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France’s Bold Move: Taxing Unrealized Bitcoin Gains and Its Implications for Investors
A notable moment occurred in France last week as Senator Sylvie Vermeillet proposed a controversial new policy regarding Bitcoin.
The proposal suggests classifying Bitcoin as “unproductive,” which would lead to taxes on unrealized gains.
Clarifying the Proposal: A Tax on Gains You Haven’t Yet Realized
This policy has already passed a preliminary vote in the Senate and is supported by France’s Finance Minister, Laurent Saint-Martin.
Currently, gains from Bitcoin in France are taxed at 30%, but it remains uncertain if this rate will apply to the new regulations.
The proposed tax would be applied when unrealized gains exceed €800,000 (approximately $845,000). For early Bitcoin investors, reaching that gain may not take a massive initial investment.
To illustrate, suppose an investor bought Bitcoin several years ago, held onto it through various price changes, and today finds their Bitcoin valued at $1 million. This increase could mean a hefty tax bill.
Many investors may not have enough cash on hand to cover such a tax without selling a portion of their Bitcoin.
This situation poses a stark penalty for those who displayed foresight and resilience in their investments.
Furthermore, if thinking of relocating to escape this tax, it’s worth noting that the new regulations seem targeted at wealthy individuals considering such options. CryptoRank.io points out:
The unprecedented crypto tax regulation in France targets wealthy investors planning to exit the country.
Long-Term Outlook: French Bitcoin Investors Should Consider Their Next Moves
As of Monday morning, Bitcoin is trading at around $98K. If this figure leads to feelings of missing out, expanding the view can provide context.
The current global market cap for Bitcoin stands at approximately $1.98 trillion, which, while substantial, is a small fraction of the total $900 trillion global investment market.
To visualize this, refer to the chart below, where Bitcoin’s market cap is marked in green (top left corner).
Source: Jesse Myers (Croesus) @Croesus_BTC
In a recent statement, Federal Reserve Chairman Jerome Powell noted:
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.
If we follow Powell’s reasoning, gold has a global market cap of $17.8 trillion. Thus, Bitcoin would need to increase nearly ninefold to match gold’s market size.
While such growth isn’t guaranteed in the near term, it highlights the potential for further increases in Bitcoin’s value.
Investors Should Follow the Institutional Trends
Significant price increases in Bitcoin will likely come from institutional investors, rather than small individual investments. This shift is already in progress.
This past spring, Fidelity released its “Institutional Investor Digital Assets Study,” revealing that:
- More than 50% of surveyed investors believe the crypto asset class is here for the long term.
- Over a quarter of investors reported a more positive view of digital assets than a year ago.
- 65% plan to invest in digital assets in the future.
Moreover, Sygnum, a global digital asset banking group, released its annual “Future Finance Survey” in November:
The survey featured diverse professionals from banks and asset managers.
57% intend to increase their crypto allocations, with 31% doing so in the next quarter and 32% in the next six months. Just 5% plan to reduce their allocations.
Lastly, a survey from EY-Parthenon in March indicated that nearly all institutions (94%) see long-term value in crypto and blockchain technology.
Research by EY-Parthenon shows that digital assets are securing spots in institutional portfolios.
A New Chapter for Crypto: The Trump Administration’s Support
Additional noteworthy news was shared last Thursday—the incoming Trump administration signaled a friendly approach to cryptocurrency regulation, likely encouraging more institutional investments.
President-elect Trump announced that billionaire David Sacks would serve as the “White House A.I. & Crypto Czar.”
According to CNBC:
Sacks will oversee policies concerning artificial intelligence and cryptocurrency, including developing a legal framework for the latter.
Notably, Sacks has shown a significant interest in Solana as an investment.
In a podcast episode back in October 2021, he revealed his substantial investments in Solana, which he believes has the potential to surpass Ethereum as a leading blockchain platform.
To conclude, a round of applause goes to subscribers of Luke Lango’s Crypto Trader, who recently enjoyed impressive gains of 30%, 50%, 55%, and even 170% on multiple trades.
While Bitcoin captures much attention, it’s essential to remain informed and consider the evolving landscape of cryptocurrencies.
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Altcoins Surge as New Stock Screener Emerges
An In-Depth Look at Market Trends and Innovative Tools
While Bitcoin’s recent performance is notable, the real excitement lies in the resurgence of altcoins.
Last Friday, Luke highlighted impressive gains in altcoins compared to Bitcoin:
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.
Exploring Luke’s New Stock Trading Tool
In last week’s Digest, we introduced Auspex, Luke’s new stock screener.
Designed as a sophisticated market system, Auspex seeks out stocks that meet high standards in three main areas: fundamentals, technicals, and sentiment.
On the fundamental side, Auspex scans for stocks showing solid growth—this includes positive revenue and earnings growth, profit margin expansion, and an increase in both revenue and profit growth rates.
From a technical perspective, Auspex looks at stocks climbing steadily, analyzing trends such as upward-moving averages across different time frames, and encouraging movements in the Moving Average Convergence Divergence (MACD) line.
Sentiment plays a crucial role as well. Auspex identifies stocks generating significant attention, like those with increasing buying volumes and upward revisions in earnings estimates by analysts.
This methodical analysis results in a selective system that flags only a handful of stocks monthly, providing a reliable strategy for navigating today’s bullish market while minimizing risks from potential downturns.
The Importance of Caution in Today’s Market
Bringing in insights from our team, Lucas Downey, a quantitative specialist associated with Jason Bodner at TradeSmith, reported concerning patterns in current market conditions.
Lucas’s analysis revealed that:
Dispersion is high right now.
Since the critical shift on July 11, when Federal Reserve Chairman Powell addressed the Senate, the gap between top-performing and bottom-performing stocks has widened significantly.
Lucas also provided a compelling chart illustrating the most extreme performance differences across sectors. For instance, within the Healthcare sector, Bristol-Myers Squibb surged 44%, while Moderna plummeted by 65%, highlighting a staggering 109-point difference.
(For further insights, Lucas and Michael Salvatore share excellent market analysis in the TradeSmith Daily. You can access this valuable resource for free.)
In this context, Auspex stands out as a powerful tool for identifying stocks similar to “Bristol-Myers Squibb” in the near term, making it especially relevant given the current market disparities.
This Wednesday at 1 PM ET, Luke will host a special live event to discuss Auspex, its proven track record, and its potential to balance risk as we approach 2025. To reserve your spot, click here.
As we conclude, Luke shares additional insights:
By integrating fundamental, technical, and sentiment analysis, this tool has consistently proven its capability at pinpointing breakout stocks before substantial growth phases.
Remarkably, it has outperformed the market every month since we began live testing in July.
If you’re searching for effective strategies to exceed market performance, join my upcoming session this Wednesday, Dec. 11 at 1 p.m., for all the information on this innovative new system.
Wishing you a pleasant evening,
Jeff Remsburg
