Americans Pocketed $4 Billion In Bitcoin Profits In 2020, Analysis Reveals (nypost.com) 79
Americans got richer off bitcoin than any other country last year -- pocketing $4.1 billion in profits as the price of the volatile cryptocurrency soared to $29,000 from under $10,000, according to a new analysis. The New York Post reports: The US was followed by China, which cashed out some $1.1 billion in profits in 2020, according to data published Monday by blockchain firm Chainalysis. Japan came in third with $900 million, followed by the United Kingdom with $800 million and Russia with $600 million. The figures only cover realized gains, meaning that profits still held in cryptocurrencies or in exchange accounts are not included.
According to Chainalysis, Americans appear to have stepped up their bitcoin investments last year, despite nationwide lockdown orders and record unemployment. US crypto investors then cashed out toward the end of the year when the price of bitcoin has soared more than three times its $9,000 price tag. While cryptocurrency profits can be hard to track due to the currencies' intentionally decentralized nature, Chainalysis produced its estimate by collecting data including deposits, withdrawals and web traffic from cryptocurrency exchanges like Coinbase.
According to Chainalysis, Americans appear to have stepped up their bitcoin investments last year, despite nationwide lockdown orders and record unemployment. US crypto investors then cashed out toward the end of the year when the price of bitcoin has soared more than three times its $9,000 price tag. While cryptocurrency profits can be hard to track due to the currencies' intentionally decentralized nature, Chainalysis produced its estimate by collecting data including deposits, withdrawals and web traffic from cryptocurrency exchanges like Coinbase.
Great, more lies (Score:1)
Can we stop with the stupid already? Or move it at least someplace else?
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Then those who avoided paying taxes will get to pay backtaxes with interest.
I don't avoid paying taxes, but my accountant really hates cryptocurrency trades. The coinbases and robinhoods don't send nicely packaged data files of the cryptocurrency trades like you get from fidelity for stock trades. Alas Fidelity has too much of a stick up their arse to allow cryptocurrency trading on their service.
Re:Great, more lies (Score:4, Informative)
Then those who avoided paying taxes will get to pay backtaxes with interest.
I don't avoid paying taxes, but my accountant really hates cryptocurrency trades. The coinbases and robinhoods don't send nicely packaged data files of the cryptocurrency trades like you get from fidelity for stock trades. Alas Fidelity has too much of a stick up their arse to allow cryptocurrency trading on their service.
Your accountant can hate crypto tax papers as much as he wants, but he's getting paid to handle them when you file for taxes. I know CoinBase will send my tax form when the time comes, and I'll hand it over to my accountant (along all the other paper crap I have to give) to handle it.
That's what we pay accountants for. To handle all this crap the legal way and with accuracy (instead of us going DIY and make a mistake or worse, break the law somehow.)
Re:Great, more lies (Score:4, Interesting)
But that money did come from people making a loss, so there's no total profit - only a few lucky ones that did profit while there are a lot of losers out there.
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Re:Great, more lies (Score:5, Interesting)
Not exactly... shares bring you some revenues so holding may end up bringing more money than what you paid for. Country bonds also bring you some interest, paid by the country which issued it...
In stock market, part of the gains don't come from the pockets of the losers...
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Not exactly... shares bring you some revenues so holding may end up bringing more money than what you paid for. Country bonds also bring you some interest, paid by the country which issued it...
In stock market, part of the gains don't come from the pockets of the losers...
I dunno meng, I don't forget the dot-com bubble, or the real estate bubble 2008. The stock market (or any type of investment) sees gains coming from the pockets of the losers when there is an unsustainable speculative bubble running hot till it pops.
We are seeing one right now with "meme stocks".
What happened to crypto was simply a speculative bubble running hot. When BTC grows as a steady pace as it did in 2019 and 2020, then gains are "normal" without incurring losers holding the basket when the bub
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What happened to crypto was simply a speculative bubble running hot. When BTC grows as a steady pace as it did in 2019 and 2020, then gains are "normal" without incurring losers holding the basket when the bubble pops.
That's not how it works. A BTC is not a revenue-generating asset, hence gains don't exist regardless of how slowly the market price moved.
Since holding a BTC does not generate any revenue for the holder, the value of a BTC is simply what a future buyer would pay for it. Obviously we don't know what that value is, but it's some finite value. When this future buyer buys it, the value of the BTC becomes what a buyer even further in the future would pay for it. So on and so forth. The problem is, since nothing
/s /s /s (Score:2)
Well I certainly hope they put a stop to this, I mean anything that even SOUNDS LIKE a currency exchange should be boarded up and shut down for good!!
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This process is appropriately called the "Greater Fool Theory" and the whole system is assured to crash to nothing eventually. This will be far worse than zero-sum, because people and companies going bankrupt come with a huge cost to society. Hence all the BTC people are essentially assholes stealing from everybody.
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. A BTC is not a revenue-generating asset, hence gains don't exist regardless of how slowly the market price moved.
Aside from the environmental damage that bitcoin mining causes, this is exactly why a large amount of investment in crypto currency is a huge negative for the economy.
It actually shrinks the economy, since any money that is invested in bitcoin reduces the amount of capital available to invest in companies that actually create good and services and jobs. Its the equivalent of encouraging people to stuff money in their mattress, or hoarding gold and precious metals.
That said, at least with investments in prec
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The stock market is also a zero sum game.
The stock market is not zero sum.
A share of stock represents ownership in a company. Last year, American corporations generated $2.3 trillion in profits.
Re:Great, more lies (Score:4, Informative)
It is not. Stock market gains come from companies making profits, which come from those companies making and selling stuff to people that they find useful.
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In a rationally regulated market, yes. But in the US, the more people buy a stock, the more the value goes up. It's literally just a popularity contest. See: Tesla, GameStop, AMC, etc.
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This is the article about it if you are interested to read it. [seekingalpha.com] Bitcoin however is all a voting machine.
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My quarterly dividend statements say otherwise.
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The difference with cryptocurrency is that it's not a working asset, it's a
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The stock market invests in companies that have real value and pay dividends. Crypto is a pyramid scheme.
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The stock market is also a zero sum game. What is your point?
You do not seem to know how a stock market works. Ever heard of a thing called a "dividend"?
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No, if they bought at $29k they're still ahead.
Correct, or to put it another way, anyone who bought before November 2020 is still ahead.
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But that money did come from people making a loss, so there's no total profit - only a few lucky ones that did profit while there are a lot of losers out there.
Losses and gains were made globally, and it is not entirely clear who loss or gained. After all BTC lost value all the way back to December 2020's valuations. Yet, anyone who invested within the 2020 tax calendar year made a profit.
Losses are currently for the 2021 calendar year, and only for those who kept purchasing or failed to short after the current meltdown. Given that we still don't how crypto is going to behave, just a mild increase (I forgot what % that was) would/could set valuations up enough t
Re: Great, more lies (Score:1)
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It is not a classic Ponzi-scheme, but it shares important characteristics. One is that the thing sold has absolutely no real value but is purely backed by fantasy and hot air. Another one is that the whole scheme does not create value, it destroys it in the order of the cost of running things. Also, the people that will profit the most by far are the fist few to get into things. I think naming is a "non-traditional Ponzi-scheme" would be perfectly adequate.
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Exactly. BTC is a negative-sum game, because mining costs resources, but create absolutely nothing in return.
Not really into reading are you... (Score:2)
Since this article does not limit it to only sold assets, this claim is misleading. No money is 'pocketed' until BTC is sold. Value may have gone up, but that is not pocketed. Typical public relations hype for pump & dump
If only there was a summary that showed how wrong you were
The figures only cover realized gains, meaning that profits still held in cryptocurrencies or in exchange accounts are not included.
Oh there was !
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The profits came entirely from other people buying those bitcoins. And it is not like the bitcoins are produced in USA and exported. Some are produced in the USA, but they are mostly imported from China.
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Profits from those services are nothing to do with crypto, as you can pay with them in USD.
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Douglas Adams would have enjoyed this. (Score:2)
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.” .” .er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances."
“If you would allow me to continue..
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut."
Murmurs of alarm came from the crowd. The management consultant waved them down.
“So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and. .
Which Americans? (Score:2)
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Losses?! Haven't you heard? Always up, never down, hodl to the moon!
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The same - since there is no revenue source the money comes from investors
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The losers here arise when the bitcoin is being given a shine and downplaying that bitcoin's rise to heights was on the back of criminal enterprises. If you have to drop the money off in an envelope behind a dumpster in a seedy alley then you stop and think that this might be a scam, but if you just dump cash into an ATM and punch in an account number, it starts to seem legitimate if you're already gullible. And I have a relative caught up in these scams who does not seem to remember the simple rule of "
Let me guess who... (Score:1)
... the 1% right?
Bitcoin: by the 1%, for the 1% (and that 1% is 0.7% bunch of computer geeks and the rest the typical rich white guys from "the other 1%" running the whole show).
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The rich get richer. That's generally how these things work.
Source of this magic money? (Score:3, Insightful)
Americans profited 4 billion dollars? So where did this money come from? The article lists many of the major countries as being "up". Is this really coming from other countries not on the list? Or is this really mostly just some Americans getting 4 billion dollars from other Americans?
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"Pocketed" may be the wrong word (Score:3, Interesting)
Pocketed is not the wrong word (Score:4, Informative)
I would not say they "pocketed" the gains unless they really did sell their bitcoin holdings for dollars.
From the helpful summary...
they did in fact pocket those gains.
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As someone below already noted, the investors already cashed out, so the source are those that bought it. Ultimately, the source will be the poor saps that will be left standing without a chair when the music stops.
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They also print bitcoins, like the us gov prints money
4 billion sounds like a lot. (Score:5, Insightful)
Until you consider that in the US, bicycle-oriented tourism generates eighty-three billion dollars of trip-related spending annually. It's not that bicycle tourism is a big deal in the US, it's that the US economy is ginormous. A few billion here and there might be a lot for an individual, it's just an infinitesimal blip as far as the economy is concerned.
Fascination with Bitcoin is a lot like the public fascination with the lottery and lottery winners, except the lottery is immensely larger. Tales of ordinary people winning fortunes speculating in the cryptocurrency market triggers human FOMO. This makes Bitcoin stories potent clickbait, but if it were all to disappear tomorrow hardly anyone's life would be any different, other than people worried about ransomware attacks.
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So... are you saying I should invest in bicycles-oriented tourism and hodl?
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With how much bike prices went up and people inevitable travel splurging after finally having a reasonable days of vacation days. That's not too bad of an idea.
Re: 4 billion sounds like a lot. (Score:2)
Re:It has to be said (Score:5, Insightful)
Dammit, I don't want to pay for the public education of the entire neighborhood. Parents should pay for their own children's education or go without. Because it's fantastic to have a bunch of people with no future hanging around my neighborhood causing problems. And I'm sure it's a lot of fun for business owners to sift through job applicants trying to find one that can read and write.
Some minimum standards in the public's education must be set if we want people to work and vote and not be a burden to society. And when the system fails to meet those standards we should be upset. Rather than the philosophy of "not my problem" that the anarcho-capitalist libertarian ideologues hold so dear.
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Let it be written, let it be done. The stone tablets the Constitution is chiseled into has deemed it so.
Americans? (Score:1)
Is that north and south Americans or just north Americans?
Jeff Bezos pocketed 20 times that amount in 2021 (Score:2)
Just to know how utterly broken the system is, remember that Jeff Bezos pocketed 20 times that amount in the same time. All of the miraculous bitcoin gains of the entire continent beaten 20 times by one person.
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My problem with paying taxes isn't that I am paying too much (I think I am). It's that I paid more taxes than Jeff Bezos and he made more in a single minute than I made for the entirety of last year.
His net worth increased by $75 billion in 2020. That's roughly $140,000 per minute.
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You assume that any organisation of people can remain functional and conducive to human rights when one single guy controls a sizeable portion of all the wealth, resources and workers in one area.
By that definition, feudalism would be a desirable political system perfectly compatible with democracy, rule of law and human rights.
Would you be okay with calling him "Archduke Jeffrey Preston Bezos I." if he owned all the land in Jefferson County California, employing everyone who lived there?
Note that my stance
"... from other Americans" (Score:2)
Added missing phrase.
Most profits would be banked off speculative trades by other Americans.
Americans paid 5 billion for worthless bitcoins (Score:2)
Wow, it's so big. Stop using dollar$$$ already. (Score:1)
Even its biggest fan can surely see that this is not exactly driving the entire economy along.
Bitcoin is for fools. Some fools gain, other fools lose. Society as a whole just sees a loss.
All that has happened here is that other Americans have lost on average $12 each so that a few can claim to have made profits adding up to $4.1B. Some, probably quite a considerable fraction, will have be
pocketed? (Score:2)
Op might not understand what that means.
If I buy a piece of dirt for $1, and because I can convince other people of its value there is a rush to buy this kind of dirt such that my dirt is now claimed to be worth $100, I didn't "pocket" $99 in income.
Tomorrow people could figure out again that it's just dirt worth $1 (or not even that) so until I SELL it to some gullible idiot, I've "pocketed" nothing.
Bitcoin is Zero Sum (Score:2)
Every time someone makes money in dollars by selling Bitcoin for a profit someone else bought it and so now has less dollars
All Bitcoin does is tie up money in bitcoin - there is no way for it to generate any new money
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Exactly. This is a closed-loop. There is no way to get more cash out of the system than has been "invested" into it. The overall sum of the real value of bitcoins (what can actually be converted to cash) is $0.00.
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It's worse than that: the bitcoin mining operation burns tremendous amounts of energy which generates a lot of environmental damage.
Bitcoin doesn't just shuffle wealth from suckers, it actively destroys wealth.
I want both sides of the story (Score:2)
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You've heard the joke of the two farmers who made money by selling a jackass back and forth to each other? Each sale, one or the other made a hundred dollars. They were rich!