- Traditional markets are selling off modestly today as earnings season has kicked into gear. The S&P 500 and Nasdaq are down 0.40% and 0.15%, respectively, at the time of writing. After the market close yesterday, $NFLX (+13.32%) and $UAL (+7.31%) posted strong earnings, displaying the resilience of corporate earnings despite the macroeconomic headwinds seen so far this year. Crypto markets have continued ranging with $BTC trading in the low $19,000s (-0.56%) and $ETH trading around $1,300 (-0.67%). As mentioned in yesterday’s Crypto Daily, there were multiple red flags surrounding the launch of Aptos’ new token. Unsurprisingly, the sentiment has translated into price action. $APT is currently down 43.1% over the last 24 hours while still boasting a market cap of over $1 billion. Whether or not the hefty valuation is justified remains to be seen.
- Nubank, Brazil’s largest digital bank, announced a plan to release its token next year. The token will be called Nucoin and will be released in Brazil, Colombia, and Mexico. Nucoin will offer the bank’s 70 million users a new way to access customer loyalty benefits and further engage with the Nubank brand. The token will be able to be redeemed for perks or discounted products. A similar program was launched by Latin America’s largest e-commerce company, Mercado Libre, which allows their customers to earn cashback on their purchases via the Mercado Coin. Nubank’s move furthers its push into the digital asset space, as it partnered with Paxos earlier this year to offer its users the ability to trade cryptocurrencies through its app. Nucoin is expected to launch on the Polygon Network in the back half of 2023. In the meantime, Nubank plans to offer a beta to 2000 customers to test the token feature, allowing them to offer suggestions and shape the future of the product. Tokenized rewards programs are just beginning but have the potential to become a huge use-case for blockchain technology.
- Requirements surrounding the taxation of digital assets have been somewhat unclear over the last few years. Earlier this week, the IRS clarified how non-fungible tokens (NFTs) would be taxed going forward. In their updated 2022 form-1040 instructions, the IRS has inserted broader language to include NFTs in their definition of “digital assets.” They explicitly call out NFTs, stating, “For example, digital assets include non-fungible tokens (NFTs) and virtual currencies, such as cryptocurrencies and stablecoins.” Previously, the tax instructions only included language regarding “virtual currencies.” Taxpayers will have to report any sale, exchange, gift, or transfer of NFTs and declare any necessary capital gains or losses associated with said transactions. It appears the IRS deliberately did not classify NFTs as collectibles, such as art pieces or antiques, which have unique tax treatment compared to stocks or bonds. It is important to note the final form has not been completed, so crypto instructions could still be subject to change before tax-day rolls around.
Crypto Daily Report – October 19
Oct 19, 2022
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