President Donald Trump announced Thursday his decision to withdraw the US from the Paris climate accord, a sweeping step that fulfills a campaign promise while seriously dampening global efforts to curb global warming.
Classifying Bitcoins as Digital Goods
The Deputy Governor of the Central Bank of Russia, Olga Skorobogatova, revealed on Thursday that the bank has proposed to classify cryptocurrencies, incbuy bitcoin with paypal no idluding bitcoin, as digital goods for tax purposes. Sputnik International reported her saying:
Two months ago we held a meeting with ministries and organizations… on how to classify non-state cryptocurrencies, which are de facto used in Russia. We propose to treat them as digital goods, use the digital goods legislation, with certain amendments on taxes, control and record-keeping.
According to Skorobogatova, the proposal was supported by all ministries, and the central bank is planning to deliver the first draft of the regulations in a month. This proposal follows her promise in February for the central bank to decide whether digital currencies are considered assets, cash or securities by mid-2017.
The Central Bank’s Need to Control Bitcoin
According to RBC, a leading Russian media group headquartered in Moscow, the central bank claims that they need to start controlling cryptocurrencies in Russia or they can quickly become a threat.
Since digital currencies are not backed by gold reserves and are not state controlled, the deputy governor said that they can lead to instability in the financial markets sooner or later.
She then noted that cryptocurrency trading volumes in Russia have increased since last year, and said (loosely translated):
If people are engaged in this, they have to pay money for it. And we must understand how to control these activities.
Russia’s Struggle to Control Cryptocurrencies
The official government stance on cryptocurrencies has been under constant debate for years. Starting with a very strict stance favoring criminalization, Russian lawmakers have become more lenient over time as the benefits of blockchain technology became apparent in the country.
In December 2016, Vadim Kaluhov, the Director of Financial Technology, Projects and Process Management at the Bank of Russia, warned the government against using excessive measures. He conveyed that if the regulations are too strict, then cryptocurrency transactions will move outside of Russia. “By pushing the process of exchange out of the country, we actually lower the level of security and stability,” he detailed.
In January, Deputy Finance Minister Alexey Moiseev told reporters that the central bank and the Federal Financial Monitoring Service had been watching bitcoin. They did not find it to be a threat. In April, he announced that the country was considering recognizing the digital currency in 2018 to fight money laundering.
This month, the largest online retailer in Russia, Ulmart, announced that it will start accepting bitcoin payments in September.
Meanwhile, trading volume has grown steadily. Localbitcoins, the most popular trading platform in Russia, shows that the country has the second largest trading volume, behind only China. Russia has seen over 400 million rubles worth of trading, or over $7 million USD in weekly volumes for three weeks in a row.
What do you think of Russia classifying bitcoin as digital goods? Let us know in the comments section below.
An analyst at Forex Analytix, Nicola Duke, uses a method called Fibonacci retracement to analyze the price of bitcoin as well as determine its support and resistance levels.
This popular technical analysis tool is based on the idea that markets will retrace a predictable portion of a move before continuing in the original direction. It looks at the peaks and troughs or rallies and falls of historical bitcoin prices in order to forecast future movements.
“According to Fibonacci analysis, the way bull markets typically work is that you’ll have a pullback that stops when it retraces a key percentage of a previous move higher,” CNBC explains, adding that these key percentages come from Fibonacci Ratios. Examples of key ratios which technical traders like to use are .618, .786, 1.27, 1.618, and 2.618.
Bitcoin’s Price Analysis
Duke’s Fibonacci retracement analysis chart, using Bitstamp weekly prices going back to 2013, was published on Tradingview.com on Thursday.
She indicated on the chart that $2,283 is the short-term trend support; another support level above that is $2,800. In addition, bitcoin has two major support levels below $2,283. They are $2,145 and the more likely $1750-80. Both are shown on her chart.
In an interview with CNBC on Thursday morning, Duke explained that “wave two” of bitcoin began in the fall of 2013. The price of bitcoin rallied sharply for several months before falling steadily. It bottomed out in January 2015, then began to climb again. Currently, bitcoin is in “wave three”, the publication relayed her findings:
$2,800 could be the level at which bitcoin begins its fall. The price is likely to hit $1,780, but could even fall as far as $1,470.
Duke expects this next wave, which is the fourth, to last 61.8 percent of how long wave two lasted. 61.8 percent is one of the key Fibonacci ratios.
She believes that the rally after the correction would start in January. “We will see the bottom at the start of January, that is when stock markets typically tend to have a correction as well,” she noted, then explained to CNBC that:
After that, there should be a sustained rally to $3,350 and then $4,480 in 2018.
What do you think of this Fibonacci retracement analysis? Let us know in the comments section below.
Bitcoin Saves a Family From Starvation and Gives Them Financial Freedom
There have been many reports of people residing in Venezuela turning to bitcoin to hedge against the country’s economic failures. Venezuelans have been using bitcoin because their national currency the Bolivar has been significantly devalued and citizens using the tender are suffering from over 1800 percent inflation. The enthusiast who detailed that bitcoin was saving his family from starvation wanted to let the public to know the potential for the cryptocurrency used in this fashion is way bigger than its use cases in the black market.
“I want to debunk that myth and explain how real the potential for bitcoin is and how it is so much bigger than the black market can ever be,” explains the threads author.
Bitcoin is literally saving my family from hunger and giving them the financial freedom to emigrate in the near future — Thanks to the rising price of Bitcoin and its relative stability (compared to the Venezuelan economy) my family is part of a very small fortunate minority that can afford to help feed their community and also potentially emigrate to another country.
‘Skeptical About Bitcoin but No Other Options Were Available’
The author states that his father lost his air conditioning job some time ago, and his neighbors around him, even the upper class cannot afford food. He explains bitcoin being used by criminals is no different than then when they use cash for illegal activities. “If you take one step back you’ll realize that the possible legitimate uses for bitcoin are far greater than the black market.” In 2014 his family discovered bitcoin but were very skeptical about the digital currency, “but we didn’t have any other options,” the author details.
The post also explains that many people are trading bitcoins underground to acquire either Bolivars or USD to purchase food and living necessities. Furthermore, some Venezuelans are using bitcoin for arbitrage opportunities as well.
Right now I can exchange 1 USD for around 6000 Bolivars. Some clever people have figured out they can sell 1 USD worth of bitcoins for 4500 Bolivars and keep 1500 as profit. They use this money to buy goods and import through towns that border with Colombia.
Many Other Countries May Face the Same Economic Hardships
The interesting post about bitcoin saving the young man’s family was well received by the crypto-community. Additionally, a few other Venezuelans revealed how bitcoin was helping them and the methods they use to convert bitcoin into USD or Bolivars.
Moreover, a couple individuals from the U.S. and other regions said that people from “well off” countries should not assume the economic situation in Venezuela will not happen to their economy. In their opinion Venezuela, Greece, and many other manipulated and centrally planned monetary systems worldwide are simply the first of many to fall.
What do you think about bitcoin helping this family from starvation? Do you believe there are more families around the world using bitcoin as a safe haven? Let us know in the comments below.