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Good morning. Here’s what’s happening:
Prices: An analyst suggests that if Bitcoin can maintain its position above $30K, we could see another surge in its value.
Insights: Japan's recent revision, which exempts unrealized gains on self-issued cryptocurrency from taxation, fosters a favorable ecosystem for crypto startups. The ongoing trend of flexible regulations has garnered acclaim from stakeholders.
Prices
|
$30,535
−19.9 ▼ 0.1%
|
$1,901
+24.8 ▲ 1.3%
|
1,242
+3.5 ▲ 0.3%
|
|
S&P 500
4,348.33
−33.6 ▼ 0.8%
|
Gold
$1,935
+16.1 ▲ 0.8%
|
Nikkei 225
32,781.54
−483.3 ▼ 1.5%
|
BTC/ETH prices per CoinCryptoUs, as of 7 a.m. ET (11 a.m. UTC)
ETF Optimism is Powering Bitcoin's Continued Rally
Bitcoin and ether are making a robust start to the week in Asia. The leading digital asset, Bitcoin, remains above the $30,000 threshold, while ether has climbed 1.3% to reach $1,901.
This mini-bull market is igniting BTC and ETH with some of the strongest weekly gains they have seen since March, as noted by analysts. The surge in interest for spot bitcoin ETFs has played a pivotal role in this upward momentum. CoinDesk Indices' Bitcoin Trend Indicator (BTI) confirms the presence of a "significant uptrend," with BTC experiencing a remarkable 15.6% price surge in the last week, accompanied by a solid 17% increase over the past 14 days.
“Last week, we noted how the market looked strong for mid to long-term opportunities, and Bitcoin was likely to be in the spotlight,” BitBull Capital’s Joe DiPasquale said in a note to CoinDesk. “This week we saw Bitcoin breaking through the $30K resistance and managing to stay above it despite volatility.”
DiPasquale anticipates ongoing market growth in the upcoming weeks, along with a notable level of volatility.
“On the flip side, alts are now also starting to rally. But the market is likely to remain volatile in the coming weeks,” he said. “If Bitcoin manages to stay above $30K for long, we may see another leg up. On the downside, $27K now remains strong support.”
CoinGlass data reveals that during the weekend, traders with short positions enjoyed a slight edge. Notably, in the past 24 hours, long positions worth $9.5 million were liquidated, while short positions were liquidated at a value of $7.10. Furthermore, there has been a substantial increase in open interest, which has risen from $11.7 billion at the start of last week to $14.6 billion.
The Securities and Exchange Commission (SEC) has yet to provide any indication of the timeline for announcing its decision regarding the bitcoin ETFs proposed by BlackRock, Invesco, and WisdomTree.
There is a prevailing optimism that the inclusion of a surveillance-sharing agreement could sufficiently alleviate the SEC's concerns and lead to the approval of the bitcoin ETFs. This parallels the approach taken by the Ontario Securities Commission, which required a well-established crypto custodian sector before granting approval for the first bitcoin ETFs to be listed in Toronto in 2021.
In the meantime, the lingering question remains: How high will bitcoin ascend?
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Terra | LUNA | +5.4% | Smart Contract Platform |
| Polkadot | DOT | +3.7% | Smart Contract Platform |
| Avalanche | AVAX | +3.1% | Smart Contract Platform |
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Decentraland | MANA | −2.4% | Entertainment |
| Loopring | LRC | −1.4% | Smart Contract Platform |
| Bitcoin | BTC | −0.3% | Currency |
Insights
Crypto-Friendly Japan Recent Tax Moves Keep It at the Forefront of Regulatory Policy
CoinDesk Japan recently reported that the National Tax Agency of Japan has made amendments to the country's tax law, exempting unrealized gains from self-issued cryptocurrencies from being subject to taxation. This update was announced over the weekend.
This news brings significant relief to cryptocurrency startups that engage in self-issuance of tokens.
Previously, under the Japanese tax law, corporations were obligated to pay taxes on unrealized gains from their cryptocurrency holdings at the conclusion of each fiscal year, regardless of whether those gains had been realized or not.
Simply put, prior to the change, if a company held a token and its value appreciated during the fiscal year, the company was required to pay taxes on the increased value (referred to as unrealized gain), regardless of whether the cryptocurrency had been sold (thus "realizing" the gain) or not. This law encompassed all forms of cryptocurrencies, whether they were self-issued by the company or not.
Imposing taxes on unrealized gains does not foster a favorable environment for fostering entrepreneurship. Norway attempted this approach, resulting in a significant exodus. However, taxing unrealized gains in the realm of cryptocurrencies is especially harmful to the industry. This is because developers and other team members are frequently remunerated with tokens to offset the inherent risks associated with the industry's volatile nature.
This is yet another astute example of Japan's smart public policy approach, effectively recognizing a challenge and crafting a tailor-made solution rooted in the world of cryptocurrency.
“What we see in Japan is a very clear taxonomy for digital assets,” Rahul Advani, Ripple’s policy lead for Asia, said in a recent interview with CoinDesk. "Regulators are now looking beyond just money laundering and terrorist financing. They're looking at capital, they're looking at bank exposures, and a very important part of that is market integrity but also consumer protection."
Japan has been at the forefront of embracing cryptocurrency regulations, with Advani commending the nation for its proactive approach in setting rules and standards for crypto exchanges. He particularly lauds Japan's laws that ensure the separation of customer funds on these platforms.
As an example, despite the worldwide bankruptcy of FTX, its Japanese counterpart, FTX Japan, seems well-prepared to fully compensate its customers. This outcome can be largely attributed to Japan's meticulous regulation of cryptocurrency exchanges, making it the most secure option for being a customer of Sam Bankman-Fried.
“Japan has in its bankruptcy laws, [a priority for] exchange customers above other creditors,” he said. “So that's one reason why exchange customers were able to be made whole before other creditors."
In stark contrast, none of these developments are taking place in the United States.
Certainly, while the current regulations regarding capital gains in the United States make it improbable for crypto company tokens to be subjected to taxation, there is no definitive framework in place to guarantee this exemption. Moreover, the U.S. Securities and Exchange Commission refuses to provide any guidance on its criteria for determining whether tokens, such as the ones being discussed, qualify as securities or not.
If the SEC is unwilling to offer voluntary guidance, it will be extremely challenging to expect any progress in terms of policy development in the United States.
Important events.
European Central Bank Forum for Central Banking
1 p.m. HKT/SGT(5 a.m. UTC): Japan Leading Economic Index (April)
Source Coindesk
