In trading today I was suspecting Bitcoin to fall and today by projection is confirmed. Bitcoin has slipped below the $30,000 level. It seems that with the recent stock market declines, BTC etc were caught in the crossfire. In trading the Dow recovered somewhat but BTC remained weak.
BTC was down more than 5% while ETH fell over 6% and XRP sank almost 9%. ETH popped up in May but it has given that all up and more in recent trading. Remember that BTC et al, pay no dividends etc.
By their very nature, cryptocurrencies are freewheeling, not beholden to country borders or specific agencies within a government. But this nature presents a problem to policymakers used to dealing with clear-cut definitions for assets. Here are two unresolved questions relating to bitcoin regulation.
Britain’s Financial Conduct Authority said that Binance Markets Limited “is not permitted to undertake any regulated activity in the U.K.” From June 30, Binance must notify U.K. users of the FCA’s restrictions in a prominent place on its website and apps. This regulatory ruling basically trashes any hope of Binance becoming a legitimate operation. On the heels of the arrests of a few persons with large holdings, it suggests the climate is focused more on financial enforcement.
The EU, which has been welcoming of the cryptocurrency revolution, may possess an advantage over other territories because it controls a 28-member bloc. Bank and corporate support is poor due to ransomware and rampant thefts. It is easy to find scams, fraud and theft related to cryptocurrencies and companies that offer related services on news worldwide. In April, Faruk Fatih Özer, CEO of Turkish exchange Thodex, left the country after thousands of users had their accounts blocked, causing an estimated loss of hundreds of millions of dollars. Africacrypt is another take of take the money and run.
South Korea also recently announced that any cryptocurrency profits over 2.5 million South Korean won will be taxed at 20%, which is estimated to take effect in 2022. The Canadian Revenue Agency generally treats cryptocurrency like a commodity for purposes of the Income Tax Act. Any income from transactions involving cryptocurrency is generally treated as business income or as a capital gain, depending on the circumstances. Similarly, if earnings qualify as business income or as a capital gain then any losses are treated as business losses or capital losses. The US is more or less doing the same thing as Canada.
Splits are taxed in the US but Australia and the UK do not. This makes the whole situation really muddy depending on a persons location.
Note that El Salvador became the first country (in June 2021) in the world to accept bitcoin as legal tender. El Salvador is an impoverished latin american nation that has struggled for years due to US ambivalence.
Reports out of China suggest that as many as 1 million BTC mining machines could be headed to Canada. Black Rock Petroleum is evidently involved and they are working to develop a new facility to handle the machines but details over the cost of operations etc are still not settled.
This is great news for gamers who can now watch with bated breath for sane video card prices. The video of Bitcoin mining machines being crushed is a gamer’s delight as the Malaysian operators were arrested for stealing electricity. No video cards were harmed in this enforcement action.