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By Taxing Crypto, the US Government Has Accepted It’s Here to Stay

Aug-12-2021 04:33:24 AM
Crypto just experienced a major watershed – and it’s time to recognize the silver lining.

Crypto suddenly became part of the U.S. Senate’s debate over the infrastructure bill, and the outcome in my view is the greatest regulatory certainty crypto has ever had in the U.S.

Out of seemingly nowhere, the infrastructure bill introduced an estimated $28 billion tax on the crypto industry. Many in the industry expressed outrage and concern. The crypto-related amendments that were introduced and debated in the Senate focused on a battle over how tax reporting will work and whom it should apply to.

Jeff Bandman is a former senior official at the Commodity Futures Trading Commission who led the agency’s initial virtual currency and blockchain work and was founding director of LabCFTC. He is currently principal of Bandman Advisors.

Here’s the silver lining – and for me a huge “Aha” moment. If the U.S. government thinks it is going to raise $28 billion in taxes from the crypto industry in the next 10 years, it means crypto is here to stay. It means crypto is going to be a new cornerstone of the U.S. economy.

Let me say this another way – the government is going into partnership with the crypto industry.

The government didn’t abolish tobacco – it taxes it. The government taxes alcohol. The government taxes capital gains and income, and all kinds of other things. It does not tax illegal narcotics, it does not tax prostitution (except in Nevada). And once the government gets used to receiving tax revenue, it is almost unprecedented for that to stop.

IF THE U.S. GOVERNMENT THINKS IT IS GOING TO RAISE $28 BILLION IN TAXES FROM THE CRYPTO INDUSTRY IN THE NEXT 10 YEARS – THIS MEANS CRYPTO IS HERE TO STAY.

My first “Aha! Moment” that crypto was here to stay occurred back in 2013-2014, when the government seized copious quantities of bitcoin (BTC, -1.86%) from the illegal Silk Road criminal enterprise.

And what did the government do with all those bitcoins? It auctioned them off to the American people. Wow!

When I teach my introductory courses on crypto-assets law, policy and regulation, in the very first class, I ask the students this riddle: How is bitcoin like a speedboat? (Actually I put up photos of both.)

There is no single right answer, and the responses are clever and creative. It is liquid. It is volatile. It is powerful. It moves rapidly, it moves frictionlessly. Your two happiest days are the day you buy it and the day you sell it.

The answer we arrive at is that the government auctions off seized bitcoin just like it auctions off other seized items – boats, cars, houses and furniture. The government does not auction off narcotics or AK-47s.

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Bitcoin Shows Signs of Exhaustion as Rally ‘Falters’ Before Next Leg Up: Sources

Aug-12-2021 04:26:38 AM
Bitcoin is flashing signs of buyer exhaustion near the $47,000 price tag as bull pressure begins to wane, according to on-chain data and CoinDesk sources.

The crypto is currently changing hands for around $45,000 after reaching a 24-hour top of $46,767, CoinDesk data shows. The temporary stay in price might be short-lived, however, as prices begin toying with major psychological resistance near $50,000, according to some.

“The derivatives markets are long, perpetual funding rates are positive for shorts, indicating short-term positive interest from retail,” Toby Chapple, head of trading at digital asset firm Zerocap, told CoinDesk via Telegram.

On the institutional side, things look slightly different, according to Chapple, who said calendar futures across both bitcoin (BTC, -1.61%) and ether (ETH, -2.04%) were “fairly compressed” pointing toward open interest growing for short positions.


BTCUSD Daily Chart
Source: TradingView
Bitcoin is up 50% over a three-week period, having broken a long-term moving average on the back of strong institutional and retail demand. Still, the crypto is showing signs of buyer exhaustion as seen by the relative strength index, an indicator used to gauge a given trend.
“Markets need to digest some overbought levels before attempting $50,000-$55,000 resistance,” Chapple said.

And while bitcoin’s rally on the back of Ethereum’s ‘London’ Hard Fork has helped drive prices, political tensions in the U.S. and China’s crackdown remain a “significant threat” to the crypto market, Jehan Chu, managing partner at Hong Kong-based crypto investment firm Kenetic Capital, told CoinDesk via WhatsApp on Thursday.

“With the ‘Saylor Surge’ and the ‘Elon Effect’ exhausted, bitcoin likely falters at $50,000 before crashing to sub-$30,000 levels, clearing space for a new year-end institutional catalyst to lift past all-time highs,” said Chu in relation to a mid-term projection on prices.

In the immediate short-term, a pullback is likely as demonstrated by the number of active bitcoin addresses beginning to decline once again, according to data by provider Glassnode.

Other cryptos in the top 20 by market capitalization over a 24-hour period were mixed with tron (TRX, +7.6%) and XRP (+14.12%) posting the largest gains while internet computer and uniswap (UNI, -3.64%) lost out the most.

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Bitcoin Fund Outflows Slow but Investors Start Exiting Ether Funds

Jun-15-2021 03:58:01 AM
Money being pulled out of digital-asset investment funds slowed somewhat last week. However, while net redemptions from bitcoin-focused funds shrank, some investors seem to be souring on ether.

Overall, digital-asset funds experienced net outflows of $21 million during the week ending June 11, down from $94 million pulled out of funds the prior week, according to a Monday report by CoinShares.

The decline in outflows might be an early sign of bearishness has peaked.
Investors have been pulling money from bitcoin funds in recent weeks as the price of the largest cryptocurrency by market value traded below $40,000, down from the all-time high near $65,000 reached in April.
Funds focused on altcoins including ether, the native cryptocurrency of the Ethereum blockchain, as well as XRP had been favored over the past month as investors diversified from bitcoin funds. The latest data suggests that trend might be starting to shift.
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XRP price soars to new highs after recent legal victories and relisting rumors

Jun-15-2021 03:51:35 AM
XRP price broke out to a new multiyear high on April 13 as a surge of trading volume in the early morning hours continued into mid-day.

Data from Cointelegraph Markets and TradingView shows that XRP registered a low of $1.42 before staging a 34% rally to a high of $1.88.
XRP/USDT 4-hour chart. Source: TradingView

The surge in price comes on the same day as both Bitcoin (BTC) and Ether (ETH) established new all-time highs as mainstream excitement for the cryptocurrency sector is on the uptrend ahead Coinbase's direct listing on April 14.

Momentum for XRP has been building over the past couple of weeks thanks to a series of legal victories for Ripple in its battle with the United States Securities Exchange Commission, along with rumors that the token may be relisted on multiple exchanges.

Ripple has also been making a marketing push to tout the various capabilities of RippleNET, including the benefits of its on-demand liquidity that eliminates pre-funding of destination accounts and reduces operational costs.

According to data from Cointelegraph Markets Pro, market conditions for XRP have been favorable for some time.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
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Gold vs cryptocurrency: Which one should you buy and why?

May-16-2021 01:51:46 PM
NEW DELHI: Indian investors wrestled with a mega puzzle on the auspicious occasion of Akshaya Tritiya this year: Should they buy gold - whose physical form became inaccessible because of Covid curbs, or go for cryptocurrencies - which have gained momentum rapidly over the past few months, as millennials go gaga over it, inflating prices constantly?

Cryptocurrencies like Bitcoin and Dogecoin have created a lot of buzz globally in recent times, and many Indian investors have also jumped o ..

Read more at:
https://economictimes.indiatimes.com/markets/commodities/news/gold-vs-cryptocurrency-which-one-should-you-buy-and-why/articleshow/82675162.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
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Bitcoin Price Drops After Report Binance Under US Probe, Tesla Fallout

May-16-2021 01:44:49 PM
Bitcoin fell to a more than two-month low on Thursday in the wake of Tesla Inc chief Elon Musk reversing his stance on accepting the digital currency, selling off for a second straight session on news of a US probe into Binance, one of the world's biggest cryptocurrency exchanges. Thursday's sell-off followed a 17 percent drop in the price of the world's largest cryptocurrency on Wednesday following Musk's remarks that Tesla would stop accepting the digital token as payment for its electric cars. Bloomberg reported on Thursday that as part of the Binance inquiry, the US.

Justice Department and the Internal Revenue Service have sought information from individuals with insight into its business. "Bitcoin's (price in India) critics will once again pounce on the many colorful personalities that seek to connect themselves with space," said Paolo Ardoino, chief technology officer at crypto exchange Bitfinex."However, it is important to remember that bitcoin is much bigger than the celebrities of today or indeed the makers and shakers in the space." Bitcoin dropped to $45,700, the lowest since March 1, and was last down 1.6 percent at $48,595. Ethereum (price in India), the second-largest cryptocurrency, dropped to a session low of $3,543.62 and last changed hands at $3,633, down 4.6 percent.

On Wednesday, Ethereum hit another all-time high of $4,380.64. Tesla's announcement on February 8 that it had bought $1.5 billion of bitcoin and would accept it as payment for its electric vehicles has been one factor behind the digital currency's surge this year. Musk has faced pressure over Bitcoin's environmental impact.
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Market Wrap: Bitcoin Near $53K After Major Drop as Ether Tops $2,800 for First Time

Apr-29-2021 04:56:39 PM
Traders and analysts continue to talk up ether and alternative cryptocurrencies as bitcoin struggles to regain the $64,000 record price level attained weeks ago.

Bitcoin (BTC) trading around $52,964 as of 21:00 UTC (4 p.m. ET). Slipping 3.6% over the previous 24 hours.
Bitcoin’s 24-hour range: $52,622-$55,851 (CoinDesk 20)
BTC below the 10-hour and the 50-hour moving averages on the hourly chart, a bearish signal for market technicians.

Bitcoin’s hourly price chart on Bitstamp since April 26.
Source: TradingView
The price of bitcoin was dropping Thursday, going as low as $52,622 and settling at $52,964 as of press time. There’s been an almost $3,000 price change over the past 24 hours for the world’s oldest cryptocurrency, ranging from $55,851 down to $52,622.

It’s the season for alternative cryptocurrencies, or “alts,” according to Rich Rosenblum, president of crypto market maker GSR. This might help explain why bitcoin has suddenly lost some of the momentum seen earlier this week.

“When new money flows into BTC, people are less focused on alts,” Rosenblum told CoinDesk. “Once it feels like the bullish pattern for BTC breaks down, people roll some of those profits into alts.”

Bitcoin market dominance
The market dominance of bitcoin continues to decline, and it’s less than half of the total blockchain market Thursday. At 49.5% at press time it is down from 73% at the start of 2021.
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What an Increasingly Booming Economy Means for Bitcoin

Apr-29-2021 04:31:49 PM
What macro role does bitcoin play as GDP and consumer confidence grow?

This episode is sponsored by Nexo.io and NEAR.org.

Download this episode

For the past year, bitcoin’s narrative has been deeply tied to the larger macro narrative of looming inflation. As the economy starts to boom, many continue to point to the spectre of inflation as a bullish force for bitcoin.

In today’s episode, NLW explores growing confidence in the markets and what it means for bitcoin. In particular, he looks at what it would mean if consumer inflation didn’t show up. Would bitcoin be cast aside, or are there properties and uses that make it relevant even outside its role as a monetary hedge?

See also: Fed’s Powell Says Market, as Exemplified by Dogecoin, Is ‘a Bit Frothy’

Image credit: Olivier Le Moal/iStock/Getty Images Plus
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Analysts say Coinbase listing represents a 'watershed’ moment for crypto

Apr-14-2021 05:08:17 AM
Coinbase, the top cryptocurrency exchange in the United States, will soon be a publicly listed company once its COIN stock launches on the Nasdaq stock exchange on April 14.

Generally, the sentiment around the listing has been overwhelmingly positive from both the crypto and traditional financial markets. With the date just one day away, analysts have been issuing a variety of perspectives related to how the listing could impact Bitcoin and altcoin prices.
Coinbase rally, crypto top?

As Cointelegraph previously reported, Coinbase is not actually conducting an initial public offering (IPO).

Instead, the exchange is directly listing on the Nasdaq, bypassing the need to work with investment banks, which is often costly for businesses.

Despite the lack of involvement of investment banks in the process of listing Coinbase, there is significant hype around COIN.

While speaking CNBC's Squawk Box on April 12, Jim Cramer said:

"You gotta buy Coinbase when that deal comes. Even though it’s a $100 billion deal, this has become common knowledge that there are many companies that are going to switch. MicroStrategy has always been the leader, so others would want to follow."

There are several reasons why investors in the traditional financial market are optimistic abou COIN.

Most notably, the two main factors are to get exposure to the crypto market without owning cryptocurrencies and the lucrative business model of Coinbase.

According to Ben Lilly, co-founder of Jarvis Labs:

"Coinbase is the watershed moment in terms of legitimizing some valuations you see in crypto, particularly around DEXs who have a tiny fraction of the amount of employees and opex [operating expenses] that a Coinbase or ICE has. Crypto is an asset with incredible volume and diversity, which is poised to grow even more. Coinbase showcases how profitable exposure to this market can be. Also, I expect a wave of M&A and VC activity on the heels of this as private investors will be asking their fund managers for exposure to this space."

A financial researcher from John Street Capital, a venture capital firm, noted that Coinbase is massively profitable, with an annual revenue of $1.8 billion.

Atop the compelling financial report and revenue, the user base of Coinbase is much larger than Cash App and Venmo.

In fact, Coinbase has the biggest user base out of all financial institutions in the U.S., with the exception of JPMorgan Chase. The researcher wrote:

"The @coinbase team announced 1Q21 data including revenue of ~$1.8B, adj EBITDA of $1.1B, NI of $730-$800M, trading volume of $335B & assets on the platform of $223B (11.3% of cryptoasset market) with 56M users Run-rate of $7.2B in revenue / $4.4B in EBITDA / $3.0B of NI. The 56M user # is bigger than @CashApp & @Venmo and significantly larger than @RobinhoodApp & @eToro . That's greater than every bank not named $JPM."

Although some traders believe crypto could reach a top after the Coinbase listing, the market sentiment building up toward the listing is highly positive.

When asked about the significance of the Coinbase listing, Ben Lilly said:

"You always need that bridge. How legacy markets value a company that operates in crypto is that bridge. Now legacy investors can walk across the bridge and realize it’s an untapped ocean of investable assets. They might not invest right away, but their framework for how to value something gets easier."

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, believes the Coinbase "IPO" could boost Bitcoin to $70,000. He said:

"Coinbase IPO May Boost #Bitcoin to $70,000, Like #Tesla to $60,000 — The lowest 30-day volatility since October indicates Bitcoin is ripe to exit its cage and bull-market continuation is favored for the next $10,000 move. Similar to Tesla's equity-wealth allocation to Bitcoin.."

How did Galaxy Digital perform when it listed on Canada's stock exchange?

Another crypto firm that went public in the past year is billionaire investor Mike Novogratz's Galaxy Digital.

Since Galaxy Digital listed in Canada's stock exchange, its stock has rise more than twentyfold.
Galaxy Digital stock price. Source: Yahoo Finance

Although the business model and the market capitalization of the two companies at launch are massively different, this shows that there is interest in publicly listed crypto-focused companies at launch, which will likely be reflected in COIN's value.
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Bitcoin futures open interest soars to new heights ahead of Coinbase listing

Apr-14-2021 04:58:06 AM
Open interest in Bitcoin futures has surged to new record highs ahead of Coinbase’s April 14 direct listing on the Nasdaq.

Crypto market data aggregator Glassode states that Bitcoin open interest has exceeded $27 billion for the first time as Bitcoin pushed into new record highs above $63,000. The milestone suggests traders may be speculating on higher prices, although some may also be hedging against incoming volatility.

The lion’s share of trading activity is on Binance, where the $5.2 billion in positions accounts for almost 20% of all outstanding positions being held on the exchange. It’s followed by Bybit with $4.66 billion, OKEX with $3.75 billion, and then Huobi, FTX, and CME with roughly $3 billion each.

Despite the record open interest, Bitcoin futures volumes appear to have been declining over the past month, sagging from $117 billion as of March 15 to range between $50 billion and $75 billion during April, according to crypto derivatives data aggregator, Skew.

The waning volume may suggest traders have become increasingly cautious about opening new positions as the date for Coinbase’s listing has approached, with a significant share of open interest likely representing positions that have been opened during previous weeks and months.

Of the $75 billion worth of BTC futures that changed hands over the past 24 hours, Binance makes up more than one-third of the volume with $26.9 billion, followed by Huobi with $14.5 billion, OKEx with $12.7 billion, and Bybit with $10.6 billion.

By contrast, open interest in Bitcoin options has declined since a record $6 billion worth of contracts expired at the end of March. Options volumes have increased during April, with the data suggesting many traders have been hedging their positions as billions were mobilized to protect against a crash down to $40,000 last week.

Bitcoin is not the only market that derivatives traders are speculating on, with open interest in Ethereum futures also spiking to record highs above $8 billion as volumes increased over recent weeks.

Ethereum’s options markets have also seen an increase in activity, with open interest pushing into 30-day highs near $3.2 billion. Ether options volumes jumped 90% overnight, surging from $200 million to $380 million.

However, many Ethereum traders appear to be looking beyond Coinbase’s listing this week, with analyst Cantering Clark noting significant volume targeting prices above $3,200 for the end of June earlier this month.
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Bitcoin Price Shoots Past $60K, Ether Hits New All-Time High in Early Saturday Trading

Apr-11-2021 05:13:37 PM
Bitcoin’s price neared its all-time high of $61,712 early Saturday while ether (ETH, +1.61%) set a new all-time high at $2,190.

According to CoinDesk’s Bitcoin price page, the leading cryptocurrency traded above $60,000 for the first time in nearly a month after spending weeks vacillating between $52,000 and the upper $50,000s. Bitcoin pulled back marginally after peaking around $60,900, though it remains above the psychological marker as of press time.

Bitcoin last hit an all-time high in mid-March, according to CoinGecko.


Bitcoin's price blasted past $60,000 early Saturday.(Bitcoin Price Index)
Meanwhile ether, the second-largest cryptocurrency by market cap, came close to $2,200, just days after breaching $2,100 for the first time.


Ether came close to $2,200 early Saturday.(Ether Price Index)
While it’s unclear if there’s a causation, the price action comes just days before leading U.S. exchange Coinbase begins trading on Nasdaq in one of the crypto industry’s most anticipated events. A sign of the maturing market, the listing will likely give Wall Street traders their most accessible bet yet on growth in the space.

Some institutional investors have wasted little time. Friday, Daniel Loeb, CEO of $17 billion hedge fund Third Point revealed he was a hodler in response to a CoinDesk report. He’s hardly alone: institutional funds have flooded the markets and have been deemed at least partly responsible for the 2020-2021 rally.

Bitcoin bulls were further bolstered on Friday by the idea that an exchange-traded fund (ETF) with exposure to the digital asset space might be approved in 2021, after the Securities and Exchange Commission (SEC) confirmed it was reviewing ETF giant WisdomTree’s application.

The regulator previously began reviewing VanEck’s ETF application last month, and another six companies have filed initial registration forms declaring their own efforts to launch a regulated bitcoin (BTC, +1.18%) investment vehicle.

The broader digital asset space has seen tremendous froth over the past few months, with investors and industry participants trading heavily in decentralized finance tools, non-fungible tokens and altcoins like doge, which hit a peak of $0.08 in February, eight times its value a month
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Blockchain 101

Mar-30-2021 08:08:21 AM
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What Can a Blockchain Do?

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What is a Distributed Ledger?

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As the implications of the invention of have become understood, a certain hype has sprung up around blockchain technology. This is, perhaps, because it is so easy to imagine high-level use cases. But, the technology has also been closely examined: millions of dollars have been spent researching blockchain technology over the past few years, and […]


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Hard Fork vs Soft Fork

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