Standard Kepler

Global Push to Tax Cryptocurrencies

03/26 – 04/01

MARKET HIGHLIGHTS

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  • Market cap and transaction volume slid for the cryptocurrencies market: As of 1 April, the market capitalization of cryptocurrencies amounts to 259.56 billion, a 21.1% decrease compared to last week. As Twitter banned ads on cryptocurrencies, BTC settled at $6895.74, a 19.5% decrease. Followed by the release of ETH by EOS, ETH fell by 25.17% to $389.85.
  • Miner’s revenue falls for Bitcoin and Ethereum mining: With the plunging price for Bitcoin and Ethereum this week, the revenue for Bitcoin and Ethereum miners also fell by 11.76% and 20.58%. For Bitcoin hashrate distribution, BTC.TOP replaced ViaBTC as the 3rd largest Bitcoin mining pool.
  • Regulators are gearing up on proposing tax frameworks for cryptocurrencies: Followed by the tax framework announced by Thailand, the South Korean government also announced the introduction of a tax regulatory framework for crypto sales, to be implemented by June.
  • Most ICOs come from diversified industries with an increasing % of ICO funds successfully raised: There are 139 ICOs ending this week, a 3.4x increase. These ICOs are mostly registered in the United States and Europe (notably in the UK and Russia). The ICO projects are diverse in terms of industries, as led by marketplace, blockchain services and trading. Besides, the % of funds successfully raised for ICO projects improved this week.


INDUSTRY OVERVIEW

  • Slumping market cap for most crypto assets: According to Coinmarketcap as of 1 April, the total market capitalization of cryptocurrencies amounts to 259.56 billion, a 21.1% decrease compared to last week. Among the top 100 crypto assets, 63 of them slump >20% in market capitalization. STORM, being the top gainer last week, is the top loser with 41.09% decrease. There are only 7 crypto assets with rising market capitalization, with MITH experiencing a 376.77% weekly increase. In general, the cryptocurrencies market suffered from the ban on ads by Twitter, and the release of ETH by EOS this week.
  • Transaction volume also falls for crypto assets: As of April 1, the transaction volume (24h) of top 100 cryptocurrencies is 9.54Bn, a 25.2% weekly decrease. 81 out of the top 100 crypto assets decreased in transaction volume with 34 falling more than 50%. The most notable decrease in transaction volume (24h) is STORM (93.86%). The top gainer in transaction volume (24h) is CNX, with a 5x weekly increase.


BTC & ETH MINING

  • BTC.TOP replaces ViaBTC as the 3rd largest Bitcoin mining pool: BTC.com and AntPool remains the largest Bitcoin mining pools, with a share of 22.65% and 15.68% respectively. The top 3 Bitcoin mining pool contributes 50.5% of the world’s total Bitcoin mining power.
  • Fall in miner’s revenue for BTC and ETH: The transaction fee paid to Bitcoin miners has fallen by 10%, causing the revenue for Bitcoin miners to fall by 11.76%. For Ethereum, miner’s revenue fell by 20.58%. This can be explained by the downward trend of daily fee mining reward for Ethereum miners, a 11.5% weekly decrease.
  • Weekly transactions per block are less active for Bitcoin: The average daily transactions per block of Bitcoin is 1,172, a 5.8% weekly decrease. This can be explained by a 4.22% weekly increase of Bitcoin’s hash rate.


LATEST NEWS AT A GLANCE

The tax regulatory framework for cryptocurrencies has been heated up for Asian regulators this week. This can be seen by the release of a cryptocurrencies tax framework by Thailand, as well as the announcement made by the South Korean government. It is believed that the proposed tax framework can ease investor concerns regarding potential tax evasion, and money laundering activities.

Industry Application

  • Crypto exchange Bitfinex won’t support Venezuela’s Petro, following US gov’t ban: This decision is made based on the fact that the US had recently banned all US citizens from purchasing Petro, as well as other similar Venezuelan digital currencies that could be introduced in the future.
  • Major international insurance alliance forms Swiss blockchain startup: The Blockchain initiative B3I, run by insurance giants such as Swiss Re and Allianz, aims to create a blockchain trading platform for a value-added chain of the entire insurance industry.
  • Ripple joins Hyperledger blockchain consortium: Through the partnership with Hyperledger, Ripple’s developers will be able to access Interledger Protocol (ILP) in Java for enterprise use.

Regulatory

  • Singapore, Japan associations sign agreement for joint fintech development: The Singapore Fintech Association (SFA) and the Fintech Association of Japan (FAJ) have signed a Memorandum of Understanding (MOU) in order to collaborate on fintech development. This agreement will raise the profile of the Japanese fintech industry and promote Singapore as a destination for Japanese business in wider Asia.
  • Two Japanese Bitcoin exchanges choose shutdown over regulatory compliance: Mr. Exchange and Tokyo Gateway will cease trading as they failed to provide security credentials to the Financial Services Authority (FSA) in the wake of Coincheck’s $530 million hack in January.
  • South Korean regulators to release crypto tax framework by June: The South Korean government’s crypto tax task force has proposed a “transfer income tax that levies taxes on profits” made from crypto sales. The government adds that full-scale “virtual currency regulation” will be set up after local elections on June 13.


ICO RECAP

  • The ICOs are fragmented in terms of place of registration and industries application: There are 139 ICO projects ending this week, and the place of registration is highly fragmented with the US remaining the most active venue for ICOs (17%). The ICO projects are fragmented in terms of industries and marketplace (24%), blockchain service (19%) and trading (15%) remain the leaders.
  • Raising % of ICO funds successfully raised: Compared to last week, the % of funds successfully raised by ICO projects have improved, with Nexo successfully raising 95% of funds. This is due to adjusted fundraising goals, and increasing investor sentiment regarding ICOs increases this week.
  • Telegram raised US$ 850m in 2nd round of presale: A total of $1.7 billion are raised during the presale and the proceeds are used to develop the Telegram Open Network (TON).


OUTLOOK

It is observed that countries and industry leaders are gearing up in forming alliances in leveraging blockchain applications. From the fintech agreement between Singapore and Japan, to the blockchain startup formed by insurance giants, it is expected that the forming of blockchain alliances will be intensified in the future.

© 2018 Standard Kepler