Reading time 4m15s
Weâre halfway through the week, Tokengraphers â but this is only the beginning of another day of big news stories in the Web3 industry.
Letâs get startedâŚ
IRS to Tax NFTs as Collectibles?
Magic Eden Gives Structure to Ordinals
MapleStory is Coming to the Metaverse
Nike Releasing NFT as IRL Sneaker
25T SHIB Just got Moved to Storage
Anyone whoâs thought of keeping NFTs in their retirement accounts will want to listen to this.
The Internal Revenue Service (IRS) is reportedly considering treating NFTs as collectibles, just like antiques, art, alcohol, and other similar items â which would prohibit the tokens from being kept in individual retirement accounts (IRAs).
Furthermore, classifying NFTs as collectibles would change how traders need to record their transactions for tax filing purposes, switching it from a short-term capital gains tax (10-37%) to a maximum 28% collectibles tax.
accountants trying to figure out your nft taxes
— dude (@theNFTdude)
Mar 17, 2023
Director of Regulatory Affairs at Blockchain Intelligence Group Timothy Cradle had the following to say on the subject: âIt appears that the IRS is intending to classify NFTs as digital receiptsâwhich is essentially what they are.â He went on to say that if NFTs are treated as collectibles, traders will be taxed for the JPEGs themselves, not for the actual NFT (the token that the JPEG represents).
All NFT tax reporting tools are trash, we are doomed đ
— DS (@DSentralized)
Mar 14, 2023
Refreshingly, the IRS is asking for public opinions and comments regarding the proposed change, asking questions such as âWhat burdens does the analysis impose?â and âWhat factors might be considered to determine whether a digital file constitutes a âwork of art?'â
If it has no value I donât have to pay no taxes on it right?
— NFT POWER RANKINGS (@nftpowerranking)
Mar 22, 2023
This tax change wouldnât be devastating or harmful to the crypto industry â in fact, it would make quite a bit of sense to us. In any case, itâs very good to see the government asking for public opinion on something regarding cryptocurrency and blockchain technology rather than enforcing regulatory changes without any warning!
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The number one NFT exchange for Solana tokens, Magic Eden, has just added support for the newest movement in the NFT world: Bitcoin Ordinals.
Just last year, Magic Eden added support for Polygon and Ethereum-based NFT trading, and now itâs one of the first major exchanges to adopt BTC Ordinals.
This is a huge step forward both for the Ordinals community and for Magic Eden itself â trading Bitcoin NFTs was relatively difficult to do before, since there was no proper exchange for it yet, so community members will have an easier time. Meanwhile, Magic Eden will likely receive a large percentage of BTC NFT trading market share.
As of today, Bitcoin #Ordinals can be bought, sold, and traded on the NFT marketplace Magic Eden â another sign of the surging popularity of Bitcoin NFTs.
— Cointelegraph (@Cointelegraph)
Mar 22, 2023
Igor Milihram, business dev at Magic Eden, told Decrypt that he and his team âfell in loveâ with the idea of permanently inscribing data into the BTC network with Ordinals.
He spoke to his perspective on Ordinalsâ value proposition (as opposed to other types of NFTs): âIt stays on every node, forever,â he said. âEven if the apocalypse hits, there will be computers that will have Bitcoin⌠and they will be able to spin it up. It's kind of undestroyable in that way. And that gives those assets more value.â
Magic Eden is now on Bitcoin.
Bitcoin thesis is playing out: all successful experiments in crypto will (eventually) get implemented on Bitcoin.
— muneeb.btc (@muneeb)
Mar 21, 2023
Ordinals have been a source of controversy within the NFT space at large, garnering many vocal supporters but seemingly just as many critics.
The argument against the technology is that Bitcoin as a network was never intended to be capable of creating assets like NFTs and that as we utilize it for purposes outside of its original design, weâre tampering with its purity as a concept.
I just bought an ordinal inscription on @MagicEden and the experience was seamless.
I'm continuously impressed by the teams building in the ordinals ecosystem. It's easy to forget that we were trading in spreadsheets just a month ago!
Welcome to Bitcoin Magic Eden đ¤
— Leonidas.og (@LeonidasNFT)
Mar 22, 2023
Supporters hold no such qualms about Ordinals, however â theyâve already created over 500,000 inscriptions of images, GIFs, text, and audio files, and as NFT exchanges like Magic Eden continue to offer support for them, Ordinals will likely continue to gain traction and grow as a market.
According to Galaxy Researchâs recent report, what could the Bitcoin Ordinals NFT market be worth by 2025?
A. $500MB. $1BC. $50MB. $4.5B
Scroll down to the bottom to see if you're right!
Other Top Stories Today đ˘
Nexon is launching MapleStory Universe: a Web3 game based on the original with its own Supernet on Polygon, which will allow the game to scale better than it could on a public chain. MapleStory has grossed $4B in revenue since its release in 2003, with hundreds of millions of users in its player base. Nexonâs vision for the game does not involve NFT presales, but players will be able to earn NFTs simply by playing the game over time. The studio also doesnât have major plans for in-app purchases.
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The RTFKT (read as âartifactâ) and Nike NFT sneaker collaboration with Takahashi Murakami is going to have its own physical release. The âforging eventâ will take place from April 24 to May 8, and only holders of the NFTs will be able to take part and purchase the shoes. In order to get your very own pair, youâll need to own NFTs of the shoe color you want, then redeem them for a real pair during the event. The shoes are set to be produced and delivered in Q4 of 2023.
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Weâve got a whale alert. Someone just transferred 25T â yes, trillion â SHIB from an exchange and into cold storage. Whatâs wild about that is that this communicates a conviction in the token: the user likely believes that the price of SHIB will go up significantly at some point in the future. Otherwise, they might be offloading some of their tokens instead of moving them to safe storage. This transfer makes that cold storage wallet the 3rd-largest SHIB holder in the world.
â Trivia Answer
Answer: D.
Galaxy Digital predicted a $4.5B market cap for Ordinals by 2025 in the bull case, and for the bear case, a $1.5B market cap. So far, Ordinals are growing at a wild pace, increasing from 300k inscriptions to 500k in just two weeks!
Web3 Resource of the Day
Why Progressives Need Bitcoin with Trey Walsh | Podcast from What Bitcoin DidToday, weâve got a podcast thatâs all about why progressives and Gen Z need Bitcoin â or at least, why Trey Walsh thinks so. Walsh is a nonprofit director and progressive Bitcoiner who was drawn to cryptocurrency because of its positive implications for equity and social justice. While Bitcoin often sees support from conservatives like Ted Cruz, todayâs podcast from What Bitcoin Did provides a fresh perspective from the opposite end of the political perspective.
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.