Crypto Guides, Knowledge & Insights

Crypto tax ‘a top enforcement priority,’ reminds IRS Commissioner

The United States Internal Revenue Service continues to propose new tax reforms to regulate the crypto investments in the U.S., with the latest notice sharing tax obligations for the marijuana industry.　　The notice, signed by IRS Small Business/Self-Employed Division Commissioner De Lon Harris, reflects the priorities of the United States federal agency to ensure cryptocurrency tax compliance among local businesses that grow, distribute and sell cannabis.　　Commissioner Harris said that the use of cryptocurrencies in the cannabis industry is one of the top enforcement priorities of the IRS. The statement coincides with the recent proposal by the Senate lawmakers from July 2021 that intends to tighten taxation and reporting rules on businesses dealing in cryptocurrencies. According to Harris:“Those who use it [cryptocurrencies] need to understand that the IRS considers it property, and there are gains that are taxable.”　　In addition, the IRS commissioner recommended cannabis businesses work with reputable exchanges for converting cryptocurrencies into U.S. dollars.　　The IRS has not yet asked businesses to report high-worth crypto transactions explicitly. However, companies will need to file Form 8300 for every transaction that exceeds $10,000.　　The Senates bipartisan infrastructure deal recently that saw last-minute amendments proposed means to raise funds worth $28 billion by taxing crypto investments

2021-09-28Deep Dive

BTC price loses $42K after fresh rejection puts focus on ‘worst case’ Bitcoin monthly close

Bitcoin (BTC) fell below $42,000 on Tuesday, Sept. 28, as the largest cryptocurrency worsened overnight losses.BTC bulls run out of steam at $44,000　　Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching local lows of $41,670 on Bitstamp.　　The fall followed a $1,000 hourly loss late Monday, which firmly halted any bullish hopes from the weekends high of $44,400.　　The turnaround was broadly expected. As Cointelegraph reported, analysts were already eyeing levels even below $40,000 as potential floors.　　On Monday, one trader likewise refused to believe Bitcoins strength going into the new week, arguing that levels above $44,000 were simply a liquidity grab before heading lower again.　　With two days left until the monthly close, meanwhile, attention was on $43,000 as the “worst-case scenario” for BTC/USD to finish September.　　PlanB, the analyst who correctly predicted the $47,000 “worst case” for August, likewise envisages October closing on at least $63,000.Trader — “Wise to bet” on Q4 rebound　　He is not alone, with an increasing number of market participants firmly convinced that Q4 will form a turnaround point in the Bitcoin bull run.　　Related: China fear is now infrastructure bill fear — 5 things to watch in Bitcoin this week　　Among them was popular trader TechDev, who argues that historical

2021-09-28Deep Dive

Bitcoin Shorts need stops above 48000

Bitcoin still holding first resistance at 43500/44000 which keeps pressure to the downside.　　Ripple still holding first resistance at 9800/9900 in what appears to be a negative bear flag pattern.　　Ethereum saw a high for the day exactly at first resistance at 3130/60 so shorts here are the perfectly trade.Daily analysis　　Bitcoin holding first resistance at 43500/44000 in recent days (in what I think is a developing bear trend) re-targets 42000/41500. This has been hit now & is holding but pressure remains to the downside. A break below 39500 then targets 37300/37000. I would not rule out 34500/300 and even more losses in to October.　　Bulls need a break above 45000 to test resistance at 47000/47500. Shorts need stops above 48000 for a medium term buy signal.　　Ripple holding first resistance at 9800/9900 eventually targets best support again at 8600/8550. A break below 8500 is a sell signal targeting 8000/7950 & 7600.　　Bulls need a break above 10000 to test strong resistance at 10250/10350. A break higher can target strong resistance at 10710/10780. Shorts need stops above 11000.　　Ethereum holding first resistance at 3130/60. Shorts need stops above 3250. A break higher targets 3300/3320 & resistance at 3400/3450. Shorts need stops above 3500.　　Shorts at at 3130/60 target

2021-09-28Deep Dive

Institutional investors bought the dip as China FUD broke

While institutional Bitcoin products have experienced outflows for 13 of the past 17 weeks, the sector has now seen three straight weeks of inflows.　　Institutional investors were buying the dip on the back of Chinas latest FUD, with digital asset investment products generating $95 million worth of inflows last week.　　According to CoinShares Sept. 27 Digital Asset Fund Flows Weekly report, a surge in dip buying helped drive a sixth consecutive week of inflows for institutional crypto investment products broadly.　　The $95 million worth of inflows between Sept. 20 and Sept. 24 marks a 126% weekly inflows increase. BTC and Ether investment products led the pack with $50.2 million and $28.9 million worth of inflows respectively.　　While BTC investment products have seen outflows in 13 of the past 17 weeks, positive sentiment towards the asset rose during September as inflows were recorded for the past three weeks. Inflows to Bitcoin products also increased by 234% week-over-week.　　Institutional appetites for altcoins appears to remain strong, with products tracking Solana (SOL), Cardano (ADA) and Polkadot (DOT) posting inflows of $3.9 million, $2.6 million and $2.4 million respectively. Multi-asset funds also saw inflows of $6.4 million this past week.　　Related: Crypto has recovered from Chinas FUD over a dozen

2021-09-28Deep Dive

Bitcoin breaking new highs in Q4 will ‘temporarily turn alts to dust’ — Analyst

Things will get exciting in quarter four, but not before a convincing floor is put in across crypto, analysts say this week.　　Bitcoin (BTC) was busy losing its overnight gains on Sept. 27 as resistance continued to prove too much for bulls.　　BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewAnalyst on Bitcoin: “Right now, were stuck”　　Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to around $1,000 below overnight highs of $44,400 on Bitstamp on Sept. 27.　　The move constitutes a rejection at a “critical” zone to break, Cointelegraph contributor Michaël van de Poppe explained, with $42,000 now the key level to hold for a higher low.　　Bitcoin is acting in an increasingly narrow range, he summarized in his latest YouTube update.　　“Right now, were stuck,” he said, pointing to $47,000 as next should the $44,600 zone be reclaimed.　　On the downside, the zone between $38,000 and $40,000 remains valid for a bounce, while a complete failure of the range as support would then send BTC/USD toward its 2021 opening price, around $28,000.　　“If $42,000 is lost, I think we‘re going to have into the lows here and take the liquidity beneath the low before we’re going to have an actual reversal at this stage,” van de

2021-09-28Deep Dive

Second-largest Ethereum mining pool to suspend all operations

Launched in China in 2018, SparkPool controls over 22% of Ethers hash rate as of Monday, second only to Ethermine.　　Sparkpool, the second-largest Ethereum mining pool in the world, is suspending operations due to the ongoing Chinese crackdown on crypto.　　The mining pool officially announced that it has suspended access to new users in mainland China on Monday in response to Chinese authorities initiating new measures to combat crypto adoption in the country.　　Following the initial restrictions made last Friday, Sparkpool will continue shutting down services, and plans to suspend existing mining pool users both in China and abroad on Thursday.　　According to the announcement, the measures intend to ensure safety of users assets in response to “regulatory policy requirements.” “Further details about the shutdown will be sent out through announcements, emails, and in-site messages,” Sparkpool noted.　　Launched in China in early 2018, SparkPool has emerged as one of the world‘s largest mining pools for mining Ether (ETH), alongside the world’s largest Ethereum mining pool Ethermine. At the time of writing, SparkPool‘s mining power makes up 22% of Ethereum’s global hash rate, slightly lower than Ethermines share of 24%, according to Poolwatch.io.　　The news comes amid the Chinese government reinforcing its negative stance on crypto by

2021-09-28Deep Dive

Bitcoin Lightning nodes and channels hit record highs

The node count for Bitcoins leading layer-two solution, the Lightning Network (LN), has spiked to record levels following a surge of adoption.　　According to on-chain analytics provider Glassnodes Sept. 27 Week on-Chain report, the number of Lightning Network nodes increased by 160% during September to tag a record high of 15,600. At the end of August, just 6,000 LN nodes were live.　　The number of channels, or connections between different nodes, on the LN has also hit a peak of 73,000 representing an average of 4.6 channels per node, the report added. Bitcoinvisuals is currently reporting an average of 9.3 channels per node as of Sept. 26.“This is around double the number of channels that were live through the period from 2019-20, with most of this growth occurring since May 2021.”　　The total capacity of the Lightning Network has seen “explosive growth” this year according to Glassnode. The metric refers to the total amount of BTC that can be transferred using the LN.　　The networks capacity is currently at an all-time high of 2,904 BTC ($123 million at current prices). The milestone marks an increase in capacity of 170% since January with roughly 22% or 514 BTC having been added to the network in

2021-09-28Deep Dive

Facebook announces $50M investment fund tasked with developing its virtual metaverse

Facebook has announced it will allocate $50 million to a two-year fund tasked with beginning work on realizing the firms vision for a virtual metaverse.　　A Sept. 27 announcement articulates Facebooks roadmap for building its metaverse, with the funding slated to back “global research and program partners” looking to build out the platform in addition to internal research.　　The metaverse won‘t be built overnight by a single company. We’ll collaborate with policymakers, experts and industry partners to bring this to life, emphasized the announcement.　　The Metaverse will allow people to interact with one another, digital objects and the physical world through their avatar in a virtual environment. Funding will be disbursed through Facebooks XR Programs and Research Fund.　　Rumors of Facebooks plan to build out a virtual metaverse began circulating in June, with the firm announcing the formation of an executive team tasked with overseeing the project the following month.　　In its latest announcement, Facebook asserts that its metaverse “is not necessarily about spending more time online — its about making the time you do spend online more meaningful.”　　Despite the $50 million investment fund, Facebook believes it will take more than a decade until a comprehensive version of its metaverse will be live and featuring

2021-09-28Deep Dive

Skybridge Capital CEO Says Institutional Investors Remain Wary of Crypto Investment

Anthony Scaramucci the manager of one of the leading hedge funds Skybridge Capital in a recent interview with Bloomberg claimed that a majority of institutional investors are still cautious of investing in the crypto market and blockchain technology. Scaramuccis comments are quite in contrast to the general belief that institutions have arrived in the crypto market as dozens of mainstream financial giants announced crypto-centric development this bull season. The hedge fund manager believes that the crypto market is dominated by only 10% of the financial service committee.　　“The institutions are not there … anybody who‘s telling you there’s institutional adoption into this space is not being honest or they‘re seeing something that I’m not seeing,”　　Scaramuccis comments came in at a time when some of the former critics including JP Morgan, Morgan Stanley, CITI Bank, Bank of America, and several other mainstream hedge funds have started offering crypto investment options to clients amid soaring demand. The growing demand from clients has also changed the tune of many of the Bitcoin critics who now see it as the future of finance.　　Scaramucci Optimistic About DeFi　　During the interview, the hedge fudge manager also gave an optimistic outlook claiming shortly institutional giants or wall street banks

2021-09-28Deep Dive

JP Morgan CEO Says He Does Not “Care About Bitcoin”. Here’s Why

Jamie Dimon, the iconic financial mogul and Chief Executive Officer of multinational investment banking firm JPMorgan Chase recently shared his opinion about the volatile cryptocurrency industry and its flagship asset, Bitcoin (BTC). Speaking in an interview with Times of India (TOI), Dimon said he does not really “care about bitcoin” when asked his take on whether the digital currency should be regulated or not.　　Dimon expressed his amazement at how a growing number of people wastes too much of their “time and breadth” on discussions that are centered on Bitcoin, pointing out the nascent asset class will be regulated by governments eventually.　　“I don‘t really care about Bitcoin. I think people waste too much time and breath on it. But it is going to be regulated. […] And that will constrain it to some extent. But whether it eliminates it, I have no idea and I don’t personally care,” the CEO submitted.　　Dimon said he cannot categorically place the angle the governments will usher in their proposed regulation on the cryptocurrency, noting that it could either be as an asset, security, a currency, or foreign exchange respectively. Either way, Dimon noted he may not be so interested as he is “not a buyer

2021-09-28Deep Dive

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