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US English

Cryptocurrencies fall on US tax reporting requirement

By Mensholong Lepcha

02:46, 16 November 2021

Bitcoin concept illustration
Most of the top 10 cryptocurrencies fell on Tuesday – Photo: Shutterstock

All top 10 cryptocurrencies barring stable coins fell in early Asia trade on Tuesday after US President Joe Biden signed a $1trn infrastructure bill containing a cryptocurrency tax reporting requirement.

The infrastructure bill includes a provision for brokers to report information on traders transacting an amount of over $10,000 to the Internal Revenue Services (IRS).

The cryptocurrency industry is worried about how the bill defines a “broker”, with many fearing that the open-ended term could include miners and node operators among others.

BTC and ETH down

“These expanded definitions aimed to increase transparency for the IRS, but ultimately run the risk of requiring network actors like node operators to report identifying information for crypto transactions that they have no way of gathering,” said Kollen Post for cryptocurrency research firm The Block.

On Tuesday, Bitcoin (BTC) fell 5.8% to $61,866.74, while Ether (ETH) lost 6.9% to $4,375.76. Both the cryptocurrencies took their seven-day losses over 8%.

BCH/USD

377.00 Price
-2.210% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

XRP/USD

0.56 Price
-2.820% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

63,891.90 Price
+0.010% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.12 Price
+0.120% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

Alt coin Polkadot (DOT) was the biggest loser among the top 10 cryptocurrencies, down 9.5% to $42.47.

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DOT top loser

Polkadot has fallen over 19% in the past one week and is about 21% away from its all-time high on $54.98 hit less than two weeks ago.

Blockchain platforms Solana’s SOL and Cardano’s ADA fell over 4.5% each to $230.43 and $1.95, respectively, in early Asia trade on Tuesday.

Meme coins Shiba Inu (SHIB) slipped 2.9% to $0.0000509, while rival Dogecoin (DOGE) lost 4.8% to $0.2499.

Read more : CoinFLEX partners Copper.co to offer access for institutional users

Markets in this article

BTC/USD
Bitcoin / USD
63891.90 USD
7.65 +0.010%
ADA/USD
Cardano / USD
0.42549 USD
-0.00073 -0.170%
ADA/USD
Cardano / USD
0.42549 USD
-0.00073 -0.170%
ADA/USD
Cardano / USD
0.42549 USD
-0.00073 -0.170%
DOGE/USD
DogeCoin / USD
0.1196242 USD
0.0001469 +0.120%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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