Cryptocurrency players struggle to operate within one percent TDS policy

Cryptocurrency players struggle to operate within one percent TDS policy

The imposed tax has adversely impacted short-term investors and day-to-day trading volume

A 30% taxation on income from cryptocurrency and other virtual assets, was followed with the government’s decision to add a one percent tax deductible at source (TDS) on cryptocurrency transactions from July 1, this year. Even as this appeared as the first step towards regularising the sector, it is felt that the industry is reeling under an adverse impact of such steps. “From the perspective of cryptocurrency trading volume, it has dropped. The implementation of these tax laws has caused the stagnancy of Indian cryptocurrency markets. Prices are also getting lower. Short-term and day traders will get affected due to the implementation of the one percent TDS,” Shivam Thakral, CEO, BuyUcoin, told FE Online.

Industry expert opined that the move by the government will ward off investment from international players. According to Anndy Lian, chairman, BigONE exchange, this will affect the market’s liquidity and foreign investors will look to stay away from Indian markets. “It will not be sustainable for investors in the long run. Active traders will get adversely affected as it would decrease day time trading. The overall market conditions would deteriorate, as more Indian cryptocurrency exchanges will look to settle outside,” he added.

What is to be noted that due to looming uncertainty over regulations and policies, a few companies have already shifted base to other markets such as Dubai. “The transition of Indian exchanges will have an impact on the overall cryptocurrency scenario within a year. I think the Indian government will see a huge efflux of cryptocurrency investors and developers in the near future,” Lian said.
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Comments on Banklesstimes: “NFT Activity is not ‘Stabilizing’, its maturing.”

Comments on Banklesstimes: “NFT Activity is not ‘Stabilizing’, its maturing.”

Sharing additional comments:

I disagree that NFT transaction activity is stabilizing in 2022. I will not say it’s stabilizing, I will use the word “matured”. If you are comparing the “blue chips” of NFTs, yes I do agree that the transaction activities are somewhat dormant. Take Bored Ape for example, if you perhaps hold more than 50 pieces and you want to sell it, can you sell it at the floor price? I do not think so. In another word, the realisation of the sale is not very feasible.

The volume will in fact pick up in the next half of the year given that more NFTs are being made available on more chains. Polygon for instance will be gaining a lot more traction in the months to come with their NFT and game assets NFTs. The in-game assets both in NFT and FT would bring in more liquidity to the space and will help to increase transactions.

You see more variations, music, celebrity, membership, game, even PFPs got more mature and complete storylines. Projects that are trending such as STEPN and Moonbird has inspired many crypto native to come out with a similar concept. Some others such as High Sloth Society is bringing membership to the next level by partnering with Sandbox to replicate a Korean National Treasure onto the Metaverse and showcase Korean heritage in a different way. This brings more utility and usage to NFTs.

Before you can only purchase from Opeansea now there are thousands of marketplaces, centralized and decentralized. Looksrare at one point even overtaken Opensea.

Projects launched this year are also more mature and more “professional”, they have utility, ecosystem, established team (so-called labs), tokenomics (such as X to earn). There are NFT financial products coming out like staking or nesting. This brings in volume.

Adding on, traditional web2 players also came into the picture and try to take a cut from it. We see more and more brands and companies issue their own NFTs or collaborations. This is a win-win for everyone.

This year you can no longer hear a new NFT went up 10,000 times, a 10 times growth will be considered extremely successful. Glad to see the NFT market is now more mature.

 

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NFT Activity ‘Stabilizing’ in 2022: Report

  • NFT transaction volume growth inconsistent since 2021
  • $37 billion poured into NFT marketplaces in 2022 as of May 1
  • NFT transaction activity in the week of March 13 lowest since the week of August 1, 2021
  • Q1 2022, 950,000 unique addresses bought or sold an NFT, up from 627,000 in Q4 2021
  • Web traffic to popular NFT platforms most from Central and Southern Asia

Even as NFT transactions volume grew significantly since the beginning of 2021 despite fluctuating month to month, activities in the space have cooled off in the first quarter of 2022, according to a report from blockchain data firm Chainalysis.

Overall, collectors have sent over $37 billion to NFT marketplaces in 2022 as of May 1, putting them on pace to beat the total of $40bn sent in 2021.

NFT market growth inconsistent

However, since late summer 2021, NFT transaction growth has remained inconsistent, with activity largely remaining flat except for two big spikes: One in late August, which was likely driven by the release of the Mutant Ape Yacht Club collection, and one stretching from late January to early February of 2022, which was likely driven by the launch of the LooksRare NFT marketplace.

After that spike though, NFT transaction activity declined significantly beginning in mid-February, dropping from $3.9bn the week of February 13 to $964 million the week of March 13 — the lowest weekly level since the week of August 1, 2021.

The NFT space is cresting the peak of the Gartner hype cycle and since NFTs are by nature illiquid and communities are built around concepts like diamond hands – who do not sell, many will continue to hold rather than sell for ever-lower prices.

Garrett Minks, CTO of RAIR TECH

“This trend will reverse when real utility is attached to the surviving NFT projects. Blue-chip projects such as Cryptopunks, Bored Apes, and Art Blocks, will likely survive and come out the other side stronger for proving themselves through an entire cycle. Some NFTs might even continue to gain value as safe haven NFTs assets, while liquidity is drained from lower-tier projects,” Minks says.

In Q1 2022, 950,000 unique addresses bought or sold an NFT, up from 627,000 in Q4 2021.

Increase in number of active NFT buyers since Q2 2020

Overall, the number of active NFT buyers and sellers has increased every quarter since Q2 2020. In Q2 2022 as of May 1, 491,000 addresses have transacted with NFTs, putting the NFT market on pace to continue its quarterly growth trend in the number of participants, the report states.

Anndy Lian, Thought Leader and Chief Digital Advisor to Mongolian Productivity Organisation disagrees the NFT transaction activity has “stabilized,” but rather “matured”.

“The volume will in fact pick up in the next half of the year given that more NFTs are being made available on more chains. Polygon for instance will be gaining a lot more traction in the months to come with their NFT and game assets NFTs,” he says and adds that this year, one will no longer hear a new NFT went up 10,000 times, a 10 times growth will be considered extremely successful.

Echoing similar sentiments, experts say stabilizing of the NFT activity is a positive sign, that the market is maturing and transitioning from speculation to real application development.

NFT valuation will depend on the usability of the token and the best tokens will be those that allow people to transact real value quickly and simply.

“That may be a virtual good, a service, or something else. The end goal is to have a variety of tokens that people use to buy and sell things as easily as we use dollars today. As long as someone is actively transacting with a token, the value of that token is increasing. The stabilization will happen once a few major applications have been implemented,” Chris Panteli, Founder at LifeUpswing says.

Original Source: https://www.banklesstimes.com/news/2022/05/08/nft-activity-stabilizing-in-2022-report/

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Elon Musk changes Twitter pic to Bored Ape NFTs, experts advise thorough research on investments

Elon Musk changes Twitter pic to Bored Ape NFTs, experts advise thorough research on investments

Even as billionaire Tesla CEO Elon Musk has put up a collage picture featuring several Bored Ape nonfungible tokens (NFTs) as his Twitter profile picture, with Ape 5809 in the center, experts have advised that investments should be based on thorough research and that investors should not get swayed by the views of any one individual.

Musk’s Twitter profile picture change was followed by a tweet that said, “I dunno … seems kinda fungible.”

The NFTs featured in Musk’s profile picture are all from different artists, each with a unique design and serial number.

ApeCoin, used to vote on community decisions and other services within the popular Bored Ape Yacht Club (BAYC) ecosystem, immediately surged 20% to $17.60, data showed after the change, and was trading at $157 later in the day.

“We have seen the effect of Musk’s Twitter play on APE. This only goes on to prove once again how vulnerable cryptos are. Any currency, whether fiat or cryptos, should not get swayed by any one person, irrespective of his position or net worth. What is needed here is that the crypto community rallies together and does not buy or sell tokens basis the views of any one individual. There should be thorough research done before buying new tokens. People can make sound returns on their investments only if they invest for the long term based on their own research of the fundamentals surrounding the token,” says Aliasgar Merchant, Developer Relations Engineer at Ignite.

Shortly after Musk made the change, Michael Bouhanna, a contemporary art specialist at auction house Sotheby’s, took to Twitter to call him out for using the image. Bouhanna said he created the picture for Sotheby’s $24 million sale of 101 Bored Apes in September, which included Ape 5809.

Musk, who recently hogged the headlines for acquiring Twitter, is a crypto enthusiast and the recent move shows his apparent interest in NFTs too.

Anndy Lian, Chairman, BigONE exchange, says that Musk is trying to tell people that NFTs are kind of fungible in some ways and that one can replicate it freely, put it anywhere one wants but does not own it.

“The other thing is I do see a surge of 19% on ApeCoin when Elon changed his profile image to Bored Ape NFT. Playing the devil here. I would really hope to see a token plunges next time when Elon tweets about it. This would an interesting social experiment,” Lian adds.

Raj Kapoor, chief Advisor at aCryptoverse, a blockchain and crypto advisory firm, says Musk has a significant influence over the cryptocurrency market and this was clearly on display by this move.

“If we also observe, almost 10 Bored Apes had been sold since Musk revised his Twitter profile photo, and the floor price had raised by 10 Eth. I would call this the Musk Effect,” Kapoor says.

NFTs are non-interchangeable units of data stored on a blockchain that can be sold and traded and are often associated with digital files such as photos, videos, and audio.

BAYC NFTs are highly desired among NFT collectors. The recent NFT project launch by Yuga Labs, makers of the Bored Ape NFT, caused gas fees on Ethereum to rise by thousands of dollars.

Several celebrities have or had put up Bored Ape pictures as Twitter profile pictures in recent times. Basketball star Stephen Curry and musician Steve Aoki are among the celebrities who have done it.

Musk received flak from the NFT community, with some saying Elon Musk made a collage of “screenshotted bored apes his profile picture to troll NFT owners.” Others believe Musk is trying to signal his intention to get into the NFT space.

 

 

 

Original Source: https://blockchainassetreview.com/elon-musk-changes-twitter-pic-to-bored-ape-nfts-experts-advise-thorough-research-on-investments/

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