Weekly Insights 4: Bitcoin price surging

The bitcoin price is currently experiencing a significant upward trend. Normally, we don't pay much attention to the price, but this week it's impossible to ignore. Within just one week, the bitcoin price has surged by over 20%. In this Weekly Insights, we'll briefly discuss this development. Additionally, we'll look into the inflows into bitcoin ETFs, discuss why bitcoin isn't crypto, and take a glance at the tax return for 2023.

Bitcoin price surging

The bitcoin price is currently making a strong upward movement. At the beginning of 2024, the bitcoin price was still below €40,000, but it's now hovering around €57,500.

A closer look reveals that bitcoin is already up by 50% year-to-date. Furthermore, we've seen a 20% increase since the beginning of this week. Where this trend is heading might be a question on your mind.

Remember, predicting the bitcoin price is extremely difficult, and no one has a crystal ball, despite what some finfluencers might claim. There are various factors influencing the price, such as bitcoin adoption, macroeconomic developments, current market sentiment, and regulations. Therefore, we refrain from making predictions about the bitcoin price.

The inflows into bitcoin ETFs

Nevertheless, this doesn't mean we ignore what may be behind the price increases this year. One significant factor appears to be the growing interest in bitcoin ETFs.

According to the latest figures from Farside Investors, updated until yesterday, nearly $2 billion has flowed into bitcoin ETFs this week alone. This strongly suggests that the bitcoin ETF market is rapidly expanding.

Never before have ETFs attracted such large volumes shortly after their launch. Particularly, BlackRock's ETF ($IBIT) is performing remarkably well. Just this week, the fund has seen an inflow of $500 million three times in a row and has become the fastest ETF ever to reach $10 billion in assets under management.

Why are bitcoin ETFs so attractive? They offer institutional investors a safe and regulated way to invest in bitcoin without worrying about managing the bitcoins themselves.

Previously, institutional investors may have had doubts about bitcoin: they may have thought it was a scam, could be banned, was too complex to manage, the traditional financial sector didn't care about it, or that bitcoin had no intrinsic value.

But it seems that sentiment is changing. The OTC desks undoubtedly have their hands full with the growing demand for bitcoin.

Bitcoin isn't crypto

Bitcoin is often considered the godfather of all crypto and symbolizes technological innovation. However, despite this status, bitcoin isn't crypto. Yet, this subtle distinction isn't entirely clear to many people.

Why is that? Cryptocasinos often advertise bitcoin as a symbol of innovation but simultaneously offer hundreds of other crypto they know will likely never succeed.

Why do they do this? For many companies, it's simply about making a profit. Additionally, consumers often seek quick financial success. Therefore, these casinos capitalize on greed by offering a wide range of coins. The more choices consumers have, the greater the chance of trading. The casino naturally profits from this trading.

While this model may be profitable, it's difficult to justify ethically. Why sell worthless products when you know they're worthless?

That's why we only offer bitcoin. It's a decentralized network with an uptime of 99.98% and provides a digital, scarce currency (with a maximum of 21 million coins) that you can save or spend, all through your own wallet.

The tax return for 2023

Since last night, everyone in The Netherlands can file their tax return. Every year, tens of thousands of people are already at it in the early hours. Last year, almost half a million Dutch citizens had already filed their tax returns on the first day, according to The Tax Administration (Belastingdienst).

Bitcoin, like stocks and savings, is considered an asset and falls under box 3: savings and investments. Essentially, you're therefore liable to pay taxes on your bitcoins. The tax is calculated based on the value of your bitcoin holdings in euros on the valuation date (January 1, 2023).

For more information on how this works exactly, you can go here. Make sure to file your tax return for 2023 on time and report your bitcoins accordingly.


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