Crypto Market Forecast: Week of July 3rd 2023

The price of Bitcoin (BTC) finished the week flat, still at ~US$30.6K. Ether (ETH) rose by a moderate 1.4% to ~US$1.9K. Binance-coin (BNB) rose by 2.3% to ~US$245.

A new report from Coincub called “Crypto Tax Report 2023” shows the most tax-friendly countries (and US states) globally. As more and more people around the world find themselves living as digital nomads (especially post-COVID) and are willing to shop around for jurisdictions with relatively lower tax rates for crypto sales, many would find Coincub’s latest report of interest.

Although there are a number of caveats to consider in the methodology (such as the fiat-denominated value of the crypto you can sell tax-free or how long ago you acquired it), Coincub’s top 10 “crypto tax countries” are (a drum roll, please): UAE, Bahamas, Bermuda, Cayman Islands, Seychelles, Monaco, Panama, El Salvador, Indonesia, and Malta. Although Coincub’s methodology doesn’t place Portugal or Germany even in their top 20 countries globally, the report lists both of them with a 0% “crypto tax rate” for Bitcoin sales that have been held for at least one year.

As for which countries Coincub recommends for not realizing your gains, it warns that “Japan, South Africa, and the UK will take a juicy $45,000 out of your $100,000, but Luxembourg hits the pain factor with 48.78% – nearly half of your gains”.

The U.S. states labeled as having 0% “crypto individual income tax” are: Alaska, Florida, Nevada, North Dakota, South Dakota, Tennessee, Texas, Washington and Wyoming. California scores worst on the list with the highest tax rate in the nation: 13.3%.

Nostr, a decentralized social media protocol, just reached over 1 million zaps. “Zaps” are Lightning BTC transctions sent over the Nostr protocol. Nostr “explorers” Primal and Nostr.Band both report well over 1.1 million zaps each, although they report slightly different values. The present total value “zapped”, according to Nostr.Band is presently 13,586,782,652 satoshis (as of the time of writing), presently amounting to roughly $4.15 million in USD terms.

Lightning Bitcoin (LN-BTC) is intimately integrated into the Nostr protocol, facilitating both freedom of speech and a freedom to transact. Over Nostr, satoshis (“sats”, Bitcoin’s smallest denomination) are customarily sent as tips to users that produce content liked by other users. The Nostr protocol has received significant funding from Jack Dorsey and includes such prominent active users as Dorsey himself, Edward Snowden, US Senator Cynthia Lummis, Vitalik Buterin, as well as well-known bitcoiners Lyn Alden, Saifedean Ammous and Matt Odell.

Matt Odell posted over Nostr on Wednesday of last week that “we hit a million bitcoin transactions on nostr without permission – we will hit a billion bitcoin transactions without permission”.

(NOTE: I have just recently migrated to Nostr myself, where you can connect with me there).

Crypto news for the weeks ahead

July 12

The Consumer Price Index data for June will be released – one of the indicators the Federal Open Market Committee (FOMC) watches when considering interest rate hikes.

July 26

The FOMC will be meeting. Futures markets are strongly leaning towards a prediction of another 25 bps hike, thus bringing the interest rate target to 5.25 – 5.5%.

July 28

The US Bureau of Economic Analysis’ (BEA’s) release of June’s Personal Consumption Expenditures (PCE) numbers will be released. This is one of the primary indicators used by the FOMC when considering interest rate levels.

August 2

Litecoin’s (LTC’s) block reward will halve, dropping from 12.5 LTC per successfully-mined block to 6.25.

Top 10 Crypto Summary

Although Bitcoin’s price dipped just below $30K for a moment on Friday, June 30^th, Brave New Coin’s top 10 assets by market cap finished off the week flat. Despite relative price inactivity (by cryptocurrency standards), the top assets benefitted greatly from bullish news that BlackRock, WisdomTree, Invesco, and Bitwise had all filed Bitcoin spot ETF applications with the Securities and Exchange Commission (SEC).

Bitcoin Price Chart

GLASSNODE this week looks at market conditions after what it calls “a gold rush of institutional-grade [Bitcoin spot] ETF applications”, noting that we seem to be moving away from the weak US demand for Bitcoin from on-shore (US-based) exchanges thus far in 2023.

Furthermore, off-shore exchanges in Asia (namely Binance, OKX and Houbi) are starting to be entering into a strong accumulation phase as well. With careful attention paid to Short-Term Holder (STH) cohort activity, we note that this cohort has begun to enter a phase of accumulation (“rather than to liquidate into whatever exit liquidity is available”) with the prospect of new institution-grade ETF players entering the market.