Will Bitcoin Price Benefit from UAE’s New VAT Exemptions for Virtual Assets?
The Bitcoin price surged 0.55% during the low-volatility weekend, currently trading at $62400. Following the broader market relief rally, the BTC price showcased its sustainability at $60,000 support, bolstering buyers to recuperate the bullish momentum. This recovery could witness another boost as the UAE Federal Tax Authority (FTA) recently announced VAT exemptions for virtual asset transfers and conversions.
Will Bitcoin Price Rally Amid UAE’s New VAT Exemptions on Virtual Assets?
The UAE FTA recently announced a significant revision to its Value Added Tax (VAT) regulations, which includes exemptions for virtual asset transfers and conversions, effective retroactively from January 1, 2018.
This move positions the UAE as a favorable hub for virtual asset investments, as easing the tax burden could notably uplift the country’s appeal for crypto-related businesses.
The auditing firm clarified that in the UAE, the term ‘virtual assets’ is classified as a “Digital representation of value that can be digitally traded or converted and can be used for investment purposes.”
Businesses engaged in virtual asset services should analyze how the VAT exemption affects their retrospective VAT position, especially concerning their input tax recovery. In some cases, voluntary disclosures may be necessary to amend historic returns and ensure compliance.
Moreover, the UAE’s Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA) have decided to streamline the licensing and oversight of Virtual Asset Service Providers (VASPs), accentuating the country’s effort for a crypto-friend environment.
This development could boost broader cryptocurrency adoption, accelerating the investment in leading assets like Bitcoin to bolster price rallies.
BTC Price Needs Another Dip Before Next Rally
In the last four days, the Bitcoin price prediction showed a modest rebound from $59,840 to $62,344, registering a 4% growth. The bullish trajectory can be attributed to combined support for $60,000 and 200-day EMA and market easing from geopolitical tension in the Middle East.
However, this reversal lacks confirmation, and the price could revert to $60,000 seeking support. If the level holds, the BTC price could surge 7.7% and challenge the resistance trendline of the flag pattern. Since March 2024, this chart setup has carried a steady correction between two downsloping trendlines, providing dynamic resistance and support.
A successful breach of this resistance is crucial to trigger a prevailing rally and target a $80000 high.
On the contrary, if Bitcoin price breaks below $60 support or reverts from flag resistance, the sellers could accelerate the bearish momentum. The potential downfall could retest the $52,000 or $50,000 support.
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