Coin Market

Tax season vs tax year: What’s the difference?

Published

1 week ago

March 25, 2025

What is the tax year?

When filing taxes, understanding the tax season and year is crucial for staying compliant and avoiding penalties. A tax year is the 12-month period in which your income, deductions and credits are recorded for tax purposes.

This period is essential because it defines the timeframe for calculating all your earnings and tax liabilities. In many countries, the tax year aligns with the calendar year, which runs from Jan. 1 to Dec. 31, but this is not always the case. Some countries and businesses may follow a fiscal year, starting and ending on different dates.

The tax year runs from Jan. 1 to Dec. 31 in the United States. Any income you earn within that period is reported in the following year’s tax return. For instance, if you earned income between Jan. 1 and Dec. 31, 2024, you would report that income in your 2025 tax return.

While the calendar year is common, some businesses and countries use a fiscal year. For example, in the UK, the tax year for individuals runs from April 6 to April 5 of the following year. Similarly, many companies might follow a fiscal year, such as April 1 to March 31.

Why tax year matters

Tax year matters because of:

Record-keeping: For accurate tax reporting, keeping track of your earnings, deductions and credits within the defined tax year is crucial. This ensures that you report the correct amount of income and claim eligible deductions or credits.Consistency in accounting: Whether for personal finance or business accounting, using a defined tax year helps maintain consistency in reporting and ensures that all financial transactions are aligned with the same period, simplifying financial analysis and tax compliance.

What is the tax season?

A tax season is the official window during which individuals and businesses file their tax returns for the previous tax year. This filing period can last a few months and is dictated by local tax authorities.

In the US, tax season typically begins in late January and ends on or around April 15 (unless extensions or special rules apply). For example, if you earned income in 2024, you would file your tax return during the 2025 tax season, between late January and April 15, 2025.

If you miss this deadline, you may be subject to penalties or interest charges unless you file for an extension.

Why tax season matters

Tax season is important because of:

Compliance deadlines: Filing your tax return within the designated season is crucial to avoid penalties or interest charges. Tax authorities often impose fines for late submissions, and the longer you delay, the more costly the penalties can become.Paperwork and preparation: Tax season is also a time for taxpayers to gather necessary documents such as W-2 forms, 1099s and other income or deduction records. This period allows individuals and businesses to finalize their deductions, review tax laws and ensure all paperwork is ready for filing their returns. Proper preparation during tax season can help maximize deductions and minimize taxes owed.

In the United States, the W-2 form is issued by employers to report an employee’s wages and the taxes withheld during the year, which is essential for completing individual tax returns.

On the other hand, the 1099 form is used to report various types of income other than wages, such as income from freelance work or interest earned. The 1099 is typically provided by clients or financial institutions, and both forms are crucial for accurately filing taxes during tax season. Employers and payers must send these forms to employees and contractors by Jan. 31 each year.

Key differences at a glance:

Did you know? Some businesses and individuals may choose a fiscal year that doesn’t align with the calendar year. For example, a fiscal year could run from July 1 to June 30.

Major countries’ tax years and filing windows

Some countries follow the calendar year (e.g., the US, Canada, Singapore). Others use fiscal years or different periods (e.g., the UK, India, Australia, Switzerland), with varying filing deadlines and extensions based on local regulations.

Different countries have varied start and end dates for both the tax year and tax season. Below is an overview of selected countries:

Always verify deadlines with official government websites, as dates can change due to policy updates or extraordinary circumstances.

Did you know? The IRS finalized regulations requiring brokers to report gross proceeds from digital asset sales starting in 2025 using Form 1099-DA.

Crypto tax year and filing deadlines: What you need to know

For cryptocurrency, the tax year and filing deadlines are often treated similarly to traditional assets. Still, the specifics can vary depending on the country and how cryptocurrency is classified (e.g., capital gains, income).

Generally, the tax year for crypto follows the same period as traditional assets (e.g., Jan. 1 to Dec. 31 in the US and Canada) but with certain exceptions for crypto-specific rules, such as:

Key considerations for crypto taxation

Tax year: Most countries align the crypto tax year with the calendar year, so if you trade or hold cryptocurrencies, your transactions from Jan. 1 to Dec. 31 are typically reported in your tax filings for the following year.Tax season and deadlines: Crypto-related tax filings are generally made during the same tax season as traditional assets. However, the complexity of crypto transactions (e.g., trading, staking, mining) may require additional reporting and documentation. For example:United States: Cryptocurrency gains are reported as part of your 2024 tax return (filed by April 15, 2025).United Kingdom: Crypto must be reported under the self-assessment system by Jan. 31 after the end of the tax year (April 6 – April 5).Special considerations: Different crypto transactions (like trading, staking or mining) may need to be reported separately, and some countries may have specific guidelines for capital gains, income from mining, or airdrops that must be disclosed in the tax filing. Additionally, cryptocurrency exchanges may send users tax documents like 1099-Ks or 1099-Bs in the US, similar to traditional financial assets.

Crypto tax reporting

Many countries are still updating their regulations to address the complexities of cryptocurrency taxation, so it’s essential to stay updated on national tax authority guidelines and any changes in cryptocurrency regulations.

The table below provides a snapshot of the reporting requirements for crypto in the listed countries, focusing on how taxes are applied based on the type of crypto-related activity (capital gains vs. income).

Also, please note that not all crypto transactions are taxable events. For example, transferring cryptocurrency between wallets or accounts you control is generally considered a non-taxable event, as it does not involve a change in ownership or a realization of gains.

However, this can vary significantly from country to country. In some jurisdictions, even wallet-to-wallet transfers might require reporting if the transferred amount later influences the calculation of gains when a taxable event occurs. It is essential to consult local tax guidelines or a professional adviser to determine which transactions are exempt from taxation in your region

Common mistakes to avoid while reporting crypto taxes

Avoiding crypto tax mistakes requires meticulous record-keeping, accurate classification of gains and income and staying updated on tax regulations.

Here are the common mistakes to avoid while reporting crypto taxes:

Failing to report all transactions: Many taxpayers neglect to report every transaction, including small trades, staking rewards or airdrops, leading to discrepancies and potential audits.Confusing capital gains with income: Mixing up capital gains and income from crypto activities (like mining or staking) can result in incorrect tax reporting. Crypto earned through mining or staking may be considered income, not capital gains.Not keeping proper records: Failing to maintain a detailed record of crypto transactions (dates, amounts, exchanges used) can make it difficult to accurately calculate gains or losses, especially if trading on multiple platforms.Ignoring hard forks and airdrops: Some taxpayers overlook income from hard forks and airdrops. These are considered taxable income at the fair market value when received and must be reported.Not using the correct valuation method: Incorrectly calculating the value of crypto at the time of the transaction, especially during volatile periods, can lead to inaccurate tax filings.Underestimating foreign crypto income reporting: If you trade on foreign exchanges, you may need to report foreign accounts and income, failing which could lead to penalties under international tax reporting laws.Forgetting to report crypto-to-crypto transactions: Swapping one cryptocurrency for another is a taxable event in many countries, and failing to report these trades can lead to errors in your tax filings.Not considering taxation for DeFi gains: DeFi income from liquidity provision, yield farming, or staking can be complicated. Many taxpayers mistakenly assume these are not taxable, which leads to issues down the line.

Countries with low or no crypto taxes (as of March 2025)

Countries like Portugal, Singapore, Germany, Switzerland, and the UAE offer attractive, low or zero crypto tax environments for investors.

As of March 2025, several jurisdictions continue to attract crypto investors with their favorable tax environments:

Portugal: Renowned for its crypto-friendly policies, Portugal still exempts individual crypto capital gains for non-professional traders, making it a top destination for those looking to minimize tax liabilities on digital asset investments.Singapore: With no capital gains tax, Singapore remains an attractive hub for crypto investors. While personal trading benefits from this favorable policy, businesses engaged in crypto-related activities must adhere to standard corporate tax rules.Germany: Crypto held by private investors for more than one year is tax-free in Germany. This rule encourages long-term holding, providing significant tax advantages for investors willing to commit to extended periods.Switzerland: Switzerland’s tax system offers leniency for private crypto investors, as capital gains on personal investments are typically tax-free. However, income from crypto activities may be subject to taxation, and the specific treatment can vary by canton.United Arab Emirates (UAE): The UAE has emerged as a crypto-friendly jurisdiction by offering zero capital gains tax on crypto investments for individuals, attracting global crypto investors seeking a tax-efficient environment.

These countries exemplify some of the most attractive tax regimes for crypto investors as of 2025, though regulations continue to evolve, so it’s essential for investors to stay updated on local guidelines.

Coin Market

Bitcoin can hit $250K in 2025 if Fed shifts to QE: Arthur Hayes

Published

58 minutes ago

April 2, 2025

Bitcoin may still rise to over $250,000 before the end of the year, with expectations of an increasing fiat supply remaining the significant catalyst for the world’s first cryptocurrency.

Bitcoin’s (BTC) 2025 price rally may be boosted by the US Federal Reserve pivoting to quantitative easing (QE), when the Fed buys bonds and pumps money into the economy to lower interest rates and encourage spending during difficult financial conditions.

“Bitcoin trades solely based on the market expectation for the future supply of fiat,” according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom.

Hayes wrote in an April 1 Substack post:

“If my analysis of the Fed’s major pivot from QT to QE for treasuries is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”

The Fed reduced the Treasury runoff cap to $5 billion per month from $25 billion effective April 1, while keeping mortgage-backed securities (MBS) runoff steady at $35 billion.

The Fed may allow the MBS roll off without replacement and the excess principal payment might be reinvested into Treasurys, according to comments from Fed Chair Jerome Powell published by Reuters.

“Mathematically, that keeps the Fed balance sheet constant; however, that is treasury QE. Bitcoin will scream higher once this is formally announced,” added Hayes.

Other analysts are eying a more conservative Bitcoin price top based on BTC’s correlation with the global liquidity index.

BTC projected to reach $132,000 based on M2 money supply growth. Source: Jamie Coutts

The growing money supply could push Bitcoin’s price above $132,000 before the end of 2025, according to estimates from Jamie Coutts, chief crypto analyst at Real Vision.

Fed will “flood the market with dollars”

Hayes has been “buying Bitcoin and shitcoins at all levels between $90,000 to $76,500,” showcasing his conviction in the crypto market for the rest of 2025. The pace of capital deployment will increase or decrease depending on the accuracy of his predictions.

“I still believe Bitcoin can hit $250,000 by year-end because now that the BBC has put Powell in his place, the Fed will flood the market with dollars,” wrote Hayes, adding:

“That allows Xi Jinping to instruct the PBOC to stop tightening monetary conditions onshore to defend the dollar-yuan exchange rate, which increases the net quantity of yuan.”

Despite the optimistic prediction, many market participants are betting on a lower Bitcoin price top for the end of 2025.

Source: Polymarket

Only 9% of traders have placed bets on Bitcoin hitting $250,000, while 60% expect Bitcoin to hit $110,000 in 2025, according to Polymarket, the largest decentralized predictions market.

Still, Bitcoin and global risk appetite remain pressured by global tariff fears ahead of US President Donald Trump’s upcoming tariff announcement, scheduled for April 2.

“Long-term positioning remains intact, but near-term momentum appears tethered to unfolding macro headlines,” Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, told Cointelegraph.

Magazine: Bitcoin’s odds of June highs, SOL’s $485M outflows, and more: Hodler’s Digest, March 2 – 8

Coin Market

Nakamoto coefficient explained: Measuring decentralization in blockchain networks

Published

2 hours ago

April 2, 2025

Measuring decentralization in blockchain

Decentralization involves spreading control and decision-making across a network instead of a single authority.

Unlike centralized systems, where one entity controls everything, decentralized blockchains distribute data among participants (nodes). Each node holds a copy of the ledger, ensuring transparency and reducing the risk of manipulation or system failure.

In blockchain, a decentralized network provides significant advantages:

Security: Decentralization reduces vulnerabilities associated with central points of attack. Without a single controlling entity, malicious actors find it more challenging to compromise the network. Transparency: All transactions are recorded on a public ledger accessible to all participants, fostering trust through transparency. This openness ensures that no single entity can manipulate data without consensus. Fault tolerance: Decentralized networks are more resilient to failures. Data distribution across multiple nodes ensures that the system remains operational even if some nodes fail.

So, decentralization is good, but it’s not a fixed state. It’s more of a spectrum, constantly shifting as network participation, governance structures and consensus mechanisms evolve.

And yes, there’s a ruler for that. It’s called the Nakamoto coefficient.

What is the Nakamoto coefficient?

The Nakamoto coefficient is a metric used to quantify the decentralization of a blockchain network. It represents the minimum number of independent entities — such as validators, miners or node operators — that would need to collude to disrupt or compromise the network’s normal operation.

This concept was introduced in 2017 by former Coinbase chief technology officer Balaji Srinivasan and was named after Bitcoin’s creator, Satoshi Nakamoto.

A higher Nakamoto coefficient indicates greater decentralization and security within the blockchain network. In such networks, control is more widely distributed among participants, making it more challenging for any small group to manipulate or attack the system. Conversely, a lower Nakamoto coefficient suggests fewer entities hold significant control, increasing the risk of centralization and potential vulnerabilities.

For example, a blockchain with a Nakamoto coefficient of 1 would be highly centralized, as a single entity could control the network. In contrast, a network with a coefficient of 10 would require at least 10 independent entities to collude to exert control, reflecting a more decentralized and secure structure.

Did you know? Polkadot‘s high score on the Nakamoto coefficient is largely due to Polkadot’s nominated proof-of-stake (NPoS) consensus mechanism, which promotes an even distribution of stakes among a large number of validators.

Calculating the Nakamoto coefficient

Calculating this coefficient involves several key steps:

Identification of key entities: First, determine the primary actors within the network, such as mining pools, validators, node operators or stakeholders. These entities play significant roles in maintaining the network’s operations and security.Assessment of each entity’s control: Next, evaluate the extent of control each identified entity has over the network’s resources. For instance, in proof-of-work (PoW) blockchains like Bitcoin, this involves analyzing the hashrate distribution among mining pools. In proof-of-stake (PoS) systems it requires examining the stake distribution among validators.Summation to determine the 51% threshold: After assessing individual controls, rank the entities from highest to lowest based on their influence. Then, cumulatively add their control percentages until the combined total exceeds 51%. The number of entities required to reach this threshold represents the Nakamoto coefficient.

Consider a PoW blockchain with the following mining pool distribution:

Mining pool A: 25% (of the total hashrate)Mining pool B: 20%Mining pool C: 15%Mining pool D: 10%Others: 30%

To determine the Nakamoto coefficient:

Start with mining pool A (25%).Add mining pool B (25% 20% = 45%).Add mining pool C (45% 15% = 60%).

In this scenario, the combined hashrate of mining pools A, B and C reaches 60%, surpassing the 51% threshold. Therefore, the Nakamoto coefficient is 3, indicating that collusion among these three entities could compromise the network’s integrity.

Did you know? Despite Bitcoin’s reputation for decentralization, its mining subsystem is notably centralized. The Nakamoto coefficient is currently 2 for Bitcoin. This means that just two mining pools control most of Bitcoin’s mining power.

Limitations of the Nakamoto coefficient

While the Nakamoto coefficient serves as a valuable metric for assessing blockchain decentralization, it possesses certain limitations that warrant careful consideration.

For example:

Static snapshot

The Nakamoto coefficient provides a static snapshot of decentralization, reflecting the minimum number of entities required to compromise a network at a specific point in time.

However, blockchain networks are dynamic, with participant roles and influence evolving due to factors like staking, mining power shifts or node participation changes. Consequently, the coefficient may not accurately capture these temporal fluctuations, potentially leading to outdated or misleading assessments.

Subsystem focus

This metric typically focuses on specific subsystems, such as validators or mining pools, potentially overlooking other critical aspects of decentralization. Factors like client software diversity, geographical distribution of nodes and token ownership concentration also significantly impact a network’s decentralization and security.

Relying solely on the Nakamoto coefficient might result in an incomplete evaluation.

Consensus mechanism variations

Different blockchain networks employ various consensus mechanisms, each influencing decentralization differently. The Nakamoto coefficient may not uniformly apply across these diverse systems, necessitating tailored approaches for accurate measurement.

External Influences

External factors, including regulatory actions, technological advancements or market dynamics, can influence decentralization over time. For example, regulatory policies in specific regions might affect the operation of nodes or mining facilities, thereby altering the network’s decentralization landscape.

The Nakamoto coefficient may not account for such externalities, limiting its comprehensiveness.

To sum up, the Nakamoto coefficient is useful for assessing certain aspects of blockchain decentralization. It should be used alongside other metrics and qualitative assessments to gain a comprehensive understanding of a network’s decentralization and security.

Coin Market

7-Eleven South Korea to accept CBDC payments in national pilot program

Published

2 hours ago

April 2, 2025

South Korea’s 7-Eleven stores will accept payments in the country’s central bank digital currency (CBDC) until June, as the retailer participates in the test phase of its CBDC project.

The convenience store chain will reportedly provide a 10% discount on all products paid for with CBDC during the test period. According to Moon Dae-woo, head of 7-Eleven’s digital innovation division, the company is making an effort to incorporate digital technology advancements in its operations.

The executive added that the company’s participation in the CBDC test will help accelerate the firm’s digital transformation.

Many stores will participate in South Korea’s CBDC testing phase, which runs from April 1 to June 30. The project also involves 100,000 participants who will be allowed to test payments using CBDC issued by the central bank.

Central bank digital currencies are digital assets issued by government agencies. Like other digital assets, CBDCs offer faster and more modernized payment features. However, unlike Bitcoin and other privacy-focused tokens that offer certain levels of anonymity, CBDCs are controlled and monitored by governments.

South Korea tests CBDC from April to June

On March 24, government agencies including the Bank of Korea, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) announced the CBDC test.

Participants can convert their bank deposits into tokens stored in a distributed ledger during the test period. The tokens hold the same value as the Korean won.

The government agencies said citizens aged 19 or older with a deposit account in a participating bank could apply to take part. Registrations were limited to 100,000 participants. KB, Koomin, Shinhan, Hana, Woori, NongHyup, IBK and Busan are among the banks participating in the CBDC tests.

Apart from 7-Eleven, participants can use their CBDCs in coffee shops, supermarkets, K-Pop merchandise stores and delivery platforms. However, users will be limited to a total conversion limit of 5 million won ($3,416) during testing.

The Bank of Korea first announced the retail CBDC testing for 100,000 users in November 2023 and was originally scheduled to begin in the fourth quarter of 2024. The FSS said the country’s CBDC test represents a step toward creating a prototype for a “future monetary system.”

Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express