bitcoin Business

Bitcoin ETF listing getting closer

Bitcoin ETFinvestors Winklevoss Twins set to list on New York’s NASDAQ exchange writes Dan Howitt.

Bitcoin is currently inaccessible for most investment banks as there is a lack of regulation when trading in it. This means currently Bitcoin is classified as a high risk asset. However when Bitcoin is wrapped in an Exchange Traded Fund, like gold is today, the regulation concern goes away completely. Check out this vid on Bloomberg.

If this Bitcoin ETF goes through, I would be expecting an 3x upswing in price per Bitcoin, trading at $643 at the time of writing. Many investment banks have been sitting on the on the fence. The ETF will open the flood gates.

This month is also launching their wallet service – where you can buy Bitcoins with a credit and debit card. Again, the likelihood is a massive price increase. Circle are essentially going for mass market adoption and have around $20 million in VC funding.

The Winklevoss brothers who are rumoured to own around 1 percent of all Bitcoins have said they are forecasting the price to reach $40k.

note from TD: is a Bitcoin investor and bought in at £292 (approx $500). If the price hits $40k we will throw a party.

1 Exchange Traded Fund – an investment fund traded on the stock exchange.

bitcoin Business

HMRC gives green light to Bitcoin business?

pirate flagThe Telegraph has reported that HMRC will announce that it is to remove the 20% VAT from the sale and trading of Bitcoin in the UK.

Until now Bitcoin has been classified as an electronically supplied service or electronic voucher (depending on which perimeter officer received the query) which meant buying from or trading with a business incurred VAT. This effectively made Bitcoin 20% more expensive in the UK than elsewhere, eliminating any chance for UK businesses to operate in this area.

UK businesses now have the ability to sell bitcoins directly to customers without passing on the 20% VAT charge, making the UK with its financial status probably the most advantageous jurisdiction in the EU to operate a Bitcoin related business. Unfortunately, UK banks have shown very little interest in operating with Bitcoin businesses without specific regulation. They are very risk averse and if the government doesn’t tackle the issue, it may mean the Bitcoin economy will flourish elsewhere at the expense of the UK.

For users of exchanges it is important to note that VAT is being scrapped on all aspects of Bitcoin trading. When you buy or sell Bitcoin on a UK exchange the exchange takes a small fee to facilitate the trade. These fees will now be VAT zero rated, meaning there should be a potential 20% saving on fees for customers and no VAT liability for UK businesses operating trading services.

As a Bitcoin startup we welcome this news and have been pushing for this for nearly 9 months. We met with our local MP Karl McCartney who raised our concerns on this issue in parliament and wrote to the Treasury and HMRC on our behalf. We have also written to members of the cabinet and directly to HMRC ourselves. Hopefully our input alongside the many others who have had similar contacts has raised this issue to the level it deserves.

In all this is great news for the Bitcoin community and we expect to see an influx of startups buying and selling Bitcoins in the UK. The recognition by a UK government agency is an important step towards mainstream adoption and we are now looking to the Financial Conduct Authority to provide UK banks with the regulatory comfort they need to support this fledgling industry.

Other Bitcoin related posts:

Bitcoin Bet of Bubble Bursting?

Silk Road FTTC and Bitcoin

Bitcoin currency crash due to problems at MtGox (sounds familiar)