- Are Bitcoin’s competitors missing the point? Castle Island Ventures Partner Nic Carter believes some altcoins aren’t properly innovating and making the kind of technological advancements BTC is known for.
- Bitcoin stumbled on Tuesday, leading to some analysts adopting a bearish outlook of the prominent token. So far, BTC has defending against the 200-day moving average, and a small rebound within the next few days is possible.
- Tether is now the world’s fourth-biggest cryptocurrency, a first for a token tied to the U.S. dollar.
- Portugal has chosen not to collect taxes on the buying and selling of cryptocurrency.
Bitcoin’s Competitors Are Missing The Point Of Cryptocurrency And Blockchain Technology
When it comes to cryptocurrency, Bitcoin is by far the most prevalent and valuable token on the market. Created as a decentralized alternative to traditional currency, BTC has become a household name — and inspired countless would-be competitors. According to Castle Island Ventures Partner Nic Carter, however, many of these crypto startups are missing the point of the technology upon which Bitcoin was founded.
Carter elaborated on these views in a recent episode of the Unchained podcast, specifically calling out altcoins. “There has been insufficient attention given to the legitimacy-conferring factors for the long tail of altcoins,” according to Carter. In other words, altcoins haven’t paid properly utilized technical innovations the way Bitcoin and others have done using blockchain.
Carter also calls out a few additional concerns: “How do you ensure that the developers can’t abuse their privilege within the system? Are there checks and balances? Is the monetary policy credible, for instance? And oftentimes, what we actually see in these systems is those credibility-endowing facts are traded off to achieve glamour metrics or technical thresholds.”
Carter used the EOS altcoin as an example of this issue. While supporters of EOS tend to point to the high number of transactions the network can process per second as a key selling point, the fact that trade offs are made in terms of the relative centralization of the validator set is oftentimes overlooked. Some of the issues associated with this centralization of the validator set were covered in a recent CoinDesk article.
“[A high degree of centralization] poses a greater threat to the long-term legitimacy of the network, which is not outweighed by the marginal technical enhancement there,” added Carter.
The level of centralization around publicly-identifiable validation nodes seen in some altcoin networks, such as EOS and Ripple (XRP), puts into question whether these altcoins should even be referred to as true cryptocurrencies.
Bitcoin May See Brief Bounce After Defending Key Price Support
After a solid year of rising prices, Bitcoin took a tumble this week, falling more than 10% in value. However, in the three days since, BTC has been defending the key 200-day moving average support, which may result in a minor bounce back upwards.
After dropping to a recent low of $7,998 on Tuesday, September 24, Bitcoin closed above the 200-day moving average. Some analysts have taken a bearish outlook on the prolific token, believing another dip to $7,500 is possible. The bearish outlook would be invalidated if BTC’s predicted bounce goes above $9,097.
As of writing, bitcoin’s weekly chart is reporting a double-top bearish reversal pattern.
The cryptocurrency is currently trading well below the double top neckline of $9,533 and loss set to end the week (Sunday, UTC) below that level, as the relative strength index has turned bearish below 50 for the first time since the end of March.
The MACD histogram is also reporting bearish conditions with a below-zero print.
The double top breakout, a bearish reversal pattern, would be invalidated if prices rise back above $9,533.
Dollar-pegged a stablecoin Tether is now the world’s 4th biggest cryptocurrency
The Next Web
Tether, a blockchain-based token with its value tied to the U.S. dollar, is now the world’s fourth-biggest cryptocurrency behind Bitcoin, Ethereum, and Ripple. With a market capitalization of $4.13 billion, Tether achieved a $36 billion trading volume in a 24-hour period.
Created in 2012, Tether is actually only 74% backed by cash and other assets, and has been the target of some controversy. Aside from accusations of price manipulation, Tether was unable to meet all withdrawal requests in 2017, despite claiming to hold the dollar value of all of its available tokens. Tether announced a new relationship with the Bahamas-based Deltec Bank in late 2018.
Although Tether enthusiasts may see this as cause for celebration, I wonder how hardcore cryptocurrency fans will stomach a stablecoin pegged to the US dollar being in the top four – it’s likely they’ll find it outright tragic.
Portugal Tax Authorities Clarify That Buying Or Selling Cryptocurrency Is Tax-Free
One of the most complex issues that has arisen alongside the prominence of cryptocurrency is how to handle taxes on digital tokens. Countries like the United States have chosen to tax crypto like any other form of income, and the IRS has been cracking down on token holders. Meanwhile, across the Atlantic, Portugal is going in the opposite direction. The Portuguese Tax & Customs Authority has announced that buying and selling cryptocurrency is a tax-free endeavor within its borders.
There are a few exceptions: first of all, using tokens in exchange for goods or services doesn’t cancel out the taxes on the original transaction. Also, those who deal in crypto for professional or business reasons may still be subject to some taxes. Naturally, U.S.-based crypto holders can’t simply take a trip to Europe to duck out on token taxes, as United States residents are still taxed on global income.
Not all European Union (EU) countries completely agree with Portugal. For example, the PTA cited a Swedish court case, Skatteverker (Administração Fiscal Sueca) v. David Hedqvist, in which the court ruled that trading cryptocurrency was not subject to VAT. However, the Swedish Tax Administration appealed that decision and it eventually advanced to the European Court of Justice (ECJ) where it was upheld. Other EU countries have taken various positions on the taxation of cryptocurrency depending on how it was obtained and how it was used.
The U.S. has, since 2014, consistently treated cryptocurrency as a capital asset if it can be converted into cash. This means that capital gains rules apply to any gains or losses. (You can read more on the taxation of cryptocurrencies like Bitcoin according to the IRS here.)
With the announcement, Portugal has made it clear that it is – at least for now – a tax-friendly home for those who buy and sell cryptocurrency. But don’t pack your bags just yet: Remember that U.S. citizens are taxed on their worldwide income, meaning that a trip across the pond won’t be enough to slash your tax bill.
That’s the roundup for September 28th. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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