CBX Weekly Newsletter // 22 January 2020
- Bitcoin falls from $9,200
- CME Open Interest for Bitcoin Futures Up 100% Since Start of 2020
- South Korea Considers 20% Crypto Income Tax
Bitcoin falls from $9,200
Bitcoin traded above $9K for a few hours last Sunday before sharply dropping to $8,480.
A break below Sunday’s low of $8,480 could invalidate the recent bullish trend and could yield a drop to $8,200-$8,000. However, if the bulls manage to support the price Bitcoin can make another attempt to go over $9,000.
For now, Bitcoin is trading in a price range of $8,460 to $8,750.
Daily chart
Bitcoin charted a big bearish outside day candle on Sunday. These usually occur when the day starts with optimism but ends trading below the day’s price action.
While the pattern is considered a bearish signal, for it the be confirmed there needs to be follow-through, a move below the low of the candle will indicate the continuation of the sell-off.
CME Open Interest for Bitcoin Futures Up 100% Since Start of 2020
About $235 million worth of positions (5,329 contracts) were open on the CME on Jan. 17 compared to $110 million seen in early December. Open interest is the sum of all contracts that have not expired, been exercised or physically delivered.
Open Interest for CME Bitcoin Futures
Source: Skew
Open interest rose to more than 5,000 contracts in the first four trading days of the week.
Further, more than 17,000 contracts (85,000 bitcoin) traded on Jan. 8 — the day when the options product went live and registered the first-day volume of $2.3 million or 55 options contracts.
Options trading volume more than doubled to 122 contracts on Friday, amounting to a notional volume of 610 BTC or $5.3 million, as each contract represents five bitcoins.
Institutional Participation
“BTC has seen remarkable growth in volume and customer interest with nearly 2.5M contracts traded to date and 4.9K+ contracts traded daily, “ the CME tweeted on Dec. 17.
South Korea Considers 20% Crypto Income Tax
The South Korean government is considering a 20% tax on income generated from cryptocurrency transactions.
South Korea’s Yonhap News Agency reported that officials from the Ministry of Economy and Finance’s income tax office had been reviewing a new proposal that could adopt a regime for taxing cryptocurrencies, re-classifying them as “other income,” placing it in the same category as money earned from lotteries, rather than as a form of capital gains, as it is currently treated.
has pushed for a new cryptocurrency tax regime for over a month now. A ministry spokesperson confirmed to The Korea Times in December that a “revised bill” for enhancing the government’s ability to tax cryptocurrencies would be drawn up in the first half of 2020.
An official of South Korea’s Ministry of Economy and Finance added that the plans for enhancing the government’s ability to tax cryptocurrencies would be drawn up in the first half of 2020, although no plans had yet been finalized, suggesting the tax plan could be amended or even thrown out by the ministry.
Although cryptocurrency taxation in most countries is still a very nascent field, the approach taken by the governments in many developed economies has been to treat returns made on cryptocurrencies as capital gains.
—
Subscribe to our Weekly Newsletter!
