#1 Big Problem With Margin Trading

Since very long we have been discussing cryptocurrencies, their futures as well as margin trading. It is obvious for everyone to have queries regarding a problem with cryptocurrencies.

So, paying attention to the same, here, we are going to discuss one of the major problems with margin trading, i.e., delta exchange.

Here we go!

Before going into the detail about delta exchange, let us clear a few important terms.

Cryptocurrency Derivatives:

As the name “derivative” itself says, it is a group of financial contracts which derive its value from the performance of an underlying entity. Bitcoin, Ether, etc. are a few examples of derivatives.

Derivatives can broadly be classified into three categories:

  • Hedging
  • Speculation
  • Access

(Source: Delta Exchange – Cryptocurrency Derivatives Exchange)

Cryptocurrency Futures:

When two parties get involved in a future contract, they agree to buy/sell any asset at a pre-fixed price on a scheduled date. Crypto futures have Bitcoins or Altcoins as the underlying, like Ethereum, Ripple, etc.

Cryptocurrencies Vs. Futures Margin:

If a trader is looking for an investment or purchasing, then, either of the two, futures or margin trading can be used. In margin trading, leverage can be achieved in the following steps:

Step 1:
Borrow money.

Step 2:
For long trading, you can use the borrowed money to buy a crypto asset and for short trading, you can sell the borrowed crypto asset.

Delta exchange:

Delta was launched in August with a single BTC-USD futures contract listed on an exchange. Futures on ETH, XRP, and XLM was listed and a referral program was launched which started to offer the option to hold USDT in Delta wallet. The exchange also provides margin trading for cryptocurrencies.

Cryptocurrencies are geography agnostic. The aim behind bringing something called “Delta-Exchange” into existence is to serve traders all over the globe. All the derivative contracts are and will always be settled in cryptos.

Foundation of Delta:

Behind the foundation of Delta, there is a team of three IIT educated engineers who have worked with bulge-bracket investment banks and have build venture-funded tech startups.

Pankaj Balani, Jitender Tokas and Saurabh Goyal are the three engineers behind the foundation of Delta.

Pankaj Balani(CEO): He has 6 years of experience in derivatives trading in Hong Kong and India at wall street giants like UBS. Not only in derivatives, but he also has a great experience in quantitative finance and Asian equity markets. He also contributed to e-commerce in India.

Jitender Tokas(CBO): Jitender Tokas has worked with Citigroup in India and GIC in Singapore. In financial services, he has more than 8 years of experience. He has been a successful institutional investor as well as an equity research analyst and helped two Indian Internet companies to make money from the market.

Saurabh Goyal(CTO): Saurabh Goyal is a serial entrepreneur and a seasoned tech leader. Housing.com was his first foundation which went to raise money from Softbank. Then, he built and sold a FoodTech company named TinyOwl that scaled to 1.5mn users. He was also a director of Engineering at Hostar- a video streaming platform which has more than 2.5mn users.

The significance of crypto derivatives:

Derivatives are a very crucial component of global financial markets. It offers several risk protections, enable innovative trading strategies and are key contributors to the stability of financial systems.

Currently, the building blocks of fiat-led financial markets are being created in the crypto ecosystem.

Margin trading:

Margin trading is a term given to a process where an individual investor buys more stocks than they can afford to. It involves buying and selling of assets in a single session. The process requires an investor to select or guess the stock movement in a particular session. It is an easy way of making a fast buck.

Final words:

So, it was all about “Delta-Exchange” which is one of the major problems in margin trading.

The article intends to make you aware of margin trading, their futures as well as problems associated with it.

We tried our best to cover all the necessary details related to the subject. We discussed various key terms, margin trading, delta exchange, the significance of crypto derivatives, etc. If you still have any doubts or queries, just feel free to contact and ask us.

If you have some other details related to the topic which you think should be a part of the discussion, definitely share with us.

It will be great to have a two-way conversation.
Hope the content must have helped you.…

Everything You Need to Know About Bitcoin, Altcoins and Taxes

If investing and trading cryptocurrency was your first experience with leveraging your personal money to turn a profit, then you may not have known you may have incurred a tax liability with your gains. What a way to kill the intoxicating afterglow of a big win! Death and taxes, the two guarantees in life.

If you were in the United States, then you definitely owed taxes on your earnings. There are two different types of taxes that you could have owed. They are either long-term capital gains or short-term capital gains. Long-term capital gains taxes are more favorable. The difference between the two is the following:

Short-term Capital Gains

You invested your money into something and then only held your investment under a year and sold it for a profit. So let’s say you bought a Bitcoin on January 1, 2017, and then sold it on December 31st, 2017 and your net profit (Final value of investment-initial cost of investment) was $100.00. You would be liable for your regular income tax bracket, so it could be anywhere from 25-39% depending on your income that year.

Long-term Capital Gains

Let’s go back to the example of you buying a Bitcoin on January 1st, 2017, but you sold it on January 2nd, 2018. You made a net profit of $100.00 you would be liable for 15-20% capital gains tax on this earning. It’s interesting that waiting two days basically cuts your tax liability in half! So this is an advantage to being a “Hodler” in the United States.

But wouldn’t it be great to live in a place where you didn’t have ANY taxes on your gains from Bitcoin and altcoins?

Are there any countries in the world where Bitcoin/altcoins that don’t have capital gains tax?

1.) Germany

In Germany, Bitcoin and other cryptos are not considered a commodity, a stock, or any form of money.

Trading bitcoins/altcoins are considered as a private sale under the rule 23 EStG which has tax-free benefits.

EStG states anyone trading bitcoins/altcoins are tax exempt if their capital gains are not more than 600 EUR. Also, if a trader is selling his/her Bitcoin/altcoins after one year or more, then those capital gains are also tax exempt.

2.) Denmark

Denmark is one of the most Bitcoin/crypto friendly countries in the world.

Bitcoin/altcoin capital gains are tax exempt under Danish law. This policy is unique to cryptocurrencies because they want to be the world’s first cashless economy.

3.) Singapore

Bitcoin isn’t classified as either currency or a commodity in Singapore.

Private investors are not subject to capital gains tax with cryptocurrency gains, but businesses are subject to capital gains tax.

4.) Belarus

In December 2017, Alexander Lukashenko legalized cryptocurrencies in Belarus.

He also stated that cryptocurrency mining, trading and capital gains on cryptocurrencies & ICOs would be tax-free until January 1, 2023.

Taxing Bitcoin/Altcoins

Currently, these are the only countries that officially have Bitcoin/altcoin capital gains tax exemption policies.

Here are some countries that are “unofficially” Bitcoin tax havens because they don’t have capital gains tax on any investment earnings.

● Hong Kong
● New Zealand
● Switzerland
● Barbados
● Malaysia
● Mauritius

If you are from one of the countries mentioned above, then enjoy the tax-exempt status. If you don’t live in one of these countries, then you might want to move to one if you’re making a lot of money on cryptocurrency.…