Everybody hates doing taxes. That’s why you have a tax guy. Or you save some money, put it off until the last minute, and do your taxes yourself.

But while taxes can be a logistical drag on the day, we love saving money on our taxes.

And a new tax loophole may be radically changing the way crypto, and you, do business.

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Espresso Shots

☕️ Bitcoin Past $27,000

Bitcoin finally peaked past $27k on Monday, BTC’s highest price point since August 31 — worthy of note despite its subsequent return to sub-$27k levels.

Additionally, the Bitcoin surge happened amid a “death cross” trading pattern on September 11.

And this 8% hike is casting some doubts about the Death Cross’s reliability as a robust performance indicator.

Some analysts believe Bitcoin’s good fortune is the result of the pause in the Fed rate hike, a pause that Fed futures indicate will most likely continue when the Federal Reserve announces its next projections on Wednesday.

But if Bitcoin can beat the Death Cross, then Bitcoin should definitely race those bullies from the rival high school around Dead Man’s Curve.

☕️ Senators Back Elizabeth Warren’s Crypto Bill

Nine additional senators have joined the bipartisan coalition backing Senator Elizabeth Warren’s crypto bill, the Digital Asset Anti-Money Laundering Act.

Warren’s legislation will extend KYC requirements, in addition to the guidelines and restrictions surrounding cold wallets, crypto mixers, and compliance across DeFi.

“Our expanding coalition shows that Congress is ready to take action – our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox.” Warren said in a statement on her website.

Though Elizabeth Warren has previously embraced the perception that she’s raising an anti-crypto army, we would argue that nine senators don’t constitute an army, that’s more of an anti-crypto squad.

☕️ Citigroup Release Private Blockchain

Citigroup announced that it would release a private blockchain that would allow institutional users to transfer funds quickly and internationally.

The new blockchain, dubbed “Citi Token Services” will allow Citi’s richest and largest clients 24/7 access to a blockchain that is intended to cut trade times from days to minutes.

“Digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks. The development of Citi Token Services is part of our journey to deliver real-time, always-on, next generation transaction banking services to our institutional clients.” Shahmir Khaliq, Citi’s global head of services, said in the official press release.

And yes, this private blockchain is only available to institutional clients, so rank-and-file investors will be left out in the cold, looking in on this shiny new blockchain.

This brings to mind the author Charles Dickens’ story of economic inequality in 19th-century France called “A Tale of Two Citis.”

Spilling the Beans

This New Loophole Changes Everything 😉 🚀

Hey, we all need a little relief when it comes to taxes.

And tax law, like any law, is malleable. There are loopholes that can be exploited and rules that can naturally be bent.

That’s why you pay a tax guy, because they know all the tips and tricks.

Whether you’re declaring that gaming chair and laptop you put in the attic qualify as a home office or maybe some of those staggering trips to the Chinese buffet were actually business dinners, there are ways to get more bang for your buck come tax season.

And if you’re a big corporation, sometimes earning those tax breaks even result in greater humanitarian efforts, like giving to local causes and philanthropic causes.

But a new development in crypto is going to redefine the way DeFi does its taxes. And nobody is covering it.

Why? Because changes in tax code seem complicated and unapproachable. And guess what? They are complicated.

But I understand all of it. Because I am very smart.

Well, no, if we’re being honest, I had my accountant explain this entire thing to me, like, 10 times. Very slowly. And I think I’ve got it.

Are you ready? Here we go.

On September 6, the Financial Accounting Standards Board (FASB) voted to allow corporations to use fair-value accounting for their crypto gains and losses.

Previously, companies had to submit price drops for crypto assets but weren’t allowed to account for when those prices would rally.

This means that the companies' holdings would reflect far more losses than their crypto assets’ actual, market value.

And sometimes those differences can be massive.

For example, analysts at the investment banking company Stifel noted in a discussion with CoinDesk that Microstrategy, one of the largest BTC holders, disclosed its 152,300 BTC holdings at the end of the second quarter of 2023.

Now, because of the current accounting metric which only accounts for losses, that BTC was valued at $2.3 billion, which was literally half of that Bitcoin’s actual, roughly $4.6 billion in market value at the time.

Through fair-value accounting, those companies will now be able to show not only losses but also gains, resulting in more accurate price reflections on their income sheets.

Now, you’re not a corporation, so how does this change affect you?

Easy. If companies' crypto assets are going to better reflect their actual market value, more companies will be interested in acquiring crypto holdings.

This means more institutional involvement in crypto, which means higher prices, which means a booming market.

This development could finally mean those rallies you’ve been waiting for.

But one disclaimer before we get too excited: This change won’t go into effect until the beginning of the 2025 calendar year.

Yes, we’ve got a while to wait. But what’s the point of being human without having something to look forward to?

It could be a tropical vacation, your wildest cousin’s marriage, or in this case, a tax overhaul that promises a potential bull market.

But in the meantime, despite the carpel tunnel brace and the Funko pops on his desk, our accountant just became the coolest guy in the office.

Premium Market Report

DeFi

Protocols

Sources: DeFiLlama - Total Value Locked (TVL) - Lido (LDO) represents one of the largest DeFi protocol

Public Chains

☕️ Our Take:

Overview:

Crypto 101

ADTV: “The Average Daily Trading Volume.” Daily trading volume is calculated by averaging the purchases and sales of a given crypto within a 24-hour period.

This gives traders a reliable indicator of how a cryptocurrency is performing in the wider market.

The Last Sip

The Last Sip: The Death Cross is being called into question in terms of its accuracy as a robust performance indicator for Bitcoin. And it’s only the latest example of the Death Cross being outshined by its cousin, the Flaming Death Cross, which is a crowd-pleaser at both motocross and lion-taming events.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.