News updates May 26, 2022
1. Bitcoin Price (BTC/USD) - Reversal OR Continuation? The last couple of days/weeks were truly boring.
BTC has been stuck inside our gray range, and the last couple of days, that range is contracted to form range within a range.
The longer the consolidation, the more aggressive the movement would be after the breakout. So be prepared!
The question is... which way?
Scenario 1: Trend Reversal
For the bulls to take over, we need a daily momentum candle close above the upper bound / gray zone.
In this case, a movement till the upper resistance zone 38k - 40k would be expected.
Scenario 2: Trend Continuation
For the bears to take over, we need a daily momentum candle close below the lower bound / gray zone.
In this case, a movement till the lower demand zone resistance 18k - 20k would be expected.
2. Crypto Regulation Rules Must Be Implemented in EU to Protect Investors: Head of EU Regulator ESMA.
As inflation keeps unfolding, retail investors may want to start flowing into risky digital assets, Verena Ross from the European Securities and Markets Authorities (ESMA) believes, according to Bloomberg.
Regulatory pressure on crypto market increases
She has warned about risks that cryptocurrencies may raise for retail buyers who seek to protect their cash during inflation periods and urged for a formal set of regulatory rules to be implemented for digital assets in Europe.
In an interview on Wednesday, Ross stated in an interview that ESMA is closely watching the flow of money that investors are looking to put into various risky assets in order to generate big profits during inflation.
So far, EU regulators are making decisions related to crypto on the basis of their local legislation, where each country chooses to do differently, deciding on their own approach to that.
3. Bitcoin Booster PlanB Accused of Making "Aggressively Stupid" Forecasts.
BlockTower Capital CIO Ari Paul has lashed out at pseudonymous cryptocurrency analyst PlanB in a recent tweet, accusing the popular Dutch influencer of making "aggressively stupid" price forecasts.
He described the analyst as the "Terra/IOTA/XRP" of Bitcoin predictions, referring to controversial cryptocurrencies that often face accusations of fraud.
PlanB's stock-to-flow (S2F), which predicts that the price of Bitcoin will keep seeing higher peaks due to its in-built scarcity, gained plenty of popularity within the cryptocurrency community. It has appeared on CNBC, the leading business news TV channel in the U.S., gaining more fans. Meanwhile, PlanB became one of the top Bitcoin influencers on Twitter, with more than 1.8 million followers.
4. Number of new Bitcoin addresses plummets; What does it mean for BTC?
As most of the cryptocurrency market is back to trading in the bearish red after a short period of recovery, the public sentiment around its flagship digital asset – Bitcoin (BTC) – is following suit, as demonstrated by the declining number of new addresses on the network.
In fact, the number of new addresses created on the BTC network has dropped in the past few days, ending up at an average of 376,488 as of May 24, according to the tweet published by crypto analyst Ali Martinez on May 25.
As per the chart the crypto trading expert published alongside the tweet, the number of new Bitcoin addresses according to the seven-day moving average before May 20 stood at around 425,000, which means that in the meantime, this number has declined by around 11.41%.
Whales jumping Bitcoin ship as well?
At the same time, the number of Bitcoin whales – or the addresses holding at least 1,000 Bitcoin – has recorded losses as well. As per another chart tweeted by Ali Martinez on May 25.
5. ECB president’s anti-crypto comments trigger community responses
On a Dutch talk show, Christine Lagarde said that crypto is “worth nothing,” as there’s no underlying asset that backs the currencies.
The crypto community has fired back at European Central Bank (ECB) President Christine Lagarde for her recent anti-crypto remarks, with people expressing disappointment and even criticizing the euro.
As crypto markets show signs of stagnation, Lagarde reminded the world of her stance on cryptocurrencies. According to her, cryptocurrencies are “worth nothing” because the assets are “based on nothing.” Additionally, she expressed concerns for those who invest in crypto and called for regulation.
Responding to these comments, the crypto community expressed their sentiments. Sheila Warren, CEO of the Crypto Council for Innovation, wrote that she’s disappointed, but not surprised, to hear these comments. According to Warren, the “new digital economy will run on a combination of digital currencies, including crypto, stablecoins and CBDCs [central bank digital currencies].”
Meanwhile, crypto analyst Lark Davis took the opportunity to react to Lagarde’s remarks. Quoting the ECB president, Davis tweeted that instead of describing crypto, she just “described the $euro” because it’s “printed out of thin air.”
6. TURKEY CRAFTS LEGISLATION FOR BITCOIN, CRYPTO OVERSIGHT: REPORT
Turkish governing party is reportedly set to submit bills to parliament in the coming weeks to better regulate the Bitcoin and cryptocurrency markets.
Turkey is close to presenting draft legislation to regulate the Bitcoin market, especially businesses involved in the sector that operate in the country, Bloomberg reported on Wednesday.
Two Turkish officials familiar with the matter told the news outlet that President Recep Tayyip Erdogan’s governing AK Party is set to submit bills to parliament containing the new rules in the coming weeks. The bill is set to include measures for businesses providing cryptocurrency businesses to the public, such as exchanges.
Among the proposals is a requirement that companies have a minimum of 100 million liras ($6 million) in capital, they said, speaking on condition of anonymity to discuss plans that aren’t public,” Bloomberg reported. “Another rule would mandate global cryptocurrency platforms to open branch offices that can be taxed in Turkey, according to the officials.”
The news comes after scandals involving cryptocurrency businesses plagued the country last year.
Faruk Fatih Ozer, the CEO of local cryptocurrency exchange Thodex, fled the country in April 2021, leaving the funds of about 390,000 active users of the exchange irretrievable. Thodex’s lawyer, Bedirhan Oguz Basibuyuk, said at the time that the CEO fled Turkey because he would have been “either arrested or committed suicide” otherwise. The lawyer cited liquidity problems and a years-old hacking incident as part of the reasons for the apparent exit scam.
A Turkish court jailed six suspects later that month as part of its investigation into the Thodex case. The group of suspects included the brother and sister of Ozer as well as senior company employees.
In the same month last year, Turkish authorities reportedly arrested four people connected to another cryptocurrency exchange, Vebitcoin, as part of a fraud investigation.
Following the issues with those two businesses, the Turkish government reportedly began exploring the idea of establishing a central custodian bank for cryptocurrency exchanges. It also instituted a ban on cryptocurrency payments in the same month as its own fiat currency tumbled.
Currently, Turkey is victim of harsh inflationary pressures as President Erdogan refuses to raise interest rates. The country’s population experienced annual increases of 35% in healthcare, 27% in education, 26% in clothing and footwear and 18.71% in communication, according to latest data.
7. Brazil's Federal Revenue now requires citizens to pay taxes on like-kind crypto trades
The Federal Revenue of Brazil wants investors to pay taxes on cryptocurrency trading profits, even if there is no exchange for Brazil's national currency.
Brazil's Federal Reserve (RFB) has declared that Brazilian investors in the crypto-asset market must pay income tax on transactions that involve the like-kind exchange of cryptocurrencies; for example, Bitcoin (BTC) for Ethereum (ETH).
The RFB's declaration was published in the Diário Oficial da União and was the result of a consultation made by a citizen of the country to the regulator. At the end of last year, the group issued an opinion in which it claimed that trading between cryptocurrency pairs is taxable even if there is no conversion to the real (Brazil's national currency).
Although it does not specify what can be understood as "profit," since in the exchange of one crypto asset for another there is no capital gain in fiat currency, it points out that there is, even so, the obligation to pay taxes on the eventual profit:
However it should be noted that not all crypto investors need to declare their trades, as the regulator established that only investors who trade more than BRL 35,000 (roughly $7263.67) in cryptocurrencies should pay income tax.
Capital gains earned on the sale of cryptocurrencies are exempt from income tax if the total value of the sales in a month, of all kinds of cryptoassets or virtual currencies, regardless of their name, is equal to or less than BRL 35,000, 00 (thirty-five thousand reais)," declared the RFB.
Federal deputy Kim Kataguiri (Podemos, or the National Labor Party) previously stated that he considers the Federal Revenue's proposal to be illegal and asked the National Congress to decree the immediate suspension of the determination.
According to Kataguiri, the regulation on the calculation and payment of IRPF (Individual Income Tax) establishes that there will only be capital gain in exchanges when currency is involved (articles 134 and 136 of decrees 9580 and 2018) — which is not the case when trading like-kind crypto assets.
"In the exchange between crypto assets, there is no exchange involving currency; one crypto asset is exchanged for another, therefore, there is no equity increase," declared Kataguiri.
The parliamentarian argued that, pursuant to article 110 of the Tax Code, the tax law cannot change the definition of private law institutes, and therefore the Federal Revenue does not have the power to change an understanding of the Tax Code.
If the Union wants to tax the exchange of crypto-assets, legal innovation will be necessary and, even in this case, doubts may be raised about the constitutionality of the new law. What we have is a completely illegal interpretation made by the tax authorities, which clearly exceeds the power to regulate," said Kataguiri.
Brazilian investors in the cryptocurrency market have been required to declare their crypto assets to the regulator since 2016. In 2019, the Federal Revenue Service of the country published Normative Instruction 1888, which determines that all national exchanges are required to report all cryptocurrency transactions between users to the regulator on a monthly basis.
8. Paraguayan Bill Regulating Crypto Mining and Trading Moves Closer to Law
The legislation was approved with modifications in the country’s Chamber of Deputies and will now return to the Senate, which had passed it in December.
Paraguay's Chamber of Deputies on Wednesday approved by a 40-12 vote a bill regulating crypto mining and trading.
The country’s Senate in December had already passed similar legislation, and the bill will now return to that body with the Chamber of Deputies’ modifications. Once the Senate approves the changes, the pending law would move to the executive branch, which hasn’t yet signaled whether it will sign or veto.
Speaking with CoinDesk last year, Carlos Rejala – one of the bill’s authors – said the legislation aims to attract international miners to Paraguay, which has one of the lowest electricity rates in Latin America at around 5 cents per kilowatt-hour.
If the bill becomes law, individual and corporate miners will have to request authorization for industrial electricity consumption and then apply for a license. The proposal also creates a registry for any individual or legal entity aiming to provide crypto trading or custody services for third parties, although the concept of exchange is not included.
In the debate, Congressman Tadeo Rojas (ANR-Central) argued against the legislation, noting that the Chamber of Deputies’ budget committee recommended rejection. He added the impact on job creation is low compared with the energy consumption required by mining companies.
In favor of the proposal, Congressman Sebastián García (PPQ-Capital) said the bill sets ceilings so that energy consumption is in line with availability
