New Tax Reform in China Could Help Cryptocurrencies Start Growing Again Says Primitive Ventures Founder
Bitcoin (BTC) and digital assets have been in a bear market since the beginning of January 2018. Indeed, Bitcoin lost more than 82% since its all-time high back in December 2017 when it reached $20,000. Other digital assets have performed even worse than BTC losing more than 90% of their value.
Dovey Wan, the founding partner of Primitive Ventures, has provided insight about the tax reform that China is undertaking and how it could affect digital assets. Wan explained that there could a potential influx of buying pressure to the market into real estate and cryptocurrencies.
Wan explained that the price of houses and apartments in San Francisco, New Yor City or Bangkok could increase in the coming years. At the same time, Wan commented that Chinese capital could move towards digital assets as well, something that the market is currently not expecting.
Although over the counter (OTC) trading desks are a good option for larger investors, they might not be worth this time since they expose users’ bank accounts and information. However, mining operations could be a good option to invest in digital assets. China is one of the countries with the largest number of mining farms located in the cold regions of the country with cheap energy.
Apparently, the Primitive Ventures partner believes that the decentralized nature of virtual currencies will increase inequality around the world. Governments are not able to tax virtual currencies in an easier way, thus, reducing the government’s funds for people in need.
Michael Novogratz, the popular cryptocurrency investor and supporter mentioned that he is worried about Chinese billionaires dying in a strange way.
China has been attacking the cryptocurrency market. Back in 2017, the country banned Initial Coin Offerings (ICOs) and also virtual currency exchanges. Now, retail investors are not able to invest in digital assets using traditional crypto platforms. If the country reduces the pressure on the market, it might be possible for Bitcoin to start growing once again.
The remaining tax effective items are non-financial assets like artwork, jewelry which can be hardly tracked by CRS. Also since Thailand and US are not in CRS, local property is quite popular among rich Chinese. Especially metropolitan property in SF, NYC, Bangkok and Phuket pic.twitter.com/QBYIWu14SW
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) January 25, 2019