Bitcoin predicts unprecedented growth: expert talks about the impact of cryptocurrencies on the traditional financial sector and prospects for Ukraine

On January 9, the most popular cryptocurrency, bitcoin, reached its highest value since November last year - the cost of one "bit" exceeded $47,000. And this, as analysts predict, is far from the limit, UNN writes.

Details

According to Bloomberg, bitcoin rose to $47,007 on January 9. It is noted that the excitement is associated with investors' optimism about the possible approval by the US Securities and Exchange Commission (SEC) of the launch of exchange-traded bitcoin funds (BTC-ETFs).

Last year, bitcoin rose by 160% in anticipation of the SEC's approval of the application. In November 2021, the token reached $69 thousand. This figure is now a historical high for bitcoin.

"Bitcoin's strengthening is almost certainly a response to the very high probability that we will see spot ETF approval this week," said Greg Moritz, co-founder and COO of crypto hedge fund Alt Tab Capital.

Earlier, investor Tim Draper said that bitcoin could reach $250 thousand in 2024. Prior to that, the expert predicted that bitcoin would rise to $125 thousand in 2024. Thus, the investor decided to increase his forecast. He noted that the digital coin has not yet reached this level due to fears about cryptocurrencies in the US government. However, the expert is convinced that this is just a delay.

At the same time, experts of the Standard Chartered banking group, who also base their forecast on the possible approval of spot bitcoin, expect this cryptocurrency to grow to $200 thousand per unit by the end of 2025.

Be that as it may, the forecasts are more than impressive.

Analysts interpret the approval of the spot bitcoin ETF as a "turning point" in the cryptocurrency market. This decision is expected to attract $50-100 billion in capital to the sector in 2024 alone.

UNN spoke with Olena Sosedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, about cryptocurrency and how it is changing the traditional financial industry around the world.

Olena Sosiedka emphasizes that cryptocurrency is not just money, it is a digital revolution. By using cryptography for security, it makes financial transactions almost impossible to counterfeit. Cryptocurrencies differ from traditional currencies in their decentralization: they are not controlled by central banks or governments.

The cryptocurrency was created by the mysterious Satoshi Nakamoto, a person or group of people whose identity details are still shrouded in mystery.

"Satoshi introduced the blockchain platform to the world, foreseeing the need for changes in the financial system," notes Olena Sosedka.

Bitcoin, as the first cryptocurrency, was introduced to the world in 2008 in an article by Nakamoto and launched in 2009 - the first block in the Bitcoin blockchain is known as the "genesis block." 

"Nakamoto laid the foundation for the concept of blockchain, a decentralized network where transactions are recorded and confirmed by network participants. This innovation has served as the basis for the development of many cryptocurrencies and blockchain projects," says Olena Sosedka.

Despite numerous attempts to uncover Nakamoto's identity, she remains one of the greatest mysteries of the digital age.

Nakamoto has not been active since 2010.

Interesting fact

Recently, an unknown user sent 26.91 BTC (almost $1.2 million at the exchange rate at the time of sending) to the wallet of bitcoin creator Satoshi Nakamoto.

The sender's address was replenished from three sources. Most of the funds came from a wallet marked as belonging to Binance.

At the moment, Satoshi's genesis wallet holds 99.67 BTC, which is more than $4.5 million. The assets stored in it have not been moved since the disappearance of the bitcoin creator in December 2010. 

This sparked a debate about who could have sent more than a million dollars to the mysterious Satoshi's crypto wallet. It is unlikely that he did it himself. Was it someone else's mistake? Or perhaps someone decided to thank Satoshi for creating bitcoin? There are various theories. 

It should be added that analysts estimate that Nakamoto can control about 1.1 million bitcoins, or $47 billion. 

Cryptocurrency and traditional banks 

According to Olena Sosiedka, in a world where cryptocurrencies and traditional banks are often perceived as competitors, there are unique opportunities for cooperation.

"Some banks in the West are actively interacting with cryptocurrencies, converting funds from cryptocurrency wallets to fiat accounts. International payment systems such as Visa and MasterCard are also looking in this direction, pioneering innovations that allow customers to easily convert cryptocurrency into fiat money in countries where it is allowed," Sosedka said.

According to the co-founder of the fintech ecosystem Concord Fintech Solutions, blockchain is a revolutionary tool for banks, improving the efficiency, speed, and transparency of their operations.

"The use of cryptocurrencies gives banks a new level of stability and trust, opening up new horizons in the financial world," Sosedka said.

In particular, the expert points to Ripple (XRP) as a vivid example of the effective integration of cryptocurrencies into the banking sector.

Ripple (XRP) is a digital payment network and protocol used for payments, asset exchange, and money transfer. In particular, one of the largest banks in Australia, National Australia Bank (NAB), together with the Canadian Imperial Bank of Commerce (CIBC), uses Ripple technology to make international payments.

"With RippleNet serving more than 300 financial institutions, Ripple is paving the way for fast, reliable and cost-effective interbank transactions in more than 50 currencies. Today, more than 50 leading financial institutions are already using Ripple, increasing the efficiency of their operations and providing better service to their customers," explained Olena Sosedka.

According to her, we are on the verge of global changes in the financial sector.

"Today, we are on the threshold of a new era where cryptocurrencies and blockchain are closely intertwined with traditional financial systems. This synergy opens the door to the global development of financial services, offering the creation of more flexible, secure and efficient finance.

This synergy opens the door to the global development of financial services, offering the creation of more flexible, secure and efficient financial solutions. The combination of traditional financial systems with cryptocurrencies and blockchain technologies promises to transform the financial world, opening up new avenues for innovation and efficiency," says Olena Sosedka.

Cryptocurrency and taxation

But despite all the attractiveness of cryptocurrencies, tax policy dictates its own rules. 

"Different countries around the world are actively discussing and implementing changes to the taxation system of cryptocurrency income. Different countries are implementing their own approaches to taxation of such assets, depending on their domestic policies and legislation.

For example, Italy, Portugal, and Germany have already established clear rules for taxation of cryptocurrency income, including income from trading, staking, and other cryptocurrency-related activities.

Taking into account the changes in taxation,  crypto exchanges are tightening requirements for their users in the context of financial transparency. They require users to provide proof of origin and declare their income to ensure compliance with the law and prevent illegal activities," explains expert Olena Sosedka. 

According to her, the development of the crypto market and its regulation in different countries emphasizes the need to find a balanced approach to cryptocurrency taxation. This includes the development of effective mechanisms for controlling financial transactions and supporting innovations in this area.

Along with traditional cryptocurrencies such as Bitcoin and Ethereum, governments are beginning to turn their attention to regulating assets such as NFTs. This creates new challenges for the development of effective and adequate tax strategies in this rapidly evolving area.

"With the changes in cryptocurrency taxation, exchanges such as Coinbase and Binance are tightening the requirements for transparency and responsibility of their users. They require users to declare their income and provide proof of origin. This helps to prevent money laundering and other illegal financial transactions, as well as ensures compliance with financial transparency legislation," summarizes Olena Sosedka. 

The expert believes that given the rapid development of the crypto market, it is important that legislators and regulators find balanced approaches to the taxation of cryptocurrencies. 

Sosiedka believes that for Ukraine, the adoption of a law regulating the virtual asset market can bring several significant benefits, in addition to increasing tax revenues to the budget:

• Ensuring investor safety: regulation helps protect investors from fraud and other unfair practices. This creates a safer and more transparent environment for investment, increasing confidence in the virtual asset market.
• Preventing Money Laundering and Terrorist Financing: Effective regulation allows governments to better monitor financial transactions and prevent money laundering and terrorist financing through cryptocurrency platforms.
• Stimulating innovation and technological development: Regulation can promote innovation by setting clear rules for companies operating in the field of virtual assets. This could attract more investment in the technology industry and contribute to overall economic growth.
• Strengthening reputation and international status: countries that successfully regulate the cryptocurrency market can strengthen their reputation as financial innovators and reliable members of the international financial community.
• Development of new market segments: legislative support can open the door to new market segments based on virtual assets, such as cryptocurrency exchanges, startups, and blockchain projects, thereby increasing the number of jobs and economic activity in this area.
• Increase financial inclusion: Cryptocurrency regulation can contribute to financial inclusion by allowing citizens who do not have access to traditional banking services to use alternative financial instruments.
• Creating a hub for investors: Effective regulation of the virtual asset market can turn a country into an attractive hub for investors. This creates a stable and predictable environment for capital investment, attracting domestic and international investors interested in innovative financial technologies. Such a hub facilitates not only direct investment, but also the development of a local ecosystem of startups, technology companies, and other entities related to virtual assets.

"The inclusion of this clause emphasizes that effective regulation of the virtual asset market not only increases budget revenues and protects investors, but also contributes to the creation of an investment-friendly environment that can have a positive impact on the country's overall economic development," the expert believes.