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Health, Wealth, and Happiness

August 25, 2023

"Your income is directly related to your philosophy, NOT the economy."

- Jim Rohn

Howdy investors!

A newly released study suggests that when a blockchain's active user base goes up, the price goes up. Shocking, we know. Today we share the study that every crypto investor should read -- with key takeaways in bite-sized nuggets.

We also report on news from the Treasury Department, where it seems they are trying to do the Lord's work of cleaning up the U.S. crypto tax mess. In addition, you can read about four bills currently in Congress that aim to define digital assets and clarify regulatory jurisdictions. All of this is good news for crypto.

Finally, we look at yesterday's bounce in bitcoin, and some interesting integration news from the Solana blockchain.

Let's jump in!

The Study Every Crypto Investor Should Read

by John Hargrave

You know how, for years, we've been promoting the idea that user growth is one of the best metrics for determining the value of a crypto investment?

Well, there's now scientific proof that our approach works!

The authors of a recent paper studied the top 100 crypto investments over a long period of time (2010-2023), making it one of the most comprehensive studies to date on what drives long-term crypto prices. The primary finding is that the number of active wallet addresses drove up the price in 94% of the crypto investments they studied.

To simplify: as users go up, so does the price.

Which is what we’ve been saying for years.

Click to find out more about this groundbreaking study >>

Breaking News

Hot off the press.

U.S. Tackles Crypto Tax Mess (The Wall Street Journal)

The U.S. Treasury Department is proposing new tax rules to increase compliance among cryptocurrency investors.

Starting in 2026, crypto exchanges like Coinbase will be required to send annual reports detailing the gross proceeds from transactions to the IRS.

The rules also aim to simplify the tax process for crypto investors by eventually requiring exchanges to report the cost basis of assets.

We covered this topic two days ago with our Guide to Crypto Taxation. The guide covers the tax status of bitcoin, NFTs, altcoins, DeFi profits, and more. If you have questions about crypto taxation, this guide is a great place to start.

This new focus by the U.S. government means you need to keep meticulous records of all crypto transactions to ensure accurate tax reporting. We've got you covered with our rating and review piece of the Best Crypto Tax Software. These platforms can be an excellent way to take the stress out of record-keeping for your crypto assets.

Note the new rules don’t change what is taxable, only how it is reported. The rules will also apply to other digital assets like NFTs and decentralized finance platforms, though there's no guidance on how DeFi transactions might be tracked.

Must Read

Today's most important stories for crypto investors.

Bitcoin Bounces Off Recent Lows for Biggest Gain in Six Weeks

(Bloomberg)

Investor takeaway: Bitcoin experienced its most significant one-day gain in nearly six weeks, rising 3.6% to $26,794, amid growing optimism that central banks may pause interest-rate hikes. This rebound follows bitcoin's worst week since November and the collapse of the crypto exchange FTX.

Notably, the gains did not hold overnight, highlighting the uncertainty among investors holding crypto markets back.

Shopify enables USDC payments via Solana Pay integration (Blockworks)

Investor takeaway: Solana Pay has integrated with Shopify, offering millions of entrepreneurs and merchants access to no-fee, Web3-native payments, including cross-border transactions and token-based incentives.

The boost to the visibility of Solana Pay is huge for expanding the project's potential user base. If you like the sound of "more users," Premium members can download our Solana Investor Scorecard and Solana Risk Scorecard here.

Four Bills That Will Define The Future Of Digital Assets (The Defiant)

Investor takeaway: The U.S. is moving towards regulatory clarity in the crypto space, with recent lawsuits by the SEC sparking action among institutional investors like BlackRock and Fidelity. Multiple bills in Congress aim to define digital assets and clarify regulatory jurisdictions, potentially fostering innovation and consumer protection.

This new approach to crypto is refreshingly tactical and focused, which can only promote more stability and trust with investors. And promoting the ability to withstand regulatory scrutiny can position major organizations and stakeholders to better advocate for more favorable legislation. Better times are ahead.

Best Stablecoin Interest Rates

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