Will crypto be the Super Bowl's biggest winner? This week's top cryptocurrency news

Will crypto be the Super Bowl's biggest winner? This week's top cryptocurrency news

Welcome to Nonfungible Tidbits, a weekly roundup of cryptocurrency, NFTs and their related realms.

Our lead story is Sunday's Super Bowl and all the crypto ads viewers will see. And, while we're on the topic of crypto and pro sports, the Washington Nationals baseball team also partnered with a decentralized autonomous organization. We'll cover the Nats' sponsorship deal and what a DAO is.

This week's roundup also features the Justice Department's biggest bust in history, as well as a new coalition of crypto companies that aims to fight market manipulation. 

In other news, the World Wildlife Fund decided to shutter its NFT project after a backlash due to the tokens' potential environmental impact. 

Here's what caught our eyes this week. Stay tuned for more next week. 

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Crypto firms gear up for the big game

Brittany Murray via Getty Images

No fewer than five crypto ads are reportedly scheduled to air at Sunday's Super Bowl, where the Los Angeles Rams face off against the Cincinnati Bengals. According to multiple media reports, FTX, Coinbase, eToro and Crypto.com are expected to have ads during the big game's US broadcast, while Toronto-based Bitbuy reportedly purchased an ad for the Canadian broadcast. 

Advertising during the Super Bowl, one of the most watched television events of the year, is eternally expensive. This year, a 30-second spot is going for about $6 million -- a new record and a small fortune for some businesses. 

Tech companies have long used the Super Bowl to enhance brand recognition. During the dot-com bubble of the late 1990s and early 2000s, a host of fledgling firms advertised during the big game. Perhaps the most memorable was a 2000 commercial by Pets.com, an early e-commerce company that went bust just a few months later.

An expected 117 million Americans will tune in to the match this Sunday. With crypto going mainstream -- 16% of Americans have invested or used cryptocurrency, according to Pew Research Center -- the Super Bowl may prove an effective way to reach an even broader audience. 

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Washington Nationals team up with a DAO. What's a DAO again?

G Flume via Getty Images

It looks like baseball is trying to keep up with football's crypto enthusiasm. With spring training right around the corner, the Washington Nationals baseball team announced a partnership with Terra, a cryptocurrency enterprise. Fans will be able to use Terra's UST stablecoin at the team's ballpark, which will feature prominent Terra promotions near home plate. 

Terra is a DAO, or a decentralized autonomous organization that makes decisions via a consensus vote using digital tokens on a blockchain. The Terra DAO voted on the sponsorship, and the organization paid the Nats nearly $40 million. 

The Nats-Terra deal follows last November's deal between LA Angels star Shohei Ohtani and FTX, a cryptocurrency exchange. Ohtani, who made history last season as the first player ever selected as both an All-Star pitcher and hitter in the All-Star game, signed on to be FTX's global ambassador and took a stake in the company. 

Last year, FTX also became Major League Baseball's official cryptocurrency exchange -- the first deal of its kind between an American pro sports league and a crypto exchange.

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A $3.6B bitcoin seizure is Justice Department's biggest bust ever

Bill Clark

The Justice Department seized $3.6B in bitcoin from a digital wallet held by a couple living in Manhattan, the department said on Tuesday. The suspects, who allegedly were trying to launder the crypto loot, are a husband and wife team, one of whom was an aspiring rapper on YouTube. The seized bitcoin has been linked to the 2016 hack of Bitfinex, when hackers spirited almost 120,000 bitcoin from the cryptocurrency exchange. The bust is the largest in the department's history.

Read CNET's full story on it here.

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Canada accounting giant buys bitcoin and ether

Mark Garlick, Science Photo Library via Getty Images

KPMG Canada, the Canadian division of the Big Four accounting firm, said Monday it had added cryptocurrency to its holdings. KPMG Canada didn't specify the amount of crypto it had purchased but said it had also bought carbon-offset credits to "maintain a net-zero carbon transaction." Carbon offsetting refers to the practice of buying credits from another company or organization that's engaged in greenhouse gas reduction, with the credits representing a kind of commoditized carbon reduction.

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Crypto firms form coalition

Getty Images

Coinbase, Circle, and 15 other crypto companies founded a new coalition, according to an announcement this week. The Crypto Market Integrity Coalition aims to address the issues raised by New York Attorney General Letitia James, SEC Chair Gary Gensler and other officials, who worry the industry is plagued by market manipulation. The coalition requires members to sign a written pledge, and according to the coalition's website, more than 350 organizations have already joined.

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Thanks for reading. We'll be back with plenty more next week. In the meantime, check out this story on what quantum hackers could mean for bitcoin by CNET's Monisha Ravisetti.

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Is the Crypto Market Bouncing Back? Here's What You Need to Know

Is the Crypto Market Bouncing Back? Here's What You Need to Know

This story is part of Power Money Moves, CNET's coverage of smart money decisions for today's changing world.

In July, the cryptocurrency market bounced back to a $1 trillion market capitalization (the total dollar market value of crypto today) for the first time in recent months. But while the market looks healthier than just a couple of weeks ago, it's still far from last November's peak, which reached $3 trillion. In an economy with high inflation and recession risks looming, is crypto still a worthy investment?

After bullish highs in 2021, cryptocurrency dropped to pessimistic lows this year, tumbling into bear market territory which investors are dubbing another "crypto winter." The $2 trillion crypto market crash wiped out investor gains, cost thousands of people their jobs and obliterated once staple digital currencies, including the crypto token luna, which lost all of its value following stablecointerraUSD's collapse in May. 

While crypto is starting to trend upward, volatile highs and lows are nothing new in the crypto markets -- and skeptics have long characterized crypto as an empty bubble destined to burst. Critics have called bitcoin, stablecoins and NFTs simply a new digital version of an old con primed to swindle and scam. But investors see the world of digital coinage as a step forward, a kind of "Money 2.0" that will democratize finance and power the metaverse. Amid the seesawing prices and teetering sentiments, one thing hasn't changed: Cryptocurrency remains controversial, risky and wildly volatile. 

Read more: The World's Biggest NFT Festival vs. the Crypto Crash of 2022

In simple terms, cryptocurrency is a digital token, ownership of which is recorded on a blockchain, a distributed software ledger that no one controls. This is designed to make it more secure, in theory. bitcoin and ethereum are the two most widely known cryptocurrencies, but more than 18,000 tokens are traded under different names (dogecoin is one famous example). 

Despite gyrating prices and a relative lack of regulation, cryptocurrency is seen by many as the next financial frontier. Developments like President Joe Biden's desire to explore a digital US dollar to multimillion-dollar Super Bowl ads underscore a growing desire from powerful government and corporate institutions to quickly legitimize crypto in much the same way as stocks and bonds.

But it's worth considering whether cryptocurrency is a smart investment for you... especially in light of the current downturn and the ever-present potential for a major crash (in crypto and the US economy, generally).

"Cryptocurrency is one of those categories of investing that doesn't have those traditional investor protections," said Gerri Walsh, senior vice president of investor education at the Financial Industry Regulatory Authority. "They're outside the realm of securities trading. It's an area that's in flux, as far as regulations go."

Professionals caution that investors shouldn't put more than they can afford to lose into crypto, which offers few safeguards, plenty of pitfalls and a spotty track record. If you're thinking about adding crypto to your portfolio, here are five key questions to consider before you begin.

What are the risks of investing in crypto?

Before investing in crypto, you should know there's almost no protection for crypto investors. And since this virtual currency is extremely volatile and driven by hype, that's a problem. It's easy to get caught up in tweets, TikToks and YouTube videos touting the latest coin -- but the adrenaline rush of a market spike can easily be washed away with a dramatic crash.

You should be on the lookout for crypto scams. One often-used scheme is a pump and dump, in which scammers encourage people to buy a certain token, causing its value to rise. When it does, the scammers sell out, often pushing the price down for everyone else. These scams are prominent, and they took in more than $2.8 billion in crypto in 2021.

From the US government's current policy perspective, you're on your own. At this time, the government provides no deposit protection for crypto as it does for bank accounts. This may change following Biden's March executive order, which directed government agencies to investigate the risks and potential benefits of digital assets.

So far as we can tell, only one company offers crypto insurance: Breach Insurance, with a Crypto Shield offering that promises to cover your accounts from hacks. Other companies, such as Coincover, provide theft protection, which alerts you if there's suspicious activity on your account. Coincover maintains an insurance-backed guarantee that if its technology fails, it will pay you back up to the amount you're eligible for, which depends on the level of protection the wallet you use offers. (Neither Coincover nor Breach Insurance will cover you against scams.)

Despite all the hype, scams, periodic crashes (and persistent risks) in this market, Cesare Fracassi, who runs the Blockchain Initiative at the University of Texas, Austin, still thinks crypto has a viable future.

"I think crypto holds a possible solution to some of the problems of the traditional financial sector," Fracassi said. "The current, traditional financial system is noninclusive, it's slow and expensive and incumbents, including large banks and financial institutions, basically have a lot of control. I think crypto is a venue through which you can actually break the system."

How do I start investing in cryptocurrency?

If you're considering buying crypto now, as prices have dipped, it's worth noting that there's no guarantee the market will recover. But the simplest way to get your feet wet with crypto investments is to use US dollars to buy a cryptocurrency using a popular exchange like Coinbase, Binance or FTX. A handful of well-known payment apps — including Venmo, PayPal and Cash App — will let you buy and sell cryptocurrency, though they generally have limited functionality and higher fees. 

Whether you're using Coinbase, Binance, Venmo or PayPal, you'll be required to provide some sensitive personal and financial information... including an official form of identification. (So much for bitcoin's reputation for anonymous transactions.) 

Once your account is set up, it's simple to transfer money into it from your bank. And the barrier to entry is quite low: The minimum trade amount is $2 on Coinbase and $15 on Binance.

Read more: Best Bitcoin and Crypto Wallets for 2022

What percentage of my portfolio should be in crypto?

Crypto is so new, there isn't enough data yet to decide how much of your portfolio "should" be in cryptocurrency, according to Fracassi.

"We need decades of returns in order to understand whether a specific asset is good in a portfolio," Fracassi said. "We know that on average stocks return about 6% more than bonds. That's because we've had 60 to 100 years to see the average returns on stocks and bonds."

Like all investment decisions, how much you pour into crypto will depend on your risk tolerance. But investment professionals suggest that investors keep their exposure low, even for those who are all in on the technology. Anjali Jariwala, a certified financial planner and founder of Fit Advisors, recommends that clients allocate no more than 3% of their portfolio to crypto.

If I make money on crypto trades, do I have to pay taxes?

Yes. Whether you're buying, selling or exchanging crypto, the IRS wants to know about it. Your tax liability depends on your particular situation, but crypto investments are broadly treated like other investments, including stocks and bonds. 

You don't need to report crypto on your tax return if you didn't sell or exchange it for another type of crypto. Buying and holding also doesn't need to be reported. If you did sell or exchange crypto, though, you'll need to report any gains or losses realized, just like you would for stocks and bonds. 

Adding crypto trades won't make your tax return any easier. But popular tax software like TurboTax, CoinTracker and Koinly now connect with wallets and exchanges to automatically track your cryptocurrency holdings, sales and transfers.

Is there a way to learn about crypto without investing in the currencies themselves?

Buying tokens is the most straightforward approach to experimenting with cryptocurrencies. But other opportunities exist for exploring the crypto world while potentially protecting your money from seesawing swings. 

Here are a handful of alternatives:

Buy shares of crypto companies. Many companies in the crypto space are publicly traded. Buying shares of Coinbase Global or PayPal Holdings rather than of the coin itself allows you to benefit from the business proceeds of these companies, which are in part generated by crypto. You can also buy shares of companies that make crypto-related hardware, such as Nvidia and AMD.

Invest in crypto ETFs or derivatives.Specialized exchange-traded funds, or ETFs, are available for crypto. ETFs are baskets of securities, such as stocks, commodities and bonds, that follow an index or sector, in this case, crypto. Futures and options are also available for some crypto products, though these advanced types of investment vehicles come with their risks.

Get a job in crypto.LinkedIn, Indeed and Monster list thousands of jobs in crypto. Whether you've got a traditional finance background or you're a software engineer, there's a boom in the blockchain labor market. There's also Cryptocurrency Jobs, a job board dedicated to blockchain careers.

Whether you'll plunge into crypto waters is ultimately up to you, but bear in mind it isn't the only place to start your investing journey. And beyond crypto, there are other digital assets to consider, too, including NFTs. But if you do take the plunge, be sure to invest in a good wallet to keep your digital currency safe.

Read more: Air Travel Is More Expensive in 2022: Here Are Smart Ways to Save Money When You Fly 

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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Nonfungible Tidbits: This week in bitcoin, cryptocurrency and NFTs

Nonfungible Tidbits: This week in bitcoin, cryptocurrency and NFTs

Welcome to the first edition of Nonfungible Tidbits, where we highlight some of the most interesting things that happened this week in cryptocurrency, NFTs and related realms. 

Certainly the biggest story this week was the price of bitcoin, which isn't, um, doing well. Meta, formerly known as Facebook, is reportedly ending its stablecoin project. And last Friday, Twitter debuted a feature that allows subscribers to its paid Twitter Blue service to use an NFT as a profile picture. Here are a few other stories that caught our eyes this week.

1. SEC turns down another proposal for a spot bitcoin ETF

Getty

The US Securities and Exchange Commission said no to a proposal on Thursday that would've allowed shares of Fidelity's Wise Origin Bitcoin Trust to be listed and traded, Bloomberg reported. The SEC cited concerns (PDF) over investor protections and public interest for the decision. Investors have been able to buy shares of an exchange-traded fund that tracks bitcoin futures contracts since last year. But a spot bitcoin ETF would track the actual price of bitcoin, rather than the price of bitcoin futures, and the SEC isn't ready for that quite yet. 

2. Texas Gov. Greg Abbott thinks bitcoin mines will shore up the state's power grid

Crypto mining rigs.

Getty

The main thing bitcoin mining operations require is electricity -- lots and lots of electricity. This is what drives the ongoing concern about bitcoin's impact on the environment. But there's a growing presence of bitcoin miners in Texas, and Gov. Greg Abbot wants to use them to… help reinforce the state's power grid? The idea here is that mining operations use so much energy they will entice new investment in power plants in Texas. Then, when demand for electricity is high, like it was during the winter storms last year, the bitcoin miners can turn off their operations to free up electricity. We should note that there is currently no law in Texas that would require miners to do this. Maybe if the governor asks nicely?

3. Miller Lite aims for Super Bowl marketing in internet land 

James Martin/CNET

Bud Light is the big game's official beer, so no Miller ads are allowed on America's most valued advertising slots of the year. What's the next best thing? Apparently it's a "metaverse bar." Miller Lite is partnering with Decentraland, a platform that allows people to buy and sell virtual plots of land. What's a metaverse bar? After reading this Marketing Dive story, the concept sounds like it's essentially a video game where you log in, and your avatar sits at a bar and buys NFTs. Very 2022.

4. The Ethereum Foundation nixes 'Eth2' terminology 

NurPhoto

The Ethereum Foundation oversees the Ethereum blockchain, which is the blockchain of ether, the No. 2 cryptocurrency after bitcoin (by market cap). The blockchain, currently in its "Eth1" phase, is scheduled for an upgrade later this year, which is supposed to make it more efficient, environmentally friendly and less expensive to conduct transactions with. Previously, the new version was to be known as Eth2, but not anymore. Why? According to an Ethereum Foundation blog post, Eth1 will be known as the "execution layer" and Eth2 will be known as the "consensus layer." This is a change in semantics, and the change reflects that the execution and consensus layers are, rather than two separate versions of Ethereum, both aspects of the same system. And that's good, right? 

That's all the tidbits we have for now. Thanks for reading. We'll be back next week with plenty more to talk about. In the meantime, check out the So Money podcast featuring CNET's Farnoosh Torabi.

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