Bitcoin has staved off yet another threat to give up USD 9,000 in a rather rare Monday for Asian traders who took profits above that key support level, before Central Europe swooped in to the rescue, bringing Bitcoin up to its current levels of USD 9,242 at 12:30 pm UTC (CoinDesk).

This is shortly after creating the day’s high, so if prices remain below the high, we should expect more consolidation or even another attempt at breaking the current floor. But if we see more highs in the coming hours, we could be witnessing the start of a more serious attempt to breach new resistance levels, as discussed in yesterday’s analysis.

Ethereum is making another run above USD 185, as Litecoin moves beyond USD 60 and XRP creeps towards 30 cents, so altcoins are definitely enjoying the new push by Bitcoin in the new month. Decred is set to be one of the biggest long-term winners in the past few weeks, with today’s 12.43% appreciation taking it to above USD 21 and back on track to August highs.

Bitcoin’s performance is so strong that it has finally outperformed gold for the first time since June 2019. The precious metal’s fortunes have been slumping as we reported earlier thanks to markets trying to seek better diversity in economic turbulence. Although October was also good for gold (it gained 2.7%), it did not fully recover from a 3.17% September dip, and pales to Bitcoin’s double-digit growth (data from Bitstamp).

With US-China trade optimism increases for a previously unexpected compromise, it might seem as though gold will lose even more of its luster in November, especially when the Federal Reserve on Thursday said it would stop cutting rates to look at new data that might change its path of lowering borrowing costs again. Gold won’t like the Fed backtracking on dovish policies so will have to face down selling pressure if rates don’t go down, or even go up.

Even better for traders now is the ongoing recovery in US stock markets, with crypto analysts Delphi Digital saying in its October report:

Prior bitcoin bull runs were characterized by a gradual decline in equity market volatility. For example, we’ve noted its, albeit imperfect, inverse relationship with the VIX Index over longer time horizons (i.e. 2017 run-up).”

Following last week’s crypto guidance issued by the US Internal Revenue Service (IRS), the UK tax authority has now issued its own guidelines for businesses.

A year ago, Her Majesty’s Revenue & Customs (HMRC) had made it clear to individuals on how it viewed crypto-related tax. And now, it will be clarifying the same for businesses and enterprises, relating to what it calls “crypto asset exchange tokens” like Bitcoin, which HMRC sees as distinct from utility tokens and security tokens. The latter two categories will have their own forthcoming guidance.

Crypto and Bitcoin continue to be defined as commodities rather than currency, under the new guidance, which ensures that all businesses that trade them, including selling goods or services for crypto or mining, are liable to pay tax. HMRC is also the body that determines the type of tax paid – capital gains tax, corporation tax, income tax, national insurance contributions, stamp taxes or VAT.

Most mining activities will also be taxed since considered a form of trade, and even if not, kept coins from mining will be considered miscellaneous income, with its own tax category. Home mining is not going to be taxable, however:

“Using a home computer while it has spare capacity to mine tokens would not normally amount to a trade … to mine tokens for an expected net profit would probably constitute trading activity.”

Like its US counterpart, HMRC also has guidance for forked coins and airdrops, although there is nothing new to note.

On the other hand, corporate token holdings now face two types of tax: capital gains tax and corporation tax. HMRC does allow the pooling of similar exchange tokens to make calculating tax easier:

“If a person owns bitcoin, ether and litecoin, they would have three pools and each one would have its own ‘pooled allowable cost’ associated with it. This pooled allowable cost changes as more tokens of that particular type are acquired and disposed of.”

Easy right? So now make sure you pay your tax on all your crypto activities!

 

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