Friday Road Trip 12/8/2017
Crypto Derivatives May Implode the CME!
So the expected CHAOS around the introduction of Bitcoin Futures Trading is here. Another 100% Webbot hit that Clif can hang on his Wall of Fame!!
Right now, I don't know if any futures trading will actually happen as the banks are definitely getting cold feet...
Stunning Bitcoin Swings Promise Stop-and-Start Futures Sessions
https://www.bloomberg.com/news/articles/2017-12-07/stunning-bitcoin-rallies-portend-stop-and-start-futures-sessions
Bitcoin futures trading looks like it's going to be choppy.
The cryptocurrency's eye-popping rally would have triggered so-called circuit breakers on seven of the past 10 days, pausing or even halting trading to ensure an orderly session, based on rules planned by exchanges.
CME Group Inc. stipulates a two-minute trading pause if the price of the contract rises or falls 7 percent from the prior day's settlement price. There'd be another two-minute pause if the gap widened to 13 percent. No trades can occur at prices higher than 20 percent from the settlement.
Thursday would've been wild. The 7 percent threshold hit less than two hours after the session started. A few hours later 13 percent fell. Around 10:15 a.m., the 20 percent cap was hit and held for about an hour. And the price popped above that level at least six other times over the rest of the day.
Cboe Global Markets Inc. has its own rules, halting trading for two minutes if prices rise or fall 10 percent, and for five minutes at 20 percent. Cboe futures are set to start Sunday, while CME targets Dec. 18.
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Remember from the latest 3 Amigos video that the CME will look like "Yosemite Sam" shooting themselves in the foot! Check out 0:24:00 mark and the 1:37:00 mark where we talk about the CME shooting themselves in the foot.
A few things come to mind here when talking about the introduction of futures aka derivatives in Bitcoin:
1) SOMEBODY caused the recent price of Bitcoin to spike going up over 30% in a day a few days ago. SOMEBODY can do that with a click of a mouse!
2) As to WHY they decided to spike Bitcoin may have to do with scaring the banksters away from attempting to control the price of BTC via derivatives.
3) It may also be a plan to destroy BTC in favor of BCH so with the big run up in BTC where this single entity loaded up on BTC now has the ability to dump everything they bought in order to destroy the price of BTC.
4) BCH and Litecoin may be the biggest beneficiaries of the chaos in BTC and today's Litcoin action may be a precursor to that.
5) Clearly, NOBODY can argue that Bitcoin and the crypto currencies are just a flash in the pan and are going away anytime soon. They will be with us for DECADES which is more than I can say for the current fiat currencies.
6) Whatever happens it will be chaotic both for BTC and for all the exchanges trying to trade BTC futures. Knowing the Good Guys desire to keep the cryptos strong and healthy my bet is that the Crypto-Verse will win 100% in the end!
Those are just some of my thoughts.
Just more reason to have a little of everyone of my top 15 picks I posted here:
SPECIAL ROAD TRIP: 15 CRYPTOS for the FUTURE!
//www.roadtoroota.com/members/SPECIAL-ROAD-TRIP-BIXS-CRYPTO-PORTFOLIO-2.cfm
If you need help getting started think about joining the Roota Crypto School at the bottom of this Road Trip!
Crypto Taxes and You
Yes, you should be paying taxes on your cryptos just like any other asset class. You should keep all your records and you should know what they want...purchase price/date and sale price/date. There are many ways to figure your taxes and as long as you stay consistent then it should be no more scary than reporting a stock gain/loss.
Here's a good take on the crypto taxing situation...
The only thing I would add is that if you can't track your trades the IRS can't either...not advice just a heads up.
Of course, the biggest problem for both sides is that the are VERY LITTLE RULES around crypto regulation and if there are no rules on the books then I don't see how the gov't can justify ENFORCING crypto laws....especially if there are none!
But who wants to get into a fight with the IRS??(...they are still a criminal arm of the Bad Guys!)
Here's a good breakdown of where the current guidelines are around the world...
USA: In the United States, the Internal Revenue Service (IRS) considers cryptocurrencies to be property.-
In a legal sense, then, this means that your crypto investments will be subject to a capital gains tax--either a short-term capital gain rate or a long-term capital gain rate depending on how long you held your crypto before taking a profit. If you cash your crypto out within one year of buying it, then you'll be hit with the steeper short-term capital gains tax. These short-term rates are typically whatever your regular tax rate is, so if you're taxed at 25%, then so, too, will your short-term gains be taxed at the same rate. For U.S. users who cash their crypto out after one year of holding it, they'll contend with the long-term capital gains tax rates of 0%, 15%, and 20% depending on their tax bracket. And the Cryptocurrency Fairness in Taxation Act (CFTA) is also currently being debated in the U.S. Congress; this will would exempt all crypto transactions beneath $600 from taxation.
Canada: Per a 2013 interpretation letter, the Canadian Revenue Agency (CRA) declared cryptocurrencies are commodities- under Canadian law--just like silver or natural gas.
This means here your crypto will either be taxed as business income or as a capital gain (or business loss and capital loss, respectively).
Mexico: The Mexican government has an open-minded, liberalized legal attitude toward Bitcoin. Domestic regulatory framework is not yet finalized, but the nation's legislature is actively designing new measures. Europe
UK: The British government repealed their VAT tax against Bitcoin in 2014. Now, most cryptocurrency transactions are exempt from VAT fees in the nation.
Moreover, the HM Treasury considers BTC and other cryptocurrencies to be assets,- not legal currencies. This mandates such crypto be taxed either by an income tax or a capital gains depending on the circumstances (if you're a trader, for example, you'll pay income tax vs capital gains for normal investors).
Mining as part of a business will have to pay corporation tax at the standard rate of 20%.
If you are an individual, you will pay capital gains tax on any profits you make from your cryptocurrency investments. It should be noted that each person has an allowance of £11,300 per year which is tax-free. You are also able to gift- some of your crypto investment to your wife who will also have the £11,300 allowance. If you plan your withdrawal properly and do it in April ( start / end of new tax year ) you could withdraw £11,330 on the 5th of april and £11,300 on the 6th of april which means they fall in separate tax years. You can double that amount if you are married, meaning it's possible to withdraw £45,200 without having to pay tax.
Switzerland: The Swiss have officially categorized Bitcoin as a foreign currency.-
Capital gains taxes aren't applied to the vast majority of individuals in Switzerland, either, so that's another important dynamic to consider.
The Netherlands: Holland's Finance Minister announced that the Dutch government would be considering Bitcoin and the like as barter items- henceforth.
This classification was a liberal one, giving crypto users in the nation no need to license their activities or meet any sort of compliance regulations.
Accordingly, Dutch crypto users' holdings are taxed according to these users' respective basic income tax rates.
Germany: Like the UK, Germany doesn't apply a VAT tax to cryptocurrencies.
If you're a trader, you have free capital gains up to €800 Euros. Once you breach this amount, you'll need to pay a 25% flat-rate on your speculative gains.
If you've made gains from simply holding your crypto and never moving it, you won't owe any taxes in Germany.
Again, like in Britain, large-scale mining operations are hit with company taxes here.
Italy: Zero taxation on cryptocurrencies as of Q3 2017.
Russia: Taxation laws as applied to individual users are unset for now. However, Russian president Vladimir Putin just instructed the Russian Duma to draft up a framework through which to regulate and tax large crypto mining operations in the nation. Asia
China: In Q3 2017, China banned crypto exchanges and Initial Coin Offerings (ICOs) indefinitely in domestic markets, leading many pundits to wonder if the Chinese Communist Party was on the verge of banning crypto ownership altogether.
The reasons for these bans? Chinese regulators are concerned about clamping down on the possibilities of money laundering through crypto before the crypto space gets too big and too unmanageable.
Per Sheng Songcheng, a top economic adviser to the People's Bank of China:
Because it is traded anonymously and peer to peer, Bitcoin makes it easy for money laundering and tax evasion.-
These Chinese bans will likely not be permanent, but they will remain as Chinese administrators further workout a new tax framework.
Japan: Japan's top regulatory watchdog considers Bitcoin to be a commodity.- The nation's government also ended the 8% Consumption tax- that hitherto applied to crypto on July 1st, 2017.
Beyond that, Japanese crypto users contend with all of the normal taxation models: income tax, capital gains tax, and company tax.
South Korea: South Korean regulators are currently exploring a range of taxation options including 1) value-added taxation (VAT), 2) gift taxes, 3) income tax, and 4) capital gains tax.
Thailand: Bitcoin was illegalized in Thailand in 2013 and then re-allowed in 2014 with numerous restrictions. Beyond
Israel: Israel's top financial watchdog drafted up new rules at the beginning of 2017 that classified cryptocurrencies as assets- that must fall under the purview of capital gains taxes in the nation.
Australia: The Australian government just ended the infamous double tax- on crypto in Australia by exempting cryptocurrencies there from facing the goods-and-services tax (GST).
Bolivia: Bolivian officials have banned cryptocurrencies, arguing that they enable tax evasion.
Turkey: Cryptocurrencies are taxed just as any other regular financial instruments are here.
Brazil: Brazilian legislators have characterized crypto as an asset,- not a currency.
Accordingly, Brazilian crypto users face a 15% capital gains tax on their profits. Most Nations See Cryptocurrencies As Property
As you can see, then, the predominant international trend is to regulate cryptocurrencies like Bitcoin as if they were property- and assets.- Most nations have yet to come around to the idea of treat crypto like real currencies in a technical, legal sense.
Whether this dynamic will hold true over the next ten years, though, is anyone's guess.
It's clear for now that regulators have only just begun to seriously scrutinize regulating cryptocurrencies. Indeed, many more tax updates are in store for crypto users the world over in the years ahead.
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Roota's Crypto School Membership Discount
So you can't quite get your head around the Crypto-verse yet and you need some guidance???
It's time to go to SCHOOL!!
I have teamed up with "V" the Gureilla Economist and his partner Frank to get a huge discount on a Crytpo School membership ONLY for Private Road Members. The Crypto School is just starting up...just like we all are and it will be adding content as we go along. Currently there are training videos on the following topics:
Part 1: GET STARTED: 3 Ways to buy Bitcoin and Cryptocurrencies with DOLLARS (USD).
Part 2: Sending, Receiving & Holding Cryptos
Part 3: MyEtherWallet.com: Important Tool for Holding ERC20 Tokens and participating in ICOs. (Bonus: Shapeshift.io)
Part 4: EtherDelta.com: A Crypto Exchange for Pros like YOU and me!
Part 5: Bittrex.com: Another Crypto Exchange for Crypto Big Shots like YOU!
RESOURCES
- How to Track Your WHOLE Portfolio in One Place
- V's Top 7 Cryptos and Where to Find Them
There will be many more videos added as more issues arise in the ever changing crypto space. I will also be contributing videos now and then so keep an eye out for me!
As I said, I have talked V and Frank into giving Private Road Members a special 50% discount at $150 for a Lifetime Membership!
But you have to use the below link and then provide them with your Private Road USERNAME to get the $150 rate.
More info here:
Roota's Crypto School Discounted Membership Offer
//www.roadtoroota.com/members/Rootas-Crypto-School-2.cfm
Hopefully, you are us for learning as much as you can as we venture into this Brave New World together!
That's it for this week. Stay safe out there!
Bix
