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Ripple Price Analysis: XRP Bullish Against Bitcoin, But Can It Break Above $0.30?

XRP saw a price decline of around 2% over the past 24 hours and it currently trades at $0.29. This latest decrease is largely due to the fact that BTC fell by 2.10% over the same period. Against Bitcoin, XRP is performing relatively well as it continues to make higher highs during October 2019.  

XRP remains the third-largest cryptocurrency with a market cap of $12.57 billion.

Looking at the XRP/USD 1-Day Chart:

  • Since our previous XRP/USD analysis, the cryptocurrency made another attempt at the $0.30 level and managed to climb as high as $0.308 before the market rolled over and fell back beneath $0.30.
  • From above: The nearest level of resistance lies at $0.30. Above this, resistance lies at $0.308, $0.3177 (200-days EMA), and $0.3262 (bearish .382 Fib Retracement). Higher resistance is expected at $0.3371, $0.35, and $0.3613.
  • From below: The nearest level of support lies at $0.2890 (100-days EMA). Beneath this, support is located at $0.2811, $0.27, $0.26, and $0.2584. Further support toward the downside is expected at $0.2518, $0.25, and $0.24.
  • The trading volume still remains relatively high when compared with September.
  • The RSI is above the 50 level but is slowly fading which could be a sign that the bullish momentum may be fading. Furthermore, the Stocahstic RSI had recently produced a bearish crossover signal which favors the bears.

xrpusd-oct18-min

Looking at the XRP/BTC 1-Day Chart:

  • Against Bitcoin, XRP managed to smash above the resistance at 3568 SAT. XRP continued to climb higher to reach the current level of resistance at 3739 SAT, provided by a 1.618 Fib Extension.
  • From above: The nearest level of resistance lies at 3739 SAT. Above this, resistance lies at 3800 SAT, 3936 SAT (bearish .5 Fib Retracement), 4060 SAT (200-days EMA), and 4305 SAT (bearish .618 Fib Retracement).
  • From below: The nearest level of support lies at 3666 SAT. Beneath this, support lies at 3568 SAT, 3500 SAT, 3375 SAT, and 3200 SAT (100-days EMA). Further support can be found at 3112 SAT and 3000 SAT.
  • The trading volume remains quite low when compared with September’s volume.
  • The RSI is well within the favor of the bulls as it remains well above 50. However, the Stochastic RSI is warning to remain cautious as it is primed for a bearish crossover signal.

xrpbtc_oct18-min

The post Ripple Price Analysis: XRP Bullish Against Bitcoin, But Can It Break Above $0.30? appeared first on CryptoPotato.

Source: Crypto Potato

Libra Roundup: G7 Voice Concerns, Senator Adds Support, New Study Emerges

Today, G7 countries have documented their concerns about the impact of stablecoins on the global monetary system, US Senator Michael Rounds has offered fresh words of support, and a new survey has emerged on Libra adoption


67% of Nigerian Businesses Would Welcome Libra

While Facebook’s intention to launch a global digital currency sparked reactions among governments and regulators in developed countries, no-one has bothered to ask the opinion of potential users, especially in developing countries.

Andreas Park, Research Director at the Rotman School of Managements FinHub, argued that Libra aimed to become more than just a global currency. Its infrastructure would support smart contracts and could primarily benefit those in developing country, who account for the largest share of Facebook users.

The RIWI’s study involved more than 10,000 online respondents. 41% of the surveyed persons have no banking account. It proves the importance of an international currency system that would reach the unbanked population.

According to the survey, 55% of respondents in Nigeria are open to using non-traditional money against 28% respondents in the US. When it comes to businesses, Nigerian companies are even more eager to use alternative money (67%). Elsewhere, the US would see only 30% of companies supporting such a currency.

Interestingly, the surveyed entities were up to 20% more willing to use alternative money that had no relationship with Facebook. The cited reasons relate to the company’s privacy issues. Besides, the confidence around Libra faded after PayPal, Visa and MasterCard left the project.

Curiously enough, 62% of respondents said that they would not consider Bitcoin as a means of exchange.

All in all, the conclusion of the survey is that a Libra-like digital currency would benefit those in developing countries. The document reads:

The biggest beneficiaries are likely people in the developing world as Libra Coin would potentially allow them to transact online in a currency that is significantly more stable than their home country’s currency and it would allow them to at least partially insure themselves against their home country’s misguided fiscal and monetary policies.

FB’s Stablecoin Praised by US Senator amid Massive Pressure from G7 Countries

Libra is now under massive pressure from G7 countries. Yesterday, the Group of Seven agreed that such stablecoins should be avoided until regulators address the fundamental international risks they pose.

If or when launched on a wide scale, Libra-like digital currencies might threaten the global monetary system and its financial stability, according to a report prepared by a G7 working group.

Nevertheless, Facebook’s project found support at home. Republican Senator Michael Rounds of South Dakota praised Libra for opening the door to alternative banking services, calling the Libra Association members to “preserve.”

Rounds’ supportive message comes after several Libra partners left the project as mentioned earlier. The Senator said in its letter:

While the Association is still in the process of standing up its governance framework and its operating rules, it would be a shame to lose the progress you have already made in creating Libra. I hope you persevere and that your decision to move forward is based on your sound business judgement.

Rounds’ Colleagues Rebuked Libra Members

While Libra had initially gathered 28 founding members, seven major members decided to leave the project. Many of these companies had previously received a letter from two of Rounds’ colleagues from the Democratic Party, who threatened with intense monitoring of the project and the members involved.

In a letter sent to Visa, PayPal, MasterCard, and Stripe, US Democrats urged,

Your companies should be extremely cautious about moving ahead with a project that will foreseeably fuel the growth in global criminal activity,

On the other side, Rounds doesn’t agree with his colleagues. He sent a letter to a founding member of the Libra Association, saying:

It is profoundly disappointing that my colleagues chose to address your peers in such an ominous tone, which I fear may put a chill on innovation in the long run.

Do you think Facebook should continue with its Libra project? Share your thoughts in the comments section! 


Images via Shutterstock

The post Libra Roundup: G7 Voice Concerns, Senator Adds Support, New Study Emerges appeared first on Bitcoinist.com.

Source: Bitcoininst

Tesla Rival Speeds Ahead with Bitcoin (BTC) Payment Option

Luxury electric car maker, Karma Automotive, now has a Bitcoin (BTC) payment option for its models. The firm is now ahead of Tesla, which has so far only toyed with the idea proposed by the crypto community.


BTC Payments Part of the VIP Package

Karma now offers new buyers and old customers the opportunity to use BTC to buy new car models, as well as services. The option will be available at the Karma Newport Beach Store, the company’s flagship operation. The service is part of the VIP option package at the car sale and service center.

Adding BTC will only boost the firm’s image as a cross between a company for VIP clients, and a high-tech incubator riding the latest trends. The payment option will be available through a partnership with Wanxiang Group.

Karma CEO, Dr. Lance Zhou, said:

Karma’s flagship store will support our efforts to prove emerging technology and provide the latest VVIP customer treatment offerings by accepting Bitcoin cryptocurrency.

The BTC appeal has moved on from the “lambo” ethos of its early days, and onto the novelty of electric vehicles. The Karma electrical vehicles are also opening up their platforms to test various blockchain applications available in the automotive space.

BTC has proven immensely useful for large-scale purchases. Real estate and luxury cars, as well as luxury goods have been available to selected customers. Now, Karma brings a BTC-powered store do its new location, among other luxury car stores near the John Wayne airport in Newport Beach, California.

Karma Aims for High-End, High-Tech Incubator Status

Karma Automotive is also on an expansion drive to introduce its Revero GT model across the US and Canada, with a global all-electric platform expected to unroll in 2021. The stores also carry an innovative three-cylinder BMW engine boasting 535 horsepower capacity. Through its models, Karma wants to establish itself as a high-end incubator for automotive breakthroughs.

As for Tesla, its real involvement with crypto assets has been superficial. Elon Musk tweets have praised BTC and Dogecoin (DOGE), but so far, no BTC transaction for a Tesla has been reported.

BTC payments are also facing new challenges, as the US Internal Revenue Service introduced new guidelines to recognize taxable events. It is no longer possible to transfer BTC in exchange for a good or service, without recognizing taxable income.

Still, the Bitcoin network is especially suited for high-end transfers, as it often carries transactions of close to $1 billion in value, with relatively low fees.

What do you think about Karma Automotive’s move to accept BTC? Share your thoughts in the comments section below!


Images via Shutterstock

The post Tesla Rival Speeds Ahead with Bitcoin (BTC) Payment Option appeared first on Bitcoinist.com.

Source: Bitcoininst

Binance to Add Bitcoin Cash to Its Decentralized Exchange

Already widely available for trading across the world, bitcoin cash continues to expand into new markets and platforms. The latest venue where users can soon exchange the cryptocurrency is Binance’s decentralized exchange. The system will feature a token pegged to BCH issued on Binance Chain.

Also Read: Binance Launches Peer-to-Peer Trading in China

Binance DEX to List Bitcoin Cash Pegged Token

The head of the world’s largest crypto exchange by volume, Changpeng Zhao, has proposed adding support for trading bitcoin cash on the decentralized exchange developed on top of Binance Chain. This will be done by listing a new token on the DEX (BCH-1FD), which is backed by real BCH assets and issued on Binance Chain. Bitcoin cash will thus become only the third cryptocurrency chosen to be added to the platform, following a BTC-pegged token which was issued in June and another tracking the price of Ripple’s XRP which was launched last Thursday.

The BCH-1FD is a token pegged to the BCH value and will be available for trading on the DEX, designed to allow users to exchange coins and tokens with full custody over their funds and wallets. The exchange’s plan is to issue about $2 million worth of the BCH-pegged tokens to be traded at first and it will continue to mint more in response to market demands. Users can swap native DEX tokens for the assets they are pegged to without slippage on the company’s main exchange.

Binance to Add Bitcoin Cash to Its Decentralized Exchange

“The BCH community is one of the strongest crypto communities, and we’re excited to collaborate with them on migrating BCH token onto Binance Chain.” said Binance CEO Changpeng Zhao. “The BEP-2 BCH token will be pegged to the native BCH. BCH holders can enjoy the seamless token swap experience on Binance.com and non-custodian trading on Binance DEX after the listing proposal is approved by the Binance Chain community.”

Decentralized Crypto Trading Is on the Rise

Centralized exchanges currently dominate the crypto ecosystem in terms of trading volumes, but many would like to see a transition to decentralized alternatives to eliminate third party custody. So far DEXs have suffered from low liquidity and long onchain order execution times as well as poor UX. Binance DEX is meant to change that, with an interface that resembles the company’s popular main exchange, and short block times ensuring trades are settled rapidly. Already many crypto projects have chosen to join Binance Chain and want to have their tokens listed on its DEX.

Binance to Add Bitcoin Cash to Its Decentralized Exchange
Another trend away from centralized exchanges that Binance supports is peer-to-peer trading. The company recently launched P2P trading functionality in China with BTC, ETH and USDT for trading against CNY (Chinese Yuan). The feature reportedly supports traders making transactions between themselves while using the widely-used Chinese payment apps Alipay and Wechat Pay.

What do you think about Binance listing a bitcoin cash pegged token on its decentralized exchange? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com.

The post Binance to Add Bitcoin Cash to Its Decentralized Exchange appeared first on Bitcoin News.

Source: Bitcoinnews.com

Crypto Market Looks Primed for Bearish Q4 as Trading Slumps

The state of the crypto market is positively dire right now, as trading across various retail and institutional platforms show marked declines. Despite hopes of halloween rallies and historical bull markets, everything seems to be pointing towards a bearish Q4.


P2P Bitcoin Transactions Register a Drop

Bitcoin’s price is currently consolidating after a whirlwind of negative news. Firstly there was Bakkt’s disastrous launch which failed to bring substantial institutional investment into the market, and now P2P trading site, LocalBitcoins, is witnessing a massive drop in volume.

According to data from Coin Dance, last week registered its third-lowest volume since August 2017.

Crypto LocalBitcoins Chart

BTC/ETH Exchange Flows Are Largely Equal

As pointed out by the TokenAnalyst, there’s not a whole lot of action going on at the major exchanges right now either. BTC/ETH exchange flows are largely equal which suggests that retail investing is pretty much flat right now. 

Things Get Even Worse for Bakkt

As if trading bitcoins in the single figures over 24 hours wasn’t bad enough, things have gotten worse for Bakkt. Its open interest rate is now down 50% this week. From this, it seems that even institutional interest is flagging right now, with accredited investors choosing to stay out of the market until more bullish signs appear.

Crypto Derivatives Not Promising Either

Derivatives, on the whole, are looking pretty dismal too. As @skew_markets also pointed out, even the mighty BitMEX just saw its slowest weekend for crypto markets in months.

Saturday’s total trading volume in Bitcoin futures was less than $1 billion.

Crypto Market Gears Up for Bear Territory

After an extremely bullish break out in the crypto markets in the second and third quarters, all the indicators point to a bearish quarter four.

Of course, long-term Bitcoin HODLers, won’t be phased by the lull. After all, despite all the negative metrics, the network keeps on growing.

The Bitcoin hash rate and network security are higher than they’ve ever been. Miners are keeping the faith and let’s not forget that Bitcoin still outperformed all major assets earlier this year. We may be entering another bearish cycle but it pays to keep in mind that all cycles come to an end.

Do you think Q4 will turn out to be bearish, or are you hopeful for another record-breaking end to the year? Add your thoughts below!


Images via Shutterstock, Twitter @skew_markets @thetokenanalyst, Bitcoin trading chart by coin.dance

The post Crypto Market Looks Primed for Bearish Q4 as Trading Slumps appeared first on Bitcoinist.com.

Source: Bitcoininst

Ethereum Price Analysis: ETH Falls Below $180, More Pressure Ahead?

Ethereum saw a small decline of around 3.26% over the past 24 hours and it currently trades at $178. ETH has seen a further 10% drop over the past month. The cryptocurrency recently met resistance at the 100-days EMA and failed to break above it which caused ETH to roll over and fall.

Ethereum remains the second-largest cryptocurrency with a market cap of $19.32 billion.

Looking at the ETH/USD 1-day chart:

  • Since our previous ETH/USD analysis, the cryptocurrency continued to fall after meeting the resistance at the 100-days EMA. ETH failed to close above resistance at $193.66 and proceeded to fall further beneath $180. 
  • From above: The nearest level of resistance lies at $185 and $187.84. Above this, resistance is located at $190, $193.66, and then at the 100-days EMA. If the bulls can penetrate above the 100-days EMA, resistance is expected at $200 and $202 (200-days EMA).
  • From below: The nearest level of support lies at $178.80. Beneath this, support lies at $171.97, $165.23 (September low-day close), $160, $158.61, and $152.38.
  • The trading volume has been diminishing during October and remains relatively low.
  • In our last analysis, the Stocahstic RSI had produced a bearish crossover signal which led to the recent price fall. The RSI has recently slipped beneath the 50 level which shows that the sellers are starting to take control over the market momentum. 

ethusd_oct16-min

Looking at the ETH/BTC 1-day chart:

  • Against BTC, ETH has remained fairly stagnant. The cryptocurrency failed to make any movement above the resistance at 0.02232 BTC but managed to remain above the 100-days EMA at 0.02155 BTC. 
  • From above: The nearest level of resistance lies at 0.02232 BTC. Above this, resistance is expected at 0.02295 BTC, 0.02363 BTC, 0.02368 BTC, 0.02423 BTC, and 0.02474 BTC (200-days EMA).
  • From below: The nearest level of support lies at the 100-days EMA. Beneath this, support can be found at 0.021 BTC, 0.0204 BTC, 0.022 BTC, 0.01963 BTC, and 0.01840 BTC.
  • The trading volume is also diminishing within this market.
  • The RSI is currently battling the 50 level as the bulls fight to remain in charge of the market momentum. The Stochastic RSI looks promising for the bulls as it trades in oversold conditions as we wait for a bullish crossover signal to send us higher.

eth-btc-oct16-min

The post Ethereum Price Analysis: ETH Falls Below $180, More Pressure Ahead? appeared first on CryptoPotato.

Source: Crypto Potato

Ripple Price Analysis: Will XRP Finally Break Above $0.30?

XRP saw a price increase of around 1% over the past 24 hours and it currently trades at $0.2926. The cryptocurrency has been on a tear these past two weeks after surging by a total of 17.72%, making it the strongest performing cryptocurrency out of the top 5 in the selected period. 

The surge has now allowed XRP to retest the $0.30 level which had provided strong support for the market all year until it was broken in July 2019. This price increase is largely a result of XRP surging against BTC as it broke above 3400 SATS. 

XRP remains the third-largest cryptocurrency with a market cap of $12.62 billion.

Looking at the XRP/USD 1-Day Chart:

  • Since our previous XRP/USD analysis, the cryptocurrency continued to climb above the resistance at $0.2811. It went higher, breaking above the 100-days EMA at $0.2890 to meet resistance at the $0.30 level.
  • From above: The nearest level of resistance lies at $0.30. Above $0.30, resistance lies at $0.308 and $0.3177 (200-days EMA). Higher resistance is found at $0.3262 (bearish .382 Fib Retracement), $0.3371, $0.35, and $0.3613.
  • From below: The nearest level of support lies at $0.2890 (100-days EMA). Beneath this, support is found at $0.2811, $0.28, the rising support trend line, and $0.2584. Further support is located at $0.25, $0.24, and $0.2345.
  • The trading volume has increased from the average level of September.
  • The RSI is in a bullish territory as they continue to control the market momentum. However, the Stocahstic RSI is in overbought territory as we wait for a potential bearish crossover signal to push the market lower in the short term.

xrpusd-oct15-min

Looking at the XRP/BTC 1-Day Chart:

  • Against Bitcoin, XRP managed to penetrate above the resistance at 3375 SATS. The coin continued higher, breaking above resistance at 3500 SAT to mee resistance at 3568 SAT (provided by the bearish .382 Fib Retracement).
  • From above: If the bulls penetrate above 3568 SAT, higher resistance is expected at 3666 SAT, 3739 SAT, 3963 SAT (bearish .5 Fib Retracement), and 4000 SAT. Above 4000 SAT, resistance lies at 4100 SAT (200-days EMA) and 4305 SAT (bearish .618 Fib Retracement).
  • From below: The nearest level of support lies at 3500 SAT. Beneath this, support lies at 3375 SAT, 3324 SAT, 3200 SAT (100-days EMA), and 3000 SAT.
  • The trading volume is lower than the average we have seen during September.
  • The RSI remains in the bullish favor as it hovers well above the 50 level. Furthermore, the Stochastic RSI has recently produced a bullish crossover signal which helped to push the market higher.

xrpbtc-oct15-min

The post Ripple Price Analysis: Will XRP Finally Break Above $0.30? appeared first on CryptoPotato.

Source: Crypto Potato

Altcoins Turn Bullish as Bitcoin (BTC) Struggles With Resistance

Bitcoin (BTC) has spent another day consolidating with further failures to top resistance. Its lethargy and another dominance dip are good news for altcoins which are having a bit of a revival today. Ripple’s XRP, which has been on the floor for most of 2019, is going up strong as is Stellar Lumens, 0x and BAT.


Bitcoin Price Battles at Resistance

As bitcoin price continues to consolidate the altcoins are finally waking up following a year of slumber. Most have retreated from their summer highs but some are starting to rally again in a rare move independent of their leader.

BTC has dropped another percentage point in dominance and is now below 68.5% according to Tradingview.com. That share is being gobbled up by high cap altcoins and XRP is one of them today.

The token has continued its rally and is one of the day’s top-performing altcoins. Since the end of last week, XRP has added $1.5 billion to its market cap and climbed 11% in price.

So far this month XRP has climbed over 20% and is approaching its psychological barrier of $0.30. Today it has seen further gains topping out at $0.298 a couple of hours ago during early Asian trading. Daily volume has surged 60% since the weekend and just topped $1.6 billion as the momentum builds.

The bigger picture still shows the cross border transfer token flat on the floor, down 90% from ATH. Regardless, the crypto community has turned bullish on Ripple’s token and sees this as a good entry-level for further gains. Trader ‘CryptoWelson’ didn’t miss the opportunity to point out his earlier prediction.

I tweeted a few weeks ago that I saw bullish momentum in $XRP and was expecting a rise! We’re now up over 20% from that, and XRP has just broken out of resistance. Get ready folks. Massive pump incoming!

Once the $0.30 level is broken further gains up to $0.40 could come quickly as there is very little resistance in between.

The annual Swell event is approaching which is usually bullish for XRP. This year it will be held from November 7 to 8 in Singapore. Traders and analysts have noted the price fluctuations before and after this event and the pump may have already started.

The San Francisco fintech firm has made a couple of partnerships but Swell is likely to be the primary driver of momentum at the moment. XRP is approaching crucial resistance and this week will determine whether it has the minerals to make further gains regardless of what bitcoin does.

When Altseason?

Ethereum has made a minor move back to $185 today but remains sluggish at any price below $200. BCH, LTC, EOS, and BNB have not moved but Stellar (XLM) has woken up with a jump of almost 10% on the day. DEX protocol token ZRX is having a double-digit shift at the moment and browser-based BAT is also going strong.

Will Bitcoin dominance fall further? Add your thoughts below.


Images via Bitcoinist Media Library, Twitter: @CryptoWelson

The post Altcoins Turn Bullish as Bitcoin (BTC) Struggles With Resistance appeared first on Bitcoinist.com.

Source: Bitcoininst

Bitcoin (BTC) Whale Just Moved $900M in Single Transaction

The Bitcoin network once again carried a stunning amount of value in a single transaction. Recent tracking showed the movement of more than 107,848 BTC, worth nearly $900 million at the time of tracking.


The Whale Turns Out to Be Bitstamp

The transaction follows a previous unknown whale that moved more than $1 billion and a more recent transfer of 13,850 BTC. Such transactions are usually found to belong to exchanges. This time, the transaction later turned out to be linked to Bitstamp, the European exchange that sports one of the important spot markets and supplies data to other exchanges. The funds were moved to a XAPO-2 wallet, a cold storage service.

Initially, the large-scale transaction created worries, as unknown movements of funds are sometimes linked to hacks or exploits. Initially, the destination address remained unknown, and was identified later.

This time, the transaction was not caught by whale-watching bots, and instead was registered by ByteTree, a service tracking the weight and value of transactions. The visuals show the transaction outpaced all other similar coin movements. It was also mystifying why the Bitstamp exchange failed to warn about the large-scale movement of funds. The exchange, initially founded in Slovenia and based in Luxembourg, is one of the fully transparent EU-based markets with high liquidity.

Bitcoin Network Had a Slow Day

The transaction happened on a day when the Bitcoin network carried a total of around $374 million, a relatively sluggish day. The network also carried around 274,000 transactions, not counting unspent outputs, a relatively slow day compared to previous periods of more rapid movement.

But there is also a sign of accelerating activity, as the US markets open. On Monday, at one point more than 16,000 transactions waited their turn to be included in a block, remaining in a pending state. Usually, an increasing backlog shows high demand to move coins. Coin movements are also linked to upcoming price action.

BTC traded at $8,371.87 on Monday, unable to break above the $8,400 tier. The leading coin is still seeking direction, with expectations of a further slide before a more significant rebounce.

Wallets of a size above 100,000 BTC usually belong to exchanges. The Binance cold wallet contains 162,644 BTC, with an extra cold wallet containing 65,044 BTC. This makes Binance one of the largest BTC whales, especially after its futures market picked up and reached record activity.

What do you think about the recent whale transaction? Share your thoughts in the comments section below!


Images via Shutterstock, Twitter @Bytetree @Chaindotinfo

The post Bitcoin (BTC) Whale Just Moved $900M in Single Transaction appeared first on Bitcoinist.com.

Source: Bitcoininst

Tax Guide: What Crypto Owners Should Know

With the rise in price and the growing adoption of cryptocurrencies, more governments worldwide have been ramping up efforts to tax them. Some countries are using extreme measures to get their hands on this new source of untapped revenue, but there are also tax-friendly countries that are not taxing crypto transactions. Furthermore, many tools exist to help crypto owners.

Also read: IRS Issues New Crypto Tax Guidance – Experts Weigh In

Know How Your Government Taxes Crypto

Each country, state, or even city has its own set of rules when it comes to determining which crypto transactions are taxable. However, few have clear guidelines as cryptocurrency is still a nascent area for governments to tackle.

The U.S., for example, first released guidance for crypto taxation back in 2014, but left out many issues. Five years later, on Oct. 9, the country’s tax agency, the Internal Revenue Service (IRS), published follow-up guidelines that answer many questions but also raised some unanswered ones. Besides, the tax agency seems to be confused about some key concepts such as how hard forks and airdrops work.

Tax Guide: What Crypto Owners Should Know

As a taxpayer, it is important to understand what is taxed in your country. In the U.S., the IRS explained:

The sale or other exchange of virtual currencies, or the use of virtual currencies to pay for goods or services, or holding virtual currencies as an investment, generally has tax consequences that could result in tax liability.

Furthermore, anyone who received cryptocurrency “from an airdrop following a hard fork,” will owe taxes “provided you have dominion and control over the cryptocurrency so that you can transfer, sell, exchange, or otherwise dispose of the cryptocurrency,” the new IRS guidance details. Meanwhile, some crypto transactions are nontaxable such as donating cryptocurrency to qualified tax-exempt organizations.

Those Probing Questionnaires

As more governments realize cryptocurrency’s potential for generating tax revenue, they are also aware that they are missing out by not finding all crypto owners and taxing them. Some tax authorities worldwide have attempted to obtain information on taxpayers’ crypto holdings and activities through probing questionnaires.

The Indian Office of the Deputy Director of Income Tax has been mailing crypto owners a long list of questions, ranging from sources of income to the names of the cryptocurrencies traded and details about hardware wallets. The Canada Revenue Agency has also sent a detailed questionnaire to the citizens it believes to own cryptocurrency. Another example is the tax agency of Denmark, Skattestyrelsen, which has been authorized by the country’s tax council to obtain information about cryptocurrency trades conducted on some local exchanges.

Tax Guide: What Crypto Owners Should Know

On Oct. 11, the IRS published a draft of the new 1040 tax form which contains a question on cryptocurrency: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” This form is the main U.S. tax form used by over 150 million taxpayers.

More Aggressive Tactics

If tax authorities believe that a significant number of people are not reporting and fulfilling their tax obligations, they may employ various tactics to convince them to do so. The IRS, for example, has tried to remind crypto owners to pay taxes by mailing letters to more than 10,000 of them. It followed up with a video about another tax notice which seeks to rectify recipients’ tax reporting discrepancies. While these letters may seem like a big deal, some people believe that they are more of a phishing campaign since the agency simply does not have enough manpower to go after all crypto owners.

Tax agencies may also use more aggressive measures to boost their revenue. An IRS cybercrime presentation shows alarming recommendations on how tax agents should deal with crypto tax evaders, including questioning their friends and family, analyzing their social media posts, and issuing subpoenas. For Americans with more than $52,000 in overdue taxes, the agency may even revoke their passports until their tax bills are settled. Recently, the Turkish tax authority froze the bank accounts of over 3 million people for nonpayment of taxes.

Tax Guide: What Crypto Owners Should Know

Some Countries Are Much More Tax-Friendly

Each jurisdiction applies different tax rates and rules to crypto transactions. For example, Romania imposes a 10% tax on crypto earnings, Venezuela taxes up to 15% of crypto remittances, and one Swedish trader expected to pay 300% of his crypto profits in taxes. Japan, often hailed as one of the most crypto-friendly countries, taxes crypto income as high as 55%. However, a proposal is already in place to lower this rate in four different ways. India presently has no legal framework for cryptocurrency, but income from crypto assets can be taxed in three different ways. Portugal, on the other hand, has emerged as a crypto haven due to its policy to exempt cryptocurrency from capital gains tax and VAT. A local tax expert detailed:

The appreciation of cryptocurrencies or any gains on the direct sale of cryptocurrencies are not taxed in Portugal.

Tax Guide: What Crypto Owners Should Know

Knowing how other countries treat crypto assets for tax purposes can be beneficial, such as when choosing a more crypto tax-friendly place to move to. With some jurisdictions taxing crypto earnings and gains significantly less than others, some crypto investors have renounced their citizenship and relocated in order to lower their tax obligations.

There Are Tools to Help

If you want to file taxes and pay as little as possible, there are many tools to help you. Many software programs can help track your cryptocurrency transactions, calculate your tax liabilities, prepare and even file your tax returns. Some allow you to download your transaction data directly from exchanges and wallets. News.Bitcoin.com recently published a list of 10 useful tax tools for crypto owners.

Tax Guide: What Crypto Owners Should Know

Some People Are Still Not Paying

Despite intense efforts by tax authorities, many people in and around the crypto community strongly believe that taxation is a form of theft, and flat out refuse to pay them. A survey by personal finance firm Credit Karma shows that an increasing number of people would not declare their crypto income. One prominent tax evader is former antivirus tycoon and cryptocurrency advocate John McAfee. After fleeing the U.S. and declaring war on the IRS from his boat, he exclaimed:

I have not paid taxes for eight years and I have made no secret of it.

Resources: Top Posts on Crypto Taxation

What do you think of how governments try to tax crypto transactions? Let us know in the comments section below.

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