Altcoin Crypto News

This is what you pay in taxes for using cryptos: USA, UK, Germany, Canada, Switzerland, etc.

Taxation in Crypto

In the last few years, we have been witnessing an untamable proliferation of the cryptocurrencies into the global commercial domain. It has propelled the governments of various countries to promulgate tax regulations with the aim of getting a lion’s share of this surging financial dealing.

If you are fascinated with crypto currencies and want to know more about how the crypto taxes are imposed, then you are at the right place. We discuss in this article the crypto tax implications and compliance requirements in the USA, UK, Germany, Canada, Switzerland.

The United Kingdom

The agency responsible for collection of taxes in UK, the Her Majesty’s Revenue and Customs, have recently published bitcoin tax software. According to the guideline, all the income received and the charges associated with the activities related to crypto are subjected to several taxes. These taxes include Income as well as capital gain tax, and corporation tax, as put under specific performances.

Crypto currencies come within the scope of capital gains tax category for casual users in the country as these are considered as investments. Countable traders might also be made to pay I.T., depending over their regularity of trading and its volume. Persons earning up to £11850 are exempted from paying of taxes in the country.

The United States

The Government Agency for collection of taxes in the country, the IRS, has expressed a different view over the relation between crypto transaction and taxes. Whenever Bitcoin or Altcoin is sold for a profit, the trader is held liable to pay taxes under the scripture of capital gains.

According to the Notice 2014-21 published by the IRS, any received or mined crypto-currency will be taken into consideration while computing gross earning. The computation would be based upon the fair value of these virtual currencies as on the date of receipt. Taxes are calculated upon value thereby bringing gifts, crypto-to-crypto swaps and related events within the clutch of taxation.

This is one of the prime reasons why IRS has shown high level of interests over crypto-currencies as a source of revenue. But, the fact that the brokers in crypto-currency trading don’t require to issue 1099 disclosure forms has made the computation tougher for them.

Canada

Government of Canada has clearly come out with its view about crypto-currencies by stating that digital currency users would be under the Canadian tax obligations. The statement infers in a straight way that all form of crypto-currencies are subjected to the Income Tax Act of the country.

The purview of the government has the vital underlying statement that while crypto-currencies would be sold for profit or making crypto-to-crypto transactions, those will be strictly adhered under notification of the Income tax department of the country. Even miners would have to pay crypto mining taxes for their transactions. While Bitcoin is used to pay for purchasing Ehereum, then the coin would be considered to be sold for the value in the currency of Canada while the transaction is made.

The rules regarding taxes for investments are applied to crypto-currencies. It infers an imposition of 50% of the gain. Bulk traders are required to submit their tax file with the Canadian Revenue Agency as self-employers.

Germany

The dealings over crypto-currencies are not considered as fair tender in this country. Rather, dealings of these types and the profit thus earned are considered as private money. This is the essence of the report published by the Finance Ministry of Germany.

Therefore, if any profit is made by trading with Bitcoins or Altcoins would be put under subject of Capital Gains Tax as per the German Legislature. The mining or exchanging of crypto-currencies would also be put under the subject matter of taxation under Capital Gains. The rate of tax imposed for these transactions would be between 25-28%. An amount of solidarity charges is also included in it. But, as per the provisions in the Income Tax Act in Germany, the cases where the crypto-currencies have been held for more than one year, these will be exempted from taxation. Citizens can resort to an online crypto tax calculator name zenledger for efficient receipt compilation and tax filing.

Switzerland

The status of crypto-currencies has never defined in the books of Income tax department in Switzerland. The wealth tax is determined on the basis of earning. The Expert Take for Cointelegraph, an international magazine on finance, has recently expressed its view over crypto-currencies. It states that crypto-currencies are neither form of native nor a foreign currency. These do not form financial supply for GST purposes.

The above clause is, however, applies to those citizens of the country qualifying as professional traders. This qualification would again be based on the amount as well as frequency of operations annually made with crypto-currencies. Whatever the case is, the users of Bitcoin would be made to pay wealth tax as determined by the tax authorities on 31st of December of the financial year.

Currently, the investors are trying to build luck with newer currencies like Ripple and Ethereum beside Bitcoins. While dealing with crypto-currencies are on a hike, the investors are still searching for a guideline to treat these for federal income tax purposes. In order to remove these confusions, IRS has come up with crypto-tax software. In this software, these currencies have clearly explained as capital asset if converted into cash. Any gain or loss would thus be treated under the rules of capital gains.…

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Margin Trading – How to borrow USD to Buy More BTC then

One of the best way to earn money in the crypto world is undoubtedly by trading cryptocurrencies.

Now with the burgeoning cryptocurrency, it is, therefore, a challenge for average investors to survive with limited cryptocurrencies.

Margin Trading

Well, if you are among those who are looking to get most out of it than Margin Trading is quite a useful option. The Margin Trading allows you to borrow money to buy more BTC to get the maximum profit.

So, before moving further let’s start by understanding what margin trading is and how it is beneficial?

What is Margin trading?

The term Margin trading means trading cryptocurrencies using borrowed funds.

In simple words, margin trading is an act of “Trader borrowing money from a broker or a crypto exchange to acquire more assets than they are actually able too.

Traders can fundamentally borrow up to 50% of the value of an asset.

The Margin Trading involves borrowing capital at relatively higher interest rates from the cryptocurrency exchange so you can access increased leverage.

Now, there are two types of Margin Trading:

1. ShortTrading

In Short Margin Trading investors bets on the assets which they think will depreciate in the future.

2. Long Trading

In Long Margin Trading the investors are seeking to purchase assets that they think might will increase in value.

Note: Both the trading are done on credit from the exchange, but with different goals keeping in mind.

Benefits of Margin Trading

1. Flexibility to Payback borrowed money on the trader’s preferred schedule.
2. Potential Tax Advantages.
3. It allows traders to gain more profit from Price Declines with the help of “Short Selling.”
4. The Margin Trading can pursue advanced trading strategies.

How Does Margin Trading Works?

Margin Traders must be careful to pay attention to their maintenance margin which means the minimum account balance that must be maintained.

If the margin traders go below the level, then the lender or broker has the right to require the deposit of additional funds, or the sale of stock to satisfy the terms of the account.

This overall process comes under the Margin Call.

Moreover, the essential benefit of trading on margin is the potential for higher profits.

Now, by borrowing money, a trader can take a more significant position and thus realizes the greater gains.

The traders can even leverage their existing holdings to increase the size of their investments.

Fundamentally, Margin Trading comes with the same risks as any form of debt, including interest charges as well as fees.

Apart from this, if the market turns in an unfavorable direction, then the margin trading can increase the losses, and the trader, therefore, would otherwise suffer.

Furthermore, if the value of the assets being used as ‘Collateral’ for a ‘Margin Loan’ decline below maintenance requirements, a trader risks facing a margin call.

Now, it’s important to know or understand the distinction between leverage as well as margin.

Leverage regarding Margin Trading is the additional buying power available to only those who have Margin Accounts. Leverage allows traders to enter higher positions than they usually have and it is primarily expressed as a Ratio.

Now, if you are looking to borrow USD to buy more Bitcoin and gain more substantial profits than here, we have featured some of the best Margin Trading Crypto Exchanges platforms.

There are a number of crypto exchanges currently available in the market. However, we have only mentioned the top 3 of them. So, here we go.

1. BitMEX

Undoubtedly, BitMEX is one of the best Margin Trading Crypto Exchanges in the market. BitMEX expedited margin trading for cryptocurrencies and gained a lot of respect in the crypto world in a shorter period.

Bitmex tradng derivative

The BitMEX consists of a team of experienced developers, economists as well as high-frequency algorithm traders, which inevitably makes BitFEX a relatable product. Currently, BitMEX offers a margin trading for 6 cryptocurrencies including Bitcoin Margin Trades one of the most famous.

2. Poloniex

Poloniex is radically one of the pioneer exchanges in the crypto world.

 

Poloniex is founded by Tristan D’Agosta and is based on the US and has been operational since 2014. Moreover, this exchange is currently owned by “Circle,” an Internet Financial Limited.

Apart from all these things Poloniex offers normal trading accounts for day traders and also offers margin trading features for advanced users. In the crypto world, only Poloniex can leverage up to 2.5X in the BTC.

3. Kraken

Kraken is based out of San Francisco and is one of the largest Bitcoin and Altcoin exchanges in the USA.

Moreover, Kraken is the most significant exchange regarding EUR Volume where anyone can register using the “Email ID” and can start trading BTC after proper “KYC Verification.”

Kraken

Typically, it takes up to 7 days to get verified from Kraken after which you can deal with fiat currencies such as USD, EUR, GBP, as well as CAD.

The Kraken provides the benefit of different leverage options which it offers for different pairs.

The Conclusion

Trading of Bitcoin on Margin can be highly profitable; however, you need to keep in mind that it is a highly risky venture.

Moreover, if a trader successfully determines the price trends on the cryptocurrency market, then he/she will find the margin trading a game changer.

Now, those who do merely day trade or margin trade, never keep your money or cryptocurrencies on these exchanges as it is not a safe practice.

Now if we talk about the exchanges which we have mentioned above, then it provides an extra bit of security features including 2-FA Authentication.

Do you trade in Cryptocurrencies? Tell us about your experience with Margin Trading.

Let’s discuss trade or margin trade cryptocurrencies in the comment section.…

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Associates forbidden from investing in Cryptocurrencies: Capital Group

One of the oldest investment management organizations in the world, Capital Group, has prohibited its associates and family members from investing in cryptocurrencies. According to the upgraded Code of Ethics registered in the Securities and Exchange Commission (SEC) on April 19, they will also not be able to participate in any Initial Coin Offerings or ICOs.

The update in the Code of Ethics stresses attention over the new policies and guidelines towards ICOs and Initial Public Offerings IPOs. It states, “All associates and immediate family members residing in the same household may not participate in IPOs or ICOs.”

As per the document, Capital Group will have the power to acknowledge a rare exception for IPOs which will be reckoned as “on a case-by-case basis.” However, the document does not inform about any exceptional case for ICOs as its prohibition “applies to all Capital associates.” On the other hand, the updated code of ethics has not clarified whether investments made on behalf of clients are also banned.

Earlier this March, SEC announced that it would be examining around 100 hedge funds that are related to digital currencies. The main reason for the investigation is to advise the SEC over their policies and its impact on virtual currencies. Currently, the examiners are matching the assets purchased by fund managers with those advertised to investors in offering statements.

A partner at Schulte Roth & Zabel LLP, a firm involved in providing advice for the hedge fund, Marc Elovitz, said, “This is a way for the SEC overall to gather information and learn about important new technology and products.” These operations are conducted “to educate the commission overall about new businesses or new industries.”

The South Korean government has disallowed its employees to hold and trade in digital currencies since last month. It said that government officials indulged in the trading of digital currencies are “in violation of the prohibition of forbearance obligations under the civil servants’ law” and are liable to disciplinary actions.

The Ministry of Personnel Management issued a document named, “Virtual currency holdings and transaction-related information for civil servants.”

In similar news, Justin Schmidt was appointed as the head of digital asset markets by Goldman Sachs Group Inc. to help clients gain exposure to cryptocurrencies. Galvin-Cohen, spokesperson Goldman Sachs said, “In response to client interest in various digital products, we are exploring how best to serve them in the space. We have not reached a conclusion on the scope of our digital asset offering.”

As of now, the reason to ban associates from using cryptocurrencies is still unclear. Being one of the largest financial service providers in the world, Goldman Sachs decision will have a great impact on other institutions. According to experts Goldman Sachs is trying to comply with the regulations launched by SEC in the US. Crypto users have always been under government radar, and Goldman Sachs is trying to stay away from any situation that harms its goodwill. It would be interesting to see if other financial services follow its footprints or not.…

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