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Mining crypto – a free lunch?

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If you speak to anyone over 50 about mining crypto, it’s likely they will ask you where your pick, hard hat and shovel are. Many of us under 30 will almost certainly have considered it.

Mining is a way of earning cryptocurrencies in your sleep. Or more accurately, a way your computer can earn them while you sleep.

USE ETORO’S CRYPTO TAX CALCULATOR

Using your computer’s internal systems to process the complex calculations to load transactions on to the ledger or block earns you coins. The more you calculate, the more coins you earn. This explains why there are huge “farms” in China and plenty of other places running 24/7 to process these transactions.

It can be lucrative, and it is a lot more certain than trying to second guess how a currency will move.

However, just as there is no such thing as a free lunch in real life, the same is true in the digital world. The taxman is very interested in your mining activities. Her Majesty’s Revenue & Customs (HMRC) have set out guidance as to how it classes these activities and, yes, you’ve guessed it, there might be tax to pay.

FIND OUT IF YOU OWE CRYPTO TAX

Just like regular mining – for coal, tin, diamonds – at the end of the process, you end up with something of value. This means you earned it (even if it was just pushing a button on a keyboard) and all earnings can be considered taxable. Income Tax, which you pay on your regular wage, might be liable on your mining activities.

HMRC says it is willing to offset “any appropriate expenses” against this Income Tax, but so far it is not clear what “appropriate” means. Consider that mining does not just require a relatively high-powered computer, but a decent chunk of your power supply, too – this might be taken into account, or it might not.

The “miner” is also likely to be liable to pay Capital Gains Tax, should they dispose of the cryptos for a higher value (vs sterling) than they earned them. Double whammy.

READ ETORO’S CRYPTOASSET TAX REPORT

But there is a potential get-out clause. HMRC has not publicly announced how much mining makes you an actual miner. It said in December that it would depend on a range of factors, including the degree of activity, organisation, risk and commerciality.

This might mean it is only looking at the massive farms, rather than the smaller setups – but for the moment, we don’t really know.

So, keep an eye on the regulations and announcements from HMRC. No one wants to dig themselves into a hole with the taxman.

To help you understand how this new tax regime might affect you, eToro has created a crypto tax calculator, infographic and crypto tax guide.

You can also listen to eToro, HMRC and ICAEW explore the cryptoasset landscape, the future of crypto, the tax levy and dispel common misconceptions in our webinar here.

LISTEN HERE

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk CFDs work, and whether you can afford to take the high risk of losing your money.

Applies to UK taxpayers only.

The information above does not constitute financial advice, always speak to a tax professional to ensure it is right for your specific circumstances.

eToro does not represent any government entity. You should check with a tax professional or HMRC if you are paying the right amount of tax.

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eToroX adds Dash, USDC, USDT and 5 new stablecoins

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Institutional traders now have access to more instruments on regulated crypto exchange

12 November 2019:  eToroX, the blockchain subsidiary of global investment platform eToro, has added five new fiat stablecoins, a new cryptoasset, two further established stablecoins and a crypto-commodity pair, signalling its rapid growth, having only launched only six months ago. There are now 26 tradable assets available on the exchange.

The new assets announced today are:

  • Turkish Lira (TRYX), Polish Zloty (PLNX), South African Rand (ZARX), Hong Kong Dollar (HKDX), and Singapore Dollar (SGDX)
  • Peer-to-peer cryptoasset, Dash
  • Circle’s USDC and Tether’s USDT stablecoins
  • GOLDX/BTC pairing

eToroX is committed to supporting the needs of algo traders seeking to diversify into cryptoassets on a secure and regulated platform. These new additions also demonstrate eToroX’s focus on Asian markets.

Doron Rosenblum, Managing Director of eToroX commented, “We see the addition of USDC and USDT as a way for eToroX to further meet the needs of professional and institutional algo traders, particularly in the Asian markets. Adding five new stablecoins, plus the addition of the Dash cryptoasset, demonstrates our ongoing commitment to bridge the gap between the world of…

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MATCH GOING PREMIER LEAGUE FANS WILL SPEND £1.3BN TO SUPPORT THEIR CLUB THIS SEASON, UP 31% SINCE 2014/15

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– Gary Neville welcomes research into fans’ spend –

Premier League match-going fans will have to shell out £1.3 billion this season to follow their teams – as increases in the price of home tickets, TV subscriptions and merchandise hit their wallets. 

The eToro Fan Financial Statement, research carried out by multi-asset investment platform eToro in association with KPMG Football Benchmark, provides a comprehensive study into the financial commitment UK football fans make to support their Premier League clubs and which clubs offer the best value.

As one of the biggest sponsors of the Premier League, eToro have been promoting their crypto offering through their six club partnerships this season. Currently, they are running promotions on match day LED boards and media backdrops, helping raise awareness of cryptoassets to a global audience.

Key findings of the report include:

  • Premier League match-going fans will spend an estimated £1.3bn this season
  • Increase of 31% since 2014/15, and 6.5% since last season
  • Overall cost of tickets for a ‘dedicated fan’ risen only 1% since 2014/15
  • Biggest increases per match-going fan are TV subscriptions (40%), merchandise (21%), home tickets (14%) and…
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eToro signals commitment to growth with acquisition of Delta

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– Second deal of 2019 supports expansion as eToro eyes further acquisitions –

Global multi-asset investment platform eToro has today announced the acquisition of Delta for an undisclosed amount. Delta helps investors make better decisions regarding their crypto investments by providing tools such as portfolio tracking and pricing data. 

Commenting on the news, Yoni Assia, Co-founder and CEO of eToro, said: “We are excited to announce that Delta will become part of the eToro Group. This is our second acquisition this year and reflects our commitment to continued growth and innovation. When we started eToro our goal was to disrupt the world of trading. We wanted to change the way people think about trading and investing, ultimately reducing dependency on traditional financial institutions and make trading and investing more transparent and fun. This mission remains our guiding light and we will continue to evolve both organically and by acquisition in order to bring our customers the very best experience.”

Delta is a crypto portfolio tracker app with over 6,000 cryptoassets available from more than 180 exchanges. It provides investors with a range of tools to track and analyze their crypto portfolios. To date, Delta has been downloaded by over 1.5 million users and has hundreds of thousands of active monthly…

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