Crypto week at a glance: Bitcoin slips below $30,000; Germany issues crypto tax guidelines

New Delhi: Bitcoin price fell below $30,000 after a slight climb on Thursday. Bitcoin has crossed the $30,000 mark in the past few days as the crypto and stock markets struggle to recover from several losses over the past few weeks.

This price drop comes as global financial markets have entered bear market territory for the first time since the start of 2020. There are many contributing factors to the decline in the price of bitcoin.

Some include geopolitical crises, rising inflation and changes in US monetary policy. These essential factors continue to drive additional short-term volatility in the stock and crypto markets around the world.

Bitcoin’s all-time high in 2022 was in early January, when its price reached nearly $48,000 on January 2. So far, it has stayed above the low of $34,000 in late January. This was the lowest price in the last six months.

Since bitcoin’s all-time high of $68,000 in November 2021, bitcoin has lost nearly 40% of its value.

Given the history of volatility in the price of bitcoin and other cryptocurrencies, the increase does not guarantee a long-term reversal. The price of bitcoin will continue to fluctuate as it climbs as well as is likely to fall back.

Ben McMillan, CIO of IDX Digital Assets, said that like all other risk assets, crypto prices in 2022 have been disproportionately driven by Ukraine war, rising inflation and Fed policy. Macmillan also said that while we are seeing crypto prices at highly attractive prices on a longer term outlook, there could be a significant downside in the short term.

Nomura Bank announces bitcoin derivatives
Japan’s Nomura Holdings has started making bitcoin over-the-counter (OTC) derivatives available to customers. This is the latest move in the cryptocurrency industry by a traditional financial institution. Crypto Trade was the first digital asset trade from a Japanese investment bank. Several other investment banks around the world have looked to provide more cryptocurrency-related services to customers. This is mainly due to the high demand from private clients and institutional investors for access to the rapidly growing sector.

Germany Issues Crypto Tax Guide

Germany’s Federal Ministry of Finance has directed the income tax treatment of crypto. Individuals in Germany can now sell bitcoin (BTC) or ether (ETH) tax-free after one year. The guidelines of the German Federal Ministry of Finance also focus on tax issues in various other crypto-focused activities such as staking, lending, mining, airdrops and hard forks.

On January 1, 2022, the German government passed a new law that focused on encouraging financial institutions to provide cryptocurrency services. The law requires any business providing cryptocurrency services in Germany to be licensed from BaFin, Germany’s Federal Financial Supervisory Authority.

Since that announcement, Germany has seen a significant increase in the total number of financial institutions providing crypto services.

In early 2022, Germany’s Commerzbank (CBK) applied for a crypto license. This made Commerzbank the first major financial institution in Germany to move towards crypto adoption.

Dapper Labs Raises $725 Million Dollars

On 10 May 2022, NFT maker Dapper Labs announced that it had secured $725 million in funding to expand its Web3 developer ecosystem. The latest investment round for the company includes participation from Coinfund, Coatue, Andreessen Horowitz (a16z), Greenfield One, Liberty City Ventures, Union Square Ventures and Digital Currency Group. The investment is the tenth time Dapper Labs has sought venture capital investment in early 2018.

Top crypto gainers and losers this week as of 22 May 2022, 12.15 pm:

Top-5 Gainers for the Week

-Kyber Network Crystal v2 (KNC): up 56%

-Kucoin Token (KCS): up 23%

-Clayton (KLAY): up 18%

-Kava (Kava): up 17%

-Bora (Bora): up 14%

Top-5 losers for the week

-teraUSD (UST): down 71%

-The Graph (GRT): down 21%

-Helium (HNT): down 18%

-Convex Finance (CVX): down 15%

-Cello (cello): 15% down

(Note: Only the top 100 cryptocurrencies are included in the analysis. Source: Coinmarketcap)

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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