Accointing Weekly Crypto News

Accointing Weekly | April 22

Our weekly crypto newsletter is here! In this issue, you can learn more about what to do when you’re not sure how more complex crypto transactions are taxed. Also, read about Germany surpassing Singapore as the friendliest crypto country and get an investment tip from us!

Pressure on crypto taxpayers and lack of guidance: What can you do? 

While the tax deadline may be in the rearview mirror, if you are a crypto investor, you must continue to be aware of the tax implications of anything you do with crypto or NFTs. So, what can you do when the taxation of Liquidity Pools, NFTs, rebasing cryptos, play-to-earn, nodes is all so unclear? How can you plan?

If you are confused by taxation, just take a step back and understand the economics of each transaction – who has the asset, has it exchanged ownership, do you have a new coin (income). The terminology may be fancy, and guidance is lacking, but understanding the economics of each transaction will get you 90% of the answer in terms of tax compliance. Remember, there are only two types of income – capital gains and losses or income and expenses.

If you need guidance when filing your taxes, please take a look at some of our recently updated crypto guides, for example, our 2022 Crypto Tax Guide USA – Quick Answer Version or our Australia Crypto Tax Guide 2021-2022.

Germany – the most crypto-friendly country in the world? 

In Coincub’s Global Crypto Ranking, Germany overtook Singapore in the first quarter of 2022 as the most crypto-friendly country in the world. Singapore was placed second, while the US retained its position from the previous quarter. Coincub’s ranking is based on nine categories like government regulation, taxes, and talent pool.

The change at the top mainly resulted from the recent decisions by both countries’ governments and their regulatory agencies. Thus, while Singapore banned some crypto service advertising, Germany made steps toward broader crypto adoption, such as:

  • Special funds are now allowed to invest up to 20% of their portfolios into cryptocurrencies, which could lead to a $415 billion influx into digital assets if all said German funds invested the maximum amount.
  • Coinbase’s German business was granted the first crypto custody business license earlier in 2022 by BaFin, Germany’s financial regulatory authority.
  • The biggest German stock exchange, the Deutsche Börse in Frankfurt, now has more than 60 crypto-related products on its digital exchange Xetra.

Other European countries like Spain, France, and the Netherlands also moved up significantly in the ranking. Switzerland rose the highest by far by moving up eight spots to the fifth place as a result of the Swiss city of Lugano’s decision now to accept Bitcoin, Tether, and Lugano’s own LVGA token as legal tender.

Fundamental Analysis: The best long-term investment strategy

Let’s face it, crypto projects are complicated. That’s why truly successful investors perform diligent research, also known as fundamental analysis. They gather and carefully analyze all available data about a project or a coin in order to properly determine its future potential and utility. Fundamental analysis can help investors estimate the intrinsic value of a crypto asset, providing them with a relatively objective measure of future worth. The aim of such an investigative approach is to minimize investor risk and optimize the future profit potential of their portfolio.

Most projects have already published lots of information about the utility and economics of their token, the team behind the project, or a roadmap for future development. Sure, you can take their word for it and believe how great their project is, but it might be a good idea to do your own research as well. You never know what you may uncover!

If you want to read more about trading and investment strategies, don’t forget to check out our Crypto 101 Guide.

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