France moves to tax unrealized gains on Bitcoin … why higher crypto prices are coming … the engineering behind Luke Lango’s “Auspex” tool … why it’s needed now more than ever
A big shout-out goes to France for the most impressive bonehead idea of December…
Last week, French Senator Sylvie Vermeillet proposed classifying Bitcoin as “unproductive.” According to French law, that would mean…
So far, the idea has passed a preliminary vote in the Senate, and is endorsed by France’s Finance Minister, Laurent Saint-Martin.
To clear up confusion, yes, this would mean that even if you don’t sell your Bitcoin, you’d have to pay the same tax as if you’d sold
The tax on Bitcoin’s gains in France is currently at 30%, but it’s unclear if this rate would be the same under this new proposal.
The tax would kick in if unrealized gains on Bitcoin exceed €800,000 (about $845,000). Yes, that’s a lot of money, but for early investors in Bitcoin, it wouldn’t have required a huge initial investment to find yourself with that kind of gain.
Consider the implications…
Say you got lucky with a Bitcoin purchase some years ago and had the stomach to hold as the crypto soared and crashed. Here you are today, sitting on a $1M net worth – but it’s almost entirely thanks to your Bitcoin gain.
Will you have hundreds of thousands of dollars laying around to pay this tax?
Of course not. So, your only choice will be to sell your Bitcoin.
What a staggering punishment for your investment foresight and iron stomach.
By the way, if you want to flee France to escape this tax, the politicians are one step ahead of you. Here’s CryptoRank.io:
The unprecedented crypto tax regulation in France targets wealthy investors planning to exit the country.
As bad as this is, French Bitcoin “Hodlers” should take the hit and get out of France now because we’re likely nowhere near the end of Bitcoin’s run (despite volatility)
As I write Monday morning, Bitcoin trades around $98K. If this price makes you feel like you’re late to the party, consider a wider perspective.
Its global market cap is roughly $1.98 trillion. While that might sound like a lot, it’s a grain of sand within the wider $900 trillion global investment universe.
The chart below provides a visual. I’ve circled Bitcoin’s crude relative size in green (top left corner).
Chart showing bitcoin's market cap at $2T within the wider $900 trillion global investment universe.
Source: Jesse Myers (Croesus) @Croesus_BTC
For added perspective, here’s Federal Reserve Chairman Jerome Powell from last week:
People use bitcoin as a speculative asset. It’s just like gold – only it’s virtual, it’s digital.
It’s not a competitor for the dollar. It’s really a competitor for gold.
Following Powell’s logic, gold’s global market cap is $17.8 trillion. With Bitcoin’s market cap at less than $2 trillion as noted a moment ago, the crypto would need to 9X from here just to reach parity with gold.
While I’m not claiming that will happen (at least, anytime soon), it should give you a sense for how much additional runway remains in front of Bitcoin.
Unsure what to do? Follow the big money
What’s going to send Bitcoin’s price substantially higher from here isn’t you and me throwing a few bucks into it; it’s the institutional and professional asset managers getting permission to move their billions in assets under management into the asset class. But this is already happening.
This past spring, Fidelity published its latest “Institutional Investor Digital Assets Study.” It concluded:
Over 50% of surveyed investors agreed the [crypto] asset class is here for the long term
More than one-quarter feel their perception of digital assets changed positively over the past year
65% of investors plan to buy or invest in digital assets in the future
Meanwhile, in November, the global digital asset banking group Sygnum published the results of its annual “Future Finance Survey”:
The survey included a diverse range of investment professionals from banks, hedge funds, multi- and single-family offices, DLT foundations, funds, and asset managers…
57% plan to increase their crypto allocations, with 31% planning to do so in the next quarter, and 32% in the next six months. Only 5% plan to decrease their allocations, and 2% remain undecided.
Last, this comes from strategy consulting firm EY-Parthenon’s survey from March of this year:
Nearly all institutions (94%) believe in the long-term value of crypto/digital assets and/or blockchain technology…
EY-Parthenon research indicates that digital assets continue to secure positions in the portfolios of institutional investors.
Last Thursday, we received additional news that the Trump administration will be friendly to the crypto space, likely making it easier for institutional allocations
President-elect Trump announced that billionaire venture capitalist David Sacks will join the Trump administration as the “White House A.I. & Crypto Czar.”
From CNBC:
Sacks will guide the administration’s policies for artificial intelligence and cryptocurrency, Trump wrote. Some of that work includes creating a legal framework for crypto, as well as leading a presidential council of advisors on science and technology.
By the way, given this news, don’t sell your Solana.
Here’s Coin Telegraph:
Apart from his interest in crypto and artificial intelligence, Sacks is known as a major investor in Solana…
In October 2021, in the 50th episode of [his podcast] All-In, Sacks publicly disclosed holding significant amounts of Solana bought at a discount…
Sacks mentioned Solana’s potential to overtake Ethereum as the preferred blockchain platform.
Given that we’re dovetailing into specific altcoins, a quick “congratulations” goes to Luke Lango’s Crypto Trader subscribers. Last week, they cashed in on four recent trades to the tune of 30%, 50%, 55%, and 170%.
As we’ve highlighted in the Digest recently, while Bitcoin is getting the press thanks to breaching $100K, the bigger story is the huge shift toward “Altcoin Season.”
Here’s Luke from last Friday:
Altcoins have been surging over the past week. While Bitcoin is up just 1% in the past 7 days… Ethereum is up 9%, XRP is up 48%, BNB is up 10%, Dogecoin is up 7%, Cardano is up 13%, TRON is up 60%, Avalanche is up 18%, Shiba Inu is up 19%, Toncoin is up 8%, Chainlink is up 34%, Polkadot is up 23%, Sui is up 25%, Bitcoin Cash is up 15%, Hedera is up 93%, and Litecoin is up 42%…
The evidence seems pretty clear. It is (finally) time for Altcoin Season.
We’ll bring you more on Luke’s altcoin trades in the coming days, but let’s shift gears now to his new stock trading screener
Last week in the Digest, we introduced you to Auspex, which is Luke’s “ultimate” stock screener.
At its core, Auspex is an advanced market system that searches out stocks with superior fundamental, technical, and sentiment criteria.
Fundamentally, Auspex scans for stocks that are growing – positive revenue growth, positive earnings growth, positive profit margin expansion, accelerating revenue growth, and accelerating profit growth.
Technically, Auspex looks for stocks that are sustainably moving higher – upward-sloping longer timeframe moving average, shorter-term moving averages crossing above long-term moving averages, and upward trending action in the Moving Average Convergence Divergence line, among other criteria.
Sentimentally, Auspex flags stocks that are generating positive attention – increasing buying volume, upward earnings estimates revisions from analysts, and more.
The quantitative engineering that underpins Auspex results in a highly discriminating market system, flagging just a handful of stocks each month. It’s a fantastic way to remain in this bullish market while also adding a layer of protection against stocks that are ripe for a sharp pullback.
On that note, consider why caution is needed today…
Last week, on an internal Slack channel, Lucas Downey, who is a quant specialist who works closely with Jason Bodner at our corporate partner TradeSmith, provided some eye-opening data about today’s market.
Lucas crunched the numbers, concluding:
Dispersion is high right now.
Since the great equalizer trade was set in motion on July 11 [that’s when Federal Reserve Chairman Powell spoke before the Senate], the spread between the biggest winners and losers has been massive.
Lucas then provided a chart showing the best/worst performing stock in each sector, and the spreads were, in fact, enormous.
As just one example, in the Healthcare sector, Bristol-Myers Squibb has jumped 44%, while Moderna has crashed 65%. That’s a 109-point spread.
(By the way, Lucas and Michael Salvatore provide fantastic market analysis over in the TradeSmith Daily. Click here to instantly access their insights – totally free.)
Auspex is the most robust tool of which we’re aware to help find the stocks more like “Bristol-Myers Squibb” over the short term. And given the massive dispersion in today’s market, that’s incredibly important.
This Wednesday at 1 PM ET, Luke is holding a special live event detailing Auspex’s track record, its engineering, and how it can help you balance offense and defense as we enter 2025. To reserve your seat, click here.
I’ll let Luke provide a few more details as we wrap up today:
By combining fundamental, technical, and sentimental analysis, this tool has consistently demonstrated its ability to identify breakout stocks before their explosive growth phases.
In fact, it has beaten the market every single month since we started live testing it in July.
If you’re looking for a way to outperform the broader market, no matter the economic climate, join my upcoming broadcast this Wednesday, Dec. 11 at 1 p.m., where I’ll be sharing all the details about this powerful new system.
