Bitcoin

Will Investors Leave the Country?

Published

1 month ago

October 17, 2024

Coin2049 Newsletter

Italy is considering a dramatic raise to its capital gains tax on Bitcoin (BTC) and other cryptocurrencies from 26% to 42%. The move could place it among the countries with the highest crypto taxation rates in Europe.

This decision, part of Italy’s 2025 budget plan, aims to address fiscal shortfalls by leveraging the fast-growing digital asset market.

Italy Risks Crypto Flight With 42% Bitcoin Capital Gains Tax

Italy’s Deputy Economy Minister Maurizio Leo announced the tax hike at a Wednesday conference. He said increasing the capital gains tax by 16% would bolster public services amid budgetary constraints. The government hopes that the added revenue will help address the country’s fiscal challenges, particularly funding public services and healthcare.

The plan also includes scrapping the revenue thresholds for Italy’s Digital Services Tax (DST), a measure targeting large digital platforms. Previously, the DST applied only to companies generating over €750 million (or approximately $815 million) in global revenue. However, this will no longer be the case if the proposed bill passes.

It is worth noting that Italy’s proposed 16% increase in capital gains tax contradicts what Prime Minister Giorgia Meloni recently wrote on X (formerly Twitter).

“…we [the Council of Ministers] approved the budget law, an intervention that puts citizens, families, and the relaunch of our Nation at the center. As we promised, there will be no new taxes for citizens. In addition, we will make the tax cut on workers structural, and 3.5 billion from banks and insurance companies will be allocated to Healthcare and the most vulnerable to ensure better services that are closer to everyone’s needs. With this Government, Italy looks to the future with a budget law that puts the work and well-being of Italians first,” Prime Minister Meloni shared.

The prospective capital gains tax has sparked significant controversy among investors and industry leaders, with largely negative reactions. The general sentiment is that it could stifle the country’s growing financial sector, especially in crypto.

Specifically, many argue that the move could push crypto investors out of Italy, potentially leading to capital flight. This occurs when investors move funds abroad to avoid taxes or inflation, seek better returns, or prepare for possible emigration.

The same happened in India in 2022, where heavy taxes on digital assets adversely affected crypto trading volumes. The government imposed a 30% capital gains tax on profits from digital assets starting in April 2022. Additionally, losses from one asset could not be used to offset taxes on profits from other assets, further impacting traders.

At the time, some overseas platforms saw signups surge to as many as 450,000, as Indian investors sought alternatives to avoid the country’s high taxes. This created a domino effect, with many shifting to foreign platforms. Given this precedent, there are concerns that Italy could face a similar exodus of crypto activity if heavy taxation policies are enforced.

“Time to leave Italy,” Lorenzo, a popular user on X, quipped.

Therefore, the risk to the local crypto industry is considerable as the bill awaits going into the voting stage. The proposed tax hike also comes at a time when Italy’s broader financial policies are in the limelight. In 2022, Italy imposed a 26% tax on cryptocurrency profits exceeding €2,000 (or $2,172). This marked a significant shift in the country’s approach to digital assets.

Against these backdrops, the latest proposed increase could make Italy one of the least attractive European nations for cryptocurrency investors. From a global context, this capital gains tax proposal would place it in a unique position in Europe. Italy could also lose its position in the region in terms of trading volume metrics.

Estimated crypto trading volume across European countries. Source: CoinWire Analysis

Noteworthy, the Italian parliament will vote on the proposal later this year. If approved, this tax policy could come into effect in 2025, potentially reshaping Italy’s position in the global cryptocurrency market.

Tether’s CEO Paolo Ardoino is particularly vocal about Italy’s proposed bill, condemning the measure as detrimental to innovation. Ardoino criticized Italy’s plan, suggesting that it would hinder the country’s ability to attract new technological ventures.

“How dare the subjects use the Bitcoin as protection/optionality towards Italian financial policies,” Ardoino noted.

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Bitcoin

$81k Bitcoin Sparks Frenzy – Google Searches Reach All-Time High

Published

1 hour ago

November 17, 2024

Coin2049 Newsletter

Bitcoin isn’t just making a spectacular run in the market of late, with its price hitting over $81,000, another all-time high. According to Google Trends, Bitcoin searches on its search engine have surged by nearly 60% in just one day, as the digital asset’s price continue to soar.

Google Trends figures show searches for BTC last November 10th were up from 37 points compared to the previous day. There has been a notable increase in search volume for the term, which coincides with the asset’s market run, which started at around $70k and went up to $80k.

Its futures premiums also surged. Also, open interest in the alpha coin’s price topping $90k increased to $2.8 billion at the Deribi derivatives exchange, a popular platform for futures trading.

Bitcoin search result in the past week. Source: Google Trends

Bitcoin’s Price Run Boosting Google Searches

Thanks to its recent bullish price action, interest in Bitcoin is coming back. According to Google Trends, interest in the asset started on October 27. Using a 90-day scale, global data suggests that the “Bitcoin” search term hit 51 out of 100 last October 30th.

Google Trends uses a scale of 1 to 100 to measure interest in search terms and track these terms by location over time. In the past three months, El Salvador has been the top location in South America for “Bitcoin” searches.

BTC market cap currently at $1.6 trillion. Chart: TradingView.com

Interest In BTC Peaked A Day After US Elections

According to Google Trends, interest in the popular digital asset rose last November 6th. Online searches for the term netted 100 points during that day, coinciding with the asset’s price hitting $75,639, an increase of 9% from the previous day’s price.

Source: Bitstamp

By November 7th, interest levels on the term slightly dropped to just 55 points. Also, web searches for BTC dipped in the following days to just 44 and 37 points. On November 10th, the search term came back, with interest levels at 58 points.

Many analysts have tied Google Trends data to BTC price action. Currently, BTC trades for $80,500, reflecting an increase of 4% in the last 24 hours and a 16% increase in a week. Also, searches for Bitcoin-related news increased last November 10th, registering 91 points from the previous day’s 40, showing a 56% increase. Even YouTube searches for the crypto increased by 92 points.

Bitcoin Continues Rally, Gets Favorable Market Acceptance Under Trump

Bitcoin hit another all-time high this November 10th, suggesting increasing confidence in the incoming (and second) Trump administration. During the elections, Trump was seen as the pro-crypto candidate with friendly policy proposals.

Initially, Trump tagged Bitcoin and cryptocurrency as scams. However, during this year’s campaign, Trump changed his tune and adopted a more friendly stance on cryptocurrencies. In one of his public speeches, Trump pitched for a Bitcoin stockpile for the US and even launched a cryptocurrency platform, The World Liberty Financial.

Featured image from Pexels, chart from TradingView

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Bitcoin

Anthony Pompliano Says Why Trump Must Keep Bitcoin Reserve Promise

Published

2 hours ago

November 17, 2024

Coin2049 Newsletter

Founder and CEO of Professional Capital Management Anthony Pompliano has emphasized the importance of Donald Trump setting up a national Bitcoin (BTC) reserve. The entrepreneur has also shared some thoughts on the selection of the next SEC chairman which may hold more weight for altcoins than Bitcoin.

There’s A Global Race Underway For Bitcoin – Pompliano

In a recent interview with Yahoo Finance, Anthony Pompliano commented on the crypto market’s buoyant reaction to Trump’s electoral victory.

According to Pompliano, investors believe the Republican President-elect and are highly confident in his willingness to implement all crypto-related manifestos. He explains that this belief is backed by recent price surges as investors are getting into positions and allocating resources to enjoy the benefits of Donald Trump’s promised crypto-friendly administration.

Anthony Pompliano states it is vital the incoming US President sticks to his words, especially in regard to the national Bitcoin reserve. In this regard, he highlights that it is not only important the US retains its current Bitcoin tokens, but also actively acquires more of the crypto.

According to Pompliano, this buying strategy is needed as there is a global race for Bitcoin at the moment, which is proving to be a strong hedge against inflation. Therefore, the US local, state, and federal governments must aim to get involved and acquire as many Bitcoins as possible.

Just like Bhutan with a $1 billion BTC sheet, Pompliano is urging Trump to follow suit but on a larger scale of $100 billion BTC which he claims is small compared to the US national spending.

Pompliano: No Preferred Candidate For New SEC Chair

When commenting on Donald Trump’s appointments, Anthony Pompliano has stated he has no favorite candidate to be chairman of the US Securities and Exchange Commission (SEC).

With Gary Gensler’s hectic regime approaching a fast end, the boss at Professional Capital Management states the new SEC Chair must be “smart, prudent and pro-crypto”.

Interestingly, Pompliano also aligns with the interviewer’s sentiments that this new appointment and the SEC’s policy moving forward will hold more regulatory implications for altcoins than Bitcoin. He explains that Bitcoin, while being the king of the crypto market, has already gained enough regulatory clarity, same with Ethereum. Therefore, altcoins especially those with ETF applications such as Solana are set to gain from any improved regulatory system.

At the time of writing, Gary Gensler’s replacement remains unknown with multiple candidates reportedly in consideration. These candidates include Wall Street lawyer Richard Farley, Robinhood Chief Legal Officer Dan Gallagher, former SEC Commissioner Chris Giancarlo, and former SEC General Counsel Robert Stebbins among others.

Featured image from IQ.wiki, chart from Tradingview

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Bitcoin

MicroStrategy Rises in Financial Rankings With $26B Bitcoin Stash

Published

5 hours ago

November 17, 2024

Coin2049 Newsletter

MicroStrategy’s decision to shift from traditional cash reserves to Bitcoin has reshaped its financial profile, catapulting the company into the spotlight as a leader in digital asset adoption.

This transformation coincides with Bitcoin’s recent surge to unprecedented price levels, significantly boosting MicroStrategy’s standing in corporate financial rankings.

Bitcoin-Focused MicroStrategy Outshines IBM and Nike in Asset Reserves

The company’s Bitcoin stash, now valued at approximately $26 billion, reportedly surpasses the cash and liquid assets held by giants like IBM, Nike, and Johnson & Johnson. For comparison, CompaniesMarketCap data shows that Nike’s reported cash and securities totaled $10.9 billion as of August, while IBM held $13.7 billion. Johnson & Johnson’s latest quarterly figures listed $20.29 billion.

This financial position shows that the niche software provider has redefined its identity by embracing Bitcoin as a core financial asset. However, despite this impressive position, MicroStrategy still trails around 14 companies, including Apple and Alphabet, in terms of corporate treasury assets.

MicroStrategy's Treasury. — MicroStrategy’s Treasury Source: Bloomberg

The company began acquiring Bitcoin in 2020 as a countermeasure against inflation and declining revenue growth. Initially funded through operational cash flow, these purchases expanded to include capital raised via stock sales and convertible debt issuance.

To date, MicroStrategy has amassed 279,240 BTC at an average acquisition cost of $42,888, with a total investment of roughly $11.9 billion. This positions the firm as the largest publicly traded Bitcoin holder, controlling around 1.3% of the cryptocurrency’s total supply.

What initially faced skepticism has now become a major draw for investors seeking indirect exposure to Bitcoin. The shift in sentiment has propelled MicroStrategy’s stock by over 2,500% since 2020. This aligns with Bitcoin’s remarkable 700% price growth during the same timeframe.

MicroStrategy Bitcoin Holdings. Source: Saylortracker

Currently, the unrealized profit of MicroStrategy’s Bitcoin holdings stands at $13.4 billion, representing a 112% increase. The firm’s Bitcoin yield — measuring the relationship between its Bitcoin holdings and outstanding shares — has risen 26.4% year-to-date.

However, MicroStrategy’s executive chairman, Michael Saylor, remains steadfast in the company’s Bitcoin-centric vision. The firm plans to raise $42 billion over the coming years to expand its Bitcoin holdings further. Meanwhile, MicroStrategy aims to transform into a trillion-dollar Bitcoin bank, solidifying its role as a pioneer in corporate Bitcoin adoption.

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