Trending Bitcoin News and Market Sentiment June 21st, 2020: New Whales Born in the Year of Accumulation, EY Releases Tax App for US Crypto Holders

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  • 2020 has given birth to new Bitcoin whales as investors spent 90% of the time buying
  • A new tax app from EY should make crypto tax reporting for US citizens a breeze

We won’t be looking too much at the Bitcoin markets today, as prices won’t be uprooting themselves from their current perch in range anyway!

But if Bitcoiners are looking for some optimism, then they should be cheering to know that 2020 has so far been a year of accumulating, with investors largely using the entire year as an opportunity to buy. At the same time, new whales are being born — signalling both new wealthy buyers, as well as a promotion of old buyers who have become whales by the simple act of “stacking sats”!

This news comes from our regular data gatherers over at blockchain monitor Glassnode, who say that the activity in June further backs up the theory that more new whales are being created. Whales are considered to be holders of large amounts of Bitcoin, and in this case, it refers to entities known to hold at least 1,000 Bitcoin (currently worth over USD 9 million). According to Glassnode, whale birth rate since halving has spiked by 2%, with the last two months seeing a rough average of 1.5% growth each.

The total whale population thanks to this has now increased sharply last week to settle at 1,840. This even from a two-year high in April 2019.

Pulling out to view a larger time frame, the firm’s ‘Hodler net position change’ shows that 154 of the past 170 days have been spent accumulating, even despite extreme volatility in the period, proving that whales have been very difficult to shake in their belief, increasing their positions and determined to save, hold, and not trade or spend their BTC.

That’s good for them of course, but a friendly word of warning to all our Bitcoiner readers out there, make sure you do your duty as a law-abiding citizen and pay your tax dues!

And if you’re really unsure of just how to go about calculating what you owe from your crypto, well, then we have good news. One of the Big Four accounting firms, Ernst & Young (EY), have just released a crypto tax app dubbed EY CryptoPrep.

It’s of course for now aimed at US residents to help them file taxes to the IRS, and is fully automated and based on the web, taking data from a number of exchanges and major cryptocurrencies. It calculated all the sums and figures, applying tax rules and spits it all out in a Form 8949. Clients can opt to crunch the numbers on their own or use it as part of a managed service.

Marna Ricker, Tax Services vice chair at EY America, said the move came as a result of a noticeable spike in crypto interest. Ricker said:

“Our clients increasingly hold and trade crypto assets, creating the need for an innovative solution to address the evolving complexity around filing crypto taxes.”

Although IRS has issued numerous guidelines, and kept them updated over the years, they continue to cause confusion for Americans, especially as cryptos are classified into several types of assets, based on characteristics that can be difficult for non-technical persons to identify. These strict requirement for traders mean that many could choose to simply ignore trying to attempt calculating taxes on crypto.

But the IRS does appear to be prepared to crack some skulls, as last month they issued a Statement of Work (SOW) asking private contractors to join them in doing audit runs for crypto. Although some believe that it could not even be legal, it appears the IRS has the right to do so. These contractors are asked to be able to “ingest all data provided by the IRS, as well as any attendant or related data the contractor collects through their systems.”

It also requests that contractors:

“…be available to consult with the IRS during meetings with taxpayers or their representatives… assist the IRS with trial preparation… [be available] to testify at trial as a summary witness explaining the calculations derived from the underlying data.”

Crypto is getting serious, people!

 

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