Israeli Draft Bill Proposes Bitcoin be Defined as Currency to Cut Down the Hefty Capital Gain Tax

Four members of the Knesset, Israel’s legislative body, from the Yisrael Beiteinu faction, the secular nationalist political party, have submitted a private member’s bill seeking to amend the taxation of crypto-related activities so that the sale of bitcoin and crypto-assets isn’t subject to 25% capital gains tax, as per local media reports.

The private member’s bill, submitted by MKs Oded Forer, Yevgeny Soba, Yulia Malinowski Kunin, and Alex Kushnir, was tabled earlier this week on Tuesday that seeks to amend the way digital assets activities are taxed under the Income Tax Ordinance.

Under the ordinance, digital currency is considered an asset; as such, its sale and conversion in fiat currency are subject to capital gains tax. Currently, the tax on most capital gains in the country is 25%.

Section 91 of the Income Tax Ordinance, however, provides relief in the taxation of capital gains from short-term lenders or non-CPI linked bonds — they are taxed at only 15%.

“The regulatory reality in Israel is not adapted to the existing reality in the field,” claims the memorandum of the proposal.

The bill also seeks to add a section in the Ordinance, which deals with the “determination of distributed digital currency.” Under this proposed section, the Minister of Finance may prescribe provisions under which the digital assets shall be determined as a distributed digital currency.

The purpose of the bill is that Bitcoin and other digital assets are considered a currency for the taxation purpose.

“The State of Israel has the ability to be among the leaders in the field of digital currencies, if only it recognizes the use of the blockchain as a currency for everything. It is precisely in this period, when the economic future is unclear It is possible to promote digital payment options due to the social distance that has been forced on us,” said K Forer after the bill was submitted.

The same day another bill was tabled in the Knesset that seeks to allow reporting on digital asset trading once every six months or year.

Currently, those who sell digital currencies are required to submit a report to the tax authority within 30 days of the sale, along with paying an advance on the tax rate applicable to the capital gain arising from the transaction.

“The two bills passed last night by MKs Oded Forer and Sharan Hashakel are an infrastructure on which Israel can be developed as a global financial center and a leader in the field of digital currencies,” said Manny Rosenfeld, chairman of the Israeli Bitcoin Association.

Related Reading:

Breaking: European Commission Proposes Legislation to Turn Crypto-Assets into Regulated Financial Instruments

More Reading: US Lawmakers Propose Two New Bills to Streamline Digital Asset And Crypto Exchange Regulation

Also Read: Russia’s Ministry of Finance Tells Traders to Disclose Crypto Wallets Or Face Fines And Jail

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Author: AnTy

Bitcoin Must Outperform Altcoins To Kick Off A Long-Term Bull Market

For the past four days now, bitcoin has been hovering around $11,000. Trading in the green, the digital asset today went as high as $11,185 but with the ‘real’ volume only about a billion dollars.

Much like the spot trading volume, futures had a lackluster performance as well. From $28 billion on Sept. 3rd, it has come down to just $7.2 billion. On CME, the volume kept between $262 million and $445 million since the mid of last week.

Open interest also followed the same path, going down from $5.1 billion to $3.7 billion in the first few days of September. But unlike futures volume, OI has been slowly trending upwards, making it to $4 billion. On CME as well, OI jumped back to $500 million.

However, during this whole ordeal, Bakkt came out the winner, making new records. On Monday this week, the total volume (physically-settled + cash-settled) was $183 million. Then on Wednesday, this record was broken with $191 million. But the OI on Bakkt had no such fun as it remains near $10 million.

What’s Looking Good?

While bitcoin looked good this week, with the price around $11,000, analyst DonAlt is all about the $10,600 area, which according to him, “is still one of the most important areas on the chart.”

“This week closes below it? I’ll assume the top is in, and we’ll trade towards $8k. We close above it? I’ll close shorts and see what happens next,” he said.

Amidst this, European Central Bank will disburse its latest rounds of loans with interest as low as -1% that has led the funding costs to fall. ECB’s liquidity injections may raise excess cash in the euro area above 3 trillion euros ($3.6 trillion) for the first time.

Today, while BTC is looking green, altcoins are not having that great of a time which includes SAFE (-25%), BAL (-16%), KNC (-10%), CRV (-9%), Tezos (-8%), YFI (-7%), and LINK (-4%), with the top ones down between 1% to 3%.

Still, the likes of CREAM (43%), SASHIMI (42%), UNI (40%), YAMV2 (16%), BASED (8%), and Aave (5%) are making gains.

Signs of New Money Moving into Crypto

The leading cryptocurrency is taking its sweet time moving upwards. Up 50.5% YTD, in Q3 bitcoin, has made gains of only 20%, about half of Q2’s 42% returns. But it is still better than gold’s 10.15%, SPX 7%, dollar’s -3.69%, and WTI’s -6.5%.

Quarter third, however, hasn’t really been good for the cryptocurrency, except for in 2017, or stocks for that matter. The next quarter, on the other hand, historically has been dominated by greens — 82.8% in 2015, 62.60% in 2016, and 210% in 2017. In 2014, 2018, and 2019, however, Bitcoin recorded losses of 18%, 42.5%, and 13.60% respectively.

Also, as Juan Villaverde of Weiss Crypto Ratings notes, underneath the surface, we are seeing “crypto-assets establishing a solid base for a potentially explosive rally as we head into the final quarter of 2020.”

His takeaway from the current market action, where bitcoin is moving higher while altcoins are struggling in sharp contrast to the past couple of months,

“Bitcoin remains the benchmark for outside investor interest in the asset class.”

“I’ve often noted on these reports how no crypto bull market is sustainable without Bitcoin leading the way, at least in the early stages,” said Villaverde adding:

“it’s only when we see Bitcoin outperform the rest of the markets to the upside that we can say that new money is moving into the crypto space — a necessary prerequisite for a long-term bull market.”

But it also remains to be seen if bitcoin will continue to outperform over the next few weeks.

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Author: AnTy

Anheuser-Busch InBev, ING Bank, & Rolls Royce Join Mousebelt’s Blockchain Education Alliance

Blockchain Education Alliance, an initiative by Mousebelt, has gained four new significant members according to an announcement by the blockchain accelerator on August 17. They include margin crypto trading platform Multi.io, Rolls Royce, Belgium brewing firm Anheuser-Busch InBev and Dutch-based ING bank.

The project whose fundamental goal is to accelerate blockchain education and research now has 26 members following this addition. Having launched in October 2019, pioneer members included ETC Labs, Nem, LTO Network, Harmony One, Wanchain, ICON, Tron, and the Stellar Development Foundation. It was not long before the initiative attracted the likes of Binance, Mastercard, KuCoin crypto exchange, and Constellation Labs onboard as well.

With such players already approving the Blockchain Education Alliance strategy, some of its milestones include a 72-hour live blockchain education event that was held in May. This virtual conference was dubbed ‘REIMAGINE 2020’ and featured networking events, panel and debates, and a continuous livestream of the keynotes.

Given the prevailing lockdowns at the height of the COVID-19 pandemic, REIMAGINE 2020 attracted students from various universities, giving them exposure to cutting edge tech like blockchain as well as an opportunity to meet with the industry veterans. Mousebelt’s head of Education, Ashlie Meredith, further pointed out that they are looking to nature skills given the looming uncertainty in the global economy,

“In a time when many students will not be returning to campus, increasing opportunities for educational experiences, jobs and internships is of utmost importance.”

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Author: Edwin Munyui

Four Top Chinese State-Owned Banks Are Testing The Chinese Digital Yuan Project (DCEP)

In an unconfirmed report, four Chinese state-owned banks are gradually testing the ‘digital renminbi’ wallet app and Digital Currency/Electronic Payment (DCEP) system in different provinces across the country.

The reports, though unconfirmed, follow the recent comments by the People’s Bank of China (PBoC) confirming the “closed pilot of the digital RMB was completed” with plans to launch research on the legal digital currency underway in this second half of the year.

It was first revealed by a local newspaper, 21st Century Business Herald, who spoke with some of the employees working on the app. As reported, the app is in extensive scale testing in Shenzen and other parts of the country with four major banks – China Construction Bank, Bank of China, Industrial and Commercial Bank of China and Agricultural Bank of China – participating.

According to the report, users will need to have to open a digital account with either of the four banks to register the app. The digital wallets are then linked to various banks allowing the users to recharge their accounts and also spend on different utilities directly – similar to Alipay and WeChat payment services.

However, the app is still not publicly available for downloads as one respondent confirmed:

“Our bank is testing the ‘digital renminbi’ app on a large scale. The app cannot be downloaded publicly for the time being, and it has an identity code after opening it.”

The app allows users to transfer amounts to others by using their phone number or a QR code, pay, save, and spend RMB digitally across several merchants across China.

Read More: Will China’s CBDC See Strong Adoption Or Will Dollar Pegged Stablecoins Cause Resistance?

China has, in the past, hastened its efforts in launching a legal digital currency since the announcement of the Libra project, championed by Facebook. The leading committee on the digital currency, Central Bank’s Digital Currency Research Institute, launched closed pilot tests in Shenzhen, Suzhou, Xiong’an, and Chengdu in preparation for a Winter Olympics 2022 date release.

Moreover, the CBDC is in testing on Tencent Holding’s food delivery app, Meituan Dianping, as well as the Chinese Uber, Didi Chuxing, which are processing billions of dollars annually. China’s hastened launch of its DCEP project aims to reduce the dollar-influence across the country and East Asia.

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Author: Lujan Odera

As Decentralized Finance Continues to Evolve, Big Four Audit Firms Will Play a Major Role in DeFi

Big four audit firms are set to be a significant part of the Decentralized Finance (DeFi) ecosystem according to the latest blockchain industry report by German-based non-profit, dGen.

The DeFi space, which has seen tremendous capital gains in TVL, will grow even more prominent in the coming decade as per dGen insights on its report. Jake Stott, the co-founder of dGen, noted that support from other financial market stakeholders would be inevitable going forward. Tom Howard, Chief Strategy Officer at Mosendo, said;

‘Over time, traditional financial institutions will have no choice but to interact with  decentralized finance tools, slowly disinter-mediating the industry from the inside out.’

Functions like verifying the authenticity of an invoice, tracking payment settlements, and insurance claims could occur faster with the help of a blockchain. Their role will be to act as an intermediary between DeFi and traditional finance.

Dubbed the ‘Decentralised Finance: Usecases & Risks for Mass Adoptionreport, dGen paid particular attention to the DeFi space. Currently, over $2.5 billion in funds is locked within DeFi based products. It is an area that has been hailed as the future of markets given almost all traditional assets are finding their way onto Ethereum based protocols. Though still at its infancy stages, dGen acknowledged this underlying potential in DeFi stating that it,

“could leapfrog the current FinTech industry, providing a new structure of financial services.”

Consequently, this optimistic narrative has gained massive support from across financial services, tech, and the academia elite. DGen’s researchers are bullish that the market could grow past the trillion-dollar mark by 2030. The report highlights that DeFi will: “Provide income for thousands of gamers, streamers, and influencers”

It will also be adopted by European financial institutions who will switch to offering “DeFi-enabled savings and pension accounts.”

A recent Q2 report by industry giant, ConsenSys, concurs on the possibility of a DeFi future given historical growth rates in the past three months. It goes on to detail that Bitcoin tokenization protocols and Yield farming frenzy are the fundamental factors behind this growth as per now.

While the DeFi space has emerged as an avenue to make better interest compared to zero percent in some jurisdictions, it continues to face security threats arising from the core infrastructures.

“Knowledge and security risks will continue to reduce, on top of a growing number of securities in the event of a hack. It appears the solutions the industry needs to scale will come from within the industry itself.”

The team is, however, optimistic the underlying issues might be resolved in as little as one year. Kain Warwick, Founder of Synthetix told dGen,

‘Insurance on DeFi is still extremely limited[…] DeFi still has significant tail risk, so insurance is likely to remain very costly in the short term, but as protocols mature, costs should come down[…] allowing for simpler and more useful insurance to emerge’.

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Author: Edwin Munyui

Hot DeFi Token, Which is Up Over 800% In the Past Year, is the Latest Addition on Binance

The new listing on Binance is the hot DeFi token Synthetix.

Binance is listing four trading pairs – SNX/BTC, SNX/BNB, SNX/BUSD, and SNX/USDT, which will be opened for trading today at 12:00 PM (UTC). Deposits are already open on the exchange.

Built on Ethereum, Synthetix is a token for minting and trading synthetic assets, including cryptos, equities, leveraged tokens, and other real-world assets on its network.

The token SNX is used to earn exchange fees for collateralizing the protocol and can also be staked.

The 28th largest cryptocurrency by market cap, SNX, is up 225% in the past month and more than 830% in the past year. Currently, it is trading at $2.92 in the green.

This token was created back in 2017 when it was initially named Havven. Founded by Kain Warwick, who is also the creator of an Australian crypto payment platform, this project raised about $30 million via Initial Coin Offering (ICO) in March 2018.

Before starting the month, Synthetix launched native binary options as part of its Acrux upgrade. These options are types of contracts that provide a fixed return based on a binary outcome in the future and payout on a specific date.

Its DeFi ecosystem consists of a decentralized exchange and Mintr where SNX stakers can mint and burn Synths to manage their collateralization ratio, track fluctuation in debt, and perform other activities on the network.

Currently, this project is the third biggest one in the DeFi space, as per DeFi Pulse.

The total amount of value locked in this application hit a new all-time high of $393.5 million today, which has been on an uptrend since March 2020.

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Author: AnTy

Ethereum (ETH) Mining Pool, Ethmine, To Receive The $2.6 Million Transaction Fee Paid Out Mysteriously

After a four day wait, the Ethermine mining pool, in charge of verifying the abnormal multi-million transaction fees charged to send Ethereum last week, will distribute the funds to the miners. This follows the lack of response from the account holder who made the transaction.

According to a statement from Bitfly, the company behind the Ethmine pool, miners who were online at the time an unusual transaction took place, will receive the 10,668 ETH in tx fees paid (about $2.3 million at time of writing). After a five day wait and no response from the owners account, the transaction fee which was withheld by the exchange will now be distributed.

The multi-million dollar transfer fees

In the early morning of the London markets opening on Thursday of last week, a rather large transaction fee was noted by whale transfer aggregators leading to Bitfly suspending the distribution of the fees to miners yet. It was an abnormal fee that has never been witnessed before.

For a miniscule 350 ETH transaction from a whale account, the address paid close to $2.6 million in transaction fees at the time leaving the crypto world shocked. However, this was the second of such a transaction with China’s Spark Pool processing another abnormal ETH transaction – 0.55 ETH (~$140 USD) was sent for a $2.6 million transaction fee.

While no reports yet on what could have caused the wild variations in transaction fees, some analysts see this as a case of money laundering or extortion of some kind.

While the second transaction by Bitfly will take a totally different route as explained above, Spark Pool has locked the transfer fee from the miners and are looking for the best way forward on why such a transaction was made.

These two transaction fees break the record for the highest fees ever recorded on a blockchain by a long shot with a transaction fee of 236 ETH (~$130,000) paid in 2018 the previous record.

‘Many wrong senders’

Well, a number of people have come forward to claim the transaction was made by them but there is still no valid transaction id sent by any of the respondents. The official Twitter statement from the Bitfly Company reads,

“While multiple people claimed being the sender of this transaction none of them was able to produce a valid signature of the sending account.”

The distribution of the funds to the miners will be made to the miners according to a “hashrate snapshot took at the time (block #10241999) mined by our Ethermine pool”.

While this was the first time such a large move has occurred, Bitfly states that they will no longer withhold any transaction fee pay outs to miners despite the size of the transaction as it is “advertised policy.” It reads,

“Also we would like to make clarify that in the future we will no longer interfere in the payout of large tx fees.”

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Author: Lujan Odera

Gemini to Add Four More Trading Pairs in Euros and Pounds Bolstering EU Expansion Plans

  • Gemini exchange has now extended support for four more trading pairs to the five they initially offered.
  • They are awaiting pending approval from European authority to operate in the region. They were among the first crypto exchanges to get BitLicense approval from NY authorities.

The Winklevoss twins announced that they have now extended support for four more trading pairs on their Gemini exchange. This was during an interview with the Consensus.

The Winklevoss backed crypto exchange has now unveiled that they have included Orchid Protocol (OXT), DAI, BAT, and Chainlink.

Prior to which they had only offered the markets most popular crypto assets: Bitcoin (BTC), Bitcoin Cash (BCV), Litecoin, Ethereum and Zcash while ignoring EOS and the XRP by Ripple.

The president of Cameroon highlighted that they were well on course with expansion plans into Europe. This as they revealed that they would avail trades in also pounds and Euros alongside the dollar to consolidate their Europe expansion plans. He cited that the projects they now support on Gemini are solving real issues in DeFi such as privacy concerns.

They are now awaiting License approval from European financial watchdogs SEA to allow them to commence operations in the region. This should be a walk in the park as they were among the first exchanges to get the BitLicense approval NYSFDS. The BitLicense grants firms access to operate in the New York Crypto space. Notably, some crypto firms have had trouble being embraced by the NYSFDS.

Zcash Commercial Privacy Aspect

They first onboarded Zcash on their platform in 2018 as the only exchange to do so. According to CEO and co-founder Tyler Winklevoss, Zcash offered a unique alternative for clients who thought the Bitcoin Network was too public.

He cited that Zcash has addressed commercial privacy concerns as they look catapult their exchange to global status. He remained confident that the crypto sphere was set to improve remarking the next four years were the best yet.

“There’s just not much in the way of commercial privacy. Zcash, led by Zooko Wilcox, can do that.”

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Author: Lujan Odera

From the Supply Side, Bitcoin Halving Doesn’t have a “Major Impact” But what about the Demand Side?

The halving is almost here.

Bitcoin block reward halving occurs once every four years. This third such event will result in the bitcoin emission rate cutting in half to 900 BTC per day from the current 1800 BTC a day.

However, there can only be 21 million bitcoin that will ever exist, the only major tradable asset with a supply cap. This helps bitcoin retain its purchasing power especially in a world where fiat currencies with unlimited supply are losing their value fast.

This halving is also the remainder of the leading digital currency’s hard money characteristics.

No major impact from only supply side

But the speculation around price is just as strong with people debating the decrease in emission rates tends to push bitcoin prices up because post halving there will be less sell pressure from miners. BlockTower explained in its latest newsletter.

“While this may have been true in the past due to the large amount of emission relative to outstanding supply, the reality of the current situation is that there is regularly $1b in Bitcoin volume and a decrease of $9m of sell volume is negligible on a day to day basis.”

“From a pure supply side look, the halving doesn’t have a major impact.”

But this reduction in new supply issuance combined with the stability of new demand will lead to “a steady upwards drift on price.”

Search interest on Google for the term “bitcoin halving” has already jumped to its all-time highs.

What happened the last two times?

After leading 2019, the best performing asset class in 2020 with over 30% returns, bitcoin is beating gold and Treasuries that are up an impressive 21% and 13% gains respectively.

According to Fundstrat’s Tom Lee, the upcoming halving along with the macro investor Paul Tudor Jones buying bitcoin are “a solid set of tailwinds.”

Historically, halving has resulted in bull runs. In 2012, pre-halving, bitcoin price jumped 663% and post halving it gained over 3400%.

Before the second halving, BTC spiked 383% and post halving, the returns were of 4,080%. However, during the last 2016 halving, the price of bitcoin remained steady for over a month which was followed by a strong correction. The bull run didn’t come two months after that.

This time, Bitcoin has rallied over 340% since December 2018 bottom. But these low returns could actually be a good thing as analyst Rekt Capital pointed out, “if bitcoin rallies less pre-Halving, then it will rally more post-Halving.”

Moreover, most of the exponential growth actually occurs after the halving.

“The bitcoin halving is a key catalyst to beginning a new Bitcoin bull market,” and BTC “rallied between 12,000%-13,000% in each of its halvings to date,” noted the analyst.

On the other hand, although the reduction in supply is relatively negligible, halving is working as a strong marketing tool for bitcoin because of being in stark contrast to the greatest monetary expansion experiment in history.

“With much of the world staring down the barrel of potential inflation, currency crisis (such as in Lebanon) and global instability — this becomes an undeniably attractive opportunity to take a look at a truly scarce asset as a hedge.”

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Author: AnTy

Bitcoin Halving Hype Could Give Way to Consolidation or Retracement, But what about Altcoins?

Just four days away from halving, we have some interesting next few weeks ahead of us.

The world’s leading digital asset is already enjoying an uptrend, currently trading above $9,800, breaking off its relation with equities after the correlation between them reached a peak during the past couple of months. This short pump is rolling off the news of $38.4 Billion hedge fund manager Paul Tudor Jones saying that he will invest a single percent into Bitcoin.

Trader Cantering Clark is expecting S&P 500 to “suffer a bit of altitude sickness up here from a demand standpoint,” as the thing starts going back to normal and approaches “Sell in May and go away” that means “most observed growth in equities occurring between November – April.”

Bitcoin halving on social media

In these last few days leading up to halving, bitcoin-related sentiments that were “sky-high” on most social media channels in the last week’s run-up to $9,000, the mood has cooled down, reports Santiment.

The trend is most visible on Telegram, which recorded a 3-month high only to decline dramatically since BTC’s move above $9k.

Other social channels are reflecting the same pattern. Major crypto subreddits that have been growing “increasingly confident” in Bitcoin since Black Thursday have made a complete 180 and now are firmly in the “ambivalent territory.”

Over the last month, Bitcoin-related sentiment recorded the largest spike on Twitter which is also seeing a steady decline in the bullish overtones since the $9,000 pump.

“The crowd appears deeply divided on the impact of the halvening, its size and direction,” reported Santiment. “At this point, I’d say the bears are just inching out the bulls. But the momentum definitely feels on the side of the bears.”

Now, the facts

The market is eagerly waiting for this third reward halving which the last two times led to bull rallies. As such, everyone is focused on this event that will cut down miners’ revenue into half while the bitcoin network remains strong as ever with all-time high hash rate and difficulty which is near its peak.

But that is to be expected as the analyst with pseudonym Rekt Capital points out, “Investors buy the hype weeks before every Halving.”

Further pointing out the bitcoin halving facts based on previous halvings, he noted that bitcoin retraced on the week of the last two halvings.

After the first halving in 2012, bitcoin consolidated for over a month before rallying, and following 2016 halving, bitcoin retraced and took weeks to recover before it rallied again.

What about altcoins?

Ahead of halving, Bitcoin’s market cap dominance continues to rise, climbing to 75.98%, as per Messari. This jump in BTC’s dominance means altcoins will “feel a lot of pain across the board.”

Already while bitcoin is enjoying a rally, having spiked to $9,800, altcoins are suffering.

Coin360-5-7

“BTC is rallying strongly with only a few days left until the Bitcoin Halving. Unsurprisingly, most of the attention is on BTC which is why capital is flowing away from Altcoins,” said the analyst Rekt Capital.

What this means is that “altcoins will have retraced to attractive prices ahead of their Q2 Hype Cycle.”

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Author: AnTy