Thursday, November 30, 2023

Brazilians may soon need to stump up taxes on crypto held abroad

The new rules would make crypto income from exchanges outside Brazil taxable at the same rate as local income.

Brazilians may soon be required to pay up to 15% tax on income derived from cryptocurrencies held on exchanges outside the country after new income tax rules were approved by the Federal Senate of Brazil on Nov.

The bill has already passed in the Chamber of Deputies and is expected to be approved by President Luiz InĂ¡cio Lula da Silva, as his administration initiated the income tax rule changes, Cointelegraph Brazil reports.

Under the bill, any Brazilian who earns more than 6,000 Brazilian reals ($1,200) on exchanges based outside Brazil would be subject to the tax, effective Jan. The change makes those funds taxable at the same rate as funds held domestically.

The bill also affects “exclusive funds” — investment funds with a single shareholder — and foreign companies active on the Brazilian financial market.

“The government is creating a tax because it is a poor manager.” 

Related: OKX launches crypto exchange, wallet services in Brazil

In September, the governor of the Banco Central do Brazil, Roberto Campos Neto, announced plans to tighten regulations on cryptocurrency in connection with a sharp rise in its popularity in the country. At the time, he said he suspected crypto was being used for tax evasion

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Bitcoin eyes best November since 2020 as PCE fails to move BTC price

Bitcoin remains on track to seal its highest monthly close since May 2022, but BTC’s price is stubbornly rangebound.

Bitcoin (BTC) brushed off fresh United States macro data into the Nov. 30 Wall Street open as traders focused on the monthly close.

BTC/USD 1-hour chart. Source: TradingView

PCE keeps Fed pivot pressure alive

Data from Cointelegraph Markets Pro and TradingView showed BTC price movements sticking to a narrow intraday range below $38,000.

After a failed breakout the day prior, hopes were high that the Federal Reserve’s “preferred” inflation metric, the Personal Consumption Expenditures (PCE) Index, would help fuel volatility.

This, however, had not come to pass at the time of writing, with November’s final Wall Street open still to come.

PCE came in broadly in line with expectations — a boost for the Fed’s monetary tightening and reinforcement of declining inflation.

Querying whether interest rates might now begin to fall — the key takeaway for risk assets — financial commentary resource The Kobeissi Letter nonetheless stayed cautious.

“Another sign inflation is falling but still above the Fed’s 2% target. Can the Fed really pivot now?” it queried on X (formerly Twitter) after the PCE results.

Kobeissi once again alluded to words from Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management, who earlier in the week predicted rate cuts beginning as soon as Q1, 2024.

“It’s important to note that the effects of monetary policy lag. However, does the Fed really want to risk jumping the gun and cutting rates too soon?” it continued.

“We believe calls for rate cuts in Q1 2024 are too ambitious.”
Fed target rate probabilities chart. Source: CME Group

PCE did not manage to dent market expectations of Fed policy, with data from CME Group’s FedWatch Tool still showing almost unanimous expectations of a rate hike pause continuing next month.

November BTC price gains near 10%

For Bitcoin market participants, however, the monthly close was of more interest.

Related: Bitcoin ETF will drive 165% BTC price gain in 2024 — Standard Chartered

BTC/USD was up nearly 10% in November at the time of writing, making it the first “green” 11th month of the year since 2020. Above $37,660, the close would become its highest since May 2022.

In November 2021 and 2022, Bitcoin fell 7.1% and 16.2%, respectively, per data from statistics resource CoinGlass.

BTC/USD monthly returns (screenshot). Source: CoinGlass

Analyzing the current chart setup, popular trader Jelle saw reasons to be bullish in Bitcoin’s relative strength index (RSI) readings.

“After spending the past month building up a giant hidden bullish divergence, Bitcoin has breached its RSI downtrend!” he told X subscribers earlier on the day.

An accompanying chart showed the required area for bulls to secure.

“If price can hold the grey box, I think this starts moving higher soon. All eyes on the monthly close,” Jelle added.

BTC/USD chart with RSI. Source: Jelle/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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Wednesday, November 29, 2023

Why JSON-LD matters for Web3

Web3 is confusing because it’s still in its formative stages. Nobody quite knows which inventions will shape it next.

When big innovations change the world, people tend to argue about them. Will Web3 finally democratize the internet? Is decentralization real? I’m a data guy. I don’t consider myself in a position to answer questions about Web3’s cultural impact. I can, however, point out that griping is nothing new. It predictably happens just when the biggest changes are coming. Consider this excerpt of an article written by automobile pioneer Alexander Winton, who sold his first car in 1897:

“…the great obstacle to the development of the automobile was the lack of public interest. To advocate replacing the horse, which had served man through centuries, marked one as an imbecile … in the ’90s, even though I had a successful bicycle business, and was building my first car in the privacy of the cellar in my home, I began to be pointed out as ‘the fool who is fiddling with a buggy that will run without being hitched to a horse.’”

In data architecture, we talk about layers. Web3, just like the cars of yore, is being built beneath a layer of scrutiny. Regardless of what we say about it, the machine-readable internet — Tim Berners-Lee original definition of Web 3.0 — is happening. From DAOs to Amazon’s Astro housekeeping robot, the use cases for machine intelligence are growing. 

Until recently, there was no way to package that data in a common language for people and machines. A wallflower of a protocol called JSON-LD is changing all that. It’s worth exploring this otherwise unsexy protocol, because it plays a formative role in Web3’s ever-growing architecture. Just as, say, the break lines in a car lay beneath notice, but really make a difference to your driving experience, JSON-LD is the connective tissue that is propelling Web3 closer to becoming the internet as we know it. 

The internet of data

What does it take to read, interpret and process data all over the internet with minimal human intervention? In Web 2.0 terms, it takes a whole bunch of API integrations with a whole bunch of databases. Data is poured into a data lake and then loaded into a data warehouse for interpretation. 

This cumbersome process is a primary motivator for the new architecture of Web3. Databases are handy for digitizing things formerly done by hand, like organizing one’s business contacts. They’re not good for feeding data to machines to come up with new lines of business and transform society. Only when data is trustworthy, secure and interoperable will it be able to live safely outside of databases and be accessible by machines. 

Many of the pieces already exist. Blockchain ensures trust and immutability. Microledgers safeguard security and privacy. Semantic standards — called W3C RDF standards — make all data machine-readable so that machines can link and leverage data from anywhere. Another word for this is interoperability, and until now, it has been one of Web3’s biggest challenges. 

Why JSON-LD is important

As you’ll recall from earlier in the article, Web3, otherwise known as the Internet of Data, requires that data lives anywhere, contains cryptographic proof of its own trustworthiness and describes itself in a common language that any human or machine can understand. It wasn’t clear how that common language would happen. Turns out that one of the internet’s most common — and easily ignored — protocols is changing all that. 

JSON is a protocol that transmits data to display it on a webpage. A dropdown list of options after you enter a search query is an example of how JSON works behind the scenes. A machine reads your entry and pulls suggestions from a database. A couple of years ago, a much more powerful version of JSON came out: JSON-LD  (linked data). Used in the same way as its predecessor, JSON-LD wraps data in RDF, a universal format that enables data to be interpreted and used outside of the database. 

By encoding meaning within a JSON document through the semantic standard — shared vocabulary — of RDF, JSON-LD lets data be organized, contextualized and connected anywhere. Machines can read and analyze data wherever it lives without human intervention. It becomes possible to re-use data regardless of application, freeing you from entering the same data multiple times into multiple databases. Tasks such as sharing, compliance reporting and re-operationalizing data into new applications becomes much easier. 

A few real-life examples might help clarify the value. You’ll be able to securely and selectively share your patient data between hospitals or transcripts between schools. Pathogen-borne illnesses and counterfeits in supply chains become easy to track. Meeting compliance requirements for data regulations like GDPR happens in a matter of hours instead of weeks. Manipulations like deep fakes become visible for what they are. The panorama of possibilities only grows when you put autonomous vehicles, robots and other smart machines into the mix.

JSON-LD could also help evolve Web3 out of its current confusion of disconnected blockchains. Let’s say someone wants to create a marketplace for NFTs and list every single NFT in existence. If every NFT developer creates their own data silo to store the data, then the anonymity of Web3 becomes a crutch. The marketplace operator would have to go to every single developer and decode the shared value of the NFT by asking: “What does this mean? What does that mean?” Interoperability provides the common vocabulary to solve that problem and allow data to link to other data, while retaining the best features of blockchains, namely privacy, trust and security. 

The driverless internet

Times have changed, and they are changing again. Web3 is confusing because it’s still in its formative stages. Nobody quite knows which inventions will shape it next. Every once in a while, though, you see things that could be able to endure the motors and wheels of Web3. JSON-LD configurations could be one of those important tools to consider to help ease Web3’s growing pains. 

Brian Platz is the co-founder and CEO of Fluree — a Web3 database platform that enables trusted and interoperable data management.


This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.



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Wormhole raises $225M at $2.5B valuation

The protocol reached a total value locked of $3.8 billion at its peak.

Cross-chain protocol Wormhole has secured a $225-million investment at a valuation of $2.5 billion.

According to the Nov. 29 announcement, the investment round was led by Brevan Howard, Coinbase Ventures, Multicoin Capital, Jump Trading, ParaFi, Dialectic, Borderless Capital and Arrington Capital.

The Wormhole Foundation also announced the launch of Wormhole Labs, which the company said “is an independent technology company that specializes in building products, tools, and reference implementations that help grow cross-chain activity and development.” Currently, its blockchain-to-blockchain communications technology is used to bridge assets, power oracle data feeds, and transfer nonfungible tokens.

Wormhole was launched in 2021 and has since facilitated over $35 billion in transactions. Developers claim that the protocol processes over 2 million cross-chain messages across more than 30 chains every day.

In February 2022, Wormhole was hacked for more than $321 million via an unauthorized minting glitch on its Ethereum–Solana bridge. Shortly after the incident, venture capital firm Jump Crypto pledged to replenish more than $320 million in funds lost during the hack.

In May, investors of the former Terra ecosystem filed a lawsuit against Jump Trading, the high-frequency trading firm that owns Jump Crypto, alleging the firm and its CEO, Kanav Kariya, manipulated the price of TerraUSD to gain roughly $1.3 billion in profits. The allegations have not yet been proven in court.

Related: Jump Crypto replenishes funds from $320M Wormhole hack in largest-ever DeFi ‘bailout’



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Tuesday, November 28, 2023

Why is Dogecoin price down today?

Dogecoin is down today primarily due to technical factors as DOGE price now risks a deeper correction by as much as 70%.

The price of Dogecoin (DOGE) is down today, mirroring trends elsewhere in the cryptocurrency market.

Why is Dogecoin price down today?

On Nov. 28, DOGE's price dropped over 3.5% to $0.076, underperforming the crypto market, which fell by around 1.25% in the same period. The memecoin's price decline is part of a broader correction that has witnessed nearly a 12.5% retreat in over a week.

XRP/USD daily price chart. Source: TradingView

Let's take a closer look at the most likely reasons behind Dogecoin's latest pullback.

Bearish divergence

Dogecoin's drop today precedes a period of growing bearish divergence between its price and a key momentum indicator.

Notably, between Oct. 6 and Nov. 17, DOGE's price rallied, forming higher highs. But, in the same period, its daily relative strength index (RSI) dropped, forming lower highs.

DOGE/USD daily price chart. Source: TradingView

As a rule of technical analysis, a divergence between rising prices and falling RSI indicates weakness in the prevailing uptrend, prompting traders to secure profits at local price highs.

Rising Bitcoin dominance

Dogecoin's price drop today is part of the decline in the broader altcoin market weight versus Bitcoin (BTC).

Notably, the Bitcoin Dominance Index, which measures the top cryptocurrency's market share versus the combined weight of all altcoins, has risen 0.83% in the past 24 hours. In simple words, traders have rotated their capital from altcoins to Bitcoin.

BTC.D daily performance chart. Source: TradingView

In contrast, Dogecoin's market dominance versus the rest of the crypto market declined by over 1% on Nov. 28.

Psychological resistance

Dogecoin's price decline today appears to be a result of a bearish rejection by one of its strongest distribution areas.

Notably, DOGE's price reversed after retesting its 0.236 Fib line near $0.081 as resistance. Since May 2023, its attempt to close above this price level has failed, as illustrated below.

DOGE/USD daily price chart. Source: TradingView

As a result, DOGE's likelihood of continuing its pullback move is high in December 2023, with its 50-day exponential moving average (50-day EMA; the red wave) near $0.072 acting as the primary downside target.

DOGE whales sell

Dogecoin's price decline coincides with a reduction in the DOGE supply held by its richest investors.

Notably, the supply controlled by Dogecoin addresses with a balance between 100 million and 1 billion DOGE tokens (the green wave) has dropped nearly 1% in the past two weeks. Interestingly, the supply held by the next cohort — those holding over 1 billion DOGE (the black wave) — has jumped 0.5% in the same period.

DOGE supply holdings among addresses with 100 million-infinity token balance. Source: Santiment

The 1 billion-plus DOGE balance cohort may include addresses associated with crypto exchanges and over-the-counter trading desks, indicating whales have transferred their Dogecoin to such platforms for the purpose of selling.

Is Dogecoin bull market over?

From a technical perspective, DOGE needs to break above the upper trendline of its prevailing descending triangle setup. If this bullish scenario plays out, the price may reach $0.10, its September 2022 resistance, by the end of 2023.

DOGE/USD weekly price chart. Source: TradingView

The bears, however, will try to pull down DOGE/USD by 25% to $0.056 by the year's end, and perhaps even by 70% to $0.023 in Q1, 2024 if the price breaks below the triangle's lower trendline.

Related: Director YOLO’d $4M of Netflix budget into Dogecoin, made $27M: Report

A descending triangle forming in a downtrend is considered a bearish continuation setup. The pattern resolves when the price breaks below its lower trendline and falls by as much as the maximum distance between its upper and lower trendline.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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More foreign banks join China’s CBDC pilot trials

A total of four foreign banks have integrated China’s e-CNY CBDC thus far.

More foreign banks have joined China’s digital yuan central bank digital currency (CBDC), the e-CNY, following British bank Standard Chartered’s entry on Nov. 27, bringing its total to four.

According to local news reports, Hong Kong-based HSBC, Hang Seng Bank and Taiwanese bank Fubon Bank have also added e-CNY integrations to their platforms. All four foreign banks will allow their clients to transfer and withdraw e-CNY. Moreover, Hang Seng Bank has allowed personal banking customers to bind debit cards within the official e-CNY app and redeem digital renminbi. They can also top up the digital renminbi wallet through the Hang Seng China Mobile Banking App. HSBC has also added similar features for retail e-CNY use for its clients.

As for Fubon Bank, it has allowed users to recharge e-CNY via mobile banking and spend the CBDC using its bank card. The firm said it would continue to explore e-CNY CBDC applications in cross-border trade, smart contracts, cross-border payments and supply chain finance.

Song Yuesheng, vice chairman and president of Hang Seng China, said that the bank plans to use the ongoing e-CNY CBDC pilot to “create new consumption scenarios, enrich service systems, stimulate new consumption vitality, and provide business opportunities.” The day before, Standard Chartered stated that it is currently experimenting with the e-CNY CBDC in fields such as “cross-border merchant payments, trade financing, and supply chain financing.”

Last month, Cointelegraph reported that the Chinese digital yuan CBDC was used for the first time to settle a cross-border oil deal where PetroChina International purchased 1 million barrels of oil using the CBDC. In the first three quarters of 2023, the use of the yuan in cross-border settlements was up 35% year-on-year, reaching $1.39 trillion, China Daily reported.

Related: Standard Chartered joins China’s CBDC pilot testing



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‘Buy the rumor, sell the news’ — Bitcoin ETF may spark TradFi sell-off

Bitcoin retail investors may end up with a hot potato if the spot ETF go-ahead plays out like gold 20 years ago, analysis considers.

Bitcoin (BTC) may suffer when the first spot exchange-traded fund (ETF) is approved by the United States, a new warning says.

In a thread on X (formerly Twitter) on Nov. 28, Joshua Lim, head of derivatives at capital market firm Genesis Trading, predicted a volatile start to 2024 for BTC price action.

Bitcoin ETF approval: Retail may be left holding the buck

Bitcoin is already a target for traditional finance, or “TradFi,” which is betting on winning big out of the spot ETF approval, Lim said.

“We know tradfi guys / macro tourists are already long crypto ahead of ETF news, they’ve built the position over the last few months and are now paying handsomely to roll it,” the thread explained alongside data covering open interest on CME Group’s Bitcoin futures.

“Commitment of traders data showing asset managers increased length by about $1bn since end of Sep.”
CME Group Bitcoin futures open interest. Source: Joshua Lim/X

The signs are there in the performance of the first Bitcoin futures ETF (BITO), as well as stocks of crypto firms such as U.S. exchange Coinbase (COIN), the latter up 250% year-to-date.

While generating buzz and emboldening the institutional adoption narrative behind Bitcoin, the party could nonetheless quickly fizzle once the spot ETF is actually given the green light. This, Lim and others suggest, would be a classic “buy the rumor, sell the news” event.

“What does it all mean?” he queried.

“Tradfi is already long and probably thinking about when to exit this trade around etf announcement expect retail to pile in.. and expect tradfi guys to exit (2021 tops in basis were prior to COIN and BITO listings).”
Coinbase (COIN) vs. ProShares Bitcoin Strategy ETF (BITO) chart. Source: TradingView

A gold ETF rerun?

Lim is not alone in wondering if ETF approval day will ultimately leave lay investors disadvantaged.

Related: Bitcoin metric that ‘looks into future’ eyes $48K BTC price around ETF

Responding, James Straten, research and data analyst at crypto insights firm CryptoSlate, channeled history to support the concerns.

“When the Gold ETF (GLD) was introduced in November 2004, it opened around $45 and dropped to approximately $41 by May 2005. However, it saw an impressive 268% increase over the subsequent seven years,” he added in a CryptoSlate analysis on Nov. 28.

On a more optimistic interim note, popular trader Jelle remarked that institutional interest had not been dented by the week’s news stories, including the $4.3-billion settlement between the U.S. government and the largest global crypto exchange, Binance.

CME futures, he stressed, continue to trade at a premium over the Bitcoin spot price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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