US investors realized 6X more crypto gains in 2021 than next country

April 21, 2022 Coin Telegraph

Crypto investors from the United States realized nearly $47 billion in gains during 2021, outpacing the UK by a factor of six.

Crypto investors from the United States realized crypto gains nearly six times higher in total than the UK, the second highest country in terms of realized gains.

According to a report by Chainalysis, crypto investors in the US accrued a record $46.9 billion in realized gains throughout 2021, leading the rest of the world by a wide margin. The US is followed at quite some distance by the UK at $8.1 billion and Germany on $5.8 billion.

Total realized cryptocurrency gains 2021: Chainalysis.

The report comes as global cryptocurrency adoption continues to gain widespread traction. The US witnessed a massive increase in adoption and realized gains, with the total estimated gains for 2021 up 476% from $8.1 billion the year before.

Special mentions were given to countries that outperformed their “traditional” economic rankings. Despite Turkey being globally ranked as number 11 by GDP, the country was ranked at number six when it came to realized crypto gains.

China was one of the only large nations that did not see the same massive gains as other countries. In 2021, China’s total estimated realized cryptocurrency gains stood at $5.1 billion, up from $1.7 billion in 2020, which equates to year-over-year growth rate of 194%. However, this is still impressive growth considering the extensive crypto bans that were progressively enacted in China in 2021.

China's result pales however besides other countries such as the UK and Germany which saw a respective 431% and a 423% increase last year.

Another notable trend was the increase in total gains from Ethereum (ETH), which saw ETH investors around the world cash out a total $76.3 billion, beating out Bitcoin (BTC) as the highest realized earnings crypto asset in 2021. Bitcoin inventors still performed well however, with the global crypto investing community securing $74.7 billion in gains throughout 2021.

Crypto ownership among Norwegian women doubles, mirroring global trends

March 31, 2022 Coin Telegraph

Coin Telegraph

According to a recent survey from Arcane Research, the number of Norwegian women that own cryptocurrency has doubled from 3% to 6% in just one year.

The number of women in Norway who own some form of cryptocurrency doubled during 2021, according to a new survey.

The survey, conducted by Arcane Research and Ernst & Young found that the rate of female ownership of crypto assets in Norway, surged from 3% in early 2021 to 6% by Mar. 30 of this year. The online survey interviewed 1000 Norwegians aged 15 and older and was conducted in partnership with NORSTAT one of the leading data collectors for market research services in Northern Europe.

Almost two thirds of all female respondents said that they first purchased cryptocurrency in 2021. Up until this recent survey was conducted, the gender gap in Norwegian crypto ownership had been widening, with female ownership steady at 3% from 2019 to early 2021. Over the same period male ownership increased, from 6% in 2019 to 14% in 2022.

The survey also found that overall, approximately 10% of the Norwegian population — which would equate to 420,000 people — now own some type of cryptocurrency, representing a doubling in overall Norwegian crypto ownership since 2018.

Norway isn’t the only country to witness increasing female involvement in cryptocurrency — Cointelegraph reported in December that a study by Australian-based cryptocurrency exchange, Independent Reserve found that the number of Australian women who invested in crypto had also doubled from 10% in 2020, to 20% by late-2021.

A 2022 survey in Turkey, released in March by KuCoin indicated a more even distribution between male and female crypto users in the country, with women accounting for almost half (47%) of all crypto investors and representing 63% of the “crypto-curious” demographic.

While the trend toward more equal participation in crypto is looking positive, there are still significant gaps in specific areas of the cryptocurrency industry. In the NFT sector female creators account for just 5% of all sales in the total market.

Overall global ownership of crypto continues to grow. Approximately half of the German population has indicated that they are ready to invest in crypto with women accounting for 53% of that total, according to a survey released last week from KuCoin.

As reported by Cointelegraph, Florian Döhnert-Breyer, the managing director of German crypto fund F5 Crypto stated that Germany will be come to be seen as a role model for the wider adoption of crypto investing: "As the largest country in the EU with a notoriously risk-averse view of financial assets, Germany has a special role to play."

"The high number of women interested in crypto is particularly encouraging as this target group is, on average, less active in the financial market (e.g., stock market).”

Research by Grayscale from 2019 shows that women tend to be more risk-averse investors, a reason often cited as a partial explanation for the gender gap between the number of female and male crypto investors.

Nexo and Amber Group executives claim ‘exponential’ growth in crypto institutional investment

March 25, 2022 Coin Telegraph

Africa

Panelists at the Blockchain Africa Conference 2022 discuss the significant potential of cryptocurrency institutional investment while highlighting the challenges it still faces.

During the 8th edition of the Blockchain Africa Conference 2022, Cointelegraph's Editor-in-Chief Kristina Lucrezia Cornèr virtually moderated a panel titled "Cryptocurrency Institutional Investment: Increasing Returns and Improving Diversification." Panelists Kalin Metodiev, Co-Founder and Managing Partner at Nexo, and Dimitrios Kavvathas, Chief Strategy Officer at Amber Group, focused on the opportunities that institutional investors perceive in the blockchain and crypto space, both in Africa and globally.

Nexo is a crypto borrowing and exchange platform that recently began offering crypto custodial services, products and lending services for institutional investors, in partnership with the crypto wing of Fidelity Investments called Fidelity Digital Assets. Crypto trading firm Amber Group recently secured a $200 million investment, which increased its valuation three-fold to $3 billion after big investment from Singaporean Temasek Holdings.

Both panelists spoke to their views on the current dynamics of institutional investment within the blockchain and crypto space and acknowledged its "exponential" growth in institutional onboarding. Metodiev stated that institutional investors, however, may claim that the crypto market is "still too volatile," making it challenging for them to determine the overall effect of crypto in relation to other assets in a portfolio.

Kavvathas expressed that "we can do more" than just adding crypto as one more asset class for large liquidity provision institutions. He added that even though participation is increasing, it is "nowhere close to being meaningful" yet. Metodiev also highlighted the importance of the African market and the "number of potential users that is growing on a daily basis" due to the "extremely" quick adoption of blockchain technology on the continent.

With mass adoption, however, may come regulation. Metodiev said that even though a free market should not mix with politics, some regulation is to be expected: "It's a pipe-dream if we believe we live in a rose-colored bubble" and expect millions of dollars to flow in without any policies or procedures. Kavvathas agreed that it's inevitable that crypto be folded into the standard regulatory structure despite the community's hesitation towards it.

Cornèr then asked what can be done to accelerate the responsible use of cryptocurrency in accordance to the environmental, social and governance, or ESG, agenda set by the United Nations. Metodiev expressed that the more vocal institutions are about their commitment to ESG goals, the more that service providers may support these initiatives as well, but that it starts with a larger investment in blockchain technology.

Kavvathas spoke about Amber Group's partnership with climate tech company Moss Earth and its program to tokenize carbon offsets of Bitcoin transactions. He added that "blockchain companies are extremely well placed to deliver climate change solutions" but that there needs to be a "tailwind" from governments and regulators following their lead.

Anther topic of conversation included what institutions may be seeking in terms of returns. Nexo's Metodiev pointed out that institutions perceive returns and risk differently than retail investors do, emphasizing that institutional interest is based on how opportunities are perceived. He said that for institutional investors it may be more important to enter a space where they can deploy billions of dollars and receive returns of 7%-12% consistently year-over-year as opposed to chasing 70%-80% returns.

The discussion wrapped with Kavvathas expressing his excitement towards tokenomics and the incentives associated with permissionless blockchains that can enable the crypto community to bridge and overcome obstacles to sustainability investing.

How are cryptocurrency taxes reported?

March 3, 2022 Coin Telegraph

Blockchain

Cryptocurrencies and NFTs are viewed differently than other investments by the IRS, making for a complex tax landscape.

How can I simplify the tax submission process for myself or my CPA?

Specialized cryptocurrency tax software enables users to generate a crypto tax report for their country, oftentimes generating Form 8949 alongside other files for e-file submission or to provide to one’s CPA.

To make an investor’s life or the life of a CPA easier, investors who engage in cryptocurrency trading can start by gathering all of their crypto transaction reports throughout the year. Modern crypto tax software tools such as Accointing automate this process to reduce the time spent compiling these documents.

The Accointing platform incorporates over 400 integrations, many of which are notable cryptocurrency exchanges, into a single view on a mobile app or desktop. With a cohesive set of data, users can calculate their total wins and losses for the year, providing the basis for a customized tax report for a CPA in a few minutes.

Learn more about Accointing

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

How to harvest losses with crypto?

Take netted losses against profits earned through cryptocurrency to bolster an investor's tax return.

To offset some of the taxes incurred through investing, many will leverage a strategy known as tax-loss harvesting. With harvest losses, investors look for dips at cryptocurrency prices for when the sale of digital assets falls below cost basis. These losses can be netted against capital gains to reduce an investor's overall tax bill.

How can I optimize my tax returns with crypto?

Investors can look to several optimization strategies, including the 0% tax rate for long-term gains and HIFO methods.

Investors can take advantage of several opportunities to optimize tax returns, including the 0% long-term capital gains tax rate. The U.S. tax code also has a relatively lesser-known 0% tax rate for certain long-term gains.

Depending on an investor's filing status, annual income and length of time a digital asset has been sold, up to $80,000 in profits can be made without being subjected to taxes.

Another strategy is known as the highest-in-first-out method for specific identification. This method is more taxing, requiring users to select the asset purchased at the highest price. Users can then classify these units as the items being sold, resulting in the lowest amount of gains and, therefore, lower tax bill.

What makes managing cryptocurrency taxes difficult?

Cryptocurrencies are treated differently than standard assets, which, when combined with the limited CPA resources with extensive knowledge on cryptocurrency taxation, result in a stressful tax season.

The current framework is complex to navigate since the IRS treats cryptocurrencies like Bitcoin (BTC) and nonfungible tokens (NFTs) differently from other assets, classifying them as property. Since different rules apply, investors often require the help of a professional or proper crypto tax software to record this activity correctly.

Other rules add complexity to the management process by suggesting that the use of fiat currency (dollars) to purchase assets in 2021 doesn't require an indication on a tax report at the time of writing.

But, selling or exchanging the same virtual currencies does require a report. Therefore, for those doing a lot of trading or holding many different currencies, the sheer number of data that must be navigated through can add to the complexity.

While in previous years, leveraging a tax professional has been an option to help with some of the more complex nuances associated with tax management, the last year has been marked by a great resignation of tax professionals. With more reports of burnout and overtime hours caused by the COVID-19 pandemic, investors are often left on their own when it comes time to calculate taxes accrued.

How to file your crypto taxes?

Investors must calculate their net gain or net loss before choosing their filing status, deciding how they will file their taxes, determining if they are taking the standard deduction and making a payment if it is owed.

To file their taxes, users may start calculating their gains and losses manually or by consulting a tax-planning professional. Capital gains and losses incurred by an individual investor require completing IRS Form 8949. The total gains and losses are combined, arriving at either a net capital gain or a net capital loss. This amount is then added to an investor's total income from the rest of their investments, such as stocks, into form 1099-B. A tax professional, CPA or software filing solution will use the information provided on this form to generate Form 8949.

In most cases, exchanges will report 1099-B Forms for cryptocurrency trading transactions, which investors can match with Form 8949. Issues only arise when there are discrepancies in values, resulting in audits or a CP2000 notice.

With the completion of these calculations, investors may undergo the rest of the standard steps involved in filing their taxes. These steps include determining the filing method (the IRS typically recommends tax preparation software to e-file), deciding between a standard deduction or itemized return and making a payment if it is applicable.

Why is it imperative that this year, more so than ever, investors are properly abiding by IRS taxing standards?

Over the last year, the government has taken note of the increase in cryptocurrency investments, issuing formal communications of their regulation efforts.

Recognizing the growth in cryptocurrency transactions has led many government organizations to crack down on investors over the past year.

According to the White House and Democratic legislators, the crypto economy and previously lax reporting requirements are largely responsible for the recent tax gap.

Earlier this year, several fiscal government organizations have sent letters communicating the importance of tax reporting and requesting information on the data stored by a cryptocurrency exchange.

The push for more regulation is now becoming evident in the requirement of answering "yes" or "no" to a tax form question about cryptocurrency transactions throughout the year. Failure to disclose this information and associated income might result in significant penalties for the investor.

How to maximize cryptocurrency earnings with smart trading

March 3, 2022 Coin Telegraph

Blockchain

Triple and quadruple-digit cryptocurrency earnings might be possible in any market with a little strategy and some analysis.

With news of early adopters retiring millionaires, and newbies making a 300% profit or more on their cryptocurrency holdings, investing in digital assets is seen by many as a lucrative opportunity.

That said, cryptocurrency continues to exist as one of the most volatile asset classes, marked with significant price swings branching from the highest highs to the lowest lows. For this reason, it is common for new investors to make attempts to time the market, especially if they have had a few successful trades under their belt.

Unfortunately, this is dangerous thinking since, like traditional asset classes, determining when a surge or dip will occur is impossible. For example, few could have predicted the current market the world is experiencing, which has made for a prime buying opportunity now that top cap tokens are facing a significant markdown from previous all-time highs.

Added complexity comes down to the cryptocurrency market being available 24 hours a day, making it all that more of an intimidating landscape for new investors to navigate. As a result, there is no proper way to time the cryptocurrency market, with the very thought being highly discouraged.

For those looking at long-term methods of building wealth, patience and strategy become increasingly crucial over timing an entry point. Like traditional assets, cryptocurrency follows standard cycles, with prices constantly compounding.

Meaning long-term investors with a particularly strong focus on strategy are far more likely to gain wealth than short-term traders. As the saying goes, timing the market time often loses to time spent in the market.

Therefore, investors are encouraged to move away from luck towards more responsible investment strategies. Consider that despite crypto trades available all day, a careful everyday analysis will result in patterns, and the addition of strategy will minimize risk.

Employing a strategy

Enabling a smart trading strategy comes down to several key principles, including investing only what a trader is willing to lose and avoiding the compelling sway of fear and greed. These efforts are often only easy in theory and require the assistance of a partially or fully automated trading platform to help execute.

For example, users are encouraged to adopt a dollar-cost averaging (DCA) strategy rather than attempting to time a dip in the market, where they can use it to build their cryptocurrency portfolio while limiting stress.

The strategy, favored by Warren Buffet, looks to buy into a holding by spreading out payments over a period of time, varying the price of purchase. Investors will typically set a recurring amount to be paid out, effectively averaging out the cost of the asset over time and limiting the potential impact of paying too much or missing a drop in prices. Many new investment tools aim to simplify this process through automation, enabling users to select a trading frequency (hourly, daily, weekly, etc.) and price limit, which the said automated platform will execute.

Following a similar strategy is the concept of grid trading. Grid trading occurs when orders are placed above and below a set price.

In practice, traders can place buy orders at every $2,000 below the price of Bitcoin (BTC) and sell orders above the market price. As assets fluctuate within that range, an automated program will look to these movements to buy low and sell high. With this strategy, investors will not need to time the market and profit from sideways markets when the price fluctuates within a given range.

Minimizing the impact

To help branch this knowledge gap for new traders, Matrixport has released a series of tools to make cryptocurrency trading smarter. Currently, Matrixport exists as one of Asia’s fastest-growing digital assets financial services platforms, releasing products such as an Auto-Invest tool for users to employ DCA, functionality for enabling a grid strategy and options-based Buy-Below-Market (BBM) and Sell-Above Market (SAM) offerings.

BBM and SAM were released as the first of their kind in the industry, enabling users to buy and sell Bitcoin at discounts or premiums relative to the market price. These offerings were inspired by the traditional wealth management accumulator and decumulator products that were reimagined for cryptocurrency investors. For investors, the benefit is twofold, allowing investors to tame an otherwise volatile market while eliminating the human emotion that elicits panicked reactions to market dips. Although the minimum requirement for the traditional model was $1 million, the BBM/SAM feature has made the feature accessible to the everyday investor with a lower minimum of $100.

More insights on matrixport here

The result of each pricing option may have one of three outcomes. In the case of BBM, this may be the asset settling in range and resulting in 50% of the user’s fund being used to purchase the asset, the price settling on the lower bound of the range and used to buy the asset or the price settling above the range with the order being knocked out. And wSAM is the reverse strategy of BBM.

Through the use of tools like BBM and SAM, among others, investors will be equipped to fill in the missing gaps in their smart trading strategies. Although not eliminating all risks, Matrixport boasts the smooth market transition for new investors as a conservative approach that removes any need to time the market.

Learn more about Matrixport

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