Bitcoin prices fell below $10,000 Thursday as a bear market reversed growth which saw BTC/USD achieve weekly highs of $11,675 March 5.
Price data from Coinmarketcap shows Bitcoin losing around $400 in three hours to hit $9658, recovering slightly to trade around $9900 at press time.
Bitcoin price chart (Image: geralt/Pixabay)
The behavior continues what has become a pattern for BTC/USD over the past month, with upticks towards $12,000 encountering resistance before diving below $10,000, then repeating the cycle.
As Cointelegraph reported previously, several analysts have warned that closing above $12,400 will be a decisive event for traders, but this will be difficult to achieve.
I was right about the Bitcoin Dip – and have made a tidy profit. I bought half a Bitcoin at £5500.
Of course, it should have cost me £2750 but I bought it through Coinbase with my debit card which is a pricey, though convenient, way to do it. Coinbase charged me 4%, so about £110, making the total £2850.
Bitcoin was been rising in value since as I predicted, though in its usual erratic way. I had intended to take my money out when it passed £8000 and, as I watched it last night, it did just that.
I was hesitant to sell it directly through Coinbase again because of its fees. However, I had come across some advice about selling through Coinbase’s exchange, GDAX, instead at lower fees. Here’s an example video from the excellent Coin Mastery:
I followed the advice and it worked like a charm.
GDAX Exchange Trading Screen (Image: BIUK)
This is the process if you want to save a stack on Coinbase fees:
Create a GDAX account if you don’t already have one (I already did).
Transfer the Bitcoin to GDAX – on GDAX click the DEPOSIT button, then in the form choose your Coinbase Account -> BTC Wallet and set the amount. Click Deposit Funds. It will appear almost immediately on GDAX and there is no charge.
Select LIMIT then SELL, then set the amount. Here you need to be a bit careful and set the correct price you are prepared to sell at (double check it, because if you set it low it will sell low). At the time Bitcoin was selling for about £8010. I wanted to make sure that, if there were fees, I would clear £4000 on my 0.5 BTC so I set the value to £8050.
Since the price is volatile your price will likely be hit very quickly so long as you didn’t set it too high (mine too less than a minute).
The BTC sells, the money appears in your GDAX wallet – and there’s no fee!
Transfer the money back to Coinbase using the WITHDRAW button, set the amount and the destination (e.g. GBP Wallet) and click WITHDRAW FUNDS. It goes back to Coinbase – no charge.
So I have proved to my own satisfaction you can sell BTC, i.e. convert it to pounds sterling, for no charge this way – and at a price slightly higher than the current market rate
Note that selling Bitcoin is called a ‘Maker’ transaction since you are putting Bitcoin into the market. Note that moving in the opposite direction has a ‘Taker’ fee of 0.25%, still not a bad deal.
I sold my 0.5BTC at £8050 so I received £4025, and that’s all now sitting in my Coinbase account.
Since I only paid £2870 for the Bitcoin less than a month ago (a profit of about £1100), I’m rather pleased with that.
In January I completed and filed my 2016-2017 UK self-assessment tax return, for which I had to consider the tax implications of my cryptocurrency holding and trading. While I was able to convince myself that there were no issues for that period, since I had sold no cryptocurrency (only bought) in that period, it was clear that I would definitely need to consider tax in detail for the upcoming 2017-2018 period.
My first step, back last summer, was to invest in a cryptocurrency accounting app known as CoinTracking.info. I have used it carefully since to record all transactions, but nonetheless it was clear that while it could help with tax filing, it was necessary for me to research and understand the issues myself.
Bitcoin ‘Taxation is Theft’ (Image: Pixabay)
The tax situation in the UK for cryptocurrency is unclear so here I’m going to record my views on the current situation – if anyone knows otherwise, please detail any corrections in the comments.
In a nutshell for an individual (not a company) with a moderate amount of cryptocurrency (less than £45k) it is as follows:
Capital Gains Tax (CGT): If you buy and sell cryptocurrency then you are liable for capital gains tax on the difference in value of the currency between when you bought it and when you sold it, valued in pounds sterling. Where this exceeds the CGT tax-free allowance (£11,300 for 2017-18) there is tax to be paid.
Income Tax: If you trade or mine cryptocurrency then you are liable for income tax on the value of the currency gained, valued in pounds sterling. Where this exceeds the income tax personal allowance (£11,500 for 2017-18) there is tax to be paid.
Value Added Tax (VAT): In virtually all circumstances VAT can be ignored (as with most conventional currencies).
While the guidance suggest that on a case-by-case basis some cryptocurrency transactions may be considered to be gambling or betting – and therefore not taxable – I will assume that the safest course is to assume that, if reviewed, all transactions will turn out to be taxable on the basis just described.
Note that, in my opinion, income tax is probably liable on any free gains of cryptocurrency, for example:
With regard to CGT, it looks like cryptocurrency will be valued in the same way as shares. If you have bought and sold lots at different times then the value of what you sell compared to what you paid for it can be difficult to calculate – how do you match which sold Bitcoin to which bought Bitcoin?
Following HMRC guidance for shares the process is basically:
Same Day Rule: If you buy and sell on the same day then the coins can be matched off against each other (even though you bought and sold at different values) and there is no CGT liability. You just have to consider CGT on any ‘left over’, i.e. if you sold more than you bought.
Bed and Breakfasting Rule: Any coins not covered by the first rule but bought and sold within 30 days can be matched against each other, and CGT is due on the difference between the buying and selling values.
All others: Any coins not covered by the first and second rules are considered to be held in a single pot (called a ‘Section 104’) and when some are sold they are valued at their proportion to the value of the total pot. That value is determined by adding up the bought price of the coins in the pot.
That’s the tax situation for cryptocurrency as I understand it so far, though of course I will look into it further in time for my next tax return. With that return in mind, I have decided to do some specific bookkeeping in advance (probably in spreadsheets) and if you own crypto you might want to consider doing something similar:
Track the buying and selling of all crypto coins to pounds, with dates, in order to determine the CGT liability as per the 3 rules just described.
Track the receipt of any free coins (including airdrops, forks and faucets) in order to determine the income tax liability – even if (particularly if) the coins ended up in the same account as those that were paid for.
Seven of the largest crypto companies are forming a UK cryptocurrency trade body, bringing in the first self-regulation for the wild west sector worth £290 billion.
CryptoUK, whose members include the popular Coinbase exchange and trading platforms eToro and CryptoCompare, said it had produced the first code of conduct for the industry to abide by.
The companies said they hoped the regulations would form the first part of broader UK rules around volatile cryptocurrency trading.
Cryptocurrency Art Gallery: Litecoin, Ether, Ripple, Bitcoin and Namecoin (Image: Namecoin/Flickr)
Bitcoin’s rise last year has made it a popular phenomenon, with its value increasing to as much as $20,000 (£14,400) in December, before falling below $7,000 last week. While Bitcoin has made made some millionaires it has left many amateur investors out of pocket, while others have fallen victim of cryptocurrency scams.
CryptoUK chair Iqbal Gandham said there was a risk of “rogue operators”, but the new body had been established “to promote best practice and to work with government and regulators”.
Analysts are concerned that Bitcoin and cryptocurrency mining centers are spending too much electricity, and that the process of verifying cryptocurrency transactions could worsen the global environment.
Justification of mining in Bitcoin and cryptocurrencies
In December 2017, several analysts criticized the electricity consumption of Bitcoin and cryptocurrency mining centers, calling the mining process an “environmental disaster.” Earlier Cointelegraph reported that cryptocurrency mining will likely exceed electricity consumption of households in 2018.
Cryptocurrency Mining Farm (Image: M. Krohn/Wikimedia)
Smari McCarthy of Iceland’s Pirate Party stated that excessive consumption for Bitcoin mining is not practical because the main use case of Bitcoin is for “financial speculation.”
“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”
If environmentalists and analysts perceive the main use case of Bitcoin and other cryptocurrencies to be financial speculation, the consumption of a massive amount of electricity could be considered impractical. However, the main application of Bitcoin is not financial speculation. In countries wherein the underbanked struggle to gain access to financial services, Bitcoin operates as an efficient currency.
In Venezuela, for instance, local residents are using Bitcoin to order food, basic goods and medicine from outside of the country because the Venezuelan bolivar, the country’s national currency, has lost almost all of its value, and has become virtually worthless.
The crypto markets continued to mount a recovery this week, brushing aside fears of a possible lull ahead of the Chinese New Year holiday.
At the close of the seven-day session, the total value of all cryptocurrencies is being reported at $471 billion by data source CoinMarketCap, up 22.65 percent from $384 billion seen last Friday. During this period, the market capitalization was up 39 percent from the Feb. 6 low of $276 billion.
But while headlines may be dominated by bitcoin’s move above $10,000 again, the world’s first cryptocurrency isn’t actually the biggest gainer of the week.
Bitcoin Price Chart (Image: NikonD300/MaxPixel)
Despite its 13.54 percent rise in prices, other large-cap cryptocurrencies (defined as those with over $1 billion in market cap), are perhaps most contributing to what could end up being a recovery from the market’s weak January performance.
Everyone following cryptocurrency knows we’ve had a big correction of late – some would say crash, but those of us who’ve been in crypto for a while know that it’s par for the course. Cryptos are volatile, get over it!
Earlier today I saw signs for a bottom in the market when the price dropped to £4300 and then hung there for a while. Following it for a few hours this evening I saw it gradually come back up and, although it dipped a few times, it never went down so low again. I think that was the lowest point, the dip.
Bitcoin price chart (Image: geralt/Pixabay)
They say ‘buy the dip’ so I put my money where my mouth is and bought from Coinbase – in fact by the time I had become sure things were going up it had already reached £5500 so that’s what I paid. As I write this it’s at £5600 but still jumping up and down. It’ll be interesting to see where it is tomorrow morning. I’m confident it will be the right side of £4300.
Meanwhile for a bit of light relief – one can spend too long looking at charts and agonising over price changes – here’s the Coin Bros with “Buy the F*#!ing Dip”. Enjoy!
(Reuters) – Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other “cryptocurrencies”, fearing a plunge in their value will leave customers unable to repay their debts.
Lloyds Banking Group Plc (LLOY.L), Britain’s biggest lender, said on Sunday it would ban its credit card customers from buying cryptocurrencies, following the lead of U.S. banking giants JP Morgan Chase & Co (JPM.N) and Citigroup (C.N).
Bitcoin (Image: Pixabay)
The move is aimed at protecting customers from running up huge debts from buying virtual currencies on credit, if their values were to plummet, a Lloyds spokeswoman said.
Concerns have arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.
However, other banks said on Monday they will continue to allow credit card customers to buy cryptocurrencies.
“We constantly review our protections for customers as a responsible bank and lender, and are keeping this matter under close review,” a spokeswoman for Barclays said.
“At present UK customers can use both their Barclays debit card and Barclaycard credit card to purchase cryptocurrency legitimately,” she said.
System & Solutions Cryptocurrency Mining Course (Image: BIUK)
It was kindly put on, for free, by Kevin Ackland, owner of Systems & Solutions. He and Richard Owen, IT Manager, gave a broad and very interesting presentation covering cryptocurrency and Bitcoin in general, and mining on PC hardware in particular.
System & Solutions Cryptocurrency Mining Rig (Image: BIUK)
This was followed by a wide ranging discussion on cryptocurrency and mining. I found this particularly interesting as I am new to mining, having just dabbled in a little GPU and CPU mining. Some of the attendees have extensive experience so I learned a lot.
System & Solutions Cryptocurrency Mining Rig (Image: BIUK)
We then had a look at a mining rig in operation, including going through the processes of starting it up and operating it. This included monitoring the operation, and power usage, via smartphone apps. I was surprised, and impressed, at how quiet it ran (having seen YouTube videos of very noise dedicated Bitcoin miners).
System & Solutions Cryptocurrency Mining Rig (Image: BIUK)
My thanks go to Kevin and Richard for putting on the course and for being such good hosts. If you’re considering getting a mining rig, and you’d like one made to your specification, do consider Systems & Solutions.
Bitcoin investors who made huge gains when the cryptocurrency’s value rocketed last year have been warned that they could unknowingly owe tax to HM Revenue and Customs (HMRC).
Bitcoin Electronic Money (Image: MaxPixel)
However, there is some confusion around the issue, as Ed Molyneux, the boss and co-founder of cloud accounting software provider FreeAgent, explains:
“HMRC sees bitcoin profits being subject to capital gains tax, but there does not appear to be a definitive answer on the issue yet, which could cause confusion among investors.”
It comes down to whether bitcoin is classified as an investment or a currency. Currencies are exempt from capital gains tax, but investments and commodities are not.
