In the second quarter, MicroStrategy also experienced a 13.4% increase in its net income. The CEO of the business intelligence firm, Michael Saylor, confirms that they will continue to bet on Bitcoin.

In the last half year, US business intelligence company MicroStrategy reported a loss of USD 300 million. That was due to the drop in the prices of Bitcoin after Tesla said it would stop accepting payments with the cryptocurrency.

MicroStrategy released a document highlighting that the net loss in the second quarter of 2021 was USD 300 million. That amount is equivalent to USD 30.71 per share.

Meanwhile, the losses due to the impairment of the Bitcoin held by MicroStrategy amounted to USD 424 million.

Although the company lost a lot of money, it also revealed that its net income increased in the second quarter of 2021. They earned a total of USD 125 million, an increase of 13.4% compared to the second quarter of 2020.

The setback that the cryptocurrency market experienced affected the company that Michael Saylor leads. However, they maintain their appetite to keep buying and holding Bitcoin.

It seems that Saylor is implementing the investment strategy known as holding. In this plan of action, the investor assumes that the price of Bitcoin will continue to increase over the years. Furthermore, its scheduled scarcity and usefulness guarantee its increased value.

Leverage in Bitcoin Favors the Shareholders of Companies

Saylor told CNBC television that MicroStrategy benefits its shareholders by leveraging Bitcoin. He has already advised other companies to do the same to increase their store of value.

The executive believes that millions of people will have access to Bitcoin on their cell phones in a matter of time. For that reason, he wants his company to continue seizing the moment.

In June, MicroStrategy acquired about 13,005 BTC, becoming the company with the largest holding of Bitcoin with 105,085 BTC. They purchased that amount in a context where the price of cryptocurrencies was falling.

How MicroStrategy Got Started with Bitcoin

MicroStrategy first bought Bitcoin in August 2020, when they acquired 21,454 BTC. At that time, Bitcoin was trading at USD 11,000 per unit, representing a total cost of USD 250 million.

Currently, MicroStrategy has a total of 105,085 BTC, that is, around USD 4.2 billion invested in the first cryptocurrency.

Some Factors Influencing the Drop in the Price of Bitcoin

The decline in the price of Bitcoin in recent months, which affected MicroStrategy’s investments, could be due to two factors.

Some analysts attribute this to the drop in hash rate after the constant attacks by China on mining activity. So far, the government of the Asian country has banned Bitcoin mining in eight provinces.

Additionally, there has been a crisis of trust that Elon Musk fueled with his comments on the alleged negative environmental impact of Bitcoin. However, a study by CoinShare Research determined that more than 70% of the energy that Bitcoin mining equipment uses is renewable.

By Alexander Salazar

Saylor is satisfied with the results of his investment strategy in Bitcoin since it had allowed them to expand their digital reserves. The executive thinks the migration of Chinese miners has contributed to decentralizing that business, benefiting Bitcoin, the US dollar, and Western technology.

In recent days, MicroStrategy CEO Michael Saylor revealed that he owns more than 105,000 BTC, worth about USD 4 billion. He also promised that he would continue to buy the pioneering cryptocurrency in the coming months.

The executive provided that information while MicroStrategy was reporting the results for the second quarter of this year. He particularly expressed that he was satisfied with the results they had obtained thanks to his investment strategy in Bitcoin.

Saylor noted that their latest capital increase has allowed them to expand their digital reserves. Right now, they exceed 105,000 BTC, to which he said that they intended to implement additional capital.

He makes those remarks at a time when Bitcoin seems to be recovering. Currently, the cryptocurrency is trading around USD 41,600 and has achieved a market capitalization of about USD 781 billion, according to CoinGecko.

Michael Saylor Announces Plans to Acquire More Bitcoin

Some investors and journalists are concerned about MicroStrategy’s approach due to the decline of Bitcoin. Saylor confirmed that his firm would remain on the same path since they see the current situation as an excellent opportunity.

Regarding their macro strategy, he said that they plan to continue to acquire and hold Bitcoin. He also announced that they would help explain the cryptocurrency to regulators, the public, and the media.

Additionally, Saylor commented that acquiring Bitcoin right now would be a wise move for the company. As they consider there is hoarding, they have committed to buying as much Bitcoin as possible.

Faced with the idea of investing in other cryptocurrencies such as Ethereum, Saylor confirmed that their strategy was to focus on Bitcoin. He explained that the pioneering cryptocurrency serves as a meeting point for the entire digital economy, being the least risky and most diverse idea.

MicroStrategy representative Phong Le supported Michael Saylor’s comments and revealed that the investment had produced returns for shareholders.

Curiously, he stated that MicroStrategy is in the early stages of that strategy concerning Bitcoin and added that they want to make other investments.

Saylor Wants Western Countries to Stop Rejecting the Crypto Revolution

Michael Saylor also expressed satisfaction with the investment and said there was a better economic environment for Bitcoin. He made those statements despite the negative news that seems to have discouraged retail investors in recent times.

The CEO of MicroStrategy thinks the migration of Chinese miners was excellent for Bitcoin, as it allowed decentralizing mining worldwide. He also believes that the westernization of Bitcoin will be good for Bitcoin, the US dollar, and Western technology in the long term.

According to Saylor, it is time for more Western governments to stop rejecting the crypto revolution. He thinks they should be more open to adopting crypto innovations and using them to improve finance, the economy, and society.

Despite the fall in the prices of Bitcoin, Michael Saylor considers that MicroStrategy’s strategy keeps it at its center. It is the most secure and most diverse investment that the company currently manages.

By Alexander Salazar

From now on, withdrawals will face a limitation of 0.06 BTC for unverified users. Previously, the maximum amount, with registration without verification, was 2 BTC.

Binance is now planning to reduce the maximum daily withdrawal amounts from 2 BTC to 0.06 BTC for those who do not have identity verification. This move is a measure against the regulations required by several of the countries in which the bitcoin and cryptocurrency exchange operates.

The announcement had come directly from Binance’s official blog, posted on July 27. It communicated that this new policy would affect the newly created accounts. For their part,  The already existing users will have until August 28 of this year to set up their identity verification before they see the withdrawal limit reduced.

The measure, according to Binance itself, although it is for regulatory purposes, will be set for security reasons, as well as to adhere to the standards of the cryptocurrency exchange industry.

For the daily limit of 100 BTC for withdrawals,  which establishes its rules for those users who achieve the identity verification, it will remain intact. This kind of verification also adds the uploading of a photo as an identity document. This photo will be a selfie of the user.

Binance Tries to Find New CEO

The measures imposed on the reduction in withdrawal limits happened on the same day that the news reporting that current CEO Changpeng Zhao (“CZ”) would be seeking a replacement for his position appeared. CZ points out that the new CEO must have greater knowledge and experience in the regulatory area, to be able to work in parallel with the regulatory entities of the countries.

Although the measure to reduce the amount to be withdrawn daily to USD 2,200 seems to favor the anti-money laundering regulations imposed by the regulators of different countries, various exchanges do not permit any withdrawal until there is complete basic identity verification.

This situation could mean an open window for,  in the future, due to the willingness that Binance has declared to work and contribute with regulators, the withdrawal limit to get reduced to 0 if users do not comply with verified accounts.

Binance Closes Markets in Favor of Regulations

In addition to the measures on limits on withdrawals, Binance has also decided to close some markets that might be suspicious for European regulators, among them the share tokens. As the company reported, the decision was to shift Binance’s business focus to other product offerings in the cryptocurrency arena.

Other products that have received damage by the new measures in favor of the regulations have been cryptocurrency futures. Firstly, Binance offered cryptocurrency futures trades with leveraged credit limits that reached 125x or 125 times the original investment. As of July 25 of this year, a progressive change began, reducing leverage to a maximum of 20x.

By: Jenson Nuñez

The income tax on investments in cryptocurrencies ranges from 19% to 23% for more than EUR 50,000. All crypto companies must duly register with the BDE and adopt the KYC-AML and CFT measures.

The government of Spain has been skeptical of cryptocurrencies since 2018 when they first spoke out against them. Bitcoin and other cryptocurrencies have never been illegal in that European country, but people can use and buy them there.

However, the Bank of Spain (BDE) and the National Securities Market Commission (CNMV) issued an extensive warning in 2018. After the great boom of Bitcoin and the Initial Coin Offerings (ICOs) in 2017, both organizations decided to protest.

The BDE reaffirmed that same position in early 2021, recalling the risks of trading cryptocurrencies. The institution mentions high volatility, liquidity problems, difficulty in guaranteeing user rights, and cross-border issues. Although the government has not yet banned them, it has imposed some strict regulations on them, with others to follow.

Rules that Institutional Actors Must Follow

As usual, most of the existing rules only apply to institutional users. These include companies dedicated to cryptocurrency services, such as exchanges, custodians, and wallets. They also consider those institutions wanting to invest in or use cryptocurrencies in Spanish territory or involving Spanish citizens.

In November 2020, the government approved a regulatory sandbox targeting FinTech companies, which includes crypto-companies. By participating in this sandbox, they promote innovation while receiving protection within the legal framework.

A reform of the law in March 2021 ruled that the CNMV would be in charge of regulating advertisements for cryptocurrencies. No one knows the final measures yet, but all announcements should include a respective risk statement.

In April, another decree adopted the European regulation called Directive 2018/843 (AMLD5). All companies related to cryptocurrencies, especially exchanges and custodians, must duly register with the BDE. Likewise, they must adopt mandatory measures against money laundering (AML) and terrorism financing (CFT) in their operations. That includes strictly identifying users (KYC) and sharing their data with authorities across Europe.

In that sense, a new law would force cryptocurrency custodians to provide information on the holders and the transactions of the coins in their possession. Custodial exchanges should do this starting this month. Likewise, Spanish insurers must report whether they have investments in Bitcoin.

Everyone Must Pay Income Tax on Cryptocurrency Investments

Both institutional and personal users must report and pay taxes on their gains on capital invested in cryptocurrencies. It works when liquidating positions to fiat currency and making a profit on exchanging one cryptocurrency for another.

The percentages for tax payments range from 19% to 23%. The first percentage particularly applies to earnings of up to EUR 6,000. From EUR 6,001 to EUR 50,000, the amount to pay increases to 21%. From then on, taxes on profits go up to 23%.

Bitcoin miners will not be exempt from paying taxes if their earnings are equivalent to those of a company. In that case, they must receive an income of around 501 times the minimum wage, or EUR 475,950, in total assets. Additionally, the wealth tax is between 0.2% and 4%, starting at EUR 400,000, depending on the region.

Those who do not declare taxes must pay fines of up to EUR 5,000 for each item not included. Also, if the amount exceeds EUR 120,000, the payment can be up to five times the undeclared amount.

By Alexander Salazar

Vitalik Buterin said that the hard fork implementing the merge does not enable removing a deposit in the PoS system. The merge will change the consensus mechanism from PoW to PoS, which is more ecological, efficient, and secure.

Vitalik Buterin said that the Ethereum network had undergone several updates, as all its content will migrate to ETH 2.0. The programmer announced that the transition to ETH 2.0 could happen within about half a year.

The existing Ethereum Mainnet will merge with the Proof of Stake (PoS) system called the Beacon Chain. It will do that after all transactions on the way to ETH 2.0 are complete. Previously, this process was called the docking, but now it is called the merge.

Here Is What Will Happen After the ETH1 and ETH2 Merge

Vitalik Buterin shared information on what will happen next, indicating that the merge will be complete within six months to a year. He stated that the hard fork implementing that process does not enable removing deposits in the PoS system.

Buterin also said that it would be possible to withdraw deposits that investors have previously frozen after that update. Similarly, the merge will add to Ethereum’s scalability and allow for more updates.

The founder of Ethereum explained that it is possible to scale between 4,000 and 5,000 transactions per second since there is 20 to 50 times more space. However, he claimed that Rollups would be able to reach up to 100,000 transactions per second.

The Merge Changes the Consensus Algorithm from PoW to PoS

The merge is an update that changes the consensus mechanism from Proof of Work (PoW) to PoS.

PoW will no longer be in use, and all the blocks will occur through PoS, which is more environmentally friendly, efficient, and secure. For that reason, Buterin warned users not to continue trying to download PoW before the merge.

The most likely estimated date for the merge is sometime in the first quarter of 2022. Tim Beiko, a developer at the Ethereum Foundation coordinating updates, said that a merge in 2021 is unlikely.

Ethereum’s EIP and the ETH2 Proof-of-Stake Merge

According to Tim Beiko, the EIP indicates that there have been no security breaches since the launch of the ETH 2.0 Beacon Chain in December. He explained that the long period of failure-free operation demonstrates how sustainable the system is to provide security for the Ethereum Mainnet.

Despite the EIP, prominent figures in the Ethereum community like Vitalik Buterin believe the merge is unlikely to occur in 2021.

Since the launch of Beacon Chain in December, ETH2 has become the second-largest PoS network by capitalization. It has around USD 12.7 billion worth of Ether locked even though its deposit is less than 6% of its supply in circulation.

Ether is currently trading around USD 2,198 and has a market capitalization of more than USD 257 billion. The cryptocurrency has grown by 20.5% in the last seven days, according to data from CoinGecko.

By Alexander Salazar

The bank refers to the announcement as a recommendation rather than a regulation. Exchanges should refrain from including such assets in mutual funds, among other financial services.

The Central Bank of Russia (CBR) uses the alleged risks of cryptocurrencies as an argument to recommend local exchanges to avoid trading them.

The statement appearing on the website of the Central Bank of Russia specifies that it is a recommendation. However, the article cites a document mentioning the obligation to reject instruments based on digital assets or whose prices depend on them.

That regulation covers much of the spectrum of cryptocurrencies, such as direct trading with them or through derivative financial assets. The latter include indexes based on crypto assets.

The announcement also states that the recommendation aims at securities markets, management companies, investment funds, mutual funds, and non-state pension funds. Likewise, it goes to professional participants and business organizers.

Additionally, the statement indicates that the recommendation only contemplates the field of cryptocurrencies. It does not consider the digital assets that the Central Bank of Russia could issue in the future. This information seems to serve to clarify the situation before the launch of the digital ruble.

Olga Skorobogatova, the First Vice President of the Central Bank of Russia, explained the reason for issuing the digital ruble. She said that this project seeks to increase accessibility and reduce payment and transfer costs for citizens and companies. The executive added that there needs to be a seamless transition from one form of the ruble to another to make it easier to use.

Central Banks Are Willing To Regulate and Even Ban Bitcoin

The Central Bank of Russia is not the first bank that has maintained a position to regulate and even prohibit using cryptocurrencies. They have even contemplated legalizing the confiscation of Bitcoin and altcoins. They do not seek to protect users but rather to pave the way for central bank digital cryptocurrencies (CBDC).

Igor Krasnov, the Attorney General of the Russian Federation, believes that the trading of cryptocurrencies contributes to laundering stolen money. He said that the law became progress against the problem. However, he thinks that the new amendments to the Penal Code would provide additional protection.

For its part, China is struggling to launch its digital yuan in a scenario where there is no competition. For that reason, it has banned Bitcoin mining in different provinces and has prohibited cryptocurrency trading platforms such as Binance.

The European Union has also started to set its position with its recent bill. In a regulatory environment, they will try to identify all Bitcoin transactions that users make.

Concerning the digital ruble, Russia has already selected twelve banks to conduct its first tests. Besides, they hope to have a prototype of this financial instrument by the end of this year. The institutions that applied and received approval are Ak Bars, Alfa Bank, Bank DOM.RF, VTB Bank, Gazprombank, Tinkoff Bank, Promsvyazbank, Rosbank, Sberbank, SKB-Bank, SOYS Bank, and TKB Bank.

By Alexander Salazar