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There is a small ripple effect from the multibillion-dollar Archegos Capital fallout to the crypto world, which is reflected on the bitcoin futures premium on CME. But the crypto market is largely unaffected.

The latest crisis on Wall Street involves a rapid de-risking triggered by the trading crisis at Archegos Capital, a family office managing at least $10 billion that bet $50 billion-$80 billion on leverage that led to nearly $5 billion of losses for Switzerlands Credit Suisse and the departure this week of its investment-banking chief.

Chicago-based CME, which offers traditional finance players bitcoin exposure with its popular futures contract, may have been slightly affected, as seen in its CME futures premium, or the price reflected in futures contracts minus the current spot price. That premium has lagged behind the equivalent gauge at popular retail-focused exchanges including Binance, Deribit, FTX and OKEx.

According to a top crypto-industry investor, the discrepancy might reflect the Wall Street deleveraging.

We are seeing everywhere de-leveraging in the traditional financial space, Jeff Dorman, chief investment officer at the digital-asset investment firm Arca Funds, told CoinDesk in a phone interview. The CME mostly serves your typical big hedge funds, big mutual funds, and the leverage is less than it was because of this leverage crackdown from the prime brokers and from the exchanges in traditional markets.

On the CME, the annualized bitcoin futures premium rate, the gap between bitcoins long-term futures contract prices and the current spot market price, is, on average, at 8.67%. That compares with a range of 27%-31% on crypto exchanges including FTX, Deribit, Binance, and OKEx, according to crypto derivatives data provider Skew.

The difference between bitcoin futures premium on CME and other crypto exchanges has widened since the end of March, when the troubles surfaced at Bill Hwangs Archegos Capital.

Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG, explained the futures premium is sometimes a function of the demand for leverage by traders on an exchange.

In a bull market like right now, the traders who look to go long on leverage are willing to pay the premium, the cost for the leverage, Heusser said. Because there is not much leverage you can take on the CME, the future premium is not that steep or big compared with other platforms.

In theory, the futures premium on CME should be lower than it is on other crypto exchanges due to its more restrictive trading rules and limited leverage positions, Heusser added.

Another explanation is the premium has been rising on crypto exchanges since the end of March because of traders bullish views on bitcoin.

There are more overly confident traders and more leveraged longs probably, says Bendik Norheim Schei, head of research at Arcane Research. Traders are expecting higher prices and taking on long positions.

Traders on retail-focused crypto-derivatives exchanges are already in the crypto ecosystem, Dorman said. Its just a completely different investor base and completely different leverage base. So what was happening is you still have really aggressive investors in the crypto world who are levering up to buy as much risk as they can.

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Here's How the Archegos Debacle May Have Spilled Over to Bitcoin - CoinDesk - CoinDesk

Experts representing numerous aspects of the cryptocurrency Bitcoin are scheduled to participate in the Bitcoin Conference April 16-17, hosted by the Mays Innovation Research Center, a center of excellence within Mays Business School at Texas A&M University.

The conference, which will be held via Zoom but with an in-person option on April 17, will address topics such as Bitcoins economic foundations, underlying technology, business and finance, and the law/policy/regulatory landscape.

Bitcoin is one of the most radical innovations of our time, so it is appropriate that the Center convene a healthy debate on Bitcoin from all angles, said Center Director Korok Ray.

Bitcoin, created in 2009 by an unknown person, is the first cryptocurrency. The digital currency is bought and sold anonymously, usually through exchanges such as Coinbase, without the need for banks or other intermediaries. The supply is limited to 21 million coins.

Bitcoin is now reaching widespread adoption and attention from institutional investors and corporations in addition to retail investors, Ray said. This attention is at least partly in response to the current low interest rate policies of the Federal Reserve.

There is considerable debate among investment professionals regarding the fundamental value of Bitcoin. Some market participants expect Bitcoins value to continue to rise, reflecting an increase in competition for a limited number of coins. Others are more conservative in their predictions, pointing to significant regulatory risk and to the fact that, contrary to other financial assets, acquiring Bitcoin does not confer their holder a claim on a commodity, on a precious metal, or on the cashflow of any other asset.

Ray said conference participants will better understand what Bitcoin is and how it works, as well as its possibilities, limitations, and future prospects.

The conference idea came from conversations between Mays Business School faculty, including Ray, and Grant Weston, Texas A&M Bitcoin Club president.

I founded the Texas A&M Bitcoin Club with my roommate Matt Lohstroh to create a community around Bitcoin, said Weston, a senior busines honors major. Students need to know about the opportunities that are out there. The Bitcoin space is still so small. Every new participant makes a difference.

Featured speakers will include Ray Dalio of Bridgewater Associates; Tim Draper of Draper Fisher Jurvetson; Michael Saylor of MicroStrategy; Bill Miller of Miller Value Partners; Pete Briger of Fortress Investment Group; Glenn Hutchins of Silver Lake Partners; Rob Kaplan of the Federal Reserve Bank of Dallas; Dawn Stump of the Commodities Futures Trading Commission; Nobel Laureate Eric Maskin of Harvard; and more.

For the full schedule and to register, go to the Bitcoin Conference registration page.

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Texas A&M Mays Innovation Research Center To Host Bitcoin Conference April 16-17 - Texas A&M University Today

The IRS wants Circle, a Boston-based financial technology company enabling trade in various types of cryptocurrencies, to produce account-registration information, account activity records and other materials for customers who had at least $20,000 in transactions any year from 2016 to 2020.

Cryptocurrency has gained prominence and value over the year, but the IRS says tax reporting hasnt kept up.

The IRS issued Circle with a summons, which is part of an ongoing investigation by the Internal Revenue Service to make sure all sorts of cryptocurrency users across the board are reporting and paying up their tax obligations, the government explained in court papers.

The IRS treats cryptocurrency as property and, when its sold at a profit, the tax collection agency will assess a capital-gains tax. If, that is, the IRS knows the transaction occurred.

The IRS treats cryptocurrency as property and, when its sold at a profit, it will assess a capital-gains tax. If, that is, the IRS knows the transaction occurred.

The IRS and the Justice Department note they are not alleging any wrongdoing on Circles part but based on dealings with some people who have Circle accounts, the feds want more information to see who else might be owing tax money.

For example, one unidentified taxpayer amended 2014-2017 returns to show $1.6 million in previously unreported virtual currency sales, the government said. Poloniex was one of the exchanges the taxpayer used.

(Circle sold the Poloniex exchange in late 2019 and customers in America can no longer trade on the exchange, court papers noted.)

Massachusetts Federal District Richard Stearns signed off on the summons Thursday, saying it was narrow enough and supported by a reasonable basis to think some account holders might not be following tax laws.

Were reviewing, and of course expect to work collaboratively with the IRS in responding to the court order, a Circle spokesman told MarketWatch.

The summons sends the clear message to U.S. taxpayers that the IRS is working to ensure that they are fully compliant in their use of virtual currency, IRS Commissioner Chuck Rettig said in a statement. We will enforce the law where we find systemic noncompliance or fraud.

The IRS has filed other court summons seeking information from other exchanges in previous years, said Dale Werts, a partner at Lathrop GPM in Kansas City, Mo., where he advises companies on blockchain and cryptocurrency matters.

But its also coming during tax season, at a time when rising cryptocurrency prices are at the front of mind for many investors. This is their way of reminding you, Hey, you better fill out your tax return properly,' he said.

For Werts, its not that the tax laws on cryptocurrency are new. Since 2014, the IRS has stated its view that capital gains taxation rules apply. Its just a new crowd that has to learn the laws that have been on the books for years, Werts said. Lots of folks, I discovered, believe that cryptocurrency is new and existing laws dont apply. This is just not true.

The summons is another sign of cryptocurrencys growing mainstream appeal, according to David Sacco, practitioner in resident at the University of New Havens Pompea College of Business. The IRS has its eyes on the money in the emerging market and more eyes may ultimately mean more regulation and investor protections, said Sacco, who teaches finance courses.

The IRS revised its tax paperwork this year to give prominent play to one question about cryptocurrency. Near the top of the 1040s first page, it asks, At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?

When Sacco looked over the revamped 1040, the question struck him as a little creepy but on the other hand, it makes it like any other asset class now.

Two accountants specializing in cryptocurrency and taxes were split when previously talking to MarketWatch on whether to answering yes for merely buying currencies like bitcoin or ether. Answering yes doesnt necessarily mean more taxes, they note.

Either way, a lots happened for cryptocurrency in 2020, and 2021 so far looks to be no different. Bitcoin BTCUSD, +2.06% tripled in value during 2020. Ethereum ETHUSD, +2.16% hit a record value above $2,000 on Friday, and was trading above that on Monday, as Bitcoin traded near $58,000 on Monday.

Between 2013 and 2015, a mere 800 to 900 taxpayers filed returns reporting cryptocurrency, the IRS said. That number increased from 2016 to 2018, but the numbers still fall far short of what would be expected given the number of users, transactions, and value that the exchanges publicize occur on an annual basis, court filings said.

Over the years, the IRS has stepped up enforcement. In the summer of 2019, it sent more than 10,000 letters to people it believed potentially failed to report virtual currency income. The taxpayer who amended returns to report $1.6 million in previously unreported sales was one of the letter recipients, the court filing said.

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The IRS wants to know all about your Bitcoin holdings --- and this court summons is a reminder - MarketWatch