The cryptoasset market was knocked back from a short-lived rally last week, as the Ukraine crisis continues to roil markets across the board.

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This week would appear to have several key flashpoints, including a vote on proof-of-work mining ban in the EU today and the issue of El Salvadoran Bitcoin Bonds (see below).

Bitcoin (BITCOMP) began last week trading in the range of $38,000 before rallying midweek on the news of an executive order on crypto from US President Joe Biden’s White House, rising to above $42,000. 

The executive order set out key aims for US institutions to lay the groundwork for better regulation, but contained little of real substance other than hints at a US digital dollar in the pipeline.

Bitcoin’s price fell away quickly after the announcement and is now trading back in the $38,000-$39,000 range. 

Ethereum (ETH-X) similarly soared to above $2,700 on the announcement, but is back trading around $2,550 this morning.

EU crypto mining crunch vote today

The EU is set to vote today on regulations which pertain to proof-of-work digital assets and could have widespread ramifications. 

The Markets in Crypto-Assets (MiCA) legislation is being voted on with most watchers saying the outcome is currently too close to call. The legislation has key provisions in it which would essentially make activities such as bitcoin mining impossible within the EU.

The bill as it is currently framed would require miners to submit environmental sustainability compliance plans. Failing to submit them would prevent their operation within the EU. The implications of this are huge - the EU is a major jurisdiction for crypto mining and crypto more generally, with over 10% of global bitcoin hash power emanating from the region.

While not on the scale of the China bitcoin mining ban, the implication for the price of BTC and other cryptoassets which follow on price, could be significant in the next few days. The cryptoasset market has been buffeted by events and this could lead to another tough trading period if the legislation passes. 

El Salvador readies its bitcoin bonds

El Salvador is making final preparations for the issuance of its so-called ‘Bitcoin Bonds’ this week. \

The Central American nation has confounded critics in the past year by making the cryptoasset legal tender in the country, with the President Nayib Bukele variously announcing via Twitter the nation was buying up tokens. 

The issue of its first bitcoin-backed bonds is a crucial moment for the country’s bold crypto finance policies. No other nation on earth has gone as far and made as bold a step in embracing the technology. 

Demand for the bonds is said to be cool among institutional investors, as they wait and see the outcome of initial demand for the instruments, and heed warnings from major players such as the IMF. 

But like much to do with crypto, the beginnings of something new often lie with grassroots investors. Take up of the cryptoasset as tender has been limited in the country so it may be that enthusiastic international watchers answer the call to buy.

Singapore to tax NFTs

Singapore has announced its intention to begin applying taxes to non-fungible tokens (NFTs).

The technology had a stellar year in 2021 but the market has struggled in 2022 so far, with the wider crypto market meeting the challenges of rising interest rates and the crisis in Ukraine. 

Singapore says it will apply taxes to those earning income from NFT transactions and trading. Singapore, famously low-taxation, has no capital gains tax on traditional assets such as property or stocks and shares, so NFT owners won’t be liable for this. But they will become liable for 22% income tax rates as the authorities intend to tax NFTs in the same way as other assets.

The country has been carefully neutral on tech such as NFTs and even crypto more broadly.  For example, it has  to give caution to its citizens about digital investments while not actively discouraging. The Monetary Authority of Singapore (MAS) recently said it would not regulate NFTs as the underlying asset of the tokens did not come within its remit.