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Bitcoin

A Post-Tax Day Bounce For Bitcoin?

Bitcoin prices traded slightly lower in U.S. trading Friday, extending a slide that has seen the largest digital currency shed roughly two-thirds of its value since December. Some bitcoin bulls believe the cryptocurrency is due to rally this month with an interesting catalyst sparking it higher.

That catalyst is Tax Day, which is fast-approaching on April 17th. Tom Lee, the co-founder of Fundstrat and one of the most ardent bitcoin bulls, estimates investors owe $25 billion in taxes on bitcoin and have been selling the digital currency in advance of Tax Day to, well, pay their taxes. Lee believes the selling pressure could slow after April 17th.

The US Internal Revenue Service (IRS) requires users of bitcoin to record all of their transactions in the cryptocurrency, regardless of the size.

“If the bitcoins were held for more than a year, long-term capital gains tax rates are applied. In the US, long-term capital gains tax rates are 0% for people in 10%-15% ordinary income tax rate bracket, 15% for people in the 25%-35% tax bracket, and 20% for those in the 39.6% tax bracket,” according to Investopedia.

Sourcing That $25 Billion

“The $25-billion tax liability accounts for 20 percent of the expected total tax payments for capital gains of around $168 billion in 2017. The projected tax liability is based on taxable gains for crypto of $92 billion,” Reuters reports, citing Lee’s Fundstrat.

Other countries have recently been unveiling their tax treatments of cryptoccurrencies.

“The South African Revenue Service (SARS) will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income,” said SARS, that country’s equivalent of the IRS, in a recent statement. “The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.”

As for the post-tax day potential of bitcoin, that remains to be seen, but Fundstrat did reiterate a $20,000 price target on bitcoin.

Bitcoin

Did Satoshi Nakamoto Just Move 50 Bitcoin?

Key Takeaways

  • 50 Bitcoin that haven’t moved since 2009 were transacted today.
  • Some Bitcoin watchers speculate that these coins belong to Satoshi Nakamoto.
  • The coins were from Bitcoin mining around a month after the network was created.

BTC from the earliest days of the network moved today. Could Bitcoin creator Satoshi Nakamoto be behind the transaction?

Was Satoshi Behind a Recent Bitcoin Transaction?

A 50 BTC transaction representing a block reward from a month after the Bitcoin network launched moved today.

The coins were awarded for mining block 3,654. Several pundits have naturally associated that early mining activity with pseudonymous Bitcoin inventor Satoshi Nakamoto.

Others Are Unconvinced

The Block’s head of research, Larry Cermak, believes the transaction is unrelated to Satoshi Nakamoto, identifying that there were several early miners on the Bitcoin network.

Blocks believed to have been mined by Satoshi have a particular pattern in their nonces, a cryptographic number that can help identify blocks. According to that pattern, these Bitcoin do not appear to have originated from Satoshi.

Patoshi blocks
Courtesy satoshiblocks.info, Patoshi blocks

Another analyst noted that the transaction marks the first time that early 2009-origin Bitcoin has moved since August of 2017.

It’s the first time since August 2017 than someone spent coins from early 2009.

View image on Twitter

Nevertheless, on-chain sleuths will closely watch the path of the coins as the transaction was undoubtedly from an early Bitcoin miner and large holder. If these 50 BTC continue to move, then a lot more about this story will be revealed.

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Bitcoin

Bitcoin price rockets 23% as investors look for a new safe haven. ‘The crypto king is on fire.’

Cryptocurrencies have seen a remarkable resurgence as investors flock to relative safe havens amid a flurry of quantitative easing measures by global central banks.

Central banks including the European Central Bank, Federal Reserve, and the Bank of England have announced asset-purchase schemes in recent days. Bitcoin, a finite cryptocurrency with only 21 million units in existence, has seen a 23% one-day surge. Bitcoin is currently up 21% as of 10.10 a.m. in London (6.10 a.m. ET), per Coindesk.

The cryptocurrency had been down 30% year-to-date amid a sell-off fueled by market uncertainty about the outbreak of coronavirus. However, investors may be looking to digital currencies in the wake of easing measures elsewhere. Other cryptocurrencies like ethereum, XRP, and bitcoin cash all saw major reversals by more than 15% over the same period.

“When it comes to bitcoin, the crypto king is on fire, and we have seen a decent rally,” said Naeem Aslam, chief market analyst at AvaTrade, in a morning note.

“Given the fact that the price has crossed the $6,000 mark — an important level of resistance — the upward momentum is likely to pick up the pace, and if the price crosses the 200-day moving average on a daily time frame, it would be a huge buy signal.”

Volumes at cryptocurrency exchanges have jumped, with Coinbase, Bitstamp, and Bitfinex combined seeing a 19% bump in 24-hour exchange volume, according to data aggregator CryptoCompare.

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Binance

Binance CEO Makes Rare Price Prediction On When To Buy Bitcoin

Bitcoin, along with the surging wider cryptocurrency market, has had an incredible start to the year.

The bitcoin price has rallied around 50% since January 1, with some smaller cryptocurrencies making surprise triple-digit percentage gains, and many bitcoin bulls think it still has further to gothough problems could be on the horizon.

Now, Changpeng Zhao, the widely-respected founder and chief executive of the world’s biggest bitcoin and cryptocurrency exchange Binance, has broken his rule against market forecasting to predict “the bitcoin price will likely increase.”

“I personally believe the halving has not been priced in,” Changpeng Zhao, often known simply as CZ, told bitcoin, cryptocurrency and blockchain video news site BlockTV this week, adding he “doesn’t usually give market predictions” because he will be wrong “50% of the time.”

Bitcoin traders and investors have begun gearing up for the looming May bitcoin halving event, among other positive bitcoin developments expected this year, when the coin reward for mining new bitcoin blocks is scheduled to drop from 12.5 bitcoin to 6.25 bitcoin–cutting the supply of new bitcoin coming onto the market by half.

There have already been two bitcoin halvings since bitcoin launched in 2009, one in 2012 and another in 2016. Bitcoin halvings are scheduled to continue roughly once every four years until the maximum supply of 21 million bitcoins has been generated by the network, something that won’t happen until well into the next century.

Whether the upcoming bitcoin halving has been “priced in” by the market has become a controversial issue among investors. Generally, in well-developed markets, equity, commodities and currencies are priced based on future expectations—suggesting that as bitcoin traders and investors are aware of the May halving, the price will have already made the gains related to it.

CZ disagrees, however, telling BlockTV: “The market is not efficient. Most people don’t get information quickly. People need a lot of time to let concepts sink in and adjust.”

Many are hoping the 2020 bitcoin halving will see a repeat of the last cut to supply. Bitcoin prices doubled in 2016 and soared 13-fold the following year.

However, CZ warned that “historic events do not predict future events, so don’t take that too literally,” but explained the bitcoin halving will mean “it costs miners almost double what it does now to produce one bitcoin. Psychologically, those miners won’t be willing to sell below that price.”

“New bitcoin coming to market will be severely limited and at the same time we’re seeing more users and traders coming in.”

“Economic theory tells us that the bitcoin price will likely increase but this is just the theory and hard to predict,” CZ said, adding he’s feeling “pretty positive.”

Meanwhile, the number of people searching Google for the term “bitcoin halving” has been steadily rising along with the bitcoin price.

Analysts at Arcane Research found last month that an increase in searches could be a sign bitcoin’s halving will recapture the wider public interest in bitcoin and crypto that catapulted the bitcoin price to around $20,000 in 2017.

Many other bitcoin and cryptocurrency market watchers share CZ’s enthusiasm, though some think it could be other factors that push up the bitcoin price.

“I still think that bitcoin will hit $100,000 by end of December 2021,” Anthony Pompliano, the cofounder of bitcoin and crypto investment group Morgan Creek Digital, said last month, pointing to bitcoin’s “fixed supply” and “increasing demand” as the reason for bitcoin’s performance.

Elsewhere, others are not so upbeat—with the the chief executive of China-based investment advisory group RockTree Capital last month forecasting we could see the bitcoin price dip.

This Article Originally Appeared In Forbes

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