Weekly Market Update
8/11/21 - 12/11/21
New all-time highs from Bitcoin and Ether early in the week have boosted optimistic expectations in the crypto market. But after a pullback Thursday, will the market continue?
- TLDR - A snapshot of the week
- Bitcoin down 0.15% (US$ 65,065 and AU$ 6,559)
- ETH up 1.4% (US$ 4788 and AU$ 6558)
- Australia’s banking regulators keep close watch on CBA
- Electronic music superstar backs the launch of new DAO
- Austria plans to tax Crypto just like stocks
Aussie banking watchdogs to assess the CBA’s crypto regulatory implications
The Australian banking regulator is assessing the implications of Commonwealth Bank’s planned launch of Bitcoin trading for retail investors.
- Last week CBA announced its plans to be the first mainstream bank in the developed world to offer retail investors cryptocurrency trading
- With no clear regulatory framework for cryptocurrencies, the CBA’s decision pushed the focus of financial watchdogs on the $2 trillion crypto industry
- A spokesperson from the Australian Prudential Regulation Authority (APRA), stated in an interview with Reuters, that CBA has made the regulator aware of its plans, and that APRA was “examining the regulatory issues that this raises.”
- CBA’s digital asset trading service will be delivered in partnership with Gemini Trust Company, one of the biggest crypto exchanges globally
- The anti-money laundering regulator the Australian Transactions Reports and Analysis Centre (ATRAC) has stated it was actively “engaging...in relation to this new product offering” together with CBA and Gemini
- CBA has stated it welcomes regulatory clarity in the industry, and that its product was created with risk-mitigation and regulatory concerns as central focus
Transformative DAO supported by Deadmau5 set to launch of multiple platforms
- MODA DAO, is harnessing non-fungible tokens (NFTs) as a governance tool for artists and their managers to control their royalty contracts.
- The decentralised autonomous organisation - which is an innovative company structure operated by code instead of people - is pairing its NFT music streaming platform with its governance token, MODA
- Using MODA tokens - which are NFTs that provide token holders creation and voting power on the blockchain - artists and managers have a direct say in the future decisions and rules of the project, including royalty agreements
- While NFTs have previously been used by musical artists in the digital release of their music and concert tickets, its application to streaming governance is a first
- Revenue earned from songs published on their music platform will be split three ways between artists, the rewards pool, and a token buy back program
- Popular electronic music artist, project advisor and DAO member, Deadmau5 sees a strong future for the project in the music streaming industry, stating in a recent interview with Coindesk;
“This new world is creating new ways for artists to take ownership of their music, but it will take a while to scare the Spotify and Apple Musics of the world”
- In an environment where royalties have become less and less profitable for musical artists and live performances are king, MODA DAO is expanding the avenues for acts to profit of their art
- With the impact of lockdowns devastating for Australia’s own music industry, the need artist led governance over musical royalties is incredibly important
- MODA DAO will additionally give token holders access to various in-house blockchain products such as audio fingerprinting, in which artists can mint raw audio-files and media as NFTs that can be sold before their songs are published digitally
Austria seeking to boost crypto adoption by taxing digital assets just like stocks
- Austria’s Federal Ministry of Finance is hoping to boost local confidence and support in cryptocurrencies, by taxing them with the same guidelines as mainstream stocks and alternative asset investments.
- From next March, 2022, a 27.5% capital gains levy will be applied to digital currencies like Bitcoin and Ethereum, as part of wider tax revisions in the nation.
- This is the first levy of its kind in the European Union
- Ministry officials see the move as an effort to equalize the treatment of digital assets like crypto and traditional financial assets, expressing in a recent statement;
“We are taking a step in the direction of equal treatment, to reduce mistrust and prejudice towards new technologies. At the same time, we are creating more fairness for investors as well as uniform market conditions.”
- Under the new rules, crypto traders who convert one token for another won’t pay tax on these transactions, and investors will have the option of compensation against potential losses.
- Coins and tokens purchased before the planned start date won’t be subjected to the new levy, and the tax will only be applied to tokens that are sold
- The tax revisions provide an interesting parallel to the tax recommendations from the Australian Crypto Senate inquiry, in which CGT was advised to only be applied where there is a clearly definable capital gains or loss when a trade occurs
- Under current Australian regulation, CGT is applied not only to the sale of digital currencies, but also on exchanges from one crypto to another
Bitcoin and Ether have exploded once again to new heights, breaking into new all-time highs in the mid-week trading sessions. Despite short-term price swings, further upside may be expected for cryptocurrencies.
- Last week saw the total market cap of all cryptocurrencies come close to the milestone of US$ 3 trillion
- The world's leading crypto’s Bitcoin and Ether hit an all-time high of AU$ 93,600 and AU$ 6,575 during Asian trading hours on Monday
- Over Thursday however, Bitcoin faced a pullback below AU$ 89,000, a decline of more than 4%, while Ethereum fell roughly to AU$ 6,300, a drop of about 3%
- Intraday charts are showing initial signs of upside exhaustion, which can explain BTC’s brief pullback, with the relative strength index (RSI) on the four-chart showing short-term overbought levels
- However upside momentum signals are shown to be improving in the daily price chart, for the first since Oct, which suggest buyers could remain active in the pullbacks
- Nicholas Cawley an analyst for DailyFX has pointed to the volatility as a potential signal of further upside, stating;
“Longer-term traders in BTC and ETH may use this recent sell-ff to build their positions as sentiment going forward remains positive”
- Others see Bitcoin’s blockchain upgrade, Taproot, as a strong bullish event for the coins in the near future
- Two daily closes above an all-time high in a row, would hit further upside targets for BTC, with the first initial target at AU$ 118,000