Since the price fall of crypto, there have been various rumours of what will provide a revival to the currency in the near future. From celebrity endorsements to countries giving boosts to Bitcoin, the ideas have been numerous.
Now, a new one has surfaced, this time coming from China. Dovey Wan, the founding partner of crypto-friendly Primitive Ventures, has claimed in a Twitter post that the recent tax reforms from the Chinese government could force the mega-rich in the country to put their surplus cash into the crypto market in order to circumvent the authorities. The new common reporting standard (CRS) will also make overseas shell companies far easier to track, making certain countries better places to hide money as well as other markets effective hiding spots – i.e. Cryptocurrency.
There is a macro factor that may contribute to various assets bloom (including US real estate and crypto assets), which is underestimated by many westerners:— Dovey Wan 🦖 (@DoveyWan) January 25, 2019
China’s tax system overhaul and implementation of CRS
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As you can see from the post, it is clear that overseas properties may be a big factor but if prices go into a negative flux and aren’t profitable in lucrative areas like San Francisco, New York City, Bangkok, Phuket, and Vancouver, then this could prompt a shift to the crypto ecosystem.
However, rather interestingly, Wan has stated that the influx of cash may not come through over the counter (OTC) desks as many may think, rather it will no doubt come through a “mining operation or hash rate rental to acquire BTC instead of buying it up front”. This is because the OTC transactions are still able to be viewed by the authorities.
The recent tax reforms have come alongside a far tougher stance by the Chinese government to restore economic equality in the nation. The disappearance of Fan Bing Bing, the famous Hollywood, and Chinese actress, made headline news around the world as many wondered where she had gone, however, following the realization that it was to do with unpaid taxes, it became clear that the government were sending a clear message to the mega-rich in the nation.
Not only that, many conspiracies have formed around the eerie disappearances of other Chinese billionaires. One such proponent of these ideas is Micheal Novogratz who quoted statistics which claimed, from 2003 to 2011, the mortality rate of billionaires had risen, with 15 murdered, 17 committing suicide, seven died from accidents. 19 also died from a handful of illnesses and health conditions, while 14 were executed.
These are scary stats. Makes me more bullish Bitcoin and more worried about China. https://t.co/srjuQTaia7— Michael Novogratz (@novogratz) January 22, 2019
Whatever the case may be, there are certainly incentives be them real or mythical, to put excess unaccounted for cash elsewhere, and with its decentralized market, crypto appears to be the place to go.