2019 marked ten years since Satoshi sent the first Bitcoin transaction on 12th January 2009. We also celebrated 50 Years of the Internet.
The Bitcoin Block countdown currently estimates 14th May 2020 as the next Bitcoin halving. What does it mean? Bitcoin miners are rewarded each time they solve a block, and it is added to the Blockchain. Every 210,000 blocks a Halvening is programmed to happen, and with the rate of mining, this occurs around every four years. At each Halvening, the Block Reward received by miners decreases by 50%. Miners currently receive 12.5 BTC each time they successfully mine a block, but at the next Halvening, they will earn just 6.25 BTC. How does this impact the price of Bitcoin? Looking at past trends, when halving occurs the price tends to rocket dramatically, then crash dramatically and then rise over the years; there’s huge volatility, but ultimately Halvening seems to have a positive effect.
Will the same happen this time? We can’t say. History tends to repeat itself, but other variables also come into play. Previously, new currencies were something to watch out for, this time around the rise of public awareness of Bitcoin will undoubtedly have an impact. Still, it is impossible to predict how investors will act.
Facebook released its highly anticipated white paper in June. We could say that it’s the most talked-about currency of 2019, but realistically it’s the origin and people behind it that’s got the world talking. In a six-hour hearing in October, Zuckerberg discussed plans to release a cryptocurrency, and as expected this became overlooked; the current controversy around Facebook itself fueled a large proportion of the questions from congress. Since the hearing, many of the big-name partners have dropped out, but with a launch schedule from mid to end 2020, we’ll be watching intently to see how Libra progresses.
Tax. The word that no one wants to hear, especially in the crypto space, but, it’s what we do and what we’re here to help you with. The crypto compliance ball started rolling in 2019 with the IRS leading the way back in July. Over 10,000 notice letters were sent out to crypto users in the US. Then in September, the Australian government announced an expected $3 billion return on its $1 billion campaign into cryptocurrency tax. More recently, Denmark’s tax agency Skat sent out compliance letters to crypto users requesting a background of their activity.
So, what about here in the UK? Back in August, industry sources suggested that the HMRC wrote to at least three exchanges including Coinbase, eToro and CEX.IO, requesting lists of customers and their transaction data. Things have been fairly quiet since, but if they follow in the footsteps of the US, we can expect letters to start arriving next year. It’s thought that the HMRC will only go back a couple of years, so interestingly early crypto investors with the biggest gains will probably not be affected, but those who came in at crypto’s peak will. We would encourage individuals to start thinking about their tax position as soon as possible, rather than get caught in a mad panic when letters start to drop.
Although the rise of crypto compliance is going to hurt a few pockets and Mr Tax Man is the only person smiling right now, this global recognition of need for regulation suggests that there is finally acceptance for crypto as a viable currency and that is far from a bad thing. The world is changing, expect growth and lots of it.
There’s been a lot of change for us this year, expanding from a team of two to six. We came out of Beta in August and recently made Recap available in the browser, making the sign-up process a lot simpler and quicker, in turn making us easily accessible for more people.
We’ve added lots of new features throughout the year, such as new automatic exchange integrations, our refer a friend programme and an account dashboard where users can see detailed historical transactions and balances by currency as well as their current asset split. We have also improved the overall tax experience; all users can now find out their tax position before subscribing to a paid plan.
Finally, thank you for all of your support this year. Your feedback drives us, so please continue to stay in touch through all of the usual channels and by email to email@example.com
See you in 2020!