[Finance] The cryptocurrency (Bitcoin etc) thread

[CheeseRolls]

This has to be one of the best cryptocurrency put downs I have seen. The missing table is included in an image below.
https://www.forbes.com/sites/stevenehrlich/2024/03/27/the-rise-of-cryptos-billion-dollar-zombies/

 

[CheeseRolls]

Apologies for a few unanswered posts.

Still banging away at my tax returns, slowly piecing together the missing information inc Kucoin.
Yes it will be nigh on impossible for HMRC to challenge anything half sensible submitted.
No HMRC are not taxing realised profits, as otherwise you could bugger off somewhere unregulated on holiday and spend a ton of untaxed crypto.

 

[beorhthelm]

No HMRC are not taxing realised profits, as otherwise you could bugger off somewhere unregulated on holiday and spend a ton of untaxed crypto.

what do you think you are taxed on then? remember the tax system works on where you are tax resident, not where you physically locate (though normally the same). if you dispose of assets overseas you are still liable for taxes in UK if tax resident. lots of precedent is set with currency and stock trading, cant sell them somewhere else, say NYSE, and avoid tax.

 

[CheeseRolls]

what do you think you are taxed on then? remember the tax system works on where you are tax resident, not where you physically locate (though normally the same). if you dispose of assets overseas you are still liable for taxes in UK if tax resident. lots of precedent is set with currency and stock trading, cant sell them somewhere else, say NYSE, and avoid tax.

Sorry this was in response to @sydney and his expectation that crypto can be a tax black hole. You are correct and in fact cryptotaxcalculator a Koinly rival is Australian, which suggests that the Aussie tax authorities are approaching this along similar lines to the UK.

 

[Tim Over Whelmed]

Seldom look at Crypto, have dabbled a few quid here and there, currently hold:

Bitcoin
Polkadot
SHIBA INU
DESO
Loopring
Ribbon Finance
MANA
Polygon
Ethererum
Jasmy
Solana
Powerledger
Harvest
Uniswap

All purchased to hold for five years and see where the markets take them

and have been hearing about Pi, anyone know what this Pi thing is?

 

[sydney]

Sorry this was in response to @sydney and his expectation that crypto can be a tax black hole. You are correct and in fact cryptotaxcalculator a Koinly rival is Australian, which suggests that the Aussie tax authorities are approaching this along similar lines to the UK.

it is only taxable once it comes out of your wallet i.e the profit is realised into cash , i have discussed this at length with my accountant , members of the public can no longer claim capital losses either , only lay these losses off against future gains.

 

[Nigella's Cream Pie]

it is only taxable once it comes out of your wallet i.e the profit is realised into cash , i have discussed this at length with my accountant , members of the public can no longer claim capital losses either , only lay these losses off against future gains.

I am not aware of any recent changes to offsetting capital losses, you can still use them against current gains.

As for CGT only when cashing out, that's not the case - from https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22100:

Individuals need to calculate their gain or loss when they dispose of their tokens to find out whether they need to pay Capital Gains Tax. A ‘disposal’ is a broad concept and includes:

• selling tokens for money
• exchanging tokens for a different type of token
• using tokens to pay for goods or services
• giving away tokens to another person (unless it’s a gift to their spouse or civil partner)

 

[sydney]

I am not aware of any recent changes to offsetting capital losses, you can still use them against current gains.

As for CGT only when cashing out, that's not the case - from https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22100:

Individuals need to calculate their gain or loss when they dispose of their tokens to find out whether they need to pay Capital Gains Tax. A ‘disposal’ is a broad concept and includes:

• selling tokens for money
• exchanging tokens for a different type of token
• using tokens to pay for goods or services
• giving away tokens to another person (unless it’s a gift to their spouse or civil partner)

im in OZ , capital loses can be offset against gains once realised but you cannot use them as a write off on earnings......the rest of it you could argue all day long about , you could have 15 k profit sat in your wallet but until its realised it's not profit is it...?? i'd argue till the cows come home , when i transfer 15 k out of my crypto to my bank account i expect to pay tax on it but if it's still in my wallet they can jog the fark on.

 

[Gazwag]

im in OZ , capital loses can be offset against gains once realised but you cannot use them as a write off on earnings......the rest of it you could argue all day long about , you could have 15 k profit sat in your wallet but until its realised it's not profit is it...?? i'd argue till the cows come home , when i transfer 15 k out of my crypto to my bank account i expect to pay tax on it but if it's still in my wallet they can jog the fark on.

In UK if you look at crypto in a wallet that is no different from shares with a stockbroker - everytime a share is disposed of a capital event occurs so a capital profit or loss is made, it matters no iota if the cash is used to purchase a new share or retained by the stockbroker and never appearing in your bank account.

No different to crypto, if any is sold/transferred into another token (although there is a difference as a share holding turns to cash first then another shareholding is purchased, this can be direct in crypto). If the 15k profit you taking about is the difference between cost and current value then yes, no tax as nothing realised, if that 15k profit was on BTC and you bought ETH, even though it was a "straight swap" so to speak the BTC profit is taxable under CGT even though nothing has left your wallet.

 

[Nigella's Cream Pie]

im in OZ , capital loses can be offset against gains once realised but you cannot use them as a write off on earnings......the rest of it you could argue all day long about , you could have 15 k profit sat in your wallet but until its realised it's not profit is it...?? i'd argue till the cows come home , when i transfer 15 k out of my crypto to my bank account i expect to pay tax on it but if it's still in my wallet they can jog the fark on.

Same rules in Oz as in UK - from https://community.ato.gov.au/s/arti...axes#3a9b6cb2-46e7-4f60-afb4-f5be399600a4-111:

If you’re an investor and dispose crypto, this is treated as a CGT event. It includes when you:

• sell, donate or gift crypto.
• trade, swap or exchange crypto (including trading one crypto for another).
• convert crypto into regular (fiat) currency, for example, into Australian dollars.
• use crypto to purchase goods or services.

The ATO tracks crypto (see https://koinly.io/blog/ato-cryptocurrency/). If you have had a letter from them, how to deal with it:
https://koinly.io/blog/ato-crypto-letter/

 

[RandyWanger]

A little update on my Best Blockchain after 2 rebalances. It's done nothing. Whereas my Golden Thematic has outperformed it. I'll give it an another rebalance and see where it is at and check back in.
My BTC is looking good and so is my DOT but my best performer is still PEPE. That crazy meme has made a lot of people a lot of money (but also a lot have somehow managed to loose their shirts)

 

[chickens]

My stocks and shares ISA is still comfortably outperforming my crypto bet, but I’ve only had skin in the game for a few months.

I have low expectations, and the tokens will just sit there gathering dust and get checked every month to see if anything interesting is happening.

BTC is the only part of the portfolio that’s up on what I paid for it, I’ve avoided every meme coin like the plague, they’re just the old penny stocks pump and dump scam over and over again.

 

[Knocky's Nose]

My stocks and shares ISA is still comfortably outperforming my crypto bet, but I’ve only had skin in the game for a few months.

I have low expectations, and the tokens will just sit there gathering dust and get checked every month to see if anything interesting is happening.

BTC is the only part of the portfolio that’s up on what I paid for it, I’ve avoided every meme coin like the plague, they’re just the old penny stocks pump and dump scam over and over again.

There's a stock market crash on the horizon, 100% - and no doubt many crypto's will follow it as they do have some correlation.

There's a new monetary system coming and this will rely on utility crypto's.. not 'stores of value' (BTC) and meme coins.

XRP, XLM, XDC, Algorand, IOTA, Hedera to name a few. Then there's the overledgers and 'connectivity' like Quant, VeChain, Chainlink etc.

The above will survive and thrive.

 

[chickens]

There's a stock market crash on the horizon, 100% - and no doubt many crypto's will follow it as they do have some correlation.

There's a new monetary system coming and this will rely on utility crypto's.. not 'stores of value' (BTC) and meme coins.

XRP, XLM, XDC, Algorand, IOTA, Hedera to name a few. Then there's the overledgers and 'connectivity' like Quant, VeChain, Chainlink etc.

The above will survive and thrive.

I’ve heard this song before, and you’re absolutely right that there’s a stock market crash coming. They come along regularly, right after stock market recoveries and stock market boom times.

However, what you’re betting on here, is that rather than crash, recover, boom, the market crashes and nobody bothers to pick up the pieces, they all start using crypto.

Now, I’m all for “believing in the product” but does it not just seem a little far-fetched to you that huge power blocs will all just go “actually forget about the USD/GBP/EUR - let’s just use this random crypto token instead. What could possibly go wrong?”

 

[Weststander]

I’ve heard this song before, and you’re absolutely right that there’s a stock market crash coming. They come along regularly, right after stock market recoveries and stock market boom times.

However, what you’re betting on here, is that rather than crash, recover, boom, the market crashes and nobody bothers to pick up the pieces, they all start using crypto.

Now, I’m all for “believing in the product” but does it not just seem a little far-fetched to you that huge power blocs will all just go “actually forget about the USD/GBP/EUR - let’s just use this random crypto token instead. What could possibly go wrong?”

Putting to one side Crypto.

If the stock markets are going to suffer a catastrophic crash, would the investment experts here recommending switching all investments into gold and safe interest bearing funds?

 

[Happy Exile]

Now, I’m all for “believing in the product” but does it not just seem a little far-fetched to you that huge power blocs will all just go “actually forget about the USD/GBP/EUR - let’s just use this random crypto token instead. What could possibly go wrong?”

I'm not an expert, but I can see utility tokens being used as part of a regulatory framework to stabilise the markets more than for currency I've read some interesting things about how moving the stock market to a blockchain based system would be a big step in that direction for example, and help clean up some of the manipulation and exploitation especially in US markets.

 

[chickens]

I'm not an expert, but I can see utility tokens being used as part of a regulatory framework to stabilise the markets more than for currency I've read some interesting things about how moving the stock market to a blockchain based system would be a big step in that direction for example, and help clean up some of the manipulation and exploitation especially in US markets.

Perhaps, but that would require them to be used by central banks, surely?

I’d have expected central banks to have a vested interest in the recovery of their national currency, rather than working around it. Any assistance provided to markets to stabilise them from central banks would inevitably be provided in that nation’s currency, would it not?

I’m not aware of any crypto project designed to address global market stability, if anything, adding additional tokens and mechanisms increases complexity, so I’m not entirely convinced. While I accept that it’s possible, my personal view is that it’s unlikely.

There seems to be an enduring (and attractive to some) myth in crypto that at the point of the next global financial crisis, central banks will all fold up their tents and slink away into the night. My suspicion is that the established pattern in these cases will repeat, the head of each central bank may be replaced, but the central banks will remain and exert just as much control over their currencies as they always have.

The simple truth is that we’ll all find out in time.

 

[RandyWanger]

Now, I’m all for “believing in the product” but does it not just seem a little far-fetched to you that huge power blocs will all just go “actually forget about the USD/GBP/EUR - let’s just use this random crypto token instead. What could possibly go wrong?”

Paving the way for a CBDC

 

[chickens]

Paving the way for a CBDC

Run by?

 

[CheeseRolls]

Perhaps, but that would require them to be used by central banks, surely?

I’d have expected central banks to have a vested interest in the recovery of their national currency, rather than working around it. Any assistance provided to markets to stabilise them from central banks would inevitably be provided in that nation’s currency, would it not?

I’m not aware of any crypto project designed to address global market stability, if anything, adding additional tokens and mechanisms increases complexity, so I’m not entirely convinced. While I accept that it’s possible, my personal view is that it’s unlikely.

There seems to be an enduring (and attractive to some) myth in crypto that at the point of the next global financial crisis, central banks will all fold up their tents and slink away into the night. My suspicion is that the established pattern in these cases will repeat, the head of each central bank may be replaced, but the central banks will remain and exert just as much control over their currencies as they always have.

The simple truth is that we’ll all find out in time.

A central bank digital currency can come in two distinct phases wholesale and retail. Wholesale being settlement of bank to bank transactions, which may include corporate treasuries and retail being an alternative to the banking arrangements most of us use today.

The immediate benefits include a reduction in the cost of international transactions and faster settlement times. This benefits governments in that economic forecasts can be based on more accurate and timely information, whereas there is a current lag of a couple of months, which can mess up forecasting.

Possibly the only government not in favour of this aproach is the US. They stand to lose the most as the dollar is the global reserve currency. Retail CBDC is a lot more controversial and many in crypto hate the idea. I think it is inevitable, but will not be pitched as either a replacement for tradtional banking nor a replacement for crypto, but another niche product.

If anyone is interested the following links provide some interesting insights into the direction of travel.

UK Regulated Liability Network
https://www.ukfinance.org.uk/regulated-liability-network

Coadjute Blockchain/ Real World Assets /web3 applied to the property market

"Home - Coadjute

We enable real-time information sharing over a secure network. No new CRMs or systems, just additional functionality.

coadjute.com

Rowan Energy Incentivising green energy rebates (arguably would have wider appeal if using a retail CBDC)
https://www.rowanenergy.com/