Riding The Wave News Summary 87
IRS introduces broader ‘Digital Assets’ category ahead of 2022 tax year, New Fidelity report flags ‘stark contrast’ between Bitcoin and fiat currencies, & more.
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IRS introduces broader ‘Digital Assets’ category ahead of 2022 tax year
New Fidelity report flags ‘stark contrast’ between Bitcoin and fiat currencies
Aptos Token Plummets 40% After APT Airdrop for 'Early Network Participants'
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IRS introduces broader ‘Digital Assets’ category ahead of 2022 tax year
American taxpayers will find a broader, more defined category encompassing cryptocurrencies and nonfungible tokens (NFTs) in their 2022 IRS tax forms. The draft bill released by the Internal Revenue Service features a well-defined Digital Assets section that outlines if and how taxpayers will account for the use of cryptocurrencies, stablecoins and NFTs.
Page 16 of the draft defines Digital Assets as any digital representations of the value recorded on a “cryptographically secured distributed ledger or any similar technology.” 2021’s tax form required taxpayers to indicate whether they had received, sold or exchanged in “virtual currency” — with this term changing in the yet-to-issued 1040 tax form for 2022.
Taxpayers are required to answer the Digital Assets section of their income tax return whether or not they have engaged in digital asset transactions during the tax year.
A number of situations will require American taxpayers to indicate yes to the question on Digital Assets of Form 1040 or 1040-SR. This includes receiving as a reward, award or payment for property or services or sold, exchanged, gifted or disposed of a digital asset in 2022.
This would include instances where an individual received digital assets as payment for property or services provided or as a result of a reward or award. Receiving new digital assets through mining or staking also falls under this category, as does transacting digital assets in exchange for goods or services as well as exchanging or trading digital assets.
Digital asset transactions can be clearly classed in either capital gains or income sections of the 2022 tax return.
If individuals received digital assets as payment for services or sold digital assets to customers in a trade or business, this would need to be reported as income in its specific category.
New Fidelity report flags ‘stark contrast’ between Bitcoin and fiat currencies
In a recent research piece, “The Rising Dollar and Bitcoin,” released Oct. 10, Fidelity Digital Assets, the firm’s crypto subsidiary, drew a line between Bitcoin and other currencies.
While hardly a stranger to bullish takes on Bitcoin, Fidelity continues to publicly reiterate its faith in the largest cryptocurrency despite the near year-long bear market.
In the report, analysts stated just how far Bitcoin as an asset has diverged from what is currently considered the norm. In the new high-inflation environment, Bitcoin’s fixed issuance and supply are of particular importance.
“Therefore, bitcoin may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take – namely the path of increased supply, additional currency creation, and central bank balance sheet expansion,” they explained.
The firm’s round-up of research for the month of October pointed to the BTC illiquid supply hitting a ten-year record, as well as surging network fundamentals.
I agree with the view that all of these indicators point to a good long-term outcome, but I dont necessarily agree that they do for the short term. Crypto is experiencing its first macro bear market, so I don't plan to reinvest until we see a change in trend.
Bitcoin fails to rally with stocks as $940 million of the crypto is pulled from exchange favored by institutions
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