October closes with a modest decline
October did not bring the price increase many crypto investors had hoped for, but there's still reason for cautious optimism. Bitcoin held up relatively well, while other financial markets took serious hits. What does that say about the outlook for the coming months? Today's edition of Bitvavo's Market News also looks at a topic that attracted significant international attention: the Dutch tax debate.
Market update
On September 30, bitcoin closed above its 12-month average on the monthly chart for the first time since October 2025. This was a strong signal, as this average has been a sharp dividing line between bear and bull markets in recent years.
While it's great when prices quickly rise further to confirm a breakout, that didn't happen in October. On Sunday, bitcoin closed October with a loss of 5.9%, wiping out more than half of September's gains. Still, there are reasons to be optimistic.
Financial markets have been turbulent in recent weeks, with concerns about Iran, inflation, interest rates, and the AI hype shaping sentiment. In October, the tech index Nasdaq 100 and gold both fell 7%, while chip ETFs dropped around 15%. Against this backdrop, the declines in the crypto market remain modest.
The chart doesn't look weak either. The price stayed safely above the dominant average, and the RSI remained above 50. On the US dollar chart, the price tested this average as support. While it wasn't the "Uptober" investors were hoping for, there's little reason for concern from a technical standpoint.
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Council of State rejects Box 3 plan
The cabinet must withdraw its plans for a new Box 3 tax regime and start over. That is the “scathing” advice from the Council of State, which published its ruling today. The government's chief advisory body considers a 2028 introduction irresponsible and recommends delaying until 2030. The unequal treatment of crypto investors also drew strong criticism.
The cabinet wants to scrap the current tax on notional returns, replacing it with a system where investors pay tax on their actual returns. The original proposal envisioned a capital gains tax, which would also tax "paper" capital gains that investors hadn't realized yet.
Following heavy criticism, the cabinet decided to amend the proposal. For stocks, bonds, and other financial instruments, a capital gains tax would apply from 2028, meaning investors would only pay tax once they realize their gains.
This exception wouldn't apply to crypto investors. Anyone holding bitcoin or other cryptocurrencies directly would still have to pay tax on unrealized capital gains starting in 2028. However, anyone investing in the same cryptocurrencies via an investment fund would only pay tax upon selling. The Dutch Association of Crypto Service Providers argued that this creates an undesirable and artificial gap with potentially major consequences.
The Council of State agrees. Its advisors believe taxing similar investments differently simply because of how investors hold them is "vulnerable," and they strongly advise the government against introducing this distinction.
But the criticism goes much further. The Council of State believes the cabinet is acting too hastily and carelessly. The proposed system is complicated and costly, and the Dutch Tax and Customs Administration warns that 2028 is too soon. Additionally, implementing a system for just two years would require hundreds of extra staff and tens of millions of euros.
The conclusion is clear: withdraw the bill. Start over and introduce a single, coherent system in 2030 that taxes all assets using the same methodology.
It remains to be seen whether the cabinet will follow this advice, as the Council of State cannot block the plans on its own. Nevertheless, for the Dutch crypto sector, it's reassuring that the criticism regarding the tax treatment of cryptocurrencies is now receiving support from one of the country's most important legal advisory bodies.
In other news
Hackers have stolen $6.36 billion in crypto from Binance. It is the largest crypto theft ever. The attackers emptied wallets across ten networks in about twenty minutes. Binance says it will cover the losses and has secured customer funds. The exchange has already partially resumed withdrawals. According to the FBI, North Korea is behind the attack. Part of the stolen funds has been frozen, which helped stop the outflow of stablecoin balances.
Google tests a new cloud service for secure cryptocurrency storage. The service, Google MPC, is intended for use by banks and other financial institutions. With the underlying technology, they can distribute control over access keys, ensuring no one can move funds independently and without others knowing. Google is entering a market currently dominated by crypto firms like Fireblocks and BitGo, leveraging its reputation and existing ties with banks, investment firms, and insurers.
Dutch households hold €3.2 billion in crypto with Dutch providers. This is evident from the first figures the Dutch Central Bank (DNB) published on the topic. At the end of June, €1.5 billion of that amount was in bitcoin. The total crypto holdings of Dutch residents are likely higher, as the DNB doesn't count funds on foreign platforms or in private wallets, and investments via exchange-traded products are also excluded. It therefore remains unclear exactly how much crypto Dutch residents own in total.
Galaxy Research and Bitwise are optimistic about bitcoin. Galaxy sees growing signs that the bottom is behind us, pointing to the behavior of long-term investors, who are becoming less prominent among sellers. Bitwise looks further ahead, forecasting a bitcoin price of $1.6 million by 2036 in its base-case scenario. To achieve this, bitcoin must capture a quarter of the store-of-value market, which is currently dominated by gold.
Satoshi Radio (NL): Paying for groceries and services with bitcoin: will that ever become commonplace? In the latest episode of Satoshi Radio, you'll hear about the somewhat disappointing state of bitcoin payments, but also about the initiatives working to change that. We also cover a new crypto service from Google, Bitwise's price targets, and the crypto investments of Dutch households.
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.