78th Edition
Jan 28, 2023
This week in The Flippening, TL;DR
- Bitcoin and Ethereum leading the way out from a crypto winter
- Ethereum launches Shanghai mainnet shadow fork
- US Senator pushes for Bitcoin to become legal tender
Top Highlights of the Week
1. On the right track
Bitcoin saw a minor mid-week correction that saw its value go from north of $23,000 to $22,400, before taking a major U-turn to jump to a January high of $23,501. Currently, it remains consolidated just below $23,000. That is still a gain of more than 11% in just the past week. Not one to be left far behind, Ethereum, clocked a growth of 6.5% in the week.
Our takeaway: The top cryptos have had a pretty busy week. January has been a break-out month for top cryptos, with Bitcoin and Ethereum leading the pack. They've also seen a cumulative trading volume of over $35 billion in the past 24 hours! The two largest cryptos are seen as benchmarks for the rest of the industry and their performance is surely signs of a thawing crypto winter.
2. Without a shadow of a doubt
Ethereum users are one step closer to receiving access to withdrawing staked ETH worth $26 billion on the network. This past week saw Ethereum's core developers successfully deploying the first mainnet shadow fork to test the readiness of the ETH withdrawal mechanism. The feature is expected to go live in March, and is currently on track.
Our takeaway: Ethereum's having a good time in the market right now, and as more and more promising news of future upgrades keep coming in, it's bound to reflect on the coin's market standing as well. Ethereum's strong fundamentals carried it through a brutal crypto winter, and it looks like it's time to reap the rewards.
3. #LegalizeBit
On January 25th, a US Senator from Arizona, Wendy Rogers, introduced a bill for Bitcoin to be recognized as legal tender. This is only one of many crypto bills tabled by the state of Arizona. Rogers has been a long-time Bitcoin enthusiast and vocal supporter of digital assets. Her other bills suggest granting permission for cryptocurrencies to be accepted as a method of payment.
Our takeaway: We've been advocates of regulations for crypto for the longest time, and this news is music to our ears. Regulations will play a big role in the adoption of crypto by mainstream retail investors. Trust in the digital asset grows by the day, and moves like this only add fuel to crypto's tank for the inevitable bull run.
- UK government considering a national cryptocurrency or 'Digital Pound.' Who's next? Read here.
- Web3 startup raises $10 million, backed by Jay-Z. Blockchain tech and rappers- better love story than Twilight. Read here.
- Celsius mulling new token launch as part of restructuring. Who says finance isn't creative? Read here.
- Crypto miners migrate to US states following China ban. Home is where the mining rig is. Read here.
Crypto simplified
Let’s discuss taxes! Crypto taxes, to be specific.
Most governments feel taxation in crypto is necessary for the same reasons that taxes are applied to traditional forms of income: to fund government operations and public services.
Why do we feel it is necessary?
Tax reporting on cryptocurrency transactions can help prevent illegal activities such as money laundering, scams, and other illicit activities. 2022 saw enough unfortunate events, and tax reporting can be instrumental in bringing these down.
Now that crypto is getting increasingly closer to mainstream financial markets, governments worldwide are evaluating this emerging asset class closer than ever before.
Current status of crypto taxation
UAE, Germany, and New Zealand are pioneers in setting the tone for mainstream crypto adoption. These nations have also stood up to the reputation in terms of regulations.
Countries like India and Turkey are still evaluating it as an asset class and are figuring out addressing wider challenges.
Canada treats cryptocurrency as a digital asset whose purchase or holding does not attract tax, but the sale does.
Germany has an interesting perspective. It views cryptocurrency as private money and not a capital asset. It does not attract any tax if you hold cryptos for more than a year.
USA’s Internal Revenue Service (IRS) states that buying and selling crypto is identified as property, not currency, for tax purposes.
What’s in store as we move ahead
Progressive regulations, hopefully! On a serious note, central governments need to develop constructive regulations for technological developments around the maturing asset class.
Disclaimer: All price movements are recorded up to 03:30 PM UTC, 27th Jan 2023
All the top cryptos stayed on track for another good week, with Cardano seeing the biggest 7-day jump.
Disclaimer: All price movements are recorded up to 03:30 PM UTC, 27th Jan 2023
Sector-wise performance remains in the green (and by a healthy amount) across the board as well.
Coin of the week 💸
Polkadot: $DOT
The Polkadot ecosystem has largely focussed on keeping their heads down and building the best versions of their products. Its native token, DOT, has been following a range bound momentum for quite some time. And it is showing signs that the crypto might just be poised to break past its long-term resistance level and move much higher. We will be keeping our eyes on DOT for the coming couple of weeks.
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