Monday, March 18, 2019

Upcoming horror film: Crypto taxes

March 18, 2018	View in browser

unbankd

Good morning! Thanks for reading. If you enjoy our free newsletter, please share us with a friend and tell them they can subscribe here.

In addition, we are making a change from daily to weekly newsletters. See our letter at the bottom of this issue to see why this will be better for you.

Today's top reads

Upcoming horror film: Crypto taxes
Volume eclipses $11 billion
PayPal turns off crypto
No mining revenue? No problem
It's just gambling

This week's poll: Would you consider yourself a Bitcoin maximalist?
Click to answer: Yes No

Market update

COIN	PRICE	7-DAY
BTC	$3,928.62	+ 2.46%
ETH	$138.45	+ 1.08%
XRP	$0.316694	+ 3.08%
LTC	$57.94	+ 6.92%
EOS	$3.78	+ 3.21%

1. Upcoming horror film: Crypto taxes

One month away. The United States tax deadline is approaching fast and crypto traders should be preparing their books for April 15th.

But that's not the case: Last year, despite more than 5% of Americans claiming they owned cryptocurrencies in a TechCrunch survey, only roughly 0.04% of customers reported their gains using Credit Karma's tax return filing service.

But that finding followed a bull market year where traders stood to give their gains to the government. So what happens in a year when investors lose their shirts?

$5.7 billion loss: U.S. investors still holding Bitcoin have unrealized losses that total an estimated $5.7 billion, according to a Credit Karma survey.
Let's skip it: But despite that astounding loss value, only 53% are actually planning on reporting their Bitcoin gains.
It's backwards: Moreover, it's actually more likely that those who made money on Bitcoin to report even though losing investors could claim a tax deduction.

Here are some tips that could benefit your tax season:

Check the guidelines. The IRS issued guidance on cryptocurrencies back in 2014. The FAQ section should be a go-to resource for burning questions.
If you paid a fee to buy crypto, it could be included. Exchange fees could be included in your crypto cost basis, which could lower your tax liability.
Remember to check how you obtained your crypto. Depending on how you received your crypto, whether its via a business transaction or from something specialized like an airdrop, you might need to report it differently.

Just remember: Avoiding taxes is a crime. If you are struggling to understand how to file correctly, try a service like CoinTracker or CryptoTrader.Tax to simplify the process.

2. Volume eclipses $11 billion

Moving into last weekend, Bitcoin's trading volume exceeded $11 billion - a level that hasn't been seen since April 25th of last year. At that time, however, Bitcoin was trading at $9,301. Now, more than $5,000 lower, the currency could be seeing a switch of sentiment.

Finally, a pop over $4,000: Traders carried Bitcoin's price over the $4,000 mark late Friday night after the asset flirted for three weeks with the resistance line.

What's the cause? Since speculation is the primary price driver, a growing positive outlook on Bitcoin's fundamentals could be the source of gains.

Some of those strong fundamentals are:

Lightning network growth. In the past 30 days the number of nodes has jumped 17.79% to more than 7,404 connected devices. Those new nodes have also helped boost the micropayment network's capicity 54%. The network has largely gained traction with movements like the "Lightning Torch" and startups like Tippin that are popularizing the tech.
An uptick in transactions. The amount of Bitcoin transactions per day has grown consistently since bottoming out in April 1st - despite Bitcoin's price slicing in half. To add, Bitcoin's active wallet addresses have also experienced consistent growth in the period.

The bottom line: Bitcoin's own network and lightning network are both growing well (really well), but is it enough to thrust the coin into a bull market?

3. PayPal turns off crypto

Days after receiving $750 million from PayPal, e-commerce giant MercadoLibre Inc. is terminating support for crypto-related listings on its platform.

What happened? On March 11th, Bloomberg reported that the Latin American retailer raised an additional $1.85 billion through a public share offering with 40% of the investment coming from U.S. payment processor PayPal.

The deal is set to help MercadoLibre boost growth in the area and give PayPal some say in the company's financial technology best practices.

And boom, crypto's gone. Less than 5 days after the deal closed, MercadoLibre sent a notice to its customers saying that crypto-related listings and pre-paid gift cards would be removed from its platform, according to a report from CCN.

One can assume...right? Though it's unknown what role PayPal played in the decision, one can only assume that a payment processor (a.k.a. crypto's takeover target) would want nothing to do with the technology.

In a nutshell: PayPal has no reason to support and promote the growth of crypto payments.

4. No mining revenue? No problem

Forget mining crypto. A new startup called Vectordash, backed by Y Combinator, is trying to attract unused GPUs that miners have sidelined during the bear market.

The idea is simple, rent Vectordash some "graphics processing real estate" for $60 to $105 per month over the cloud, and they will supply it to gamers that want to beef up their usually-weak setups for $28 per month.

The platform doesn't run on crypto or blockchain but certainly stands to benefit from the industry's top GPU miner manufacturers and vice versa.

5. It's just gambling

A new study from Rutgers University has found that cryptocurrency trading is "strongly associated with problem gambling severity." Those who participated in sports betting, daily fantasy sports, or high-risk stock trading were much more likely to frequently trade crypto within the past year.

At least 50% of participants, out of 900 individuals that deal with gambling addiction, indicated that they were involved in crypto trading.

Further analysis showed that:

Effects are the same. The analysis found that compulsive sports betting and crypto trading addiction can exhibit the same effects which could be depression, negative financial balance, and or anxiety attacks.
On-land casino customers are less likely. Those who visit on-land casinos and gamble are much less likely to fall victim to crypto trading addiction in comparison to their online gambling counterparts.

The bottom line: Crypto trading is no different than investing in any other risky financial assets and should be conducted responsibly.

6. You should also know

A CoinDesk editor implanted a RFID chip in her hand at a body hackers conference to turn her hand into a Bitcoin wallet.
Coinbase Pro updated their market structure to "optimize the health" of the platform by increasing liquidity and making price movements smoother.
Investment app Donut raised $1.8 million from a variety investors to make crypto investing and diversification easy with recurring micro investments.

A LETTER FROM THE EDITOR:

7. One year ago today

One year ago, we sent our third newsletter ever to 61 lucky subscribers. Since then we have grown to over 5,000+ subscribers while reporting during a bear market. Most important though, we never stopped writing.

While the latest switch to weekly content was a tough decision to make, we believe this change will bring:

Better content: The content we can write, develop, and deliver to you on a weekly basis will be much more thorough than our daily updates. Expect deeper dives, more data, and original content.
Less noise: We listened to tons of feedback from subscribers and found that news everyday might not be the answer. We started Unbankd to cut the noise and instead, in a way, we were adding to it. Basically we are trimming down, once again.
Improved design: Our new writing design is intended to help readers follow along the story and grasp headlines much quicker. It breaks down the story into pieces rather than paragraphs.

Thank you to everyone who has supported us so far. From now on, you can expect Unbankd in your inbox every Monday morning, prepped to give you the crypto smarts you need for the week. Cheers to a better Unbankd!

Kind regards,
Kyle Samera
Founder