Since Bitcoin (BTC) tested its all-time high in December 2017, the digital currency market has been on a continuous downward trend. Since that unforgettable month, the value of Bitcoin (BTC) has been heading south. Many expected the market to recover in the last quarter of 2018. But a price trend reversal wasn’t seen, and the digital currency market started this year even on a lower key.
However, amidst the current turmoil, one digital currency bull said that digital currencies could be blessed with a notable tailwind in the next couple of months. And no, this is not about an exchange-traded fund for Bitcoin (BTC), neither is it the endorsement of a celebrity in this infantile industry.
Digital Currencies Could See and Upsurge Due to China’s Tax Reform
The founding partner of digital currency-friendly Primitive Ventures – Dovey Wan – recently took to her Twitter page to talk about the tax reforms of China. She also talked about the possible effect of such changes on publicly tradable assets.
China recently passed on new rules. According to reports, the new rules are to ensure that the “ultra-rich” are paying their dues in full. After breaking down on this rule, she drew attention to the possible influx of buying pressure that digital currencies and real estate could see.
In a tweet, Wan said: “Digital currencies are also quite tax-effective since there is no reporting standard at all. Nevertheless, carrying out transactions via over-the-counter (OTC) will expose your bank accounts. As a result, the rich in China are investing in hashrate rental and mining operations to acquire Bitcoin (BTC) rather than buying it up front.”
She also said that:
The remaining tax-effective items are non-financial assets such as jewelry, artwork which can be hardly tracked by CRS. Also, since the U.S. and Thailand are not in CRS, a local property is quite popular among rich Chinese. Especially metropolitan property in NYC, SF, Phuket, and Bangkok.
First, she pointed out that the value of detached houses and condos could increase in the coming years, especially in top areas such as New York City, San Francisco, Vancouver, and Bangkok. If overseas properties are not as attractive and lucrative, she said that an influx of capital could find its way into the wider digital currency ecosystem. However, this wouldn’t happen in a way that consumers would expect, she added.
As digital currency trading platforms are banned, some may feel that OTC desks could become a feasible fiat on-ramp. Nevertheless, she said that this is not the case. She said that darkpools expose the accounts of tax dodgers to the “all-seeing eye” of China.
As a result of this, mining operations, like the mass direct minting of BTC, will most likely see an increase in adoption in the Asian powerhouse. Interestingly, wan noted that the decentralized, borderless, and pseudonymous nature of digital currency might not be all too good at the moment, adding that the inability of the government to adequately tax this asset could result in further inequality in the long-run.
Bitcoin (BTC) Price Today – BTC / USD
At the time of writing, Bitcoin (BTC) is changing hands at $3,455 after a decrease of about three percent over the past twenty-four hours. The current market cap of the digital currency is $60.50 billion and its trading volume over the past twenty-four hours is $3.16 billion.