Investors in Bitcoin and other cryptocurrencies face hefty tax bills
The rollercoaster ride for some cryptocurrency investors could be about to take another tax-time lurch, according to experts, as the taxman looks for his share of transactions made using bitcoin and its like.
Wild fluctuations in the value of digital currencies – bitcoin surged from less than one dollar in 2010 to $997 at the start of the 2017 to nearly $20,000 before settling back to around $8,500 on Friday – have exposed investors to tax bills the value of their coins may no longer meet.
On Reddit earlier this week, one contributor, under the heading “I just discovered that I owe the IRS $50k that I don’t have, because I traded in cryptos. Am I fucked?”, wrote they had ended up with a $50,000 tax liability on trades after they sold $120,000 worth of bitcoin to buy different coins. The current value of those coins is about $30,000. “I feel like I might have accidentally ruined my life because I didn’t know about the taxes,” the poster wrote. One complication for crypto investors is that digital currencies that were, in part, devised to operate outside of government and banking industry oversight, are still of interest to the US tax authorities, who look at cryptocurrency as property and not currency.
According to the Internal Revenue Service, anything purchased using a digital currency is liable to be taxed as a capital gain. So anyone who has cashed out or paid for anything using cryptocurrency may have capital gains to report to the IRS.
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Source: The Guardian
How To Prepare Your Business For The Age Of Stable Bitcoin
If there’s one thing everyone knows about Bitcoin, it’s that its dollar price has been flying faster and higher than Elon Musk’s old Roadster. Someone who bought a single Bitcoin at the start of 2017, when the token was worth less than a thousand dollars, would have been sitting on $20,000 when the currency peaked before the end of that year. That rise has been enough to attract the attention of the mainstream press, which brought in commercial investors who pushed the price higher still. But the ups and downs have made it challenging for businesses to adopt the new digital currency for transactions.
If you were to ask new investors what exactly bitcoin is and how it works, you’d be likely to get little more than a shrug. Bitcoin’s early users were libertarian geeks keen to create a currency free of government control and designed for an international digital environment. The investors who have swapped their greenbacks for unreadable hashes since Bitcoin’s dramatic rise are much less aware of the workings of the blockchain, of Bitcoin’s block size limits or the way that mining works. Like investors in a biotech company with no idea how that company edits strands of DNA, they don’t care much. As long as the price keeps rising, they’ll be happy.
But, the price hasn’t kept rising. From mid-December to early February, the dollar price of Bitcoin fell by roughly two-thirds, dropping from just under $20,000 to below $6,000 before rising again. For anyone who joined at the peak, the fall has been sobering. One of the most popular posts on Reddit’s Bitcoin forum during the fall was the number of the National Suicide Hotline. After weeks of describing Bitcoin billionaires and discussing celebrity ICOs, the press was suddenly asking whether the Bitcoin bubble had burst.
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Source: Forbes
Alt-coin bear market is over, but bitcoin is still the best bet: Wall Street's Tom Lee
Thomas Lee, head of research at Fundstrat Global Advisors, said the bear market for small-cap cryptocurrencies is over. But he said he still thinks bitcoin is the best bet for investors.
"Increasingly, I think investors are comfortable that bitcoin is likely to be viewed as a commodity," Lee said Tuesday on CNBC's "Fast Money." "Whether regulations change around security tokens and registration, bitcoin sits in its own sphere."
"I'd still be buying bitcoin," he said.
In a note on Tuesday, Lee wrote, "We believe the alt-coin bear market is over," referring to cryptocurrencies other than major ones such as bitcoin and ethereum.
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Source: CNBC
Peter Thiel: Bitcoin Will Be the 'One Online Equivalent to Gold'
Peter Thiel has once again endorsed bitcoin, which he recently argued is tantamount to digital gold.
And much like gold, the billionaire co-founder of PayPal conjectures that the cryptocurrency is destined to be a store of value rather than a means of payment.
"It's like bars of gold in a vault that never move," he told a CNBC reporter during a conversation at the Economic Club of New York last week, adding:
"It's sort of hedge of sorts against the whole world falling apart."
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Source: CoinDesk
‘Secretive’ Wall Street Firm Includes Bitcoin In Its Traded Assets
Trading firm Jane Street Capital, which reportedly trades an average of $13 bln daily in equities across the globe, has included Bitcoin (BTC) in its traded assets, Business Insider reported today, March 17.
A statement from the company reads: “Jane Street trades over 56,000 products globally across a wide variety of asset classes, including Bitcoin.”
Unnamed sources told Business Insider that Jane Street, which was founded in 2000, only entered into crypto trading last year. The company’s website reports that $5.6 trln was traded across all products in 2017.
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Source: CoinTelegraph
Can we Finally Look at Blockchain and Bitcoin Separately?
Unless you have been living under a rock, the word blockchain wouldn’t have missed your attention over the past one year. Amongst all the hullaballoo that surrounds blockchain, Bitcoin has stood out most prominently. From the wild swings in Bitcoin prices to the emergence of multiple cryptocurrency wallets, the Bitcoin buzz has taken over the world and India is not behind.
But the emergence of Bitcoin has been bereft of challenges in the fastest-growing economy in the world. The Indian government has refused to accept the presence of Bitcoin and has openly said Bitcoin is “not legal tender”. During the Union Budget 2018-19, India’s Finance Minister Arun Jaitley clarified the government discourages the use of Bitcoin or any other cryptocurrency.
Governments across the world too have dismissed cryptocurrencies. China, which although houses the largest community of Bitcoin miners, has begun a crackdown on cryptocurrency websites citing instability as one of the reasons.
With all the controversy surrounding Bitcoin, the use of blockchain - the technology behind Bitcoins - has been left underexplored. While blockchain and Bitcoin have been synonymous for quite some time now, in reality the two are not quite so.
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Source: Entrepreneur
Inside The World's First Whisky-Based Cryptocurrency
Whether it’s Scotch, bourbon, Irish whiskey, or Japanese, anyone following the whiskey industry knows that prices are rising. The rarer the bottle the less likely it is to be consumed. Bottles are shelved instead and left to sit for years until a decent profit can be made on the secondary market. Another method of whiskey investment I’ve covered is buying your very own cask from a distillery. As the whiskey market continues to grow, investment methods are evolving alongside it, continuously adapting as consumers of fine whiskey search far and wide for the best deals. Now, whisky has entered the cryptocurrency market, connecting blockchain technology with the physical asset of whisky.
Sure, Ethereum and Litecoin are great, but CaskCoin is backed by Scotch whisky, so I'm sold. The cryptocurrency market can be hard to understand, so let’s keep it simple. CaskCoin’s portfolio, estimated at £40 million, features casks from some of the most popular Scotch whisky distilleries in the world. These include giants like the Macallan, Dalmore, Bowmore, and Glenlivet distilleries. The casks are between 20 and 50 years old and are stored in bonded warehouses in Scotland. Each coin purchased gives the buyer a share of every cask in the CaskCoin repertoire. The more coins you buy, the more whisky you own. Speaking to CaskCoin CFO, Barry Millar, he touches on the three “pillars” of the whisky-based coin. First is complete traceability, brought forth in the blockchain technology backing the coin. Then comes provenance, which is evident in the unique casks and their origins, tied to the Scotch whisky industry. Lastly, sharing intelligence. CaskCoin owners are given a vote on when the casks are to be bottled and sold.
‘The idea of a new cryptocurrency pinned to maturing Scotch Whisky stocks was the result of brainstorming sessions with CaskCoin founder, Ricky Christie, where we tackled the greatest challenge that Scotch Whisky distillers have to overcome - the traditional financing of maturing whisky stocks,’ says Millar. ‘We decided that CaskCoin holders should be able to participate on this journey and the value to them would mirror that of the Scotch whisky stock - which should, in turn, equate to more stability as a cryptocurrency.’
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Source: Forbes
Bitcoin will be the worlds single currency, says Twitter and Square CEO Dorsey
What is the endgame for bitcoin?
This is the continuing debate among the virtual-currency community. Skeptics label it a scam and a fraud, predicting it will crash and eventually to a value of zero, and at the other end of the spectrum, champions believe it to be the future of money and that blockchain, the distributed-ledger technology underpin cryptocurrencies, will become the single marketplace for recording keeping and transacting.
Speaking to the Times of London, Jack Dorsey, co-founder and CEO of Twitter TWTR, -2.23% and payments platform Square Inc. SQ, -1.91% put his chips on the table, saying bitcoin BTCUSD, -2.29% will eventually be the worlds single currency.
The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin’
Jack Dorsey, co-founder of Twitter
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Source: MarketWatch
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