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Congress Weighs In on Cryptocurrency Taxation

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Bipartisan members of the House are advocating for more clarity in the tax law as it relates to taxation of cryptocurrency.

First, on April 9, Representative Warren Davidson (R-OH), a member of the House Financial Services Committee, reintroduced legislation that would provide clarity on certain tax and securities law issues related to cryptocurrency.  The bill, entitled the “Token Taxonomy Act of 2019,” resembles the original bill that Davidson introduced in the 115th Congress with Congressional Blockchain Caucus co-chair Darren Soto (D-FL).  The 2019 version of the bill is co-sponsored by Representatives Soto, Josh Gottheimer (D-NJ), Ted Budd (R-NC), Scott Perry (R-PA), and Tulsi Gabbard (D-HI) (who has announced she is running for President).

Davidson said in a statement that “[t]he Token Taxonomy Act is the key to unlocking blockchain technology in America.  Without it, the U.S. is surrendering its innovative origins and ownership of the digital economy to Europe and Asia.”

The bill would enact a number of new tax provisions.  The new tax provisions apply only to “virtual currency,” which is generally defined as “a digital representation of value that is used as a medium of exchange,” and so would not apply to digital tokens that are not used as a medium of exchange.  The tax provisions of the bill would:

  • Expand like-kind exchanges under section 1031 to include virtual currencies. The tax legislation enacted at the end of 2017 limited like-kind exchanges completed after December 31, 2017 to exchanges of real property.  However, taxpayers would still need to determine whether exchanged virtual currencies are treated as “like kind” in seeking to qualify for this tax-deferred treatment.  As a result, the ability to conduct like-kind exchanges of virtual currencies would be uncertain, as it was prior to 2018.
  • Create a de minimis exclusion from gross income for up to $600 (indexed to inflation) of gain from certain sales or exchanges of virtual currency for property other than cash or cash equivalents. This provision would help taxpayers avoid recognizing gain when they use appreciated virtual currencies for small consumer transactions.  Under current law, a taxpayer who purchases even a small item—such as a cup of coffee—with appreciated virtual currency generally recognizes gain on the increase in the value of the virtual currency during the time that they held it.
  • Authorize the Treasury Department to issue regulations providing for information returns on transactions in virtual currency for which gain or loss is recognized. It is unclear how current information reporting rules apply to many virtual currency transactions.  Guidance from Treasury could be very helpful to taxpayers who want to ensure that they are compliant with tax reporting rules.  However, in order to create an administrable system that is not overly burdensome to taxpayers, the guidance would have to be implemented in a way that is sensitive to the unique issues surrounding transactions executed via blockchain.
  • Clarify that an IRA may hold virtual currencies under rules similar to those currently in place for certain metallic coins or bullion.

Although the bill has bipartisan support, the challenge will be to find a vehicle for passage.  Possibilities include an extenders package or disaster relief, but including additional tax provisions will likely face opposition.

Second, on April 11, a group of 21 bipartisan members of Congress sent a letter to the IRS urging them to provide guidance on the tax consequences for taxpayers that use virtual currencies.  While the letter acknowledges the 2014 guidance released by the IRS, it stresses that there are still many open questions.  It identified three areas where there is an “urgent need” for guidance:  (1) how to calculate the cost basis of virtual currencies; (2) how to allocate basis to particular lots of virtual currencies; and (3) the tax treatment of forks.

Although the IRS has been considering cryptocurrency guidance, it currently has its hands full with implementing the 2017 tax legislation.  It is possible that the IRS will consider “informal” guidance, such as FAQs on its website, as previewed by Commissioner Rettig last November.

Source: https://www.steptoeblockchainblog.com/2019/04/congress-weighs-in-on-cryptocurrency-taxation/

Blockchain

Tezos price analysis: Technical indicators suggest XTZ might surge towards $4.5

Tezos aiming to reach its all-time high again XTZ/USD pair maintaining parallel ascending channel Historically proven indicator presents another strong buy signal For the first time in the course of three months, Tezos price action sets forth a vital buy signal which should result in a massive upside break. In defiance of August’s crypto market […]

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  • Tezos aiming to reach its all-time high again
  • XTZ/USD pair maintaining parallel ascending channel
  • Historically proven indicator presents another strong buy signal

For the first time in the course of three months, Tezos price action sets forth a vital buy signal which should result in a massive upside break. In defiance of August’s crypto market flip, technical indicators signal a superb buying opportunity for XTZ. Furthermore, some bullish patterns suggest that Tezos price might have the capability to reach a new all-time high.

Following the March coronavirus-triggered market decline, the XTZ/USD pair was trading beneath $0.98. However, the bulls managed to consolidate enough momentum to trigger a 300 percent upside rally towards the $4.5 price level a few months after the crash, recording a massive rise in trading volume and number of transactions.  

Tezos price action prepared to recommence bullish momentum?

The XTZ/USD pair experienced a sharp correction after hitting a new ATH back in August. The value of Tezos depreciated by about 50 percent hitting a low of $2.3 after the correction. Nevertheless, regardless of the massive decline in Tezos price, a peculiar technical indicator implies the digital asset would soon switch red for green.

Tezos 3-day chart

The initial pattern to notice from the chart is an ascending parallel pattern in the Tezos price action in 2020. Notably, XTZ has been hovering within this ascending channel for most part of this year, having to bounce back from the bottom part of the channel multiple times.

Tezos price analysis: Technical indicators suggest XTZ might surge towards $4.5 1
XTZ/USD 3-day chart: TradingView

At the moment, the XTZ/USD pair is protecting the 100- simple moving average(SMA) at $2.39 and a vital anchor point and the relative strength (RSI) near 40. During the pandemic-driven cryptocurrency market crash in March, the RSI level declined towards 39, from which the XTZ/USD pair recovered resolutely. An identical level was protected back on July 2.

TD sequential indicator presents third buy signal in 2020

Additionally, in the above chart 3-day chart, the TD sequential indicator presents traders with a buying signal. The initial buy signal presented by the indicator was formed on March 19, on the heels of the RSI touching 39. The subsequent second signal was created on July 5, and the third formed just the other day on September 12. Historically, the previous two buy signals this year have been validated, recording an average return of 84 percent.

Tezos price analysis: Technical indicators suggest XTZ might surge towards $4.5 2
XTZ/USD 3-day chart: TradingView

Given the fact that the RSI is over long and TD indicator just signalled a buy signal, the XTZ/USD pair could be targeting to reach its all-time high of $4.5 once more, recording a 70 percent rise in value. Regardless of the degree of doubt in the market recently, traders should take the buy signal under serious consideration given the substantial gains recorded during the previous two occasions.  

What to expect from XTZ/USD?

Although Tezos price action has presented a firm buy opportunity, the cryptocurrency is still facing vital challenges onwards. XTZ bulls have successfully created a couple of higher lows but still face vital resistance near $2.64. Tezos price action must clear this rejection to move further upwards.  

Notably, if the bears can manage to exert more selling pressure at this critical resistance, it would be calamitous for the bulls and XTZ. Although there are several higher lows formed, there is no firm anchor point and the price of XTZ might sink back to the $2.3 lows.

Disclaimer. The information provided is not a trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Bitcoin’s uptrend is only beginning and here’s proof

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In the cryptocurrency world, every sign is a bullish sign. From China getting into blockchain, to Facebook launching its own cryptocurrency, to Donald Trump tweeting about Bitcoin, nearly everything can be construed to be a sign of the upcoming bull run. Needless to say, not all of these signs actually have any backing behind it.

When everything is a sign of a bull run, well, nothing is. However, looking at the actual price of Bitcoin against its previous trend, one can find signals that are worth their salt. Even if these signals aren’t flushed with ‘Bitcoin to the moon,’ they usually have one or two key points which suggest that the swing, in either direction, is strong or stronger than it has been previously. We have one such signal for you.

Looking at the Bitcoin markets of late, one would think that the bears have taken over. With a drop to $10,000 from over $12,000 after nearly a full month of holding strong, a collapse to four-digits is likely. While the initial hesitancy of the drop can override the long-term market feeling, a look at the data would suggest that Bitcoin’s price has just crossed a major threshold, despite the drop.

Plotting Bitcoin’s daily close against its yearly moving average presents a good snapshot of where the current price stands against its YTD value. Based on this premise, the drops of 12 March would have a huge impact on the MA because of two reasons – the severity of the crash (around 50 percent of the trading price) and the timing (72 days since the beginning of the year). Just that one day drop increased the difference between the BTC daily close price to its moving average from less than $1,000 to over $3,500.

The above chart plots the daily difference between Bitcoin’s closing price and its yearly moving average from the beginning of the year to the most recent drop on 4 September. Unsurprisingly, the difference began rising after the drop in March and has been increasing every day since then, with the current trading price closing the distance against the average.

Now, looking at how that gap has closed is important. Prior to the drop, the highest point of the moving average was $8,988, recorded on the 26th of February when Bitcoin rose above the $10,000 mark for the second time. While its rise above the level didn’t last long, it pushed its average up. Since then, the average has been consistently dropping, made worse by the March drop. However, at the beginning of September, the yearly moving average jumped over the 26 February-mark, marking a high of $9,028 on 1 September.

If you’re thinking the crash down to $10,000 on 4 September affected the average, it didn’t. The average has been consistently rising due to the number of days Bitcoin has maintained its price above $10,000 since the end of July. As things stand, the average is at $9,141, less than $1,200 away from the trading price of Bitcoin, but still, a good distance considering it took nearly four months to close the gap between $8,200 to $9,000 in the first place.

The chart below plots the daily close price of Bitcoin against the moving average, and you can see that the latter is crossing above its previous highest point in February.

To conclude, Bitcoin’s recent price run has not only pushed its current price higher, but also its yearly average. This is not just a positive sign in the here and now, but shows that the price surge is not a mere “pump,” but has enough backing to sustain itself for quite some time.

Source: Coinstats

Source: https://eng.ambcrypto.com/bitcoins-uptrend-is-only-beginning-and-heres-proof

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YFI Founder Puts Himself Forward for Uniswap (UNI) Delegation Duties

Andre Cronje has announced his intent to become a Uniswap delegate. Those delegates receiving sufficient community backing will be able to submit governance proposals, influencing the way the platform operates. The founder of the hugely popular yEARN Finance protocol identified various issues with Uniswap that the platform’s governance could address. These include a reevaluation of […]

The post YFI Founder Puts Himself Forward for Uniswap (UNI) Delegation Duties appeared first on BeInCrypto.

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Andre Cronje has announced his intent to become a Uniswap delegate. Those delegates receiving sufficient community backing will be able to submit governance proposals, influencing the way the platform operates.

The founder of the hugely popular yEARN Finance protocol identified various issues with Uniswap that the platform’s governance could address. These include a reevaluation of the UNI token’s distribution and tokenomics, as well providing support for other projects that may provide value to the exchange platform.

One of DeFi’s Biggest Names Interested in Uniswap Community Governance

One of the biggest stories to break in the world of cryptocurrency this week was the launch of the UNI token. On Sept. 16, UNI tokens were distributed to Ethereum wallets that had interacted with the popular automated market making platform before Sept. 1.

Initially, the price of UNI tokens declined as those claiming the free airdrop cashed out. Since then, buying pressure has moved the price up aggressively.

At their highest point during the few days since launch, the 400 UNI tokens that previous platform users received were worth more than $3,400. At the time of writing, the current UNI market cap is over $780 million.

The newly launched token will provide additional incentives to those providing liquidity on Uniswap. It will also allow holders to participate in the platform’s governance.

According to a Uniswap blog post detailing the launch, users can delegate their tokens to others so that they meet the required percentage of the total supply needed to submit governance proposals. Those submitting proposals will need a total of 1% of the total supply of 1 billion tokens.

One of those interested in becoming a Uniswap governance delegate is Andre Cronje. The yEARN Finance founder tweeted as such earlier Saturday:

As part of the above thread, Cronje stated that he did not think the platform should rush to provide incentives to liquidity pools. He added that he believes there are other opportunities to improve the protocol. These include a reevaluation of UNI’s tokenomics and distribution, along with efforts to bring stablecoins like DAI and sUSD back to their pegged values.

Cronje’s Delegation Pitch Prompts Increased UNI Buying Pressure

Having a name as big as Cronje’s is to the DeFi niche taking an interest in serving as a Uniswap delegate appears to have further excited the market. At around the time of his tweet, UNI traded at around $6.40.

The price went on a short-lived run following his announcement, topping at just over $7.30. It has since pulled back slightly to $7.

Uniswap UpUniswap Up

Cronje is best known for his work on the yEARN Finance protocol. The automated yield farming optimizer grabbed the attention of the DeFi sector earlier this summer.

Cronje inspired the cryptocurrency industry by electing to launch the YFI token without a pre-mine or any reward for himself. This “fair launch” subsequently inspired other teams to experiment with different token distribution models — such as that employed by Uniswap itself.

The YFI price shot from less than $700 at launch to more than $42,000 by Sept. 13. The token’s stellar performance is thanks to both community interest in YFI and its incredibly low circulating supply of 30,000.

Judging by engagement on Cronje’s Twitter post, the developer will be a popular candidate for delegation duties. If he is delegated enough tokens, it should be interesting to see the direction the popular developer attempts to steer Uniswap.

Source: https://beincrypto.com/yfi-founder-puts-himself-forward-for-uniswap-uni-delegation-duties/

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