Bitcoin Scraps Anonymity

Bitcoin is hitting the headlines again. This time because of a price warning that two thirds of Bitcoin owners are to sell their shares in the virtual currency as South Korea plans to ban all anonymous trading.   On top of this, the price of Bitcoin dropped 16 percent this week, going from a high of $16,895 to $14,081 the next morning. This has led Chris Gersch, who is the director of strategy for Bell Curve Capital, to predict that more turbulence is to be expected for the world’s first and most popular cryptocurrency.   In an interview with Bloomberg, he said that he believed that two thirds of Bitcoin owners could sell off their assets as the anonymity is removed, which would then have an even bigger impact on the market, which, let’s face it, is incredibly volatile. Speaking about the matter he said,   “Bitcoin was founded on the anonymity of everyone, and having your name on a ledger is going to have two-thirds of Bitcoin holders, that have never sold, they’re going to start selling…That’s what you saw overnight, you had that huge pullback. I think we’ll have resistance at $13,500 but in very light volume – only 500 contracts trade here at CME”.  It is not just South Korea that could see this change either, as anonymity could be scrapped in the UK as well, as experts have warned the cryptocurrency will no longer remain exempt from tax. The CEO of the London Block Exchange, Benjamin Dives, said;  “In this world, nothing can be said to be certain, except death and taxes. Cryptocurrency may be new and unique, but it is not exempt from tax liability.”  He went on to say that any individuals who profit from their Bitcoin investments will be required to pay capital gains tax, just like they would with any other investments and shares. The worry with introducing this could mean that Bitcoin could become a tool for tax evasion. Richard Asquith, the vice president of global indirect tax at Avalara, said;  “It almost certainly already is, with wither large amounts of undeclared gains on the current bubble or money laundering.”  He adds that the disadvantage is that the public ledger systems makes it possible for law authorities to track down most of the crimes and criminals. Image Source: Flickr Sponsored by