Is Germany really the most crypto-friendly jurisdiction? Maybe Not; Bitcoin gains


BTC continues its recovery from a five-week low on Monday.

Good morning. This is what is happening:

Prices: Bitcoin trades higher along with the US stocksreaching $41,360.

Outlook: Germany may not be as crypto-friendly as its top ranking implies.

Technician Opinion: Bitcoin’s recovery phase remains intact, albeit within a wide trading range.

Prices

bitcoin (BTC): $41,386 +1.4%

ether (ETH): $3,102 +2%

main winners

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Solarium SUN +5.8% Smart contract platform
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the best losers

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bitcoin cash BCH −0.5% Badge
Stellar XLM −0.3% Smart contract platform

Bitcoin price rises for a second day on hopes of a soft landing

By Bradley Keoun and Angelique Chen

Bitcoin (BTC) continues its recovery from a five-week low around $38,700 on Monday.

At press time, the largest cryptocurrency was changing hands at $41,300, still well below the high of around $48,000 a few weeks ago.

“The macro picture looks positive in my opinion,” Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, wrote in a newsletter.

Sotiriou said he believes the economy will have a soft landing despite many analysts predicting a recession. He is bullish on bitcoin and equities even though the Federal Reserve could raise interest rates by 0.5 percentage point next month, double the 0.25 percentage point increases seen in recent years.

Last week, crypto funds saw outflows for the second week in a row, with some $97 million in swaps, possibly due to “bitcoin becoming increasingly sensitive to interest rates.”

According to Glassnode, a large amount of bitcoin supply has built up between the $38,000 and $45,000 price range, as reported by CoinDesk’s Damanick Dantes on Market Wrap. That suggests price-insensitive traders are keeping much of the bitcoin supply above the $40,000 price level.

“Traders have yet to make high-conviction bets on the upside or downside,” according to analysts at investment research firm FundStrat.

Coin Metrics, a chain of blocks analysis firm, noted that Bitcoin is approaching the midpoint between the third and fourth rewards of the original blockchain. (They happen every 210,000 blocks of data, or roughly every four years.; the next one is expected to happen on May 4, 2024).

“Halfings are the core feature of Bitcoin’s programmatic monetary policy,” Coin Metrics wrote.

In traditional markets, US stocks rose as analysts noted investors had turned too bearish, the 10-year US Treasury yield rose to 2.94%, the highest since 2018 .

Elsewhere in crypto, CoinDesk’s Tracy Wang reported that prolific decentralized finance (DeFi) developer Andre Cronje appears to have returned to crypto after abruptly leaving the industry last month.

markets

S&P 500: +1.6%

DJIA: +1.5%

Nasdaq: +2.2%

Prayed: $1,952 -0.4%

perspectives

No, Germany is not the most crypto-friendly country in the world

By Sam Reynolds

What is the first thing you associate ‘EU’ with when it comes to business? Devastatingly high taxes and a cut-throat bureaucracy.

It is therefore surprising that Germany recently took the top spot from Singapore as the world’s most crypto-friendly jurisdiction, according to a ranking by CoinCub.

The rational? There are no taxes on cryptocurrencies if you sell them after one year of holding. If you sell it (more than 600 euros, or $648) before that point in a year, you’re taxed under the usual capital gains regime.

This is certainly a very good thing for long-term HODLERs. If you have a lot in bitcoin and you want to accumulate sats, this tax regime will treat you very well.

However, this does not work very well for decentralized finance (DeFi). Decentralized Exchanges, Yield Farming, liquidity mining… all this is based on fast operations and transactions. It’s what underpins this fancy new machine, which is worth over $100 billion currently locked up.

So a DeFi trader in Germany will have a nasty tax bill come tax time. Determining tax liability is difficult, when a DeFi trader’s average month is a complex and intricate web. Crypto Derivatives Trading: What Pumps through hundreds of billions of dollars a day in volume, it is also subject to the usual capital gains tax. Germany’s crypto friendship quickly fades if you look at it under this rubric.

A Pepe meme on the complexity of DeFi and taxes (unknown author)

Crypto has naturally gravitated towards hubs like Singapore due to the lack of capital gains taxes. Singapore is an island city with no natural resources, so to boost its development as a hub, it created a tax-friendly regime to encourage trade.

With no capital gains tax, there is no need to worry about the length of the holding when experimenting with new protocols. You can only trade.

Of course, Singapore has made some moves that would be considered “anti-crypto”, but this does not mean that the country should be considered hostile to cryptocurrencies.

The Monetary Authority of Singapore (MAS) discourages cryptocurrency trading by the general public because it knows that if enough people get angry after tapping into their retirement savings, they will complain to politicians, who will request more supervision and control: this supervision and control is simply not in the DNA of a financial center like Singapore.

But despite this discouragement, the lack of capital gains tax still exists and anyone who wants to trade can go ahead. Singapore also discourages other behaviors such as drinking alcohol and smoking tobacco, and accompanies both with heavy vice taxes. There is no such vice tax for cryptocurrencies.

technician’s socket

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Bitcoin (BTC) shed over $40,000, which is the midpoint of its three-month price range. Still, the cryptocurrency is facing initial resistance at $43,500, which could stop the current rally in price.

BTC was trading around $41,200 during the New York trading day and is up 2% in the last 24 hours.

The Relative Strength Index (RSI) on intraday charts is approaching overbought levels, similar to what happened in late March, which preceded a price pullback. However, on the daily chart, the RSI is neutral, which means that the buyers could remain active at the support.

For now, BTC continues to hold support above $37,500, a key level that has kept the recovery phase intact. Additionally, a series of higher price lows since January 24 indicates a slowdown in selling pressure, albeit with 20% price swings.

Momentum signals in the weekly graphic they remain positive, which could point to a further upside towards the $46,710 resistance level in the medium term.

Important events

10:30 am HKT/SGT (2:30 am UTC) Global International Monetary Fund panorama Press conference

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