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The Bitcoin Saga: A Look At BTC’s History Of Up’s And Down’s

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The Bitcoin Saga: A Look At BTC's History Of Up's And Down's

Bitcoin has ran into its fair share of judgement and hate, if it’s from people accusing the blockchain of harming the earth, or countries banning them, we will take a look at Bitcoin’s run-ins and how it has gone through minor setbacks, and major comebacks.

A History Lesson

We all know the powerhouse that is starting to raise fresh eyes and debates on the new way of Money. The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The currency began use in 2009 when it’s implementation was released as open-source software. Bitcoin are created as a reward for a process known as mining. Among asset classes, Bitcoin has had one of the more volatile trading histories. The cryptocurrency’s very first big price increase occurred in 2010 when the value of a single bitcoin jumped from just a fraction of a penny to $0.08. Today that same coin is worth around $54k; not many people saw this coming at all as it shook the world, and started the new wave of finance.

Related Reading | How NFTs Are Impacting Artists’ Lives: Enter Bullseum

 

The Up’s And Downs, The Good And The Bad

BTC has faced many ups and downs in years, on top of bans and many tiny setbacks – but still the blockchain has risen. Bitcoin caught a huge break in 2017, when BTC caught mainstream attention; many developments  and media outlets have had some sort of impact on price. People like Elon Musk and Jack Dorsey have had success in garnishing both good and bad press for these coins.

Other things such as Bitcoin halving events, in which the total supply of Bitcoin available in the market declines due to a reduction in miner rewards because of an algorithmic change, have all played a role in price increases. The price of Bitcoin since the May 2020 halving has seen an increase of nearly 300%. Previous halving events in 2012 and 2016 produced significantly larger price gains of 8,000% and 600%, respectively. Among many factors, the halving in the reward given to miners that also doubles the asset’s stock-to-flow ratio seems to have a significant effect on Bitcoin’s price and that is important to know.

Many countries have banned or attempted to ban the mining of these coins as it left a carbon print that is impacting the environment. China has often taken the stance that crypto mining is an “extremely harmful” industry that jeopardizes China’s pursuit of carbon neutrality, as stated by Meng Wei, a spokesperson for China’s macroeconomic agency, the National Development and Reform Commission. On the other side of the coin, both New York and El Salvador have made cryptocurrency and bitcoin a top priority.

This is an ongoing battle, and the outcome and winner will come in the future only time will tell if bitcoin will face another crash or rise

Related Reading | Exchanges See Bitcoin Outflows For 7th Straight Day As BTC Price Begins Recovery

 

 

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The NFT Investor’s Worst Nightmare: IRS Craves For A Crackdown

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NFT

Last year, when the NFT Everydays: The First 5,000 Days by Beeple sold at Christie’s for $69.3 million, it catapulted the non-fungible token’s market into the mainstream. A large number of people have invested billions in this industry and the boom is not stopping.

Recently, NewsBTC reported an aggressive surge in the NFT trading volume this year despite the falling crypto market. A report by Dappradar showed that in the first ten days of January, NFT trading generated around $11.9 billion.

Our previous report quotes Mason Nystrom, a senior research analyst at Messari, who alleged that “The cryptomarkets are fairly correlated – the market tends to rise and fall with Bitcoin. This has made it surprisingly interesting over the recent downturn as the NFT market has continued to increase in volumes.”

However, the rapid rise of the NFT space has not moved the officials of the Internal Revenue Service (IRS) to shed some light on the taxation parameters for the assets.

Even taxation experts are confused on the matter and can only speculate about the possible outcomes. As a large share of NFT traffic comes from the younger generations, are users prepared for tax filing season? The IRS is gazing at future penalties.

Related Reading | January Proves Turbulent For Investors But NFT And GameFi Seems To Be Eating Good

The IRS Gears Up

In November 2021, the $1.2 trillion infrastructure bill was signed into law by President Joe Biden as a key part of his economic agenda, proposing large investments in the country’s infrastructure. The funding is to come from a few sources involving tax changes.

Watching over the cryptocurrency industry’s boom, the infrastructure bill directly targets its investors, but they fail to educate digital assets users on all the information they need to report. The unawareness could result in possible felony convictions for tax evasion.

However, the law updates the definition of the terms “broker” and “digital assets”, and clarifies that users with regular transactions or any crypto transaction over $10,000 must report that data to the IRS. In this case, taxation works for digital assets in a similar way it does for capital gains relative to stock and bond trades.

However, non-fungible tokens are not close to being as clearly defined by the law as other digital assets, so there is a lot of room left for interpretation. That’s a dangerous game for investors, but the IRS investigators seem eager for cases to surge soon and are ready to crackdown on the market. They might see billions of dollars coming from the NFT gains tax bills.

Are NFT Investors Evading Taxes?

The murky confusion originates because it is not clear whether NFTs are taxable as art collectibles or not. It is fundamental to be aware of this because most crypto assets and stocks have a long-term capital-gains rate up to 20%, but for art collectibles, it’s 28%. And if NFTs are to be considered as ordinary income, the rate could go as high as 37%.

Michael Desmond, the former chief counsel at the IRS who is now a partner at Gibson, Dunn & Crutcher, commented for Bloomberg that the rising NFT trading traffic might force the IRS to clarify the rules, “but it may begin auditing people first.”

The best-case scenario is gearing up and going through large amounts of paperwork, like the NFT investor Adam Hollander did, spending 50 hours checking months’ worth of transactions. He stated that “It’s an absolute nightmare,” and added that “There are people who aren’t going to be willing to do what I’m doing.”

And that nightmare really is the best-case scenario compared to tax evasion penalties.

Related Reading | Sports NFT Marketplace Lympo Suffers An $18.7 Million Hack

Total crypto market cap at $1,9 trillion in the daily chart | Source: TradingView.com
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Mercedes Joins with ART2PEOPLE 5 NFT Artists For G-Wagon NFTs

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Mercedes Joins with ART2PEOPLE 5 NFT Artists For G-Wagon NFTs