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| bitcoin he best Sundays are for long reads and deep conversations. Earlier in the week the Let's Talk Bitcoin! The show gathered to debate Coronavirus and its potential impacts or disruptions to the decentralized world of bitcoin. Later, we hear from correspondent George Ettinger about the indications of a "Dumb Currency Singularity" happening at the IRS immediately (also presented fully text below). Listen/subscribe to the CoinDesk Podcast feed for unique perspectives and fresh daily insight with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, IHeartRadio or RSS. On today's podcast we discuss Coronavirus and: The bitcoin mining industry and therefore the slowing rate of hash-rate increases within the run-up to the 2020 halving shelter, uncorrelated and risk asset narratives because the price of bitcoin bounces defies expectations The potential for shifts in how society cares money within the wake of a highly transmissible global disease Plus a quick primer on virus families (skip to 13 minutes for blockchain only content if you're already up to speed) Credits for LTB#429 - Coronavirus Impacts on Bitcoin (And the IRS's Dumb Singularity)This episode of Let's Talk Bitcoin! Is sponsored by Purse.Io and eToro.Com.This episode featured Stephanie Murphy, Andreas M. Antonopoulos, George Ettinger, and Adam B. LevineToday's episode was produced by Adam B. Levine, edited by Adam B. Levine with music provided by Jared Rubens and Adam B. LevineWould you wish to Sponsor a future episode of the Let's Talk Bitcoin! Show? does one have any questions or comments? Email adam@ltbshow.Com The Dumb Singularity: Crypto Currencies and Game Currencies are Overdue for a Collision So. it's come to the present . one among the most important barriers to entry for disruptive technology is that the incompetence of the typical consumer. On the opposite hand, simply preying on the illiteracy of consumers is often a boon for a few truly terrible inventions. it's within the clash of those two ideologies that we've reached the Dumb Currency Singularity. The digital currency has been on track for the Dumb Singularity for overflow a decade, and that we finally passed the event horizon late last year. At the top of 2019, the IRS quietly published a group of virtual currency guidelines that broadly lumped together mainstream cryptocurrencies like Bitcoin and Ethereum with honest-to-god Fortnite V-Bucks and Roblox Money. I even have just been informed that the legal term for Roblox currency is "Robux." That seems... Fair. My point, however roundabout it's going to be, is that somebody during a position of some influence at the us tax income Service saw their grandkid beg for a Roblox card within the Walgreens queue and thought, "MY GOD, THE BIT-COINS HAVE COME FOR the youngsters ." then, when he put his horror to print, enough a phalanx of fellow IRS employees looked it over and thought "yes, that sounds right" that it had been greenlit for public consumption. That advisement (to which the IRS claimed players of Fortnite and Roblox must report any purchases of "Bucks", whether "V"- or "Ro"-) stood monolithically for nearly three months before it had been escorted off the stage even as quietly because it had arrived. during a fit of Streisanding, this alteration caught more attention than the addition had garnered to start with, and therefore the IRS gave a proper explanation. "The IRS recognizes that the language on our page potentially caused concern for a few taxpayers," they said. "We have changed the language to reduce any confusion. Transacting in virtual currencies as a part of a game that doesn't leave the sports environment (virtual currencies that aren't convertible) wouldn't require a taxpayer to point this on their income tax return ." This is, surprisingly, rather huge. Huge therein they got this follow-up explanation relatively right, and large therein they still continue getting so-called "virtual currency" wrong. You see, the IRS has been caught flat-footed over and over with every passing year that cryptocurrency has spread. They were slow enough recognizing the growing importance of Bitcoin that it wasn't until 2013 that they designated a team to start planning for a way to handle the currency… and that they still haven't found out the way to handle it. Yet, dating back even before this, the IRS has ALSO been blindsided at every turn by non-crypto "gaming" digital currencies. Their official language conflating the 2 is not just a red flag- it’s a canary within the coalpit. Game Currencies- for simplicity, hereafter mentioned as, uh, "Game Currencies"- run a good gamut but the bulk is strictly what the IRS did not recognize in Fortnite and Roblox: a non-convertible, non-transferrable currency that can't reasonably leave the confines of its game. Your Fortnite V-Bucks and Apex Legends Coins and… [SIGH]... Ro-Bux… are just an interstitial medium between your real money and therefore the gameplay. you are doing not trade these with other players, nor does one have the choices to require these chips up to the casino counter and cash them back out: once your USD enters the sport, it cannot leave it in any reasonable form. After the first point-of-sale, a Game Currency is not any different from Sonic's rings. So, for as correct because the IRS eventually got it, they've still been handling Game Currencies wrong, and it's informed the ways they still get Crypto wrong. Many game currencies ARE transferrable and ARE dangerously viable mediums for exchange and laundering, and that they are around longer than Bitcoin. It's absolutely no secret that World of Warcraft gold is player-transferrable: it is the entire reason "gold farming" remains a legitimate source of income for therefore many. Though less ubiquitous than Warcraft, the seminal Supply Chain Actuary Simulator EVE Online notoriously monetized its monthly subscription cards into a consumable ingame item. For those unfamiliar, this suggests that once you buy a month of game time, it is not simply added to your account: it becomes an item in your game inventory which will either be wont to extend your subscription, or TRADED with other players as a dollar-pegged commodity. Now, the truly fantastical economic tales of cash laundering, actual virtual space piracy, and actual-million-actual-dollar banking deals in Eve Online can and HAS filled several books, so I will be able to not enter detail here. the purpose is, simply, that player-exchangeable cash-value items are a huge grey marketplace for years and continued to slide under the IRS's nose. They didn't bat an eye fixed at the horrifying headlines of Diablo 3's aborted real-cash firm fiasco, yet now in 2020, they're fumbling to understand onto its legacy. That fumbling is part-and-parcel with their fumbling of Bitcoin, and therefore the timeline tells a story. A recent Government Accountability Office review of IRS virtual currency policies painted a somewhat scathing picture of a bureaucracy that was slow to note and even slower to adapt. The IRS initiative in 2013 was a kneejerk response to the primary truly landmark year of Bitcoin cash trading, where dollar parity was suddenly blown aside by a hundred dollar parity. The impetus is obvious: disruptive changes to currency don't interest the IRS until they see it on the "Wacky Stories" segment of their local station news. The financial establishments that stood to realize from digital currencies were quick on the uptake, but the groups tasked with oversight were responding to changing conditions and new developments with the grace of a grandparent still gift wrapping cabbage patch dolls for the kids' 35th birthdays. The GAO points out that, across three years, the IRS was trying to garner clues from the 900 folks that had self-reported Bitcoin capital gains. That's right- from 2013 to 2015, nearly thousand god-fearing Americans had the saintly humility to self-report their Bitcoin earnings to the feds, and it took three years of study for those feds to deduce that there could be more out there going unreported. Kudos, by the way, to those 900 honorable people that attempted to observe out for the watchmen while the watchmen weren't even watching. In these years since, the spectrum of cryptocurrencies has exploded and therefore the applications of game currencies have become strangely homogenized. Convertible game currencies like Warcraft gold persist, but they're the exception instead of the rule. Publishers have found that stifling a cross-player economy gives them a far better control over the experience and much less accountability for what's through with that cash . Fortnite follows this contemporary standard; real currency is an aggressively-optimized one-way be the due player to the publisher, with no convertible gains to tax. The IRS has long ago missed the boat on game currencies. Why, then, did they so recently then awkwardly hit cryptocurrencies within the revenue service's jumbled mind? This, my friend, is that the beginning of the Dumb Singularity: desperation and technological-illiteracy have finally boiled over, and therefore the bureau is trying to play catch-up on the years that have passed it by. they'll have smoothed over the initial blunder, but this is often indicative of their intent to maneuver forward with a more active hand, and therefore the broad use the phrase "virtual currency" means more blunders lie ahead. The GAO excoriated them for his or her slowness, vagueness, and all-around wishy-washiness in these regards, but to some extent, it had been not the IRS's fault. The organization has struggled under budget cuts and a dangerous lack of latest blood, and yes, you'll read that as younger-and-more-savvy blood. it had been that very same old blood that struggled to form any headway with their internal Virtual Currency Issues Team in 2013 and still wasn't seriously analyzing self-reported data from major crypto exchanges even into 2016. Some gentle flame finally reached their backsides sometime after, because by 2018 they were bent |getting down to"> starting to proactively reach out to users with obvious crypto gains and attempting to secure accurate reporting. Now, with the top of the tax year 2019 upon us, they're finally facing the ontological conundrum in the middle of the Dumb Singularity: what's the Enforceable Definition of "Virtual Currency?" what is going to distinguish between play money and dangerous money? While they dragged their feet comprehending the question, the answers have gotten only more muddled as technology blazed trails forward with no policy guidance. This year, game currencies are completely surpassing retail purchases because the primary source of publisher revenue and most of them aren't convertible or taxable; most, but not all. The IRS's complacency left it with a huge ecosystem to sift through and a scarcity of reliable, literate talent to try to to it. If their random grab at the foremost obvious game currencies they might consider was any indication, there'll be more broad and clumsy strokes before there are any real answers. The IRS has the unenviable task of writing an ideal definition during a language it can't seem to talk , all because they never got around the asking the question that I accidentally came across twenty years ago. When my 13-year-old self spent 10 bucks on eBay for a wealth of obviously-hacked Phantasy Star Online loot, I wondered: what laws can actually apply to the person who Game-Genies' his paychecks? Disclosure Read More The leader in blockchain news, CoinDesk may be a media outlet that strives for the very best journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. |
Forget The Coronavirus—Is This the important Reason Bitcoin Suddenly Collapsed?
Bitcoin crashed in the week, collapsing by almost 15% over the last seven-days and dragging down the broader cryptocurrency market. The bitcoin price, which has had a fantastic start to the year, had been hovering around $10,000 per bitcoin before moving sharply lower—diving even as global markets went into free fall thanks to the spreading coronavirus. However, many thought bitcoin had begun acting as a so-called shelter asset, rising as equity and riskier assets fell, and a ruling by the U.S. Securities and Exchange Commission (SEC) against a long-hoped-for bitcoin exchange-traded fund (ETF) might somewhat explain the sudden sell-off. The bitcoin price had been bouncing around the $10,000 mark for a previous couple of weeks before moving ... [+] sharply lower--leaving many bitcoin and crypto analysts scratching their heads over the explanation for the sell-off. SOPA Images/LightRocket via Getty Images On Wednesday, the SEC rejected an ETF application from New York-based asset management firm Wilshire Phoenix and options exchange NYSE Arca that wanted to combine bitcoin and short-term Treasuries. "The Commission concludes that NYSE Arca has not established that the relevant bitcoin market possesses a resistance to manipulation that's unique beyond that of traditional security or commodity markets such it's inherently immune to manipulation," the SEC said during a statement. Bitcoin dropped some 6% on Wednesday, taking the bitcoin price below the psychological $9,000 per bitcoin mark and exacerbating a slump within the price. Bitcoin has now found a short-lived floor of around $8,500 after its slide lower this past week. The SEC has rejected many applications for a bitcoin ETF over recent years, meaning this latest ruling didn't come as a surprise. "I didn’t see any viable reason why this can be accepted when others were denied," Bloomberg analyst James Seyffart said. However, comments accompanying the ruling have suggested the SEC won't greenlight a bitcoin ETF for the foreseeable future. SEC commissioner Hester Peirce, referred to as "crypto mom" within the bitcoin community thanks to her support of cryptocurrency products, said the rejection leads her "to conclude that this Commission is unwilling to approve the listing of any product that might provide access to the marketplace for bitcoin which no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products." Wilshire had said it might work to counteract bitcoin's volatility by investing fettered if the bitcoin price fluctuated too heavily—and reversing that position because the price stabilized. The bitcoin price has struggled in the week after climbing over a previous couple of months, though many are ... [+] still feeling positive for bitcoin's short term prospects. Coinbase "We made every effort to urge the SEC’s attention on this important issue, including undertaking extensive analysis that was made available to the SEC staff, submitting key data, and offering to supply additional information to facilitate the listing of a way needed regulated bitcoin-related ETP within the us ," Wilshire Phoenix said following the ruling, adding it's "very disappointing." Earlier this year, bitcoin seemed to be boosted by geopolitical fears surrounding the escalating tensions between the U.S. And Iran then apparently gaining on fears the coronavirus could knock global trade—leading some to suggest the cryptocurrency had begun performing as a secure haven asset almost like gold or the Japanese yen. Following bitcoin's crash in the week , cryptocurrency market watchers appear to possess returned to assessing bitcoin supported its own metrics. "Bitcoin’s value isn’t derived from an equivalent indicator as fiat, like interest rates and GDP," said the chief executive of crypto social trading platform HedgeTrade, Dave Waslen. "Bitcoin is only driven by demand which is why it often remains steady when other markets are teetering." Looking ahead into 2020, bitcoin traders and investors have tons to feel bullish about. The bitcoin mining sector is gearing up for the looming May bitcoin halving event, which can see the number of bitcoins rewarded to miners cut by half—something many hopes is going to be a positive for the bitcoin price. Elsewhere, bitcoin is predicted to be upgraded during a so-called soft fork later this year, a development that's been called "one of the foremost innovative additions" that bitcoin's had. The soft fork, which may be a change to a cryptocurrency's protocol that does not require all nodes to be updated and is backward-compatible, is predicted to enhance bitcoin's privacy and scalability. Alongside technical developments, a consumer app for bitcoin and cryptocurrency purchases from bitcoin futures market Bakkt will launch within the half of 2020. U.S. Coffee chain Starbucks is going to be its first launch partner, with the corporate one among the first backers of the crypto project, alongside software giant Microsoft and Boston Consulting Group.
?Bitcoin Price Falls $1,400 In One Week — is that the market Back?
This week the equity markets experienced their worst week in 12 years and as this meltdown happened the crypto market also took successfully. Bitcoin (BTC) and therefore the cryptocurrency market saw a big selloff in the week and this outcome is comparatively reasonable as long as people sell their assets out of fear of potential economic instability. Other safe-haven assets like gold and silver also saw a huge selloff on Friday. Are the crypto markets getting to find support within the coming weeks, or will we see a continued downtrend in momentum? Crypto market daily performance. Source: Coin360 Selloff ensues after Bitcoin lost key support at $9,400 the worth of Bitcoin found resistance at the $10,400 level, after which a test of the $9,400 support was heavily needed. The $9,400 level was unable to supply sustainable support and because the price fell through it this caused a big selloff throughout the crypto market. BTC USDT daily chart. Source: TradingView The sell-off led to subsequent support area at $8,200-8,400 and lots of horizontal levels are lining over here , providing potential temporary support and space for a relief rally. However, for the short term, many believe that the upwards momentum is out of the markets because the price of Bitcoin is making a lower low (a key indicator for downwards momentum) on the daily timeframe. Does this mean that the whole crypto market will reverse course and enter a bearish trend? Not in the least . the worth of Bitcoin remains 27% higher as on the first of January, which makes Bitcoin one among the best-performing assets of the year. Weekly chart brings focus to the 21-Week MA BTC USD 1-week chart. Source: TradingView The weekly chart is currently resting on an exciting MA (Moving Average), namely the 21-week MA. The previous bull cycle held this level as support towards the bull peak in December 2017, which makes this a stimulating indicator for bulls to carry on to. If the worth could find support at this level, it could mean a continuation of bullish momentum within the coming period. BTC USD 1-week chart. Source: TradingView The weekly chart also clearly shows the huge selloff of the past week. However, it’s currently resting on potential support. Holding the green zone around $8,400 would line up with the 21-WMA and possibly grant a relief rally. For sustained upwards momentum, a breakthrough of the past high at $10,400 must take place but such a move could take a while . The market must find support before these levels are often targeted. If Bitcoin price can’t find support at $8,400, the subsequent level to focus on is at $7,500-$7,700. Total market capitalization searches for support Total market capitalization cryptocurrency chart. Source: TradingView the entire market capitalization for cryptocurrencies was unable to interrupt above $300 billion and also couldn’t find support at $250 billion so further downwards momentum was expected. Currently, an exciting level is approaching because the 21-WMA is additional exposure to this chart. Through the entire bull cycle of 2016-2017, the 21-WMA granted support on the entire market capitalization as an entire . Providing support during this area would give bulls arguments for upwards momentum. apart from the 21-WMA, an important horizontal level is often seen here. During 2018 and 2019, the market capitalization found support at the $225 billion level several times. Showing support here would grant potential upward continuation, because the total market capitalization had been making higher lows since rock bottom in December 2018. Are altcoins on the brink of bottoming out? Total altcoin cryptocurrency market capitalization chart. Source: TradingView The altcoin market capitalization shows an identical outlook because of the remainder of the market. There was a huge rejection at the horizontal level at $115 billion, through which the altcoins are checking out support also. the subsequent significant level is found around $73-$75 billion, which is analogous to the $225 billion of total market capitalization. Since rock bottom in December 2018, altcoins are consistently made higher lows, warranting a replacement upwards trend to occur. Finding support around the $73 billion levels would warrant another higher low and potential continuation upwards. The bullish scenario for Bitcoin If the scenario turned bullish, a relief rally towards $9,200-9,400 would be the primary step. to try to do this, Bitcoin price must find support at $8,250-$8,400 to sustain some upwards momentum to retest previous support levels for resistance. BTC USD 12-hour bullish scenario chart. Source: TradingView subsequent important question investors will ask will be: Can Bitcoin price break through the resistance and continue its upward momentum? If the solution is not any , a possible retest of the $8,200-$8,400 area is next to occur. However, breaking the resistance around $9,200-$9,400 and making it support would open the door for a move to subsequent levels near the $10,400 highs of a fortnight ago. and eventually , finding support around this area would confirm the 21-WMA to be supported again, which may be a massive indicator for bull/bear momentum. The bearish scenario for Bitcoin BTC USD 4-hour chart. Source: TradingView There’s no clear guideline for a bearish scenario at now , but the chart is showing several perspectives. What traders should search for are potential bearish retests. If the worth of Bitcoin rallies upwards with none volume and rejects at $8,950 or maybe $9,175, a bearish retest is confirmed, and therefore the price should trend further down. If such a bearish retest occurs, the worth will likely retest the support around $8,200-$8,400 another time. However, the more support gets tested, the weaker it becomes. Heavy retests of this support would typically induce further continuation downwards to $7,500-$7,700 because of the next primary support after this zone. The views and opinions expressed here are solely those of the author and don't necessarily reflect the views of the Cointelegraph. Every investment and trading move involves risk. you ought to conduct your own research when making a choice.
