01 Mar, 2024

Potential Impact of Bitcoin Halving: LADT Analyst Insights

Bitcoin, the world’s leading cryptocurrency, may face price adjustments following the upcoming halving event in April, according to analysis by JPMorgan, led by Nikolaos Panigirtzoglou.The halving, occurring approximately every four years, is poised to reduce miner rewards from 6.25 BTC per block to 3.125 BTC. As a result, JPMorgan analysts caution that Bitcoin's price could potentially dip to $42,000 post-halving.Reasons Behind the Forecasted Decline to $42,000This potential downturn is attributed to reduced profitability for miners and subsequent increases in BTC production costs. Historically, Bitcoin's production cost has served as a "lower bound" for its prices, with the estimated range doubling post-halving to around $53,000.A potential 20% reduction in the BTC network’s hash rate looms, primarily due to less efficient mining rigs exiting the operational landscape. This scenario may drive the estimated production cost range to $42,000, calculated under an average electricity cost of $0.05 per kilowatt-hour (kWh).JPMorgan analysts anticipate that Bitcoin miners with “below-average electricity costs” and “more efficient equipment” will fare better post-halving, while those with “higher production costs” may face profitability challenges.Expected Trends in the Bitcoin Mining IndustryAnalysts foresee increased concentration within the Bitcoin mining industry, with publicly listed miners likely to hold a higher share. Additionally, the possibility of "horizontal integration" through "mergers and acquisitions" among miners across regions aims to leverage synergies and minimize collective operational expenses.Bitcoin Market Sentiments and Potential GrowthDespite JPMorgan's cautious outlook, Hunter Horsley, CEO of Bitwise, remains optimistic about Bitcoin's long-term prospects, predicting a surge to $250,000 sooner than expected.Market indicators suggest a potential surge for Bitcoin. On-chain data indicates that the Bitcoin Market Value to Realized Value (MVRV) ratio has reached levels reminiscent of the huge bull run experienced in 2020, hinting at a forthcoming surge.LADT's Analysis BreakdownAt LADT, we hold our own perspective on JPMorgan's analysis of the BTC halving. Considering the assumption that people may grow weary of BTC as a narrative, it's uncertain whether institutions are prioritizing the halving narrative. Their focus seems to be on the concept of Bitcoin as a finite resource, rather than solely on the event of halving. Institutions recognize the value of Bitcoin in its scarcity, which becomes more evident with each halving cycle. While fluctuations in the values of mining companies may occur, it's imperative to acknowledge that Bitcoin itself is steadily becoming scarcer, enhancing its long-term value proposition.Is it accurate to classify BTC at $42k as a crash? This designation may be premature and overly dramatic by JPMorgan. While a decline to $42k from recent highs may seem significant, it's essential to contextualize this within the broader trajectory of Bitcoin's price history. Bitcoin has experienced fluctuations throughout its existence, and such movements are not uncommon within the cryptocurrency market. A "crash" typically implies a sudden and severe drop in value, whereas a correction or adjustment may be a more accurate characterization in this scenario.We respectfully disagree with the notion that the current situation represents a cause for alarm. Historically, every time the halving occurs, Bitcoin has not only recovered but also continued to surge in value over the long term. The perceived concerns may stem from Fear, Uncertainty, and Doubt (FUD), which often accompany market fluctuations. It's crucial to maintain a broader perspective and consider Bitcoin's track record of resilience and growth despite short-term volatility.In the current market landscape, BTC trades at $63,391, marking a slight retracement from its recent peak above $64,000 – the highest level traded in the past two years.

27 Feb, 2024

Lao Government Rolls Out New Tax Regulations on E-Commerce

The Ministry of Finance announced a new regulation on mandatory tax payments for all digital shopping platforms in its latest notice, released on 14 February.The notice classifies digital platform shopping websites into three groups: registered enterprises in the Value-Added Tax (VAT) system, micro-enterprises, and revenue-generating individuals, legal entities, and organizations.Under the new regulations, enterprises registered with the VAT system must include their taxpayer identification number and VAT certificate in their advertisements for selling goods and services through e-commerce channels. They must also inform users whenever VAT is collected.Microenterprises, however, are not required to inform users when collecting tax but must display their taxpayer identification number in their advertising. VAT-registered enterprises, microenterprises, as well as revenue-generating individuals, legal entities, and organizations must provide information on the purchase of digital products, services, and every electronic commerce activity. Only VAT-registered enterprises are required to connect their electronic information to the Tax Revenue Information Management System (TaxRIS).The TaxRIS system is a government investment aimed at modernizing revenue collection. It aligns with the strategic plan to make tax payments easier for taxpayers, ensure all taxes are accounted for in the state budget, and enhance transparency. Furthermore, all three e-commerce groups must manually submit their revenue tax, VAT, profit tax, salary tax, and other taxes through the government’s website. Additionally, they must maintain accounting according to the system prescribed by the Law on Accounting Management and submit proper documentation to receive an annual tax payment certificate.The notice also instructs the Tax Department nationwide to streamline procedures for the three groups. This includes facilitating the issuance of taxpayer identification numbers to individuals, legal entities, or organizations that conduct electronic commerce to access the TaxRIS system fully.Failure to comply with the new regulations may result in warnings, fines, legal action, or even the platform’s shutdown.The Ministry’s new regulations aim to enhance tax compliance among digital shopping platforms in Laos. These measures, including the integration of taxpayer identification numbers and VAT certificates in advertisements, reflect the government’s commitment to modernizing revenue collection and ensuring transparency in e-commerce transactions.