bitcoin: Crypto week at a glance: Bitcoin slips below $30,000; Germany issues crypto tax guidelines
This price drop comes as the global financial markets have entered bear market territory for the first time since early 2020. There are many contributing factors to the decline in the Bitcoin price.
Some include geopolitical crises, rising inflation and shifting US monetary policy. These essential factors have continued to drive extra short-term volatility in the stock and crypto markets worldwide.
The high point of Bitcoin in 2022 so far was in the earliest days of January, when its price hit almost $48,000 on Jan. 2. So far, it has stayed above its late January low point below $34,000. This was the lowest price it had attained in the previous six months.
Since the all-time high of Bitcoin in November 2021 of $68,000, Bitcoin has lost almost 40% of its value.
Given the history of volatility in the prices of Bitcoin and other cryptocurrencies, the increase does not guarantee a long-term reversal. The price of Bitcoin will keep fluctuating as it is likely to fall back down as it continues climbing.
Ben McMillan, CIO at IDX Digital Assets, said that just like all other risk assets, crypto prices in 2022 have been driven disproportionately by the Ukraine war, rising inflation and the Fed Policy. Mcmillan also said that while we are watching crypto prices at highly attractive prices on a longer-term outlook, there could well be a considerable decline in the near term.
Nomura Bank announces Bitcoin derivatives
Japan’s Nomura Holdings has started providing Bitcoin over-the-counter (OTC) derivatives to clients. This is the latest move by a conventional financial institution into the cryptocurrency industry. The crypto trades were the Japanese investment bank’s first digital asset trades. Many other investment banks worldwide have looked to provide clients with more cryptocurrency-related services. This is primarily due to high demand from private clients and institutional investors for access to a fast-growing sector.
Germany issues crypto tax guides
Germany’s federal finance ministry has guided the income tax treatment of crypto. Individuals in Germany can now sell bitcoin (BTC) or ether (ETH) tax-free after one year. The German federal finance ministry guidelines also focus on tax issues across various other crypto-centric activities such as staking, lending, mining, airdrops, and hard forks.
On Jan. 1, 2022, the German government passed a new law that focused on encouraging financial institutions to provide cryptocurrency services. The law required any business providing cryptocurrency services in Germany to obtain a license from BaFin, Germany’s Federal Financial Supervisory Authority.
Since that announcement, significant growth was observed in the total number of financial institutions providing crypto services in Germany.
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 mn
On May 10 2022, NFT creator Dapper Labs announced that it had secured funding of $725 million for the expansion of 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. This investment is the tenth time Dapper Labs has sought venture capital investment since it started in early 2018.
Top crypto gainers and losers this week as of 22 May 2022, 12.15 pm:
Top-5 gainers for week
-Kyber Network Crystal v2 (KNC): 56% up
-KuCoin Token (KCS): 23% up
-Klaytn (KLAY): 18% up
-Kava (KAVA): 17% up
-Bora (BORA): 14% up
Top-5 losers for the week
-TerraUSD (UST): 71% down
-The Graph (GRT): 21% down
-Helium (HNT): 18% down
-Convex Finance (CVX): 15% down
-Celo (CELO): 15% down
(Note: Analysis includes top 100 cryptocurrencies only. Source: Coinmarketcap)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
