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4chan’s Chainlink, Tendies picks made it the top “crypto fund” of 2020

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A bunch of internet anons and their crypto picks have purportedly outperformed hedge funds in the crypto space, according to data by on-chain analytics firm Messari.

4chan’s /biz channel, the tongue-in-cheek go-to for trollers (and even the sane) for business and financial advice, has picked some top-performing altcoins this year. These include altcoins like Chainlink (LINK) and Tendies (TEND), which returned over 600% for investors this year each, data shows.

The picks seem even more impressive as three high-profile crypto funds—Adaptive Capital, Adamant Capital, Tetras Capital—went bust earlier this year after citing poor performance.

But the online forum seemed to have it better. “4chan Capital the best performing fund YTD,” commented Messari analyst Ryan Watkins on Twitter, referring to the returns on the altcoins “shilled”—or publicized usually for reasons of self-interest—by the forum’s users.

In comparison, Bitcoin, Ethereum, and XRP, the top-three cryptocurrencies by market cap as per price tracking site CoinGecko, have returned 60%, 70%, and 34%—which are still stellar financial gains but not as much as 4chan picks.

An example of a 4chan post on Chainlink. Image: 4chan

Informed guesses or social influencing?

However, while the gains are envious, the returns do not imply a paradigm shift in the future of crypto fund management.

For one, the crypto market has, as a whole, trended massively upwards in the past few months based on the hype and sentiment around DeFi projects. The market was valued at over $187 on January 1 this year; it is now $350 billion as per figures on online broker TradingView. This has pushed altcoin valuations massively.

A rise, followed by a fall. Image: TradingView

Second is that social influencing, like sports blog Barstool Sports founder David Portnoy did last week for LINK, usually ends up in a short-term price rise and a drastic drop as early holders sell at a profit.

Portnoy was even transparent in his approach to crypto trading:

“The thing I like about pump-and-dumps in crypto is it’s encouraged. In crypto, you can pump and dump all day long.”

Meanwhile, a few other 4chan picks have gone on to rally massively this year, as CryptoSlate earlier reported. These include Opyn y.curve Insurance token, which rallied over 10,000% after 4chan forum users started shilling the project online.

It even led one investor to take notice. Andrew Kang, the founder of Mechanism Capital, tweeted in July the importance of 4chan in the crypto industry is not one to ignore.

All in all, even as anon forum users might look cool in a cyberpunk era, the old adage applies: if something looks too good to be true, it usually is.

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Source: https://cryptoslate.com/4chans-chainlink-tendies-picks-made-it-the-top-crypto-fund-of-2020/

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India Reportedly Plans to Tax Crypto Investors As Bitcoin Price and Trading Activities Soar

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Barely ten months after the Indian Supreme Court lifted the RBI’s ban on cryptocurrency transactions, fresh reports from yesterday revealed that the country’s tax authority is now keeping a close watch on crypto traders as Bitcoin’s price continues its bullish trend.

Taxing Crypto Gains

According to local media, the Indian Tax Department is already in possession of data belonging to investors who invested in Bitcoin or cryptocurrencies through banking channels before the RBI’s ban in 2018. 

This development is coming after data shows a tremendous increase in crypto trading activities in India. Since the crypto ban was lifted earlier this year, retail investors between the ages of 25 and 40 have been spending millions of dollars on crypto trading every day. 

Over $25 Million Daily

Two of India’s largest crypto trading platforms, Binance-acquired WazirX and CoinDCX, saw a significant increase in activities over the last six months. According to an earlier report, WazirX recorded a massive 125% increase in user signups in the last two quarters. The exchange also has a daily trading volume of $19-26 million, with more than 85% of the transaction coming from Indian traders. 

Some experts believe it will be difficult for the country to tax crypto because there’s no regulation in place for crypto dealings. They feel a regulatory framework will provide the needed clarity to make taxation easier. While India is yet to release its crypto regulation, an earlier report suggests that the country may regulate crypto as commodities.

Declaring Bitcoin Profits As Capital Gains

Although it is unclear how India plans to implement the tax law, sources familiar with the matter claimed that the country’s taxman is already preparing to collect tax on the gains made from Bitcoin. And notice may be sent out to investors if “something goes out of this.”

Experts believe that the tax authorities may classify crypto gains as business income, and investors may have to pay up to 30% tax on profits made from selling cryptocurrencies. 

However, some tax experts are advising their clients to declare their Bitcoin earnings as capital gains, which is similar to profits generated from shares.

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Source: https://cryptopotato.com/india-reportedly-plans-to-tax-crypto-investors-as-bitcoin-price-and-trading-activities-soar/

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Bolivia Essentially Banned Crypto but Blockchain Advocates Are Pushing Back

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Earlier this year, Bolivian blockchain engineer Mario Blacutt – previously known in crypto circles only as “Berzeck” –finally felt safe enough to reveal his name and come out as the creator of a new blockchain network. 

Blacutt let down his guard after the left-wing government that had banned crypto fell in November 2019, and its leader, Evo Morales, fled to Mexico

A year earlier, Blacutt had his bank accounts shut down and his credit card taken away. The banks cited a directive put out by Bolivia’s central bank (BCB) in 2014 prohibiting virtual currencies, and flagged funds received in Blacutt’s accounts via crypto exchanges Bitstamp and Bitinka. Blacutt was paid in cryptocurrency.

“They said it was to protect me. This is a funny thing,” Blacutt said.

Even as many governments around the world embrace or at least regulate cryptocurrency, Bolivia is one of the rare countries that tried to stamp it out entirely. 

A 2014 central bank circular technically only prohibited the use of crypto by banks and in commercial transactions or payments. But in 2017, Bolivian authorities arrested 60 individuals who were allegedly “undergoing training related to the investment of money in cryptocurrencies,” according to a statement released by the country’s financial authority ASFI. 

So when Morales fled, Blacutt felt more at ease. “After he was ousted, I was more free to use my identity because I was optimistic that things were finally changing,” he told CoinDesk. 

But now, Morales is back.

In the balance

The right-wing regime that replaced the Morales regime has quickly become unpopular as Bolivia’s economy suffers during the coronavirus pandemic. 

Luis Arce, former economic minister to Morales, won the presidency in a landslide, restoring the socialist government to power; last month, the exiled Morales made a triumphant return to Bolivia.

Now, many things hang in the balance, including crypto. 

Alberto Bonadona, senior economist and emeritus professor at Universidad Mayor de San Andrés (UMSA) in Bolivia told CoinDesk the current government is unlikely to reverse the crypto ban.

“All these kinds of cryptocurrencies are not quite welcome in Bolivia,” Bonadona said.

Cryptocurrencies like bitcoin are still widely viewed with skepticism in Bolivia, and adoption is slow compared to other Latin American countries like Mexico or Venezuela

Although Blacutt doesn’t believe he’s in any real danger, the return of the socialist government, he said, may put crypto enthusiasts in a “difficult position.” 

But a growing community of advocates including Bolivian software engineers, entrepreneurs and developers are determined to change the government’s position.

Even though policy remains unchanged, sentiment may be changing, albeit slowly. The interim government that came to power after Morales’ exit did not lift the ban, but the blockchain community visibly grew this year. Bolivian users only traded a monthly average of $21,330 on peer-to-peer exchange Paxful, but the platform saw a 570% increase in trading volume compared to 2019, while new user registrations went up by 230%. 

LocalBitcoins saw over 450% growth in trading volumes between January and September 2020, recording an all-time daily high of $17,000 on Sept. 2. 

Why ban crypto? 

In 2014, Bolivian software engineer Gabriela Melendrez was writing her undergraduate thesis on blockchain technology when the country’s central bank (BCB) issued the directive banning the use of “any kind of currency that is not issued and controlled by a government or an authorized entity.”

The directive was the first of its kind from a South American nation, and named a range of virtual currencies including bitcoin, namecoin, devcoin, quark and others as currencies that “do not belong to any state, country or economic zone” because they can cause losses to their holders.

Melendrez interviewed BCB personnel following the ban.

“The resolution was born to protect the population against pyramid schemes, Ponzi schemes and things like that. That was the answer they gave me,” Melendrez told CoinDesk via Telegram.

The 2017 statement by the ASFI reminded the citizens of Bolivia that this type of activity is prohibited across the nation because they may seek to trick Bolivians into losing their money and savings.   

The central bank and ASFI did not respond to requests for comment by press time.

Blacutt confirmed the government was nervous about scams and the use of cryptocurrencies to fund criminal activities. But that was only part of the story. 

The BCB statement also said the ban is necessary to ensure the stability and purchasing power of the national currency, the boliviano. 

When the socialist government came to power in October, the country’s foreign reserves fell to a record low, the lowest in 13 years, down $1.3 billion since September. Wealthy Bolivians had begun sending money abroad, fearing President Arce’s promised wealth tax on millionaires. 

Cryptocurrencies “could help people to take money out of the economy. Right now, they’re trying to stop that,” Bonadona said. 

An uneasy fit 

When systems engineer Alvaro Guzman first heard about bitcoin back in 2013, he stayed up all night discussing the possible applications of blockchain in Bolivia.

“The first area I saw is, of course, an alternative to traditional banking. The second and very interesting area of development is on transparency,” Guzman told CoinDesk, citing claims of fraud that surrounded Morales’ fourth-term election last year, which led to his eventual resignation.

Guzman suggested that blockchain-based banking and cryptocurrencies can offer a viable alternative to traditional financial services in the country for a number of reasons, one being its high unbanked population. 

According to World Bank statistics, in 2017, 46% of Bolivian adults did not have a bank account while only 7% of adults had a credit card. For comparison, 29% of Venezuelan adults claimed to own a credit card in 2017.

Bolivia has a very large, informal economy that is not taxed or regulated by the government, Guzman said. In fact, it is the largest informal economy in the world, according to the International Monetary Fund. 

While a cash-driven economy and large unbanked population are driving crypto adoption in Mexico, Bolivia doesn’t seem to be showing the same momentum or interest in digital assets. 

Bonadona said the government and most Bolivians still view bitcoin as an instrument for speculation as opposed to a reserve or currency that can be used for international transactions. 

In Bolivia, Bonadona added, speculative investment instruments are not all the rage. According to the 2020 Investment Climate Statement by the U.S. Department of State, the Bolivian stock exchange (BBV) is very small, with more than 95% of transactions concentrated in bonds and debt instruments.

“There is the idea that basically this is a bubble and somehow, in some time, it will explode and won’t do any good for anybody who invested in it,” Bonadona said. 

Persistent advocates

Although it may have looked like an outright ban on the usage of crypto, Blacutt and Guzman agree that the 2014 central bank directive did not ban owning or trading crypto on exchanges, but only limited paying for goods and services with cryptocurrencies (hence keeping it out of circulation) and prohibited banks from transacting with them. 

The ban is very specific in saying that Bolivia is not allowing commercial transactions using a currency that’s not issued by the central bank, Guzman said, adding that he can’t go out and buy a burger or a car with bitcoin. 

“But that’s the only thing that they have written in the law. … The problem is that in practice, if you promote bitcoin, they can arrest you,” Blacutt said. 

Despite the ban, and the authorities’ somewhat haphazard interpretation of it, blockchain believers powered ahead through the Morales regime and seemed undeterred by the Socialist party’s return to power. 

“Technology is always one step ahead of legislation,” Guzman said. 

After the ban was implemented, crypto enthusiasts formed networks that traded in cash underground, making themselves invisible to the government, Guzman added.

According to blockchain developer Huascar Miranda Martinez, few Bolivians trade on peer-to-peer platforms like LocalBitcoins and even less use exchanges like Binance (where they are not allowed to trade with a Bolivian credit card), although that number is slowly growing. People mostly trade bitcoin in person to avoid interactions with banks: Buyers and sellers agree on prices in WhatsApp groups or other social media networks, and meet at restaurants or cafes to exchange bitcoin wallet addresses for cash.

“The bank prohibition is not a problem for us. It’s a problem for the bank,” Martinez said. 

To avoid getting flagged by banks, Guzman said people are now careful about how much money they transfer from wallets or exchanges, and make sure banks are not used in a way that breaks the law. 

“Basically, the only thing that the bank can do is say, hey, you’re getting $70,000? Who sent this money? How did you get it? And depending on the response, and the amount, the bank can follow up with an investigation and look for the source,” Guzman said. 

Road to adoption

Bolivia is in recession, compounded by the COVID-19 health crisis. Its economy is projected to contract by 7.3% this year, according to the World Bank. Although the pandemic’s economic fallout is driving crypto adoption in countries like Nigeria, where a tech-savvy population is increasingly using bitcoin as a hedge against inflation, in Bolivia people still seem to prefer physical assets like jewelry or cash.  

Guzman says this may have to do with a lack of knowledge of digital currency. Even if Bolivians buy things online, people still end up paying in cash, Guzman said, either on delivery or using a third party.

Bolivia’s blockchain activists aim to communicate with both the people and the government, helping them understand the broader applications of blockchain technology, Melendrez said.

Melendrez works with various crypto projects and founded Bolivian Mind Blockchain, a platform for learning and sharing knowledge about the technology. 

“Nowadays we are working on education and presenting projects that could help our society understand the technology,” Melendrez said. 

She eventually met Guzman, who was hosting meetings over beer to talk about community interest in cryptocurrencies. Lately, and more urgently, Guzman has been meeting with former lawmakers and experts to find ways to open a discussion with the government. 

Meanwhile, blockchain projects are slowly coming out of the woodwork: A Bolivian cattle ranch is to be tokenized so investors can trade physical assets digitally, and a blockchain advocate Carlos Rodrigo, has created a gold tokenization project

“I want to launch the project, and use that to show the government how we can raise capital in order to expand natural resources in our country with the private sector,” Rodrigo said. 

Rodrigo is hopeful the government will reverse the ban. Eventually, he said, “they’re going to do it.”

Disclosure

Source: https://www.coindesk.com/bolivia-crypto-ban

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U.S. Treasury’s Brian Brooks: ‘Nobody Is Going to Ban Bitcoin’

On Friday (December 4), during an interview on CNBC’s “Squawk Box“, Brian P. Brooks, Acting Comptroller (since May) at the Office of the Comptroller of the Currency (OCC), said that “nobody is going to ban Bitcoin.” Brooks is currently also a member of the Board of Directors of Federal Deposit Insurance Corporation (FDIC). Between September 2018 and […]

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On Friday (December 4), during an interview on CNBC’s “Squawk Box“, Brian P. Brooks, Acting Comptroller (since May) at the Office of the Comptroller of the Currency (OCC), said that “nobody is going to ban Bitcoin.”

Brooks is currently also a member of the Board of Directors of Federal Deposit Insurance Corporation (FDIC). Between September 2018 and March 2020, he served as Chief Legal Officer at crypto exchange Coinbase.

The OCC is “an independent bureau of the U.S. Department of the Treasury that charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks. Its goal is to ensure that the banks it supervises “operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.”

Brooks’ comments about Bitcoin and cryptocurrencies in general came during an interview with Suawk Box co-anchors Melissa Lee and Joe Kernen.

With Bitcoin trading around $19,000 at the time of today’s interview, Lee started the interview by asking Brooks about the tweet below by Coinbase CEO Brian Armstrong:

Brooks replied:

“Melissa, you know rumors abound within Bitcoin more than almost any other place, but I would tell you is we’re very focused on getting this right. We’re very focused on not killing this, and it’s equally important that we develop the networks behind Bitcoin and other cryptos…”

Lee then asked if there could be some new crypto regulations before the end of Trump’s first term in office.

Brooks answered:

“I think you’re going to see a lot of good news for crypto by the end of the Trump term. Some is going to have to do with banks connecting to blockchains, some of it is going be more clarity around the nature of these assets. So, believe me, there’s going to be very positive messages coming up.

“At the same time, it’s a dangerous world out there. We have to be honest about that, but nobody is going to ban Bitcoin. Nobody is going to ban some of these transmission technologies. I think it’s going to be a lot less bad than people worry about.”

On November 10, Brooks testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and as part of his prepared statement, spoke about cryptoassets.

Brooks was appearing as a witness at a committee hearing titled “Oversight of Financial Regulators“. The other witnesses were the Honorable Randal K. Quarles, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System, the Honorable Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation, and the Honorable Rodney E. Hood, Chairman, National Credit Union Administration.

With regard to crypto, here is what Brooks had to say about usage of cryptocurrencies (including stablecoins) in the U.S and what actions the OCC has taken to respond to this usage:

“Today, roughly 60 million Americans own some type of cryptocurrency, with a total market cap of nearly $430 billion. These figures clearly illustrate that this payment mechanism is now firmly entrenched in the financial mainstream. Cryptocurrency has become a popular mechanism for sending and receiving payments for goods and services because transactions post in real time and provide convenience and security. Cryptocurrency also describes categories of specific currencies of value, and the rise in the use of stablecoins demonstrates consumers’ comfort with its use.”

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