Bitcoin’s Identity Crisis; Dark Web Déjà Vu

By March 23, 2020bitcoin-ms
Click here to view original web page at

Get Forbes' top crypto and blockchain stories delivered to your inbox every week for the latest news on bitcoin, other major cryptocurrencies and enterprise blockchain adoption.

Golden bitcoin background


Bitcoin rebounded close to 20% in a 24-hour period Thursday, recovering much of the value it lost during last week’s crash, as stocks continued to sputter. Other major cryptocurrencies like ether, XRP, litecoin and bitcoin cash were all up more than 15% as well, but analysts have warned that it might just be a “dead cat bounce” that will soon fall again.

Source: Messari. Prices as of 4:00 p.m. on March 20, 2020.


Investors spent the early part of the week trying to make sense of last week’s sudden fall that briefly saw bitcoin’s price drop to less than $4,000. On the Seychelles-based BitMEX exchange, bitcoin fell to $3,600, more than $300 below its price on other exchanges, before it was closed for maintenance. BitMEX receives a lot of leveraged trades since users can borrow against their deposits up to a ratio of 100:1, and $750 million of bitcoin was liquidated in a matter of minutes on the exchange last week.

"[Bitcoin] was always a confidence game. All crypto is. And it appears global confidence in just about anything has evaporated," Galaxy Digital CEO and hedge fund multi-millionaire Michael Novogratz tweeted during the plunge.



The IRS announced the indictment of Michael Rahim Mohammad, sometimes called “Mr. Dark,” accusing him of operating Dark Scandals, bitcoin-funded websites that featured disturbing violent rape videos and child pornography. Users paid for this content using bitcoin under the illusion of anonymity, and Mohammad allegedly banked almost $2 million, but law enforcement caught him by tracing the flow of funds on the blockchain.


Bitcoin has never moved more hand in hand with the stock market than it has during the coronavirus pandemic; in fact, for a long time it had the opposite effect. When stocks fell, bitcoin was more likely to rise. But since last fall, with more institutional investors joining the disenfranchised idealists that had long had the industry to themselves, far more short-term trading has taken place, according to CoinMetrics.

Forbes Staff Writer Michael del Castillo writes that this makes bitcoin’s future up in the air, but if it survives this identity crisis, it could evolve into a stronger asset.


If your cryptocurrency portfolio is in the red but you still haven’t sold, you wouldn’t be able to deduct an unrealized loss from your 2020 tax return. But since wash-sale rules aren’t applicable to cryptocurrencies under current guidance, you can exploit this loophole by selling to lock in your losses and buying back in at the same price. This could offset any gains in other assets you’d have to pay taxes on, though it would also make your taxable gain on cryptocurrencies much larger if your portfolio grows and you decide to sell in the future.


Thousands of These Computers Were Mining Cryptocurrency. Now They’re Working on Coronavirus Research [CoinDesk]


Leave a Reply

All Today's Crypto News In One Place