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There is no hiding the fact that taxes hinder Bitcoin and crypto spending. The US Internal Revenue Service (IRS) and other regulators, in countries where cryptocurrencies are classified as commodities subject to capital gain taxes, are actively monitoring crypto transactions.

Individuals who don’t file their returns are often penalized, at least judging from the collective action of tax collectors. Paying to Czar what belongs to him is apparently a big obstacle to crypto adoption unless there are regulatory changes. And the effects are being felt according to a report by Long Hash.

The IRS and Coinbase

The report states that the number of users using Bitcoin to pay for goods and services is on the decline.

For a long time now, the writing has been on the wall. With fuzzy laws and policies around Bitcoin and cryptocurrencies in general, it wasn’t long before policy makers and tax collection agencies dug in their heels and began offerin “guidance”.

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To that effect, the US IRS reportedly sent over 10,000 letters to Coinbase account holders, educating them of their obligations regarding taxes and advising them to carefully file their tax returns. It was also revealed that the US IRS might know about attempts to evade taxes through enforceable actions taken against exchanges as Coinbase.

Volatility is Bitcoin’s Achilles Heel

Such smothering actions are obvious impediments and as Bitcoin fashions itself as electronic money, its volatility is proving to be its weakness.

Regulators, like investors, want to generate as much revenue as possible from price gains. As such they effectively classify crypto as commodities, not legal tender. In countries such as Japan, crypto capital gain taxes are punishing and upwards of 40%.

Solution Through Policy

To remedy this and spark adoption, ShapeShift CEO Erik Voorhees, says the issue around Bitcoin taxation should be solved at a policy level since tax implication to would-be users is too much to bear, in a recent panel with Sergej Kotliar, the CEO of Bitrefill, during the Bitcoin 2019 conference in San Francisco.

“An average person on the street that wants to buy something for $20 with Bitcoin, they’re not going to care if they’re not reporting taxes on that. Those types of people, in terms of spending power, represent a very tiny amount. The actual [majority] of spending power generally comes from people, by definition, with more money. Those people tend to, by definition, care more about tax consequences.”

Do you think that taxes are an impediment in crypto adoption? How do you think should crypto be taxed? Share your views with us in the comments below!

Summary

Bitcoin (BTC) Not used for Payment Because of Taxes

Article Name

Bitcoin (BTC) Not used for Payment Because of Taxes

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There is no hiding the fact that taxes hinder Bitcoin spending. The US Internal Revenue Service (IRS) and other regulators are actively monitoring crypto transactions slowing down adoption.

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Dalmas Ngetich

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CoinGape

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cryptocoach

Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



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Dalmas Ngetich , 2019-11-23 08:56:26 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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