The IRS is seeking third-party contractors who can analyze crypto holdings on 2020 tax returns.
- After some initial price fluctuations, bitcoins halving appears to have reduced implied volatility by almost 20%.
- The IRS is reaching out to third-party contractors for assistance in analyzing crypto holdings for tax returns.
- During the “Money Re-Imagined” panel at Consensus:Distributed, speakers discussed how central banks could incorporate privacy into upcoming digital currencies.
- The Austrian blockchain project HotCity aims to crowdsource waste heat hotspots and channel them into public heating.
Bitcoin’s recent halving was publicized for months, heralded as a new age for the popular crypto. And yet, despite some initial price fluctuations, the halving produced a minimal net impact on token prices. In fact, bitcoins implied volatility decreased from 102% to 80% following the event.
Bitcoin’s lackluster response to the halving is hardly surprising as the event has been extensively discussed over many months and was factored in by the market.
Speaking at CoinDesk’s Consensus: Distributed virtual conference, Cynthia Wu, head of business development and sales at digital assets financial services firm Matrixport, said, “Halving was already priced in and the cryptocurrency could trade in the range of $8,000 to $10,000 in the near term.”
Bitcoin reversed the sell-off from $10,000 to $3,867 seen in the first half of March in the eight weeks to May 7. The spectacular rise was at least in part fueled by the bullish speculative buzz surrounding the halving. There was evidence of both small and large investors accumulating coins in the run-up to the event. However, an additional price bump failed to materialize, in line with Wu’s comment.
The Internal Revenue Service (IRS) has expressed interest in processing crypto holdings for tax returns, but its expertise with tokens is limited. To that end, the IRS sent letters to third-party contractors in the hope of gaining their assistance. One of these letters — published by CryptoTrader.Tax — asks for help in report preparation, data discrepancy analysis, error resolution, and more.
“To whom it may concern:
The Internal Revenue Service is engaging outside contractors to assist our Revenue Agents in calculating taxpayers’ gains or losses as a result of their transactions involving virtual currency. We are placing a few single-case contracts as pilots with a goal of publishing a solicitation and request for proposal for a larger multi-case contract. Attached is a sample Statement of Work describing the types of services we are looking for. I wanted to make you aware of our efforts in case your company has any interest in pursuing this type of work.”
As central banks take bold steps to develop their cryptocurrencies, a new debate has emerged regarding whether these technologies can maintain individual privacy. During this week’s s “Money Re-Imagined” panel at Consensus:Distributed, speakers addressed issues such as the ways anonymity can be harmful, and how privacy is implemented differently across cultures.
Christopher Giancarlo, the director of the Digital Dollar Project and former chairman of the U.S. Commodity Futures Trading Commission, asserted that a state-issued virtual currency affords opportunities to code nuanced privacy-balanced individual rights with the oversight needs of government.
“Getting the privacy balance right” must be a “design imperative” for any digitized fiat currency, argued Giancarlo.
Giancarlo argued that the objective of a digital dollar should be the creation of a currency that is the preferred unit of money among the public by choice, stressing that the design for any digital dollar initiative must be informed through vigorous public debate.
What if blockchain could directly reduce the amount of CO2 released into the atmosphere? One Austrian project called HotSpot aims to find out by analyzing waste heat hotspots in Vienna and Graz. If this project is effective, it will enable Austria to redistribute waste as a form of energy for consumers.
“Plus-energy districts” that produce more heat energy than they consume can generally feed some of that waste heat into the grid, increasing efficiency.
But while large sources of waste heat, like large factories and data centers, are easy to identify, smaller sources remain untapped.
The HotCity project would thus help form precise and granular data sets that could help improve urban planning in Austria. The project received a 310,000 Euro grant from the Austrian Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation, and Technology.
That’s the crypto news roundup for May 16, 2020. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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