What the UK's New Crypto Tax Rules Mean for Holders Bitcoin Is the Big Winner in an Inflationary Environment, Says BTC Bull Anthony Pompliano

A prominent crypto influencer is doubling down on his belief that Bitcoin (BTC) continues to serve as an inflation hedge even after its deep correction last year.

In a lengthy thread, Bitcoin bull Anthony Pompliano explains to his 1.6 million Twitter followers why BTC is still the best hedge against inflation despite the king crypto’s bearish price action in 2022 when prices of goods and services were soaring.

According to Pompliano, those who dismissed Bitcoin last year missed the big picture.

The British finance ministry’s plans to update crypto tax rules should clear up confusion for taxpayers and give the Government more information on crypto holders, experts have said.

As part of the Spring Budget announcement on Wednesday, the Treasury said it was amending the rules surrounding cryptoassets on the Self Assessment (SA) system, which UK taxpayers can use to file their own tax returns. The change requires any amounts related to crypto to be identified separately.

Crypto is already subject to taxes in the UK. Usually, this takes the form of Capital Gains Tax (CGT) on any profits made from selling tokens, while profits from crypto mining and staking are treated as income. This would be reported alongside the profits made on selling other assets, such as property and shares, through the SA form, which is sent to the UK tax department, His Majesty’s Revenue and Customs (HMRC).

By separating out crypto in the way Self Assessment users report their taxes, the Government said it hopes to raise an additional £10 million ($12.1 million) a year, once the rules have been introduced for the 2024-2025 tax year.

“Markets are forward looking. So when the Fed said they were going to bring down inflation, investors sold their inflation hedge assets to buy treasuries and value stocks. They didn’t wait for inflation to come down. They front-ran what the Fed said they were going to do.

Many people incorrectly pointed out that Bitcoin’s crash in 2022 proved it wasn’t an inflation hedge. That couldn’t be more inaccurate. You would expect inflation hedge assets to fall in price when the Fed is bringing down inflation. Surprise! That is what happened.”