Frustrated that savvy rich people will hide from the White House’s newly proposed tax hikes last week and sock it away into Bitcoin? Don’t worry.
While most of us don’t have that much money in wages, dividends and other yield bearing investments to worry about this massive wealth transfer to the State, those who do will not be able to hide it in cryptocurrencies…in the U.S.
The capital gains that you get from the sale or trade of Bitcoin for another asset are treated as taxable income.
Bitcoin can still be a tax avoidance, but that is becoming harder when it comes to selling.
The same goes for people with Bitpay accounts who are moving Bitcoin to their Bitpay Mastercard.
“If you’ve sent X amount of dollars worth of BTC from an exchange to a crypto supported credit card, then the credit card company has no idea of the cost basis for the Bitcoin, so if they tried to generate any reports the calculations will be incorrect,” he says.
“I know that ‘whales’ are accumulating as much BTC as possible while weaker-handed retail investors capitulate and sell,” says Elena Sinelnikova, MetisDAO CEO and co-founder based in Toronto.
Wealthy investors may be using Bitcoin as an inflation hedge.
I am also a retail investor with interests in cryptocurrencies, so I tend to write about the investing ideas I am considering myself.