Crypto Chronicle - 23/11/23

Welcome to the seventeenth edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

ATO Set to Enforce Capital Gains Tax on Wrapped Cryptocurrency Tokens

The Australian Taxation Office (ATO) mandates capital gains tax (CGT) on wrapping and unwrapping crypto tokens regardless of their market value. 

ATO also scrutinises liquidity pool activities for CGT. 

Australia’s Board of Taxation reviews digital asset taxation, including CGT on cryptocurrencies, planning to submit findings to the government by February 29, 2024.

Read more here: https://imperialwealth.com/news/ato-set-to-enforce-capital-gains-tax-on-wrapped-cryptocurrency-tokens

BlackRock Submits S-1 Form to SEC for Ether ETF

BlackRock, the largest asset manager, applied for an Ether ETF with the SEC, seeking to mirror Ether’s performance. 

This move followed the establishment of the iShares Ethereum Trust and mirrored selections made for Bitcoin ETFs. 

BlackRock chose Coinbase Custody Trust and a benchmark akin to Bitcoin. This follows their earlier push for a Bitcoin ETF, marking growing institutional interest. 

Applying for an ETF involves SEC approvals, seen in the race that began with Grayscale Investment’s bid for an Ethereum trust ETF. 

Meanwhile, ETH has surged 28% in the past month.

Read more here: https://imperialwealth.com/news/blackrock-submits-s-1-form-to-sec-for-ether-etf 

Fidelity Enters the Competition with BlackRock for an Ethereum ETF

Fidelity Investments seeks approval for an Ethereum-based ETF, disclosed in a filing after BlackRock’s similar submission. 

The fund, aiming to mirror Ethereum’s value, awaits SEC approval for trading on Cboe’s exchange. 

It highlights the absence of regulated exposure to ETH for U.S. retail investors, contrasting European access to diversified spot crypto products. 

This mirrors the challenge faced by prior Bitcoin ETF attempts, requiring SEC compliance with spot market surveillance. Advocates push for a safer investment route. 

The SEC delays decisions on Bitcoin ETFs, while Fidelity, managing over $11 trillion, expands its crypto services since 2018, amid increasing competition in the ETF space.

Read more here: https://imperialwealth.com/news/fidelity-enters-the-competition-with-blackrock-for-an-ethereum-etf 

Bitcoin Fees Surge as Excitement Builds Around Spot BTC ETF

The imminent approval of a US-based spot Bitcoin ETF has amplified demand, spiking transaction fees to $11.6 million on November 16. 

Fees surged by 113% from the previous day and 746% from a year prior, hitting $18.69. 

Bitcoin’s climb to $37,130, breaking a bear market range, followed major asset managers’ ETF submissions like BlackRock, Fidelity, and ARK. 

A potential ETF is expected to attract institutional investment, potentially driving Bitcoin to new heights.

Additionally, renewed interest in Ordinal Inscriptions, akin to BTC-based NFTs, emerged as Bitcoin wallets expanded. Despite fee concerns, rising adoption and fees bolster Bitcoin’s security, crucial as the 2024 halving event approaches, slashing miner rewards.

Read more here: https://imperialwealth.com/news/bitcoin-fees-surge-as-excitement-builds-around-spot-btc-etf 

Victory for Argentina’s Bitcoin-Friendly Candidate, Javier Milei, in Presidential Election

In Argentina’s recent presidential runoff, Javier Milei won with over 55% of the vote, a nearly 3 million lead, showing a strong Bitcoin-friendly stance. 

He aims to replace the faltering Argentine peso with the US dollar due to the country’s staggering 143% hyperinflation. 

Milei’s support for Bitcoin aligns with prior protests against inflation. While not explicitly advocating Bitcoin, he criticises central banking, praising Bitcoin for returning monetary control to the private sector. 

The news led to a 2% surge in Bitcoin’s value.

Read more here: https://imperialwealth.com/news/victory-for-argentinas-bitcoin-friendly-candidate-javier-milei-in-presidential-election 

SEC Initiates Fresh Lawsuit Accusing Kraken of Operating Unregistered Online Trading Platform

The SEC filed a lawsuit against Kraken, alleging securities violations. 

Kraken acted as a broker, dealer, and exchange for crypto assets without registering, risking investor safety while collecting substantial fees. 

SEC claims Kraken mingled $33 billion in customer crypto with corporate assets. It highlights Kraken’s cash mixing and aims for a permanent injunction and return of profits. 

Previously, Kraken’s parent faced SEC charges and settled for $30 million. The regulator identified tokens like Algorand’s ALGO as unregistered securities. 

Read more here: https://imperialwealth.com/news/sec-initiates-fresh-lawsuit-accusing-kraken-of-operating-unregistered-online-trading-platform 

U.S. Authorities Reach $4.3 Billion Agreement with Binance, Strike Plea Deal with CZ

The U.S. DOJ revealed Binance’s CEO CZ’s guilty plea in criminal and civil cases, involving a $4.3 billion settlement. 

Accusations included Binance enabling illegal fund transfers and falsely claiming compliance. CZ faces a $50 million fine and admitted breaching the Bank Secrecy Act. 

Binance must appoint oversight for three years, report compliance, and CZ is barred from leadership for that duration. T

This marks a government win against major crypto players. 

Binance’s statement acknowledges past compliance gaps but emphasises commitment to user security, clarifying no allegations of fund misappropriation or market manipulation were made in U.S. resolutions.

Read more here: https://imperialwealth.com/news/u-s-authorities-reach-4-3-billion-agreement-with-binance-strike-plea-deal-with-cz 

Technical Analysis

Wild week!

BTC has maintained its uptrend/trendline. 

Please see the chart below:

Here we’ve held it, bounced from the local golden pocket, and reclaimed the major .382. Awesome stuff.

Last Thursday we were sitting at $36,400 – since, we ranged up to the highs, failed to break them, dumped all the way back to $35.5k, renounced to as high as $37,800 this morning, before retreating to where we currently trade around $37,300 as of writing.

Still really positive.

Last week I showed a number of structural bearish charts that were invalidated.

These still are, with all HTF bullish charts and scenarios looking really healthy still, that you can view in last weeks chronicle.

The only difference between last week and this week, is alts were the rage. We saw SOL as high as $60+, LINK as high as $16, amongst others, now with BTC close to range highs again, these trade a fair bit lower for the time being, with alts getting wishy washed in these BTC movements.

For now, BTC target of $38k remains as resistance, if it breaks, we could see $40k + very easily.

Please see the chart below:

Downside support remains around $35,500, with $34,000, $32,400 and $30,000 all integral HTF levels of support under us if we do see a deep retracement.

Please see the chart below:

BTC.D remains to and from the 53% level as the market confuses itself constantly! Still believe 57-60% can be seen on an ETF approval, before any real alt rally.

We are currently running 50% OFF SALES on all of our trading/investment services!

If you are keen to get investing, trading, feel free to book a free online consultation here! 

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Cryptocurrency Mining

Bitcoin has performed very strongly over the past 2 weeks as Bitcoin rewards remain strong with transactional fees remaining High. Block rewards currently sit around 7.5btc per block which is an increase of 1.5btc additional from fees. 

Looks as though a small 3% difficulty rise is on the cards in 3 days time which is quite standard. 

Hashrate has seen a huge spike to 550 EH which is most likely which difficulty has risen. There was a report than Hashrate was going to rise a bit more due to lots of hobby miners turning on older machines to try and gain a bit more BTC before than halving with higher fees and BTC price rise. 

Other networks: 

Doge and LTC has seen a 30% drop in difficulty which has improved the returns on L7 models. 

KAS has had a rise of 8% in difficulty to compensate for the gigantic price increase over the past fortnight.

Dash has continued to drop difficulty as the price has dropped, this is giving miners a greater reward for the moment. 

Kadena has had a very stable week with only a 0.7% rise in difficulty.

If you wish to speak to Taylor on any of these machines, feel free to book a free online consultation here!

As part of the Black Friday sale, we have huge discounts on BTC and KAS MINERS!

That’s it for this weeks edition, stay tuned for next weeks!

Thanks!