Decentral Block Post

Modern parents are going to need to keep an even closer eye on their kids’ gaming habits, as some of them may be accumulating a hefty tax bill, according to a crypto tax specialist.

Speaking to Cointelegraph during last week’s Australian Crypto Convention, Adam Saville-Brown, regional head of tax software firm Koinly said that many don’t realize that earnings from play-to-earn (P2E) games can be subject to tax consequences in the same way as crypto trading and investing. 

This is particularly true for play-to-earn blockchain games that offer in-game tokens that can be traded on exchanges and thus have real-world financial value.

“Parents were once worried about their kids’ playing games like GTA, with violence […] but parents now need to be aware of a whole new level […] tax complexities.”

Saville-Brown said he was approached during the convention by a father of a nine-year-old son, concerned that his boy was “making bank” from P2E games.

Bitcoin (BTC) faced a 9% correction in the early hours of Sept. 19 as the price traded down to $18,270. Even though the price quickly bounced back above $19,000, this level was the lowest price seen in three months. However, pro traders held their ground and were not inclined to take the loss, as measured by derivatives contracts.

Pinpointing the rationale behind the crash is extremely difficult, but some say United States President Joe Biden's interview on CBS "60 Minutes" raised concerns about global warfare. When responding to whether U.S. forces would defend Taiwan in the event of a China-led invasion, Biden replied: "Yes, if in fact, there was an unprecedented attack."

Others cite China's central bank lowering the borrowing cost of 14-day reverse repurchase agreements to 2.15% from 2.25%. The monetary authority is showing signs of weakness in the current market conditions by injecting more money to stimulate the economy amid inflationary pressure.

There is also pressure from the upcoming U.S. Federal Reserve Committee meeting on Sept. 21, which is expected to hike interest rates by 0.75% as central bankers scramble to ease the inflationary pressure. As a result, yields on the 5-year Treasury notes soared to 3.70%, the highest level since November 2007.

Let's look at crypto derivatives data to understand whether professional investors changed their position while Bitcoin crashed below $19,000.

The United States equities markets and the crypto markets are likely to remain volatile in the near term because traders remain nervous about the size of the next Federal Reserve rate hike on Sept. 20 and Sept. 21. While the majority favors a 75 basis point rate hike, according to the CME FedWatch Tool, some analysts expect the Fed to hike rates by 100 basis points, the first such instance since the early 1980s.

Many expect Bitcoin (BTC) to continue its slide and drop below the June low in the future. Although anything is possible in the markets, many times, the markets do not oblige the majority. If the Fed does not surprise the markets, traders who may be cautious and sitting on the sidelines could jump right back in, resulting in a brief relief recovery.

Bear markets offer an opportunity for investors to accumulate for the long term. It is futile to catch the bottom, hence traders may be on the lookout to start accumulating during periods of extreme pessimism. A strong stomach is needed to tide over the volatility but the ones who do that are likely to benefit when the next bull run begins.

Could Bitcoin and altcoins stage a turnaround or is a deeper decline possible? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin has been in a strong downtrend for several months. Buyers started a recovery from the June low at $17,622 and pushed the price above the 200-week simple moving average (SMA) but they could not sustain the higher levels.