Following a significant change in the tax laws of the United Arab Emirates, the price of Bitcoin might increase. Value Added Tax (VAT) exemptions for transfers and conversions of virtual assets have been established by the UAE Federal Tax Authority (FTA), which could stimulate the cryptocurrency market.
Bitcoin increased by 0.55% throughout the course of the previous weekend, closing at $62,400. This slight increase comes after a more general market rebound, with Bitcoin continuing to remain steady at the $60,000 support level. The recent announcement of the VAT exemption may help to further boost the price of Bitcoin by enhancing the business environment for virtual asset transactions in the United Arab Emirates.
Will Bitcoin Increase in Value Despite the UAE’s Virtual Asset VAT Exemptions?
A significant change has occurred with the UAE’s decision to exempt virtual asset conversions and transfers from VAT, which will apply to transactions made as early as January 1, 2018. This action lessens the tax burden on companies that deal in virtual assets and strengthens the UAE’s reputation as a friendly destination for cryptocurrency investments.
The authorities in the United Arab Emirates have classified “virtual assets” as “digital representations of value that can be traded, converted, or used for investment purposes.” Companies in this industry that provide services need to reevaluate their VAT responsibilities, especially with relation to input tax recovery. To ensure compliance with the new regulations and update prior VAT returns, they might occasionally need to make voluntary disclosures.
In keeping with their pledge to promote an atmosphere that is beneficial to cryptocurrencies, the United Arab Emirates’ Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA) are also expediting the licensing and regulation of Virtual Asset Service Providers (VASPs). These improvements may contribute to the acceptance of cryptocurrencies in the area and may encourage more people to invest in popular assets like Bitcoin, which could result in price increases.
Does the Price of Bitcoin Still Need to Correct Before the Next Upswing?
The price of Bitcoin has increased by 4% during the last three days, from $59,840 to $62,344. The 200-day Exponential Moving Average (EMA) and the $60,000 level of support, together with a slight detente in Middle East geopolitical tensions, are responsible for this upward trend.
The present reversal in Bitcoin has not yet been verified, though. A return to the $60,000 support level could precede any upward upswing. The price of Bitcoin might increase by an additional 7.7% if it stays at this level, testing the resistance created by a flag pattern on the charts. This pattern has been evolving since March 2024 and consists of a slow correction between two trendlines that slope downward and provide support and resistance.
Conversely, the pessimistic attitude may intensify if Bitcoin breaches the $60,000 support level or fails to overcome the resistance of the flag pattern. In that scenario, a pullback in Bitcoin may see it head back towards $52,000 or possibly $50,000, challenging the support of these lower levels.
The United Arab Emirates’s exemption from value-added tax (VAT) on virtual assets and its continuous regulatory measures may have a noteworthy effect on the cryptocurrency industry as a whole. This might potentially stimulate fresh investment and support Bitcoin’s upward trend. Bitcoin’s price fluctuations are still, nevertheless, influenced by important technical levels and general market dynamics.
