Give applause to the European Parliament (EP).
I know I keep repeating myself, but one day we will breach $20k to the upside for the very last time
That is a big move in OI (open Interest) though it has not been accompanied by a mismatch of buyers and sellers. However, this gross notional is on the large side, and could quickly become unstable one way or the other if we saw a sharp market-induced move, further exacerbating such a move.
GBPUSD rallying hard now 6% higher than Sunday before last and 12% higher than the groupthink follow-through as execution desks opened in Asia that Monday morning. Contrarians worldwide — with no political ax to grind — are taking that profit.
I look forward to the next time the IMF gets involved in issues of sovereignty of which it knows nothing.
Curious Cryptos’ Commentary — The EU leads the way in taxation for cryptos
The tax rules applied to cryptos in most countries are somewhat unclear.
Here in the UK gains or losses from cryptos would probably be taxed under normal capital Gains Tax rules, which is the more favorable tax treatment from the perspective of the taxpayer.
If, however, trading was frequent, with a view to creating an income stream, gains, or losses from cryptos could be subject to income tax rules.
Even more confusion reigns around the topic of staking gains, which are often described as passive income, and which some liken to interest received on fixed income instruments such as bonds, or indeed bank accounts, though I personally disagree with that comparison.
These traditional products are always taxed as income, but it is hard to see how receipts of say XTZ (Tezos) which are paid out every 2–3 days fits into the same framework. HMRC themselves are very confused on this point stating under the section of their guidance headed “Staking” that rewards for “successful mining will generally be taxable as income”.
Well, I got news for you buddy. Staking rewards have nothing to do with mining. That is the point of PoS (Proof-of-Stake) versus PoW (Proof-of-Work) consensus mechanisms.
And that word “generally” makes the whole process ever more opaque.
This is the guidance from HMRC. There is no framework in place to the best of my knowledge. Until there is, I suspect many people will simply park their profits if they have them, to be dealt with later. The result will be a string of court cases, and though the principle of case law is an effective means of interpreting legislation passed by Parliament, it is a desperately poor method of creating laws.
Step forward the European Parliament (EP), and plaudits are due to them.
A resolution has been passed with the objective of setting out clear rules and regulations on this topic.
Given politicians’ propensity to try to cash grab as much as they can, one particularly surprising and welcome comment in this paper discusses the definition of a taxable event:
“The conversion of a crypto asset into a fiat currency might be the more appropriate choice and it asks the Commission to specifically assess this option, along with a more general one concerning the identification of possible taxable events.”
And this too:
“…crypto assets must be subject to fair, transparent and effective taxation. It also invites authorities however to consider a simplified tax treatment for occasional or small traders and small transactions.”
Look at this responsible and mature approach to what must be admitted as being a difficult subject by a bunch of bureaucrats.
Life is full of surprises.
I do have two criticisms, however.
The first is that this is a non-binding resolution.
The second is that the EP wants the same taxation regulation across the EU.
But let us not nit-pick for now. In much the same way as we need appropriate and targeted regulation to drive the mass adoption of cryptos, we need a transparent and effective taxation regime.
The EP has done us all a favour.
Even BTC haters make the same comment.
Trigger alert warning — if any reader feels that they are “literally shaking” (as claimed by a Durham student who cannot emotionally cope with a different point of view as posited by Rod Liddle) after reading my commentary, then I can only suggest you don ‘t read, or don’t shake. It is entirely up to you.
Cryptos — none of my commentary should be seen as a recommendation to get involved in cryptos. I might be talking complete nonsense without knowing it. Any crypto investments must be viewed as extremely high risk and treated as if they are worth zero until sold.
Stocks — just to make it clear this is not a stock advisory service. The CCC team does not provide financial advice in any way at all. Any reference to asset prices in this commentary are there to simply give context to the commentary and to give color to the performance of certain stocks related to cryptos.
For the avoidance of doubt, this newsletter is not an incitement to buy cryptos, buy stocks, or even to sell family members in the hope of buying cryptos or stocks.
Please note that all copyright is reserved to Curious Cryptos Ltd.
Ask politely to share and copy, and your wish will be granted.
New subscribers to this missive or our website are always most welcome.