of this writing in a matter of hours. When Twitter users asked Gordon for his sources, he would jokingly respond that his “uncle works there” or say that previous reports on the matter were “old” at this point.
But really, nothing has changed since then. DecipherGG’s reported in previous rumors in May 2023, not even since the first official trailer — which initially leaked with “BUY BTC” stamped on itApparently by the leaker in question—premiered last December.
DecipherGG reached out to Rockstar Games for comment but did not receive an immediate response.
Could Grand Theft Auto 6 implement a crypto element when it releases in 2025? It’s certainly possible, and if so, it would be a transformative moment for cryptocurrency adoption by the traditional gaming industry.
Take-Two Interactive has explored the space before, acquiring casual gaming giant Zynga in early 2022, when Take-Two founder and CEO Strauss Zelnick suggested there were “Web3 opportunities” that they could explore better as a team. Zynga has launched its first blockchain game on Ethereum, called Sugartownbut Take-Two has yet to get involved with other brands.
Rockstar Games, on the other hand, prohibited the use of cryptocurrency or NFTs on player-run Grand Theft Auto 5 servers in late 2022, following a rise in the use of NFTs to represent unique player-owned assets on modded game servers.
And given Grand Theft Auto’s satirical tone, the game may be more likely to criticize cryptocurrency and poke fun at caricatures of crypto fans and NFTs, for example, rather than trying to launch its own on-chain currency. But that’s all speculation at this point, as there are relatively few official details about GTA 6.
For now, at least, don’t believe the hype. While Rockstar Games hasn’t officially closed the door on cryptocurrency usage in Grand Theft Auto 6, it hasn’t confirmed anything about it either. However, it’s sure to remain a hot topic in the long run leading up to release, which is currently scheduled for fall 2025.
Edited by Ryan Ozawa.
Bitcoin
Crypto President Trump’s ‘Lesser’ Regulation Will Bless Coinbase’s Bitcoin Leverage, Expert Says – Coinbase Glb (NASDAQ:COIN)
Chris SenyekChief Investment Strategist at Wolfe Researchrecently expressed his opinion on the potential impact of a Donald Trump win the 2024 elections in the cryptocurrency market.
What happened: Senyek suggested that a Trump presidency could ease cryptocurrency regulations, benefiting companies like Coinbase Global Inc. COIN due to its importance Bitcoin BTC/USD Leverage.
“Trump would be less harsh on crypto regulation, and Coinbase would be a big beneficiary of that given its influence on bitcoin,” Senyek said during CNBC’s “Last Call” on Tuesday.
See too: Enhance Your Retirement Portfolio: The Benefits of Adding Cryptocurrency
Why does this matter?:Senyek’s comments come in the context of the former president Donald Trump‘s reported plans to participate at the Bitcoin 2024 convention, which could reinforce his image as a “Crypto President”.
Trump’s potential participation in the Bitcoin 2024 convention, a major event on the cryptocurrency calendar, could have significant implications for the industry.
Pratik KalaHead of Research in DigitalX Limitedhe has predicted a Trump victory in the upcoming elections, but warns that immediate cryptocurrency-friendly regulations may not be a priority.
A recent report by 10x Search explore the recent rise in Bitcoin price and its potential connection to Trump’s strong position in the 2024 election race. The report, titled “Is the Bitcoin Trump Pump Sustainable?”, highlights a 4% spike in Bitcoin’s price following the news that the president Joe Biden will remain in the race despite a poor performance in the presidential debate.
Price Action: At the time of writing, Bitcoin was trading 2.10% lower at $60,860.66, according to Benzinga Pro.
Read next:
Image created using photos from Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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