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Majority of Spanish Crypto Traders Report Financial Losses- 70%

Over 70% of Spanish crypto traders declared losses in their 2022 tax returns, highlighting the impact of crypto market fluctuations and growing adoption of cryptocurrencies in Spain.

Over 70% of Spanish crypto traders declared losses in their 2022 tax returns, highlighting the impact of crypto market fluctuations and growing adoption of cryptocurrencies in Spain.

Highlighting Points

  • Over 70% of Spanish crypto traders declared losses in their 2022 tax returns, with 91% of those in derivatives reporting losses.
  • Spain mandates crypto tax declarations, issuing warning letters to suspected traders for unreported earnings.
  • A significant crypto price drop in 2022 led investors to report losses to reduce tax bills.
  • Binance was the top platform for transactions; Binance Coin (BNB) and USDT were favored over Bitcoin (BTC); staking and crypto-to-crypto trades were common.

According to a report by TaxCripto, an accountancy firm specializing in tax returns for crypto holders, over 70% of Spanish crypto traders declared losses in their tax returns for the financial year 2022. The report highlighted that losses were even higher among those investing in crypto derivatives and futures, with 91% of this group reporting losses.

This comes as crypto tax declarations have become mandatory in Spain, although the tax body has faced challenges in implementing its taxation plans in the past. The tax body has previously sent warning letters to suspected crypto traders, urging them to declare their crypto earnings or face heavy fines.

TaxCripto conducted the research using data from its own customers, and noted that a significant drop in crypto prices in 2022 led many crypto investors to report income losses for the year. However, it is worth noting that declaring losses may exempt traders from paying taxes on their holdings, prompting many investors to materialize their losses before the year-end to reduce their tax bills.

Insights from the TaxCripto Study

The TaxCripto study also provided further insights into Spanish crypto traders’ tax returns. It revealed that a majority of crypto transactions declared on tax returns, 85% to be precise, were made on the Binance trading platform. In contrast, only 10% of transactions were carried out on Coinbase, and less than 2% on the Spanish Bit2ME platform.

Additionally, the study found that Bitcoin (BTC) accounted for just 10% of the declared transactions, surprising advocates of the leading cryptocurrency. Binance Coin (BNB) emerged as the most popular option, representing 18% of the total declared transactions, followed by USDT with 11%.

When considering transaction types, the study found that staking was the most popular trade, comprising 46% of the declared transactions, followed closely by crypto-to-crypto trades at 39%.

Crypto Adoption on the Rise in Spain

The report’s findings indicate a growing adoption of cryptocurrencies in Spain. Survey data from last year revealed that crypto awareness among the general public in Spain had reached 76%. As more individuals in Spain become aware of and engage with cryptocurrencies, the country’s crypto market continues to evolve.

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