Crypto Bros vs. Gamers 🎮
The new costs of the metaverse, NFTs are a tax mystery
Cultured is a newsletter by Otis that gets readers up to speed on the most interesting things going on at the intersection of finance, art, collectibles, NFTs, and more.
🗞 STORIES OF THE DAY
Gamers are rebelling against crypto’s push into video games
As hype around the metaverse grows, game publishers are integrating crypto-based assets (particularly NFTs) into their games. But many gamers are outraged, seeing it as another opportunity to wring money out of them.
Major studios like Ubisoft, Square Enix, and Zynga have launched NFT products in their game stores. The new version of S.T.A.L.K.E.R., a popular FPS, will let players buy and sell NFT clothing for their avatars.
Gamers have risen up on Twitter and YouTube to protest the small-scale purchases, arguing that they already paid for the game and that companies were trying to nickel-and-dime them.
Our Take: Consumers are excited for the metaverse, but wary of potential new costs.
New technology means potential new revenue streams for businesses. The opposition most gamers are voicing is not to the metaverse itself, but to being charged for the same product in a different format. As more brands experiment with metaverse versions of their real-world products, consumer discontent over paying for a real world and virtual item may be a source of concern.
Confused about how to pay taxes on your NFT returns? So is the IRS.
The IRS hasn’t revealed how it plans to tax returns on NFTs, bringing confusion to collectors in the months leading up to Tax Day.
Central to the question is whether NFTs should be taxed as collectibles or crypto. Collectibles earnings are subject to capital gains taxes of 28%, while taxes on crypto cap out at 20%.
Most tax professionals agree that NFTs are collectibles and advise clients to pay at that rate. But until the IRS makes a final decision, it’s impossible to know for sure.
Our Take: The rapid rise of NFTs has caught everyone off guard, even the tax police.
NFTs exploded into a $44 billion market last year, with many people making millions off of reselling tokens. Without clear guidance, the cost to collectors could be huge. With the IRS showing signs of cracking down on NFT collectors, this year’s tax season could be a nail biter.
✨ AROUND THE INTERNET
Fendi has teamed up with Ledger, a crypto asset management company, to create a luxury hardware wallet. It’s real-world bling for your digital drip.
The collectible coin market has been heating up since the start of the pandemic, growing 16% in the last year alone. For many collectors, they’re a hedge against an increasingly unstable financial market.
A 29-year-old art collector recently launched a business to support Black NFT creators. It’s made $140,000 in less than a year.
The results are in on Logan Paul’s $3.5 million box of Pokémon cards. They are…fake. Big surprise.
Peer-to-peer transactions are gaining ground in the art world, thanks to NFTs. What will happen to traditional dealers?
A single page of a Spider-Man comic fetched $3.36 million at auction — that’s one (1) page from a book.
