Blockchain Bites: Ethereum 2.0 Deposit Contract Fully Loaded, IRS Sends Befuddling Letters – Again

More than 500,000 ETH have been locked and loaded into Ethereum 2.0’s deposit contract, kick-starting the network’s major, multi-year development phase. JPMorgan analysts say institutions are piling into bitcoin. And the IRS has again sent out (possibly erroneous) letters to crypto traders indicating they owe taxes on unrealized gains.

Top shelf

Taxman knocketh
The Internal Revenue Service (IRS) is again sending mixed messages related to crypto trading and tax reporting obligations. Allegedly, “dozens of individuals” have received CP2000 letters detailing how much the IRS believes traders owe – based on gains from unreported crypto holdings in 2018, according to CryptoTrader.tax. However, as in years prior, it’s possible these traders never realized these gains and don’t owe anything. The issue may stem from how crypto exchanges report transactions to the IRS, using form 1099-K, which shows all transactions as generating revenue. Exchanges could prevent this issue by sending 1099-B reports to the IRS, which accurately mark gains and losses, TaxBit co-founder Austin Woodward told CoinDesk last time around, in March.

Institutional analysis
JPMorgan analysts say institutions are piling into bitcoin at a stronger pace this quarter than they were in Q3, according to the banking giant’s “Flows & Liquidity” report. Published Friday, the analyst report compares institutional to retail buying. For instance, Q3, retail customers bought $1.6 billion worth of bitcoin using Square’s Cash App, nearly three times more than what was invested in Grayscale’s bitcoin product. Though in Q4, the Grayscale Bitcoin Trust is at three times its Q3 numbers. To be sure, Square has yet to post numbers related to customers’ Q4 bitcoin buys. (Grayscale, like CoinDesk, is wholly owned by Digital Currency Group.)

Gold bug to BTC ‘cockroach’
Pendal Group, an Australian Securities Exchange-listed investment manager with over A$100 billion (US$73.6 billion) in assets…

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