“Buy whatever you can.” With this phrase, crypto evangelists urge mostly retail investors to pour all their money into bitcoin and other cryptocurrencies.
With the main cryptocurrency, bitcoin, having broken all records after Donald Trump’s election in the US, surpassing $97,000 today (Thursday), analysts and crypto experts are encouraging people to join the party before another major surge happens, potentially reaping massive profits in no time.
The cryptocurrency ecosystem is in such a euphoric state that it resembles the drunken peak of a party. While some analysts warn that there’s a strong possibility the party may end abruptly (with a downward price cycle, even if temporary), what should be considered a given is that cryptocurrencies will soon be officially recognized as a legitimate means of transaction.
This will soon be seen in Greece. Here, as well as in the rest of Europe, a regulatory framework is being prepared for taxing profits from cryptocurrencies, as well as for recording and supervision. The chaos surrounding cryptos, where no one knows who holds what and where their profits come from (or how they are used), will soon be brought to an end.
Bitcoin: Surpasses $97,000: A Crypto Tax is Coming – A Beginner’s Guide
Cryptocurrencies are known for their extreme price volatility. The most powerful investors are called “whales.” Just like marine mammals that can create waves with a flick of their tails, potentially drowning those near the surface, “whales” can drown smaller investors by withdrawing amounts from the market.
The Fuel for the Rally
Since November 5, the day of the US presidential elections, bitcoin has increased its value by more than 35%. Trump’s (pre-election) promises and statements that he would make the US “the global capital of cryptocurrencies,” coupled with his connections to crypto-friendly figures, created a climate of euphoria and expectations that propelled bitcoin to new highs.
So, while the all-time high was $73,800 last March, bitcoin had been trying to find support at $73,000, awaiting Trump’s victory (with analysts believing that if Kamala Harris had been elected, it would stabilize below $50,000), and then reaching its peak of about $97,000.
Bitcoin: Surpasses $97,000: A Crypto Tax is Coming – A Beginner’s Guide
In this way, the market capitalization of just bitcoin, after surpassing the oil giant Saudi Aramco in market prices, reached $1.72 trillion, surpassing silver and making it the eighth-largest asset. In total, cryptocurrencies now have a market capitalization exceeding $3 trillion.
Interestingly, before the elections, Standard Chartered analyst Jeff Kendrick predicted that if Trump won, bitcoin would surge to $90,000 (which happened), and that by the end of the year, it would reach $125,000. Now, even though there are reservations about how short-term these gains are, Bernstein analysts have set a target of $200,000 for bitcoin by the end of 2025.
This entire atmosphere of euphoria surrounding cryptocurrencies is rooted in Trump’s election itself. Although the newly elected US president had previously called cryptocurrencies a “scam,” just before the election, he made a 180-degree turn, bringing crypto-friendly figures (such as Elon Musk) onto his team and adopting a rhetoric that the US should accumulate bitcoin and become the “global capital” of cryptos.
This made traders expect a more favorable stance from him regarding deregulation and market freedom, factors that many investors associate with bitcoin’s attractiveness.
Based on this, crypto fans are expecting the Trump administration to dismantle a series of institutional figures in key positions who are the staunchest opponents of cryptocurrencies. These are officials from the US Securities and Exchange Commission (SEC) (even though the SEC took a step forward approving spot bitcoin ETFs) and the Federal Reserve Bank (Fed). Positions in the Treasury and Commerce departments are also expected to be filled by officials with a more crypto-friendly agenda.
What Goes Up… Must Come Down?
Like all currencies, crypto – even though it’s intangible and has no physical form – has two sides. The euphoria that has led to the historic rally can quickly and easily turn into tragedy, sending investors into despair. It won’t be the first time this has happened.
Bitcoin, and cryptocurrencies in general, have a key characteristic, as all central banks of the world, including Greece’s Bank of Greece, have emphasized.
It is the extreme volatility of their prices, which is influenced by a number of unpredictable factors: from the movements of the largest investors in them to the loss of confidence due to an incident or the overall state of the market. There’s a reason the strongest investors in cryptocurrencies are called “whales.” Just like marine mammals, with a flick of their tails, they can create waves that drown those near the surface. In the same way, “whales” can drown smaller investors by withdrawing amounts from the market.
Thus, in the past week, $711.34 million worth of bitcoin was liquidated by investors who are shorting the cryptocurrency, withdrawing the amounts they invested to make quick profits from its price increase.
However, what causes panic is when these liquidations start to become massive – often fueled by the collapse of a cryptocurrency or a terrifying event.
The Historic Record
This terrifying phenomenon occurred in late 2022. In 2021, Bitcoin set a historic record by soaring to $68,000, sparking a wave of euphoria. Many small investors took out loans from banks, sold assets, even their homes, or placed all their savings—whether for their children’s education or their retirement—into Bitcoin, eager to capture the insane returns they saw around them.
However, since then, a decline began, and a year later, Bitcoin had fallen from $68,000 to below $18,000. The primarily retail investors had lost over $2 trillion in a year! 80% of small investors were underwater, meaning they held assets worth much less than they had purchased them for.
According to analysts, Bitcoin and other cryptocurrencies tend to follow such cycles. In fact, it has been recorded four other times in the short history of cryptocurrencies that Bitcoin reached historic highs in a 22-day rally, only to then enter a correction, losing about 80% of its value.
As demand for cryptocurrencies naturally wanes at some point, another question is whether Trump will support cryptocurrencies in the way he has promised.
Because, on the other hand, as President of the United States, he must protect the position of the dollar as the world’s strongest currency, which he cannot do without the backing of traditional banking and the markets.
Market analyst at Pepperstone, Dillin Wu, explains that “Trump’s proposals will remain uncertain until control of the House of Representatives is clarified, and any internal party reactions are settled,” adding that his policies could lead to larger trade deficits and high inflation, negatively impacting the U.S. economy in the long term, which “would ultimately burden risk assets like Bitcoin.”
Regulations in Greece
With cryptocurrencies once again a global topic of discussion, the tax authorities of organized economies are setting their sights on them. The goal is to monitor transactions (to combat money laundering) and tax the profits from cryptos.
As in many other countries, in Greece, the Ministry of Finance is preparing a framework for recording, monitoring, and taxing profits from cryptocurrencies and other digital assets, forming a special committee. This committee’s task will be to determine the tax framework for cryptocurrencies and establish methods for overseeing investments in them, based on the European strategy for combating money laundering and tax evasion. The strictness of this strategy is demonstrated by the decision of neighboring Italy, which is preparing to impose a 28% tax on profits from digital assets.
Our country aims to meet the deadline of December 30th, when EU member states must incorporate the EU and OECD framework into national legislation (MiCA Regulation for Crypto-Assets Markets), which sets rules for market participants and protects consumers. Thus, by 2025, Greece is expected to join 59 countries in the OECD’s Crypto-Asset Reporting Framework (CARF).
“Cryptocurrencies are a new reality, and we cannot approach them with head-in-the-sand thinking. However, there is not the level of control that there should be at both the national and international levels,” recently said the Minister of National Economy and Finance, Kostis Hatzidakis, announcing the development of “an effective and fair institutional framework for taxing cryptocurrencies, alongside the integration of international legislation to protect consumers.”
The national plan for cryptocurrencies includes imposing a capital gains tax on profits from them. This way, cryptos will no longer be invisible to the tax authorities. Until now, their returns were not taxed, meaning that Bitcoin holders couldn’t justify their profits or the acquisition of assets from them—and thus paid additional tax.
The committee tasked with creating the proposed framework for taxing and monitoring cryptocurrencies will meet at least once a month. The committee will be chaired by the General Secretary of Tax Policy at the Ministry of Finance, Maria Psilla, with members including the General Secretary of the Financial Sector and Private Debt Management, Theoni Alampasi, the President of the Capital Markets Commission, Vasiliki Lazarakou, the President of ELTE, Panagiotis Giannopoulos, from the SDOE, Ioannis Blatsos, Marianna Iliokavtou, Eleni Vrentzou, Anna Kloni, an executive from the Hellenic Bank Association, Georgios Naskaris, a Bank of Greece official, Alexandros Kalliontzoglou, Assistant Professor at Panteion University, Nikolaos Daskalakis, Professor at the Athens University of Economics and Business, Christina Tarnanidou, from the Money Laundering Authority, Konstantinos Giouleka, and from AADE, Georgios Chatzistavrou.
Greece also has cryptocurrency exchanges and ATMs, which are physical devices allowing the purchase of cryptocurrencies with cash, debit or credit cards, and in some cases, even their sale for conversion into real money. According to CoinATMRadar, there are 63 such ATMs in Greece, most of them located in Athens (25) and Thessaloniki (13), with the rest spread across the major cities and islands.
7 Impressive Facts
- 2 Pizzas
Bought with 10,000 Bitcoins in 2010. Today they would cost $900 million. - 28% Tax
Italy will impose a 28% tax on profits from cryptos. - 10 Times
Cryptocurrency mining uses 10 times the energy consumed annually by Greece. - 151,000 Greeks
Own cryptocurrencies. - $711.34 Million
Worth of Bitcoins liquidated last week. - $1.72 Trillion
Bitcoin’s market capitalization surpassed Saudi Aramco, while the Memecoin Dogecoin overtook Ford and Adidas in market cap.
Price Elevator
In 2009, BTC had a price of $0. In 2011, it reached the value of $1. It first surpassed $1,000 in November 2013, then fell to $300 by mid-2015.
In 2017, it reached $20,000 and then plummeted to $3,000. It hit a historic record above $68,000 in November 2021, before dropping to $16,000 in 2022. It started 2024 near $70,000 and has now reached $97,000.
