A new article published yesterday on the Wall Street Journal is in today’s Bitcoin news – mostly because of its interesting angle and a piece of advice to investors on how they should sell and then repurchase their Bitcoin (BTC) in order to save on taxes.
In the context of the current bear market, the WSJ article suggests that “the only good thing about investing in cryptocurrencies [this year] was the tax break.”
Since the United States tax authorities and the Internal Revenue Service (IRS) have both treated crypto as an investment property since 2014 (but not a currency) – crypto users can allegedly benefit from the “special and favorable” taxation policy the country gives to these investments.
For all of the investments in the US – short-term gains and losses apply to holdings held a year or less. Moreover, any gains are taxable at a rate of as high as 40.8%, while long-term gains and losses max out at an upper bound of 23.8%.
While the losses can be used to offset taxes on gains for all investments, the potential tax relief may be greater than for traditional assets in the case of crypto, mostly because “a quirk” in US tax rules permits traders to sell and reinvest their crypto right away and in respect of the law.
This is mostly because cryptocurrencies are now exempt from the so-called “wash sale” rules which “prohibit capital loss deductions when investors purchase a security such as a stock within 30 days of selling a loser,” as the article suggests.
As previously reported on our site, data showed that ahead of the preceding tax year only 0.04% of tax filers were reporting capital gains from crypto investments to the IRS.
Crypto Analysts: 2019 May Be A Year Of Bitcoin Accumulation
“Similar to 2015, 2019 may be the year of accumulation.’’Another crypto researcher Willy Woo said that while a crash of bitcoin to $3,122 could lead to an increase in volume, it won’t show signs of starting of the accumulation period. He pointed out:
‘’Despite the technical setup that suggests bullishness is possible, there’s not a lot on-chain volume to fuel a prolonged up move. What we saw in the last 7 weeks was a spike of on-chain volume driven by volatility, coins moving to exchanges to trade. The initial volume spike false signalled a faster detox and an earlier end to the bear market, but in fact it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.’’Until evidence for the accumulation of crypto assets shows up, there are still expectations of high volatility levels.
Scott Galloway Of UCLA Believes Crypto Will Get Worse In 2019
‘’VR and crypto go from bad to worse. AI fails to live up to the hype. 3D printing rises from the ashes. Smart cameras become a hot category.’’His assessment seems to be accurate but can the crypto market prove to be the odd one out? This can be so since many industries are really committed to the crypto sector. Companies such as Fidelity, ICE, and Nasdaq have funded at least five projects in the crypto space over the past year. Venture capitalist Jim Breyer even said:
“So many of the very best computer scientists and deep learning Ph.D. students and postdocs are working on blockchain because they have so much fundamental interest in what blockchain can mean. You don’t want to bet against the best and brightest in the world.’’
Pantera Capital CIO: “Bitcoin Will Not Succeed As Money”
"Bitcoin created the ability to send money around the globe cheaply and easily without having to trust a third party," Krug was confident.He also went on to discuss several revolutions in the past, from the information revolution triggered by printing press up to the telegram, telephone, radio, television and finally, the Internet. When asked about finance, Krug believes that the industry has made leaps of progress such as increases in execution speeds, online user interfaces, brokers etc. However, he stated that a financial revolution powered by the blockchain could advance us into a next era where money, value and finance will all be coordinated thanks to crypto.
"This infrastructure will be borderless, cheap, quick, and, most importantly, will let people trade on things they’ve never been able to exchange before, and if markets for those don’t exist yet, it’ll let them create it," Krug concluded.
Scottish Man Sentenced To Prison For Buying Firearms On The Dark Web With BTC
‘’You claim that you had no intention of causing harm to anyone but the fact remains that you went to considerable lengths to get hold of a potentially lethal weapon and ammunition. You must have appreciated that this was unlawful. For this conduct you must be punished.’’This case is only a number in the series of similar cases where bitcoin is used to carry out illegal activities on the dark web.
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