Bitcoin Skyrockets After UAE Frees VAT For Virtual Assets

Bitcoin skyrocketed after the UAE freed VAT for virtual assets (Photo; Doc. Bayut)

JAKARTA - The price of Bitcoin jumped 1.42% over the weekend, reaching 62,650 US Dollars (around Rp970 million), amid low market volatility. This increase is in line with the overall recovery of the crypto market, plus support from the new United Arab Emirates (UAE) policy regarding the exemption of Value Added Tax (VAT) for virtual asset transfers and conversions. This move is seen as the main driver who sparked price increases and created an atmosphere of optimism among global crypto investors.

Quoted from Cointurk, the UAE Federal Tax Authority (FTA) recently made major revisions to their VAT regulations, including the exemption of VAT for virtual asset transactions and conversions. This move makes the UAE a more attractive investment center for virtual assets, by reducing tax burdens and supporting business operations engaged in the crypto sector. According to audit firms in the region, virtual assets in the UAE are defined as "a representation of digital value that can be traded, converted, and used for investment purposes."

Over the past four days, the price of Bitcoin has slowly recovered from 59,840 US Dollars (Rp926 million) to 62,975 US Dollars (Rp976 million), recording growth of more than 4%. Efforts to keep the crucial support level at 60,000 US Dollars (Rp928 million) as well as support from the 200-day average exponential movement (EMA) are an important factor in maintaining this momentum increase. In addition, a slight easing of geopolitical tension in the Middle East also played a role in strengthening the price of Bitcoin.

However, this recovery has not been fully confirmed. There is a possibility that the price of Bitcoin will fall again in around 60,000 US Dollars (Rp928 million). If this level is maintained, Bitcoin can continue its journey towards the target price of 80,000 US Dollars (Rp1.23 billion). For altcoin investors, the consolidation phase since March 2024 is still a challenge.

Not only VAT exemption, the UAE also continues to strengthen regulations related to virtual assets. The Virtual Asset Supervisory Authority (VARA) and the UAE Securities and Commodities Authority (SCA) facilitate licensing and supervision of virtual asset service providers (VASPs). This step further strengthens the status of the UAE as a crypto-friendly country and can encourage wider adoption of crypto assets.

With tax profits and regulatory convenience in the UAE, many market players are monitoring the impact of this new policy on Bitcoin prices and the development of the crypto market as a whole. Even though short-term profits have been seen, market volatility and global geopolitical factors remain an important element that affects price movements in the future.