Health, Wealth, and Happiness |
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| "What I will say about crypto and NFTs in general is I really love the idea of creators owning their media and owning their content."
- Jack Conte |
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| Howdy investors!
Taxes are complicated -- especially when it comes to crypto investments -- and a lack of specific rulings can make calculating taxes on crypto a frustrating experience.
Today's feature breaks down taxation to make your crypto taxes easier when tax reporting for your crypto, NFTs, and DeFi profits.
In other (huge) news, Coinbase and Circle have dissolved the Centre Consortium. Now, Circle will be the sole issuer of the USDC stablecoin, with Coinbase taking a minority ownership position in Circle.
In other other news, bitcoin's halving is coming soon, and if history is a good predictor, the coming event could be huge for crypto markets.
Finally, look how L2s now command 5x the throughput of Ethereum's mainnet. The rise in L2 throughput comes as newer L2s like Coinbase's Base and zkSync Era continue to gain traction.
Let's jump in! |
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| Bitcoin, Altcoins, DeFi, and NFTs: What’s Taxable by Preetam Kaushik |
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| The IRS issued its first cryptocurrency taxation guidelines in 2014. But not until 2019 did the IRS start explicitly asking taxpayers to report their crypto investments on their income tax returns.
However, a central premise of cryptocurrency taxation has remained unchanged since 2014 – specifically, that cryptocurrencies and other blockchain-based digital assets are treated as property, not currency, to file taxes. Any transactions involving cryptocurrencies that create a gain for the owner are thus taxable by law in the United States.
In other words, if you profit by selling your crypto investments, you must report it as a capital gain and pay tax on it. (Conversely, if you lose money on your investments, you may be able to deduct it as a capital loss.)
Our new guide will simplify all your common questions about bitcoin, altcoins, DeFi, and NFTs.
Read our new guide on Bitcoin Market Journal >> |
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| Premium Power-Ups Level up your crypto investing game. |
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| Our Highest-Rated Investment Ever (So Far)
On Monday, we looked at our lowest-rated investment ever, so it's only fair that we turn the tables today and look at our highest-rated investment (so far).
A huge Premium benefit is our Investor and Risk Scorecards, where we rate the rewards and risks of individual crypto investments. Our BMJ analysts compare our secret blend of metrics to give you an unbiased 1-to-5-star rating.
Our highest-rated investment received a 4.9 out of 5-star rating, hitting on nearly all the metrics we measure. What was that investment?
Premium members: Click here to download our highest-rated investment (so far).
Not a Premium member? Sign up today to access our complete library of crypto scorecards, webinars, and other member-exclusive content. |
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| | | Must Read Today's most important stories for crypto investors. |
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| Investor takeaway: Centre Consortium, overseeing USDC governance operated by Circle and Coinbase, is set to dissolve. Circle will assume all of Centre's responsibilities with Coinbase purchasing an equity stake in Circle.
This is potentially good news for holders of USDC, as Circle has already announced plans to launch USDC on six new chains. Things look good for $COIN investors, too: Coinbase will continue to receive revenue generated by USDC’s reserve assets. (Those revenues made up a sizeable portion of Coinbase's $700 million in revenue in the latest quarter.) |
| Investor takeaway: Bitcoin's monetary policy is governed by immutable code, with a "halving" mechanism at its core. As the 4th halving approaches, discussions around Bitcoin's security budget, miner economics, and potential market volatility are anticipated to intensify. (The halving is expected April/May 2024.)
Some also hope the halving will set off another bull market for crypto. Investors have expressed hopes based on previous halving events, with the bitcoin price increasing by 10x during the second halving and 4x during the third halving. Next spring could be a fascinating time for bitcoin investors. |
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| Investor takeaway: Layer-2 networks have grown significantly, with their combined throughput now 400% greater than the Ethereum mainnet. The newly launched Layer-2 Base has seen a 50% growth in the past week, on the strength of friend.tech.
Despite the rise of new competitors, Arbitrum and Optimism continue to dominate, holding over 80% of the nearly $10B total value locked in Layer 2s. Any of these L2s are interesting investment opportunities: see our sector report here. |
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| | ICYMI In Case You Missed It |
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Best Staking Rates The best rates for DeFi staking this week. |
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Rule of thumb: Take out 30% for taxes and $50 in Ethereum fees for every crypto profit. Letting your wealth grow is free. |
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| Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It's created by John Hargrave, Steve Walters, Gerald Jackson, Anatol Antonovici, Matthew Du, Daniel Joel, and Preetam Kaushik.
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