Bitcoin has gone: what's happening to the crypto market - and where will it go from here?
Everyone agrees that the dramatic fall in digital currencies is not "another crisis", but even consensus that it is not really the end of the blockchain story, on the contrary: it may even be a necessary step on the road to a regulation that will increase investor confidence.
In the meantime, we need to invest in education as well.
Panel of Experts
Wednesday, 22 June, 2022, 10:36 Updated: 10:56
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The crypto market is in freefall.
It is estimated that the market has written off about $ 2 trillion.
Bitcoin, the most recognizable currency, fell below the $ 20,000 threshold, having already peaked at over $ 70,000 per currency.
The founder of the largest crypto exchange in the world, Binance, was quoted as saying that this is a "bloodbath" and the founder of the largest crypto exchange in the US, Coinbase, fired 18% of
The crypto market is at the end of the scale of risk assets, so its volatility is more significant.
If you compare 12 years back between the stock market and the crypto market then lately the pendulum between despair and euphoria is moving with great volatility.
Avraham Education, Director of the NFT Division at Accelerator WeCcelertae supports the words of its employees and adds: "The crypto market is experiencing fluctuations,
We have seen the falls of Celsius, there is talk that the Asian hedge fund Three Arrows Capital has reached insolvency so it is not ‘another’ crisis.
It should also be remembered that in some cases entities have invested in each other and created a chain effect.
Thus, for example, Three Arrows is associated with the collapse of the Luna currency.
According to published reports, it appears that the fund alone invested about $ 200 million in the loan, an investment that was wiped out with the collapse of the currency. "
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The market experiences a "run to the bank" (Photo: ShutterStock)
Josh Behar, crypto products manager at FinTech
(which develops clearing systems for thousands of banks around the world and in Israel), says: "The crypto market is currently experiencing one of the most severe upheavals it has known since its inception.
% Of the peak in November last year. The main factor is liquidity difficulties, many leverages and speculative investments, large companies in the crypto market have stopped withdrawals after liquidity difficulties, among the companies is Celsius - which has to freeze withdrawals, a company whose peak cryptocurrency value was twenty billion dollars.
Of course, the glorious collapse of LUNA and with it the stable currency UST played a part in the celebration. In 2008 ".
Avishai Ovadia, Founding Partner of the Collider Venture Capital Fund (Photo: Collider)
Maor Tzur, VP of Safe School
and an expert in identifying online dangers among teens, says that "teens look at this whole industry as a trend they must be a part of like any trend that catches teens, certainly when it comes to the virtual world since the whole issue of social networking, Especially in the age of Metaverse which is very attractive to young people, who will be able to pay in digital currencies in the future.
If you ask a teenager, for example - would you prefer your character in Metaverse to wear a Nike shirt or you yourself, on your body, wear a Nike?
Where would you choose to invest?
The growing trend is for teens to invest in the virtual figure as the world goes in that direction.
The lives of teenagers are starting to rise in cyberspace and there they are managing their social life.
Along with all this, we must remember that where there is money, there are those who will choose to sting and exploit the youth and lead them to the loss of the whole. "
Avraham Education, Director of the NFT Division at WeCcelertae Accelerator (Photo: PR)
So what do we expect it to be?
Ovadia says: "No one knows how to predict the future. We are in a situation where the corona is not releasing, in Ukraine there is a war, the traditional capital market is in free fall, that is, unprecedented global events. On the other hand, so far more than $ 15 billion has been raised. To
the world's largest funds for third generation projects in the field of internet, blockchain, and digital assets.
So this time it seems technology is here to stay, our faith in this field has risen relative to previous years. I believe the market will cleanse itself in the near future. "They own their own assets, but I guess we will see a clearing of $ 1 million virtual monkeys, we will look back to basics. Funds will continue to invest in startups, they in turn will continue to build and develop new products.
Behar adds that "the crypto market has experienced crises in the past with similar declines and even more in percentage terms, of course then the market was younger with a much smaller aggregate value. The market has to make natural choices: value-added projects They will disappear like many to this day. "
Josh Behar, Crypto Product Manager at FinTech Finstra Corporation (Photo: Yanai Rubha)
Will the market recover?
Education believes so and that it is a matter of time: "People forget that Bitcoin has been around since 2009, and is the currency associated with the field. Bitcoin has collapsed, twice, around 90% and twice more falls of over 80%. And yet, after all these falls It returned to new highs in 40 to 1181 days. Of course in between we saw declines of 30%, 40% and 50%. Such declines are dramatic in a period of 12 years. So you have to understand that this is the market and just wait and understand that the market will calm itself
. Because that "the crypto market is experiencing a 'run to the bank', so capital adequacy does not satisfy investors' attractions, crypto asset management companies have taken great risks and long-term locks in order to provide unrealistic returns promised, but this is another crisis that will pass like those before, the crypto market does not "It will disappear, he is with us here to stay, we must separate the chaff from the straw to invest wisely and use existing and developing technologies to build the future."
Maor Tzur, VP of Safe School and an expert in identifying online dangers among teenagers (Photo: Micha Rizov)
What investors should know
And what do these declines mean for investors, other than the immediate financial loss?
Will they still have to pay taxes?
CPA Uri Ezra from Elliott Global Israel
says that the Tax Authority requires a 25% tax on profits from every sale of cryptocurrency (including exchange between currencies) (more often if it is in the area of the taxpayer's occupation). If there are both profits and losses in that year then Offset from each other.But if in 2021 when the crypto value increased, the public profited and realized then it is required to pay 25% on the profit even though in 2022 there is a sharp decrease and may have realized in loss.It
will not change the tax calculations for 2021 but only for 2022 or years Forward, such a loss is considered a capital loss and can be offset in accordance with the offsetting laws that are sterilized against another capital loss, such as the sale of business activities, shares, real estate, etc.
In order to recognize the loss, an annual report must be submitted to the Assessing Officer and attach appendices as required.
CPA Uri Ezra, Elliott Global Israel (Photo: PR)
Where do you continue from here?
"It's a very volatile market and people can lose everything in one day," says Ovadia.
"Whoever wants to enter should know that what he invests he can lose immediately, so do not invest what you can not lose. Therefore, in my opinion this market is not suitable for the masses. Those who are interested, learn the technology, understand the rationale. It is not just Economic change, it's a political and social revolution, and as long as people do not understand what is behind the bizarreness, and still buy crypto, it is no different from gambling to me - and you will probably lose the money.
CPA Ezra adds that "it is a pity that the State of Israel and many other countries do not open their eyes and understand that there is a huge market here that needs to be handled properly, not only in the area of taxation but in a correct and uniform regulation.
Uniform criteria must be produced and licenses issued to those who meet the criteria, such as a uniform and proper "know the customer" form, control and supervision of operations performed, proper calculation of tax payments, etc. so that eventually the same body can manage cryptocurrencies similar to how the public manages His investment portfolio in the bank.
On the day there is legislation on the subject, our assessment is that many banks and currency service providers will enter the market, regulate the jungle that is going on today, report to the tax authorities on the actions taken so that the tax authority level oversees the entire public profits and losses.
In terms of tax calculation, they reported, the ability to control it and most importantly that at the end the investor will be able to ‘meet with the money’ at the time of sale.
Some of the investors in crypto are also young, middle-aged people who have lost a fortune for them.
Zur says that "I think a law can not replace education or solve an overall problem. 'If it is forbidden then it will not be' It just does not work. Seeing the use of alcohol, drugs and porn consumption.
The social network is available to them, everything is available on the handheld mobile device Their and no law can prevent this.The law can not give a solution without significant education and guidance.but as part of something comprehensive.If there is no education about the damages from their base while backing legislation and supervision, it will not be worth anything.The
children will always find the solutions.Always important To equip with knowledge, in the end whoever decides to do or not to do it is the child himself but he must get the full picture, the guidance, understand what the risks are and then make an informed decision.If the child chooses to download the open sea app and start buying NFT images we want to be There and give him the tools what this world is and what the dangers are.