Interview with Blockpit: Crypto Tax & Portfolio Tracking

Blockpit is one of coinIX portfolio companies since 2018 and it provides a software to track crypto investments and it offers tax solutions as well. I have interviewed Florian Wimmer , the Co-founder and CEO of Blockpit and in this article, I will share his insights.

Mahsa: Would you please introduce yourself and tell us how did you end up in the blockchain industry? what is your story?

Florian: I’m one of the founders and CEO of Blockpit . With a tech background, I studied software engineering before entering the business world at KPMG . Although it’s primarily an audit and tax firm, I focused on digital marketing during my time there. In 2015, I was introduced to crypto at an event selling mining hardware for Bitcoin . Intrigued by blockchain and the potential for investment, I delved deep into the space, experimenting with mining in my cellar and investing in ICOs during the 2017 craze. As the Austrian financial ministry issued statements on taxing crypto assets, I faced a dilemma: understanding my tax liabilities. Unable to find adequate help, I conceived the idea for software to calculate and ensure compliance, leading to the founding of Blockpit in 2017.

Mahsa: It’s truly remarkable how you encountered a problem and engineered a solution. How would you explain your project to your grandma?

Florian: It’s a challenging question, especially given the niche nature of our work. When explaining to my grandmother, I would draw parallels to more familiar concepts. For example, I might liken it to investing in stocks or gold, where you buy low, sell high, and pay taxes on your profits. However, in the realm of crypto, there’s no involvement from banks or government entities in this process. Despite this, tax obligations still exist, requiring individuals or advisors to manually calculate them. Our company provides software that automates this otherwise complex task, ensuring users remain compliant with tax laws.

Mahsa: When was the first moment that the idea of Blockpit came into your mind?

Florian: It began as a personal solution before evolving into a larger venture. Initially, I developed the software for my own use without any plans of commercializing it. However, as colleagues and friends expressed interest and encouraged me to pursue it further, I began attending pitch events to gauge wider interest.

During one such event, a banker showed keen interest, signaling potential profitability. This pivotal moment convinced me to take the risk and fully commit to the idea.

Your observation is spot on. While many blockchain projects aim to offer services from the outset, Blockpit’s journey was driven by the genuine need to address a specific problem within the crypto industry.

Mahsa: What problem is Blockpit solving?

Florian: Regarding the problem Blockpit solves, there are two primary components. Firstly, we tackle the challenge of data aggregation. With users utilizing various wallets, exchanges, and crypto service providers, each with different technologies and assets, standardizing and enriching this data is crucial. We automatically aggregate data from diverse sources, standardize it, and enhance it with parameters such as pricing data and valuation for transactions in real-time.

Secondly, we address the calculation of tax liabilities and other portfolio-related figures. This involves translating regulatory requirements into algorithmic code to automatically calculate tax obligations. Given the differing tax regulations across jurisdictions like Germany, Austria, the UK, and the US, we tailor our solution to meet the specific needs of each region.

In essence, Blockpit’s software provides comprehensive support for portfolio tracking and managing tax liabilities by seamlessly integrating data aggregation and automated tax calculation functionalities.

Blockpit’s focus currently spans nine countries, including Austria, Germany, Switzerland, France, Spain, the UK, Netherlands, Belgium, and the US. While our generic reporting feature is available globally, our full optimization and audited tax reports are specifically tailored to these nine jurisdictions.

Mahsa: Would you mention some of the recent updates, partnerships, and advancements?

Florian: As for recent updates, our most notable achievement is the acquisition of our largest Swiss competitor. Leveraging market downturns like the crypto winter, we’ve strategically pursued acquisitions to strengthen our position. In 2020, we acquired a German competitor, followed by the acquisition of the leading Swiss competitor in November of last year. These moves signify consolidation within the market and demonstrate our resilience amid challenging times, supported by our strong financing and shareholders.

Mahsa: Can you name some of your competitors? What makes your projects stand out among your competitors?

Florian: Regarding competitors, there are two prominent players in Europe, with numerous others in the US market. While the US presents a vast market opportunity, competition is fierce, with three unicorns achieving billion-dollar valuations in 2021. Despite their lofty valuations, we remain competitive in terms of traction and revenue. In Europe, our ambition is to further penetrate the market and capture market share from competitors like Coinbully and CoinTracking in the coming years.

Mahsa: Is there anything else you would like to share about Blockpit?

Florian: Certainly, the market dynamics are fascinating. Our business is primarily driven by two factors: the performance of the crypto market and regulatory developments. While market fluctuations impact user gains and tax liabilities, regulatory changes, especially in Europe and the EU, significantly influence our business outlook.

One notable regulation is the Markets in Crypto-Assets (MiCA) framework , expected to be implemented in 2026. This, alongside the crypto asset reporting framework, will compel service providers to share transaction histories with authorities. Such developments will likely enhance tax compliance in the crypto space, which bodes well for our business.

Education and regulation are pivotal for the widespread adoption of blockchain technology. For those hesitant to enter the crypto market, my advice is to dip your toes in cautiously. Start with a small investment — only what you’re comfortable losing — and explore the technology. You’ll be pleasantly surprised by the usability advancements in recent years. While I don’t advocate going all-in, allocating a small percentage of your investment portfolio to crypto can be a valuable learning experience. After all, investing in yourself is always worthwhile. In your knowledge, you’ll learn a lot and be at the forefront of the technological revolution.

Mahsa: What is your message to the people who have not invested in the blockchain industry yet?

Florian: Blockchain is poised to be the next big thing since the Internet, enabling decentralized value transfer, a concept already grasped by major institutions. We’ve seen significant progress, like with ETF s. Don’t be left behind; try it out, educate yourself, do your research; you’ll likely find it appealing — and obviously don’t forget about potential tax liabilities.

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About Crypto Diva

I’m already in the Future… Meet me there! Blockchain Technology is my passion and I have dedicated my career and research path to DeFi. My ultimate goal is to encourage more female professionals in the DeFi industry.

As the Sales and Marketing Manager of?coinIX ?&?COINVEST , I’ve got the privilege of being in close contact with Blockchain investment firms, as well as the innovative web3 projects which are creating the foundations the future financial world. I love to make the impossible possible and i’m willing to go the extra mile for that. Be my companion in my DeFi journey and I’ll show you everything.

Peace & Love,

Your Crypto Diva

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