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They Made Millions on Luna, Solana and Polygon: Crypto’s Boom Beyond Bitcoin – The New York Times

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The ranks of cryptocurrency speculators have swelled, with even obscure tokens minting the newly wealthy: at least on the blockchain.

David Yaffe-Bellany talked to cryptocurrency investors in five countries for this story.
Etienne vantKruys, a globe-trotting cryptocurrency investor from Amsterdam, was hunting for a new investment two summers ago when he met some early backers of Luna, a digital coin that offers a framework for decentralized finance. Impressed by their commitment to the project, he bought $25,000 of Luna for 20 to 35 cents a coin.
These days, despite a recent fall in cryptocurrency prices, the value of a Luna coin is up to around $50. Mr. vantKruys’ original investment? It’s now worth about $5 million on paper.
“Dude, man,” he said on a recent call, “we’re in some happy country.”
You have probably heard of Bitcoin, Ether and even Dogecoin millionaires. But over the past two years, their ranks have rapidly expanded, as speculators recorded huge profits from more obscure cryptocurrency projects, some with names that sound cribbed from a children’s cartoon. Now there are Solana millionaires, Luna millionaires, Polygon millionaires.
Even after the drop in cryptocurrency prices dampened some of the hype, the gains remain staggering. The value of Solana, a cryptocurrency platform that provides an alternative to Ethereum, has grown by more than 6,000 percent since January 2021. The price of Cardano, another crypto platform with its own currency, is up 500 percent.
The wealth generated by these coins shows how widespread the cryptocurrency phenomenon has become. More than 11,000 digital currencies exist, and anybody can create one with a bit of coding. Some of the coins are tied to complex “DeFi” projects, which offer decentralized borrowing and lending options, while others serve as currency in video games like Axie Infinity. These currencies, usually created for some kind of practical application, are distinct from meme coins like Dogecoin, a joke currency that soared in value last year.
“Every type of financial service is now being replicated in these decentralized environments,” said Stephen McKeon, a cryptocurrency expert at the University of Oregon. “This is what’s driving all the investment.”
The investors profiting from obscure coins come from a variety of backgrounds. There are industry aficionados who had already made money on Bitcoin and Ether, and newcomers who have notched impressive gains practically overnight.
In interviews, members of this new class of crypto millionaires said they were still figuring out what to do with their growing wealth. Some have made splashy purchases, renting fancy apartments or partying in foreign countries. Others have relocated to tax havens like Puerto Rico or quit their day jobs as they plowed even more money into an ever-expanding set of tokens.
In January, Cal Graham, 28, a British cryptocurrency speculator, invested $200,000 in a new token called LooksRare, which is part of a trading platform for the unique digital collectibles known as NFTs, or nonfungible tokens. He sold all his LooksRare holdings less than two weeks later, walking away with nearly $500,000 in profits.
Mr. Graham, who lives in a luxury apartment in London, became a crypto millionaire through his investment in Ether, the second-most-valuable digital currency behind Bitcoin. He said he had made at least $1 million more by trading lesser-known currencies like LooksRare.
“I’m a simple man, I like simple pleasures,” he said. “I will be buying myself an expensive car and an expensive Rolex at some point.”
A former human resources officer, Mr. Graham described himself as “semiretired,” with a daily routine that often consists of several hours of intensive tweeting (he doles out market analysis to his 90,000 followers), boxing practice at the local gym and movies in the evening. Eventually, he plans to funnel his LooksRare profits back into the cryptocurrency market.
But as some people mint millions from little-known cryptocurrencies, others have seen impressive gains disappear overnight. For every Solana or Luna, there’s an out-of-the-way token that shoots up in value, only for its price to collapse. Some of these projects are scams, or what industry experts call “rug pulls,” in which someone aggressively markets a coin, then immediately liquidates the holdings, leaving investors with major losses.
“There’s too many pockets of froth that lure a lot of people who are just getting crushed and duped,” said Ed Moya, a cryptocurrency analyst at the trading company OANDA. “You have a lot of social media influencers that are pumping up certain coins that are worthless.”
Even paper gains from a successful investment in a legitimate coin can turn out to be just that: paper gains. That’s because it’s difficult and labor-intensive to convert large amounts of cryptocurrencies into dollars. Some little-known coins are unavailable on mainstream exchanges like Coinbase, meaning they first have to be converted into a better-known cryptocurrency, like Ether or Bitcoin, said Philip Gradwell, the chief economist at the crypto tracking firm Chainalysis.
A sudden conversion of a large amount of cryptocurrency can also be dangerous, causing the price of the coin to collapse as it’s turned into dollars.
“You cannot ever just get all out, or get your money out with immediate effect,” said Adrian Zdunczyk, a former musician who trades digital currencies full time from his home in Warsaw. “You’d just dampen the market or crush the market. It doesn’t work in your favor.”
Mr. Zdunczyk, 28, said he had made several million dollars from his crypto investments, more than half from obscure coins. Once, he said, he recorded profits of $150,000 in two days after buying e-Radix, a token for DeFi projects. To avoid a drop in prices, he has learned to withdraw only a small portion of his profits at a time, while keeping the rest in the crypto market.
Mr. Zdunczyk has used some of his new income to help his parents pay off their debts, and he recently donated $15,000 to a parrot sanctuary in Arizona. He also has three parrots of his own. “I found an amazing love,” he said. “Beautiful creatures.”
Mr. Zdunczyk has steered some of his other profits into less volatile investments, like real estate and even gold, which Bitcoin was specifically intended to replace. “I’m a huge fan of commodities,” he said.
A glossary. Cryptocurrencies have gone from a curiosity to a viable investment, making them almost impossible to ignore. If you are struggling with the terminology, let us help:
Bitcoin. A Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world. Bitcoin is also the name of the payment network on which this form of digital currency is stored and moved.
Blockchain. A blockchain is a database maintained communally, that reliably stores digital information. The original blockchain was the database on which all Bitcoin transactions were stored, but non-currency-based companies and governments are also trying to use blockchain technology to store their data.
Cryptocurrencies. Since Bitcoin was first conceived in 2008, thousands of other virtual currencies, known as cryptocurrencies, have been developed. Among them are Ether, Dogecoin and Tether.
Coinbase. The first major cryptocurrency company to list its shares on a U.S. stock exchange, Coinbase is a platform that allows people and companies to buy and sell various digital currencies, including Bitcoin, for a transaction fee.
Crypto finance. The development of cryptocurrencies spawned a parallel universe of alternative financial services, known as Decentralized Finance, or DeFi, allowing crypto businesses to move into traditional banking territory, including lending and borrowing.
NFTs. A “nonfungible token,” or NFT, is an asset verified using blockchain technology, in which a network of computers records transactions and gives buyers proof of authenticity and ownership. NFTs make digital artworks unique, and therefore sellable.
Some of the new crypto millionaires have found more sophisticated ways to protect their wealth, joining earlier generations of wealthy Bitcoin investors in offshore tax havens like St. Kitts and Nevis.
“They say, ‘Why do I need to be a U.S. citizen, what’s the benefit?’” said Armand Tannous, a wealth management executive who advises crypto investors seeking citizenship in other countries. “‘I’m a global citizen, I don’t need to live in the U.S. anymore, I don’t need to pay taxes anymore.’”
Brenda Gentry, 46, a cryptocurrency speculator from San Antonio, said she started buying Bitcoin in 2020 before switching her focus to lesser-known tokens like Bund, which is tied to a decentralized sports-betting network. Ms. Gentry’s Bund trades netted her around $400,000 in profits, she said, and her total portfolio is now in the mid-six figures, after taking a hit from the recent drop in prices.
“It’s like a child walking into a candy store,” Ms. Gentry said, noting that she can buy one token, then convert it into another, and then another.
On top of her cryptocurrency investments, Ms. Gentry, a former mortgage underwriter, has found work as a consultant advising DeFi and NFT projects. She’s planning to use her cryptocurrency income to buy an acre in San Antonio. She wants to build a house, with a crypto mining operation in a storage unit next door.
Many people who have gotten wealthy through little-known cryptocurrencies said they didn’t plan to cash out. They said they preferred to HODL, or hold on for dear life, and keep speculating.
Consider Mr. vantKruys, the Luna investor. He said he recently used about $1 million of his cryptocurrency holdings to buy a house for a loved one. But he has no interest in selling his stash of Luna, despite market volatility that led to a drop from $99 to below $50 per coin between December and January.
“My idea is Luna is going to be $500 in five years,” said Mr. vantKruys, who is 45. “That’s the horizon we’re playing with.”
Recently, he has become fixated on another obscure token, Pocket Network, that offers digital infrastructure for a range of blockchain initiatives. (Mr. vantKruys, the managing partner at the crypto fund TRGC, is an adviser on the Pocket Network project.)
Mr. vantKruys once heard about a Dutch investor who had sold his house to make a huge Bitcoin purchase. At the time, he said, he thought the man was insane, but now he’s contemplating a similarly substantial investment in Pocket Network.
“My dude, it’s just the first crypto where I’ll probably do something crazy,” he said. “You’re at the poker table — you’re like, all in.”
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Cryptoverse: Bitcoin miners get stuck in a bear pit – Reuters

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Sept 27 (Reuters) – Spare a thought for the beleaguered bitcoin miner.
In late 2021, miners were the toast of the town with a surefire path to profit: hook powerful computers up to cheap power, crack fiendishly complex maths puzzles and then sell newly minted coins on the booming market.
A year's a long time in crypto.
Global revenue from bitcoin mining has dropped to $17.2 million a day amid a crypto winter and global energy crisis, down about 72% from last November when miners were racking up $62 million a day, according to data from Blockchain.com.
"Bitcoin miners have continued to watch margins compress – the price of bitcoin has fallen, mining difficulty has risen and energy prices have soared," said Joe Burnett, head analyst at Blockware Solutions.
That's put serious pressure on some players who bought expensive mining machines, or rigs, banking on rising bitcoin prices to recoup their investment.
Bitcoin is trading at around $19,000 and has failed to break above $25,000 since August, let alone regain November's all-time high of $69,000.
At the same time, the process of solving puzzles to mine tokens has become more difficult as more miners have come online. This means they must devour more computing power, further upping operating costs, especially for those without long-term power pricing agreements.
Bitcoin miners' profit for one terahash per second of computing power has fluctuated between $0.119 and $0.070 a day since July, down from $0.45 in November last year and around its lowest levels for two years.
The grim state of affairs could be here to stay, too: Luxor's Hashrate Index, which measures mining revenue potential, has fallen almost 70% so far this year.
2140: THE LAST BITCOIN
It's been painful for miners.
Shares of Marathon Digital (MARA.O), Riot Blockchain (RIOT.O) and Valkyrie Bitcoin Miners ETF (WGMI.O) have sunk more than 60% this year, for example, while crypto-mining data center operator Compute North filed for bankruptcy last week.
Yet mining is ultimately a long-term proposition – the last bitcoin is expected be mined in 2140, more than a century away – and some spy opportunity in the gloom.
"The best time to get in is when market's low, the same mining rigs that went for $10,000 earlier this year you can get that for 50% to 75% off right now," said William Szamosszegi, CEO of Sazmining Inc which is planning to open a renewable-energy powered bitcoin mining operation.
Indeed, many miners are cutting back on buying rigs, forcing makers to cut prices.
For instance, the popular S19J Pro rig sold for $10,100 in January on average, but now sells for $3,200, analysts at Luxor said, also noting prices for bulk orders of some mining machines had fallen by 10% in just the past week.
Chris Kline, co-founder of crypto investment platform Bitcoin IRA, said miners would have to be "hyper-focused" on energy efficiency, both to bring costs down and to avoid any repercussions from climate change-related regulations.
"From managing their balance sheet, processing units and energy costs, miners will look to stay afloat regardless of current market conditions," he added.
Our Standards: The Thomson Reuters Trust Principles.
Crypto companies were undeterred by initial failure to obtain licences to operate in Britain and were submitting new applications, the Financial Conduct Authority said on Thursday.
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Crypto market volatile; Terra Classic Lunc leads the laggards, Bitcoin above $19k | Mint – Mint

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  • The American currency scaled past the 111 level against a basket of currencies — making cryptocurrencies against the greenback vulnerable as well. Currently, there is a steep plunge in trading volumes of cryptocurrencies.

Cryptocurrencies are trading volatile tracking feeble global equities after recession fears in major economies like the US and Europe sparked. The US Fed’s aggressive approach to tame inflation at the cost of economic growth further dampened the mood. Fed has hiked the rate by another 75 basis points. Wall Street and European stocks slipped sharply last week, while energy prices settled lower and bond yields climbed to multiyear highs. The American currency scaled past the 111 level against a basket of currencies — making cryptocurrencies against the greenback vulnerable as well. Currently, there is a steep plunge in trading volumes of cryptocurrencies.
On CoinMarketCap, at the time of writing, the global crypto market is at $939.57 billion up by 0.28% over the last day. However, total crypto market volume dropped nearly 37% over the last 24 hours and is at $49.82 billion.
Meanwhile, the total volume in DeFi is currently at $3.11 billion — 6.25% of the total crypto market 24-hour volume. The volume of all stablecoins is now $45.65 billion which is 91.63% of the total crypto market 24-hour volume.
Ethereum is the top trending cryptocurrency today followed by PancakeSwap and XRP.
The crypto leader Bitcoin is trading at a little over 19,000 mark at $19,090 up by 0.5%. Its market cap is nearly $366 billion. The digital coin’s dominance is currently up by 0.12% over the day at 38.95%.
Meanwhile, the second largest cryptocurrency Ethereum is performing near $1,331 and is up by 0.75%. Its market cap is around $163.3 billion.
Recently, Ethereum launched the most-awaited Merge which led to a transition of proof-of-stake consensus, officially deprecating proof-of-work and reducing energy consumption by ~99.95%.
Data from Coinglass showed that Ethereum has liquidated more than $759 million since September 15.
However, both Bitcoin and Ethereum have dipped by nearly 5% and 9% respectively in the last seven trading sessions.
Among top-performing cryptocurrencies in the last 24 hours are — Reserve Rights climbing by 9.5% followed by Chainlink up 5.5%. Algorand, Chiliz, and eCash surged by 4-5.5%.
On the other hand, Terra Classic Lunc took lead in the laggards list by plunging more than 7%, followed by XDC Network shedding nearly 5%, Stellar and DogeCoin tumbling more than 3% each. Axie Infinity, Helium, Nexo, Celsius, and Synthetix dived between 2-3%.
Terra tokens are under pressure as currently, Terraform Labs CEO Do Kwon is facing multiple jurisdictions. An arrest warrant has been issued by the Seoul Southern District Prosecutors Office against Kwon who is the forefather of TerraUSD algorithmic stablecoin and sister token Luna that wiped out reportedly $60 billion in the cryptocurrency market. Kwon’s whereabouts are unknown, although, the co-founder of Terra tokens denied rumours of being on the ‘run’ from government agencies.
Last week, US Fed in its latest policy statement said, “the Committee is highly attentive to inflation risks.”
FOMC further said, in support of these goals, the Committee decided to raise the target range for the federal funds rate to 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt, and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that was issued in May.
FOMC is committed to returning inflation to its 2% objective.
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Bitcoin news – live: Price crash continues as crypto ‘stable’ coin UST uncouples from dollar – Yahoo News

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