Trade Cryptocurrency CFDs with FXTM

Trade Cryptocurrency CFDs with FXTM

Discover potential trading opportunities when you trade Cryptocurrency CFDs with FXTM. | FXTM Global The current GAAP treatment for crypto asset may not reflect the true nature of the asset class, leading to somewhat misleading financials. Cryptocurrencies are a largely untethered domain in the virtual world. These aren’t owned or regulated by any individual or group. Cryptocurrencies and American Legislation

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Cryptocurrencies are a disruptive sensation in the financial markets. These digital currencies provide even more opportunities for today’s traders, with many turning to them as alternative investment options.

Trade cryptocurrency CFDs (Bitcoin, Ethereum, Litecoin, Ripple) against the US dollar with FXTM today.

Why trade cryptocurrencies with FXTM?

Our brand is regulated and licensed under the FSC of the Republic of Mauritius and UK’s FCA, among others.

We speak your language so that you can feel at home while trading with us.

FXTM’s Performance statistics, including Requote, Slippage and Order Execution, are checked by PwC.

Your funds are kept in segregated accounts, and your trades are secured by negative balance protection.

Cryptocurrencies are the digital alternative to traditional currencies; allowing for fast, decentralised, anonymous payments across the world.

Cryptos are a high-volatility instrument and are known for their rapid price swings. They gain in value as they reach greater adoption and falling on news of possible government regulation and security concerns.

The major benefit of trading crypto CFDs (Contracts for Difference) against the US dollar is that traders can potentially profit from the market’s drop in value, as well as a rise. The possibility of losses is just as great, making a solid risk-reward ratio all the more essential.

We offer cryptocurrency CFD trading for the four most popular digital coins:

  • Bitcoin
  • Ethereum
  • Litecoin
  • Ripple
  • High volatility
  • Potential profits in both bull and bear markets
  • Flexible leverage

Bitcoin was the first cryptocurrency to be developed and remains the most well-known. In 2009, a programmer (or a group of programmers) using the name ‘Satoshi Nakamoto’ introduced Bitcoin to the world along with its decentralised, public ledger blockchain.

Bitcoin prices skyrocketed to record-breaking heights in December 2017, reaching almost $20,000 before falling back down. Many Bitcoin enthusiasts remain hopeful that its price could reach a similar threshold again. Some investors are more cautious, speculating that the currency will find a stable price once interest has steadied and users grow more confident of its use in the real world.

This uncertainty makes CFDs a particularly suitable financial product for Bitcoin and other cryptocurrencies. Trading Bitcoin as CFDs means that you don’t need to invest in the actual asset – you can instead speculate on which direction the price will go. You’re also protected from the scams sometimes associated with cryptos, while still enjoying the opportunity to potentially profit from its success.

Are you new to cryptos? Read our Ebook on Bitcoin, and practise your cryptocurrency trading strategies first on our risk-free demo account.

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We offer the industry’s leading trading platforms MetaTrader 4 and MetaTrader 5 on your PC, Mac, mobile or tablet to suit you.

These intuitive platforms are equipped with all the tools you need to maximise your trading potential, including technical indicators, interactive charts and a powerful security system.

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Start Trading CFDs on Cryptocurrencies with FXTM

Leverage enables you to increase your buying power. Traders should keep in mind that that leverage can boost your losses as well as your profits.

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*Leverage is offered based on your knowledge and experience.

The spread is the cost to the trader of making a transaction. Typical spreads for FXTM cryptocurrency CFDs range from 200 to 400 pips.

Visit our Trading Accounts Comparison page today to discover the trading account that best suits your investment goals.

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You can trade Bitcoin, Ethereum and Litecoin CFDs from 00:05 to 23:55, 5 days a week. Ripple CFDs are available for trading from 01:00 to 23:45.

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Source: www.forextime.com


How Are Cryptocurrencies Classified In GAAP Financials?

How Are Cryptocurrencies Classified In GAAP Financials?

Office – documents, ring binders, laptop, pen and calculator

More businesses are beginning to accept cryptocurrencies, including stablecoins, as a form of payment in addition to more traditional methods such as cash and credit card. Properly accounting for these transactions in GAAP financial statements is an emerging area as this trend continues.

The Financial Accounting Standards Board (FASB) is the IRS of the accounting world. The FASB is responsible for creating Generally Accepted Accounting Principles (GAAP). As of the date of posting, there are still no cryptocurrency specific GAAP rules.

In the absence of these crypto specific rules set by the FASB, a few months ago, a working group formed by the American Institute of CPAs (AICPA) came up with a Digital asset practitioner guide addressing how to classify cryptocurrencies in GAAP financial statements, specifically, on the balance sheet.

In case you aren’t an accountant, the balance sheet of a company shows its financial position at a specific point in time. This is where the company lists their fixed assets (cash, equipment, land, etc.) and liabilities (amounts owed to outsiders, loans, etc.) and equity (composition of the ownership). What’s reported on the balance sheet reflects the financial picture of the entity so it has a direct impact on company valuation.

According to the white paper issued by the AICPA, crypto assets can not be classified as “cash or cash equivalents” on GAAP financial statements because they are not backed by a sovereign government or considered legal tender. They cannot be classified as a financial instrument or a financial asset because they are not cash (see above why) and do not represent any contractual right to receive cash or another financial instrument. Additionally, since cryptocurrencies are intangible, they do not clearly meet the definition of inventory and cannot be labeled as inventory on the balance sheet either. 

After going through the process of elimination as explained above, we are left with only one category to classify cryptocurrencies under: intangible assets with indefinite life. This is how companies like Sqaure are currently classifying crypto assets in the GAAP financials.

Obtained from Square, Inc. 2018 10-K Report

There are a few problems with classifying cryptocurrencies as intangible assets with indefinite life. Practically speaking, this accounting treatment does not align with the reality. Cryptocurrencies like bitcoin are liquid and work extremely similar to cash. The purpose of GAAP financial statements is to paint an accurate, unbiased picture of the underlying entity’s financial situation. By treating crypto assets as intangible assets, GAAP financials fails to communicate the high liquidity of crypto assets. 

Second, once an item is classified as an indefinite life intangible asset, it should be tested for impairment. This means, if the value of the crypto asset has gone down at the end of the reporting period, the business gets to write off that amount as an impairment loss (not to be confused with tax losses) on the income statement. However, if the value goes back up (which is pretty common due to high volatility), the business does NOT get to mark up the value of the asset. Therefore, the current GAAP accounting practice only leads understatement of crypto assets and prohibits the business from showing the true value of its crypto assets under possession on financial statements.

One thing to note is that, the majority of the small businesses are not required to issue financial statements that comply with GAAP standards. These businesses use either cash or tax basis accounting methods to prepare financial statements which often offer more flexibility when it comes to the classifications of crypto assets. In the next post, we will go through how a small business that deals with cryptocurrencies could treat them in financial statements.

Disclaimer: this post is informational only and is not intended as tax or investment advice. For tax or investment advice, please consult a professional.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here. 

Source: www.forbes.com

Author: Shehan Chandrasekera


Cryptocurrencies and American Legislation

Cryptocurrencies and American Legislation

Cryptocurrencies are a largely untethered domain in the virtual world. These aren’t owned or regulated by any individual or group. There are a lot of questions floating around regarding the safety and legitimacy of crypto and Blockchain. The advent of such AI technologies has expanded the realm of possibilities of what can be done through the Internet.

The concept of untouchable money has been a bit odd to understand completely. When cryptocurrency first gained ground, people were excited by the freedom it brought. However, the alarming rise in illegal activities and shady transactions urged legislations, including Congress, to regulate this technology. 

Till the end of 2019, American legislation has passed 22 bills regarding cryptocurrency regulation. These bills are mainly focused on public policy and safety, economic and industry regulations, and tackling illegal use of crypto.

However, Congress is also aware of the positive and advantageous uses of cryptocurrency in various industries. So far, here is what the American legislation has considered in its efforts to make cryptocurrencies beneficial for the US. 

Economic superiority is the first and foremost state policy concern in the US. Currently, Congress is focused on how crypto and Blockchain can be used to evade US sanctions. America is an economic superpower in the world. From out-casting small groups and organizations to sanctioning entire countries, it’s capable of doing a lot. But with a currency that does not need elaborate trading licenses, this American pride could be threatened.

Crypto transactions are way easier than regular money transactions. Therefore, it is easier to fund terrorist groups, foreign interference missions, human trafficking, money laundering, and evading sanctions. 

American legislation does recognize the benefits of cryptocurrency for regional and local economies. In recent years, many essay examples samples have highlighted how useful cryptocurrency be for small businesses. It isn’t challenging to find an essay about human rights advocating the use of cryptocurrency for economic strengthening at the grassroots level.

Cryptocurrency Supporting Local Economic Ecosystems

States like Wyoming, Colorado, and Arizona have started with attempts to legalize and mainstream cryptocurrency and Blockchain for small businesses. The American legislation and state-level authorities are introducing crypto-friendly jurisdictions to build people’s legitimate trust in this technology. The legislation does not have a problem with controlled, legal transactions.

The US government has planned on making Blockchain and cryptocurrency beneficial for the empowerment of trade as well. The Blockchain Promotion Act of 2019 focuses on two key areas where the exploration of Blockchain can benefit economies. First is the usability of Blockchain and crypto in Export-Import Bank.

This step aims to encourage free and fair trade. It also encourages people in the trade sector to keep a record of transactions using intelligence and Federal laws. The supervised use of Blockchain and crypto in trade will make trade much easier and less complicated. If governed with precautions, cryptocurrency can avoid the complex barriers in the US economic structure while allowing legalized capital earning.

Another reason why Congress aims to implement cryptocurrency is that it can help marginalized communities achieve their financial independence. Orphans, disabled, migrants, and the black female community can legitimately benefit from this venture, too. The legislation aims to allow start-ups and low-income businesses to benefit from crypto to increase their revenue. These measures, with appropriate regulation, will also contribute to national economic growth.

Blockchain Use by the US Government

Under the IRS Notice 2014-21, Guidance on Virtual Currency (March 25, 2014), virtual currency is identified as property rather than currency. The property tax laws that are applied at the state level are also applicable to cryptocurrency.

So, for cryptocurrency transactions, you need to maintain details such as the ones listed below:

  • the capital gain on purchase of cryptocurrency
  • the capital gain on sale of cryptocurrency
  • the record of sales and purchase
  • the taxation on the fair market value of mined cryptocurrency
  • For individual tax filing procedures, individuals need to identify crypto as a possession and a means of the capital asset as well. Just like other property, the date, time, volume, and purpose of crypto transactions are also mandatorily disclosed. 

    The mining, possessing, purchasing, selling, and transacting of cryptocurrency is quite different from paper or digital currency. The US economic and banking structure is centered around these latter two. The bills and laws regarding cryptocurrency are bring designed to regulate crypto. It’s a priority of the legislation that the regulatory rules do not stifle individual freedom to trade and invest in cryptocurrency. 

    Source: www.bitcoininsider.org

    Author: Author: Scarlett Hobler


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