A tax loophole which reduces Bitcoin investors’ gains to zero will be exploited by people filling in their returns for this tax year, potentially creating millions in lost revenue for the Government, experts have warned.
HMRC is expecting to see a surge in the number of taxpayers declaring gains from cryptocurrencies this year after many investors sold their holdings after values soared, leaving them with huge profits.
However the taxman’s anticipated windfall could be far less than expected thanks to a loophole which lets taxpayers class their investment in cryptocurrency as “gambling”, winnings from which are tax-free.
An HMRC spokesman said:
“We don’t normally tax betting and gambling because it is usually not classed as trading income…”
The price of bitcoin has fallen below $10,000 for the first time since early December.
According to CoinDesk’s Bitcoin Price Index (BPI), the cryptocurrency’s value has hit a low of $9,714.02 as of press time. The last time bitcoin’s price was below $10,000 was on Dec. 1, BPI data shows.
As of the time of writing, the price had recovered somewhat, trading at $9,737.20. Market analysis suggests that the price could shift in either direction and recent regulatory developments – out of South Korea and China in particular – could roil markets further, according to some observers.
Bitcoin’s come comes amid the backdrop of a wider fall in cryptocurrency markets, a state of affairs which was on full display during yesterday’s trading session. Data from CoinMarketCap shows that many of the top cryptocurrencies remain in the red for the past 24 hours, including ether, which has fallen below $900.
The year of 2017 was a fantastic year for some Bitcoin users, but others were not so lucky with the cryptocurrency.
Below, we’ll look at some of the most impressive success stories of the year, as well as the profiles of people who probably wish they’d never touched Bitcoin at all.
It’s a highly erratic currency, but people who invested in it before its recent prominence often found their foresight was lucrative in ways they never imagined at first.
This Anonymous Person Who Became a Bitcoin Millionaire
One anonymous person who posted a detailed story on Steemit said that in 2010, the price of each Bitcoin was so low that it was not even valuable enough to buy a pizza. Still, by the end of that year, the person reportedly had 12,000 Bitcoins and collecting the large number of them paid off.
That’s because by April 2013, the worth of each Bitcoin had ballooned to over $100. Due to some issues in the individual’s personal life and a few other non-Bitcoin-related factors, the person took a couple of breaks from Bitcoin but was never completely out of the loop with them. Eventually, this anonymous Bitcoin user heard that the 12,000 Bitcoins were now worth over $10 mln.
Despite that fortunate turn of events, the person only began selling them in small quantities so as to not attract attention. The individual also planned for the future by choosing investment strategies and did not let the rapid wealth impact their employment. As words of advice, the person suggests exercising patience and not getting greedy, while also keeping up on newsworthy events.
Erik Fineman began investing in Bitcoins in 2011 when he was only 11 after his grandmother gave him $1,000 and his brother offered him a tip about what to do with the money. In those early days, Bitcoins were only worth $12 each. However, when Fineman sold his first Bitcoins at the end of 2013, each one had a value of $1,200.
The bitcoin price has dipped below $13,000 for the second time in December, following the December 23 correction which led the price of bitcoin to plummet to $11,500.
Bitcoin Dominance Index at 37.9 Percent
Analysts have attributed the recent decline in the price of bitcoin to the unexpected surge in the valuation of several cryptocurrencies including Ripple and Cardano.
Over the past 24 hours, the market valuation of Ripple has increased by nearly 100 percent, surpassing $100 billion in market cap. While it has corrected since then, the market valuation of Ripple still remains above $89 billion, more than $23 billion higher than that of Ethereum.
Apart from the one brief period in November during which Bitcoin Cash overtook Ethereum for several hours, Ethereum had not given up its position as the second most valuable cryptocurrency behind bitcoin throughout the past 12 months. Yet, Ripple remains as the second most valuable cryptocurrency behind bitcoin 24 hours after it has initially taken over Ethereum.
For the first time since June, the dominance index of bitcoin over the cryptocurrency market has dipped below 38 percent. At the time of reporting, the dominance index of bitcoin is 37.9 percent, and is close to achieving an all-time low at 37.39 percent.
Historically, bitcoin has demonstrated a trend in which the value of bitcoin surges when other alternative cryptocurrencies drop. In contrast, when the value of alternative cryptocurrencies decline, the value of bitcoin has tended to increase.
As such, given that the recent fall in the price of bitcoin was mostly triggered by FOMO or fear of missing out demonstrated by a small portion of bitcoin investors switching over to Ripple, the bitcoin price will likely be able to recover to the $15,000 relatively soon, especially if the market cannot sustain the valuation of Ripple at around $90 billion.
BITCOIN will be taxed following a dizzying year of price rises and falls, industry experts have warned as the volatile cryptocurrency continues moving towards the mainstream.
With bitcoin’s price rising 1100 per cent over 2017 the HMRC has decided against creating new legislation to ensure the investment gains are taxed appropriately.
But experts have warned the cryptocurrency will not remain exempt from tax.
Benjamin Dives, CEO of London Block Exchange told Express.co.uk:
“In this world, nothing can be said to be certain, except death and taxes. Cryptocurrency may be new and unique, but it is not exempt from tax liability.”
Mr Dives says individuals who profit from their Bitcoin investments will be required to pay capital gains tax – just like those who profit from the disposal of their stocks, shares and other investment instruments – through their annual self-assessment.
Profits from bitcoin price rises are subject to 20 per cent Capital Gains Tax – or 19 per cent Corporation Tax if it’s a company doing the trading. Everyone has a Capital Gains Tax free allowance of £11,300 per annum – any gains up to this amount are tax free.
Block No. 501451, which is planned to be produced roughly speaking on December 28, 2017, will be decisive for the old/new fork Segwit2X, and a Christmas present for the entire crypto-community.
An experienced team of developers declares that it will resume activity based on the launch of the suspended project on its website.
“Commission and transaction speed within the Bitcoin network reached inconceivable values. In the last month, the average commission of the network was 15-20 US dollars, and the confirmation rate could reach several days. It is simply impossible to use it as a means of payment.
Our team will carry out the Bitcoin hard fork – Segwit2X, which was expected in mid-November. At the same time, its futures trading is conducted on some exchanges, including HitBTC.
We promise that all BTC holders will receive, not only B2X in the ratio of 1:1, but also as a reward for your commitment to progress, the proportional number of Bitcoin of Satoshi Nakamoto who mined it in the first year of the network’s existence,”
commented Jaap Terlouw, the project CEO.
The new fork will appear as a result of the revival of Segwit2X, initiated by a group of professional developers. The idea is to resume and refine the suspended project, to create a really anonymous and instant Bitcoin. At the same time, the goal of this work is not the replacement of the original network, but the effective coexistence of two networks with different purposes.
If you thought Bitcoin Cash, Bitcoin Gold, and Bitcoin Diamond were excessive, we’ve got a surprise for you: Bitcoin has 6 forks lined up going into the new year.
That’s right–six shiny new mints bearing Bitcoin’s name. Super Bitcoin, Lightning Bitcoin, Bitcoin God (no joke) Bitcoin Uranium, Bitcoin Cash Plus, and Bitcoin Silver are slated to launch throughout the Christmas and New Year holidays. This will double the number of forked currencies within the month, leaving the market with 8 total Bitcoin derivatives to choose from.
For those that don’t know, a hard fork is a method for developers to update and alter Bitcoin’s software. Once Bitcoin reaches a certain block height, miners switch from Bitcoin’s core software to the fork’s version. After this split, miners begin mining the new currency’s blocks, creating a new chain entirely and a currency to go with it.
Bitcoin Cash was the first hard fork to occur on Bitcoin’s blockchain, followed by Bitcoin Gold and Bitcoin Diamond. As you can probably imagine, hard forks have become a hot topic within the crypto community. Many believe that they are necessary for improving the network and solving Bitcoin’s scalability issue, as with Bitcoin Cash. Others have criticized them as money making schemes, as anyone holding Bitcoin at the time of a fork receives an equal share of the new currency.
Whether you love ‘em or hate ‘em, it’s important to understand what each fork is and what it wants to accomplish, and given the number coming up, there’s a lot of information to digest.
That’s why we compiled info on each fork into these manageable chunks, to make that research a bit easier to swallow. Time to dig in.
Super Bitcoin (SBTC)SBTC
The first of our new forks, Super Bitcoin, is estimated for December 12th at block 498888 with a circulating supply of 21,210,000 SBTC. Of this supply, 210,000 will be pre-mined.
As its name suggests, Super Bitcoin is like Bitcoin on steroids. Its team picked through what they like best about the current Bitcoin protocol and introduced some added features that they believe will buff-up the network. Like Bitcoin Cash, it will increase block sizes from 1MB to 8MB to improve scalability. It will run Bitcoin’s lightning network, and it plans to support anonymous payments with a zero-knowledge proof by May of next year.
Funnily enough, Super Bitcoin’s distinguishing feature isn’t even Bitcoin-related–it comes from Ethereum. The team wants to implement Ethereum-inspired smart contracts into Super Bitcoin’s program, which will allow third parties to build decentralized apps on the new protocol.
This is all the information as presented on Super Bitcoin’s website. There’s no white paper, but there is a developer’s reference “to provide technical details and API information to help you start to build Bitcoin-based applications.”
The team includes INBlockchain Inc. founder Li Xiao Lai, Link Capital founder JaiPeng Lin, and Ranger Shi. With their software upgrades, they hope to “revitalize [bitcoin’s] dominance,” which they believe has “lost a tremendous share of the cryptocurrency market.” Oh yeah, and they want to “Make Bitcoin Great Again.”
Bitcoin Platinum (BTP)BTP
We included Bitcoin Platinum and its “specifications” in an earlier draft of this article, but since then, it’s been exposed as a scam.
Like it or not, forking bitcoin has become an efficient approach for blockchain teams to receive quick money.
How many forks will we have? Are there services support them?
A Glimpse at Forked Coins Already Existing
Bitcoin Cash (BCH), the first bitcoin fork, was only listed on Viabtc when it first came out. Most of the bitcoin community, if not all of them, thought it was just a joke at first. The emergency difficulty adjustment (EDA) mechanism BCH adopted led to unstable block times, but since the November 13 upgrade and recent price spikes, it is safe to say that BCH has survived and is enjoying more support from exchanges and wallets.
Ordinary wallets supporting BCH include: Bitcoin.com, Electron Cash, Coinomi, Webmoney, Strongcoin, Stash, Jaxx, Bitpay, BTC.com. Hardware wallets: Ledger, Trezor, Keepkey. Paper wallets: Cashaddress, Walletgenerator. Mobile wallets apps: Bitcoinindia, Mobi and more. Official BCH wallets: Bitcoin ABC, Bitcoin Unlimited, XT, Parity, and Bitprim.
Bitcoin Gold (BTG), the GPU-friendly forked coin based off of bitcoin, was created on October 25 to compete with BCH and to fight mining centralization, according to its creator Jack Liao.
Ordinary wallets supporting BTG: Coinomi, Bitpie, Guarda, Freewallet. Official BTG wallet: BTGWallet.online. Hardware wallets: Trezor, and Ledger. News.Bitcoin.com spoke with Ledger’s Vanessa Rabesandratana who shared how to claim BTG at Ledger.
There is another Bitcoin hard fork coming our way in next few hours, which will create yet another breed of Bitcoin fork called ‘Super Bitcoin‘.
So quickly coming straight to the point, we will explore the following salient points regarding this Bitcoin fork so that we all can benefit from it in a safe and secure way.
What Is Super Bitcoin?
Super Bitcoin is the new upcoming Bitcoin hard fork of original Bitcoin which will launch at Block Height of 498888 of the main chain.
Super Bitcoin is abbreviated as SBTC as of now and is dubbing itself with the motto of “Make Bitcoin Great Again”.
It seems like a friendly fork because they have not mentioned explicitly that they want to compete with BTC but of course they are doing it to make the new version a lot better than BTC. All new things they are doing will explained further in the post.
When Is The Fork Happening?
According to their official website, Super Bitcoin was supposed to fork from the original Bitcoin Blockchain on December 17, 2017 but it looks like it will happen before that.
The new timeline and date of the Super Bitcoin fork is December 15, 2017 at a block height of 498888, according to the latest announcement by one of their team member on medium.
But we think it is going to happen even sooner than that. Probably December 12/13 according to your time zone because of the increased mining speed. So the best thing is to ignore the date and track the block height 498888 at which the fork will happen.