Italy plans to introduce 26% tax on profit from cryptocurrencies. The government will charge tax if the profit exceeds 2 thousand euros.
Taxpayers have already received letters demanding to indicate the value of their crypto-assets as of January 1, 2023 in the declaration and pay a tax of 14%.
The sharp decline in the value of cryptocurrencies this year put pressure on the shares of companies working in the field of digital currency mining, writes The Wall Street Journal.
Shares of American miners Riot Blockchain Inc. and TeraWulf Inc. Since the beginning of the year, prices have fallen by 78% and 89%, respectively, while the price of Canadian Hut 8 Mining Corp. and Bitfarms Ltd collapsed by 79% and 71%, respectively.
The price of bitcoin has fallen by about 70% from its November highs to $20,000. As a result, North American mining companies have earned less than $20 million per day in the last week, according to Glassnode. In October last year, the average daily revenue was about $72 million.
The situation is aggravated by the fact that banks are less and less willing to do business with representatives of the cryptocurrency sector, which negatively affects their ability to pay for the purchase of new equipment.
According to Arcane Research analyst Yaran Mellerud, companies have to sell almost all the mined cryptocurrency in order to purchase powerful new computers and chips. According to his estimates, in January-April 2022, publicly traded miners sold about 30% of all bitcoins they mined, and in May the figure exceeded 100% – that is, companies had to sell digital assets from their reserves.
“If they have to liquidate a significant portion of their reserves, this could put even more downward pressure on bitcoin prices,” Mellerud said.
According to Glassnode, if the price of bitcoin falls below $17,600, the miners will be unprofitable. On Saturday, the price of bitcoin at some point fell below $17,630 thousand. IDEG believes that the price at which bitcoin mining turns out to be breakeven is even higher – in the region of $28,000 thousand, and with this forecast, miners have been operating at a loss for several weeks.
The value of cryptocurrencies is falling along with other risky assets, including stocks, amid tightening monetary policy and increasing risks of a global recession, many analysts believe. As the world’s central banks are determined to keep raising rates, the fall in digital currencies could be protracted. So, the investment director of Absolute Strategy Research, Ian Hartnett, believes that bitcoin may well fall to $13,000.
A week earlier, market expert Igor Stakovichenko, responding to a request from Open4Business, said that in the current situation, the fall of the bitcoin market below 22,000 launched a new, even deeper “bearish phase” of the cycle, as it greatly shook the positions of long-term holders of the asset. The long-term holders, who had held their positions during the last drops, could not stand it and started dumping the cue ball at the lowest prices.
“This shook the entire structure, and both technical and macroeconomic indicators today indicate a possible fall in the main cryptocurrency to 16,000 or even lower,” the expert said.
However, according to Stakovichenko, it is too early to bury bitcoin, as “whales” (investors owning more than 10,000 BTC) continue to accumulate this digital currency, which may indicate the possibility of growth in the medium and long term.
In addition, the expert predicted possible stabilization and even some growth of the world’s main cryptocurrency.
CRYPTOCURRENCIES, GLASSNODE, MINERS, RIOT BLOCKCHAIN, SHARES, STAKOVICHENKO, TERAWULF, МЕЛЛЕРУД, ХАРТНЕТТ
The Blockchain Association of Ukraine (BAU) has proposed to make Ukraine competitive jurisdiction for companies dealing with cryptocurrencies and blockchain technology and proposed some principles for being implemented into the law, including the introduction of 5% tax on deals with cryptocurrency.
The respective document was posted on the association’s website last week.
According to the text of the document, proposals for implementation in the legislation in the field of regulation of cryptocurrencies were developed with the aim of accelerating the pace of development of this market.
In particular, according to the association, cryptocurrency exchange and sale transactions should not be subject to VAT and cryptocurrency suppliers should not be tax agents of individuals. For transactions with cryptocurrency, personal income tax should be levied at a rate of 5%, and the tax base should be net profit for the reporting year.
Blockchain Ukraine also proposes to introduce licensing of the exchange of cryptocurrency for fiat currencies.
The BAU said that the proposals of the association were accepted for consideration by the Ministry of Digital Transformation of Ukraine and the interfactional parliamentary association of the Verkhovna Rada Blockchain4Ukraine.
In the near future, it is planned to sign a memorandum of understanding and cooperation between the Ministry of Digital Transformation and the community of blockchain and crypto companies.
The Blockchain Association of Ukraine brings together experts in the blockchain industry and is a non-profit organization that actively promotes the integration of blockchain technology into the Ukrainian economy. The main mission of the association is to develop multilateral dialogue, the result of which will be consensus in all areas of activity.
