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How To Navigate Through Crypto Taxation in 2021?

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Cryptocurrency and taxation may sound incompatible: decentralized digital currency was inspired by libertarian ideas and the wish to minimize government and bank influence in finance. However, 11 years after the Bitcoin creation, we have a crypto market that is subject to regulations and even taxation. This might have been a nightmare for the early crypto adopters, but from today’s point of view, looks like a thing to bring much good to the community. How is that possible? And how to understand if you have to pay any crypto taxes? Find the answers below! 

Should I pay any crypto taxes?

First of all, that depends on your jurisdiction. Many countries have established strong crypto regulations and taxation, while others still struggle with defining the legal and fiscal status of Bitcoin. To cover both categories, we will consider the crypto taxation policy in the USA, Great Britain, and India. However, if you are from a different country, don’t skip this paragraph — here, you will gain a basic understanding of what crypto taxation looks like and the way it is applied. 

United States 

If you are an American taxpayer, you are required to report gains and losses from each of your crypto transactions. In 2021, the Internal Revenue Service will ask you in Form 1040: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” Interestingly, the IRS treats cryptocurrencies as property, not as a currency. 

Here are the events to report on: 

  • Earning crypto. Whether that be a job, mining, staking, airdrop, or interest from Bitcoin lending — if you’ve got any income in crypto, you are liable for income taxes. 
  • Selling crypto for cash. This is a way to realize the gain on your crypto property — quite a taxable event in the eyes of IRS. 
  • Paying for goods or services; buying one crypto with another. Another way to profit from your crypto earnings — and gain attention from the IRS!

No tax is paid for these crypto activities:

  • Buying and HODLing crypto. Great news for the long-term crypto investors! You’re not liable to tax in the case of buying and hodling Bitcoin or other cryptos unless you sell them to make a profit. In case you do, this will be treated as getting income, which is subject to taxation today. 
  • Transferring crypto between wallets. No new profits generated here = no taxable event has been triggered. 

If you trade on major crypto exchanges, you might have seen the options of collecting data for your tax authorities. These make it easy to track how much of your income is liable for taxation. Let’s say, if you bought 1 Bitcoin at $16,000 and then sold it for $26,000, you would incur a $10,000 capital gain. The sum of money you’d need to pay as tax here depends on your tax bracket. The tax for $10,000 will be added to the total taxation amount you have. 

And here’s the good news: if you lost money on your trading, the losses will be deducted from your income this decreasing the final tax size. 

Great Britain

Same as the USA, Great Britain views digital assets as property. If you trade cryptocurrency, your gains are subject to taxation, while losses can reduce your taxable earnings. Here’s what’s different: 

  • HODLers have to pay taxes. It’s 10% even if you aren’t actively trading your Bitcoin. 
  • You’re free from taxes if your net crypto income is below 12,500 GBP. If it’s above, from 20% to 45% have to be paid depending on your tax bracket.

India

Cryptocurrency was legalized in India in 2020. Yet, not enough time has passed for the authorities to establish any clear guidelines for crypto income declaration. “Income from Other Sources” is the category that Indian exchanges recommend their users to choose when classifying their crypto earnings. 

While the Indian government is reportedly planning to impose a 30% tax on cryptocurrency, the exact fiscal status of crypto remains unclear. Spheres that are supposed to be subject to future taxation include mining, selling crypto for cash, buying goods and services, and more. 

Do I have to pay a tax when I take out a loan in crypto? 

Irrespective of your jurisdiction, the short answer is: no, you don’t. 

If you do crypto lending yourself, you will be liable for taxation on the amount you earn. While cryptocurrency lending may be quite a lucrative activity, this is mostly a part of the DeFi sector. At CoinRabbit cryptocurrency lending platform, here’s what we can explain to you as a borrower: IRS hasn’t issued any clear guidance on crypto loans taxation yet. The Service is basing its work on the frameworks from 2014, which is like forever ago for the crypto industry — there were barely any crypto loans back at that time. While we are to expect the new regulations, crypto loans don’t seem to be a thing to declare.

What do the crypto enthusiasts think about taxation in crypto? 

As you may guess, many cryptocurrency adopters are very skeptical about any government participation in the crypto industry. This does not only include taxes but any regulation in general. 

However, we seem to be still far from a world where genuine peer-to-peer governance could be combined with wide adoption. Lack of regulation in crypto lead to the unprecedented spread of scams in the ICO boom in 2017, and the same pattern seems to be repeating for the current DeFi craze. 

This undermines trust in crypto from the institutional investors and all those who can drive the really wide adoption of digital assets. And inversely, higher regulations rate and taxation make the market more trustworthy and transparent. 

Whatever the case, the crypto loans’ taxation definition and framework haven’t been developed yet — and this is a great chance to enjoy borrowing without having to worry about any tax. Secure custody resistant to hacks, no credit checks, no monthly payments, and limitless loans at 50% loan-to-value — borrow stablecoin USDT or USDC at CoinRabbit and start fulfilling your dreams now!

Post Author: CoinRabbit.io

Source: https://coinrabbit.io/blog/how-to-navigate-through-crypto-taxation-in-2021/

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5 Under-the-Radar DeFi Platforms Supporting the NFT Space

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As the non-fungible token (NFT) market heats up, BeInCrypto explores five DeFi platforms, building buzzing NFT marketplaces.

1. Axie Marketplace

Axie Marketplace is the official NFT market for collectibles in the Axie Infinity game universe. More specifically, Axies are cute avatars with which users can explore the Axie world.

These avatars, in NFT form, can sell for as much as $4,500 (3 ETH) and come with several different characteristics such as body parts, skills, speed, health, morale, and class.

The marketplace itself a fully decentralized exchange (DEX), running on the Ethereum network. Recently, the platform’s native token AXS doubled in price, owing to the game’s renewed popularity.

2. Decentraland

Decentraland (MANA) is a fully decentralized virtual world. Launched in 2017, some describe the virtual world as the decentralized version of popular online space, Second Life.

Users can create roam the world, socialize with friends and create almost anything which the platform then stores as NFTs. Indeed, Decentraland developers pit the world as the first such owned entirely by its “citizens”.

Within the world itself, there are numerous NFT art auctions and giveaways. The platform also has its own native token, MANA, which users can use to buy virtual land parcels in the world.

3. Terra Virtua

Terra Virtua (TVK) claims to be the most immersive digital collectible platform in the NFT space. Moreover, it also boasts NFTs from some of the most famous names in the entertainment industry.

NFTs include merchandise from top-shelf games such as Pasific Rim and Top Gun, as well as collectibles from age-old classics such as The Godfather movie.

Terra Virtua also hosts an interactive space, which can take the form of a modern art gallery or exposition hall. In its most valuable sale, the marketplace hosted a collection called Voice Note Art 2020, which sold for $10,000.

4. Rarible

Rarible is a blockchain-based NFT space for creators and collectors, allowing creators to create pieces directly onto its blockchain.

Unlike other platforms that either use third party apps or require development knowledge, Rarible requires no code, simplifying the creation process.

The platform has a native governance token called RARI which gives the Rarible community a say in the direction of the platform’s development. Indeed, the platform is run by a fully decentralized autonomous organization (DAO).

5. AtomicMarket

AtomicMarket is a shared liquidity marketplace for NFTs. It is used by multiple portals (or websites) to display NFTs hosted on other marketplaces.

Essentially, it is a smart contract into which multiple marketplaces inject liquidity for each NFT they host that can be seen by the other marketplaces.

Indeed, its ultimate aim is to create a standard universal for the NFT space. Its native token, WAX, currently has just over $17 million staked.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Emmanuel entered the cryptocurrency space in 2013 as a cryptocurrency broker. He is a crypto-enthusiast, entrepreneur, and investor, who has built and led several projects and communities in the space. He is CEO and co-founder of Provence Intelligence, a boutique crypto-consultancy firm that aims to bridge the gap between the cryptocurrency and DLT space and the traditional world. Interests include DeFi, non-blockchain DLTs, and the synthetic derivatives space.

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Source: https://beincrypto.com/5-under-the-radar-defi-platforms-supporting-the-nft-space/

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NFT Mania Brings in Our Lady Peace

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The Canadian rockers became the latest act to take advantage of the Non-Fungible Token (NFT) wave.

Canadian rock band, Our Lady Peace (OLP) announced that they would release a single from their upcoming Spiritual Machines II album as an NFT in April. The launch will be on the S!ng app.

The news accompanied a wave of tweets by the band and frontman Raine Maida about the platform.

OLP follows on the heels of an announcement by the American rock band Kings of Leon that they would release their forthcoming album When You See Yourself as an NFT on Mar. 5. According to Rolling Stone, the Kings of Leon release as an NFT is the first of its kind. 

NFT advantages

Our Lady Peace and Kings of Leon switched to NFPs for several reasons. The platform enables artists and performers to tailor their releases for better engagement with their fans and offer enhanced and one-of-a-kind opportunities.

From a business standpoint, NFTs help eliminate middle-men and retain ownership. Because the copy comes off a blockchain, protecting the intellectual property created is also ensured.

Surging popularity

NFTs are surging in popularity in 2021, though the basic technology has been around since 2017. They gained a first splash of notoriety when the CryptoKitties craze brought the Ethereum network to its knees. 

However, several platforms and projects made a debut in late 2020 and early 2021. The increase of interest in crypto that has accompanied the 2020-2021 bull run also helped. For example, the CryptoPunks platform reached over $83 million in sales since opening shop, with $45 million of that volume coming in over Feb. 18-25.

Adding star power

As with the surge in celebrity crypto endorsements during the current bull run, star power is affecting NFT sales and popularity. Internet personality Logan Paul launched his own NFT with the help of Bondly Finance in February. He then recorded a first edition Pokemon trading card box break, broke the video into NFTs, and sold the results. 

Pushing the envelope in a different direction is a set of “art and tech enthusiasts” who purchased an art piece by Banksy, digitized it as an NFT, and burned the physical copy. The original work, called ‘Morons’, supposedly cost $100,000.

With artists, willingly or not, and musicians climbing on board the NFT wagon, the NFT craze is only beginning.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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James Hydzik is a finance and technology writer and editor based in Kyiv, Ukraine. He is especially interested in the development of regulation in the face of increasingly rapid technological change. He previously covered the CEE region for Financial Times banking and FDI magazines. An ardent believer in gut renovating eastern Europe one flat at a time, he currently holds more home renovation gear than crypto.

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Source: https://beincrypto.com/nft-mania-brings-in-our-lady-peace/

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Coinbase Direct Listing a Milestone: Analysts

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Coinbase’s upcoming direct listing will make it the first cryptocurrency exchange to go public. This listing has been described as an “Amazon moment” by analysts from D.A Davidson.

Coinbase, filed papers with the US Securities and Exchange Commission on Feb. 25, for the listing on the Nasdaq. 

The company’s valuation is set at $100 billion, based on its secondary market price at $373 a share. This would make it the biggest listing for a tech company since Facebook. 

Analyst Gil Luria from D.A Davidson told CNBC that with this listing the cryptocurrency market and stock market will become intertwined. 

“It’s going to become clear that crypto is a giant asset class with a Trillion Dollars, is very relevant to the future of the delivery of financial services, and Coinbase is going to present that moment to the marketplace,” said Lucia. 

Luria’s confidence in Coinbase’s success lies in its diversification. He explained that it’s diverse coin offerings means that investing in the exchange itself lessens the risk for the investor, in comparison to investing in one coin market like bitcoin. 

While Luria presented an encouraging outlook, he did note that the volatility of cryptocurrency markets is likely to play a role in the price of Coinbase stock. 

Bitcoin outshines Big Tech Stocks

The biggest tech stocks, Facebook, Apple, Amazon, Netflix, Google (FAANG) had a good run in 2020 but were no match for Bitcoin. The cryptocurrency outpaced the year-to-date returns of many of these big names, even Amazon. Overall, Bitcoin outperformed the S&P 500 by 1600%  in 2020, according to data from Forbes.  

This bodes well for Coinbase’s stock market entrance. Not only is it coming onto the market with significant hype and a great reputation, but the performance by Bitcoin and cryptocurrency pumps could also translate into impressive stock performance. Since Coinbase is a company invested in the trade of Bitcoin, positive movements in this trade reflect well on the company and public confidence in it. 

However, on the flip side, this could mean that it also is linked to crypto markets volatility. This could make its price vary more than its tech company counterparts.

While FAANG has to worry about poor returns and public scandals shaking confidence in their performance, Coinbase has a myriad of cryptocurrencies to concern themselves with as well. Major crashes in the Bitcoin price or stumbling blocks like regulatory pushback would likely reflect its stock price. 

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Anirudh works in the financial markets along with being a cryptocurrency and blockchain enthusiast. Apart from work, he is a music connoisseur and likes to play the drums.

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Source: https://beincrypto.com/coinbase-direct-listing-a-milestone-analysts/

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BTC, ETH, XRP, SNX, QTUM, ZEC & RLC: Technical Analysis for March 5, 2021

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The Bitcoin (BTC) price has bounced at a minor support level and is in the process of moving above a short-term descending resistance line.

The technical analysis for Ethereum (ETH) and Zcash (ZEC) shows no bullish reversal signs. However, both are trading above a strong support area/line.

XRP (XRP) is trading inside a range between $0.36 – $0.63.

Synthetix (SNX) has broken out from a descending resistance line.

Qtum (QTUM) has bounced at a long-term support area but has failed to clear the most recent breakdown level, which is now acting as resistance.

iExec RLC (RLC) has failed to validate the previous all-time resistance area as support, breaking down below it instead.

Bitcoin (BTC)

BTC has been decreasing alongside a descending resistance line since Mar. 3, when it was trading at a high of $52,640. Currently, it is trading just below this line. 

Earlier this morning, BTC reached the 0.618 Fib retracement support level at $46,600 and bounced. Currently, BTC is trading just below the aforementioned resistance line. 

The MACD is potentially providing a bullish reversal sign, but has yet to confirm it. Similarly, the RSI is moving upwards but is still below 50. 

A breakout from the descending resistance line would confirm the MACD bullish reversal and cause the RSI to move above 50, confirming that the short-term trend is bullish.

For a longer-term BTC analysis, click here.

Ethereum (ETH)

ETH bounced after reaching a low of $1298 on Feb. 26 but has lost nearly all of the gains resulting from the bounce. 

Currently, ETH is trading just above the $1430 support area, which also coincides with a long-term ascending support line. As long as ETH is trading above these levels, the price action remains bullish. 

However, technical indicators are firmly bearish, as evidenced by the bearish cross in the Stochastic oscillator.

A breakdown from the support area/line could cause a sharp drop towards the $1175 region, which is the 0.5 Fib retracement of the most recent upward movement.

XRP (XRP)

On Feb. 22, XRP reached the $0.63 resistance area, but was promptly rejected and created a long upper wick. It dropped all the way to the $0.36 support area the next day, but bounced immediately, creating a long lower wick. 

XRP has been trading between these two levels since. 

Technical indicators are neutral, suggesting that XRP is likely to continue consolidating inside these levels.

Synthetix (SNX)

On Feb. 14, SNX reached an all-time high price of $28.98 but began to decrease afterwards, following a descending resistance line in the process. 

The decrease continued until SNX dropped to the 0.5 Fib retracement level at $15.60, where it bounced, leaving a long lower wick behind (green arrow). 

The bounce caused a breakout from the aforementioned descending resistance line. As a result, SNX is now retracing after breaking out. 

The MACD has given a bullish reversal signal, the RSI is bouncing above the 50 line and the Stochastic oscillator has begun to move upwards. 

Therefore, it is likely that the trend for SNX is bullish. If so, this would lead to a new all-time high price.

QTUM (QTUM)

On Feb. 25, QTUM reached a low of $4.24 but bounced almost immediately afterwards, creating a long lower wick in the process. 

The bounce was also important since it served to validate the previous all-time high resistance area of $0.425 as support.

Despite the bounce, QTUM has been rejected by the minor resistance of $6. This is the 0.382 Fib retracement of the most recent downward move.

Technical indicators are neutral. Thus, more consolidation is expected before a potential breakout.

Zcash (ZEC)

ZEC has been moving downwards since creating the second portion of a double top on Feb. 19. The high reached was at $190. 

The drop has taken ZEC all the way to the $115 support area, which previously acted as resistance. The area coincides with an ascending support line that has been in place since Dec. 15, 2020. 

The price action and technical indicators are similar to those of ETH.

On one hand, the price action is bullish as long as ZEC does not close below this horizontal area and ascending support line.

On the other, technical indicators are firmly bearish.

iExec RLC (RLC)

On Feb. 12, RLC broke out above the previous all-time high resistance area of $1.95, proceeding to reach a high of $2.59 in the process.

However, it failed to validate the same area as support, breaking down right through it instead. 

The drop took it to the $1.40 support area, where RLC has initiated a weak bounce. 

The MACD has given a bullish reversal signal but both the RSI & Stochastic oscillator are bearish. 

Therefore, similarly to QTUM & XRP, some consolidation seems like the most likely option.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo.
In 2019, he decided to focus full-time on cryptocurrencies and trading.

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Source: https://beincrypto.com/btc-eth-xrp-snx-qtum-zec-rlc-technical-analysis-for-march-5-2021/

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