1. Market Wrap: Bitcoin Reclaims $50K as Bulls Eye Uptrend Revival
A gain this month would mark the sixth straight monthly increase for bitcoin, the first time that’s happened in seven years.
Bitcoin (BTC) trading around $50,500 as of 21:00 UTC (4 p.m. ET), gaining 6.4% over the previous 24 hours.
Bitcoin’s 24-hour range: $52,636.22 to $47,332.82.
Continuing a strong start to the month, bitcoin finally reclaimed $50,000 as bullish investors hope for a revival of the uptrend from early February.
Bitcoin rose 5% on Wednesday to just above $50,000, and traders are speculating whether the move represents a resumption of this year’s powerful bull market or simply a rebound following last week’s steep plunge to around $43,000.
The largest cryptocurrency is now up 10% so far in March, and a gain this month would mark the sixth straight monthly increase, the first time that’s happened in seven years.
2. SushiSwap, Fleeing Ethereum Fees, Is Now Live on Binance Smart Chain, Fantom, Others
The move is one of the first concrete examples of the Uniswap clone going its own way.
Decentralized exchange (DEX) SushiSwap is now live on Binance Smart Chain (BSC), Fantom, Polygon, xDai Chain and Moonbeam Network, according to the project’s CTO Joseph Delong, in one of the knockoff project’s most notable divergences from Uniswap to date.
SushiSwap, which has some $3.3 billion in liquidity and $300 million in 24 hour volume, was formerly only hosted on the Ethereum blockchain, which is currently suffering under increasingly high transaction fees. Many Ethereum-based projects have been scrambling for scaling solutions, such as Rollups or moving to another blockchain that supports ERC-20 styled digital assets.
The exchange first garnered attention after copying Uniswap’s open source code, adding a token and then diverting liquidity away from Uniswap towards itself with the novel “vampire mining” program. Since then, the project has professionalized, particularly with the addition of Delong.
Delong said SushiSwap is eyeing an integration with Optimism’s Layer 2 solution, Optimistic Rollups. Optimism — closed a $25 million Series B with Andreessen Horowitz in February — is expected to go live on mainnet later this month.
Not all those blockhains are ready for handling ERC-20 assets, Delong said. BSC and Fantom have “good support,” but the others “will need some work for the end user experience.”
3. Banksy Work Physically Burned and Digitized as NFT in Art-World First
A group of crypto artists bought the Banksy piece “Morons” and burned it before issuing an NFT. It’s an artistic statement, or something.
A piece by famous street artist Banksy is to be sold as a non-fungible token (NFT) — after the original was physically burned in Brooklyn, N.Y., on Wednesday.
It’s a first for the art industry as NFTs jump into the mainstream consciousness.
The piece, “Morons,” which pokes fun at art collectors, has been burned by a team of crypto enthusiasts at a discreet Brooklyn location.
To be clear, Banksy was not involved. The piece was bought for roughly $100,000, an unnamed source told us.
The burning was live-streamed through a Twitter account, after which the team created an NFT to represent the artwork on the Ethereum-based OpenSea marketplace.
An auction for the NFT will commence on OpenSea on March 4 with proceeds from the sale going to charity. The winning bidder will receive the official proof of authenticity from Banksy’s authentication agency, Pest Control.
4. IRS Says Buying Crypto With Fiat Does Not Trigger Tax Reporting Rules
The IRS has narrowed the breadth of its new crypto reporting question.
The U.S. Internal Revenue Service (IRS) said Tuesday it will not require crypto investors who simply bought “virtual currency with real currency” in FY2020 to report that transaction on this year’s tax returns.
Delivered on the tax collector’s crypto FAQ page, the clarification effectively exempts taxpayers who, say, bought bitcoin (BTC, +4.52%) with dollars, to check the crypto box on their annual 1040. That new question asks: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
The exemption is narrow, however. Investors who swapped one crypto for another, sold their positions or received a token airdrop will still need to check the crypto box under the latest IRS FAQ update.
Taxpayers expressed confusion over whether “otherwise acquire any financial interest” in crypto included the act of buying with fiat, said Shehan Chandrasekera, head of tax strategy for CoinTracker. Even IRS officials have told us that some of the agency’s crypto regulations “are not ideal.”
5. US crypto tax startup TaxBit to channel $100M raise into UK expansion
Utah-based startup TaxBit prepares to provide global crypto-oriented tax expertise with a newly raised $100 million.
Major cryptocurrency tax compliance startup TaxBit has raised $100 million as it expands into Europe.
According to a report, TaxBit has secured the funds in Series A round led by Paradigm and Tiger Capital. Additional investors included PayPal’s venture arm, major industry firms like Coinbase and Winklevoss Capital, as well as individual investors like Bill Ackman, Ryan Smith, Anthony Pompliano and others.
According to the announcement, the new investment round comes in response to the increasing global demand for crypto services amid the crypto industry’s parabolic surge to hit a $1.5 trillion market capitalization. “The importance of TaxBit’s tailored tax and accounting software is readily apparent,” TaxBit’s vice president of marketing, Michelle O’Connor, said in the blog post.
With newly raised funds, TaxBit is planning to start to expand internationally in 2021. TaxBit CEO Austin Woodward told Forbes the company wants to tap the United Kingdom market as its first destination. The company is also expecting to launch an enterprise resource planning solution in compliance with the United States Securities and Exchange Commission later this year.
Launched in 2018, TaxBit’s platform is designed to automate aspects of crypto tax compliance for enterprises, consumers and governments. Developed by a group of CPAs, tax attorneys and software developers, the solution enables users to track the tax impact on their trades on crypto exchanges.
TaxBit’s raise comes as the U.S. Internal Revenue Service updates its crypto reporting rules to clarify that investors who purchased crypto with fiat currency do not need to report their transactions under the “virtual currency” question.
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March 4, 2021