So what about Bitcoin?
Good morning on Monday!
Today a quick recap of Bitcoin and crypto in the world.
- Bitcoin appears to have stabilized a bit. Prices have started a slight rebound and are now at their highest in a fortnight. The king of cryptocurrencies crossed the symbolic $40,000 per unit threshold on Friday (04.02) for the first time since 22.01.
- Bitcoin is dragging the rest of the market up with it: Ether, the native blockchain currency of Ethereum, rose 5.9% on Saturday to $3,029.42, while its main rivals Solana, Avalanche gained 9, 2% and 9.5%.
- Solana, the Visa of Crypto, suffered this week from the theft of more than $320 million from the decentralised finance project (DeFi) WormHole, which connects the Solana blockchain to other decentralised blockchain networks.
- The market as a whole has gained some colour: the value of the cryptocurrency market has thus risen to just over $2 trillion, according to CoinGecko. It has thus recovered at least $300 billion in just a few days.
Crypto in the world
At the end of last week, Florida Governor – Ron DeSantis – continued his support for Florida companies to be able to pay state fees in cryptocurrencies. The governor proposed a program to allow companies to pay state fees in digital currencies late last year. DeSantis stressed that South Florida has seen an influx of people thanks to the state’s friendly stance on cryptocurrencies.
Finance Minister – Nirmala Sitharaman – announced a 30% tax on any income from the transfer of virtual digital assets, a first in the country. Sitharaman also said that the digital rupee is likely to be issued between 2022 and 2023, marking the first time the Indian government has given a timeframe for the introduction of a central bank digital currency (CBDC).
Japanese brokerage Mitsui & Co. plans to issue a digital currency called ZipangCoin (ZPG) as early as this month. The currency will be pegged to gold prices and sold to retail investors through cryptocurrency exchanges. Unlike traditional stablecoins, ZipangCoin will not be valued at 1 JPY or 1 USD. The value of ZipangCoin is expected to be close to the value of one gram of gold. This means that 1 ZPG will be equal to about JPY 6,280 or USD 54.64.
Sergey Katyrin, wrote to Finance Minister Anton Siluanov asking him to exclude crypto mining from the “grey zone” businesses.
The appeal came after President Vladimir Putin backed a government proposal to tax and regulate cryptocurrency mining, despite the central bank’s continued hardline stance.
This week the UK tax authority, Her Majesty’s Revenue and Customs (HMRC), published new guidance on DeFi’s tax rules.
Under the new guidance, HMRC has focused on DeFi lending and staking. HMRC notes that “the nature of the return received by the lender/liquidity provider will depend on how the transaction is structured”.
Due to the evolving nature of the DeFi space, HMRC has set out some guiding principles. Investors will need to determine whether the return is income or capital in nature. According to the guidance, the question to be answered is whether “the return was earned by the lender/liquidity provider or whether it was a return realised as a result of capital growth in assets owned by the lender/liquidity provider”.
- Live analyses and regular updates on Bitcoin and other cryptocurrencies are available here.
- Zoom calendar for the new week:
Monday 21:30 Market analysis
Tuesday 21:00 Elements of strategy
Thursday 10:30 Market analysis + update
Have a great and fruitful week!