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Summary
- Bitcoin has appreciated above 300% in the past year. Elon Musk’s support to cryptocurrency is driving the asset to new highs.
- Cryptocurrency adoption in NZ is fuelled by retail investors looking to diversify their portfolios.
- The digital asset is gaining acceptance by the NZ investors as a legitimate investment. Its popularity has caught the attention of the IRD who now classify the asset as taxable property.
- Dogecoin, a digital asset started as a tweet from Musk, has appreciated 600% in the past month. The catalyst for the price movement is online memes.
Cryptocurrency is again filtering into the NZ mainstream news at a regular rate. This is because investors have been flocking to the digital asset while record prices are being set every other week.
The price of Bitcoin, the most popular and well-known cryptocurrency, has been rising consistently since the beginning of 2020. In the past 52 weeks the cryptocurrency increased in price from ~NZ$16,000 to NZ$63,324, as noted on 9 February 2021.
Yesterday, the price jumped NZ $10,000 as Elon Musk, the tycoon behind Tesla Automobiles, reported that the Company is acquiring NZ $2.0 billion worth of Bitcoin. Tesla plans to accept the digital currency as payment in the future.
The adoption of Bitcoin and other digital assets is likely to be accelerated due to this high-profile adoption and further drive the digital asset to new record prices.
READ MORE: Tesla jumps on Bitcoin bandwagon, how is the crypto currency looking on charts?
Cryptocurrency adoption in NZ
The adoption rate of digital assets in New Zealand is growing at quicker pace. Adoption is primarily coming from retail investors rather than institutions, motivated to diversify their savings during times of economic uncertainty.
The growth in popularity of digital assets has prompted the Inland Revenue Department (IRD) to classify the asset as a form of property in late 2020. Holders of digital assets are now required to pay tax on capital gains if they were initially purchased with the intent to sell or trade.
NZ companies selling cryptocurrency have been asked by the IRD to hand over the details of their customer base including what digital assets were purchased and their corresponding value.
Meme investing
Musk is also a major protagonist in the skyrocketing price of another cryptocurrency, Dogecoin. The serial entrepreneur has posted multiple tweets jokingly promoting the coin.
Dogecoin was created in 2013 as a joke and has an excessive inflation rate and no cap. 100 billion Dogecoins are currently in circulation with a further 5 billion added to the pool every year.
Nevertheless, the coin has increased in value by approximately 600% in the past month on the back of individuals online, including Musk, promoting the coin via memes as the future global currency or a way to get rich quick. New dogecoin investors, typically the younger generations engaged in the meme economy, and are happy to participate in pumping up the price.
READ MORE: Dogecoin Soars By 240%: What’s Behind This All-Time High Rally?
On 9 February, Bitcoin was valued at NZ $63,324 per coin, while Dogecoin is valued at NZD $0.0151 per coin, down 12.21% at the time of writing, as on 10 February.
