Futures Launch Weighed on BTC Price, US Fed Reserve Says

Researchers believe that bitcoin's recent price trend is similar to how the housing bubble developed in the U.S. during the 2000s
08 May 2018   1353

The launch of bitcoin futures at the end of last year, played a role in the subsequent movement of its price, according to the US Federal Reserve Bank Research. This is reported by Coindesk.

In an economic letter published by the Federal Reserve Bank of San Francisco, it is said that the rapid rise and subsequent decrease in the price of bitcoin against the background of futures launch is far from a coincidence. The event corresponds to the traditional behavior of the asset market after the launch of futures on its basis. A similar situation occurred with bonds in the early 2000s.

Rapid rise of the price of bitcoin and its decline following [the] issuance of futures on the CME is consistent with pricing dynamics suggested elsewhere in financial theory. And until December 17, those investors [optimists] were right: As with a self-fulfilling prophecy, optimists' demand pushed the price of bitcoin up, energizing more people to join in and keep pushing up the price. The pessimists, however, had no mechanism available to put money behind their belief that the bitcoin price would collapse. So they were left to wait for their 'I told you so' moment.
 

U.S. Federal Reserve Bank's San Francisco Research

CBOE and CME launched their bitcoin futures in mid-December. At the same time, the cryptocurrency reached its historic high above $ 20,000, after which it returned to $ 6,000 in early February.

They also suggest that the key factor that will determine the price of bitcoin in the long term will be its role as a means of committing transactions that are not constrained by state borders and characterized by low commissions, while the speculative component will gradually lose its significance.

Israeli BTC Investors to Face Catch 22

They need to pay taxes from Bitcoin investing in order to avoid their property arrest, but banks don't take their money due to AML issues
06 August 2019   144

Bitcoin investors in Israel are faced with the impossibility of paying taxes, as local banks refuse to accept funds received from the sale of cryptocurrencies because of the risks of money laundering and terrorist financing. About this writes the local edition of Haaretz on August 6.

Bitcoin is not recognized as a currency in Israel, therefore, individuals must pay 25% of the income from cryptocurrency trading to the treasury, and legal entities - 47%.

Investor Ron Gross told the publication that he acquired bitcoins in 2011 and reported his income to the tax office. In 2017, the bank that served Gross began to refuse to accept funds received from the sale of bitcoins. The investor met with representatives of the bank to demonstrate to them a 70-page history of bitcoin transactions as confirmation of the origin of the funds, but failed to convince them.

The tax authority is aware of the problem, but they say the ball isn’t in their courts. I’ve tried working with almost all the banks, but the minute they hear the word ‘Bitcoin’ they freeze up.
 

Ron Gross

Bitcoin investor from Israel

 

Since Gross was unable to pay taxes on time, his bank account, home, and even scooters were arrested. According to the investor, the tax authorities know about the problem, but can do nothing.

According to Haaretz, the tax office is aware of $ 86 million in unpaid taxes on income from cryptocurrency trading. It is possible that the real amount may be significantly higher.

Roy Arav, another Bitcoin investor, kept the proceeds from trading Bitcoin in an account with Israeli bank Discount under the control of the Bit2C exchange. The bank refuses to transfer money to Arava’s personal account under the pretext that its politicians forbid it to transfer funds related to virtual assets to client accounts due to the risks of money laundering and terrorist financing.

Arav also could not pay taxes and was forced to sue the bank. According to the investor, the authorities entered his position and granted him a deferral of time for the consideration of the claim.